1

1.1 Purpose of the study:

Purchasing the home of your dreams is not an easy task. Especially when you plan to buy a home on loan. Home loans mean that you buy a house on installments. In simpler terms when you want to own a home and can not afford to pay the amount in lump sum, you can pay it in monthly installments with an interest rate. There are number of companies that offers cheap loans at a low interest rate You can avail loan against existing house for renovation or expansion etc.

The purpose of this study was to identify the problems related to home loan products and services of both the banks. This will help the banks to understand the shortcomings in their products and services so that they could remove these defects and increase their market share.

1.2. Research objectives: 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 prime objectives of the study are: To undertake the comparative analysis of two private banks (HDFC bank and ICICI bank) in housing loan sector. To study consumer preference for the above mentioned housing finance players.
To analyze the satisfaction level of Home Loan customers of HDFC Bank and ICICI Bank.

1.3 Scope of the research:

.i have two branche of icici bank (cannaught place) and h.d.f.c bank (daryaganj) and studied their database. Taken 50 custmoers of each bank and ask their opinion about the the home loans purchased by them. Questionares were given to them asking about their preferences.

HDFC BANK
INTRODUCTION The HOUSING DEVELOPMENT FINANCE CORPORATION LIMITED (HDFC) was amongst the first to receive an in principal approval from The Reserve bank Of India (RBI)to set up a bank in the private sector, as part of the RBIs 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 is Indias premier housing finance company and enjoys an impeccable track record in India as well as in International markets. Since its inception in 1977, the Corporation has maintained a consistent and healthy growth in its operations to remain the market leader in mortgages. Its outstanding loan portfolio covers well over a million dwelling units.HDFC has developed significant expertise in retail mortgage loans to different market segments and also has a large corporate client base for its housing related credit facilities. With its experience in the financial markets, a strong market reputation, large shareholder base and unique consumer franchise.HDFC was ideally positioned to promote a bank in the Indian environment. HDFC bank began operations in 1995 with a simple mission: to be a WORLD CLASS INDIAN BANK. We realized that only a single minded focus on product quality and service excellence would help us get there.Today,we are proud to say that we are well on our way towards that goal.

Table-1 Cities Branches ATMs March 2007 316 684 1605 March 2008 327 761 1977 March 2009 528 1412 3295

As of march 31st 2009, the banks distribution network was at 1412 branches and 3295 ATMs in 528 cities as against 761 branches and 1977 ATMs in 327 cities as of March 31st 2008.During the year as a result of the CBoP merger and the step-up in retail acquisition, deposit accounts increased from 8.7 million to just over 15 million. Total cards issued (debit and credit cards) crossed 13 million including over 4 million credit cards. At the beginning of the financial year, on account of the CBoP merger the Banks gross NPAs as of March 31st 2009 were at 1.98% of advances as against 1.91% as of December 31st2008.In addition, applications received for loan restructuring which were yet to be approved or implemented amounted to Rs.305 crores,of which Rs.254 crores were classified as NPAs.Total standard assets which have been restructured or where restructuring is under consideration were therefore,0.1% of the banks gross advances as of march31st2009. HDFC GROUP SUBSIDIARIES HDFC Securities A trusted financial service provider promoted by HDFC Bank and JP Morgan Partners and their associates HDFC Mutual Fund HDFC Mutual Fund is one of the largest mutual funds and well established fundhouse in the country.

 HDFC Standard Life Offers a bouquet of insurance services and solutions like Life Insurance, Investment Options, Financial Planning, and Pension. HDFC Bank HDFC Realty Offers wide range and different types of property in India.

HDFC ERGO Motor Insurance, Health Insurance, Home Insurance from HDFC ERGO.

HDFC Home Loans, Housing Loans and Home Loans in India.

HDFC BANK COMPETITORS ICICI Bank www.icicibank.com ICICI Bank is Indias second largest bank. IDBI Bank www.idbibank.com Provides financial products and banking services in India.

TECHNOLOGY USED IN HDFC BANK

In the era of globalization each and every sector faced the stiff competition from their rivals. And world also converted into the flat from the globe. After the policy of liberalization and RBI initiatives to take the step for the private sector banks, more and more changes are taking the part into it. And they create competition among the private sector banks and public sector banks. Private sector banks are today used the latest technology for the different transaction of day to day banking life. As we know that Information Technology plays the vital role in each and every industry and gives the optimum return from the limited resources. Banks are service industries and today IT gives the Innovative technology application to banking industries. HDFC BANK is the leader in the industries and today IT and HDFC BANK together combined they reached the sky. New technology changed the mind of the customers and changed the queue concept from the Indian banking transaction. Today there are different channels available for the banking transactions We can see that how the technology gives the best results in the below diagram. There are drastically changes seen in the use of Internet banking, in a year 2001(2%) and in the year 2008(25%).These type of technology gives the freedom to retail customers. Centralized Processing UnitsDerived Economies of Scale Electronic Straight through Reduced Transaction Cost Processing Data Warehousing (CRM)Improve Cost Efficiency, Cross Innovative Technology

HDFC BANK is the very consistent player in the New Private Sector Banks. New Private Sector Banks to withstand the competition from public sector banks came up with innovative products and superior service.

HDFC BANKS PRODUCTS AND SERVICES

The bank operates on the following basic segments: Personal Banking: Encompasses all financial dealings between a commercial bank and an individual Wholesale Banking: Deals with all sorts of financial dealings with corporates, medium and small enterprises, financial institutions and trusts as well as the government sector. NRI Banking: Consists of personal banking relations with the Non-Resident Indians(NRIs) Table-2 Personal Banking Savings Account Salary Accounts Current Accounts Fixed Deposits Demat Accounts Safe Deposit Lockers Loans Credit Cards Debit Cards Prepaid Cards Investment and Insurance Forex services Payment Services Net Banking InstaAlerts Mobile banking InstaQuery NRI Banking Rupee Savings Account Rupee Current Account Rupee Fixed Deposits Foreign Currency Deposits Accounts For Returning Indians Quickremit (North America, UK, Europe, Southeast Asia) IndiaLink (Middle East, Africa) Cheque Lock Box Telegraphic/Wire Transfer Funds Transfer Through Cheques/DDs/TCs Mutual Funds Private Banking Portfolio Investment Schemes Loans Payment Services 9

