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DECLARATION

I, Ms. Smita y. vyas student of SHREE SAMANVAY INSTITUTE OF M.B.A (BOTAD), affiliated to BHAVNAGAR UNIVERSITY, BHAVNAGAR hereby declare that this project report is a result of culmination of my sincere efforts. I declare that this submitted work is done solely by me and to the best of my knowledge; no such work has been submitted by any other person for the award of degree or diploma. I also declare that all the information collected from various secondary sources has been duly acknowledged in this project report.

Smita y. vyas Signature Place: Date:

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PREFACE
Banking industry is the primary requirement for the financial development of the country. Up to the mid after the liberalization, privatization, globalization process private sector bank, co operative bank and multinational banks have emerged strongly. The banking sector has the potential to become special sector of the next decade. In terms of savings mobilizing, employment generation, rural development and also financing the government in building up the infrastructure in the economy. Here as management student this to study and observe the overall development of the banking sector and how the market is influenced by the market of various players. I realized how theories, principals and the laws implied with the practical manner. Thus practical exposure of the industry is important to learn and observe for the management students. It was interesting to have summer placement / industrial training / project study at the HDFC Bank Ltd.

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ACKNOWLEDGEMENT
According to famous poem namely, Half Measures can kill, of very well known poet of Russia Mr. Yevat Shanko, one should not do incomplete work because it is more dangerous than doing nothing. With reference to our M.B.A. program it is also very true. Only getting the theoretical knowledge by attending the classes is not enough to me because it is proven to be a half measure. To get the complete knowledge, skill and experience regarding my field I must have to study real economic scenario through training so that I can get golden touch of corporate world This project was meant to be sole responsibility of the researcher but it was apparent from the start that in the light of its sheer enormity and under such acute time shortage, a project without the support of many persons would be unimaginable. This page gifts me an opportunity to articulate my gratitude to all those people who have in some way or other provided the above. First of all, I would like to thank Ms. Ami pandya for giving me continuous support throughout the project. I also express my gratitude to Ms. Archana rathod for giving me her time and guidance. . I am thankful to all my Faculties-SHREE SAMANVAY INSTITUTE OF M.B.A (BOTAD) for their guidance and humble support extended for the summer training. I would like to express my humble thanks to Mr. Chetan Trivedi (Branch Manager, HDFC Bank-Bhavnagar) for giving me such nice opportunity to undertake training in his Branch. I also like to thank Mr. Himanshu Trivedi (Assi. Branch Manager) and Mr. Mitul Mehta (Personal Banker) without their valuable suggestion my training would not have been possible at all. And also I would like to thank to shah for his co-operative guidance during my summer training. Shree Samanvay Institute Of MBA Page 3 Mr. Maulik

At last but not the least, I take an opportunity to appeal my profound gratitude to my adorable and beloved parents for their everlasting love, strong moral support, encouragement and personal sacrifice without which I was unable to reach the present status of education.

EXECUTIVE SUMMARY

The role of financial institution is ever expanding and is becoming inseparable part of the growth of the country. There are many financial products coming everyday to the Indian market. Some are old and some are new from Indian context. However, there are some products have presence in the country since long, like Saving A/c, Current A/c, Fixed Deposit, various types of loans(personal loan, vehicle loan, home loan) etc. But in the era of Globalizations and with free entry of lot of private players this product need some modification. So, in the current situation lots of different and attractive products regarding loan, Saving A/c, Current A/c, and Fixed Deposits are available with this Financial Institutions. Now to avail such kind of Products detailed knowledge Bhavnagar University, Bhavnagar arranged six week summer project in any business organization for sharpen our skills & to bridge to gap of the theory & practice. I completed my project at HDFC Bank, Bhavnagar. This is a specialized training project report prepared at HDFC Bank, which consist of detailed analysis on the topic of Analysis of customer behavior towards personal loan market & comparison among top 3 banks In first part of this project I highlighted brief introduction of Industry and information HDFC bank. This include Brief introduction about the Bank. Founder and director of the bank, structure of the bank etc. So this section includes brief history about HDFC Bank. Shree Samanvay Institute Of MBA Page 4

In second part of the project, I get detailed knowledge about the different products and services of the HDFC Bank. In this section I highlight different loans of HDFC Bank Ltd. Plus I highlight different products of the HDFC Bank. In addition to this I presented different aspects of personal loan.. In last and most important part is a Research Analysis made by me on the topic Analysis of customer behavior towards personal loan market & comparison among top 3 banks with the help of 200 sample size.

INDEX

CHAPTER NO. CHAPTER 1


1.1 1.2 1.3

NAME OF CHAPTERS INDUSTRY PROFILE What is banking? Structure of Indian banking industry Current scenario PROFILE OF HDFC BANK About HDFC Group List of Enterprise About HDFC Bank History of the Banks Mission Goal and Objectives Organizational culture and values Board of directors Awards & Achievement Products of the Bank Org. chart of HDFC at Bhavnagar branch ATM in Bhavnagar Map of the Bhavnagar-HDFC Bank Branch Various loans provided by HDFC Bank INTRODUCTION OF PERSONAL LOANS Introduction Types of personal Loans

PAGE NO.
7 8 10 17 20 21 22 24 26 27 27 28 29 31 32 35 38 39 40 58 59 61

CHAPTER 2
2.1 2.2 2.3 2.4

2.5 2.6 2.7 2.8 2.9 2.10 2.11 2.12 2.13 2.14 CHAPTER 3 3.1
3.2

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3.3 3.4 3.5 3.6

Types Of Interest Rates Personal Loans Interest Comparison Chart Personal Loan Process Factors that influence loan rate PROFILE OF BANKS SELECTED FOR COMPARISON ICICI Bank SBI Bank RESEARCH METHODOLOGY FINDINGS ANALYSIS SUGGESTIONS CONCLUSION ANNEXURE BIBLIOGRAPHY

66 68

70 71
73 74 79 82 86 115 117 119 121 125

CHAPTER 4 4.1 4.2 CHAPTER 5 CHAPTER 6 CHAPTER 7 CHAPTER 8 CHAPTER 9 CHAPTER 10 CHAPTER 11

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Chapter 1

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1.1

WHAT IS BANKING?
provides financial services usually for profit.

Bank

is

business

that

Traditional banking Services include receiving deposits of money, lending money and processing transactions. A commercial bank accepts deposits from customers and in turn makes loans based on those deposits. Some banks (called Banks of issue) issue banknotes as legal tender. Many banks offer ancillary financial services to make additional profit; for example: selling insurance products. Banking is the business of providing financial services to consumers and businesses. The basic services a bank provides are checking accounts, which can be used like money to make payments and purchase goods and services; savings accounts and time deposits that can be used to save money for future use; loans that consumers and businesses can use to purchase goods and services; and basic cash management services such as check cashing and foreign currency exchange. Four types of banks specialize in offering these basic banking services: commercial banks, savings and loan associations, savings banks, and credit unions. A broader definition of a bank is any financial institution that receives, collects, transfers, pays, exchanges, lends, invests, or safeguards money for its customers. This broader definition includes many other financial institutions that are not usually thought of as banks but which nevertheless provide one or more of these broadly defined banking services. These institutions include finance companies, investment companies, investment banks, insurance companies, pension funds, security brokers and dealers, mortgage companies and real estate investment trusts. This article, however, focuses on the narrower definition of a bank and the services provided by banks in Canada and the United States. (For information on other financial institutions, see Insurance; Investment Banking; and Trust Companies.) Shree Samanvay Institute Of MBA Page 8

Banking services are extremely important in a free market economy such as that found in Canada and the United States. Banking services serve two primary purposes. First, by supplying customers with the basic mediums-of-exchange (cash, checking accounts, and credit cards), banks play a key role in the way goods and services are purchased. Second, by accepting money deposits from savers and then lending the money to borrowers, banks encourage the flow of money to productive use and investments. This in turn allows the economy to grow. Without this flow, savings would sit idle in someones safe or pocket, money would not be available to borrow, people would not be able to purchase cars or houses, and businesses would not be able to build the new factories the economy needs to produce more goods and grow. Enabling the flow of money from savers to investors is called financial intermediation, and it is extremely important to a free market economy.

