DECLARATION

I, Vipin Upreti student of MBA 4thSemester, of IIMT

management college Meerut hereby declare that the

Research Project Report title as " LOAN SCHEMES AND

CAR RECOVERY PROCEDURE OF H.D.F.C. BANK" is the

outcome of my own work & I also declare that this report is

my original work and no part of this has been published or

submitted to anybody or any university by any one for the

award of any other degree/ diploma.

Vipin Upreti

ACKNOWLEDGEMENT

It is a matter of great explanation and ecstasy for me to

present my research project report the topic " LOAN

SCHEMES AND CAR RECOVERY PROCEDURE OF

H.D.F.C. BANK" I offer my sincere gratitude to every one

involves directly and indirectly for his help and guidelines

through out the project I am especially thankful to my

project guide MR. Sandeep Kumar Lecturer, who had given

me opportunity to complete project.

My project has been influenced by number of standards

and popular text books.

I express my gratitude to the respective author.

Vipin Upreti

PREFACE

The opening of the economy has brought car buyers a

plethora of models choose from. The decision to buy the car

means the buyers have covered half the distance they need

to travel to own their dream car. The second half, which is

probably the more difficult path begins with the question

"How are you going to pay for it?" i.e. whether the buyers

wants to buy the car by their own funds or they want to

finance it.

The current sluggish market conditions coupled with

the lowering of the inter rates; have made the car finance

market extremely competitive. Final companies, dealers and

manufacturers are wooing buyers with special offers/ such as

low interest rates.

To select the best cat loan scheme that suits the

customer, it is necessary for the customer to first make

himself familiarize with the mechanics of this market after

which the customers will be in a better position to make up

their mind.

With the popularity of financing the problem of

recovery has also borrowing for houses and appliances.

Therefore, it is not infrequent that a person with multiple

liabilities for funding his assets can sometime find it difficult

to meet all his obligations in time. Now, come the question -

how to recover the loan? In eve finance company, there is a

specified loan recovery procedure. But even they are facing

the problem of non-recovery of loan. Non recovery of

installments as well as interest on the loan portfolio negates

the effectiveness of the process of the credit cycle. Non

recovery also affects the profitability of lenders besides

required to maintain additional owned funds by way of

capital and provisions recovery.

This report will elaborate the basics of car finance, the

various terms and some insights into how the car loan

schemes work. It also contains collection strategy to be

adopted for delinquency management.

INTRODUCTION

Finance plays an important role in economy. As

banks, credit unions, and other financial institutions

provide credit, they help expand the economy by directing

funds from savers to borrowers. For example, a bank

acquires large amounts of money from the deposits of

individual savers. The bank does not let this money sit idle

but instead provides loans to borrowers who might then

buy a house / car or expand a business. The savings of

millions of people percolate through many financial

institutions, spurring economic growth. Thus the modem

economic activities of any country cannot be imagined

without money capital. every country has its own

monetary and financial institutions, which restates the

circulation of money and provide financial'" assistance of

money and provide financial assistance to all economic

activities. A wide variety of financial institutions have

different roles in finance and the economy. The institutions

of classified into two categories:

1) Banks and

2) Non - Bank financial institutions

Automobile industry produces automobiles and other

gasoline-powered vehicles, such as cars, buses, trucks, and

motorcycles etc. Automobile industry is one of the most

important industries in the world, affecting not only the

economy but also the cultures of the world. It provides jobs

for millions of people, generates billions of dollars in

worldwide revenues, and provides the basis for a multitude

of related service and support industries. Automobiles

revolutionized transportation in the 20th century, changing

forever the way people live, travel and do business.

Here, we are mainly concerned with the car industry

that is a part of the, automobile industry. Day by day the car

industry is growing with a very fast speed. In India, the

competition in the car industry has been increasing a lot

over a few years. Today, both in the petrol as well as diesel

there is a lot of competition in our country.

The days have gone when people were known only with

few cars like

Ambassador, Maruti 800, Premier Padmini etc. With the

automation computerization increased competition and

changed customer perception and consciousness, a lot of

cars have come into being in our country in every segment:

be it compact segment, mid segment or multi utility etc.

Below is given the different segments in which different cars

fall.

VARIOUS SEGMENTS OF CAR

Cars according to certain parameter (i.e. on the basis of

price) can be

Classified under following segments:

1. SMALL SEGMENT: -Ranging from 2 Lac to 6

Lac

Maruti 800

Maruti Wagon R

Maruti Alto

Maruti Zen

Daewoo Matiz

Fiat Uno

Tata Indica

Hyundai Santro

2. MID SEGMENT - Ranging from 4 Lac to 6 Lac

Maroti Esteem

Ford Ikon

Fiat Siena

Hyundai Accent

HM's Ambassador

GM's Opel Corsa

3. LARGE SEGMENT - Ranging from 6 lac to 10 Lac

Maruti Baleno

HM's Contessa

HM's Lancer

OM's Opel Astra

Honda City

Honda Accord

4. PREMIUM SEGMENT Ranging from 10 Lac to 15 Lac

Mercedes Benz E-Class

Mercedes Benz C-Class

Hyundai Sonata

5. SPORTS AND MULTI UTIUTY SEGMENT

M & M's Classic

M & M's Marshal

M & M's Voyager

M & M's Bolero

M & M's Armada

Tata Sierra

Tata Sumo

Tata Safari

Bajaj Challenger

Bajaj Gama

Bajaj Judo

Bajaj Trax

Bajaj Traveller

HM's RTV

The focus of the project is to make a comparative study

of car loan schemes of S.E. Investments Limited with some

other financial institutions. In fact the scope of car finance

has been increased with the growth in the car industry. The

growth of passenger car industry is closely related to the

market dynamics as the economic liberalization has paved

the way for increased activities in this vital industry, Earlier

the restrictive policies of the GOI didn't allow the foreign

players to set up shop in India. This has adversely affected

the technological upgradation of the domestic car

manufacturers. But with the opening up of the economy,

several global automobile companies did set up their plants

and started production, Estimates show that between 2002-

03 is considered as the peak year of industrial growth in the

current decade, the car sales have gone up by 19%. Since

then, the economy slumped into recession and the auto

industry too slowed down. But during the year 2005-06, the

Combined Annual Growth Rate (CAGR) stands at 17.6%. And

no doubt, such a rise in the sale of the car industry has given

a positive sign for the financial institutions.

HDFC BANK LIMITED

PROFILE

The Housing Development Finance Corporation Limited

(HDFC) was amongst the first to receive in 'in-principle'

approval from the Reserve Bank of India (RBI) to set up a

bank in the private sector, as part of the RBI's liberalization

of the Indian Banking Industry in 1994. The bank was

incorporated in August 1994 in the name of 'HDFC Bank

Limited', with its registered office in Mumbai, India. HDFC

Bank commenced operations as a Scheduled Commercial

Bank inJanuatyl995.

