“COMPARATIVE STUDY OF SBI CAR

LOAN SCHEME VIS-A-VIS OTHERS”

i
 PREFACE
A Loan is a debt provided by one entity (organization or

individual) to another entity at an interest rate, and

evidenced by a note which specifies, among other things,

the principal amount, interest rate, and date of repayment. A

Loan entails the reallocation of the subject asset(s) for a

period of time, between the lender and the borrower.

In a Loan, the borrower initially receives or borrows an

amount of money, called theprincipal, from the lender, and is

obligated to pay back or repay an equal amount of money to

the lender at a later time. Typically, the money is paid back in

regularinstallments, or partial repayments; in an annuity,

each installment is the same amount.

The Loan is generally provided at a cost, referred to

as interest on the debt, which provides an incentive for the

lender to engage in the Loan. In a legal Loan, each of these

obligations and restrictions is enforced by contract, which

ii
can also place the borrower under additional restrictions

known as Loan covenants. Although this article focuses on

monetary Loans, in practice any material object might be

lent.

Acting as a provider of Loans is one of the principal tasks

for financial institutions. For other institutions, issuing

of debt contracts such as bonds is a typical source of

funding.

iii
 Table of content

1. INTRODUCTION

2. COMPANY PROFILE

3. SWOT ANALYSIS

4. RESEARCH METHODOLOGY

5. DATA ANALYSIS

6. FINDING

7. LIMITATION

8. CONCLUSION

9. RECOMMENDATION

10. BIBLIOGRAPHY

11. QUESTIONNAIRE

iv
 INTRODUCTION
A Loan is a debt provided by one entity (organization or individual) to
another entity at an interest rate, and evidenced by a note which specifies,
among other things, the principal amount, interest rate, and date of
repayment. A Loan entails the reallocation of the subject asset(s) for a period
of time, between the lender and the borrower.

In a Loan, the borrower initially receives or borrows an amount of money,

called theprincipal, from the lender, and is obligated to pay back or repay an
equal amount of money to the lender at a later time. Typically, the money is
paid back in regularinstallments, or partial repayments; in an annuity, each
installment is the same amount.

The Loan is generally provided at a cost, referred to as interest on the debt,

which provides an incentive for the lender to engage in the Loan. In a legal
Loan, each of these obligations and restrictions is enforced by contract,
which can also place the borrower under additional restrictions known
as Loan covenants. Although this article focuses on monetary Loans, in
practice any material object might be lent.

Acting as a provider of Loans is one of the principal tasks for financial

institutions. For other institutions, issuing of debt contracts such as bonds is
a typical source of funding.

Types of Loans

Secured

A secured Loan is a Loan in which the borrower pledges some asset (e.g. a
car or Car) as collateral.

1
A mortgage Loan is a very common type of debt instrument, used by many
individuals to purchase Car loan. In this arrangement, the money is used to
purchase the Car. The financial institution, however, is given security —
a lien on the title to the house — until the mortgage is paid off in full. If the
borrower defaults on the Loan, the bank would have the legal right to
repossess the house and sell it, to recover sums owing to it.

In some instances, a Loan taken out to purchase a new or used car may be
secured by the car, in much the same way as a mortgage is secured by Car
loan. The duration of the Loan period is considerably shorter — often
corresponding to the useful life of the car. There are two types of auto
Loans, direct and indirect. A direct auto Loan is where a bank gives the Loan
directly to a consumer. An indirect auto Loan is where a car dealership acts
as an intermediary between the bank or financial institution and the
consumer.

Unsecured

Unsecured Loans are monetary Loans that are not secured against the
borrower's assets. These may be available from financial institutions under
many different guises or marketing packages:

 credit card debt

 personal Loans
 bank overdrafts
 credit facilities or lines of credit
 corporate bonds (may be secured or unsecured)

The interest rates applicable to these different forms may vary depending on
the lender and the borrower. These may or may not be regulated by law. In
2
the United Kingdom, when applied to individuals, these may come under
the Consumer Credit Act 1974.

Interest rates on unsecured Loans are nearly always higher than for secured
Loans, because an unsecured lender's options for recourse against the
borrower in the event of default are severely limited. An unsecured lender
must sue the borrower, obtain a money judgment for breach of contract, and
then pursue execution of the judgment against the borrower's unencumbered
assets (that is, the ones not already pledged to secured lenders). In
insolvency proceedings, secured lenders traditionally have priority over
unsecured lenders when a court divides up the borrower's assets. Thus, a
higher interest rate reflects the additional risk that in the event of insolvency,
the debt may be uncollectible.

