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A

SUMMER TRAINING REPORT

ONCOMPARATIVE ANALYSIS OF HOUSING LOANS

OF HDFC LTD. WITH OTHER BANKS

AT

HDFC BANKSUBMITTED TO:

KURUKSHETRA UNIVERSITY, KURUKSHETRA

IN THE PARTIAL FULFILLMENT OF THE REQUIREMENT FORTHE

DEGREE OFMASTER OF BUSINESS ADMINISTRATION

SESSION: 2011-13

SUBMITTED TO: SUBMITTED BY:MISS. KAMYA NEETULect. (FINANCE) MBA - 3RD SEM

ROLL NO.7811012


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PREFACE

This project report is the result of my 6 weeks of on job summer training

internship is an integrated part of the MBA course which the students has toperform and its aim at providing a firsthand experience of the industry to the

students. This practical experience helps the student to view the real business

world closely, which in turn widely influences their conceptions and perceptions

about the corporate world.

In order to make students competent all the students are required to take a real

time project work under summer training in the MBA curriculum .Project work not

only helps to understand but also practicality goes on in the corporate world and

correlate the theoretical concepts better which remains undiscovered in the

classrooms .

I had make discussion with my training guide and he assigned me the project

COMPARATIVE ANALYSIS OF HOUSING LOANS OF HDFC LTD. WITH

OTHER BANKS it requires a lot of extensive study to gather the information .It

provided me a great deal of exposure and I found practical work totally different

from that of theoretical.


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DECLARATION

This report is the result of my management training in HDFC Ltd. I hereby declare that

the project report title COMPARATIVE ANALYSIS OF HOUSING LOANS OF

HDFC LTD. WITH OTHER BANKS submitted in the partial fulfillment of

requirement for the degree of master of business administration. This report is a bonafide

research work carried about by me. No part of this report has been submitted for the

award on any other diploma, degree, fellow ship or other similar title of prize. The report

is based on my personal opinion hence cannot be referred to for official or legal purpose.

NEETU


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ACKNOWLEDGEMENT

I am grateful thanks to MR. GAURAV BAJAJ ( H.O.D. SHREE RAM INSTITUTE

OF MANAGEMENT) MISS KAMYA for their guidance and a valuable

suggestion. This project involves many helping hands and I would like thanks to

all those, who help me in completion the project and bringing out the timely

submission of the report. I am extremely grateful to faculty members for their

whole hearted co-operation.

Above all no words can express feeling of gratitude for my guardians, Parents

and my friends, who supported me all through my project report. On the whole

this Achievement is entirely due to the moral support and blessing at my parents

and Teachers.

NEETU

(SHREE RAM INSTITUTE OF BUSINESS &

MANAGEMENT)


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TABLE CONTENT

INTRODUCTION OF COMPANY

COMPANY PROFILE

VISION AND MISSION

EXCUTIVE SUMMARY

OBJECTIVES OF COMPANY

SWOT ANLYSIS

INTRODUCTION TO THE TOPIC

REVIEW OF LITERATUREOBJECTIVES OF STUDY

BOARD OF DIRECTORS

COMPANY PROFILE

LIMITATION OF STUDY

RESEARCH METHODOLOGY

RESEARCH DESIGN

SOURCE OF DATA

SAMPLING & SAMPLE DESIGN

SCOPE OF STUDY

DATA ANLYSIS AND INTERPRETATION

FINDINGS

CONCLUSIONSUGGESTION AND RECOMMENDATIONS

QUESTIONAIRE

BIBLIOGRAPHY


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COMPANY PROFILEOF

HDFC HOSING DEVELOPMENT FINANCE

CORPORATION LTD

INTRODUCTION:-

Housing Development Finance Corporation Limited , founded 1977 by Ravi

Maurya and Hasmukhbhai Parekh, is an IndianNBFC, focusing on home mortgages.

HDFC's distribution network spans 243 outlets that include 49 offices of HDFC's

distribution company, HDFC Sales Private Limited. In addition, HDFC covers over 90

locations through its outreach programmes. HDFC's marketing efforts continue to be

concentrated on developing a stronger distribution network. Home loans are also Shacked

through HDFC Sales, HDFC BankLimited and other third party Direct Selling Agents

(DSA).

HDFC Incorporated in 1977 with a share capital of Rs 10 Crores, HDFC has since

emerged as the largest residential mortgage finance institution in the country. The

corporation has had a series of share issues raising its capital to Rs. 119 Crores. The gross

premium income for the year ending March 31, 2007 stood at Rs. 2,856 Crores and new

business premium income at Rs. 1,624 Crores. The company has covered over 8, 77, 000

lives year ending March 31, 2010.

HDFC operates through almost 450 locations throughout the country with its

corporate head quarters in Mumbai, India. HDFC also has an International Office in

Dubai, UAE with service associates in Kuwait, Oman and Qatar. HDFC is the largest

housing company in India for the last 27 years.

SNAPSHOT-I

Incorporated in 1977 as the first specialized Mortgage Company in India.
http://en.wikipedia.org/w/index.php?title=Ravi_Maurya&action=edit&redlink=1http://en.wikipedia.org/w/index.php?title=Ravi_Maurya&action=edit&redlink=1http://en.wikipedia.org/wiki/Hasmukhbhai_Parekhhttp://en.wikipedia.org/wiki/Indiahttp://en.wikipedia.org/wiki/NBFChttp://en.wikipedia.org/wiki/Mortgageshttp://en.wikipedia.org/wiki/HDFC_Bankhttp://en.wikipedia.org/w/index.php?title=Ravi_Maurya&action=edit&redlink=1http://en.wikipedia.org/w/index.php?title=Ravi_Maurya&action=edit&redlink=1http://en.wikipedia.org/wiki/Hasmukhbhai_Parekhhttp://en.wikipedia.org/wiki/Indiahttp://en.wikipedia.org/wiki/NBFChttp://en.wikipedia.org/wiki/Mortgageshttp://en.wikipedia.org/wiki/HDFC_Bank


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Almost 90% of initial shareholding in the hands of domestic institutes and retail

investors. Current 77% of shares held by foreign institutional investors.

Besides the core business of mortgage HDFC has evolved into a financial

conglomerate with holdings In:

CHART:- 6.1

HDFC Standard Life insurance Company- HDFC holds 72.26 %.

HDFC Asset Management Company HDFC holds 60%

HDFC Bank- HDFC holds 23.26%.

Intel net Global (Business Process Outsourcing) HDFC holds 50%.

HDFC Chubb General Insurance Company HDFC holds 74%

BOARD OF DIRECTORS:-

Mr. D S Parekh - Chairman Mr. D N Ghosh

Mr. Keshub Mahindra - Vice Chairman Dr. S A Dave

Ms. Renu S. Karnad - Executive Director Mr. S Venkitaramanan

Mr. K M Mistry - Managing Director Dr. Ram S Tarneja

HDFC

LTD

72.26%

HDFC

STANDARD

LIFE

60%

HDFC

ASSET

MANAGEMENT

23.26%

HDFC

BANK (inclusive


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Mr. Shirish B Patel Mr. N M Munjee

Mr. B S Mehta Mr. D M Satwalekar

GROUP COMPANIES:-

HDFC Bank: World Class Indian Bank- among the top private banks in India.

HDFC AMC: One of the top 3 AMCs in India- Preferred investment manager.

Intel net Global: BPO services for international customers.

CIBIL: Credit Information Bureau India Limited.

HDFC Chubb: Upcoming Private companies in the field of General Insurance.

HDFC Mutual Fund HDFC reality.com: Helps to search properties in all major cities in India

HDFC securities

HDFC Standard Life Insurance Company Ltd Aug, 2000

ORGANISATIONAL GOALS:-

HDFC's main goals are to-

a) develop close relationships with individual households,

b) maintain its position as the premier housing finance institution in the country,

c) transform ideas into viable and creative solutions,

d) provide consistently high returns to shareholders, and

e) to grow through diversification by leveraging off existing client base.

In addition to home building loans, HDFC also offers home extension, home

improvement and home conversion loans. It also helps to identify and value properties.

HDFC also offers depository services in form of term deposits.


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Types of Products offered

HDFC provide loans to meet all your requirements for you to make that house a home.