Business Focus:

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

Bank. The Bank's aim is to build sound customer franchises

across distinct businesses so as to be the preferred provider

of banking services in the segments that the bank operates

in and to achieve healthy growth in profitability, consistent

with the bank's risk appetite. The bank is committed to

maintain the highest level of ethical standards, professional

integrity and regulatory compliance. HDFC Bank's business

philosophy is based on four core values: Operational

Excellence, Customer Focus, Product Leadership and People.

Distribution Network:-

HDFC Bank is headquartered in Mumbai. The Bank at

present has an enviable network of over branches spread

over cities across the country. All branches are linked on an

online real-time basis. Customers in 90 locations are also

serviced through Phone Banking. The Bank's expansion plans

take into account the need to have a presence in all major

industrial and commercial centres where its corporate

customers are located as well as the need to build a strong

retail customer base for both deposits and loan products.

Being a clearing/settlement bank to various leading stock

exchanges, the Bank has branches in the centres where the

NSEIBSE have a strong and active member base.

The Bank also has a network of over networked A TMs

across these cities. Moreover, HDFC Bank's A1M network can

be accessed by all domestic and international

Visa/MasterCard, Visa Electron/Maestro, Plus/Cirrus and

American Express Credit/Charge cardholders.

Capital Structure:-

The authorized capital of HDFC Bank is Rs.450 crore

(Rs.45 billion). The paid-up capital is Rs.282 crore (Rs.28.2

billion). The HDFC Group holds 24.2% of the bank's equity

while about 13.1 % of the equity is held by the depository in

respect of the bank's issue of American Depository Shares

(ADS/ADR Issue). The Indian Private Equity Fund, Mauritius

(IPEF) and Indocean Financial Holdings Ltd., Mauritius (IFHL)

(both funds advised by J P Morgan Partners, formerly Chase

Capital Partners) together hold about 5.5% of the bank's

equity. Roughly 27.5°, 10 of the equity is held by FIls,

NRls/OCBs while the balance is widely held by about.

214,000 shareholders. The shares are listed on The Stock

Exchange, Mumbai and the National Stock Exchange. The

bank's American Depository Shares are listed on the New

York Stock Exchange (NYSE) under the symbol "HDB".

Technology: -

HDFC Bank operates in a highly automated

environment in terms of information technology and

communication systems. The entire bank's branches have

connectivity which enables the bank to offer speedy funds

transfer facilities to its customers. Multi-branch access is

also provided to retail customers through the branch

network and Automated Teller Machines (ATMs).

The Bank has prioritized its engagement in technology

and the internet as one of its key goals and bas already

made significant progress in web--enabling its core

businesses. In each of its businesses, the Bank has

succeeded in leveraging its market position, expertise and

technology to create a competitive advantage and build-

market share.

Business-Profile:-

HDFC Bank caters to a wide range of banking services

covering commercial and investment banking on the

wholesale side and transactional/branch banking on the

retail side. The bank has three key business areas

A) Whole sale Banking Services

The Bank's target market is primarily large, blue-chip

manufacturing companies in the Indian corporate sector and

to a lesser extent, emerging mid-sized corporate. For these

corporate, the Bank provides a wide range of commercial

and transactional banking services, including working capital

finance, trade services, transactional services, cash

management, etc. The bank is also a leading provider of

structured solutions which combine cash management

services with vendor and distributor finance for facilitating

superior supply chain management for its corporate

customers. It is recognized as a leading provider of cash

management and transactional banking solutions to

corporate customers, mutual funds, stock exchange

members and banks.

B) Retail Banking Services

The objective of the Retail Bank is to provide its target

market customers a full range of financial products and

banking services, giving the customer a one-stop window for

all his/her banking requirements. The products are backed

by world class service and delivered to the customers

through the growing branch network, as well as through

alternative delivery channels like A This, Phone Banking, Net

Banking and Mobile Banking. The Bank also has a wide array

of retail loan products including Auto Loans, Loans against

marketable securities, Personal Loans and Loans for Two-

wheelers. It is also a leading provider of Depository Services

to retail customers, offering customers the facility to hold.

their investments in electronic form.

HDFC Bank was the first bank in India to launch an

International Debit Card in association with VISA (VISA

Electron) and issues the MasterCard Maestro debit card as

well.

C) Treasury Operations

Within this business, the bank has three main product

areas - Foreign Exchange and Derivatives, Local Currency

Money Market & Debt Securities, and Equities. With the

liberalization of the financial markets in India, corporate

need more sophisticated risk management information,

advice and product structures.. To comply with statutory

reserve requirements, the bank is required to hold 25% of its

deposits in government securities. The Treasury business is

responsible for managing the returns and market risk on this

investment portfolio.

Rating:

HDFC Bank has its deposit programmes rated by two

rating agencies - Credit Analysis & Research Limited (CARE)

and Fitch Ratings India Pvt. Ltd. The bank was one of the first

four companies which subjected itself to a Corporate

Governance and Value Creation (GVC) rating by the rating

agency, The Credit Rating Information Services of India

Limited (CRISIL). The rating provides an independent

assessment of an entity's current performance and an

expectation on its "balanced value creation and corporate

governance practices" in future. The bank has been assigned

a 'CRISIL GVC Level rating which indicates that the bank's

capability with respect to wealth creation for all its

stakeholders while adopting sound corporate governance

practices is the highest.

PRODUCT RANGE

SAVING FIXEDDEPOSIT CURRENT &

DEMAT A/C

INNOVATIVE

SERVICESLOANS

SAVING A/C

SWEEPIN A/C

HDFC BANK PLUS

DEMAT A/C

SUPER SAVER A/C

ATM

PHONE BANKING

MOBILE BANKING

NET BANKING

INTERNATIONAL DEBIT CARD

INTER GITY INTER BRACH BANKING

PERSONAL LOANS

NEW & USED CAR LOANSTWO WHEELAR & CONSUMER LOANS

LOAN AGAINST SHARES

INSURANCE

MUTUAL FUNDS

CAR FINANCING

CAR FINANCING

WHY...?

Before the availability of car financing scheme a

person have to wait for the acquisition of car until he had

saved money sufficient to buy car. In other words even an

officer of a car or government would not be able to buy a

car until he was in his late 40's. His priority would have

been to save money for the education of his children and

then to buy a house or an apartment. The car would have

been the last priority. However with attractive loan

financing schemes for Children Education, Housing

Finance and last but not the least the Car Financing

Schemes, a person can acquire a house as well as a car

once he gainfully employed and -at the same time he can

fund his children to schools and colleges by financing

their, through educational loans.

