ABSTRACT

Introduction: Purchasing the home of your dreams is not an easy task. Especially
when you plan to buy a home on loan. Home loans means that you buy a house on
installments. In simpler terms when you want to own a home and cannot afford to pay
the amount in lump sum, you can pay it in monthly installments with an interest rate.
There are number of companies offer cheap loans at a low interest rate you can avail
loan against existing house for renovation or expansion etc. The demand for home
loans will not sag much. The reason is a substantial rise in the income-generating
capability of Indian youth. So this particular section will keep the housing loan
demand high and increased lending rates can only shelve their plans for some time.
The main objective of any bank is to acquire larger market share, or higher
percentage of turnover in the industry, which can only possible by lending money at
good interest rates. This could be only achieved by building a lower percentage of
lending solutions to customers.
Any bank can survive through the stiff competition of the market if it has
better loan offerings, such as home loans. Today many banks and financial institutions
in the market are providing solutions, such as home loans, and they adopt many
strategies to maintain and improve and grab the majority of the market share.
The importance of the home loans in the economy can be illustrated such that, with
a plethora of auto loan opportunities available in India these days, it is now possible
one to buy a dream home within a matter of days. No need to save up money for
making complete down payment at the time of buying. Just gather enough amounts
for the initial payment and pay the rest in easy installments, by taking up a loan.
The best part about home financing is that, apart from the new homes, loans are
available for old homes as well. So people these days are rushing in buying homes.

CHAPTER -I
INTRODUCTION
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.
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, tiling and flooring, grills and aluminum windows. HDFC finances up
to 85% of the cost of renovation (100% for existing customers).
Current status is that HDFC reduced home loan rates by 50 basis points for all
its existing floating rate customers.

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 door 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 HDFC Bank and standard chartered bank provide door to step
services to customers to borrow loan.
(v)

Loan period:There are many banks which provide maximum loan tenures upto 15-20 years

based on the loan amount and the creatibility of customers. This relieves the
customers to repay loan amount till 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.

BANKS IN INDIA
India has a well developed banking system. Most of the banks in India were
founded by Indian entrepreneurs and visionaries in the pre-independence era to
provide financial assistance to traders, agriculturists and budding Indian industrialists.
Indian banks have played a significant role in the development of Indian economy by
inculcating the habit of saving in Indians and by lending finance to Indian industry.
The commercial banking structure in India consists of: Scheduled Commercial Banks
and Unscheduled Banks. Scheduled commercial Banks constitute those banks, which
have been included in the Second Schedule of Reserve Bank of India (RBI) Act,
1934.
FOREIGN BANKS IN INDIA
Foreign banks have brought latest technology and latest banking practices in
India. They have helped made Indian Banking system more competitive and efficient.
Government has come up with a road map for expansion of foreign banks in India.
Major foreign banks in India are:

ABN-AMRO Bank

Abu Dhabi Commercial Bank Ltd.

American Express Bank Ltd

BNP Paribas

Citibank

DBS Bank Ltd

Deutsche Bank

HSBC Ltd

Standard Chartered Bank

Nationalized Banks in India

Banking System in India is dominated by nationalized banks. The
nationalization of banks in India took place in 1969 by Mrs. Indira Gandhi the then
prime minister. The major objective behind nationalization was to spread banking
infrastructure in rural areas and make available cheap finance to Indian farmers.
Fourteen banks were nationalized in 1969.
The second phase of nationalization of Indian banks took place in the year 1980.
Seven

more

banks

were

nationalized

with

deposits

over

200crores.

List of Public Sector Banks in India is as follows:

Allahabad Bank

Andhra Bank

Bank of Baroda

Bank of India

Bank of Maharashtra

Canara Bank

Central Bank of India

Corporation Bank

Dena Bank

Indian Overseas Bank

Oriental Bank of Commerce

Punjab and Sind Bank

Punjab National Bank

State Bank of Bikaner & Jaipur

State Bank of Hyderabad

State Bank of India (SBI)

State Bank of Indore

State Bank of Mysore

State Bank of Patiala

State Bank of Saurashtra

State Bank of Travancore

Syndicate Bank

UCO Bank

Union Bank of India

United Bank of India

Vijaya Bank .

Private Banks in India

All the banks in India were earlier private banks. They were founded in the preindependence era to cater to the banking needs of the people. But after nationalization
of banks in 1969 public sector banks came to occupy dominant role in the banking
structure. Private sector banking in India received a filip in 1994 when Reserve Bank
of India encouraged setting up of private banks as part of its policy of liberalization of

the Indian Banking Industry. Housing Development Finance Corporation Limited

(HDFC) was amongst the first to receive an 'in principle' approval from the Reserve
Bank of India (RBI) to set up a bank in the private sector.
Major Private Banks in India are:

Dhanalakshmi Bank

Federal Bank

HDFC Bank

IDBI Bank

IndusInd Bank

ING Vysya Bank

Jammu & Kashmir Bank

Karnataka Bank

Karur Vysya Bank

Kotak Mahindra Bank

SBI Commercial and International Bank

South Indian Bank

UTI Bank
YES Bank

OBJECTIVES OF STUDY
There is no strongest foundation for your dream home, than a cheap loan. Home loans
have become that 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 BANK.
2) To analyze the history of HDFC BANK.
3) Generating good business to the company by promoting and selling the products of
HDFC BANK.
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.
8) To study the problems faced by customers in obtaining the home loans.
9) Visiting the customers and closing the deal.
10) To learn about various aspect of HDFC BANK.

NEED 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 aspect of HDFC BANK.

SCOPE OF STUDY
The Indian housing finance industry has grown by leaps and bound in few years. total
home loans disbursements by banks has risen 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.

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.

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

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-

RESEARCH DESIGN:This project is based on exploratory study as well descriptive study. It was an
exploratory study when the customer satisfaction level was studied to suggest new
methods to improve the services of HDFC BANK in providing home loans and it was
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descriptive study when detailed study was made for comparison of disbursement of
home loans by commercial banks.