Home Improvement Loan

Home Extension Loan

Loans to professionals for office or clinic.

Home Equity Loans (Loan Against Property)

Loan against Rent receivables \

Short Term Bridging Loan.

Loans to professionals for non-residential premises loan


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HDFC HOME LOAN ADVANTAGE :-

Home loan counseling sharing over 30 years of home loan experience

Door step service

Helps in finding Dream home

Wide Product Range

Multiple Repayment Option

Wide Network of financing


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ICICI Bank LTD

ICICI Bank was the first bank in India to launch an international debit card in association

with VISA ( Visa Electron) and issues the master cards, maestro debit card as well. The

debit card allows the user to directly debit his account at the point of purchase at a

merchant establishment in India and overseas. The bank launched its credit card in

association with VISA in November 2000. the bank is bowel positioned as a leader in

various net-based B2C opportunities including a wide range of internet banking services

Promoters :

ICICI is Indias premier housing finance company and enjoys an impeccable track record

in India as well as in international markets. Since its inception in 1985, the corporation

has maintained a consistent and healthy growth in its operations to remain the clear

market leader in mortgages and banking services in India. Its outstanding loans portfolio

covers over a million dwelling units. ICICI has developed significant expertise in retail

mortgage loans to different market segments and also has a large corporate client base for

its housing related credit base for its housing related credit facilities. With its experience

in the financial markets, a strong market reputation, large shareholder base, unique

consumer franchise, ICICI was ideally positioned to promote a bank in the bank

environment.

Business Focus

ICICI banks mission is to be a world class Indian bank. The banks aim is to build a

sound customer franchisee across Distinct business so as to be the preferred of banking

services in the niche segment that the bank operates in and to achieve healthy growth in

profitability, consistent with the banks risk appetite. The bank aims to ensure the highest

level of ethical standards, professional integrity and regulatory compliance. ICICI banks


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business philosophy is based on four core values : operational excellence ,customer focus,

product leadership and people.

Capital structure

The authorized capital of ICICI bank is Rs. 450 crores. The ICICI group holds 24.5% of

the banks issue of American depository in respect in banks issue of American

depository shares (ADS/ADR Issue).the Indian private equity fund, Mauritius(IPEF) and

Indochina financial holdings ltd. Mauritius(IFHL) (both funds advise by j p Morgan

partners , Formerly chase capital partners)together hold about 11.6% of the banks

equity. Roughly 18% of the equity is held by fells. NRIs /OCBs while the balance is

widely held by about 3,00,000 shareholders. The shares are listed on the stock exchange,

Mumbai and the national stock exchange. This banks American depository shareware

listed on the New York Exchange under the symbol HDB.

Times Bank 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 ICICI Bank Ltd, effective February 26, 2000 .As per the Scheme of

amalgamation approved by the shareholders of both Banks and the Reserve Bank of India,

shareholders of Times Bank received 1 share of ICICI bank for very 5.75 shares of Times

bank. The amalgamation added significant value to ICICI bank in terms of increased

branch network , expanded geographic reach, enhanced customer base, skilled manpower

and the opportunity to cross- sell and leverage alternative delivery channels .

Distributed Network

ICICI Bank is head quartered in Mumbai. The bank at present has an enviable network of

over 240 branches spread over 128 cities all across the country. All branches are linkerson an online real time basis. Customers in 39 locations are also serviced through Internet

Banking. He banks expansion plans take in to account the need to have a presence in all

major industrial and commercial centers where its corporate customers are located as well

as the need to build a strong retail customer vase. Being a clearing /settlement bank to


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various leading stock exchanges, the bank has the branches in the centers where the

NSE/BSE has a strong and active member base.

Management

Mr. Garget Kapoor took over as the banks 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 20 years, and before joining ICICI

bank in 1994 was heading city Banks Operation in Malaysia. The Banks Board of

director is composed of eminent individuals with a wealth of experience in public policy

and commercial banking. Senior executive representing ICICI and J P Morgan, Partners

(Formerly Chase Capital Partner) are also on the board.

Technology

ICICI bank operates in highly automated environment in terms of information technology

and communication system. All the bank branches have connectivity which enable the

bank to offer speedy funds transfer facilities to it customers..Multi-branch access is also

provided to retail customers through the branch network and Automated Teller Machines

(ATMs)

Business profile

ICICI Bank caters to a vide range of banking services covering both commercial and

investment banking on the wholesale side and transactional/branch banking on the retail

side. The bank has 3-key business areas.

A) Whole-sale Banking Services

The banks target market is primarily large, blue chip manufacturing companies

in Indian corporate sector and to A small extent, emerging mid-signed corporate. For

these Corporate. The bank provides a vide range of banking service including working

capital finance , trade services, traditional services, cash management etc. based on its

superior product delivery/ services levels and strong customer orientation, bank had made


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significant in roads into the banking consortia of a number of leading corporate including

multinational companies from the domestic business houses, and prime public sector

companies .

B) Retail Banking services

The objective of the retail bank is to provide a full range of financial products and

banking services, giving the customer A-one stock window for all its banking

requirements. The Products are backed by World-Class service and delivered to the

customer through various delivery channels including the branch networks as well as

alternative delivery channels like ATMs, Phone Banking , Net Banking , and Mobile

Banking .The ICICI Bank preferred program for High Net Worth Individuals, the ICICI

Bank plus and the investment advisory Services programs have been designed keeping in

mind needs.

C)Treasury operations

With in this business, the bank has three main product areas, foreign change and

derivatives, local currency, money market and Debt Securities and equities .With

liberalization of the financial market in India corporate needs more sophisticated risk

management information, advice and products structures. These and fine pricing on

various treasury products are provided through the banks treasury team.

Rating

The Indian Rating agency, credit Analysis and research Ltd.(CARE) have rated ICICI

Banks program for certificate of Deposits. The CDs are rated PR1+, which is the

highest rating For short term investments indicating superior capacity for repayment.

Product RangeSaving Accounts:

Apart from the usual facilities you get a free ATM card, Inter branch banking, net-

banking, bill pay, phone banking, debit card and mobile banking, among others.


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ICICI Bank Preferred:

A preferential saving accounts where you are assigned a Dedicated relationship manager,

who is your one-point contact. You also get privilege like fee waivers, enhanced ATM

withdrawal limit, priority locker allotment, free accounts and low interest rates on loans,

to name a few.

Sweep in Account:

A Fixed deposit linked to your Saving Accounts. So, even if youre saving accounts runs a

bit short, you can issue a cheque (or use your ATM card ). The money is automatically

swept in from Your fixed deposit into your saving accounts.

Super Saver Account:

Gives you an overdraft facility up to 75% of your fixed deposits in an emergency, you can

access your funds while you fixed deposits continues to earn high interest.

Demat Account:

Conduct hassle free transactions on your share. You can also Access your Demat Account

on the interest innovative services for your convenience.

ICICI Bank Plus:

A pat from regular and premium current account us also Have ICICI bank plus a current

account and then some more. You can transfer up to Rs. 50 lakh per month at no extra

charge, between the four metros , get cash delivery /pickup to Rs. 25000/-, Home

delivery of demand draft, at par cheques, outstation cheque clearance facility etc.

Phone Banking:

24-hours automated service.


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ATM-24 Hour Banking:

A part from routine transactions you can also pay your utility bills and transfer funds at

any of our ATMs across the country all year around.

Net Banking:

Access you account from anywhere in the world, at any time at your own convenience.

You can also view your Demat account through Net Banking.

International Debit Card:

An ATM Card you can shop all over the country and in Over 140 countries. You can

spend in any currency and pay in rupees.

Mobile banking:

Access you account on your mobile phone screen at no airtime cost. Use SMS technology

to conduct your banking transaction from your cell phone.

Consumer Durable Loans:

To help you buy the best durable for your home

Intercity/ Inter-branch Banking:

Access your account from any of our 127 branches in 53 cities.

Personal Loans

Take a loan of up to Rs.3 lakh for wedding, education, and purchase of a computer or on

exciting holiday.


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PUNJAB NATIONAL BANK

Punjab National Bank with 4497 offices and the largest nationalized bank is serving its

3.5 crore customers with the following wide variety ofbanking services:

Corporate banking

Personal banking

Industrial finance

Agricultural finance

Financing of trade

International banking

Punjab National Bank has been ranked 38th amongst top 500 companies by The

Economic Times. PNB has earned ninth position among top 50 trusted brands in

India.