ATM

Net Banking InstaAlerts Mobile Banking InstaQuery ATM Phone Banking

1.2.1 Major players: Details of terms and conditions of home loan facilities of different players: (All nationalized, non-nationalized, and private financers)

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Home Loans Interest Comparison Chart

Bank/Housing Finance Corporation Processing Pre-Payment Fee Penalty 0-10Years 10-20 Years

Fixed No penalty if upto 25% of loan is cleared per year. Else 7.75 2% on the amount in excess of 25% 7.75 2% 0% Upto 3% 8.50 9.0 8.5 11.75 8.0

Floating

Fixed

Floating

Floating

ABN-Amro

0.50%

7.25

7.75

7.75

7.25

Allahabad Bank Andhra Bank Bank Of Baroda Bank of India Bank of Maharashtra Bank of Punjab Bank of Rajasthan Birla Home Finance Central Bank of India Corporation Bank

0%

7.25 8.00 7.50 7.5 7.5 7.50 7.5

8.25 9.25 9.5 9.25 11.75 8.25

7.75 8.75 8.0 7.75 8.0 7.50 7.5

7.75 9.00 8.25 8.25 8.25 7.50 8.0

8.00

8.00

8.5

8.5

8.75

0%

8.5

8.0

9.0

8.5

9.0

0%

8.0

7.5

9.00

8.25

8.50

Canara Bank

8.0

7.50

9.00

8.00

8.00

Can Fin Homes Citibank Dena Bank Dewan Housing Finance Ltd DHFL Federal Bank GIC Housing 0.50% 0%

7.75 8.25 8.75

7.25 8.25 7.25

8.75 8.25 9.25

8.0 8.25 7.75

8.0 8.25 8.0

8.5

8.0

8.5

8.0

8.0

9.75

7.25 7.5

9.75

7.5 8.0

8.0 8.25

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Finance HDFC Bank 1.0% 2% 8.75 8.25 8.5 8.0 7.5

HSBC

1.8%

Up to 25% of the loan amount every financial year NIL, For amount over 8.0 25% of loan amount in every financial year- 2% of amount prepaid 2% 2% 0 9.25 9.0 7.75 8.25

7.75

8.0

7.75

7.75

IDBI ICICI Indian Bank

0.75% 0.50% 0

7.5 8.0 7.25 7.75

9.25 9.0 8.25 9.25

8.0 8.0 7.75 9.25

8.25 8.0 7.50

Indian 0.5% Overseas Bank Kotak Mahindra Bank LIC Housing Finance Oriental Bank of Commerce 1% Nominal fee

8.5

8.5

8.25

7.25

7.5

8.0

7.5

8.0

7.5

7.5

8.0

7.5

<span style

1.2.2 Competition:

In private sector the basic competition between HDFC ,

ICICI., Axis Bank, HSBC, Citi bank

1.2.3 Marketing & Business strategies: HDFC BANK mission is to be a World Class Indian Bank, benchmarking themselves against International standards and best practices in terms of product offerings, technology, service levels, risk management and audit and compliance. The objective is to build sound customer franchises across distinct businesses so as to be a preferred provider of banking services. The objective is to build sound customer franchises across distinct businesses so as to 12

be a preferred power of banking services for target retail and wholesale customer segments, and to achieve a healthy growth in profitability, consistent with the Banks risk appetite. HDFCs business strategy emphasizes the following: Increase our market share in Indias expanding banking and financial services industry by following a disciplined growth strategy focusing on quality and not on quantity and delivering high quality customer service. Leverage our technology platform and open scaleable systems to deliver more products to more customers and to control operating costs. Maintain our current high standards for asset quality through disciplined credit risk management. Develop innovative products and services that attract our targeted customers and address inefficiencies in the Indian financial sector. Continue to develop products and services that reduce our cost of funds. It involves standard rules and policies.It establish checklist to facilitate autonomous Focus on high earnings growth with low volatility. INSIDE HDFC BANK FIVE S PART OF KAIZEN WORK PLACE TRANSFORMATION FOCUS ON EFFECTIVE WORK PLACE ORGANIZATION BELIEVE IN SMALL CHANGES LEAD TO LARGE IMPROVEMENT

Every successful organization has their own strategy to win the race in the competitive market. 13

They use some techniques and methodology for smooth running of business.HDFC BANK also acquired the Japanese technique for smooth running of work and effective work place organization. Five S Part of Kaizen is the technique which is used in the bank for easy and systematic work place and eliminating unnecessary things from the work place. BENEFIT OF FIVE S It can be started immediately. Everyone has to participate. Five S is an entirely people driven initiatives. Brings in concept of ownership. All wastages are made visible.

FIVE S MEANS

1) S-SORT SEIRI:It focuses on eliminating unnecessary items from the workplace.It is an excellent way to free up valuable floor space.It segregates items as per required and wanted. 2) S-SYSTEMATIZE SEITON: Systematize focus on efficient and effective storage method.It means it identify, organize and arrange retrivel.It largely focus on good labeling and identification practices. Its objective is A place for everything and everything in its place. 3) S-SPIC_N_SPAN SEIRO: It focuses on regular clearing and self inspection. It brings in the sense of ownership.

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4) S-STANDARDIZE SEIKETSU: It focuses on simplification and standardization maintenance of workplace.It assigns responsibility for doing various jobs and decides on Five S frequency. 5) S-SUSTAIN SHITSUKE: It focuses on defining a new status and standard of organization workplace.Sustain means regular training to maintain standards developed under S-4.It brings in self-discipline and commitment towards workplace organization.

HUMAN RESOURCES

The Banks staffing needs continued to increase during the year particularly in the retail banking businesses in line with the business growth. The bank continues to focus on training its employees on a continuing basis, both on the job and through training programs conducted by internal and external faculty. The bank has consistently believed that broader employee ownership of its shares has a positive impact on its performance and employee motivation. The Banks employee stock option scheme so far covers around 10,000 employees.