SOURCES OF DATA:To fulfill the information need of the study. The data is collected from primary
as well as secondary sourcesA - 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 of HDFC
BANK.
B SECONDARY SOURCE: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.
SAMPLING:Sampling refers to the method of selecting a sample from a given universe with
a view to draw conclusions about that universe.
SAMPLE SIZE:-

11

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.
SAMPLING TECHNIQUE:Random sampling technique was used in the survey conducted.
TOOLS OF ANALYSIS:Data has been presented with the help of bar graph, pie charts, line graphs etc.
DATA COLLECTION INSTRUMENT DEVELOPMENT:The mode of collection of data will be based on Survey Method and Field
Activity. Primary data collection will base on personal interview. I have prepared the
questionnaire according to the necessity of the data to be collected.
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 noncooperative attitude of respondents.

12

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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CHAPTER-II
REVIEW OF LITERATURE
SUMMARY: After going through pervious studies of Home loans I came to

conclude

that There is growth of home loans after 2001.

Home loans have an inverse relation with interest rates i.e. when interest rate
low the demand of home loans increase. (Ojha 1987)
People are going more towards home

loans

than

private

mortgage

insurance .(Berstain 2008)

Government taking various steps to encourage people to go toward home
loans .(Haavio, Kauppi 2000)
Growth of home loans are due to increase of living standard of people,
shifting from joint family to nuclear family .(Lacourr, Micheal 2007)
There are some problems also attach with these home loans such as time i.e
filling of application of loan to closing ,people have their own specified needs from
these home loans which are not fulfilling. (Lacour Micheal 2006).
SBI provide a very low interest rate on home loans as compared to other
banks. (SBI May 2000)

14

Now after this conclusion the details of reviews are belowBerstain David (2009) examined in his study taken from 2001 to 2008 that in
this period there is increase use of home loans as compared to private mortgage
insurance (PMI).he have divided his study into four sections. Section 1 describes
why people are going more for home loans than PMI. the main reason for this that
now home loans market provide Piggybank loans for those people who dont have
20% of down payment. Section 2 tells the factors responsible for the growth of home
loans and the risks on shifting toward home equity market without any PMI coverage.
PMI can protect lenders from most losses up to 80% of LTV and the absence of PMI
will result in considerable losses in an environment.
La courr, Micheal (2007) analysis in his study the factors affected the increase in the
level of Annual percentages rates (APR) spread reporting during 2014 over 2004. the
three main factors are changes in lender business practices; (2) changes in the risk
profile of borrowers; and (3) changes in the yield curve environment. The result show
that after controlling for the mix of loan types, credit risk factors, and the yield curve,
there was no statistically significant increase in reportable volume for loans
originated directly by lenders during 2014, though indirect, wholesale originations did
significantly increase.
La cour Micheal (2006) examined the home purchase mortgage product preferences
of LMI households. Objectives of his study to analysis the factors that determined
factors their choice of mortgage product , is different income groups have some
specified need to met particular product. The role pricing and product substitution
play in this segment of the market and do results vary when loans are originated
through mortgage brokers? For this they have use the regression analysis and the
results are high interest risk reduce loan value. Self employed borrower chooses
reduce documented loans than salaried workers.use of this product type seems to be

15

more prevalent among borrowers with substantial funds for down payment and better
credit scores.
Dr. Rangarajan C. (2001) said that the financial system of India built a vast network
of financial institutions and markets over times and the sector is dominated by
banking sector which accounts for about two-third of the assets of organized financial
sector.
Narasimham Committee (1991) points out that although the banking system in our
country has made rapid progress during the last two decades, there is decline in
productivity and efficiency and erosion of profitability. The committee strongly make
indications of liberlising, deregulating economy to make Indian baking system more
competitive and efficient.
Ojha (1987) in his paper "modern international caparison of productivity and
Profitability of pubic sector banks of India" making Comparison on the basis of per
employee indicators and taking examples of state bank group and Punjab National
bank noted that Indian banks are the lowest in all accounts. However such
international comparison will not be fair for numbers of reasons.
Godse (1983) in his essay, looking a fresh at banking productivity observe that
productivity aspect is only at the Conceptualization stage in banking industry. He
suggested improvement in productivity and procedures, costing of operations and
capital expenditure etc.
Fanning (1982), while examining bank productivity of British banks observed that
although the productivity of the UK clearing banks is improving, they are still heavily
over manned as compared with similar banks else where.
Banking Commission (1972) reviewed bank operating methods and procedures and
made recommendations for improving and modernizing these, particularly relating to

16

customers services, credit procedure and internal control systems. It observed that
present methods of working out branch profitability are not appropriate and an
integrated costing and financial reporting system is needed.

Department of Banking operations and development, RBI: Bombay

observed that the rapid expansion of banks activities since 1970 called for a phase of
consolidations to improve the quality of banks operational efficiency, productivity
and customer services.
HOME LOAN PRODUCTS OF HDFC BANK
HDFC Bank home loan provide not just the most competitive interest rates &
best level of service, but also products designed to cater to the specific needs of
consumer. New products / New features in existing products are introduced based on
customer feedback. Choose the HDFC Bank Home Loan that suits your needs.
Home Loans
Home Loans are provided to individuals to own a residential property.
HDFC Bank offers easy home loans for

First Purchase in ready construction

Under construction property

Purchase in re-sale

Self construction & extension of existing living space

The following are the features of HDFC Bank Home Loans

Home loan amount can be chosen to suit specific needs

One can avail of a loan up to 85% of Cost Of Property

Conveniently pay off the loan over a period of up to 25 years

17

It can be availed at the Floating rate of Interest or at the Fixed rate of

Interest or at the combination of both Fixed & Floating rates

Eligibility Norms for Home Loans.

Home Loans can be availed by Resident Indian whether Salaried or Self-Employed
and also by Non- Resident Indian who are Salaried. For resident Indians the following
are the eligibility norms

You must be at least 21 years of age when the loan is sanctioned.

The loan must terminate before or when you turn 65 years of age or
before retirement, whichever is earlier.

You must be employed or self-employed with a regular source of

income.