Punjab National Bank India maintains relationship with more than 200 leading

international banks worldwide. PNB India has Rupee Drawing Arrangements with

15 exchange companies in UAE and 1 in Singapore.

PNB Online

Punjab National Bank of India is also a member of SWIFT and more than 150

PNB Branches are connected with terminals in Mumbai. It promotes "Any Time,

Any Where Banking".

Punjab National Bank Housing LoanAny individual can avail Punjab National Bank Housing Loan for any of the following

purpose:

For construction of house.

For purchase of house/ flat.
http://finance.indiamart.com/investment_in_india/punjab_national_bank.htmlhttp://finance.indiamart.com/investment_in_india/punjab_national_bank.html


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For purchase of house/ flat from the original allottee, i.e. on First Power of

Attorney basis.

For carrying out repairs/ renovation/ additions/ alterations in the existing house.

Approximately 80% of the cost of project is sanctioned by PNB Housing Finance,

subject to a maximum of Rs. 50 lack. In case of carrying out repairs/ renovation/

additions/ alterations in the existing house, the ceiling is Rs. 5 lack. The loan is available

for a period of 5 years to 20 years or before the borrowers attain the age of 65.

PNB Mutual Fund

PNB Mutual Fund services are distributed under the scheme of Principal PNB Asset

Management Company from its assigned branches. The varieties of Punjab National Bank

Mutual Fund are as under:

Principal Growth Scheme

Principal balanced Fund

Principal Income Fund

Principal Income Fund - Short Term Debt

Principal Cash management Fund

Principal Index Fund

Principal government Securities Fund

PNB Office Addresses

Head Office

Punjab National Bank

Street 7, Bhikaji Cama Place

New Delhi 110066, India

Tel : 91-11-26196486, 26102303

e-mail : [email protected]

For ATM related queries


ATM Card Centre,

5, Sansad Marg
http://finance.indiamart.com/investment_in_india/punjab_national_bank.htmlhttp://finance.indiamart.com/investment_in_india/punjab_national_bank.htmlmailto:[email protected]://www.pnbindia.com/http://finance.indiamart.com/investment_in_india/punjab_national_bank.htmlhttp://finance.indiamart.com/investment_in_india/punjab_national_bank.htmlmailto:[email protected]://www.pnbindia.com/


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New Delhi - 110001

Tel : 91-11 - 23352019

24 hours toll free PNB Call Centre number

1600 12 22


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LITERATURE REVIEW

Once the research problem is formulated, I have undertaken an extensive literature survey.

The literature survey conducted here includes the academic books, journals, and websites

from internet:

Kothari C.R.1:- He has revealed in his study the information regarding the basics of

research and research methodology, what are the different types of research designs, what

is problem statement, what are the sources of data collection and what are the methods of

data collection is given in this section.

Goel D.K. & Goel Rajesh2:- he has stated the ratio analysis and its formulas to

calculate them, and stated the ways for comparative statement analysis.

Panday I.M.3:- He has found out the tools for analysis of financial statements like

ratio analysis, cash flow analysis, and comparative statements.

M. Y &. Jain P.K4:- He revealed information about the analysis of financial

statements & theory of financial analysis.

MACHIRAJU.H.R.5:-He revealed the functioning of financial institutions and what

are the services they provide.

Maheshwari, S.N.6:- In this study, he found out the ratio analysis as a tool to analyze

the financial statements of organization. Different ratios depict the position of firm in

market. From it we find the many type ratios like as liquidity ratios, profitability ratios,

solvency ratios etc.


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NICE Journal of business7:- In her study, she has found out the various models for

research.

Altman, E.I8.:-He has stated that the ratios are the best ways to know the soundness,

profitability of a firm as it can convert the huge data into small numerical form.

Apropos the soundness of public sector banks9:- It has found out that soundness of

a firm can be revealed by using various ratios.

Changing scenario of commercial banks10:- It revealed the current scenario of the

Indian commercial banks.

'Report of the Committee on Banking Sector Reforms11:- It has stated the current

situation of the Indian banking sector.


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1.1 INTRODUCTION TO HOME LOANS

Home is a dream of a person that shows the quantity of efforts, sacrifices luxuries and

above all gathering funds little by little to afford ones dream.

Home is one of the things that everyone one wants to own. Home is a shelter to person

where he rests and feel comfortable. Many banks providing home loans whether

commercial banks or financial institutions to the people who want to have a home.

HDFC-(Housing Development And Finance Corporation) Home Loan, India have been

serving the people for around three decades and providing various housing loan according

to their varied needs at attractive & reasonable interest rates. Owing to their wide network

of financing, HDFC Housing Loans provides services at your doorstep and helps you find

a home as per your requirements.

Many banks are providing home loans at cheapest rate to attract consumers towards them.

The more customer friendly attitude of these banks, currently offer to consumers cheapest

loan over homes.

In view of acute housing shortage in the country, and keeping in mind the social

economic role of commercial banks in the present times, the RBI advised banks to

encourage the flow of credit for housing finance.

With the RBI reducing bank rate, the home loan market rates nose-diving by 50 basis

points. The HDFC Bank and Standard chartered bank has become the first player in this

sector to announce a housing loan for a 20 years period. No doubt it will enhance the end

cost people to plan their house over longer duration now; it has been made easy for a

person to buy that dream house which he dreamt of long ago.

HDFC also provides with Home Improvement Loan for internal and external repairs and

other structural improvements like painting, waterproofing, plumbing and electric works,


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tiling and flooring, grills and aluminum windows. HDFC finances up to 85% of the cost

of renovation (100% for existing customers).

Status is that HDFC reduced home loan rates by 50 basis points for all its existing floating

rate customers.

1.2 ADVANTAGES OF HOME LOANS:-

The various benefits of home loans arising to the customers are:-

(i) Attractive interest rates:-

The various banks offer attractive interest rates to boost and help their customers. Many

banks provide loans on fixed or floating rates to facilitate consumers as per their needs.

(ii) Help in owning a home:-

The home availed by a person with the help of banks, because they provide technical and

financial assistance to customers for owning their dream home.

(iii) No requirement of guarantor:-

The commercial banks now a day liberalize their laws regarding home loans. Some of

banks dont even require the guarantor to grant loan to their consumers. They also make

consumers free by reliving him to find a guarantor to complete the proceedings of availing

loan.

(iv) Door-Step Services:-

These doors to step services are provided from enquiry stage to the final disbursement

takes place such services are beneficial for customers in present busy life. Banks like

ICICI bank and standard chartered bank provide door to step services to customers to

borrow loan.


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(v) Loan period:- There are many banks, which provide maximum loan tenures

up to 15-20 years based on the loan amount and the credibility of customers. This relieves

the customers to repay loan amount until a long period.

(vi) For accidental death insurance :-

Some banks provide free accidental death insurance with housing loan which is also

beneficial for the customers.

These benefits or advantages of home loans are responsible for making than so popular

among customer that people who dont have their home and want to buy, they do it with

home loan. Home loans help such persons in making their dream home.

1.2 DISADVANTAGES OF HOME LOANS:-

The main disadvantages of home loans are high lightened as below:

(i) Delays in processing :-

Many times, there are huge delays in processing of providing home loans because various

formulations to be fulfilled in this process. Due to these delays customers feel mentally as

well as financially weak.

(ii) Fluctuating interest rates:-

Some banks give home loans at floating rates, which fluctuate at Different intervals due to

some reasons. These changes sometimes, may lead to increase in interest rate which will

increase the cost of home loans to the customers

(iii) High Cost:-

The public sector banks charge high processing cost for home loans sanctioning. They

are forced to pay serious charges at various stages to fulfill the requirements. Some


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consumers are not able to pay such charges so such people could not avail the benefits of

home loan schemes.

(iii) Problems in disbursement:-

There are many problems in disbursement of home loan amount. There is some delay in

disbursement of loan amount to the customers due to legal formalities. This causes

problems to the customers.

These are limitations or disadvantages of home loans. But some times some banks

charges high installments to repay loan amount. Such also causes problem to customers.

These limitations can be removed by providing good and promote services to the

customers.