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1.2 STRUCTURE OF INDIAN BANKING INDUSTRY

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Organized banking was active in India since the establishment of the General Bank of India in 1786. After independence, the Reserve Bank of India (RBI) was established as the central bank and in 1955, the Imperial Bank of India, the biggest bank at the time, was taken over by the government to form state-owned State Bank of India (SBI). RBI had undertaken an exercise to merge weak banks to strong banks and the total number of banks thus reduced from 566 in 1951 to 85 in 1969. With the objective of reaching out to masses and meeting the credit needs of all sections of people, the government nationalized 14 large banks in 1969 followed by another 6 banks in 1980. This period saw enormous growth in the number of branches and the banks branch network became wide enough to reach the weakest sections of the society in a vast country like India. Sibs network of 9033 domestic branches and 48 overseas offices is considered to be one of the largest for any bank in the world. The economic reforms unleashed by the government in early nineties included banking sector too, to a significant extent. Entry of new private sector banks was permitted under specific guidelines issued by RBI. A number of liberalization and deregulation measures aimed at consolidation, efficiency, productivity, asset quality, capital adequacy and profitability have been introduced by the RBI to bring Indian banks in line with International best practices. With a view to giving the state-owned banks operational flexibility and functional autonomy, partial privatization has been authorized as a first step, enabling them to dilute the stake of the government to 51 per cent. The government further proposed, in the Union Budget for the financial Shree Samanvay Institute Of MBA Page 11

year 2000-01, to reduce its holding in nationalized banks to a minimum of 33 per cent on a case by case basis. The banking system can be broadly classified as organized and unorganized banking system. The unorganized banking system comprises of moneylenders, indigenous bankers, lending pawnbrokers, landlords, traders, etc. Whereas the organized banking system comprises of Scheduled Banks and Non-Scheduled Banks that are permitted by RBI to undertake banking business.

The Indian Banking Industry can be broadly classified into: A. Public Sector Banks B. Old and New Private Sector Banks C. Foreign Banks D. Co-operative Banks

A. Public Sector Banks


Public sector banks are banks where in the government has a holding of 100%.This been a situation prior to liberalization. The stake has fallen because of a public issue in the post liberalization period. Some of the other leading banks in this segment have also proposed to come out with an equity issue to raise further capital. The government is proposing to bring out a bill wherein its share in all these banks would stand reduced to 33% from the current levels The public sector banks largely dominate the Indian Banking industry. These banks till the early 90s were involved in the traditional banking business of deposits and credit lending. The public sector banks have a strong distribution network all over the country. But the strength of the earlier periods has now become a concern for these banks. As compared to the tech-equipped distribution network of the new private sector banks and the foreign banks, these banks have found it difficult to upgrade them on the technology front. These banks are also facing the problem of Shree Samanvay Institute Of MBA Page 12

surplus manpower. Most of these banks are now coming out with a VRS to bring down their number of employees and improve the efficiency ratios. The public sector banks still control a major share in the banking operations of the country. Their inefficiencies have been exposed only when the market was thrown open for competition and new players started eating up their share. But given their size and the strong network, most of these banks can change their perception. The recent thrust on reduction of government stake; VRS, NPA settlement schemes etc have been some of the steps in this direction. Since the growth of the economy is largely dependent on the performance of these banks, even with the growth of new private and foreign players, these banks will have an important role to play.Some of the players here are State Bank of India and its associates, Bank of Baroda, Corporation Bank, Punjab National Bank, Union Bank of India, etc.

B. Old and New Private Sector Banks


Private Sector Banks-Old
These banks existed prior to the promulgation of Banking Nationalization Act but were not nationalized due to their smaller size and regional focus. Most of these banks continue to have a regional focus and are relatively smaller in size. A large number of these banks are basically from the south. Being small in size, these banks focus on service and technology and thus face competition from new private and foreign banks. Most of these banks are trying to increase their presence nationwide and are planning to enter other business areas like insurance. The old private sector banks have performed reasonably well during the FY2000. As these banks were facing stiff competition from the new private banks and the foreign players who were making inroads in their markets,

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these banks have been able to increase their net profits by over 50%. As a result of the increasing competition in the sector, these banks have been trying to improve upon their margins and asset quality. Most of these banks have a high CAR and as such they do not face any capital constraint in their growth plans. Even their return on net worth has been at par in most of the cases with the other new players in the market. But the coming years would be more challenging for these banks as the public sector are also trying to adapt to the new environment and the new banks have already equipped themselves to have a major share in any opportunity that would accrue. Some of the private sector-old players are Bank of Madura Ltd., Tamilnad Mercantile Bank Ltd., The Jammu & Kashmir Bank Ltd., The Vysya Bank Ltd., etc.

Private Sector Banks- New


The Banking Regulation Act was amended in 1993 permitting the entry of new private sector banks. The act also specified certain criteria for establishing new private sector banks. The criteria are as follows: 1. The banks should have a minimum net worth of Rs1bn. 2. The promoters holding should be minimum 25% of the paid up capital. 3. The banks should offer shares to the public within three years of their operations. The first new private sector bank started operations in 1995. The minimum net worth requirement of Rs1bn and difficulty in getting the banking license has kept the option open for very few players.

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The financial institutions have promoted many of these banks. With emphasis on service and technology, it is for the first time that Indian banks are challenging the foreign banks. These banks are making heavy use of technology to give good service on par with foreign banks but to a much wider audience e.g. branch size has been reduced considerably by using technology and having less manpower. This saves the cost of the branch. In addition the ATM etc helps drawing large customers to one branch. The new private banks have been consistently gaining market share from the public sector banks. The major beneficiary of this has been corporate clients who are most sought after now. The new private sector banks have performed very well in the FY2000.Most of this banks have registered an increase in net profits of over 50%.They have been able to make significant inroads in the retail market of the public sector and the old private sector banks. During the year, the two leading banks in this sector had set a new trend in the Indian banking sector. HDFC Bank, as a part of its expansion plans had taken over Times Bank. ICICI Bank became the first bank in the country to list its shares on NYSE. Some of the private sector-new players include, Centurion Bank Ltd., Global Trust Bank Ltd., HDFC Bank., ICICI Banking Corporation Ltd., IDBI Bank Ltd., etc.

C. Foreign Banks
Foreign banks have been doing the normal banking business in the country. During the period of nationalization, the entry of new foreign banks and expansion by existing foreign banks were prohibited. Even, when the norms were relaxed later on, RBI was very slow in granting any further approvals to these banks. But most of these banks have concentrated on the metropolitan cities of the country and Shree Samanvay Institute Of MBA Page 15

have been able to do reasonably well. These banks have used the latest technology to compensate for the limited number of branches they have. In the post liberalization period, there has been a sharp increase in the total business done by the foreign banks. A number of new players have entered and the existing players have consolidated their position in the market. In the last couple of years, some of the foreign banks have entered the retail segment and introduced a number of new products in the market. This has intensified the competition in the banking sector and has made most of the old players rethink their strategy. Some of the foreign banks operating in India are ABN-AMRO Bank N.V., ANZ Grind lays Bank Ltd, Citibank N.A., Deutsche Bank AG, Standard Chartered Bank, etc.

D. Co-Operative Banks
Co-operative banks are a part of the vast and powerful superstructure of cooperative institutions, which are engaged in the tasks of production, processing, marketing, and distribution, servicing, and banking in India. The co-operative banks were conceived in order to substitute unorganized money market agencies like moneylenders, to provide adequate short-term and long-term institutional credit at reasonable rates of interest, and to bring about integration of the unorganized and organized segments of the money market.

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The main aim of the co-operative banks is to provide cheaper credit to their members, and not to maximize their profits. There has been an impressive growth in deposits, credit and working capital of these banks. The annual rates of growth of co-operative banks have been quite high, and are comparable with those of commercial banks. The government and the RBI have taken a number of steps to improve the health and strength of co-operative banks in India. In keeping with other financial sectors reforms, certain co-operative banking reforms also have been carried out after 1991.