Land Loan
Land loans give an opportunity for individual customer to purchase a residential plot
of land to do self- construction. Thus, customer can invest now in a plot of land &
build in future. The Land loan can be financed only within municipal limits or in case
of direct allotment outside municipal limits by DA.
Land Loan can be availed by Resident Indian whether Salaried or Self-Employed and
also by Non- Resident Indian.
Home Improvement Loans
Home Improvement Loan is offered to facilitate improvement of a self owned
dwelling unit to existing or new customer. HIL considers a range of facilities internal
or external to the structure without increase in the living pace. Thus, a customer can
add or improve facilities to his dwelling unit with a loan at Home Equity Loan rate of
interest
18

Home Improvement Loan can be availed by Resident Indian whether salaried or SelfEmployed.
Office premises loans:
Office Premises Loan can be used for purchase, construction, extension & also
for improvement (at the time of acquisition of office premises). It creates an
opportunity to extend loans to self employed individuals to house their profession or
business giving a permanent address for generating steady flow of income. The
product can also include the estimate of renovation at the time of purchase of the
property. This loan is especially meant for self-employed professionals like Doctors,
Architects

etc.

Loan on phone:
Loan On Phone is a pre sanctioned loan. Its is based on the existing relationship of
the customer with HDFC Bank. The biggest advantage is that the customer can get
the loan with minimum documentation. Good banking transactions and repayment
records becomes a strength for availing loans in future.
Loan on Phone can be availed by Resident Indian whether Salaried or Self-Employed
Home equity loan:
Loan against property gives the owner of residential or commercial premises to
leverage on the value of the property. It offers the ability to unlock funds gives the
advantage of looking at the asset as a source of security bringing liquidity and
retaining ownership.
Property overdraft:
The overdraft facility from HDFC Bank allows you to borrow money against your
self-occupied property. The overdraft facility comes with a multi-city cheque book
and phone banking facility. The customer is charged interest only for the amount that

19

he withdraws from the account. Whenever he deposits funds into the account, they go
towards reducing the outstanding balance in the account.

It offers the following benefits:

Generating capital against property (R ) or ( C) for business or

personal use

Convenience of Pre - Sanctioned limit and draw as you need

Pay interest on the amount drawn and for days utilized

Convenience of depositing & withdrawing like any Current Account

Benefit of Cheque Book & Phone banking

Fast Processing and door-step service

Multi-city cheque book and phone banking facility

Property Overdraft can be availed by Resident Indian who are Self-Employed

Factors affecting your Loan Amount
HDFC home loans bring to you a home loan power-packed with numerous
facilities making it the perfect home finance option for you.
You can get a home loan suited to your needs. The home loan amount depends
on your repayment capability and is restricted to a maximum of 85% of the cost of the
property or the cost of construction as applicable. Repayment capacity takes into
consideration factors such as income, age, qualifications, number of dependants,
spouse's income, assets, liabilities, stability, continuity of occupation and savings
history.
A number of factors are taken into account when assessing your repayment
capacity. Your income, age, number of dependants, qualifications, assets and
liabilities, stability/ continuity of your employment / business are some of them.
However, there are ways by which you can enhance your eligibility.

20

If your spouse is earning, put him/her as a co-applicant. The

additional income shall be included to enhance your loan amount.
Incidentally, if there are any co-owners they must necessarily be coapplicants.

Did you know that your blood relater income can also be considered
for sanctioning the loan on your combined income? The
disbursement of the loan, however, will be done only after you
submit proof of your marriage.

Providing additional security like bonds, fixed deposits and LIC

policies may also help to enhance eligibility.

Documents required for loan sanction

The leading home loan provider offers attractive interest rates and unbeatable
benefits to ensure that you get the best deal without any hassles. Keeping your
convenience in consideration, we ask you for minimal mandatory documents for the
sanctioning of your home loan.
At HDFC Bank we require the following documents to sanction your home
loan:

Sanction Documents

Duly Completed Application Form

Photograph

Fee cheque

Photo identity proof

Age proof

Signature verification proof

21

Residence address proof

Documents for salaried people

Last three months salary slips

Form 16

Bank statements for last 6 months from salary account

Repayment track record of existing loans

Documents specific for Self Employed

Income Tax Return / Computation of Total Income / Auditors Report /

Balance Sheet / Profit & Loss Account certified by Chartered
Accountant for last 2 years (3 years for Home Equity) (both for business
and personal of partners/directors)

Bank Statement for last 6 month from operating account

Repayment Track record of existing loans / Loan closure letter

Board Resolution in case of a company

Proof of existence

Office Address Proof

Photo Identity Proof, Residence Address Proof, Signature Verification is

required to be provided for all the main partners / directors.

These are the documents required for sanctioning a loan. You may be asked to
submit further legal documents if required by HDFC Bank or its approved lawyers.
Do retain photocopies of all documents being submitted by you.

22

Disbursement of your HDFC Bank home loan

We disburse the loan amount after you identify and select the property or home
that you are purchasing and submit the requisite legal documents.
While you may be under the impression that the list of documents asked for is
rather extensive, please note that it is for your own good. Each and every single
document asked for will be verified and checked to ensure your safety.
This may take some time but we want to ensure a clear title and will complete
all the legal and technical verifications to ensure that you have full rights to your
home.
Your loan will be disbursed after you identify and select the property or home
that you are purchasing and on your submission of the requisite legal documents.
The 230 A Clearance of the seller and / or 37I clearance from the appropriate income
tax authorities (if applicable) is also needed.
On satisfactory completion of the above, on registration of the conveyance deed
and on the investment of your own contribution, the loan amount (as warranted by the
stage of construction) will be disbursed by HDFC Bank.
Disbursement Documents
Property documents (as per P&D for respective states and as asked by
empanelled lawyers for individual cases)

Facility Agreement

Disbursal Request Form

Cheque Submission

ECS or Auto Debit for HDFC Bank account holders or Post Dated
Cheques for EMI

23

ECS or Auto Debit for HDFC Bank account holders or Post Dated
Cheques for EMI

Personal Guarantors Documents (PG Form, Photograph, Identity

Proof, Address Proof, Signature Verification and Income documents,
if applicable)

In case of property is owned by a company

Memorandum of Entry

Form 8

NOC

Flexible Installment Plan (FLIP)

FLIP is a variant for structuring enhanced eligibility of home loan applicants
with varying tenure of income source. This repayment facility is given when income
is going to reduce after certain time during the loan tenure due to one of the
borrowers retiring before loan maturity. The EMI payable becomes affordable based
on individual income source and also matching the family cash flow. This variant is
offered typically to family members joining as applicants like husband & wife or
father & son with varying tenure of service Period / Age norm.
FLIP has the following features

FLIP considers income of two applicants and offers step down

repayment facility

One of the applicants should have service period till the end of the

tenure of the loan

FLIP would have two different EMIs during the tenure of the loan

Normally the first EMI would be based on the combined income

24

The second EMI would be smaller & based on the lower income with

longer tenure of the applicant.