It is therefore evident that the financing schemes

have created whole new industries and have been

advancing the cause of Industrialization of the country.

The creation of jobs, small trade opportunities and

new lifestyles are some of the benefits of these financing

schemes. One can see various models of new car and

motorbikes in almost every Indian cities road. This would

have not been possible without the car financing

schemes. In order to support these industries, the

government has, also provided various tax breaks such as

allowing interest paid on these loans as tax - deductible

payments

MAJOR CAR FINANCERS IN Meerut

BANKS NBFCs

SBI

PNB

Canara

Bank

SB of

Hyderabad

SB of

Allahabad

Central

Tata

Finance

Sundara

m

Bajaj

Auto Finance

S.E.

Investments

Bank

Bank of

Baroda

HDFC

Limited

Mahindr

a

Manjula

DEFAULT IN CAR FINANCE

MEANING OF DEFAULT

Repeated prolonged delays and dishonored cheques deem

to be default.

According to RBI "Default means non-payment of any

principal debt or interest thereon on any other amount

payable by a borrower to any secured creditor consequent

upon which the account of such borrower is classified as

non-performing asset in the books of accounts of the

secured creditor in accordance with the dictions or

guidelines issued by the Reserve Bank"

TYPES OF DEFAULT:

A. Willful default:-If the borrower does not

pay though he has to pay, wrong use of funds; and

siphoning of funds is called willful default.

B. Unwillful default:- Means borrower who is

willing to pay the dues but due to certain reasons which

are/were beyond his control could not receive the funds

receipts for payment of dues, such borrower may be

termed as unwillful defaulter.

REASONS FOR DEFAULT

A. Unaware of the cheque being presented if awareness

calling has not happened.

B. Unable to fund the account on the cycle date of the

month.

C. Customer has issued PDC's from multiple bank

accounts and has funded a wrong account.

D. Deliberate default, skip and fraud.

MEASURES TO GET RID OF DEFAULT

Measures are divided into two phases:

1. Pre Sanction Measure

2. Post Sanction Measure

PRE SANCTIN MEASURES

A. Before sanctioning a loan, a financer conduct a

Field Investigation to verify the following:

CHARACTER: - The word character

implies a number of personal characteristics of a

person, e.g., honesty, integrity, regularity and

promptness in fulfilling his promises and repaying the

dues, sense of responsibility, good habits and the

reputation and goodwill which he enjoys in the eyes of

others.

CAPACITY: - The success of an

enterprise largely depends upon the ability,

competence and experience of the entrepreneur. If the

borrower possesses necessary technical skill,

managerial ability and experience to run a particular

industry or trade, success of such unit may be taken for

granted and the banker will consider him a deserving

case for granting an advance.

CAPITAL: - Banks are the

repositories of the public money and the borrowed

money. The banker therefore does not lend money to

an entrepreneur without adequate funds of his own. In

case of failure of the business enterprise the banker

will be to realize his money if the borrower own capital

is sufficient.

B. Bank takes the necessary follow up action to

ensure that the loans are actually utilized for the

purpose for which they are sanctioned.

C. Normally, a bank obtains any security which may

be available such as goods or other asset, a life

insurance policy or other collateral security or the

guarantee of the third party.

D. The banker obtains the necessary documents.

POST SANCTION MEASURES:-

A. Monitoring of the account

B. Issuance of notices to the borrower as well as to the

guarantors

C. Personal contact

D. Telephone persuasion

E. Registration notice

F. Legal notice

G. Filling of suit

H. Taking over of possession

CAR FINANCE FIELD INVESTIGATION REPORT

Borrower Guarantor

1. Name

2. I. Address Verification Correct /Incorrect Correct/Incorrect

II. Office / Business

Premises address

Correct / Incorrect Correct /

Incorrect

III. Tel No. (s) Correct / Incorrect Correct /

Incorrect

IV. Family details

furnished

Correct' Incorrect

Could not verify

Correct /

Incorrect

Could not verify

V. House Rented/ owned /

Ownership / Could

not be verified

Rented / owned /

Ownership /

Could not be

verified

VI. Period of stay - years

3. Type of house

Approx. Area

4. Checked with any

Existing customer

(state name and

contact number)

Name

5. Was there any

Corroboration done

with any neighbor

Yes/ No Yes/ No

CAR LOANS

LOANS

Meaning of Loan:-

An arrangement in which a lender gives money or

property to a borrower and the borrower agrees to return the

property or repay the money, usually along with interest at

some future point (s) in time.

LOAN SYSTEM

Under the loan system, credit is given for a given

purpose and for a predetermined period. Normally, these

loans are repayable in installments. Funds are required for

single non - repetitive transactions and are withdrawn only

once. If the borrower needs funds again or wants renewal of

an existing loan, a fresh request is made to the bank. Thus a

borrower is required to negotiate every time he is taking a

new loan or renewing an existing loan. Banker is at liberty to

grant or refuse such a request depending upon his own cash

resources and the credit policy of the central bank.

ADVANTAGES OF LOAN SYSTEM

1) Financial Discipline on the Borrower:- As the time

of repayment of the loan or its installments is fixed in

advance, this system ensures a greater degree of self -

discipline on the borrower as compared to the cash

credit system.

2) Periodic Review of Loan Account:- Whenever any

loan is granted or its renewal is sanctioned, the banker

gets an opportunity of automatically reviewing the loan

account. Unsatisfactory loan account may be

discontinued at the discretion of the banker.

3) Profitability: - The system is comparatively simple,

Interest accrues to the bank on the entire amount lent

to a customer.

DISADVANTAGES OF LOAN SYSTEM

1) Inflexibility every time a loan is required; it is to be

negotiated with the banker. To avoid it, borrowers may

borrow in excess of their exact requirement to provide

for any contingency.

2) Banks have no control over the use of funds borrowed

by the customer. However, banks insist on

hypothecation of the asset /vehicle purchased with loan

amount.

3) Though the loans are for fixed periods, but in practice

they roll over, i.e., they are renewed frequently.

4) Loan documentations are more comprehensive as

compared to cash credit system.

TYPES OF LOAN

The various types of loans are as follows:

1. SHORT - TERM LOANS: - Short terms loans are

usually granted to meet the working capital needs of

the borrowers. Usually one year or less, often used to

refer to bonds or shorterm loans.

2. MEDIUM - TERM LOANS :- Medium terms loans

repayable over a period, ranging from one year to

seven years, are granted for the purchase of durable

goods like tractors ai1d vehicles, equipments for

professionals and other tools and machinery, etc.

3. LONG - TERM LOANS:- Long terms loans, are

generally called "term loans", are extended by banks,

and other tenn lending institutions for meeting the

requirements of capital investment in industry or

agriculture.

4. COMPOSITE - LOAN: - When a loan is granted

both for buying equipments and for working capital

purposes specially in case of small borrowers it is called

composite loan.