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SWOT ANALYSIS STRENGTH: Right strategy for the right products. Superior customer service vs. competitors. WEAKNESSES: Some gaps in range for certain sectors. Customer service staff needs training. Sectoral growth is constrained by low unemployment levels and competition for staff. OPPURTUNITIES: Could extend to overseas broadly. Fast-track career development opportunities on an industry wide basis. Could seek better customer deals. 16

THREATS: Very high competition prevailing in the industry. Lack of infrastructure in rural areas could constrain investment. High volume/low cost market is intensely competitive.

COMPETITIVE SWOT ANALYSIS WITH ICICI BANK:

STRENGTH WEAKNESS OPPURTUNITIES S-O STRATEGIES Strength: Large capital base Oppurtunity: Market Expansion Strategy: Deep penetration into rural market W-O STRATEGIES Weakness: Workforce responsiveness. Opurtunity: Outsourcing of Non-Core Business. Strategy: Outsource customer care and other E-Helps. THREATS S-T STATEGIES 17

Strength: Low operating costs. Threat: Incresed competition from other private banks. Strategy: Steps to ensure loyalty by old customers. W-T STRATEGIES Weakness: Not equal to International Standards. Threat: Entry of many foreign banks. Strategy: Consider additional benefits

HDFC HOME LOANS

Home loans offered by HDFC Bank encompasses a wide range of loan options which are subject to various parameters like term of loan, financial status of the individual seeking loan and the purpose of loan. Owing to these diversifications, HDFC Home loans have grown in popularity over the years. HDFC is Indias largest housing finance company with a market share of 55% in loan disbursals.BeingBeing in the business for over 25 years; HDFC has an impressive loan portfolio for varied housing finance needs. In the home loan segment, HDFC offers loans for individuals to purchase (fresh/resale) or construct houses. There is a great flexibility and variety in the home loans as it is open to salaried and self employed individuals alike, to both resident and non-resident Indians and requires no guarantor, charges one time processing fees and offers choice of variable and fixed rate loans. It offers loans to construct/buy a new home, loans for home extension, home repairs and purchase of plots. In addition to the attractive loan schemes, HDFC customers can avail of a host of related benefits like Loan Cover Term Assurance Plan, automated repayment of home loan EMI and in-house

18

scrutiny of property documents. Existing HDFC Bank home loan customers can avail of other loans such as Personal loans and Car loans at lower interest loans.

The advantages associated with HDFC Home Loans are: An individual can undergo a Home Loan Counseling where HDFC shares its experiences of providing Home Loans for 29 years. Wide range of products which offers multiple choices to an individual to choose the loan plan that suits him/her the best. Multiple Repayment Options gives a customer a wider scope of repayment according to his/her financial situations. Wide network of financing also enables the individuals to get his/her loan sanctioned from a place of his/her choice and also pay the installments duly no matter where he/she is. The HDFC Bank with its varied offering of house loan and home finance offers the buyers an opportunity to select the perfect loan as per their individual needs. There is a wide range of home loans available with HDFC to choose from according to the needs of the buyers: Home Extension Loans: These loans are given for expanding or extending an existing home. For example: Adition of an extra room, a larger bathroom or even enclosing an open balcony.

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FEATURES: MAXIMUM LOAN: The maximum amount of the loan is 85% of the cost of extension. MAXIMUM TERM: The maximum term of the loan is 20 years subject to the age of your retirement. Land Purchase Loan: These loans are available for purchasing land for both construction and investment purposes.

FEATURES: MAXIMUM LOAN: The maximum amount of the loan is 85% of the cost of the land and based on the repayment capacity of the customer. MAXIMUM TERM: The maximum term of the loan is 15 years subject to the age of your retirement. HOME IMPROVEMENT LOANS: These loans are available for improvement of the house. For Example: External Repairs, Tiling and Flooring,etc.

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FEATURES: MAXIMUM LOAN: For existing customers the maximum amount of loan is 100% of the cost of improvement. For new customers the maximum amount of the loan is 85% of the cost of improvement. MAXIMUM TERM: The maximum term of the loan is 15 years subject to the age of your retirement. SHORT TERM BRIDGING LOAN: It makes you realize your dream of buying a bigger and better home and gives you time to sell your existing property to pay off the loan. This is a short term loan to help customers with the interim period between the sale of your old home and purchase of a new home. You can take the loan even if you are an existing customer of HDFC.

FEATURES: MAXIMUM LOAN: The maximum amount of the loan is 90% of the cost of property.

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MAXIMUM TERM: The maximum term of the loan is 2 years. HOME EQUITY LOANS: HDFC Home Equity loans helps you encash the present market value of the property by taking a loan by mortgaging the property.

FEATURES: PURPOSE: Loan can be for any purpose.However, the funds should not be used for speculation or any other purposes. Customers have benefited by taking loans to meet the following funding requirements Education Marriage Expenses Medical expenses

MAXIMUM LOAN: For existing customers the maximum amount is the balance of 60% of the market value and present loan outstanding. For new customers the maximum amount is 50% of the market value of the property (including the cost of the land).It is subject to minimum market value of the property being Rs.5,00,000 for Residential Property and Rs.7,50,000 for Non Residential Property.

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MAXIMUM TERM: Table-6 Property type Residential Non Residential Residential and residential Repayment option EMI Based EMI Based Non Simple Interest Number of years 15 10 2

REPAYMENT FACILITIES: HDFC provides Multiple Repayment Facilities to its customers. These facilities include Step up Repayment Facility, Flexible Loan Installments Plan, Tranche Based Equated Monthly Installments, and Accelerated Repayment Scheme. Step Up Repayment Facility: This facility helps young executives a much bigger loan today based on an increase in their future income, this helps executives buy a bigger home today. Flexible Loan Installments Plan: Often customers, parents and their children, wish to purchase properties together. The parent is nearing retirement and their children have just started working. This option helps such customers combine the incomes and take a long term home loan where in the installments reduces upon retirement of the earning parent. Tranche Based Equated Monthly Installments:

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Customers purchasing an under construction property need to pay interest (on the loan amount drawn based on level of construction) till the property is ready. To help customers save this interest, they have introduced a special facility of Tranche Based Equated Monthly Installments (EMIs).Customers can fix the installments they wish to pay till the property is ready.The minimum amount payable is the interest on the loan amount drawn. Anything over and above the interest paid by the customer goes towards principal repayment. The customer benefits by starting EMI and hence repays the loan faster.