1.4 DISBURSEMENT OF HOME LOANS:-

The every bank has its own procedure to disburse the loan amount among customers.

After choosing your right home, the next step is disbursement of home loans. The loan

amount is disbursed after identifying and selecting the property or home that are

purchased and submit the requisite legal documents. In the disbursement of home loans a

clear title and full verification to ensure that a person has full rights on his house. The

230A clearance of seller and /or 371 clearances from the appropriate authority of income

tax are also needed.

(I) Eligibility criteria:-

However, if one is a resident or non-resident individual who is planning to buy a house in

India, one can apply for a home loan. If a person has decided to buy a property in the near

future, he/she can apply for a loan before even selecting the property. Once the maximum

amount to put into the property has been decided, the Housing Finance Institutions or

Banks will let the customer know that how much he/she is eligible for and this helps to

plan the budget.

(ii) Conditions regarding co-applicants: -


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All Housing Finance Institutions lay down conditions on who can be co-applicants. All

co-owners to the property. Need to be co-applicants to the loan necessarily. These

institutions do not permit minors to join in as either co-owner or as co-applicants because

a minor is not eligible to enter into a contact as per law. They do not permit even friends

or relatives who are not blood relatives to take a property jointly However, Income of co-

applicants can be clubbed together to get higher loan eligibility. Given below is a Table

that throws light on acceptable relationship of a co-applicant for clubbing of income.

Income Clubbing of Co-applicants:- It is as follows:-

Combination Income Clubbing -

Husband-Wife: - Income of husband-wife can be clubbed.

Parent - son: - It can be clubbed if only son is there but not if any male sibling exists.

Brother-Brother: - If they are currently staying together and intend to stay together

in the new property, then only, their income-can is clubbed for above purposes

Brother-Sister: - No clubbing-is possible.

Sister-Sister: - No clubbing is possible.

Parent-Minor- Child: - No clubbing is possible in this case also.

(ii) General Terms and Conditions: -

The following are the terms and conditions applicable to the basic home loan product

only. These are likely to change based on the variations of the home loan product.

Typically, in general home loans, the following conditions are applicable:-

1) The loan to value ratio (LTV) cannot exceed a particular percentage. This differs from

product to product and from one Housing Finance Institutional Bank (HFI/B) to another.

The components of the value of the Property calculated here are covered under cost of

property.

2) The maximum tenure of the bank is nominally fixed by HFI/Bs. However, HFls/Bs

do provide for different tenures with different terms and conditions.

3) The installment that one pay is normally restricted to about-50-per cent of the

monthly-gross income of the candidate.


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4) The total monthly outflow towards all the loans that have been availed of, including

the current loan is normally restricted to 50% of the gross monthly income.

5) One will be eligible for a loan amount which is the lowest as per one's eligibility. This

is calculated as per the LTV norms, the HR, norms and the FOIR norms as mentioned

above.

6) Most HFls/Bs considers the profile before they judge the repayment capacity. The

judgment is based on age, qualifications, number of dependents, employment details,

employer credentials, work experience, previous track record of repayment of any loans

that have been availed of, occupation, the industry to which the candidate's business

relates to, if he/she is self-employed, then the turnover in the last 3-4 years etc.

7) Some His/Bs insist on guarantees from other individuals for the repayment of the loan.

In such cases, the customer has to arrange for the personal guarantee before the

disbursement of the loan takes place.

8) The property should be technically clear before the HFIs/Bs disburses the loans

amount. Most of institutions and banks have teams of technical experts who visit the site

to get a technical report before the disbursement of loan. This is also beneficial to the

customer as they check for the technical quality and compliance with local laws.

9) The property should be legally clear before one can avail of a disbursement of the loan

amount. Housing-Finance Institutions /Banks (HFIs/Bs) take legal clearance from their

lawyers before the disbursement of amount. This proves to be beneficial to the customers

as a legal expert checks his/her documentation to ensure that he/she get a proper title to

the property.

10) The disbursement of the loan is as per the progress of construction of the property

unless it is a ready property in which case the disbursement will be by one single cheque.

PEMI or simple interest on the loan amount disbursed to the customer in case of a part

disbursement will be payable by the customer on the disbursement.

11) The disbursement in most cases will be favoring the builder or the seller or the society

or the development authority as the case may be. The disbursement will come in the

customer's favor under special circumstances only.

12) The repayment of loan can be made either through deduction against salary, post-

dated cheques, standing instructions or Auto debit instructions to bank.


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13) The principle is amortized either on annual reducing or monthly reducing basis as the

case may be.

The above terms and conditions are generally true for most Housing finance

Institutions/Banks with respect to the general Home Loans. However, the specific terms

and conditions vary with respect to special Housing Finance Institutions or Banks.

(iv) Charges applicable to home loans:-

The different kinds of charges applicable to home loans are discussed below :

a) Processing fees:-

First, comes the process fee. This is a charge that is levied by most Hells/Bs. This has to

be paid at the time of submission of the application form. It has normally charged as a

percentage of the loan amount sanctioned. Some HFls also charge a flat fee based on the

loan amount instead of a percentage. When a lower amount is sanctioned the excess fees

paid at the time of submission of the application is adjusted with the charges, which one

make to the HFI/B subsequently. Most HFls/Bs refund the processing fee if the loan

application is rejected.

b) Administrative fees:-

This charge is again, normally, a percentage of the loan amount sanctioned. It is collected

by the HFI/B for the maintenance of customer's records, issuing interest certificates, legal

charges, technical charges, etc. though the tenure of the loan. It is payable by the customer

when he/she accepts the offer letter given by the HFI/B. This payment has to be made

before the ailment of the disbursement. The mode of collection of these fees varies from

one HFI/B to another.

c) Rate of interest :-

This is the rate of interest applicable on the loan amount through the tenure of the loan. It

is charged on the principal monthly reducing method. Most HFIs/Bs gives an option to

select either a fixed rate of interest or a variable rate of interest.


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d) Legal Charges:-

Some HFIs/Bs mainly Public Sector Banks levy legal charges that they incur on getting

the property documents vetted by their panel of lawyers.

e) Technical Charges:-

These chargesare also levied by certain Housing Finance Institutions/Banks (HFIs/Bs) to

meet their expenses on the technical site visits to the customer's property. This ensures

quality of construction and construction within the norms as stipulated by the respective

approval authority.

f) Stamp duty and registration charges:-

HFIs that go in for a registered mortgage pass these charges on to the customer. These are

rather heavy in certain states depending on the laws laid down by the state where one buys

a property.

g) Personal Guarantee from Charges :-

Since the personal guarantee provided by the customer need to be stamped, these charges

are also recovered from the customer. They are charged to him by HFIs who demand for

Guarantees.

h) Cheque Bounce Charges :-

In case the cheques through which one makes a payment to HFls get dishonored, some

minimum charges are levied by the HFI. The same are recovered from the customer.

(i) Delayed payment charges :-

HFls/Bs charge delayed payment charges from the customer if he/she delays the payment

of installments beyond the due date.


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(j) Additional charges :-

These are levied as a percentage on the delayed payment charges by most HFls. They are

levied if one fails to pay the dues within the stipulated time after a delay has taken place.

(k) Incidental charge :-

This is payable in case the HFI/B sends a representative from their organization to collect

their outstanding dues. It is normally charged at a flat rate per visit. These charges are

levied by most HFls/Bs.

l) Prepayment Charges :-

This is a penalty charged by HFls/Bs from when one makes either a part prepayment or a

full repayment of the loan. This charge is levied only on lump sum payments and not on

the EMls that one pays. This charge is levied on the amount prepaid by one and not on the

entire outstanding principal. These charges are gradually being discount. So, these are the

charges levied by most Housing Finance Institutions and Banks while granting home loan

to the customers. Now, the decision on the repayment capacity shall be talked about as

follows.

(v) Judgment regarding repayment capacity on the basis of income :-

To understand how the income of a customer is considered to arrive at his repayment

capacity, it is first necessary to classify customers into salaried and self employed

individuals.

a) The income of the salaried individual is considered in the following manner:-

Gross monthly income as it appears on the salary slip

Less: - Any non-regular variable income appears on the salary slip (including overtime,

etc.)


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Add : - 50 per cent of the average variable income of the last six months.

Add: - Any fixed cash/voucher payments for which proof can be submitted.