1.3 CURRENT SCENARIO


A. PUBLIC SECTOR BANKS
SBI Group: State Bank of India with its seven associates banks command the largest banking resource in India. SBI and its associates banks are:

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1 State Bank of India 2 State Bank of Bikaner & Jaipur 3 State Bank of Hyderabad 4 State Bank of Indore 5 State Bank of Mysore 6 State Bank of Patiala 7 State Bank of Saurashtra 8 State Bank of Travancore After the amalgamation of new bank of India with Punjab national bank, currently there are 18 nationalized banks in India: > Allahabad bank > Andhra bank > Bank of Baroda > Bank of Maharashtra > Canara bank > Central bank of India > Corporation bank > Dena bank > Indian bank > Syndicate Bank > Union Bank of India > United Bank of India > UCO Bank > Vijaya Bank > Indian Overseas Bank > Oriental Bank Of Commerce > Punjab and Sind Bank > Punjab National bank

A. PRIVATE SECTOR BANKS


Bank of Rajasthan Indian Overseas Bank Catholic Syrian Bank Centurion Bank of Punjab Shree Samanvay Institute Of MBA > ING Vysya Bank > Jammu & Kashmir Bank > Karnataka Bank > Karur Vysya Bank Page 18

Dhanalaxmi Bank Federal Bank HDFC Bank ICICI Bank IDBI Bank

> Kotak Mahindra Bank > South Indian Bank > Tamilnad Indian Bank > Axis Bank > Indusind Bank

A. FOREIGN BANKS
ABN AMRO Bank Abu Dhabi Commercial Bank Ltd Bank of Ceylon BNP Paribas Bank Citi Bank China Trust Commercial Bank > Deutshce Bank > HSBC > JPMorgan Chase Bank > Standard Chartered Bank > Scotia Bank > Taib Bank

Currently (2009), overall, banking in India is considered as fairly mature in terms of supply, product range and reach-even though reach in rural India still remains a challenge for the private sector and foreign banks. Even in terms of quality of assets and capital adequacy, Indian banks are considered to have clean, strong and transparent balance sheets-as compared to other banks in comparable economies in its region. The Reserve Bank of India is an autonomous body, with minimal pressure from the government. The stated policy of the Bank on the Indian Rupee is to manage volatility-without any stated exchange rate-and this has mostly been true. With the growth in the Indian economy expected to be strong for quite some timeespecially in its services sector, the demand for banking services-especially retail banking, mortgages and investment services are expected to be strong. M&As, takeovers, asset sales and much more action (as it is unraveling in China) will happen on this front in India.

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In March 2006, the Reserve Bank of India allowed Warburg Pincus to increase its stake in Kotak Mahindra Bank (a private sector bank) to 10%. This is the first time an investor has been allowed to hold more than 5% in a private sector bank since the RBI announced norms in 2005 that any stake exceeding 5% in the private sector banks would need to be vetted by them. Currently, India has 88 scheduled commercial banks (SCBs) - 28 public sector banks (that is with the Government of India holding a stake), 29 private sector banks (these do not have government stake; they may be publicly listed and traded on stock exchanges) and 31 foreign banks. They have a combined network of over 53,000 branches and 17,000 ATMs.

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Chapter 2

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2.1 ABOUT HDFC GROUP


If ever there was a man with a mission it was Hasmukhbhai Parekh, Founder and Chairman-Emeritus, of HDFC Group who left this earthly abode on November 18, 1994. Born in a traditional banking family in Surat, Gujarat, Mr. Parekh started his financial career at Harkisandass Lukhmidass a leading stock broking firm. The firm closed down in the late seventies, but, long before that, he went on to become a towering figure on the Indian financial scene.

In 1956 he began his lifelong financial affair with the economic world, as General Manager of the newly-formed Industrial Credit and Investment Corporation of India (ICICI). He rose to become Chairman and continued so till his retirement in 1972. At the ripe age of 60, Hasmukhbhai started his second dynamic life, even more illustrious than his first. His vision for mortgage finance for housing gave birth to the Housing Development Finance Corporation it was a trend-setter for housing finance in the whole Asian continent. He was also a writer in his own right. There are over 200 published articles by him.

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In 1992, the Government of India honored him with the Padma Bhushan Award. The London School of Economics & Political Science conferred on him an Honorary Fellowship. He was one of the Founder Members of the Centre for Advancement of Philanthropy, and its Chairman till 1993.

2.2 LIST OF ENTERPRISES


Enterprises under common control of the promoter:
HDFC Bank Ltd. HDFC Asset Management Company Ltd. HDFC Standard Life Insurance Company Ltd. HDFC Developers Ltd. HDFC Holdings Ltd. HDFC Investments Ltd. HDFC trustee Company Ltd. HDFC Finance Ltd. HDFC Chubb General Insurance Company Ltd. HDFC Venture Capital Ltd.

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REGISTERED OFFICE:

CORPORATE OFFICE:

Address: HDFC Bank House Senapati Bapat Marg Lower Parel, Mumbai, Maharashtra, 400013. Phone: 91-022-56521000 Fax: 91-022-24960737

Address: Ramon House, 169, Back Bay, Reclamation, H T Parekh Marg, Church Gate, Mumbai 400 020.

BHAVNAGAR BRANCH

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HDFC BANK LTD. Sterling Point, Waghawadi Road, Bhavnagar- 364002. Websites Www. hdfc.com Www. hdfcbank.com

2.3 ABOUT HDFC BANK


The Housing Development Finance Corporation (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, as part of 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 in January 1995 HDFC Bank, the pioneer of the retail-banking movement in India, is one of the fastest growing and most profitable banks in India with a strong urban presence. The bank, with a market share of 2.5% has a wide reach across the country with a branch network of 425 branches and 950 ATMs. Strong understanding of the retail sphere (46% of total advances in 9mFY05) and technology initiatives has made the bank the second largest private sector bank in the country. The bank has largely outpaced the sector growth over the last few years, but of late the growth momentum has been subdued due to competitive reasons. HDFC Bank is headquartered in Mumbai. The Bank at present has an enviable network of over 250 branches spread over 135 cities across the country. All Shree Samanvay Institute Of MBA Page 25

branches are linked to each other through an online real- time basis. Customers in 80 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 centers 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 centers where the NSE/BSE has a strong and active member base. The Bank also has a chain of over 800 networked ATMs across these cities. Moreover, HDFC Bank's ATM network can be accessed by all domestic and international Visa/MasterCard, Visa Electron/Maestro, Plus/Cirrus and American Express credit/charge cardholders. 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 made substantial efforts and investments in acquiring the best technology available internationally to build the infrastructure required for a worldclass bank. In terms of software, the Corporate Banking business is supported by Flex cube, while the Retail Banking business by Fin ware, both from i-flex Solutions Ltd. The systems are open, scalable and web-enabled. The Bank has prioritized its engagement in technology and the internet as one of its key goals and has 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. The Bank has received recognition both nationally and internationally for 'The Best Bank' on various parameters in publications like Euro money and Finance Asia. Shree Samanvay Institute Of MBA Page 26

The Bank's IT department has total staff strength of 120 (approx.), with a mix of functional and technical specialists. The project managers for new IT initiatives are designated both from this group and from businesses. Almost all the project development and application maintenance activities are outsourced to IT vendors.