5. SECURED WANS:- A loan, which is backed by

assets belonging to the borrower in order to decrease

the risk assumed by the lender. The assets may be

forfeited to the lender if the borrower fails to make

necessary payments.

6. UNSECURED WANS: - Unsecured loans or

advance means a loan or advance not so secured.

Unsecured. loans are also known as clean advances and

are obviously granted to parties enjoying high

reputations and sound financial position.

7. DEMAND LOAN: - A loan which is repayable on

demand (i.e. without prior notice), rather than on a

specific date.

PRINCIPLES OF SOUND LENDING

There are 5 cardinal principles of bank lending that has

been followed by the commercial banks since long. These

are the principles of

Safety

Liquidity

Profitability

Purpose of the Loan

Principle of Diversification of Risks

Central government & Reserve Bank have issued

number of directions in this regard, highlighting, the social

purpose, which they have to subserve

1) SAFETY: - As the bank lends the funds entrusted

to it by the depositors, the first and foremost principle

of lending is to ensure safety of the funds lent. By

safety is meant that the borrower position to repay the

loan, along with interest, according to the contract. The

repayment of the loan depends upon the borrower's (1)

capacity to pay, and (2) willingness to pay. The former

depends upon his tangible assets and the success of his

business; if he is successful in his efforts, he earns

profit and can repay the loan promptly. Otherwise, the

loan is recovered out of the sale proceeds of his

tangible assets. The willingness to pay depends upon

the honesty and character of the borrower. The banker

should, therefore, take utmost care in ensuring that the

enterprise or business for which a loan is sought is a

sound one and the borrower is capable of carrying it out

successfully. He should be a person of integrity, good

character and reputation.

2) LIQUIDITY:- Banks are essentially

intermediates for short-term funds. Therefore, they

lends funds for short periods and mainly for working

capital purposes. The loans are, therefore largely

payable on demand. The banker must ensure that the

borrower is able to repay the loan on demand or within

a short period. This depends upon the nature of assets

owned by the borrower and pledged to the banker. For

example, goods and commodities are easily marketable

while fixed assets like land buildings and specialize

types of plants and equipments can be liquidated after

a time interval. Thus, the banker regards liquidity as

important as safety of the funds and grants loans on

the security of the assets, which are easily marketable

without much loss.

3) PROFITABILITY:-commercial banks are

profit earning institutions; the nationalized

banks are no exception to this. They must employ their

funds profitably so as to earn sufficient income. The

sound principle of lending is not to sacrifice safety or

liquidity for the sake of higher profitability. That is to

say that the banks should not grant advances to

unsound parties with doubtful repaying capacities, even

if they are ready to. pay a very high rate of interest.

Such advances ultimately prove to be irrecoverable to

the detriment of the interest f the bank and its

depositors.

4) PURPOSE OF THE LOAN:- while lending his

funds, banker requires of the purposes for which he

seeks the loan. Banks do not grant loan for each and

every purpose - they ensure the safety and liquidity of

their funds by granting loans for productive purposes

only. Loans are not advanced for speculative and

unproductive purposes 'like social functions and

ceremonies or for pleasure trips or for the repayments

of a prior loan.

5) PRINCIPLE OF DIVERSIFICATION OF RISKS:

- This is also a cardinal principal of sound lending. The

banker should not grant advances to a few big firms

only or to concentrate them in a few industries or in a

few cities or regions of the country only. The advances,

on the other hand, should be over a reasonably wide

area, distributed amongst a good number of customers

belonging to different trades and industries. The banker

thus diversifies the risk involved in lending. If a big

customer meets misfortune, or certain trades or

industries are affected adversely, overall position of the

bank will not be in jeopardy.

CAR LOAN PROCEDURE

Based on the initial quotes from a

number of financiers you need to shortlist a set you

think that suit your requirement the best. There after

you should bargain with the selected set for the best

deal.

Once you have finalized your

financier and the scheme details, the sales person from

the selected financier will give you the final quote and

request for the documents that he has already

appraised you of. On collecting the necessary

documents, the sale person initiates the approval

process. Based on your documents, your eligibility is

determined (mainly the principal amount, tenure and

IRR). On being found eligible, the financier conducts a

Field Investigation to verify your address and a few

other basic details. Sometimes, if applicable, your credit

history is also cross-checked with other financiers.

Once the Field Investigation gives the

green signal, the scheme is processed Down Payment

and Post Dated Cheques (PDC) towards the installment

payment are collected from you by the financier and

the appropriate agreement (depending on the nature of

financing) is signed.

Thereafter the financiers make

payment of the necessary amount to the dealer toward

the purchase of your car. The financier will give you a

Amortization table to indicate the repayment dates.

On delivery of the car it is registered

and insured, and an entry is made in the RC book to

indicate the claim of the financier on the car. A copy of

the RC Book has to be submitted with the financier.

FLOW CHART FOR OBTAINING CAR LOAN

Proposal

Field Investigation

Valuation

(Only for property based)

If satisfied with F.I. If not satisfied with

F.I.

Loan Sanctioned Loan not

Completion of File

Deposit of initial Amount

Issue of draft In Favour of Supplier

Issue of Insurance Cover note

Delivery of Car

Noting of Company Hypothecation Charge in the Books of

RTO

PRECAUTIONS WHILE GRANTING LOANS

A banker must take the following precautions:

PRECAUTIONS BEFORE SANCTIONING A LOAN

2) The applicant for a loan must be properly introduced to

the banker the banker must try to know the background

of the applicant, i.e., the credit worthiness of the

borrower or a person. Such credit worthiness is judged

by the banker on the basis of (1) character (2) capacity,

and (3) capital

Character :- the word character implies and

includes a number of personal characteristics of a

person, e.g., his honesty, integrity, regularity and

promptness in fulfilling his promises and repaying

the dues, sense of responsibility, good habits and

the reputation and goodwill which he enjoys in the

eyes of others.

Capacity : - the success of an enterprise

largely depends upon the ability, competence and

experience of the entrepreneur. If the borrower

possesses necessary technical skill, managerial

ability and. experience to run a particular industry

or trade, success of such unit may be taken for

granted and the banker will consider him a

deserving case for granting an advance.

Capital: - Banks are the repositories of the

public money and the borrowed money. The

banker, therefore does not lend money to an

entrepreneur without adequate funds of his own.

In case of failure of the business enterprise the

banker will be able to realize his money if the

borrower's own capital is sufficient.

3) The bank should take the necessary follow up action to

ensure that the loans are actually utilized for the

purposes for which they are sanctioned.