Add: - 50 per cent of the average variable cash/voucher payments with proof like

traveling reimbursement etc.

Add :- HRA receivable if not being received already in the salary slip.

The above income calculated for the calculation of eligibility using IIR and FOIR norms.

For calculation of FOIR, the installments of all the loans that one has availed of currently

for which repayment is being made is taken into account as well. The lower of the two

eligibilities is considered as the maximum repayment capacity.

b) To consider income of Self-employed individuals we further classify them into

Professionals and non-professionals .

Professionals: - Comprising doctors, chartered accountants, lawyers, architects,etc. For calculation of eligibility of professional's income is computed by most HFIs

using the gross professional receipts instead of the Net profit as in the case of self-

employed non-professionals.

Non-Professionals : - The income of non-professionals is normally calculated by

HFIs in the following manner: -

Average of the net profits of last 2 years as it appears in the profit and loss account

(Returns need to be filed for the same. They should be filed regularly before the due date

is over).


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Less: - Any income, which is unusual and non-recurring in nature like sale of some asset,

etc which affects profits substantially,

Add: - Any expense that is unusual and non-recurring in nature like repairs and

maintenance that has not been capitalized and effect profit adversely.

Add: - 50 per cent of the average depreciation of the last two years. The above income is

calculated for the calculation of eligibility using IIR and FOIR norms.

For calculation of FOIR, the installments of all the loans that one has availed of currently

for which repayment is being made is taken into account and the eligibility is worked out.

The lower of the two eligibilities is considered as the

Maximum repayment capacity.

(vi) Credit documentation:-

Given below is the exhaustive list of credit documents- that need to be submitted for a

general home loan product. The documents vary from one HFI/B to another based on

one's employer, qualifications experience etc. the general requirements are as follows: -

(a) Income Documents : -

For salaried slips for the last three months appointments letter-salary certificate-retainer

ship agreement, if appointed as a consultant-Form 16 issued by the employer in

customer's name income document for self employee - last three years profit and loss

account statement duly attested by Chartered Accountants. Last three years Balance

Sheets duly attested by Chartered Accountant, last three years Income Tax Returns with

computation chart duly filed and certified by the Income Tax authorities.

b) Proof of employment : -

Identify card issued by the employer- Visiting card.

(c) Employer's details (In case of private limited companies) : -


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Profile of employer on employers letterhead (to be signed by a senior person in the

organization) comprising

Name of promoter/directors

Background of promoters/directors

Nature of business activity of your employer

Number of employees

List of branches/factories

List of suppliers

List of clients/customers

Turnover of employer

Annual reports of the employer for the last two to three years.

(d) Proof of age (Anyone of the following) : -

Passport- Voter's ID card-PAN card-Ration card-Employer's identity card-School leaving

certificate-Birth certificate.

(e) Proof of residence (Anyone of the following) : -

Ration card-Passport- PAN card-Rent agreement, if the customer is staying currently on

rent- Bank Pass book-Allotment letter from the company if he/she is residing in company

quarters.

(f) Proof of name change (If applicable) : -

A copy of the official gazette A copy of a newspaper advertisement publicizing the name

change-Marriage certificates.

(g) Proof if investment (If required) :-

Bank statement for the last six months of all operating and salary accounts - Bank

statements for the last six months of all current accounts, if self-employed-any other

photocopies of investments held, if required by the HFC.

(vii) Legal documentation :-


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Legal Documentation the typical legal documents that need to be submitted to the HFC

arc discussed here. Given below is a list of legal property documents that need to be

submitted to the HFC for mortgage of the property. The name and the list of documents

vary from state to state and also depend on the type of property being financed. A broad

outline of the documents required is given below.

a) Acceptance copy of the offer letter issued by the HFC/B.

b) Title documents of the property that include -sale agreement duly

Registered-Own contribution receipts - Allotment letter-Registration receipt-Land

documents indicating ownership, if applicable- Possession letter-Lease agreement, if

applicable (Property bought from a development authority) - Mortgage deed if the HFCopts for a registered mortgage.

c) No Objection Certificate from the developer, society or development authority as

applicable.

d) Personal Guarantees, if applicable.

e) In case of alternator additional security, documents for the same depending upon the

security details.

f) Post dated cheques for the EMls.

The above documents are only indicative in nature and do not cover the entire list. It may,

also be noted that in a resale case, the previous chain of agreement also need to be taken.


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8.1 - Disbursement of Home loans by different banks:-

HDFC LTD :-

Years No. of

Home

loan

account

holders.

Home loan Disbursed

(in crore Rs.)

Distributed Recovered Balance

2004-05

2005-06

2006-07

2007-08

2008-09

700

950

1130

1435

1594

90.07

120.00

144.67

180.33

240.00

63.05

91.20

127.31

165.90

228.12

27.02

28.8

17.36

14.43

11.88

Interpretation:-

On the above table, it is evident that there are increase in No. of account holders from 700

to 1594 in the year 2008-09. The loan amount distributed among home loan account

holder has also increased from Rs.90.07 crore in 2004-05 to Rs.240 crore in 2008-09.


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Punjab National Bank:-

Years No. of Homeloan account

holders.

Home loan Disbursed(in crores Rs.)


2004-05

2005-06

2006-07

2007-08

2008-09

810

950

1120

1433

1500

120.15

183.26

213.65

240.87

265.15

97.28

150.00

185.86

231.07

265.05

22.87

33.26

28.05

9.80

9.10

Interpretation:-

The Punjab National Bank is Public sector Bank. It comes second after State Bank of

India in its branch location and expansion. From the Table, the figures show that there are

increasing trend in customer base from 810 in the year 2004-05 to 1500 in the year 2008-09. The bank also show enhancement in loan amount up to Rs.265.15 crore in the year

2008-09. The recovery process of loans in past is slow but now it is increasing.


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Standard Chartered Bank :-

Years No. of

Home loan

account

holders

Home loan Disbursed

(in crores Rs.)


2004-05

2005-06

2006-07

2007-08

2008-09

106

130

154

180

260

6.21

11.55

17.06

20.09

24.10

5.27

10.16

14.35

18.68

23.91

0.94

1.38

2.70

1.41

0.48

Interpretation:-

The standard chartered bank is a private sector bank. It has also upgraded its position in

banking sector . The figures shown in table reveals that there is upward shift in customer

base of Bank from 106 customers to 260 customers. The bank has also increased its share

in housing finance by distributing Rs. 24.10 crores in 2008-09. The recovery procedure of

Home loan is very sound.


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ICICI BANK:-

Years No. of Home

loan account

holders

Home loan Disbursed

(in crores Rs.)


2004-05

2005-06

2006-07

2007-08

2008-09

650

853

1019

1132

1434

104.33

123.24

150.65

176.75

224.00

98.12

105.00

133.46

144.65

209.16

6.21

18.24

17.19

32.10

14.84

Interpretation :-

The amount reveal that there is tremendous increase in Home loan accountholders. The

amount distributed as home loan is also increased from Rs. 104.33 in 2004-05 to Rs. 224

crore in 2008-09. But the recovery mechanism of the Bank is not so good thats why theoutstanding amount shows fluctuating trend.


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8.2 -COMPARATIVE STUDY OF DISBURSEMENT OF HOME

LOANS BY COMMERCIAL BANKS:-

There are number of schemes and products, offered by commercial banks to attract thecustomers. The comparison among different commercial banks which offer home loans in

regard of Disbursement of home loans are as:

No. of Home loan account holders ;-

Table 8.2(a)

Years HDFC LTD Punjab

National

Bank

Other Banks ICICI

Bank

2004-05

2005-06

2006-07

2007-08

2008-09

700

950

1130

1435

1594

810

950

1120

1433

1500

106

130

154

180

260

650

853

1019

1132

1434

Average of No. of accounts holders: - Total of home loan customers

= --------------------------------------

No. of year


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Table 8.2 (b)

Name of Bank Average (Rs) Percentage of

Accountholders

HDFC LTD


Other Banks

ICICI BANK

1109

1163

166

1018

32

34

5

29

Total 3456 100

GRAPH:- 8.2

Home loan holders of HDFC

LTD and commercial banks

Interpretation:-

The figure reveals that HDFC LTD is having large number of home loan accountholders.