2.4 HISTORY OF THE BANK


HDFC was incorporated in 1977 with the primary objective of meeting a social need that of promoting home ownership by providing long-term finance to households for their housing needs. HDFC was promoted with an initial share capital of Rs. 100 million. Against the milieu of rapid urbanization and a changing socio-economic scenario, the demand for housing has grown explosively. The importance of the housing sector in the economy can be illustrated by a few key statistics. According to the National Building Organization (NBO), the total demand for housing is estimated at 2 million units per year and the total housing shortfall is estimated to be 19.4 million units, of which 12.76 million units is from rural areas and 6.64 million units from urban areas. The housing industry is the second largest employment generator in the country. It is estimated that the budgeted 2 million units would lead to the creation of an additional 10 million man-years of direct employment and another 15 million man-years of indirect employment. Shree Samanvay Institute Of MBA Page 27

MILE STONES
Acquired Times Bank in merger from Times Of India Group (5 6% present holding) in 2000. HDFC owns only 24.4%, rest owned by public and private equity investors JP Morgan Chase (5 -6%). Large Foreign Institutional Investors (in India) including Putnam, etc. (big vote in Indian equity markets) 10-11% Warburg Pincus has a significant holding in HDFC (its promoter) Having identified housing as a priority area in the Ninth Five Year Plan (1997-2002), the National Housing Policy has envisaged an investment target of Rs. 1,500 billion for this sector. In order to achieve this investment target, the Government needs to make low cost funds easily available and enforce legal and regulatory reforms.

2.5 MISSION
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.

2.6 GOAL AND OBJECTIVES


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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.

Organizational Goals
Develop close relationships with individual households, Maintain its position as the premier housing finance institution in the country, Transform ideas into viable and creative solutions, Provide consistently high returns to shareholders, and To grow through diversification by leveraging off the existing client base.

2.7 ORGANIZATIONAL CULTURE & VALUES


HDFC Bank has an open and informal culture. HDFC Bank has value integrity, commitment and teamwork and excellence in customer service. HDFC adopts a policy of learning by doingwhich encourages decision making as well as learning from doing. As HDFC Bank continue to grow rapidly in spite of the competitive market scenario, young professionals opting to make a career with HDFC Bank today will find more challenging and exciting opportunities to contribute and grow with them. Shree Samanvay Institute Of MBA Page 29

If you are young, talented individual who enjoys challenges, has a passion to excel and can fit into our organizational culture & value system, you could be a part of learning and growing team of professionals at HDFC Bank. HDFC Bank has always been market-oriented and dynamic with respect to resource mobilization as well as its lending programmed. This renders it more that capable to meet the new challenges that have emerged. Over the years, HDFC Bank 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 Bank has developed a network of industries through partnerships with some of the best institutions in the world, for providing specialized financial services. Each institution fine tuned for a specific market, while offering the entire HDFC customer base the highest standards of quality in product design, facilities and services.

2.8 BOARD OF DIRECTORS


ORGANISATION AND MANAGEMENT
HDFC is a professionally managed organization with a board of directors consisting of eminent persons who represent various fields including finance, taxation, construction and urban policy & development. The board primarily focuses on Shree Samanvay Institute Of MBA Page 30

strategy formulation, policy and control, designed to deliver increasing value to shareholders.

Board of Directors

BOARD OF DIRECTORS
Managing Director Director Director Director Director Executive Director Chairman Director Director Executive Director Director Director Mr.Aditya Puri Mr.Arvind Pande Mr.Ashim Samanta Mr.C M Vasudev Mr.Gautam Divan Mr.Harish Engineer Mr.Jagdish Capoor Mr.Keki M Mistry Mr.Pandit Palande Mr.Paresh Sukthankar, Mr.Renu Karnad Mr.Vineet Jain

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SHARE HOLDING PATTERN


Share Holding Pattern Indian Promoters Foreign collaborators Indian inst/Mut Fund FIIs/GDR Free float Shareholders

24.20% 13.10% 2.10% 26.90% 33.70% 215,630

HDFC has a staff strength of 1029, which includes professionals from the fields of finance, law, accountancy, engineering and marketing.

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2.9 AWARDS & ACHIEVEMENT


Euro money Awards 2009: 'Best Bank in India' Economic Times Brand Equity & Nielsen Research annual survey 2009: Most Trusted Brand - Runner Up Asia Money 2009 Awards: 'Best Domestic Bank in India' IBA Banking Technology Awards 2009: 'Best IT Governance Award Runner up' Global Finance Award: 'Best Trade Finance Bank in India for 2009 IDRBT Banking Technology Excellence Award 2008: 'Best IT Governance and Value Delivery' Asian Banker Excellence in Retail Financial Services: 'Asian Banker Best Retail Bank in India Award 2009 ' Finance Asia Country Awards for Achievement 2008: 'Best Bank and Best Cash Management Bank' CNN-IBN: 'Indian of the Year (Business)' Nasscom IT User Award 2008: 'Best IT Adoption in the Banking Sector Business India: 'Best Bank 2008' Forbes Asia: Feb. 50 companies in Asia Pacific Asian Banker Excellence in Retail Financial Services: Best Retail Bank 2008 Asia money: Best local Cash Management Bank Award voted by Corporate Microsoft & Indian Express Group: Security Strategist Award 2008 World Trade Center Award of honor: For outstanding contribution to international trade services Business Today-Monitor Group survey: One of India's "Most Innovative Companies" Financial Express-Ernst & Young Award: Best Bank Award in the Private Sector category Global HR Excellence Awards - Asia Pacific HRM Congress; 'Employer Brand of the Year 2007 -2008' Award - First Runner up, & many more Shree Samanvay Institute Of MBA Page 33

Business Today: 'Best Bank' Award

2.10 PRODUCTS OF THE BANK


SAVINGS ACCOUNTS
These accounts are primarily meant to inculcate a sense of saving for the future, accumulating funds over a period of time. Whatever your occupation, we are confident that you will find the perfect banking solution. Open an account in your name or register for one jointly with a family member today. TYPES OF SAVINGS ACCOUNTS (1) Regular (2) Savings Max (3) Institutional Savings (4) No frills (5) Senior citizens A/C. (6) Kids advantage (7) Corporate Salary TYPES OF SALLARY ACCOUNTS (1) Classic (2) Regular (3) Payroll (4) Premium

CURRENT ACCOUNTS
Now, with an HDFC Bank Current Account, experience the freedom of multi-city banking! You can have the power of multi-location access to your account from any Shree Samanvay Institute Of MBA Page 34

of our 684 branches in 316 cities. Not only that, you can do most of your banking transactions from the comfort of your office or home without stepping out.

TYPES OF CURRENT ACCOUNTS (1) Regular (2) Current Plus (3) Current Trade (4) Current Premium (5) Bank Flexi (6) Bank Apex (7) Bank Max

FIXED DEPOSITS
Long-term investments form the chunk of everybody's future plans. An alternative to simply applying for loans, fixed deposits allow you to borrow from your own funds for a limited period, thus fulfilling your needs as well as keeping your savings secure. (1) Regular fixed deposits (2) Super saver fixed deposits (3) Sweep in fixed deposits (4) 5 year tax savings fixed deposits

DEMAT ACCOUNT
HDFC BANK is one of the leading Depository Participant (DP) in the country with over 8 Lac Demat accounts.

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HDFC Bank Demat services offers you a secure and convenient way to keep track of your securities and investments, over a period of time, without the hassle of handling physical documents that get mutilated or lost in transit. HDFC BANK is Depository participant both with -National Securities Depositories Limited (NSDL) and Central Depository Services Limited (CDSL).

NRI ACCOUNTS
(1) NRE savings account (2) NRO savings account

CARDS
Our range of Cards helps you meet your financial objectives. So whether you are looking to add to your buying power, conducting cashless shopping or budgeting your expenditure, you will find a card that suits you. CREDIT CARDS (1) Silver Card (2) Gold Card (3) Platinum Card (4) Titanium Card (5) Womens gold credit card DEBIT CARDS (1) Easy shop international debit card (2) Easy shop gold debit card Shree Samanvay Institute Of MBA Page 36

PREPAID CARDS (1) Forex Plus card (2) Gift Plus card

INVESTMENT AND INSURANCE


(1) Mutual Funds (2) Insurance (3) Bonds (4) Mudra Gold Bar

2.11 ORG. CHART OF HDFC AT BHAVNAGAR


BRANCH
P.B. Authorisor : Mr.Hitesh Shah IRM : Mr. Kamlesh Pipal Relationship Manager: Mr. Keyur Jani ABM for Current a/c: Mr. Himanshu Trivedi Teller Authorizer : Mr. Vijay Bhalani

Branch Manager

Personal Banker Authorizer

Teller Authorizer

Clearinghouse

Sales Executive

Personal Banker

Teller

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Functions
Branch manager
Require approval from BM for transaction more than 50,000 RS. organising coordinating and motivating employees in the organization. Develop his territory.