What is the repayment tenure?
Repayment tenure is the tenure for the number of year for which the loan gets
sanctioned. We offer you a wide range of options for the tenure of the loan. You can
take a home loan for up to 25 years provided you do not reach the age of 65 years or
retire within that period.
How is the loan repaid?
All loan repayments are done via equated monthly installments (EMI).
What is an EMI?
An EMI refers to an equated monthly installment. It is a fixed amount which
you pay every month towards your loan. It comprises of both, principal repayment
and interest payment.

When does the repayment start?

EMI payments start from the month following the month in which the full
disbursement has been made.
How is the EMI paid?
The EMI is to be paid every month through post-dated cheques (PDCs) or
Electronic Clearing System (ECS)*. If you are opting for PDCs, then you will have
to provide 36 PDCs upfront. The PDCs are to be dated on the 1st of every month.
However, if you receive your salary a few days later, we provide the flexibility of
dating the cheques for the 10th of the month. In case you have an HDFC Savings
account you can also go in for the facility of Auto Debit.

25

When do I pay PEMIs?

The first PEMI is payable by cheque by the end of the month in which the
disbursement is made and each subsequent PEMI at the end of every month till the
commencement of EMI. In case you have an HDFC Savings account you can also go
in for the facility of Auto Debit.
Application Process of your Home Loan
Your search for the perfect home loan ends here at HDFC Bank home loan,
even before your have found the perfect property.
The moment you decide to buy a home, you can put in your application for a
home loan. Yes, you can apply for a home loan even before you have selected the
property.
The property need not even be in the same city where you are residing. The only
condition being that HDFC Bank has home loan operations in both the cities.
Should there be a change in your financial status or plans, you can withdraw
your sanction within 6 months of approval of your home loan.
However, we are always ready to assist our customers in the event of legitimate
problems. And, we might reconsider this if we find that there are satisfactory reasons
for the delay.
And, neither would we charge you extra for this delay.
If it is refinancing you are interested in, it is possible within 6 months from the
date of purchase of property.
Insurance Plans for your Home Loan
Introducing exclusive home loan insurance that can provide cover to your
Home loan in the face of any unforeseen event happening to your life. In case of any
of these happenings, your family will have the support of the insurance cover to pay
for the outstanding Home loan, without being burdened by the loan EMI's.

26

CHAPTER-III
INTRODUCTION TO THE INDUSTRY
THE HISTORY OF INDIAN HOME LOANS:Home loans in India have made people Buy Property in India in spite of the
skyrocketing prices. Today, we find considerable Real Estate Investment in India,
either in the field of Residential Property in India or Commercial Properties in India.
Home Loans in India are disbursed by many Banks as Loan Banking is on of the most
important function of the Financial Services in India. Property Dealers and Real
Estate Consultants in India usually recommend that we undertake appropriate Home
Loan or Mortgage Loan counseling so that we can Buy Apartment in India at an
affordable Mortgage Rate. Purchasing the home of your dreams is not an easy task.
Especially when you plan to buy a home on loan. Home loan means that you buy a
house on installments. In simpler terms when you want to own a home and cant
afford to pay the amount in lump sum, you can pay it in monthly installments with an
interest rate.
The interest rates of home loans are expected to go down even further according
to analysts who foresee a cut down in the rates by the RBI in the wake of the decision
taken by US Federal Reserve to cut its rates by a significant margin.
There are number of companies offer cheap home loans at a low interest rate. You
can avail loan against existing house for renovation or expansion etc. There are many
nationalized banks that offer finance for affordable housing. India Housing has put
together a comprehensive data to provide you with the cheapest Home Loans
27

available in the market. We have listed all the important housing finance institutes and
some of the top home finance banks providing lowest interest rates.
In the last few years, housing loan scenario in India has changed drastically. It
has taken a front seat and people are looking forward to owning their own houses. It
is no more a dream that required lifetime saving and a difficult decision to make.
Today the new home purchase loan is much easily available and is much cheaper than
what was available earlier. Banks are now everywhere and the schemes are
implemented even in villages and smaller towns. The housing loans are popular there
too, however, the activity of building flats is little slow. It would not be wrong to say
that there has been a boom in the home loan market and with this boom; there is also
a boom in the Number of home loans mortgage brokers in India.
The main reason for this boom in home loan market is the change in government
policies. It is our governments motivation that the home loan interest rates in India
have fallen considerably. Lot many banks are offering home loans and this is
available at low EMIs (Equated monthly Installments). High EMIs are now a thing of
past. Today lending rate is in the range of 7.5 to 15 %.
Again, there are different types of home loans available today. The interest rate
available is also of two different types. One is the fixed rate loan and the other is the
floating rate loan. In the fixed rate loan, whatever interest is fixed on the start of loan
is carried on for the complete period.
There is also a trend to opt for home construction loan. This loan is available
to those who want to design their homes according to their requirement and taste. In
other words, this loan is meant for those who themselves want to construct their new
home.
As shared earlier, taking a loan is not a difficult task. However, before taking a
loan, one must realize that the relationship with the bank will be for a longer period
usually 15 to 20 years so one must ensure faith and integrity in bank. Apart from low
rate of interest, the bank should also provide some value added services.
Taking home loans these days has become simpler. With the RBI regularly
bring down interest rates; taking home loans have become extremely easy. Housing
loans which were 16.5% to 18% a few years ago fell by 11.5% to 13%. With interest

28

rates going down, people increasingly number apply to take these loans. Some of the
leading banks offering home loans in India, including HDFC Bank, IDBI Bank,
HDFC Bank , Bank of Baroda, SBI, Standard Chartered Bank and Axis Bank .