So it ranks first among other banks. But government sector PNB is not behind so much

with 31% also market leader.

Home loans distributed by HDFC and Commercial banks:-

Table 8.3 (a)

Years HDFC LTD Punjab

National

Bank

Standard

chartered Bank

ICICI BANK


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2004-05

2005-06

2006-07

2007-08

2008-09

120.15

183.26

213.65

240.87

265.15

90.07

120.00

144.67

180.33

240.00

6.21

11.55

17.06

20.09

24.10

104.33

123.24

150.65

176.75

224.00

(Rs.in crore)

Average of home loans granted

Total home loans granted

= ---------------------------------

No. of years

Table. 8.3 (b)

Name of Bank Average (Rs) Percentage of home

loans granted (Rs in

crore)


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HDFC LTD


Other Bank

ICICI BANK

204.62\

155.01

15.80

155.79

39

29

3

29

Total 531.22 100

GRAPH:- 8.3

Home loans granted by HDFC LTD and

commercial banks

Interpretation:

There is no doubt that every bank tries to maximize its home loan disbursement. But on

the basis of data it is concluded that HDFC LTD shows high average of loan grants Rs.

20.62 crore as compared to ICICI, standard charted bank and PNB respectively.

Recovery of Home loans:-

Table 8.4 (a)

Years HDFC BANK

(Rs in crore)

Punjab

National

Bank( Rs in

crore)

Standard

chartered

Bank (Rs in

crore)

ICICI

BANK (Rs

in crore)


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2004-05

2005-06

2006-07

2007-08

2008-09

97.28

150.00

185.86

231.07

256.05

63.05

91.20

127.31

165.90

228.12

5.27

10.16

14.35

18.68

23.91

98.12

105.00

133.46

144.65

209.16

Average recovery of home loans

Total home loans recovered

= ----------------------------------

No. of years

Table 8.4 (b)

Name of Bank Average (Rs) Percentage of home

loans recovered( Rs in

crore)

HDFC LTD


Standard Chartered Bank

184.05

135.21

14.47

39

30

3


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ICICI BANK 138.08 28

Total 471.80 100

GRAPH:- 8.4

Home loans recovered by HDFC LTD and

commercial banks

Interpretation:-

In the previous years the recovery process of granting loans are very unorganized and

inefficient. So there are less recovery of home loans by the commercial banks. But it is

evident from the table that every bank whether public or private showed increase HDFC

LTD has the greatest recovery of home loans i.e. 39%,

Outstanding Balance :-

Table 8.5 (a)

Years HDFC LTD

(Rs in crore)

Punjab

National

Bank(Rs in

crore)

Standard

chartered

Bank(Rs in

crore)

ICICI BANK(Rs in

crore)


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2004-05

2005-06

2006-07

2007-08

2008-09

22.87

33.26

28.05

9.80

9.10

27.02

28.8

17.36

14.43

11.88

0.94

1.38

2.70

1.41

0.48

6.21

18.24

17.19

32.10

14.84

Average of balance due

Total of Balance due in 5 years

= --------------------------------------

No. of years

Table 8.5 (b)

Name of Bank Average

(Rs)

Percentage of

balance due (Rs incrore)

HDFC LTD

PNB

Standard Chartered Bank

ICICI BANK

20.61

19.89

1.38

17.72

34

33

2

31


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Total 59.15 100

Average of one bank

%age = --------------------------- x100

Total Average of Banks

GRAPH:- 8.5

Balance due on home loans by HDFC LTD and

commercial banks


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Interpretation:-

From the above table and figure it shows that standard chartered bank has been less

outstanding balance among other banks. The HDFC LTD got high balances due to large

customer base, not proper recovery process and lack of modernization of activities.


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OBJECTIVES OF STUDY

There is no strongest foundation for your dream home, than a cheap loan. Home loanshave become those stronger foundations for people who want to own a home. The main

objectives of the study are as follows :-

1) The main objective of this study is to know the Customers perceptions about home

loans of HDFC housing development finance corporation LTD.

2) To analyze the history of HDFC ltd.2) To analyze the history of HDFC ltd.

3) Generating good business to the company by promoting and selling the products of

HDFC LTD.

4) To know the ideas of customers about home loan products and services.

5) To make comparative study of Disbursement of home loans by Commercial banks.

6) Fixing the appointments with the customers.

7) To study the satisfaction level of customers about home loans.


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8) To study the problems faced by customers in obtaining the home loans.

2.1 PURPOSE OF THE STUDY

The main purpose of this study is to attain the knowledge of the processing system of

home loans. The main purpose of the study are as follows :-

To know the ideas of customers about home loan products and services.

To study the satisfaction level of customers about home loans.

To study the problems faced by customers in obtaining the home loans.

To learn about various aspects of HDFC home loan ltd.To learn about various aspects of HDFC home loan ltd.


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2.2 SCOPE OF STUDY

The Indian housing finance industry has grown by leaps and bound in few years. Total

home loans disbursements by banks has raised which witnesses phenomenal growth from

last 5 years. There are greater number of borrowers of home loans. so by this study we can

find out satisfaction level of customers and problems faced by them in obtaining home.


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RESEARCH METHODOLOGY OF THE STUDY

RESEARCH METHODOLOGY:-

Research methodology is a way to systematically show the research problem. It

may be understood as a science of studying how research is done scientifically. It is

necessary for the researcher to know not only the research methods but also the

methodology.

This Section includes the methodology which includes. The research design, objectives of

study, scope of study along with research methodology and limitations of study etc.

To know the Customers perceptions about home loans of HDFC LTD.


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To study the satisfaction level of customers about home loans.

To study the problems faced by customers in obtaining the home loans.

To make comparative study of disbursement of home loans by commercial banks,

the study shall be conducted in the manner enumerated below-

3.1- RESEARCH DESIGN:-

This project is based on exploratory study as well as descriptive study. It was an

exploratory study when the customer satisfaction level was studied to suggest new

methods to improve the services of HDFC LTD in providing home loans and it was

descriptive study when detailed study was made for comparison of disbursement of home

loans by commercial banks.

3.2 SOURCES OF DATA :- To fulfill the information need of the study. The

data is collected from primary as well as secondary sources-

A - PRIMARY SOURCE:-

I decided primary data collection method because our study nature does not permit to

apply observational method. In survey approach we had selected a questionnaire method

for taking a customer view because it is feasible from the point of view of our subject &

survey purpose. We conducted 100 sample of survey in our project to judge the

satisfaction level of customers which took home loans.

Sample size;-

For the questionnaire I have taken the sample size of 100 customers .

B SECONDARY SOURCE:-


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It was collected from internal sources. The secondary data was collected on the basis of

organizational file, official records, news papers, magazines, management books,

preserved information in the companys database and website of the company.

3.3- SAMPLING :-

Sampling refers to the method of selecting a sample from a given universe with a view to

draw conclusions about that universe. A sample is a representative of the universe

selected for study.

SAMPLE SIZE :-

Large sample gives reliable result than small sample. However, it is not feasible to target

entire population or even a substantial portion to achieve a reliable result. So, in this

aspect selecting the sample to study is known as sample size. Hence, for my project my

sample size was 100.The Sample Size consists of both the Professional and Business class

people. IT peoples, Doctors, Jewelers, Timber Merchants & Real estate Agents are taken

as Sample.


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ANALYSIS & INTERPRETATION

The analysis is based on the responses given by customers through questionnaires.

AGE GROUP OF SURVEYED RESPONDENTS

TABLE 9.1:

Age group No. of Respondents

18 - 25 years 127

26 - 35 years 67


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36 - 49 years 46

50 - 60 years 24

More than 60 years 6

CHART-9.1:

Analysis:- From the chart above we find that 47% of the respondents fall in the age

group of 18 25 years, 25% fall in the age group of 26 35 years and 17% fall in the age

group of 36 49 years. Therefore most of the respondents are relatively young (below 26

years of age). and 6% respondents age are 50-60 years and 2% respondents age are 60 to

above years.

GENDER CLASSIFICATION OF SURVEYED RESPONDENTS

TABLE-9.2

Sr. No. Category No. of Respondents Percentage

1 Married 140 70%

2 Unmarried 60 30%

Total 200 100%

Base 200 respondents

CHART-9.2


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Interpretation

From the table and graph above it can be seen that

70% respondents are married.