Personal Banker authorizer


After his approval, all the applications collect and checked by PB, Executives go for further process to branch manager. -Daily stock (welcome kit, debit pin number, cheque book, and debit card) requires approval of PB authorizer.

Personal Banker
Maintain contacts with walk-in customers, existing customers and provide satisfactory service to them. Handle all the complaint of the customers and resolve it. Maintain daily stock reports and take approval from the PB authorizer.

Teller Authorizer
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He gives approval to all types cheques and DDs by checking all the details and validity of it. At the end of the day all the cash on hand in the bank require signature of him. Report of cash loading in ATM is to be submitted to him. He is responsible for it.

Teller

Maintain daily transactions of cheque withdrawal, cheque deposits, cash withdrawal cash deposit, fund transfer and DD etc. Check the validity of all the above transactions.

Clearinghouse
All the cheques are being transferred to this department and it checks the sign, balance amount in his/ her a/c, date of issuing. It also maintains the transaction with other branches and banks. DRF forms are being handled by this department.

Sales Executive
Generate new inquiries by cold calling and tele marketing. Handle existing and new customers. Maintain customer relationships.

2.12 ATM IN BHAVNAGAR


Dr. Kapasis Hospital,

Address

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Opp City Bus Stand, Down Chowk Bhavnagar Bhavnagar 364001 Gujarat Address Gopi Arcade Opp Thakteshwar Post Office Waghawadi Bhavnagar - 364002 Gujarat Address 1 , Shop No. Prithvi Complex Kalanala Bhavnagar Gujarat Address 6 Shop No. Prithvi Plaza, Ground Floor Ghogha Circle Bhavnagar Gujarat Address H / 82 Shop No. Akshardeep Complex Shastrinagar Bhavnagar Gujarat

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2.13 MAP OF THE BHAVNAGAR-HDFC BANK


BRANCH

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2.14 VARIOUS LOANS PROVIDED BY HDFC BANK


1. Personal Loan
Features & Benefits
1) Borrow up to Rs 15, 00,000 for any purpose depending on your requirements. 2) Flexible Repayment options, ranging from 12 to 60 months. 3) Repay with easy EMIs. 4) One of the lowest interest rates. 5) Hassle free loans - No guarantor/security/collateral required. 6) Speedy loan approval. 7) Convenience of service at your doorstep. 8) Customer privileges If you are an HDFC Bank salary account holder, we have a special offer for you If you are an existing Auto Loan customer with a clear repayment of 12 months or more from any of our approved financiers or us, you can get a hassle free personal loan (without income documentation). If you are an existing HDFC Bank Personal Loan customer with a clear repayment of 12 months or more, we can Top-Up your

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personal loan.

1) Credit Shield In case of death or total permanent disability of the loanee, the loanee/nominee can avail of the Payment Protection Insurance (Credit Shield) which insures the principle outstandings on the loan up to a maximum of the loan amount. Principle outstanding is defined as the amount of loan outstanding (not including any arrears in payment or interest thereon) at the Date of Loss, having accounted for payments made and interest accruing as determined in the Policy. Hence, the amount covered does not include any principal added because of non - payment of EMI and also will not include interest/ accrued charges. 2) Personal Accident Cover In order to ensure that your family is taken care of we also offer a Personal Accident cover of Rs.2, 00,000 at a nominal premium.

Salaried Individuals include Salaried Doctors, CAs, employees of select Public and Private limited companies, Government Sector employees including public sector undertakings and central, state and local bodies:

Eligibility Criteria
1. Minimum age of Applicant: 21 years Shree Samanvay Institute Of MBA Page 43

2. Maximum age of Applicant at loan maturity: 60 years 3. Minimum employment: Minimum 2 years in employment and minimum 1 year in the current organization 4. Minimum Net Monthly Income: Rs. 10,000 per month (Rs. 15,000 in Mumbai, Delhi, Bangalore, Chennai and Hyderabad & Rs. 12,000 in Calcutta, Ahmadabad and Cochin)

Documents required
1. Proof of Identity (Passport Copy/ Voters ID card/ Driving Licence) 2. Address Proof (Ration card Tel/Elect. Bill/ Rental agr. / Passport copy/Trade licence /Est./Sales Tax certificate) 3. Bank Statements (latest 3 months bank statement / 6 months bank passbook) 4. Latest salary slip or current dated salary certificate with latest Form 16 Self employed (Professionals) include self - employed Doctors, Chartered Accountants, Engineers, MBA Consultants, Architects, and Company Secretaries.

Eligibility Criteria
1. Minimum age of Applicant: 25 years 2. Maximum age of Applicant at loan maturity: 65 years 3. Years in business: 4 to 7 years depending on profession 4. Minimum Annual Income: Rs. 100000 p.a.

Documents required
1. Proof of Identity (Passport Copy/ Voters ID card/ Driving Licence). 2. Address Proof (Ration card Tel/elect. Bill/ Rental agr. / Passport copy/Trade licence /Est./Sales Tax certificate). 3. Bank Statements(latest 6 months bank statement /passbook) Shree Samanvay Institute Of MBA Page 44

4. Latest ITR along with computation of income, B/S & P&L a/c for the last 2 yrs. certified by a CA 5. Qualification proof of the highest professional degree Self Employed (Individuals) include self-employed - Sole proprietors, Partners & Directors in the Business of Manufacturing, Trading or Services.

Eligibility Criteria
1. Minimum age of Applicant: 21 years 2. Maximum age of Applicant at loan maturity: 65 years 3. Years in business: 5 yrs continuous business experience 4. Minimum Annual Income: Rs. 1, 00,000 p.a. 5. Available in select cities

Documents required
1. Proof of Identity (Passport Copy/ Voters ID card/ Driving Licence) 2. Address Proof (Ration card Tel/elect. Bill/ Rental agr. / Passport copy/Trade licence /Est./Sales Tax certificate) 3. Bank Statements(latest 6 months bank statement /passbook) 4. Latest ITR along with computation of income, B/S & P&L a/c for the last 2 yrs. certified by a CA 5. Proof of continuation (Trade licence /Establishment /Sales Tax certificate) 6. Other Mandatory Documents (Sole Prop. Decl. Or Cert. Copy of Partnership Deed, Cert. Copy of MOA, AOA & Board resolution.) Self Employed (Pvt Cos and Partnership Firms) include Private Companies and Partnership firms in the Business of Manufacturing, Trading orServices. .

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Eligibility Criteria
1. Years in business: Minimum of 3 years in current business and 5 years total business experience 2. Business must be profit making for the last 2 years 3. Minimum Annual Income: Rs 100000 p.a. 4. Available in select cities

Documents required
1. Address Proof (Ration card Tel/elect. Bill/ Rental agr. / Passport copy/Trade licence /Est./Sales Tax certificate) 2. Bank Statements(latest 6 months bank statement /passbook) 3. Latest ITR along with computation of income, B/S & P&L a/c for the last 2 yrs. certified by a CA 4. Proof of continuation (Trade licence /Establishment /Sales Tax certificate) 5. Other Mandatory Documents (Sole Prop. Decl. Or Cert. Copy of Partnership Deed, Certified true copy of Memorandum & Articles of Association (certified by Director) & Board resolution (Original)

2. SmartDraft-Overdraft against salary


SmartDraft is an unsecured overdraft facility offered to HDFC Bank's corporate salary account holders. The facility operates in the form of additional funds in the account, for use during short-term exigencies. Our corporate salary account holders can avail of Overdraft facility of up to 3 times the salary

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Features & Benefits


1. Overdraft limit up to 3 times the salary 2. Minimum documentation 3. No pre-closure charges 4. Easy-to-use and easy-to-pay facility 5. Freedom to use limit through Cheque book, ATM, online transfer, etc. 6. Interest payable on the amount utilized 7. Credits in the account set-off utilization and help save interest 8. Easy documentation 9. Limit will be set on the existing account 10. Non EMI based facility