Demand

Demand Loans are short term Loans that are atypical in that they do not
have fixed dates for repayment and carry a floating interest rate which varies
according to the prime lending rate. They can be "called" for repayment by
the lending institution at any time. Demand Loans may be unsecured or
secured.

Subsidized

A subsidized Loan is a Loan on which the interest is reduced by an explicit

or hidden subsidy. In the context of college Loans in the [United States], it
refers to a Loan on which no interest is accrued while a student remains
enrolled in education.

Concessional

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A concessional Loan, sometimes called a "soft Loan," is granted on terms
substantially more generous than market Loans either through below-market
interest rates, by grace periods or a combination of both. [3] Such Loans may
be made by foreign governments to poor countries or may be offered to
employees of lending institutions as an employee benefit.

Target markets

Personal or commercial

Loans can also be subcategorized according to whether the debtor is an

individual person (consumer) or a business. Common personal Loans
include mortgage Loans, car Loans, home equity lines of credit, credit
cards, installment Loans and payday Loans. The credit score of the borrower
is a major component in and underwriting and interest rates (APR) of these
Loans. The monthly payments of personal Loans can be decreased by
selecting longer payment terms, but overall interest paid increases as well.
For car Loans in the U.S., the average term was about 60 months in 2009

Loans to businesses are similar to the above, but also include commercial
mortgages and corporate bonds. Underwriting is not based upon credit score
but rather credit rating.

Loan payment

The most typical Loan payment type is the fully amortizing payment in
which each monthly rate has the same value over time.

The fixed monthly payment P for a Loan of L for n months and a monthly
interest rate c is:

4
For more information see "Monthly Loan or mortgage payments"
under Compound Interest

Abuses in lending

Predatory lending is one form of abuse in the granting of Loans. It usually

involves granting a Loan in order to put the borrower in a position that one
can gain advantage over him or her. Where the moneylender is not
authorized, they could be considered a Loan shark.

Usury is a different form of abuse, where the lender charges excessive

interest. In different time periods and cultures the acceptable interest rate has
varied, from no interest at all to unlimited interest rates. Credit card
companies in some countries have been accused by consumer organizations
of lending at usurious interest rates and making money out of frivolous
"extra charges".

Abuses can also take place in the form of the customer abusing the lender by
not repaying the Loan or with an intent to defraud the lender.

United States taxes

Most of the basic rules governing how Loans are handled for tax purposes in
the United States are codified by both Congress (the Internal Revenue Code)
and the Treasury Department (Treasury Regulations — another set of rules
that interpret the Internal Revenue Code).[6] Yet such rules are universally
accepted.

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1. A Loan is not gross income to the borrower. Since the borrower has the
obligation to repay the Loan, the borrower has no accession to wealth.

2. The lender may not deduct (from own gross income) the amount of
the Loan. The rationale here is that one asset (the cash) has been converted
into a different asset (a promise of repayment). Deductions are not typically
available when an outlay serves to create a new or different asset.

3. The amount paid to satisfy the Loan obligation is not deductible

(from own gross income) by the borrower.

4. Repayment of the Loan is not gross income to the lender. In effect, the
promise of repayment is converted back to cash, with no accession to wealth
by the lender.

5. Interest paid to the lender is included in the lender’s gross

income. Interest paid represents compensation for the use of the lender’s
money or Car and thus represents profit or an accession to wealth to the
lender. Interest income can be attributed to lenders even if the lender doesn’t
charge a minimum amount of interest.

6. Interest paid to the lender may be deductible by the borrower. In

general, interest paid in connection with the borrower’s business activity is
deductible, while interest paid on personal Loans are not deductible. The
major exception here is interest paid on a home mortgage.

Income from discharge of indebtedness

Although a Loan does not start out as income to the borrower, it becomes
income to the borrower if the borrower is discharged of indebtedness. Thus,
if a debt is discharged, then the borrower essentially has received
income equal to the amount of the indebtedness. The Internal Revenue
6
Code lists “Income from Discharge of Indebtedness” in Section 61(a)
(12) as a source of gross income.

Example: X owes Y $50,000. If Y discharges the indebtedness, then X no

longer owes Y $50,000. For purposes of calculating income, this should be
treated the same way as if Y gave X $50,000.

For a more detailed description of the “discharge of indebtedness”, look at

Section 108 (Cancellation of Debt (COD) Income) of the Internal Revenue
Code.