30% respondents are unmarried.

Educational qualification of respondents

TABLE-9.3


1 Under graduate 50 25%

2 Graduate 80 40%

3 Post graduate 70 35%

Total 200 100%

Base 200 respondents


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CHART-9.3

Interpretation


25% respondents are under graduate.

40% respondents are Graduate.

35% respondents are Post graduate.

CUSTOMER PROFILE OF SURVEYED RESPONDENTS

TABLE 9.5:

Customer profile No. of respondents

Student 7

Housewife 5

Working Professional 116

Business 49

Self Employed 24

Government service employee 24

Chart-9.5


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2%

51%

11%

22%

3%11%

student

housewife

working

professional

business

self-empoyed

government service

Interpretation

51% of the respondents are working professionals, 22% are into business and 11% are

self-employed, 11% of the respondents are government service employee and 3% of the

respondents are student and 2% of the respondents are house-wife.

ANNUAL HOUSE HOLD INCOME?

TABLE-9.6


1 Less than 2 lakh 98 49%

2 Between 2 to 5 lakh 62 31%

3 Between 5to 8lacs 30 15%

4 More than 8 lakh 10 5%

Total 200 100%

Base 200

CHART-9.6


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Interpretation

From the table and graph above it can be seen that 49% respondents annual household income is less than 2 lakh.\

31% respondents annual household income is between 2 to 5 lakh.\

15% respondents annual household income is between 5 to 8 lakh

5% respondents annual household income is more than 8 lakh.

Do you know about HDFC housing development finance corporation

LTD?

TABLE 9.7:

Category No. of RespondentsYes 164

No 16


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CHART:-9.7

Awareness about HDFC LTD

Interpretation:-


91% respondents are known about HDFC LTD

9% respondents are not known about HDFC LTD

Table 9 .8:-

Reasons for getting the home financed

Sr.No. Number of Reasons Percentage

a. Non-availability of funds 36

b. Reluctancy to pay cash in

one go

35

c. Tax benefit 24

d. Any other 5

GRAPH:- 9.8


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0

5

10

15

20

25

30

35

40

percentage of

customers

non-

availability

of funds

reluctancy tax benefit any other

Interpretation :-

To interpret the response of the questions, the figures shows that most of the customers

find the problem in availability of funds i.e. 36% and very less number of customers

found problem in paying cash in one go is 35%, customers get housing loan for tax

benefits is 24%. This was the expected response because a large number of people find a

problem of availability of funds which works as an obstacle in owning a dream home.

Table-9.9

From where you have got your home financed

Name of Banks / company Percentage of customers

HDFC LTD 55

Punjab National Bank 15

Standard Chartered Bank 07

ICICI BANK 20

Any other 03

GRAPH:- 9.9

From where you have got your home

financed


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010203040

5060

percentageof

customers

HDFC

LTD

PNB SCB ICICI

BANK

any

other

Interpretation:-

The analysis showed that a large number of customers prefer HDFC LTD as compared to

others. The data shows that 7% of customers took loan from Standard Chartered Bank,

20% of customers from ICICI BANK, 15% .

Table-9.10

Sources of information about Home Loans Scheme

Sources of information Percentage of

customers

Newspapers 49

Magazines 16

Banners/Hoardings/Pamphlets 11

Word of mouth 20

Any other source 04

CHART:-9.10 percentage of source of information about home loans scheme


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49%

16%11%

20%4%

newspaper

magazines

banners

word of

mouthany other

Sources of information about Home Loans Scheme

Interpretation:-The data shows that around 20% of customers got information from source of 'Word of

Mouth' which includes information from friends, relatives, colleagues etc. 49% of

customers got information from newspapers, only 16% of customers from magazines and

4% of customers got information about home loans schemes under 'Any other source' and

11% through Banners/ Hoardings/Pamphlets .

TABLE:- 9.11

DATA GIVES PREFERENCE OF RESPONDENTS OF HOME LOANS

COMPANIES AND BANKS

COMPANYS NAMENO.OF

RESPONDENTS(%)

HDFC LTD 78 78

SCB 2 2

ICICI BANK 10 10

PNB 7 7

SBI 3 3

TOTAL 100 100

GRAPH:-9.13


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INTERPRETATION:-

78% of the people contacted prefer HDFC LTD to any other and therefore it is ranked

no.1 by that percent of respondents.

PROBLEMS FACED BY CUSTOMERS IN AVAILING

HOME LOANS

There are everything in the world has good or bad points. No doubt banking

industry/ company has made many efforts to enhance the customer satisfaction but

customer still faced some problems. These are high lightened as below:

1) The customer does not have proper knowledge about different home loan

products so they face problem in making a good deal.

2) There are procedural delays, which harass the customers lot. This will crush thecurtsy of customers to avail the home loan.

3) The attitude of bank employees some times non cooperative and it creates a

hurdle in building trust and Confidence among customers about banks.

NO. OF RESPONDENTS

0

10

20

30

40

50

60

70

80

percentage of

customers

HDFC LTD SCB ICICI

BANK

PNB SBI


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4) The banks do not take into account the paying capacity of customers. So some

customers are not able to get amount of loan needed by them.

So above discussed are the problems which faced by customers while availing home

loans.


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LIMITATIONS OF THE STUDY

This study also includes some limitations which have been discussed as follows:

i) The sample size of 100 customers and 4 banks might prove a limitation because of

difficulty in generalization of results.

ii) To collect the data from various banks was quite difficult due to non- cooperation of

some banks. This proved to be major limitation of the study.

iii) To access such a large number of customers was difficult because of non-cooperative

attitude of respondents.


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iv) Lack of data was also the other limitation of the study as some of banks do not have

proper data on topic.

v) There was limitation of time to conduct such a big survey in limited available time.

vi) Ignorance and reluctant attitude of customers was also a major limitation in this study.

Thus above all were the limitations in this research study. The maximum efforts were

made to overcome these limitations in the study.


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FINDINGS

1. HDFC LTD has good brand image in the minds of customers.

2. Majority of the people got loans from HDFC LTD only

3. Most of the customers are not aware of the products of home loans.

4. Some of the customers felt that the interest rates are some what high

5. Some of the customer not having good faith on private banks like Standard

chartered bank, HSBC bank etc.

6. Most of the people are directly go to HDFC to apply a home loan.

7. Some of the customer of HDFC already benefited through HDFC home loan

products and services


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8. Customer awareness is medium about HDFC products.

9. HDFC LTD providing good services to their customers.


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CONCLUSION

1) In my study we came to know that many peoples are interested to take a home loan

from HDFC LTD to construct their homes.

2) Home loans have long period when compare to other personal loans and other loans. So

peoples are confused to take a home loan.

3) Even though the interest rates are high peoples are willing to take a loan from HDFC

LTD due to some reasons.

4) The interest rates also some what high when compare to other banks

5) The loan sanction process is low when compare to other banks.

6) For disbursement process is also it will take low time when compare to other banks


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Finally the whole research was carried out in a systematic way to reach at exact

results. The whole research and findings were based on the objectives. However, the study

had some limitations also such as lack of time, lack of data, non-response, reluctant

attitude and illiteracy of respondents, which posed problems in carrying out the research.

But proper attention was made to Carry out research in proper way and to make accurate

conclusion for the HDFC LTD which may beneficial for banks to enhance their customer

base.


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RECOMMENDATIONS AND SUGGESTIONS

These suggestions have been discussed as follows:-

1) To increase their customers, the HDFC LTD should provide specialized

services in this sector. These services can be such as proper guidance to the customer

regarding the processing of loans, especially for the customers who are illiterate.

2) To satisfy their customers and for good dealings in future, the HDFC LTD

should make prompt disbursement of loan amount to the customers so that they can buy or

construct their dream home as early as possible.


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3) The HDFC LTD should use easy procedure, or say, less lengthy procedure for

the sanctioning of loan to the customer. There should be less number of legal formalities,

in case this exists, then, these should be completed in less time. This will be helpful in

attracting more customers.

4) Although the interest rates on specific norms, yet customers seek less interest

rate which can lower their cost of house. So banks should try to lower their interest rates.

Needles to say, that the bank which is having lower interest rates, have the maximum

clients for loans.