4) Normally, a bank is expected to obtain any security

which may be available such. as goods or other assets,

a life insurance policy or other collateral security or the

guarantee of the third party

PRECAUTIONS AFTER SANCTIONING A LOAN

1) The banker must directly make payment to the dealer

m vehicles on the basis of Performa invoice, to ensure

that the loan is properly utilized.

2) The vehicles to be purchased must be hypothecated to

the bank and the interest of the bank in vehicle must

be noted in the registration book and a certificate to

this effect must be issued by the Regional Transport

Office (R.T.O.).

3) The banker must insist that the borrower takes a

comprehensive insurance policy on the vehicle in the

joint names of the borrower and a banker for its full

value. The policy must continue till the entire amount of

the loan is repaid.

4) The loan must be repaid in Five I Seven years in

monthly I quarterly installments. The banker must

ensure that the borrower pays the installments

regularly.

5) The banker must obtain the necessary documents.

6) The rate of interest should be mentioned.

HDFC CAR LOANS

Car Loan- New Car Loan

Advantages of New Car Loans Services.

Speedy processing - within 48 hours.

Covers the widest range of cars and multi-utility

vehicles in India. (. Whatever the car you choose,

we finance you, for up to 90000of its invoice

value.

Flexible repayment options - 12 to 60 month

period.

Attractive car loan plans.

Among the lowest interest rates.

Hassle-free documentation.

Prepayment - prepay the loan anytime after 6

months at a small

Charge.

Special rates for HDFC Bank account holders.

SCHEMES FOR NEW CAR LOANS

Auto Loan Takeover Plan

Requirements:

Facility is available to only HDFC bank account

holders (CASA).

All terms and conditions applicable for the used

car product are applicable for the Loan take over

product.

Minimum 9 month old loan with any approved

Financier with dear repayment track record

Advantage platinum Credit Card

Plan

If you are a salaried individual holding any of the credit

cards mentioned below, your loan gets processed faster.

HDFC Bank International Credit Card. Citibank

Gold

Citibank Diners

HSBC Gold

ANZ Grind lays Gold

American Express Gold Card. American Express

Charge Card

Standard Chartered Gold

No Income-Document Loan Plan

This Loan Plan removes all income document

requirements. You can get a loan for a car without proof of

income.

Under this plan, the loan amount would be as

much as 600/0 of the car invoice value.

The tenure of loan can be a maximum of three

years.

100% Loan Plan with Fixed Deposit Lien

This allows you to take a loan against your deposit at HDFC

Bank.

You can get a loan for 1000/0 of the invoice value

amount with the required margin placed as a fixed

deposit in HDFC Bank.

Lien is marked on the specified deposit.

Installments can be paid separately or out of the

deposit (if deposit is large enough).

NRI Loans

NRIs can avail of new car loans from HDFC Bank for the use

of the vehicles by their relatives in India. Additional

documents required are as follows:

Contract copy and salary slip of NRI.

Endorsement on passport for last 3 years.

Proof of ownership of property.

Post-dated cheques must be from the resident

account of the borrower.

Approval Plan

If you have an HDFC Bank Preferred Account or a

Corporate Salary Account with HDFC Bank for more than six

months, you can get fast approvals on your loans with

minimal documentation

Car Loan - Used Car Loans

Advantages of our Used Car Loans Services

You can choose any car manufactured in India

within a certain age*. * 6 years for premium

vehicles, 7 years for standard vehicles and up to 8

years (only for salaried individuals) on select

vehicles.

Choose flexible loan repayment schedules.

Get up to 80% finance of the value of the car.

Repay in easy installments of 12 to 48 months.

Avail of the lowest interest rates.

If you are an HDFC Bank account holder, we have

got special benefits for you.

SCHEMES FOR USED CAR LOANS

Credit Card Plan

For a salaried individual and hold any of the cards mentioned

below, your loan request gets processed faster than normal.

Citibank Gold

Citibank Diners

HSBC Gelid

ANZ Grind lays Gold

American Express Gold Card

American Express Charge Card

Standard Chartered Gold

60-Miute approval products

If a person has a HDFC Bank Preferred Account or a

Corporate Salary Account with us for more than 6 months,

you can get fast approvals on your loans with minimum

documentation.

NRI Loans

NRls can avail of Used Car Loans from HDFC Bank, for use of

the vehicles by their relatives in India. Additional documents

required are as follows:

Contract copy and salary slip of NRI.

Endorsement on passport for last 3 years.

Proof of ownership of property.

Post-dated cheques must be from the resident

account of the borrower

No Income-Document Loan Plan

If one do not wish to submit income documents, it's OK. You

can get a car loan without proof of income.

Under this scheme, you get the loan amount up to

60% of the car invoice value.

The tenure of loan can be a maximum of 3 years.

100% Loan Plan with Fixed Deposit Lien

This allows one to take a loan against your deposit at HDFC

Bank.

You can get a loan for 100% of the invoice value

amount with the required margin placed as a fixed

deposit in HDFC Bank.

Lien is marked on the specified deposit.

Installments can be paid separately or out of the

deposit (if deposit is large enough).

Eligibility For New And Used Car Loans.

For salaried individuals :

Minimum age of Applicant 21 years

Maximum age of Applicant at loan maturity: 58

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

For 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: Net profit Rs. 60000 p.a

for standard cars and Rs.100000 p a for mid-sized

and premium cars

Telephone: Must at residence

For partnership firms:

Minimum Income: Net profit Rs. 60000 p.a for

standard cars and RS.100000 P a for mid-sized

and premium cars

Minimum turnover: Turnover Rs 4.5 lacs

Telephone: One phone at least at business and at

residence of the loan executing partner

For private limited company:

Minimum Income: Net profit Rs. 60000 p.a for

standard cars and RS.100000 P a for mid-sized

and premium cars

Minimum turnover: Turnover Rs 4.5 lacs

Telephone: One phone at least at business

premises

For public limited company:

Minimum Income: Net profit Rs. 60000 p.a for

standard cars and Rs.100000 p a for mid-sized

and premium cars

Minimum turnover: Turnover Rs 4.5 lacs

Telephone: One phone at least at business

premises

Documentation for New and Used Car

Loans

For salaried individuals:

Proof of Identity:- Passport copy, PAN Card, Voters

Id car, driving licence (Laminated, Recent, Legible.

Income Proof:- Latest salary slip with form 16.

Address Proof:- Ration card/Driving licence/Voters

card/passport copy/telephone bill/ electricity

bill/Life insurance policy PAN Card.

Bank Statement- Not mandatory

For self employed:

Proof of Identity:- Passport copy, PAN Card, Voters

Id car, driving licence ( Laminated, Recent,

Legible)

Income Proof:- Latest ITR. Address Proof:- Ration

card/Driving licence/Voters card/passport

copy/telephone bill/ electricity bill/Life insurance

policy PAN Card.