7
 COMPANY PROFILE
State Bank of India

State Bank of India

Type Public

Traded as NSE: SBIN

BSE: 500112
LSE: SBID
BSE SENSEX Constituent
CNX Nifty Constituent

Industry Banking, Financial Services

Founded 1 July 1955

Headquarters Mumbai, Maharashtra, India

Area served Worldwide

Key people Arundhati Bhattacharya

(Chairman)

Products consumer banking, corporate

banking, finance and

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 insurance, investment
banking, mortgage loans, private
banking, private
equity, savings,Securities, asset
management, wealth
management, Credit
cards, General Insurance

Revenue 200560 crore (US$34 billion)

(2012)

Profit 17916 crore (US$3.0 billion)

(2012)

Total assets 1566261 crore (US$260 billio

n) (2012)

Total equity 98884 crore (US$17 billion)

(2012)

Owner(s) Government of India

Employees 295,696 (2012)

Website www.sbi.co.in

State Bank of India (SBI) is a multinational banking and financial

services company based in India. It is a government-owned
corporation with its headquarters in Mumbai, Maharashtra. As of
December 2013, it had assets of US$388 billion and 17,000

9
branches, including 190 foreign offices, making it the largest banking
and financial services company in India by assets.

State Bank of India is one of the Big Four banks of India, along
with ICICI Bank, Punjab National Bank and HDFC Bank.

The bank traces its ancestry to British India, through the Imperial
Bank of India, to the founding, in 1806, of the Bank of Calcutta,
making it the oldest commercial bank in the Indian Subcontinent.Bank
of Madras merged into the other two "presidency banks" in British
India, Bank of Calcutta and Bank of Bombay, to form theImperial
Bank of India, which in turn became the State Bank of
India. Government of India owned the Imperial Bank of India in 1955,
with Reserve Bank of India (India's Central Bank) taking a 60% stake,
and renamed it the State Bank of India. In 2008, the government took
over the stake held by the Reserve Bank of India.

State Bank of India is a regional banking behemoth and has 20%

market share in deposits and loans among Indian commercial banks.

History

10
Seal of Imperial Bank of India.

The roots of the State Bank of India lie in the first decade of the 18th
century, when the Bank of Calcutta, later renamed the Bank of
Bengal, was established on 2 June 1806. The Bank of Bengal was
one of three Presidency banks, the other two being the Bank of
Bombay (incorporated on 15 April 1840) and the Bank of
Madras(incorporated on 1 July 1843). All three Presidency banks
were incorporated as joint stock companies and were the result
of royal charters. These three banks received the exclusive right to
issue paper currency till 1861 when, with the Paper Currency Act, the
right was taken over by the Government of India. The Presidency
banks amalgamated on 27 January 1921, and the re-organised
banking entity took as its name Imperial Bank of India. The Imperial
Bank of India remained a joint stock company but without
Government participation.

Pursuant to the provisions of the State Bank of India Act of 1955,

the Reserve Bank of India, which is India's central bank, acquired a
controlling interest in the Imperial Bank of India. On 1 July 1955, the
Imperial Bank of India became the State Bank of India. In 2008,
the government of India acquired the Reserve Bank of India's stake in
SBI so as to remove any conflict of interest because the RBI is the
country's banking regulatory authority.

In 1959, the government passed the State Bank of India (Subsidiary

Banks) Act, which made eight state banks associates of SBI. A
process of consolidation began on 13 September 2008, when
the State Bank of Saurashtra merged with SBI.

11
SBI has acquired local banks in rescues. The first was the Bank of
Behar (est. 1911), which SBI acquired in 1969, together with its 28
branches. The next year SBI acquired National Bank of Lahore (est.
1942), which had 24 branches. Five years later, in 1975, SBI acquired
Krishnaram Baldeo Bank, which had been established in 1916
in Gwalior State, under the patronage of Maharaja Madho Rao
Scindia. The bank had been the Dukan Pichadi, a small moneylender,
owned by the Maharaja. The new bank's first manager was Jall N.
Broacha, a Parsi. In 1985, SBI acquired the Bank of Cochin in Kerala,
which had 120 branches. SBI was the acquirer as its affiliate,
the State Bank of Travancore, already had an extensive network in
Kerala.

The State Bank of India and all its associate banks are identified by
the same blue keyhole logo. The State Bank of
Indiawordmark usually has one standard typeface, but also utilises
other typefaces.

On October 7, 2013, Arundhati Bhattacharya became the first woman

to be appointed Chairperson of the bank.

Operations

SBI provides a range of banking products through its network of

branches in India and overseas, including products aimed at non-
resident Indians (NRIs). SBI has 14 regional hubs and 57 Zonal
Offices that are located at important cities throughout India.