5) HDFC LTD provide loan according to the repaying capacity of the customer

and his/her eligibility. Due to which, some customers are not able to get amount of loan

needed by them. So, the HDFC LTD should soften their norms regarding the loan amount.

6) Create awareness: The Company has to take care of awareness creation about

the products and services among the customers.

7) Charges: The Company has to reduce the mortality and administration charges.

8) The company has to reduce their interest rates on home loan products and

services.

9) The company has to identify the potential customers.

10) Company should consider the present competition and should act according to

the customer needs.

11) The HDFC LTD should try to provide proper knowledge regarding their home

loan schemes, even to people who don't know about such schemes and their benefits

especially in rural areas. So they should provide knowledge to the ignorant customers,

especially in rural areas and backward urban area So, above are the main suggestions

provided to the HDFC LTD. By considering these suggestions, the HDFC LTD can


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strengthen their customer base in home loans sector. They should improve their services

and reduce legal proceedings and should be friendly to their customers. All this will be

helpful to satisfy their customers.


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Balance sheet of CCI Ltd.

Mar ' 09 Mar ' 08 Mar ' 07 Mar ' 06 Mar ' 05

Sources of funds

Owner's fund

Equity share capital 414.22 408.90 408.90 429.28 429.28

Share application money 41.75 47.07 41.75 17.54 -

Preference share capital 355.43 355.43 355.43 - -

Reserves & surplus -1,060.98 -1,113.53 -1,154.42 -1,321.02 -2,152.86


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Loan funds

Secured loans - - - 16.61 74.44

Unsecured loans 440.83 445.19 417.72 866.27 1,629.08

Total 191.25 143.07 69.39 8.68 -20.06

Uses of funds

Fixed assets

Gross block 664.17 648.18 646.76 647.14 646.27

Less : revaluation reserve - - - - -

Less : accumulated

depreciation 549.43 538.36 526.87 511.14 494.28

Net block 114.74 109.82 119.90 136.00 151.99

Capital work-in-progress 13.29 22.35 13.75 10.81 21.11

Investments 2.28 2.28 2.28 2.28 2.28

Net current assets

Current assets, loans &

advances 417.63 372.85 291.41 198.98 151.92

Less : current liabilities &

provisions 374.04 381.16 373.05 355.13 388.06

Total net current assets 43.58 -8.30 -81.63 -156.15 -236.14

Miscellaneous expenses not

written 17.36 16.92 15.10 15.74 40.70

Total 191.25 143.07 69.39 8.68 -20.06

Notes:

Book value of unquoted

investments 2.28 2.28 2.28 - -

Market value of quoted

investments 0.02 0.02 0.02 - -

Contingent liabilities 509.17 507.61 492.03 - -


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Number of equity shares 41.42 40.89 40.89 - -

Profit loss account of CCI Ltd.


Income

Operating income 319.48 292.28 284.25 195.22 149.42

Expenses

Material consumed 47.65 42.82 39.76 50.01 31.80

Manufacturing expenses 96.52 42.00 39.16 116.65 81.67

Personnel expenses 57.24 36.89 35.95 69.43 26.54

Selling expenses - - - - -

Adminstrative expenses 60.47 104.63 101.90 33.73 15.72

Expenses capitalized - - - - -

Cost of sales 261.88 226.34 216.78 269.82 155.73

Operating profit 57.60 65.95 67.47 -74.60 -6.31

Other recurring income 44.02 23.25 149.06 947.24 9.47

Adjusted PBDIT 101.62 89.19 216.53 872.64 3.16

Financial expenses 37.37 34.65 31.10 11.52 186.73

Depreciation 10.91 11.38 16.57 16.74 17.02

Other write offs - 0.38 1.29 7.58 16.79

Adjusted PBT 53.33 42.80 167.57 836.80 -217.38

Tax charges 0.36 0.37 0.36 0.24 -

Adjusted PAT 52.97 42.43 167.22 836.56 -

Non recurring items - - - -4.72 -1.56

Other non cash adjustments -0.43 -1.53 -0.61 - -

Reported net profit 52.55 40.89 166.61 831.84 -218.94


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Earnigs before appropriation -1,060.98 -1,113.53 -1,154.42 831.84 -218.94

Equity dividend - - - - -

Preference dividend - - - - -

Dividend tax - - - - -

Retained earnings -1,060.98 -1,113.53 -1,154.42 831.84 -218.94


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QUESTIONNAIRE

1. Age:

(a) Below 30 (b) 30-40 (c) 40-50 (d) Above 50

2. Occupation:

(a) Professional (b) Self-employed (c) Salaried

(e) Others

3. Which income group do you belong? (Per annum)

(a) Below 2 lakes (b) 2-4 lakes

(c) 4-6 lakes (d) 6 lakes and above

4. Have you ever taken Home loan before?

(a) Yes (b) No

5. Are you Satisfied with the services provided? (on 5 point scale)

_____________________________________________________________________

Highly dissatisfied Neutral satisfied highly

dissatisfied dissatisfied

Name: ..

Address: ..

Contact No :( O) (M)

City: ...............Pin: .State: .


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6. While taking loan, which things attract you the most?

(a) Interest rates (b) Service Provided

(c) Pay back period (d) Schemes

7. Even if the Interest rate is high for the personal loans, you will go for it?

(a) Yes (b) No

8. How much loan amount you took?

(a) Less than 1 lakhs (b) 1-5 lakhs

(c) 5-10 lakhs (d) more than 10 lakhs9. What is reason for getting it financed?

1. Non availability of funds [ ]

2. Reluctance to pay cash in on go [ ]

3. Tax benefit [ ]

4. Any other (please specify) .........................................

10. From which of the following banks/ company you have got if financed?

Standard Chartered Bank [ ] State Bank of India [ ]

ICICI Bank [ ] HDFC LTD [ ]

Any other (please specify) ...........................................


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BIBLIOGRAPHY

REVIEWS

Berstain David(2008), Home equity loans and private mortgage insurance:

Recent Trends & Potential Implications, Vol.3 No.2, August 2008, Pp. 41 - 53

Dr. Rangarajan C. (2001), A Simple Error Correction Model of House Price.

Journal of Housing Economics Vol. 4, No. 3,pp 27 34

Fanning (1982), The Demand for Home Mortgage Debt Journal of Urban

Economics, Vol 11 No 2, November, pp. 770-774

Godse (1983), looking a fresh at banking productivity, Journal of Real Estate

Literature, Vol. No. 13, Page 141 to 164.

Haavio, Kauppi(2000) , Residential Lending to Low-Income and Minority

Families: Evidence from the 1992 HMDA Data," Federal Reserve Bulletin,Vol no 80(2),

December 2000 Pp-79-108

Kulkarni (1979), Development responsibility and profitability of banks Journal

of Economic Perspectives, Vol 9 No 1 ,pp. 26-32.

La courr, Micheal(2007) , Economic Factors Affecting Home Mortgage

Disclosure Act Reporting The American Real Estate and Urban Economics Association,

Vol.2 No. 2 May 18, 2007, Pp. 45 -58

La cour Micheal(2006) , The Home Purchase Mortgage Preferences Of Lowand-

Moderate Income Households, Forthcoming in Real Estate Economics , Vol 18, No 4 ,

December 20, 2006, p. 585.

Vandell ,kerry D(2008), Subprime lending and housing bubble: tail wag dog?

International Journal of Bank Marketing, vol 21,no 2, pp. 53-7

Brochure on home loans from HDFC LTD

NEWS PAPERS

The Times of India


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Financial Express

WEB PAGES:-

http://www.hdfcindia.com/http://www.hdfcindia.com/others/popup/news/hdfc_fin_result_june_30_08.html

www.hdfc.com

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http://www.thinkplaninvest.com/2009/01/hdfc-will-cut-home-loan-rates/

http://www.suncorp.com.au/suncorp/personal/home_loans/tips/faq.aspx

http://investing.businessweek.com/research/stocks/people/people.asp?ric=HDFC.BO

http://www.economywatch.com/companies/forbes-list/india/housing-development-

finance-corporation.html

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http://docs.google.com/gview?

a=v&q=cache:woJTMDV1HLYJ:www.hdfc.com/pdf/2AGM

%2520speech.pdf+hdfc+housing+finance+development+product&hl=en&gl=in

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