Home Loan Procedure in India:Submission of Application Form: - After choosing a particular home loan, the
customer submits the application form to the housing finance company (HFC) along
with other relevant documents as required by the HFC. They comprise documents to
establish income, age, residence, employment, investments, etc.
Validation of the Information: - In the next stage, HFCs validate the information
provided by the customer on the application form. They usually conduct checks on
the residential address of the customer, the place of employment of the customer, and
credentials of the employer.
Issue of Sanction Letter :- After due appraisal of customer profile, a sanction letter
is issued which contains details such as loan amount, rate of interest, annual / monthly
reducing balance, tenor of the loan, mode of repayment and general terms and
conditions of the loan. This is the actually the approval of the money lending
procedure by the company. However, the money is sanctioned only after the
documents and the property on behalf of which the loan is being granted is
thoroughly verified.
Submission of Documents: - Once the sanction letter is passed, the customer is
required to leave the entire set of original documents pertaining to the property being
purchased with the HFC as security for the loan amount sanctioned. These documents
remain in the custody of the HFC till the time the loan is fully repaid. Once the
documents are handed over to the HFC, they send all the documents for a thorough
legal scrutiny.

29

Validation of Property: - Prior to disbursement, the HFC also conducts a site visit to
the customer's property to ensure that all construction norms have been adhered to
properly. Once the HFC is satisfied that the property is legally and technically clear,
they disburse the loan amount. The disbursement from the HFI is on the basis of the
stage of construction of the property.
Payment Procedure: - Once all the above mentioned process, the borrower is
entitled to take the money from the lender party. Until such time that the entire
sanctioned amount is not drawn, the customer is supposed to pay a simple interest on
the Actual Amount drawn (without any principal repayments). The EMI payments
commences only after the entire sanctioned loan amount is drawn.

INTEREST RATES PROVIDED BY VARIOUS BANKS

Finance Institution

Loan Period
(in years)

Fixed

EMI / Lakh
(INR)

Floating

EMI / Lakh
(INR)

Bank of Baroda

Up to 5
6 to 10
11 to 15
16 to 20

9.00
9.25
9.50
9.50

2076
1230
1044
932

8.00
8.25
8.25
8.50

2028
1227
970
868

State Bank Of India

Up to 5
6 to 10
11 to 15
16 to 20

9.50
9.75
-

2100
1300
-

8.75
9.25
9.25
9.75

2064
1280
1029
949

HDFC

Up to 5
6 to 10
11 to 15
16 to 20

11
11
11
11

2175
1375
1137
1033

9.50
9.50
9.50
9.50

2101
1294
1045
933

30

Up to 5

10.75

2162

9.50

2101

6 to 10
11 to 15
16 to 20

10.75
10.75
10.75

1364
721
1016

9.50
9.50
9.50

1294
1045
933

Up to 5
6 to 10
LIC Housing Finance
11 to 15
16 to 20

10.50
11
11
11

2149
1373
1137
1032

9.50
9.50
9.50
9.50

2100
1294
1044
932

Up to 5
6 to 10
PNB Housing Finance
11 to 15
16 to 20

9.00
9.00
9.25
9.50

2076
1267
1030
933

10.50
10.50
10.50
10.50

2150
1350
1106
999

HDFC Bank

The above table illustrates the comparison between the interest rates from
various Housing Finance Companies and banks. It can be seen that if one wishes to
go for floating loans, the bank which gives the best deal as far as the interest rate is
concerned is HDFC followed by PNB Housing Finance with the lower rates.
Lock-in facility by banks:A lock-in, also called a rate-lock or rate commitment, is a lenders promise to
hold a certain interest rate and a certain number of points for you, usually for a
specified period of time, while your loan application is processed. (Points are
additional charges imposed by the lender that are usually prepaid by the consumer at
settlement but can sometimes be financed by adding them to the mortgage amount.
One point equals one percent of the loan amount.)
5.4 Indian Market for Home loans is more than Rs.500,000 crore:Today, not only the metros are witnessing the housing crunch even the second tier
cities like- Jaipur, Bhuvneshwar, Lucknow, Trivendrum etc. are falling into the dearth
of living space and wanting for more expansion.
India Report:

31

Indian credit report in comparison to the other Asian countries is shown in the
statistics below, which is among the lowest. It is Indian psyche that credit is termed
bad, Indian are traditionally not inclined to take credit this reflects in the figures
below:GRAPH

COMPANY PROFILE
32

OF
HDFC HOSING DEVELOPMENT FINANCE CORPORATION LTD

INTRODUCTION:Housing Development Finance Corporation Limited , founded 1977 by

Ravi Maurya and Hasmukhbhai Parekh, is an Indian NBFC, 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 Sharcket through HDFC Sales, HDFC Bank Limited 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, 2007.
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

33

Incorporated in 1977 as the first specialized Mortgage Company in India.

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
LTD

72.26%
HDFC
STANDARD
LIFE

60%
HDFC
ASSET
MANAGEMENT

23.26%
HDFC
BANK (inclusive of
warrants)

HDFC Standard Life insurance Company- HDFC holds 72.26 %.

HDFC Asset Management Company HDFC holds 60%
HDFC Bank- HDFC holds 23.26%.
Intelenet Global (Business Process Outsourcing) HDFC holds 50%.
HDFC Chubb General Insurance Company HDFC holds 74%.

SNAPSHOT-II

34

Loan Approvals

Rs. 805 billion.

(Up to Dec 2007)

(US $ 18.30 bn.)

Loan Disbursements

Rs.669 billion

(Up to Dec. 2007)

Housing Units financed

Distribution

(US $ 15.20 bn)

2.5 million.