Domestic presence

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SBI had 14,816 branches in India, as on 31 March 2013, of which
9,851 (66%) were in Rural and Semi-urban areas. [1] In the financial
year 2012-13, its revenue was INR 200,560 Crores (US$ 36.9 billion),
out of which domestic operations contributed to 95.35% of revenue.
Similarly, domestic operations contributed to 88.37% of total profits
for the same financial year.

International presence

The Israeli branch of the State Bank of India located in Ramat Gan.

As of 28 June 2013, the bank had 180 overseas offices spread over
34 countries. It has branches of the parent
in Moscow, Colombo, Dhaka, Frankfurt, Hong
Kong,Tehran, Johannesburg, London, Los Angeles, Male in
the Maldives, Muscat, Dubai, New York, Osaka, Sydney, and Tokyo. It
has offshore banking units in the Bahamas, Bahrain, and Singapore,
and representative offices in Bhutan and Cape Town. It also has an
ADB in Boston, USA.

The Canadian subsidiary, State Bank of India (Canada) also dates to

1982. It has seven branches, four in the Toronto area and three in
the Vancouver area.

SBI operates several foreign subsidiaries or affiliates. In 1990, it

established an offshore bank: State Bank of India (Mauritius). SBI

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(Mauritius) has 15 branches in major cities/towns of the country
including Rodrigues.

State Bank of India (S.B.I.) Branch at Tsim Sha Tsui, Hong Kong

In 1982, the bank established a subsidiary, State Bank of India

(California), which now has ten branches – nine branches in the state
of California and one in Washington, D.C. The 10th branch was
opened in Fremont, California on 28 March 2011. The other eight
branches in California are located in Los Angeles, Artesia, San Jose,
Canoga Park, Fresno, San Diego, Tustin and Bakersfield.

In Nigeria, SBI operates as INMB Bank. This bank began in 1981 as

the Indo-Nigerian Merchant Bank and received permission in 2002 to
commence retail banking. It now has five branches in Nigeria.

In Nepal, SBI owns 55% of Nepal SBI Bank, which has branches
throughout the country. In Moscow, SBI owns 60% of Commercial
Bank of India, with Canara Bankowning the rest. In Indonesia, it owns
76% of PT Bank Indo Monex.

The State Bank of India already has a branch in Shanghai and plans
to open one in Tianjin.

14
In Kenya, State Bank of India owns 76% of Giro Commercial Bank,
which it acquired for US$8 million in October 2005.

Associate banks

Main Branch of SBI in Mumbai.

SBI has five associate banks; all use the State Bank of India logo,
which is a blue circle, and all use the "State Bank of" name, followed
by the regional headquarters' name:

 State Bank of Bikaner & Jaipur

 State Bank of Hyderabad
 State Bank of Mysore
 State Bank of Patiala
 State Bank of Travancore

Earlier SBI had seven associate banks, all of which had belonged
to princely statesuntil the government nationalised them between
October 1959 and May 1960. In tune with the first Five Year Plan,
which prioritised the development of rural India, the government
integrated these banks into State Bank of India system to expand its
rural outreach. There has been a proposal to merge all the associate

15
banks into SBI to create a "mega bank" and streamline the group's
operations.

The first step towards unification occurred on 13 August 2008

when State Bank of Saurashtra merged with SBI, reducing the
number of associate state banks from seven to six. Then on 19 June
2009 the SBI board approved the absorption of State Bank of Indore.
SBI holds 98.3% in State Bank of Indore. (Individuals who held the
shares prior to its takeover by the government hold the balance of
1.77%.)

The acquisition of State Bank of Indore added 470 branches to SBI's

existing network of branches. Also, following the acquisition, SBI's
total assets will inch very close to the 10 trillion mark (10 billion long
scale). The total assets of SBI and the State Bank of Indore stood at
9,981,190 million as of March 2009. The process of merging of State
Bank of Indore was completed by April 2010, and the SBI Indore
branches started functioning as SBI branches on 26 August 2010. [11]

State Bank of India Mumbai LHO.

Non-banking subsidiaries

Apart from its five associate banks, SBI also has the following non-
banking subsidiaries:
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 SBI Capital Markets Ltd
 SBI Funds Management Pvt Ltd
 SBI Factors & Commercial Services Pvt Ltd
 SBI Cards & Payments Services Pvt. Ltd. (SBICPSL)
 SBI DFHI Ltd
 SBI Life Insurance Company Limited
 SBI General Insurance

In March 2001, SBI (with 74% of the total capital), joined with BNP
Paribas (with 26% of the remaining capital), to form a joint venture life
insurance company named SBI Life Insurance company Ltd. In 2004,
SBI DFHI (Discount and Finance House of India) was founded with its
headquarters in Mumbai.