Bank Statement- Waived for small cars, for mid -

sized and premium cars if income is greater than

Rs 1.5 lacs then bank statement requirement can

be waived.

For partnership firms:

Proof of Identity:- NA

Income Proof:- Audited balance sheet, Profit & loss

Account for latest two years and the latest 2 years

IT returns of the company

Address Proof:- Telephone Bill/Electricity Bill/Shop

& Establishment Act certificate/SSI registered

certificate/Sales Tax certificate

Bank 5tatement- Waived for small cars, for mid -

sized and premium cars if income is greater than

Rs 1.5 lacs then bank statement requirement can

be waived.

For private limited company:

Proof of Identity:- NA

Income Proof:- Audited balance sheet, Profit & loss

Account for latest two years and the latest 2 years

IT returns of the company

Address Proof:- Telephone Bill/Electricity BiII/Shop

& Establishment Act certificate/SSI registered

certificate/Sales Tax certificate

Bank Statement- NA

For public limited company :

Proof of Identity: - NA

Income Proof:- Audited balance sheet, Profit & loss

Account for latest two years

Address Proof:- Telephone Bill/Electricity Bill/Shop

& Establishment Act certificate/SSI registered

certificate/Sales Tax certificate

Bank Statement- NA

Frequently Asked Questions About New Car

Loans

Who can avail of HDFC Bank New Car Loans?

To avail of a New Car Loan you need to be in one of the

following categories:

Salaried individuals in the age group of 21 to 60

years (at the end of the tenure)

Self-employed individuals in the age group of 21

to 65 years (at the end of the tenure)

Partnership Firms

Public & Private Ltd. companies

Which cars can be financed?

HDFC Bank finances most passenger cars and multi-utility

vehicles manufactured by India's leading automobile

companies.

How much finance can I avail of?

You can borrow up to 90% of the invoice value. But if you so

desire, the minimum loan amount is RS.1 lakh.

What are the tenure options?

The choice is yours. You can choose any repayment option

from 12 to 60 months all specially designed to suit your

requirements.

How long will it take to process the loan?

Within 48 hours of completing documentation.

Does one have the option of pre-paying the entire

loan amount?

Yes. One can pre-pay the loan any time after 6 months of

availing of the loan. One merely has to pay a small

prepayment fee on the outstanding loan amount.

If one doesn't have an account with HDFC Bank, can

one still avail of loans?

Of course, one can get an HDFC Bank Car Loan. You need

not necessarily have an account with us.

Does one need a guarantor?

Generally no. But if your income does not meet our credit

criteria, then you may be required to have a guarantor for

this loan.

Frequently Asked Questions About Used

Car Loans

Who can avail of HDFC Bank Used Car Loans?

If you are looking for your dream car, and loan to buy it,

you've come to the right place. You have to fall into any of

the following categories

Salaried individuals in the age group of 21 to 60

years (at the end of the tenure)

Self-employed individuals in the age group of 21

to 65 years (at the end of the tenure)

Partnership Firms

Public & Private Ltd. companies

Which cars can be financed?

HDFC Bank finances most passenger cars and multi-utility

vehicles manufactured by India's leading automobile

companies, Maruti 800, Omni, Zen, Esteem, Baleno, Wagon

R, Honda City, Opel Astra & Corsa, Ford Escort & Ikon,

Hyundai Accent & Santro, Daewoo Matiz & Cielo, Tata Indica,

Safari, Sumo, Fiat Siena & Uno and Mitsubishi Lancer. So

choose the car from the extensive list and apply right away.

How much finance can one avail of?

If you so desire, you can borrow up to 800/0 of the invoice

value.

What are the tenure options?

The choice is with you. You can choose from any of the 4

well-paced repayment options of 12, 24,36 or 48 months all

specially designed to suit your requirements.

How long will it take to process the loan?

Within 48 hours of completing documentation.

Do one have the option of pre-paying the entire loan

amount?

Yes. You can pre-pay the loan any time after six months of

availing of the loan. You merely have to pay a small

prepayment fee on the outstanding loan amount

If one doesn’t have an account with HDFC Bank, can I

still avail of loans?

Of course, you can get HDFC Bank Car Loans. You need not

necessarily have an account with us.

Do one need a guarantor?

Generally no. But if your income does not meet our credit

criteria, then you may be required to have a guarantor to

stand surety for your loan.

So how does one get HDFC Bank Car Loans?

It's quite simple. You can either meet us at an HDFC Bank

Branch convenient to you. Or visit any of the HDFC Bank

preferred dealerships or you could also call us and we will

promptly send an HDFC Bank associate over to you.

FORM FOR CAR LOAN

Kindly share with us a few details about yourself and our

representative shall get in touch with you.

All fields are mandatory

First Name

Last Name

Email Id

Tel. No. - Residence

Tel. No.-0ffice Ext.

Mobile No.

Loan Required

City

Occupation

Company#

Designation#(# Required for

Salaried)Income per annum

(Net Income for salaried employees /

Business Income as per ITR for non-salari

RECOVERY PROCESS

HDFC BANK: RECOVERY PROCES

ROLE OF A COLLECTION MANAGER

Collection manager plays an important role in HDFC bank.

He/She is responsible for delinquency management in a

particular location on the portfolio assigned to him. He/She

is expected to perform his duty as a team leader, guide and

as a facilitator for the staff and vendor at his disposal.

For effective discharge of his duties, a collection manager

need to interact with other departments / functions like

business, credit, operations and legal.

The relation of the customer with the company with the

disbursement of the loan and continues till the end of his

loan tenure. In order to achieve the goal of controlling

delinquency, it is important for collectors to maintain

continuous contact and good relations with the customer

throughout the tenure of the loan.

PERSONS INVOLVED IN COLLECTION

PROCESS

Daily Recovery executives

Senior Recovery Head

Sales executive

Recovery Advisor

COLLECTION STRATEGY

The Collection Strategy at HDFC Bank is attuned to the

nature of product and is in line with the kind of risks involved

in the same. Collection is done using all the tools like in

house telecalling, dunning letters, field collections through

agencies, possessions of assets, sale of possessed assets

and legal action.

Broadly, the Collection Strategy will be as follows :

Awareness calling is initiated with the purpose of

ensuring minimum cheque returns and also to identify

non-starters, frauds and skips at an early stage.

To organize collection follow -up coverage for

delinquent accounts in a cost-effective manner, efforts

will be made to focus on early buckets and to minimize

the forward flows to higher buckets.

Collection follow up will be done through

telecalling and or field visit. Dunning letters will also be

used for specific purpose / special cases.

In-house telecallers (or outsourced telecallers operating

inhouse) and pickup boys will be used for all Tele

collections. External collection agencies may be used

for field collections.

In house collectors can recommend accoW1ts to

held agencies through the collection manager for

reasons like.