Offices

181

Outreach Programs

90

HDFC Limited

Type

Public (BSE: 500010)

Founded

1977

Headquarters
Key people

Mumbai,India
Ravi Maurya
Hasmukhbhai Parekh

Industry

Housing Finance

Revenue

US$ 3.44 billion (2012)

Employees
Website

1,833(March 2013)
www.hdfc.com

KEY EXECUTIVE HDFC HOUSING DEVELOPMENT FINANCE CO., LTD

:Mr. Deepak S Parekh: -

serves as Executive Chairman and Chief Executive Officer of

the Board of Housing Development Finance Corp. Ltd., (HDFC). He joined HDFC
Limited in a senior management position in 1978. He was inducted as a whole-time
director of HDFC Limited in 1985 and was appointed as its Executive Chairman in

35

1993. He is the Chief Executive Officer of HDFC Limited. Mr. Parekh is a Fellow of
the Institute of Chartered Accountants (England & Wales).
Mr. K.m mistry: - The Managing Director of the Corporation. He has been employed
with the Corporation since 1981 and was the executive director of the Corporation
since 1993. He was appointed as the deputy managing director in 1999 and the
Managing Director in 2000. He is also a member of the Investors Grievance
Committee of Directors.
Ms. Renu S. Karnad: - The Executive Director of the Corporation. She has been
employed with the Corporation since 1978 and was appointed as the Executive
Director of the Corporation in 2000. She is responsible for overseeing all aspects of
lending operations of HDFC.New Delhi.
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. V. Srinivasa rangam

Mr. K M Mistry CEO

Dr. Ram S Tarneja

Mr. Shirish B Patel

Mrs. Renu sud karnad

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.

Intelenet Global: BPO services for international customers.

36

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

JOINT VENTURE

HDFC Standard Life Insurance Company Limited was one of the first
companies to be granted license by the IRDA to operate in life insurance sector.
Reach of the JV player is highly rated and been conferred with many awards. HDFC
is rated AAA by both CRISIL and ICRA. Similarly, Standard Life is rated AAA
both by Moodys and Standard and Poors. These reflect the efficiency with which
HDFC and Standard Life manage their asset base of Rs. 15,000 Cr and Rs. 600,000
Cr. respectively.
HDFC Standard Life Insurance Company Ltd was incorporated on 14 th August
2000. HDFC is the majority stakeholder in the insurance JV with 81.4% staple and
Standard of as a staple 18.6% Mr. Deepak Satwalekar is the MD and CEO of the
venture.
HDFC Standard Life Insurance Company Ltd. Is one of Indias leading Private Life
Insurance Companies, which offers a range of individual and group insurance
solutions. It is a joint venture between Housing Development Finance Corporation
Limited (HDFC Ltd.) Indias leading housing finance institution and the Standard
Life Assurance Company, a leading provider of financial services from the United
Kingdom. Both the promoters are will known for their ethical dealings and financial

37

strength and are thus committed to being a long-term player in the life insurance
industry- all important factors to consider when choosing your insurer.

Business Growth:The company commands a market share of over 60% in the housing finance
sector. Leveraging on its brand equity HDFC has also entered the Indian Mutual Fund
scene quite recently. HDFC was the only applicant to be given clearance by the
government, to enter the Rs 250 bn life insurance business. This in itself speaks
volumes about the managements professional reputation.
(TABLE:-6.2) Financial Snapshot
Growth ratios

FY12

FY13

FY14

1HFY15

Operating income

22.21% 22.71% 16.90%

21.17%

Other income

331.7%

215%

368.8%

Net profits

31.60% 30.18% 26.05%

20.49%

-24.6%

Approvals

28.9%

25.2%

30.3%

33.4%

Disbursements

31.1%

24.4%

31.2%

31.5%

% change compared to corresponding previous period

The entry of new players has not in any way significantly reduced HDFCs
domination in terms of volume. However, the increased competition has led to a
decline in interest spread (the difference between interest income earned and interest
paid). Over the last couple of years HDFCs spread has shrunk from 2.1% in financial
year 1997 to 1.8% in financial year 2000. When it comes to containing risk, the
companys track record is among the best in the financial sector. During the financial

38

year 2000, HDFC has reduced the quantum of loans where payment was in arrears to
just 0.9% of its portfolio. This is because individuals account for nearly 70% of its
total outstanding loans. The high level of an individual investors personal
contribution in a house makes the possibility of default less likely.
BUSINESS OBJECTIVES:-

The primary objective of HDFC is to enhance

residential housing stock in the country through the provision of housing finance in a
systematic and professional manner, and to promote home ownership.
Another objective is to increase the flow of resources to the housing sector by
integrating the housing finance sector with the overall domestic financial markets.
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,

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

39

Short Term Bridging Loan.

Loans to professionals for non-residential premises loan

Key Associates and Subsidiaries: - These are:HDFC BANK:

23.26% owned by HDFC(inclusive of warrants)

Market Cap US $ 11 billion

ADRs listed on NYSE

1,412 branches, 528 cities, 2,890 ATMs

Over 12 million customer accounts

HDFC Standard Life Insurance Company Ltd. (HDFC-SL) :Structure:- Strong and stable partnership:

Tie up with Standard Life Assurance Company, U.K.

HDFC holds 72.26% of the equity of HDFC-SL

Products: - Diversified product portfolio covering all life stages and needs:

Offers 20 individual products and 5 group plans along with 5 optional riders

Offers 8 fund options with market linked products

Market share: - Market share of 7.3% (private sector) and 4.7% (overall) in terms
of Effective Premium.

40

Key performance indicators and business practices: -A diversified distribution

mix including the tied agency and alternate channels

Banks, brokers, telemarketing, direct sales force Tied agency contributed 64%
effective premium in Q1 09 Strong bank assurance tie-ups with public,
private, co-operative and foreign banks amongst the leading players in the
pensions segment Leveraging technology to strengthen processes.

Workflow system awarded the best technology innovation

Web based facility to service customers and channel partners

HDFC ASSET MANAGEMENT:

Tie-up with Standard Life Investments (SLI)

HDFC holds 60% of HDFC Asset Management

HDFC MF offers 34 equity and debt oriented products

Earned a Profit after Tax of Rs 1.18 billion for FY08; Return on Equity: 75%

Paid a dividend of 150% for FY08 to equity shareholders

Equity assets as a proportion of the mutual funds AUM is 35%.