ACCELERATED REPAYMENT SCHEME: Accelerated repayment Scheme offers you a great opportunity to repay the loan faster by increasing the EMI, whenever you get an increment, increase in your disposable income or have lump sum funds for loan repayment, you can benefit by: Increase in EMIs means faster loan repayment. Savings of interest because of faster loan repayment. You can invest lump sum funds rather than use it for loan prepayment. The return from the investments also gives you the comfort of paying the increased EMI.

ELIGIBILITY TERMS FOR HDFC HOME LOAN Due to varied offering of house loans and home finance, attractive loan interest rate and numerous other facilities besides a basic home loan, you would be sure that HDFC Bank Home Loans provides the perfect home loan for you. The eligibility norms for availing of home loans are easy and simple to follow. They have different norms for the different types of property loans available to you. These eligibility norms for home loans are applicable to all Resident Indians looking to avail of their home loans. CONDITIONS OF HOME LOAN

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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.

LOAN AMOUNT The home loan amount depends on your repayment capability and is restricted to maximum of 85% of the cost of property or the cost of construction as applicable.

Table-7

Description Of Charges Loan Processing Charges Administrative Charges Prepayment Charges Floating Rate Of Interest Fixed Rate Of Interest

Interest Rate 1% 0.5% 2% 8.50% 8.25%

DOCUMENTS REQUIRED FOR HOME LOAN SANCTION: HDFC Bank the leading Home Loans Provider, offers attractive interest rates and unbeatable benefits to ensure that you get the best deal without any hassels.Keeping your convenience in

25

consideration, they ask you for minimal mandatory documents for the sanctioning of your home loan. At HDFC BANK HOME LOANS they require the following documents to sanction your home loan: a. COMMON FOR ALL APPLICANTS: i. ii. iii. iv. Allotment letter of the co-operative society/association of apartment owners. Copy of approved drawings of proposed construction/purchase. Agreement for sale/sale deed/detailed cost estimate from architect/engineer for the property to be purchased/constructed. If you have been in your present employment/business or profession for less than a year, mention details of occupation for previous 5 years, giving positions held reasons for change and period of the same. v. vi. Applicable Processing Fees. Any other information regarding your repayment capacity that is necessary and will assist HDFC in appraising the case. b.ADDITIONALLY, IF YOU ARE EMPLOYED: i. ii. iii. Latest salary slip/salary certificate showing all deductions. If your job is transferable, permanent address where correspondence relating to the application can be mailed. A letter from your employer agreeing to deduct the monthly installments towards repayment of the loan from your salary.This wills expediate the processing of your loan application. C.IF YOU ARE SELF-EMPLOYED: i. Balance Sheets and Profit and Loss Accounts of the business/profession along with copies of Individual Income Tax Returns for the last three years certified by a Chartered Accountant.

26

ii.

A note giving information on the nature of your business/profession, form of organization, clients, suppliers, etc. Please take photocopies of all documents that are submitted to HDFC (including the application form) for your personal account.

ICICI BANKINTRODUCTION ICICI bank is Indias second largest bank with total assets of Rs 3793.01 billion at March 31st 2009 and profit after tax Rs.37.58 billion for the year ended march 31st2009.The bank has a network of 1,449 branches and about 4,721 ATMs in India and presence in 18 countries.ICICI Bank offers a wide range of banking products and financial services to corporate and retail customers through a variety of delivery channels and through its specialized subsidiaries and affiliates in the areas of investment banking, life and non life insurance, venture capital and asset management. The Bank has subsidiaries in the United Kingdom, Russia and Canada, branches in united States,Singapore,Bahrain,Hong Kong,Sri Lanka,Qatar and Dubai International Finance Centre and representative offices in United Arab Emirates,China,South

27

Africa,Bangladesh,Thailand,Malaysia and Indonesia.Its UK subsidiary has established branches in Belgium and Germany. History ICICI was founded in the mid-1950s at the behest of the World Bank, the Indian government and various captains of industry in India. Its purpose back then was to provide medium and longterm development finance for Indian business. In the mid-1990s its business strategy shifted to take advantage of the opening of the Indian economy. The idea? To create a diversified financial services supplier offering a range of products, instead of concentrating purely on project finance.ICICI Bank was,therefore,established in 1994 to provide retail banking facilities across India ICICI GOUP SUBSIDIARIES ICICI Brokerage Services Limited ICICI Distribution Finance Private Limited ICICI home Finance Company Limited ICICI Investment Management Company Limited ICICI Lombard General Insurance Company Limited ICICI Prudential Life Insurance Company Limited ICICI Securities Limited ICICI Trusteeship Services Limited

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 ICICI Venture Funds Management Company Limited Prudential ICICI Asset Management Company Limited Prudential ICICI Trust Limited Technology Platforms Much of what is deployed to support their various Knowledge Management initiatives is customdeveloped, but the tools are supported on a variety of standard hardware and software platforms, particularly Microsoft Windows, Linux, Microsoft Office, Open Office (the open-source alternative to Microsoft Office), and a host of other off-the-shelf and custom applications. Implementation was eased by the fact that it was not one single mega project, but a combination of many experiments and modular launches. This means that they nurtured what worked and discarded along the way any elements that plainly did not work. One early project was a Yellow Pages-style directory for the entire corporate group. These, of course, are quite common KM tools, helping put staff in direct contact with one another. The result, People finder, is the experts directory that employees use to locate others and update their own profile with interests, areas of expertise where they can help colleagues and other relevant information. Creating it was like opening the doors and windows in a dusty house shut for many months as people who did not even know who was sitting on the same floor as them suddenly got connected and it continues to be one of the most-used sections. Many implementations began as line-of-business pilots. At your Service is one such example in which employees who are also customers of the bank can talk directly with the product and process teams for personal banking issues. With a back-end plug-in to the call centre it serves the dual purpose of learning while solving problems. It was so effective that it was replicated for other teams too.