3.Home loans
Home Loans Features & Benefits
1. Home Loan - Home loans for individuals to purchase (fresh / resale) or construct houses. Application can be made individually or jointly. HDFC finances up to 85% maximum of the cost of the property (Agreement value + Stamp duty + Registration charges) based on the repayment capacity of the customer. Shree Samanvay Institute Of MBA Page 47

Chapter 6

6.1 FINDINGS-CUSTOMERS
QUESTIONNAIRE
Q.1 which alternative would you prefer for taking personal loan? A. Banks B. Finance Companies C. Agencies D. Others

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Options Bank FC Agencies Others Total

No. of Respondents 90 72 20 18 200

% of Respondents 45% 36% 10% 09% 100%

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4 3 2 1 5 0 L O A F B 9 1 3 4 % P 5 0 % e t g C a % 0 6 5 of e %

h e n % R r d e n k es s e r c s p y r s i o o s e n s d a p e l r nt e s f L e o r a r e n d

L e n d e r ' s s e l e c t i o n
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Interpretation

From this chart we find that 45% of the customers have obtained personal loans from Banks, 36% of the customers have obtained from Finance company and remaining 19% are obtained through various agencies and others.

Previously, before few years the proportion of personal loans acquired by the customers was majority obtained through Finance Companies as compared to the banks. Currently, many banks have jumped up in providing personal loan services and now the numbers of customers for personal loans have increased. Here this chart shows that now the customers opts more to obtain loans from the banks as compared to other alternatives.

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Q.2 If bank, through which bank you have taken personal loan? A.HDFC B.SBI C.ICICI D.Others Options HDFC SBI ICICI Others Total No. of Respondents 36 21 25 8 90 % of Respondents 40% 23% 28% 9% 100%

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9 B O I S H 6 5 3 1 0 2 4 % M a t C B D % 8 3 0 of o n h I F % R k e C s s r I e t s s P p r P e o r f n e e d r f e r e e nt d

s r

r e d B a n k s b y c u s t o m e r s

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Interpretation

Out of the total number of customers surveyed, there are 40% of the customers such that have obtained personal loans through HDFC bank and 23% of the customers have obtained from SBI bank, 28% of them obtained from ICICI bank and remaining 9% of customers have obtained from other banks like Bank of India, Punjab National bank, Bank of Baroda, Citi bank, IDBI Bank, Axis Bank and others.

From 90 customers of banks, 36 customers have taken personal loan from HDFC bank. This shows that from various banks providing personal loans, majority of the customers prefers to obtain the loans from the HDFC banks as they have created good reputation in their eyes.

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Q.3 what is your annual income? A. Rs.1 lacs to Rs.2 lacs B. Rs.2 lacs to Rs. 3 lacs C. Rs.3 lacs to Rs.5 lacs D. More than Rs.5 lacs

Level of Incomes Rs.1 lacs to Rs.2 lacs Rs.2 lacs to Rs. 3 lacs Rs.3 lacs to Rs.5 lacs Mora than Rs.5 lacs Total

No. of Respondents 16 52 92 40 200

% of Respondents 8% 26% 46% 20% 100%

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4 2 8 More than Rs.5 R I 0 6 % lacs s n %

. c 3 2 1

o l m a e
c s g R r s o . u 5 3 2 p l a l s c a s c o s

p e r s o n a l l o a n c u s Shree Samanvay Institute Of MBA t o m e r

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Interpretation
Out of 200 customers surveyed, the 46% of the personal loan customers of banks fall in the income group of Rs.3 lacs to Rs.5 lacs per year. There are 26% of customers who fall in the income group of Rs.2 lacs to Rs.3 lacs per year. This means that out of the total loans issued by the banks, 72% of personal loans are provided to the income level group between 2 lacs to Rs.5 lacs per month. This is because issuing personal loans below and above that range; the bank faces more risks in repayment of them.

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Q.4 What are the criterias for which you have opted to take personal loan from your selected bank? (Rate them 10 as best and 1 as worst) A. Prestige of the bank B. Rate of interest offered C. Amount of loan offered D. Privacy E. Flexibility in fore -closure F. Mode of repayment G. Less processing time H. Less processing cost I. Less documentation J. Attractive scheme

HDFC BANK
FEATURES - HDFC Prestige of the bank Rate of interest offered Amount of loan offered privacy Flexibility in fore-closure Mode of repayment Less processing time Less processing cost Less documentation Attractive scheme No. of Respondents
5 6 4 1 1 3 5 3 6 2

% of Respondents
14 17 11 3 3 8 14 8 17 5

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Total

36

100

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P 5 3 8 1 L M F r A 1 7 % 4 t e o l i m R P % t s d e v o a r r s x a u t e a i c n e s c d p o b y t t r f o i i c l o f g v u c r i f e m e t i e s p y l n o n s a o t f c t y i a e h a m n r t t g e h m i n f o s e e c o f t n o i r f b s m e o a t e r f n c e f k l d e o r s e u d r e

I m p o r t a n t F e a t u r e s o f H D F C b a n k Shree Samanvay Institute Of MBA

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Interpretation
Out of the 200 customers surveyed, 36 customers have obtained personal loan from HDFC bank. From 36 customers, 6 assumes that the main feature for selecting HDFC bank is that the bank requires less documentation work and 6 customers assumes that it offered rate of interest is quit less and also requires very less processing time and it has good prestige due to which they have selected HDFC bank for personal loan. Other customers also assume that the bank implies very less processing cost and also offers higher amount of loan than others. Thus, HDFC bank is ranked as number one personal loan provider bank. It has good prestige and is famous for their services also.

ICICI BANK
FEATURES - ICICI Prestige of the bank Rate of interest offered Amount of loan offered Privacy Flexibility in fore-closure Mode of repayment Less processing time Less processing cost Less documentation Attractive scheme Total No. of Respondents
2 3 6 1 2 2 3 1 5 0 25

% of Respondents
8 12 24 4 8 8 12 4 20 0 100

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8 0 4 1 2 L M F A R P 0 % 2 4 t e o l m a r % s d i o t e r x v u e s i a n t d p b c t o i t o r i y f g i c l o e v u c r f i m e t n o e s p y l t f n s a o e c y i a r t a m n e h t g s e m i n f o t e c t o f b n i r f o a s m e f n t e r f k c e l d r o e s d u r e

I m p o r t a n t F e a t u r e s o f I C I Samanvay Institute Of MBA Shree C I

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a n k

Interpretation
Out of the 200 customers surveyed, 25 customers were of ICICI bank. From the total customers of ICICI bank, 6 customers assumes that the bank have the special features that it offers higher amount of loan and 5 customers assumes that it takes very less documentation and 3 assumes that it takes very less processing time, and attractive interest rate.

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STATE BANK OF INDIA


FEATURES - SBI

No. of Respondents
2 6 4 2 1 3 1 2 0 0 21

% of Respondents
9 29 19 10 5 13 5 10 0 0 100

Prestige of the bank Rate of interest offered Amount of loan offered privacy Flexibility in fore-closure Mode of repayment Less processing time Less processing cost Less documentation Attractive scheme Total

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Interpretation
Out of the 200 customers surveyed, 21 customers have obtained personal loans from SBI bank. From 21 customers, 6 assumes that the main feature for selecting SBI bank for personal loan is the lower rate of interest offered by the bank and 4 customer believes that it offers higher amount of loan and is one of the oldest bank in India in the eyes of people due to which they have opted to take loan from SBI. 13% of customers assume that its mode of payment is simple and 10% of them believe that it has very less processing cost and privacy maintain in SBI as compared to other banks.