TABLE:-6.4
CONSOLIDATED EARNINGS:(As at March 31, 2008)
HDFC

consolidated

Return on Equity

27.8%

28.2%

Return on Average Assets

2.7%

2.7%

Earnings per share (Rs)

22.4

95

Profit after Tax (Rs in billion)

768

27.13

Total Assets (Rs in billion)

810.99

925.83

41

DISTRIBUTION NETWORK: - HDFCs distribution network spans 254 outlets

that include 54 offices of HDFCs distribution company, HDFC Sales Private Limited
(HSPL). In addition, HDFC covers over 90 locations through its outreach
programmes. Distribution channels form an integral part of the distribution network
with home loans being distributed through HSPL, HDFC Bank Limited and other
third party direct selling associates.

HDFC HOME LOAN ADVANTAGE :

Home loan counselling sharing over 30 years of home loan experience

Door step service

Helps in finding Dream home

Multiple Repayment Option

Post disbursement service

Loan repayment option

42

AWARDS & ACCOLADES:

Goldman Sachs has listed HDFC as one among top 7 financial services
organization in 2008.

HDFC ranked among the top 3 Best Managed Companies in India by Finance
Asia in 2007

Selected as the best Indian company in the FIs / NBFCs / Financial Services
sector at the Dun & Bradstreet American Express Corporate Awards 2006
and 2007.

HDFC is featured in the Limca Book of Records 2006, for the landmark
achievement of Rs. One trillion in home loan approvals

FUTURE: - HDFC has always been market-oriented and dynamic with respect to
resource mobilisation as well as its lending programme. This renders it more than
capable to meet the new challenges that have emerged. Over the years, HDFC has
developed a vast client base of borrowers, depositors, shareholders and agents, and it
hopes to capitalize on this loyal and satisfied client base for future growth. Internal
systems have been developed to be robust and agile, to take into account changes in
the volatile external environment. HDFC has developed a network of institutions
through partnerships with some of the best institutions in the world, for providing
specialized financial services.

CHAPTER-IV
ANALYSIS & INTERPRETATION
The analysis is based on the responses given by customers through questionnaires.
AGE GROUP OF SURVEYED RESPONDENTS

43

TABLE 9.1:

Age group

No. of Respondents

18 - 25 years

127

26 - 35 years

67

36 - 49 years

46

50 - 60 years

24

More than 60 years

CHART-9.1:

44

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
45

Sr. No.

Category

No. of Respondents

Percentage

Married

140

70%

Unmarried

60

30%

Total

200

100%

Base 200 respondents

CHART-9.2

46

INTERPRETATION:From the table and graph above it can be seen that

70% respondents are married.
30% respondents are unmarried.

47

Educational qualification of respondents

TABLE-9.3
Sr. No.
1
2
3

Category
Under graduate
Graduate
Post graduate
Total

No. of Respondents
50
80
70
200

Percentage
25%
40%
35%
100%
Base 200

respondents

CHART-9.3

48

INTERPRETATION:From the table and graph above it can be seen that

25% respondents are under graduate.
40% respondents are Graduate.
35% respondents are Post graduate.

49

Number Of years Are You in Hyderabad?

TABLE-9.4
Sr. No.

Category

No. of

Percentage

Less than five

Respondents
78

39%

years
More than five

122

61%

200

100%

years
Total

Base 200 respondents

50

CHART-9.4

Staying years in Hyderabad

INTERPRETATION:From the table and graph above it can be seen that

39% respondents are in Hyderabad is less than five years.
61% respondents are in Hyderabad is more than five years.

51

CUSTOMER PROFILE OF SURVEYED RESPONDENTS

TABLE 9.5:
Customer profile
Student
Housewife
Working Professional
Business
Self Employed
Government service employee

No. of respondents
7
5
116
49
24
24

52

Chart-9.5

INTERPRETATION:From the table and graph above it can be seen that: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.

53

ANNUAL HOUSE HOLD INCOME

TABLE-9.6
Sr. No.
1
2
3
4

Category
Less than 2 lacs
Between 2 to 5 lacs
Between 5to 8lacs
More than 8 lacs
Total

No. of Respondents
98
62
30
10
200

Percentage
49%
31%
15%
5%
100%
Base 200 respondents

CHART-9.6

54

INTERPRETATION:From the table and graph above it can be seen that

49% respondents annual household income is less than 2 lacs.
31% respondents annual household income is between 2 to 5 lacs.
15% respondents annual household income is between 5 to 8 lacs.
5% respondents annual household income is more than 8 lacs.

55

Do you know about HDFC BANK?

TABLE 9.7:
Category

No. of Respondents

Yes

164

No

16

56

CHART:-9.7

Awareness about HDFC BANK

INTERPRETATION:From the table and graph above it can be seen that

91% respondents are known about HDFC BANK
9% respondents are not known about HDFC BANK

57

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

GRAPH:- 9.8
58

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.
In today's life, people hardly earn both means and ends of life and they don't
have much of money to buy a home or a land to construct house because of cost of
property. So, they take the advantage of home loans provided by different banks at
different terms feasible to the customers. There are very less number of people, who
don't own home even when they have sufficient funds and they take the advantage of
home loans because they don't want to pay huge cash in one go.
On the basis of study, it is concluded that most of people lack of money in
fulfiling their dreams and few of them were reluctant to pay cash in one go and
wanted to pay their home loans slowly in installments.