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ICICI BANKS PRODUCTS AND SERVICES ICICI Banks operates on the following basic segments: Table-9

Personal banking Deposits Loans Cards Investments Insurance Demat Services Wealth Management

Wholesale banking Corporate Banking] Cash management Trade Services FXOnline SME Services Online Taxes Custodial Serviced Net

NRI banking Money Transfer Bank accounts Investments Property Solutions Insurance Loans

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AWARDS AND RECOGNITIONS ICICI Bank bags the Best bank in SME financing (Private Sector) at the Dun and Bradstreet awards 2009.

31

 ICICI Bank NRI services win the Excellence in Business Model Innovation Award in the eighth Asian Banker Excellence in Retail Financial Services Awards Programme. ICICI banks Rural Micro Banking and Agri-Business Group wins WOW Event and Experiential Marketing Award in two categories:. Rural Marketing Programme of the Year and Small Budget on Ground Protection of the Year. These awards were given for Cattle Loan Kamdhenu Campaign and Talkies on the move campaign respectively. ICICI Banks Germany branch has been certified by Stiftung Warrentest.ICICI Bank is ranked 2nd amongst the 57 savings products across 19 banks. ICICI Bank Germany won the yearly banking test of the investor magazine Euro in the Call Money category. ICICI Bank was awarded the runners up position in Gartner Business Intelligence and Excellence award for Asia Pacific for its Business Intelligence functions. ICICI Banks Organizational Excellence Group was recently awarded ISO 9001:2008 certification by TUV Nord.The scope of certification comprised processes around consulting and capability building on methods of quality and improvements. ICICI Bank has been awarded the following titles under The Asset Triple A Country awards for 2009 Best Transaction Bank in India Best Trade Finance Bank in India. Best Cash Management Bank in India. Best Domestic Custodian in India.

ICICI Bank Canada received the prestigious Canadian Helen Keller Award at the Canadian Helen Keller Centres Fifth Annual Luncheon in Toronto. The award was given to ICICI Bank for its long-standing support to its unique training centre for people who are deaf-blind.

ICICI BANK HOME LOAN

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ICICI Bank is one of the top listed banks to provide Home Loans in India. The ICICI Bank Home Loans offers unmatchable benefits to the prospective loan seekers, which ensure that one, get the best deal without any hassles. Attractive Home Loans of ICICI bank with its flexible features to apply for owing a house in India is offered with usual Eligibility conditions and nominal Rates of Interest etc. ICICI Banks low Interest Home Loan in India attracts lots of customers to own a home of their dreams. As the home loan is offered with easy Repayment schedules the bank is one among the top banks in India to claim more number of Customers. The loans are offered by the ICICI Bank to suit the repayment capacity of the buyers to avail the loan by providing: 1. Attractive loan interest rates 2. Free Personal accidental insurance 3. Insurance options for your home loan at attractive premium. 4. Lucrative home loan amounts starting from Rs.2 lakhs. 5. Term loans up to 25 years. 6. Special 100% funding for select properties. The ICICI Bank with its varied offering of home loans and home finance offers the buyers an opportunity to select the perfect loan as per their individual needs. There is a wide range of Home Loans available with ICICI Bank to choose from according to the needs of the buyers: Adjustable rate Home Loan Fixed Rate Home Loan Part Fixed, Part Floating Rate Home Loan Smart Fix Home Loan Money saver Home Loan A Balance transfer of loan seekers existing home loan from other banks. 33

OFFICE PREMISES LOANS It is one of the things you have always desired. A place where you have the freedom to achieve your goals and fulfill your dreams. An Office of Your Own. This loan is especially meant for self-employed professionals like Doctors, Architects, etc. Choose a loan ranging anywhere between Rs.3, lakh and Rs.1 crore. Conveniently pay off your loan over a period of up to 15 years. LOAN AGAINST PROPERTY You can avail of a multipurpose loan against your property. You can avail of Loan against property for purposes like: a) Education b) Medical Reasons c) Buying a car d) Home improvement e) Financing your business f) Marriage Expenses g) Purchase of a new house or office Get loan up to Rs.3 crore. Avail of tenure up to 15 years Loans available against residential and commercial properties. PROPERTY OVERDRAFT The overdraft facility from ICICI Bank Home Loans allows you to borrow money against your property. The overdraft facility comes with a multi-city cheque book and phone banking facility. The best part is that you are charged interest only for the amount that you withdraw from the account. Whenever you deposit funds into the account, they go towards reducing the outstanding balance in the account. It offers the following benefits: 34

 Unlock the locked-up capital in your house or office property. Fast Processing and door-step service. Multi-city cheque book and phone banking facility. Pay interest only on the amount utilized. PART FIXED,PART FLOATING HOME LOAN A product that offers the dual benefit of fixed rate loans as well as floating rate loans. With this product, you can book part of your loan under a fixed rate plan and the other part under a floating rate plan.Thus; you can minimize the impact of any adverse changes in the interest rate regimes and at the same time, avail of any benefits that may come by way of favorable changes. SMART FIX HOME LOANS 3 years fixed and floating rate thereafter. A product that offers the safety of fixed rates plus the advantages of floating rates. For the first 3 years you get a fixed interest rate. From the fourth year, your loan gets switched to the prevailing floating interest rate. HOME IMPROVEMENT LOANS You can get a loan for renovation/refurbishment of your home. Get the same interest rate as applicable on home loans. Avail of up to Rs.50 lakhs Avail of loan up to 70% of cost of improvement. .Enjoy repayment period of up to 15 years.