1. To establish contact with a no-contract case or

2. To follow up on a ~Promise to pay', or a

broken promise

3. To accelerate / intensify follow up.

As a last report possession of assets to be

initiated and the asset is to be as prescribed in this

policy. Legal action should be initiated.

A. AWARENESS CALLING

The details of fresh cases booked during the previous month

(awareness data) and whose EMI PDC's are being deposited

for the first time is sent to the collection manager on a

monthly basis. Telecalling is done to all these customers

informing them of their EMI cheque being presented and the

cycle date for future EMI's, this process is known as

awareness calling.

The awareness data contains the demographic details,

loan/assets & PDC start / cycle date.

Through awareness calling the customer is informed of the

date of presentation of his first EMI Cheque, on account of

loan obtained from S.E. Investment. Also the cycle date for

future presentation of PDC in every month is informed to

him. This enables the customer to make arrangements for

honouring the cheque, in case it is not provided for.

Awareness calling holds a very special importance to

collection as during awareness calling important information

can be gathered, viz

a) Customer contractibility

b) Correctness or otherwise of address

c) Correctness or otherwise of phone

numbers

d) Additional landmarks to the address

e) Confirming asset delivery

f) Obtaining vehicle registration numbers'

g) Early warning about customer being a

skip if no contact established.

h) Disputes-services issue of any.

B. COLLECTION CALLING

Start collection calling to all customers through in-house

/outsource tele callers.

Basic courtesies have to be observed and the tone

and manner must be pleasant and professionals.

The customer must be briefed about the penal

charges

In case the payment is ready, it is to be collected

after making an appointment with the customer

through pickup collectors.

In case the customer asks for time then a follow

up is done on the day the customer promises to pay

Cheque returned must be intimated only to the

customer or in his absence to his wife or secretary (in

case a call is made to the office)

In case both the telephone numbers (residence

and office) is out of order, confirm the number by

checking with the Directory information Services

In case no contact is made through telephone

even after four attempts the case is then handed over

to the field agency

Record of telecal1ing done, should be maintained

as per format below:

Attempt 1st 2nd 3rd 4th 5th

Date of

calling

Time of

calling

Outcome

The outcome of the telecalling will be recorded as per the

action codes

S.No. ACTION CODE DESCRIPTION

1 NC No contact

.2 LM Left message

3 PP Promise to pay

4 BP Broken promise

5 OS Outstation

6 PY Payment received

7 SK Skip

8 OT Others

FIELD REFERRALS

a) Field Visits - all cases that are still outstanding after

telecalling, will be allocated to the' field agency. This

will consists of cases with remarks LM (Left Message)

and NC (No Contact). Also where telecalling units are

not in place, allocation to field will happen.

Apart from the above, the following cases will also be

referred to the field collection agency.

Skips cases

Fraud cases

Non-starter

Where customer refuses! dispute the

payment. If required the collection manager

should meet the customer personally and

close the Issue.

Any other account where the Loan/ Asset is

considered to be at risk.

b) All cases, which are in Bucket 2 and above (i.e. more

than 1 EMI, due) will be routed to the collection agency

by the collection manager.

NON-STARTER & SKIPS

1) Non-Starter:

Anon-starter is a customer who defaults during the first

month after the commencement of the loan.

Non-Starters have to be given 1 st priority in collection,

as they are likely to become chronic defaulters.

2) Skips:

The customer is classified as SKIP if he is not available

at the given residential office I property financed

addresses and the forwarding address is either not

available or the same is incorrect and cases where the

customer's residence and office telephone number is

incorrect/ unlisted /untraceable.

C. DUNNING OF LETTERS

Dunning is a very effective collection follows up tool.

Apart from serving the purpose of having sent written

correspondence, it is useful in all legal matters where

the dunning letters serve as valid proof or evidence.

Dunning is used as a mode of collection as it has

extensive coverage in a short period with minimum

cost, and the impact of any written communication is

always more than verbal communication. It is also used

as a back up mode for other collection activities.

D. LOAN RECALL NOTICE

This is a notice sent to the customer stating the loan

extended to the customer has been withdrawn or

terminated. This letter is sent to all customer of Bucket

3. This letter also states the total amount payable by

the customer for settlement of the account in full.

After sending this notice following situations

may arise:

The customer makes a part payment of the over

due amount only. In such cases legal steps taken

should be pursued with. Also the regular PDC's will

be banked.

The customer regularize the account by clearing

the dues as of date and request for continuation

of loan

In cases where the asset is there - we should

exercise the option of possession. However, if the

collection manager feels that upon possession and

sale of asset should result in a shortfall, the

collection manager should look at the option of

continuing the loan. If the customer remains

delinquent, the option of possession of assets if

available should be carried out and legal action

viz, civil litigation should be pursued for summary

suit.

E. LEGAL ACTION

Legal action, though it is the last option available with

the collection unit, it is generally used as a strategy to

force the customer to honor his dues. Normally legal

recourse is taken if the normal collection actions fail to

recover the money from the delinquent customer.

SECTION 138 (B)

In case cheque is dishonored by the banker of

hirer the company can

Invoke the provisions U/S 138 (B) of Negotiable

Instrument Act as amended.

On receipt of dishonored cheque hirer is

contacted to apprise with the payment status so

that hirer may make sincere efforts to discharge

liabilities.

On failing the company issues a notice to the Hirer

U/S 138 (B) within 30 days from the date of

dishonoring the cheque and allows Hirer to

deposit the default amount with the company

within 15 days of the receipt of such notice.

On expiry of 15 days lead time to the hirer

company submits a complaint in writing in the

appropriate, court of law.

Apart from above provision the hirer has the

option to return the hired article to the company

for settling the issue in such cases the company

with due concern of the hirer sales the article and

realizes amount from the hirer and process of set

on and set off carried on.

In case of amount received from the selling of the

article falls short the hirer is bound to make the

good of the laws.

COLLECTION FOLLOW UP MATRIX

Bucket No. of

EMI'S

DUE

ACTIVITY

1 1 Telecalling starts

1st bounce calling

Collection calling / 2nd bounce

letter /cheque pick up.

Routed to collection agency if

Non- Starter.

2 2 Handling over the collection agency

3 and

above

3 and

above

Notice u/s 138 for criminal

action

It should happen the 3rd

cheque bounce happens

Legal recall notice

Handling over to possession

agency for to over possession of

asset.

Valuation of asset.

Sale of possessed asset, if not

settled by Hirer

Post sale notice for recovery of

shortfall.

Legal action if shortfall not

paid by customer.

SPECIALIZED COLLECTION TOOLS

SHARING OF DATABASE:- Social pressure

needs to be put on the customer in such a way that he

cannot obtain any form of loan from any banks or NBFC.