59

Table-9.9
From where you have got your home financed
Name of Banks / company

Percentage of customers

HDFC BANK

55

Punjab National Bank

15

Standard Chartered Bank

07

HDFC BANK

20

Any other

03

To understand the response more effective and closely, it has been showed
diagrammatically as follows :-

GRAPH:- 9.9
60

From where you have got your home financed

INTERPRETATION:The analysis showed that a large number of customers prefer HDFC BANK as
compared to others. The data shows that 7% of customers took loan from Standard
Chartered Bank, 20% of customers from HDFC BANK, 15% Customers took loan
from Punjab National Bank, 55% of customers took loan from HDFC BANK and a
3% of customers fall under the category of 'Any other' which included State Bank of
India, Canara Bank, Punjab and Sind Bank, etc.
The data shows that most of people prefer HDFC BANK compared to public
sector banks and other private banks. This is because of the extra services provided by
HDFC BANK. However, there is less difference in figures of HDFC Bank and Punjab
National Bank. But there is considerable difference in figures of the two private
sector banks i.e. HDFC Bank and Standard Chartered Bank. As HDFC is the market
leader in the home loans sector. This may be the reason for such difference in
Standard Chartered Bank's percentage and HDFC Bank's percentage. Another reason
for specialized services in home loans, more amounts of loans, and efficient query
handling.

61

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

62

Percentage of source of information about home loans scheme

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 .

63

Table-9.11
Opinion about the services of HDFC BANK
Percentage of customers agreeing
Services of HDFC BANK

Strongly
agree

Agree

Neutral

Disagree

Strongly
disagree

a. Professionally
managed

86%

10%

4%

b. Reliable &
transparent

67%

33%

c. Socially responsible

75%

10%

15%

4%

d. Customer care

20%

68%

8%

e. Query handling

20%

76%

4%

GRAPH-9.11

64

Opinion of customers about HDFC BANK

INTERPRETATION:Customers from HDFC BANK are quite satisfied from their services like
query handling and customers social responsibility of banks towards
customers and professionally managed services. They don't give so good
response to reliability and transparency services of banks. So, customer's
satisfaction level toward HDFC BANK services is lightly satisfied.

Table-9.12

65

Opinion of customers about home loan schemes

HDFC BANK:Services of HDFC
BANK

Percentage of customers agreeing

Strongly
agree

Agree

Neutral

Disagree

Strongly
disagree

a. Amount of loan

60%

35%

5%

b. Legal formalities

42%

45%

14%

c. Interest rates

32%

56%

12%

d. Repayment options

26%

64%

10%

e. Security demanded

20%

32%

48%

f. Installments

55%

40%

5%

g. Services

45%

30%

18%

6%

1%

h. Processing for
sanction of loan

55%

24%

18%

3%

GRAPH:- 9.12

Percentage of satisfaction level of customers of HDFC BANK

66

INTERPRETATION:The analysis shows that the customers of HDFC BANK gave 60 percent of
amount of loan and legal proceedings, 56% to interest rates, 45% to proceedings and
services, 55% to installments. So, customer of HDFC BANK didn't give response
regarding the services of the bank / company except to the amount of loan and legal
formalities.

TABLE:- 9.13
DATA GIVES PREFERENCE OF RESPONDENTS OF HOME LOANS
COMPANIES AND BANKS

67

COMPANYS NAME

NO.OF
RESPONDENTS

(%)

HDFC BANK

78

78

STANDARD CHARTERED
BANK

HDFC BANK

10

10

PNB

SBI

100

100

TOTAL

GRAPH:-9.13

68

NO. OF RESPONDENTS

INTERPRETATION:From the table and graph above it can be seen that:78% of the people contacted prefer HDFC BANK to any other and therefore it
is ranked no.1 by that percent of respondents.

PROBLEMS FACED BY CUSTOMERS IN AVAILING HOME LOANS

69

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 the curtsy of customers to avail the home loan.
3) The attitude of bank employees sometimes non cooperative and it creates a
hurdle in building trust and Confidence among customers about banks.
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.

CHAPTER-V

70

FINDINGS

1. HDFC Bank having good brand image in the minds of customers.

2. Majority of the people got loans from HDFC Bank only
3. Most of the customers are not aware of the products of HDFC 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
6. Most of the people are directly go to bank to apply a home loan
7. Some of the customer of HDFC already benefited through HDFC home loan
products and services
8. Customer awareness is medium about HDFC products.
9. HDFC providing good services to their customers.

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RECOMMENDATIONS
Create awareness: The Company has to take care of awareness creation about
the products and services among the customers.
Charges: The Company has to reduce the mortality and administration
charges.
The process is some what late to sanction a loan.
The company has to reduce their interest rates on home loan products and
services.
The company has to identify the potential customers.
Production promotion strategies should be improved.
Company should consider the present competition and should act according to
the customer needs.

72

CONCLUSION

In my study we came to know that many peoples are interested to

take a home loan from HDFC Bank to construct their homes.

Home loans have long period when compare to other personal loans
and other loans. So peoples are confused to take a home loan.

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

Even though the interest rates are high peoples are willing to take a
loan from HDFC Bank due to some reasons.

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

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

73

References:
BOOKS
Kotler, Philip and Armstrong, Graw-Principles Of Marketing, Pearson
Education, Hyderabad 2012
Kotler, Philip Marketing management: Analysis, Planning, Implementations
and control, Pearson Education, Hyderabad. 2003, 11th edition.
Sharma J K- Business Statistics (Pearson Education).

JOURNALS
Business World
Business Today
The Economic Times
INTERNET
www.HDFC.com
www.HDFCbank.com
www.google.com
www.wikipedia.org
www.statebankofindia.com

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QUESTIONNAIRE

DATA GIVES PREFERENCE OF RESPONDENTS OF HOME LOANS

COMPANIES AND BANKS

OPINION OF CUSTOMERS ABOUT HOME LOAN SCHEMES

OPINION ABOUT THE SERVICES OF HDFC BANK

SOURCES OF INFORMATION ABOUT HOME LOANS SCHEME

FROM WHERE YOU HAVE GOT YOUR HOME FINANCED

REASONS FOR GETTING THE HOME FINANCED

DO YOU KNOW ABOUT HDFC BANK?

ANNUAL HOUSE HOLD INCOME?

CUSTOMER PROFILE OF SURVEYED RESPONDENTS

NUMBER OF YEARS IS YOU IN HYDERABAD?

EDUCATIONAL QUALIFICATION OF RESPONDENTS

GENDER CLASSIFICATION OF SURVEYED RESPONDENTS

AGE GROUP OF SURVEYED RESPONDENTS

75