ELIGIBILITY TERMS FOR ICICI BANK LOANS FOR

RESIDENT INDIANS

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Due to varied offering of house loans and home finance, attractive loan interest and numerous other facilities besides a basic home loan, you would be sure that ICICI Bank Home Loan provides the perfect home loan for you. The eligibility norms for availing of home loans are easy and simple to follow. They have different norms for the different types of property loans available to you. These eligibility norms for home loans are applicable to all Resident Indians looking to avail of their home loans. CONDITIONS OF HOME LOAN 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. LOAN AMOUNT The home loan amount depends on your repayment capability and is restricted to a maximum of 85% of the cost of property or the cost of construction as applicable. Table-10 Description Of Charges Loan processing charges/Renewal charges Home Loans Home Loans: 0.5% of loan amount as Administrative fee or Rs.2,000 whichever is higher. Loan overdraft against property or office premises: 1% of loan amount or Rs.2,000 whichever is higher. Fees are Non-refundable. Prepayment Charges 2% on the principal outstanding on full prepayment Charges For Late Payment(loans) Home Loans: 2% per month. Home OD: 1.5% of the outstanding amount subject to minimum of Rs.500 and maximum of Rs.5,000. Interest Rate Swiping Charges Cheque swap Charges 1.75% on principal outstanding Rs.500 36

Document retrieval charges Cheque Bounce Charges

Rs.500 Rs.200

DOCUMENTS REQUIRED FOR HOME LOAN SANCTION

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

DOCUMENTS Bank statement for the last six months. Income Document e.g. Latest Form 16, Certified IT returns for latest 3 years. Administration Fee Cheque. Loan Enclosure Letter. Other Documents.

For Individual borrowers: Photo Id Proof Residence Address 37

 Proof For Non Individual borrowers: Id Proof Office Address Proof

2.2 About the topic: The topic deals entirely with the consumer preferences about the home loans requirement between HDFC bank and ICICI bank. This topic deals with the study of consumer preferences for their home loan requirement i.e what type of their demand is and what type of loan do they require. It may be for the renovation for the existing one, extension for the existing one or may to buy the new one. It also contains the various procedures of obtaining the home loans from both the banks.

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Research Design
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A research design is the specification of methods and procedures for acquiring the information needed. It is the overall operational pattern or framework of the project that stipulates what information is to be collected from which source by what procedures. Research design denotes the description of the research design. The aim was to collect relevant information, which fulfill our requirement and can be analyzed at a later stage of study without any problem. This was to be done in minimum expenditures and least efforts and in a set period of time. For my research I select DESCRIPTIVE RESEARCH DESIGN to know the Comparative Study Of The Home Loan Scheme Offered By ICICI Bank And HDFC Bank and Assessing The level of Consumer Satisfaction in Delhi City. This helped us in having enough provision for protection against bias and maximizes reliability.

3.1 Types of research:

3.1.1 Data collection: Both primary and secondary data have been used in this project. The
methodology reveals the methods of data collection.

The data used was as follows:

Industry Scenario Sketch (utilizing secondary information)

Studying consumer preference for home loan (utilizing primary data)

3.1.2 Collecting Secondary Data:

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After deciding my objective I looked for collecting and studying secondary data .It included extensive study of literature available in reports of HDFC bank and ICICI Bank,articles,newspapers,journals,magazines,handouts,pamphlets describing the banks. Study of secondary data gave me an insight into the problem into hand.It also provides me with clues and helped in designing primary research.It provided us a more accurate picture about the functioning of various service providers in the Muzaffarnagar city. Extensive use of secondary information in the form of magazines, journals, newspaper clippings,such as Business World,Business Today,Business India,Economic Times,etc.Internet websites of HDFC Bank and ICICI Bank.

Collecting Primary Data:

The objective of Primary data is formulated on the basis of research objectives.Objectives set the guidelines and directions of research planning .Formulating the objectives offers the best feasible means of solution.The primary data for my study was being collected by conducting survey.To analyze buying behavior and in order to gain an insight into the buyer need-satisfaction level, a questionnaire was formulated and administered among 100 people.The tools for data collection used was following types:

3.2.2 INSTRUMENT FOR DATA COLLECTION (QUESTIONARE)

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This method of data collection is quite popular,particularly in case of big enquiries.A questionnaire is a method of obtaining specific information about a defined problem so that data,after analysis and interpretation,results in a better appreciation of the problem. In order to motivate respondents and to get best of the information from them,I was tried to build questionnaire that is interesting,serve my objective of response to get meaningful outcome within acceptable limits. A few were in disguised, where the true purpose was hidden but was sufficient to bring in the right information from respondents. Depending on the requirement, the questionnaire was prepared. The sequence of questions in questionnaire was kept in a logical order. It included questions based on Simple Category scale where the respondent just have to say yes or no, Multiple Choice Single Response scale where the respondent can choose from many available options, Likert Scale where attitude was to be studied and Rank Order scale where ranking was required. After following a series of Trial and changes the finally evolved questionnaire was being used for survey work.

3.2.3 METHOD FOR DATA COLLECTION: The questionares was distributed among
people in shopping malls, homes, and they were enquired through telephones, questionares were send to persons through e- mails also to know their respond.

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43

Data Analysis and Interpretation :

The following analysis was done to

obtain the findings in accordance with our objectives determined during the course of study. To know about comparative study of home loan scheme offered by HDFC Bank and ICICI Bank and assessing the level of consumer satisfaction. Following questions asked in the questionnaire: The questionnaire was filled by 50 respondents. There are 35% females and 65% are males. The age of the respondents lie between 20years to 60 years. There are15% respondents lie between age group of 20-30 years,26%respondents are of 30-40 years of age,30% respondents are of age group of 30-40 ,14% respondents lie between age group of 40-50 years and 15% respondents are of age group 50-60 years.

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Job profile:

Table-1 Types Of Job No.Of Persons (%) 23% 39% Chart 1 24% 14% Government sector Private Sector Business Others

On The Basis Of Job

14%

23%

24%

39%

Govt sector

Private sector

Business

Others

ANALYSIS Out of 50 respondents, most persons are from private sector, some persons have their own business and some belongs to govt. sector, while very less belongs to others category.

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Salary Structure
Table-2 Salary No. Persons(%) <10,000 Of 29% 38% Chart 2
Salary Structure

10,000-20,000

20,000-30,000 25%

>30,000 8%

8% 29% 25%

38%

<10,000

10,000-20,000

20,000-30,000

>30,000

ANALYSIS Among 50 respondents, the salary of less persons are below Rs.10,000,salary of most persons lies between Rs.10,000-Rs.20,000, while salary of some persons lies between Rs.20,000Rs30,000,and salary of very less persons is more than Rs.30,000.