This is done by sharing the defaulter database with

other banks and NBFC's. While taking defaulter list

efforts to be taken to ensure the genuiness of the same

LETTERS TO EMPLOYER:- we need to

ascertain the current business address of the customer

and a letter can be written to the employer stating the

default committed by the employee of his organization.

This is more effective way of inducing the customer to

pay, because no individual should like the organization

to know that he has availed a loan and that he is a

defaulter in it. This result in lowering his status. in his

office and hurting his ego. However in such cases

utmost care should be taken to ensure that the

outstanding amount specified in the letter is true and

should be used cases in Bucket 4 and above only.

PAPER ADS/PUBLIC NOTICE:- For all

chromic defaulters, which are beyond Bucket 7 and it,

is felt that recovery under the present circumstances is

doubtful due to various factors like customers being a

well known or influential person, a paper advertisement

can be put in the local newspaper.

OBJECTIVE

The very basic purpose for which the project has been

undertaken is for the of the partial fulfillment of the MBA

degree programme as required by U.P. Technical University

Lucknow.

The major objective for which the study as been

undertaken i.e. which are basically taken into consideration

is:

To understand the economics of car financing

schemes and its benefits to the customer.

To understand the management of car loan

recovery procedure and measures taken to

reduce the default rate.

The above is fulfilled by considering the following sub-

objectives:

Car loan procedure of HDFC Bank

Loan amount sanctioned by HDFC Bank

Rate of interest charged by HDFC Bank

Financing period offered by HDFC Bank

Recovery rate regarding financed amount of the

bank along with the percentage of defaults

Action against default payments

To arrive at some other relevant findings

RESEARCH METHODOLOGY

Research Methodology is a way to systematically solve

the research problem. It may be understood as a science of

studying how research is done scientifically. In it we study

the various steps that are generally adopted by researcher

in studying his research problem along with logic behind

them. It is necessary for the researcher to know not only the

research methods/techniques but also the methodology.

Researchers also need to understand the assumptions

underlying various techniques and they need to know the

criteria by which the can decide that certain techniques and

procedures will be applicable to certain problems and other

will not.

We use a particular method of research in the context

of our research study and explain why we are using a

particular method or technique and why we are not using

other so that research results are capable o being evaluated

either by the researcher himself or by others.

Research :

Research is a scientific and systematic search for

pertinent information on a specific topic. According to

Clifford Woody research comprises defining and redefining

problems, formulating hypothesis or suggested solutions;

collecting, organizing and evaluating data, making

deductions and reaching conclusions; and at last carefully

testing the conclusions to determine whether they fit the

formulating hypothesis.

Research Design:

A research design is purely and simply the

framework or plan for study that guides the collection and

analysis of data. Application and specification are the

main characteristics in a research designs can be

classified on the basis of the fundamental objectives of

the research. There are mainly two types of research

design.

a. Exploratory

b. Conclusive

1. Descriptive

2. Experimental

Since our research is descriptive type, so research

design is also descriptive.

Sampling Design :

Sampling is a process of obtaining information about an

entire population by examining only a part of it. Sampling is

used for a variety of reasons such as:

i. Sampling can save time and money.

ii. Sampling may enable more accurate

measurements.

iii. Sampling remains the only way when populations

contain infinitely many members.

iv. Sampling only remains the only choice when a test

involves the destruction of the item under study.

Sampling methods can be divided into two.

1. Probability Sampling

2. Non-probability Sampling

In my research probability sampling is used. Again in

probability sampling, simple random sampling is used. This

sampling is stratified system.

Data Collection Method:

Data collection methods are generally of two types:

a. Primary Data

b. Secondary Data

Primary data are those which are collected a fresh and

for the first time and thus happens to be original in

character. The primary data is collected in the process of

questionnaire and interview of the outlets.

Secondary data are those which have already been

collected by someone else and which have been already

been passed through the statistical process. In my

research the secondary data is collected from the

company sales records and from research reports.

Tools and Techniques:

Primary Data : Questionnaire and Personal

Interview.

Secondary Data : Company sales record and other

Research reports.

. Sampling Plan:

Target Population Or Universe :

All the resident of Meerut

City.

Sampling Unit :

Any Insurance policy of

who works with any

insurance company

Sampling Size : Around 100 people

Sampling Method : Judgment and

Convenience.

Sampling Area : Study Shall cover Meerut

City.

CONCLUSION

In today's era, it is not easy for a middle class person to avail

a car where he is supposed to fulfill various other important

needs of his family which are more basic and necessary than

owning a car for the life.

So, if one wants to have the car along with the fulfillment of

other needs, finance option make it possible.

We have comprehensively discussed the car finance

schemes of HDFC Bank. Its future looks to be bright as the

ultimate customer (who is the king) is given the utmost care

and is considered above all.

But, with the popularity of car financing, the problem of

default becomes the fact of life and therefore HDFC Bank in

this field is applying various measures to overcome the

problem of default.

Default in payment of car loan is not unusual, as historically

some creditors have always defaulted in meeting their

obligations. Therefore, the car financing industry will

continue to face this problem.

APPENDIX

STRUCTURED INTERVIEW QUESTIONS

1. Who can apply for the loan?

2. How much your organization can lend

for car finance?

3. For how long an individual can get loan?

4. What is the mode of repayment?

5. What is the security for the loan?

6. What is the rate of interest?

7. What is the limit for margin money?

8. What is required for the security?

9. How much processing fees you charge?

10. Is there any penalty in case of prepayment?

11. What is the loan procedure?

12. What actions are taken in case of

default?

BIBLIOGRAPHY

1. Books Consulted:

Banking Law and Practice: P. N. Varshney

Money Banking and Finance: N.K. Sinha

2. Pamphlets

3. Websites:-

www.hdfcbank.com

www.googlesearch.com

yahoo search

CONTENTS

Certificate

Declaration

Acknowledgement

Preface

CHAPTER 1

Introduction to topic

CHAPTER 2

Company Profile

Business Profile

CHAPTER 3

Car Financing

Reason for car financing

Default in car financing

Measure to get rid of default

Car loans

Types of car loan

Procedure of car loan

Precautions

HDFC Car Loan

CHAPTER 4

HDFC Bank recovery process

Collection Strategy

Field referrals

Specialized collection tools

Objective

Research Methodology

Conclusion

Appendix

Bibliography

A

ON

Car Loan Scheme and Recovery Procedure of HDFC Bank

(For the fulfillment of Master of Business Administration)

Under the guidance of

Mr. Sandeep Kumar

Submitted To: - Submitted BY:-MR. N.N. Sen Gupta Vipin Upreti

H.O.D Roll No 0407270149

IIMT MANAGEMENT COLLEGE

MEERUT

(Affiliated to U.P.T.U. Lucknow)