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Q.6 Whose referrals motivated you to obtain personal loan from the bank? A. Advertisement by print media B. Publicity through agent C. Advertisement by TV, movie halls D. Mailers to customers E. Telemarketing

Option Advertisement by print media Publicity through agents Advertisement by TV, movie halls Mailers to customers Telemarketing Total

No. of Respondents 18 6 24 12 30 90

% of Respondents 20 7 27 13 33 100

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T M P A 7 3 1 2 e a u d % 0 3 7 l i b v % l e m e i r a r c t r s i k t s t y e t o m i t e c h n g u r t s o t u b o g y m h e T p V a r s , g i e n M n t o t v s M i e e d i h a a l l s

R e f e r r a l s

Interpretation
Out of 90 customers of banks surveyed, the 33% customers got information through telemarketing as main element for marketing personal loans, 27% of the customers got reference from advertisement by TV, movie halls There are only 20% of customers that uses Advertisement by print media to get detail about personal loan. Only 7% of customers aware by agent. Shree Samanvay Institute Of MBA Page 67

From this we can interpret that advertisements through telemarketing and through television have greater impacts on customers for marketing personal loan.

Q.7 For which of the following purpose have you taken personal loan? A. Marriage B. Home Renovation C. Business development D. Childs education E. Health treatment Shree Samanvay Institute Of MBA Page 68

F. White entry G. Furniture H. Others No. of Respondents


50 30 34 36 6 14 16 14 200

Customers purpose Marriage Home Renovation Business development Childs Education Health treatment White entry Furniture Others Total
O F W Health treatment C B H M o f W C H B M C 4 5 0 8 7 3 1 2 P t h u o a t e h o u a r 0 % 8 7 5 u h i s m r h a i m s r n t l e r i % r r e d n i n t l e i r t p s t e r a r e t d . i u s e g e o s t h R D a r s n e r s t e o u s e g i e r d D v r t n v e y u e a a t r o e c v t s t a e i r e E v l t l o o y d a o i o n m u t p o p t n m e c i m e a n a o e n k t n t

% of Respondents
25% 15% 17% 18% 3% 7% 8% 7% 100

e i t o n p e r s o n a l l o a n

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Interpretation
Out of 200 customers surveyed, 25% of the customers have obtained the personal loans for social reason, 15% have taken for home renovation, 17% have taken for business development, and remaining have taken for childs education, health treatment, white entry and furniture etc. From this we can very well interpret that majority of the customers have obtained personal loans for live their social and family life smoothly.

There are very less percentage of customers who have obtained loans for purchasing furniture, health treatment.

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Q.8 On what basis do you choose a lender? A. Eligibility period B. Interest rates C. Other costs (Administration fee, processing fee). E. Documents required. F. Penalties Options Eligibility Interest rates Other costs Documents required Penalties Total No. of Respondents 44 70 34 22 30 200 % of Respondents 22 35 17 11 15 100

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L e n d e r's s e le c tio n d e c is io n
40 35 30 % of Respondents 25 20 15 10 5 0 E lig ib ility In te re s t ra te s O th e r c o s ts D o c u m e n ts re q u ire d c rite ria s P e n a lt ie s 22 17 11 15 35 E lig ib ility In t e re s t ra te s O th e r c o s t s D o c u m e n t s re q u ire d P e na lties

Interpretation
Out of 200 customers surveyed, 35% of the customers considers interest rates are the first preference to be given while selecting the lender, 22% considers eligibility as the second alternative and how much period they are providing for the repayment of loan, 17% gives preference to the costs involved in it like administrative costs and other charges. 15% of the customers gives preference to the Penalties, i.e., what are the penalties to be paid in case of any default or delay in the repayment of the installment. Customers give less preference to the documentation work required by the bank as compared to other options.

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Q.9 By which way do you increase the eligibility for which you can obtain a personal loan? A. Stretch your loan tenure B. Clear your outstanding debts C. Step-up loan D. Balloon Payment (loan against investment) Options Stretch your loan tenure Clear your outstanding debts Step-up loan Balloon Payment Total No. of Respondents 60 76 24 200 % of Respondents 30 38 12 20 100

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O p tio n s fo r in c r e a s in g e lig ib ility


40 35 30 25 % of Respondents 20 15 10 5 0 S t re t c h y o u r lo aC le a r y o u r S t e p -u p lo a B a llo o n P a y m e n t n n t e n u re o u t s t a n d in g d e b t s O p ti o n s 12 20 30 S t re t c h y o u r lo a n t e n u re C le a r y o u r o u t s t a n d in g d e b t s S t e p -u p lo a n B a llo o n P a y m e n t 38

Interpretation
This question is asked to know the customers response about what should they do for increasing their eligibility for personal loans. 38% of the customers gives preference to the option that firstly, they should clear their outstanding debts which may be of home loans, Car loans, etc. If their EMIs are cleared then that increases your eligibility for personal loans. 30% of the customers give preference to the option of stretching their loan tenure. The basic rule of EMI is larger the tenure lower will be the EMI and similarly shorter the tenure higher will be the EMI and if borrower will take the

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larger tenure then automatically their EMI will decline and their paying capacity increases. The reason being their principal amount is spread among the number of years and it lowers the amount of EMI but amount of interest paid is higher in larger tenure, as one of the major components while calculating interest rates is tenure.ijmjimijmimijmjnhubnbgbbybybunyyyy

Q.10 For what time duration has you taken personal loan? A. For 0 year-1 year B. For 1 years-2 years C. For 2 years-3 years D. For 3 years-4 years E. For 4 years-5 years

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Options For 0 year-1 year For 1 year-2 years For 2 years-3 years For 3 years- 4 years For 4 years-5 years Total

No. of Respondents 42 56 72 20 10 200

% of Respondents 21 28 36 10 5 100

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% y 4 1 0 5 3 2 P of y e 5 0 6 8 1 e R e a 5 4 3 1 r e a r 2 r s y i p s y e o o 2 1 e a d n 5 4 3 y a r d y e s r y e a s o nt e a r f a r s r

p e r s o n a l l o a n s

o b t a i n e Shree Samanvay Institute Of MBA d

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Interpretation
Out of 200 customers surveyed, 36% of the customers have opted for the personal loan with period of 2 to 3 years. 28% of customers have opted for the personal loan with period of 1 to 2 years. It states that larger the tenure, lesser the EMIs and larger the interest that the customer has to pay. There are only 5% of customers who have obtained personal loans for 4 years to 5 years.

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Q.11 what amount have you taken a personal loan? A. Up to Rs.1 lacs B. Rs.1 lacs to Rs.5 lacs C. Rs.5 lacs to Rs.10 lacs Options Up to Rs.1 lacs Rs.1 lacs to Rs.5 lacs Rs.5 lacs to Rs.10 lacs Rs.10 lacs onward Total D. Rs.10 lacs onward No. of Respondents 46 68 56 30 200 % of Respondents 23 34 28 15 100

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% A R U 4 5 0 1 3 2 P R m s p 0 5 4 8 3 e R s o . r s . f u R 5 1 t . 5 R n s 0 o s 1 e t . l o 0 s 1 l a R n p 0 a c s a o c s . n l s 1 l w d a t a t e c o l l r o n s a o d R t c R s a s . n . 5 1 0 l O a a n m l c w o s a u c r s d n

t s o b t a i n e d b Shree Samanvay Institute Of MBA y c u


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t o m e r ' s
Interpretation
Out of 200 customers surveyed, 34% of customers in Bhavnagar have opted for personal loan range between Rs.1 lacs to Rs.5 lacs. This states the increasing prices for purchasing of new things, education fee etc. There are only 15% of customers who have been given personal loans for more than Rs.10 lacs. So, there are very few customers who have obtained loan for Rs.10 lacs or more, as such loans are more risky for the lender and it also contains larger interest payments.

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Q.12 which type of interest rate would you prefers? A. Fixed rate. B. Floating rate. C. Combination of fixed & floating rate.

Options Fixed rate Floating rate. Combination of fixed & floating rate Total

No. of % of Respondents Respondents 102 52 66 33 30 15 200 100

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In te r e s t r a te s S e le c t io n
C o m b i n a ti o n o f fi xe d & fl o a tin g r a te 15%

F ix e d ra te

F l o a t in g ra t e .