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Q.1.What is your opinion regarding the home loan procedure? Table-3 Opinion No.Of Persons(%) 26% 37% Chart 320% 17% Complex Difficult(own safety) Simple Cant Say

Opinion R egarding H ome Loan

17%

26%

20%

37%

Com plex Diffic ult(own S afety ) S im ple Cant S ay

ANALYSIS Among 50 respondents, some persons think that the home loan availing procedure is complex, while most of them believe that it is difficult (requires own safety), some persons think that it is simple and there are less persons who do not have any opinion about it.

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Q.2 Which type of interest rate have you preferred? Table-4 Types interest No.Of persons(%) 51% 38% Chart 4 9% 2% of Fixed Floating Adjustable Others

Interest Rate
9% 2%

51% 38%

Fixed

Floatind

Adjustable

Others

ANALYSIS Among 50 respondents, most persons are interested in fixed rate of interest at the time of home loan, while substantial amount of persons are interested in floating rate of interest, much less persons prefer adjustable rate of interest and few prefers other interest rates.

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Table-5

Criteria

Lower Rate Easy Of Interest Availability

Flexible Repayment Period

Quality Of Lower Service Processing Fees 25% 16%

No.

Of 29% 17% Chart 5 13%

Persons(%)

Criteria Considering Home Loans

16%

29%

25% 13% Lower rate of interest Flexible repayment period Lower processing fees 17%

Easy availability Quality of service

ANALYSIS Among 50 respondents, much persons consider lower rate of interest while taking home loan, less consider easy availability, consider flexible repayment period, most consider quality of service and few persons consider lower processing fees while taking home loan.

Q.4 .Are you satisfied with the bank or financial institution from where you have availed the home loan? 49

Table-6 Satisfaction No. Of Persons(%) Yes 65% Chart 6

Satisfaction Level

No 35%

35%

65%

Yes

No

ANALYSIS Among 50respondents, most of the persons satisfy with the bank or financial institution from where they have availed the home loan but some persons are not satisfied with the bank or financial institution from where they have availed the home loan.

Q.5.How did you come to know about the specific financial institution offering home loan? Table-7

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Source

Of Phone

Internet

Television Friends/ Relatives

Brochures Press

Information No. Of Persons(%) 22% 26% 28% Chart 7

9%

8%

7%

Sources Of Information
7%

8% 9%

22%

28%

26%

Phone Friends/Relatives

Internet Brochure

Television Press

ANALYSIS Among 50 respondents, some persons came to know about home loans through phone, most persons came to know through internet, much persons came to know through television, less persons through friends/relatives, less through brochures and few persons came to know about home loans from press.

Q.6.Which bank you prefer to take personal loan? Table-8

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HDFC Bank No. Of 65% Persons(%)

ICICI Bank 35%

Chart 8 Preffered Bank

35%

65%

HDFC BANK

ICICI BANK

ANALYSIS Among 50 respondents, most of the persons prefer HDFC Bank to take personal loan, less persons prefer ICICI Bank.

Q.7.Which bank provide home loan at lower rate of interest? Table-9

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Bank No. Persons(%) Of

HDFC Bank 31%

ICICI Bank 28% Chart 9

. Lower Intrest Rate

35%

65%

HDFC BANK

ICICI BANK

ANALYSIS Among 50 respondents, most persons says that the interest rate is lower in HDFC Bank and higher in ICICI bank.

Q.8.Easy availability is an important factor for home loans.Do you agree? Table-10

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Opinion No. Persons(%) Of

Totally Disagree 17%

Disagree

Agree

Totally Agree

20% Chart 10

35%

28%

Opinion about Easy Availability

17% 28%

20%

35%

Totally Disagree

Disagree

Agree

Totally Agree

ANALYSIS Among 50 respondents, some persons says that they totally disagree with the fact that easy availability is an important factor for home loan, some persons disagree with it, while most persons says that they agree and much persons says that they totally agree with the fact that easy availability is an important factor for home loan.

Q.9.Which bank easily provide home loan? Table-11

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Bank

HDFC Bank

ICICI Bank

NO. Persons(%)

Of 33% Chart 11 39%

Lower Intrest Rate

35%

65%

ICICI BANK

HDFC BANK

ANALYSIS Among 50 respondents, most persons say that ICICI Bank easily provide home loan, less persons says that HDFC Bank easily provide home loan.

Q.10.Flexible repayment period plays an important role while taking home loans. What is your opinion? Table-12

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Opinion No. Of Persons(%)

Indifferent 36%

Agree 42% Chart 12

Totally Agree 22%

Opinion About Flexible Repayment Period

22% 36%

42%

Indifferent

Agree

Totally Agree

ANALYSIS Among 50 respondents, much persons are indifferent about flexible repayment period, most persons says that they agree with the fact that flexible repayment period plays an important role while taking home loan and some persons totally agrees with the fact.

Q.12.Do provisions of more insurance affect your selection of mortgage from banks? Table-1 Table-13

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Opinion No. Of Persons(%)

Agree 67% Chart 13

Disagree 33%

Opinion About Insurance

33%

67%

Agree

Disagree

ANALYSIS Among respondents, most of persons agree with the fact that insurance affect their selection of home loan from banks and some persons disagree with it

Q.13.Prepayment penalty need to be taken into consideration while taking home loan.What is your opinion? Table-14 Opinion No. Of Persons(%) Indifferent 29% Agree 36% Totally Agree 35%

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Chart 14

Opinion About Prepayment Penalty

35%

29%

36%

Indifferent

Agree

Totally Agree

ANALYSIS Among 50 respondents, some persons are indifferent about prepayment penalty, most says that they agree with the fact that prepayment penalty need to be taken into consideration while taking home loan and much persons totally agrees with it.

Q.15.Do miscellaneous expenses affect your selection of home loans? Table-15 Opinion No. Of Persons(%) Yes 58% No 42%

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Chart 15

Opinion About Miscellaneous Expenses

42% 58%

Yes

No

ANALYSIS Among 50 respondents, most persons says that miscellaneous expenses affect their selection oh home loans but much persons says that it does not affect their selection.