F l o a ti n g r a te . 33%

F i xe d r a te 52%

C o m b in a t io n o f fix e d & fl o a t in g r a t e

Interpretation
Out of 200 customers surveyed, 52% of customers in Bhavnagar have obtained for personal loan at fixed interest rate. There are only 33% of customers who have obtained loan at floating interest rate. Only 15% of customers have obtained loans with combination of fixed and floating interest rates. Shree Samanvay Institute Of MBA Page 83

This is because floating interest rates are fluctuating, customers dont want to take risk and believe in paying fixed interests.

Q. 13 Do you know that HDFC Bank provides all these facilities to the customer of personal loan? A. Yes B. No

Option

No. of Respondents

% of Respondents Page 84

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Yes No Total

138 62 200

69 31 100

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No N Y O 8 7 5 4 2 1 0 3 6 % A o e p 0 1 9 of w s t R i a o e r n s s e

p n o e n s d s e n t a s b

o T u s t H D F C B a n k s f a c i l i t i e Shree Samanvay Institute Of MBA s

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Interpretation
Out of 200 customers of personal loan of various banks, 138 customers aware about facilities which are providing by HDFC Bank and 62 customers dont know. For the customers who dont know about HDFC Banks services, HDFC can attract people through increasing marketing efforts.

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Chapter 7

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ANALYSIS

Banks have more market share in personal loan industry as compared to the Finance Companies. For personal loans most of the customers prefer to obtain loans from banks as compared to FCs. Out of the banks most customers have obtained loan from HDFC and SBI majority. ICICI bank is famous for its prestige and takes less processing time for providing personal loans from the customers context. According to customers, HDFC Bank is providing loans at lesser interest rates and has good prestige too. SBI is famous for customers for its prestige of worlds localized bank and as per their views, it asks for less mortgage requirement Majority of customers obtains personal loans for the childs education and secondly for the purpose of social function, business development. While selecting the lenders, the customers mainly gives priority to the interest rates offered by them and secondly gives significance to the availability of the time period. For increasing their eligibility for the personal loans, the customers would opt to clear their outstanding debts of previous loans obtained, like car loans, home loans, etc. must be paid off firstly. Majority of the customers have taken the personal loans for the period ranging between 2 to 3 years because if they obtain it for more years then their EMIs gets shorten up and can afford to repay the amount easily in installments. Most of the customers have obtained the amount of personal loans ranging from Rs.1 lacs to Rs.5 lacs.

FROM QUESTIONNAIRES

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The customers selects more to pay fixed interest rates as compared to that of floating interest rate because they dont want to take any risk and want to pay fixed interest. Maximum customers get information regarding personal loan through telemarketing because of privacy. Most of the customers take loan whose income between Rs.2 lacs to Rs.3 lacs per annum to maintain their lifes needs.

Chapter 8

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SUGGESTIONS TO CUSTOMERS
These are some suggestions for the customers who are applying for obtaining personal loans that must be considered before making the decision. The suggestions to the customers are that as obtaining personal loan is a very rational decision making process, the customers should verify certain factors and then obtain loan. The customers should firstly get the pre approval of personal loans. They should obtain first proper knowledge of interest rates provided by the banks and FCs. They should collect the brochures from the banks and FCs and make visit to their websites also. The customers should study all the details relating to the banks and FC;s as the costs occurred, time period provided for repayment of loans, processing time and costs, their prestige and many other factors. The customers should firstly pay off their outstanding debts if any, like car loans, home loans, etc. before applying for the personal loans.

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Chapter 9

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CONCLUSION
Aim and culture emanates from its complete obsession with its quality, not just in product and services and also in the operations and approach be it manufacturing, marketing, consumer satisfaction or even the dedication and commitment. Through this program me we learnt how to deal with the finance sector of Indian Banking. The important point was extracting as much information as possible, which helped us to improve our potentials. And this definitely has helped us in our enhancing our academic career. Last but not the least, we can say correctly for our professors that You inspire it, we develop and stand by. Finally, we can state that the personal loan Sector Financing in India is developing rapidly and it is a boon to the people to ease their need to live life. There is keen competition between various banks, FCs, etc. in this sector. Due to existence of keen competition, customers are benefited lot and they have better alternatives available for making decision of from where to obtain personal loans?

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We can conclude that each customer have different perceptions before obtaining the loans. They make decisions on the basis of quality of services offered, costs, benefits available and other such factors. Thus we can say that customer is selective in approaching towards personal loans.

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Chapter 10

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QUESTIO

NAIRE FOR CUSTOMERS


Name: Area: A. Banks B. Finance Companies C. Agencies D. Others Q.2 If bank, through which bank you have taken personal loan? A.HDFC B.SBI C.ICICI D.Others.____________________________ Q.3 what is your annual income? A. Rs.1 lacs to Rs.2 lacs B. Rs.2 lacs to Rs. 3 lacs C. Rs.3 lacs to Rs.5 lacs D. More than Rs.5 lacs Q.4 What are the criterias for which you have opted to take personal loan from your selected bank? (Rate them 10 as best and 1 as worst) A. Prestige of the bank Shree Samanvay Institute Of MBA Page 96 Qualification:Age:-

Q.1 which alternative would you prefer for taking personal loan?

B. Rate of interest offered C. Amount of loan offered D. Privacy E. Flexibility in fore-closure F. Mode of repayment G. Less processing time H. Less processing cost I. Less documentation J. Attractive scheme Q.5 Whose referrals motivated you to obtain personal loan from the bank? A. Advertisement by print media B. Publicity through agents C. Advertisement by TV, movie halls D. Mailers to customers E. Telemarketing Q.6 For which of the following purpose have you taken personal loan? A. Marriage B. Home Renovation C. Business development D. Childs education E. Health treatment F. White entry G. Furniture H. Other. Q.7 On what basis do you choose a lender? A. Eligibility period B. Interest rates C. Other costs (Administration fee, processing fee). E. Documents required. F. Penalties

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Q.8 By which way do you increase the eligibility for which you can obtain a personal loan? A. Stretch your loan tenure B. Clear your outstanding debts C. Step-up loan D. Balloon Payment (loan against investment)

Q.9 For what time duration has you taken personal loan? A. For 0 year-1 year B. For 1 year-2 years C. For 2 years-3 years D. For 3 years-4 years E. For 4 years-5 years Q.10 what amount have you taken a personal loan? A. Up to Rs.1 lacs B. Rs.1 lacs to Rs.5 lacs C. Rs.5 lacs to Rs.10 lacs D. Rs.10 lacs onward Q.11 which type of interest rate would you prefers? A. Fixed rate. B. Floating rate. C. Combination of fixed & floating rate.

Q. 12 Do you know that HDFC Bank provides all these facilities to the customer of personal loan? A. Yes Shree Samanvay Institute Of MBA Page 98

B. No

Chapter 11

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BIBLIOGRAPHY

BOOKS
Kothari C.R., Research Methodology, Second Edition New Delhi, New Age International (P)Ltd. Publisher Year of Publication: 1990 Kotler Philip, Keller Kevin L., Koshy Abraham, Jha Mithileshwar; Marketing Management, Twelth Edition, Pearson Prentice Hall of India Pvt.Ltd.2007. Year of Publication:1994

MAGAZINE
Banking finance, Editor R.G Agrawal and Associates, March 2009

NEWSPAPERS
Business standard Economics times

WEBSITES
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www.hdfc.com www.hdfcbank.com www.personalloan.com search engine - www.Google.com http://www.bankbazaar.com/guide/category/personal-loans/ http://www.hdfcbank.com/personal/loans/personal_loans/pl_fees.htm http://locator.mapmyindia.com/hdfcBank/map.jsp?cat=FINBNK&id=17 http://blog.apnapaisa.com/tag/personal-loan/ http://www.rupeetimes.com/article/personal_loan/personal_loans_in_i ndia_features_and_benefits_1011_P2.html http://www.apnaloan.com/know-your-bank/personal-loan-india/hdfcbank.html http://www.iseekloans.com/personal_loan_articles/personal-loantypes.htm www.icicibank.com www.sbibank.com www.theasianbanker.com

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