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CHAPTER- 5 FINDINGS

Findings
Most of the respondents think that the home loan availing procedure is complex.

Most persons are interested in fixed rate of interest at the time of home loan, some persons are interested in floating rate of interest. Most consider quality of service, some persons consider lower rate of interest while taking home loan, some consider easy availability(Refer Chart 5).

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Most persons satisfy with the bank or financial institution from where they have availed the home loan but some persons are not satisfied with the bank (Refer Chart 6).

Most persons came to know about home loans through phone, some persons came to know through internet, some persons came to know through television.(Refer Chart 7). Most persons prefer HDFC Bank to take personal loan, some persons prefer ICICI Bank and some persons prefer other banks to take personal loan.(Refer Chart 8). Most persons says that the interest rate is lower in HDFC Bank, some persons says that it is lower in ICICI bank .(Refer Chart 9). Most persons says that they agree some persons says that they totally disagree with the fact that easy availability is an important factor for home loan, some persons disagree with it. (Refer Chart 10). Most persons say that HDFC Bank easily provide home loan, some persons says that its ICICI bank. ICICI Bank easily provide home loan and some persons says that other banks easily provide home loan. Most persons are indifferent about flexible repayment period, most persons says that they agree with the fact that flexible repayment period plays an important role (Refer Chart 12).
Most persons say that HDFC Bank provide flexible repayment period, some says that ICICI Bank provide flexible repayment period. Most persons are indifferent about prepayment penalty, some says that they agree with the fact that prepayment penalty need to be taken into consideration while taking home loan and much persons totally agrees with it. (Refer Chart 15)

Most persons says that HDFC bank charges lower prepayment penalty, some persons says that ICICI bank charges lower prepayment penalty and most person says that other banks charges lower prepayment penalty.(Refer Chart 16).
Most persons says that miscellaneous expenses affect their selection home loans but much persons says that it does not affect their selection.(Refer Chart 17).

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. The appearance of banks also becomes very important for the present generation and private banks put their complete efforts on this, which is lacking in government banks. At last I can only say that HDFC Bank enjoys leading position in personal loan sector

CHAPTER 6 LIMITATIONS

62

Limitations:
This research study was time bound and due to this only few topics were taken up for study. This research study was taken in a limited area only (i.e. Delhi city) and findings may vary if the area of study is increased or changed. Some of the respondents might have been biased in their responses as such the analysis could vary to some extent.

CHAPTER 7
63

RECOMMENDATIONS

64

Suggestions
People have chosen HDFC bank over the ICICI bank because of its best repayment facilties and low inetrest rates and pubic belief. So following suggestions are made for the ICICI bank
Rate of interest should be competitive with HDFC BANK.

Proper credit appraisal of the customers should be done. Relevant information should be provided to customers time to time. Emphasis should be given on retaining customers. People who deal with customers should have complete knowledge about the housing finance industry. To penetrate in the rural market. To provide plans for the low-income group. To decrease the training fees compare to Competitors (fees of advisors training). To increase the incentive package. To open more number of branches in different cities. To make training time flexible. Hope these points will be taken into consideration.

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CHAPTER 8 CONCLUSIONS

Conclusion

66

The present study shows that people prefer HDFC Bank more than ICICI Bank for home loans in private sector. Mostly people Prefer HDFC bank for loans. The appearance of banks also becomes very important for the present generation and HDFC bank put their complete efforts on this, which is lacking in ICICI bank. ICICI bank needs to put in lots of efforts to capture more of the market segment. At last I can only say that HDFC Bank enjoys leading position in home loan sector.

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BIBLIOGRAPHY BOOKS a. 1 Kotler, Philip and Armstrong- Graw-Principles Of Marketing, Pearson Education, New Delhi 2004 b. 2 Beri marketing Research (Tata McGraw-Hill), 1993, 2nd edition. II. III. IV. V. VI. VII. Cooper and Schindler- Business Research Methods, 9th edition INTERNET www.icicibank.com/Personal-Banking/loans/home-loan/index.html http://www.icicibank.com/Personal-Banking/loans/home-loan/home-improvementloan/index.html http://www.hdfc.com/loans/home-loan.asp http://www.hdfc.com/loans/hm-imp-loan-features.asp

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QUESTIONAIRE (To undertake the comparative analysis of HDFC Bank and ICICI Bank in home loan sector) Gender: Age: Job Profile: Government sector Private sector Business Others < Rs.10,000 Rs.10,000-Rs.20,000 Rs.20,000-Rs.30,000 > Rs.30,000 Complex Difficult(Own Safety) Simple Cant say Fixed Floating Adjustable rates Others

Salary Structure:

1. What is your opinion regarding the home loan procedure?

2. Which type of interest rate have you preferred?

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3. What criteria is considered by you while selecting the home loans? loan? Yes No Phone Internet Television Friends/Relatives Brochure Press HDFC Bank ICICI Bank Others HDFC Bank ICICI Bank Others Totally Disagree Disagree Agree Lower rate of interest Easy availability Flexible repayment period Quality of service Lower processing fees

4. Are you satisfy with the bank or financial institution from where you have availed the home

5. How did you come to know about the specific financial institution offering home loan?

6. Which bank you prefer to take personal loan?

7. Which bank provide home loan at lower rate of interest?

8. Easy availability is an important factor for home loans. Do you agree?

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Totally Agree

9. Which bank easily provides home loan HDFC Bank ICICI Bank Others

10. Flexible repayment period plays an important role while taking home loans.What is your opinion? Indiffrent Agree Totally Agree

11Which bank provide flexible repayment period? HDFC Bank ICICI Bank Others
Agree Disagree

12. Do provisions of more insurance affect your selection of mortgage from banks?

13.Prepayment penalty need to be taken into consideration while taking home loan.What is your opinion
Indiffrent Agree Totally Agree

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Q.14.Which bank charges lower prepayment penalty? HDFC Bank ICICI Bank Others

Q.15.Do miscellaneous expenses affect your selection of home loans?

Yes No

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