Other SBI service points

As of 31 March 2014: SBI has 43,515 ATMs and SBI group (including
associate banks) has 51,491 ATMs. SBI has become the first bank to
install an ATM at Drass in the Jammu & Kashmir Kargil region. This
was the Bank's 27,032nd ATM on 27 July 2012.

Logo and slogan

 The logo of the State Bank of India is a blue circle with a small
cut in the bottom that depicts perfection and the small man the
common man - being the center of the bank's business. The logo

17
 came from National Institute of Design(NID), Ahmedabad and it
was inspired by Kankaria Lake, Ahmedabad.[12]
 Slogans: "PURE BANKING, NOTHING ELSE", "WITH YOU -
ALL THE WAY", "A BANK OF THE COMMON MAN", "THE
BANKER TO EVERY INDIAN", "THE NATION BANKS ON US"

Listings and shareholding

As on 31 March 2014, Government of India held around 58.60%

equity shares in SBI. Life Insurance Corporation of India is the largest
non-promoter shareholder in the company with 14.99% shareholding.

Shareholders Shareholding

Promoters: Government of India 58.60%

Banks & Insurance Companies 16.79%

FIIs/GDRs/OCBs/NRIs 12.04%

Mutual Funds & UTI 03.78%

Private Corporate Bodies 02.87%

Others 5.92%

Total 100.0%

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The equity shares of SBI are listed on the Bombay Stock Exchange,
[14]
where it is a constituent of the BSE SENSEXindex,[15] and
the National Stock Exchange of India,[16] where it is a constituent of
the S&P CNX Nifty.[17]
Its Global Depository Receipts (GDRs) are listed on the London
Stock Exchange.[18]

Employees

SBI is one of the largest employers in the country having 222,033

employees as on 31 March 2014, out of which there were 45,132
female employees (20%) and 2,610 (1%) employees with disabilities.
On the same date, SBI had 42,744 Schedule Caste (19%) and
17,243 Schedule Tribe (8%) employees. The percentage of Officers,
Assistants and Sub-staff was 36%, 46% and 18% respectively on the
same date Hiring drive: 1,776 Assistants and 1,394 Officers joined
the Bank in FY 2013-14, for expansion of the branch network and to
mitigate staff shortage, particularly at rural and semi-urban
branches. Staff productivity: As per its Annual Report for FY 2013-14,
each employee contributed net profit of INR 4.85 lakhs.

Recent awards and recognitions

 SBI won the Best Bank award in the 'ASiAMONEY FX POLL

OF POLLS 2014’ for best overall performance as domestic
provider of Forex services over the last 10 years.
 SBI was ranked as the top bank in India based on tier 1
capital by The Banker magazine in a 2014 ranking.

19
 SBI was ranked 298th in the Fortune Global 500 rankings of the
world's biggest corporations for the year 2012.
 SBI won "Best Public Sector Bank" award in the D&B India's
study on 'India's Top Banks 2013'.
 State Bank of India won three IDRBT Banking Technology
Excellence Awards 2013 for “Electronic Payment Systems”, “Best
use of technology for Financial Inclusion”, and “Customer
Management & Business Intelligence” in the large bank category.
 SBI won National Award for its performance in the
implementation of Prime Minister’s Employment Generation
Programme (PMEGP) scheme for the year 2012.
 Best Online Banking Award, Best Customer Initiative Award &
Best Risk Management Award (Runner Up) by IBA Banking
Technology Awards 2010
 SKOCH Award 2010 for Virtual corporation Category for its e-
payment solution
 SBI was the only bank featured in the "top 10 brands of India"
list in an annual survey conducted by Brand Finance andThe
Economic Times in 2010.
 The Bank of the year 2009, India (won the second year in a
row) by The Banker Magazine
 Best Bank – Large and Most Socially Responsible Bank by the
Business Bank Awards 2009
 Best Bank 2009 by Business India
 The Most Trusted Brand 2009 by The Economic Times.
 SBI was named the 29th most reputed company in the world
according to Forbes 2009 rankings
20
 Most Preferred Bank & Most preferred Home loan provider by
CNBC
 Visionaries of Financial Inclusion By FINO
 Technology Bank of the Year by IBA Banking Technology
Awards
 SBI was 11th most trusted brand in India as per the Brand Trust
Report 2010.

21
 SBI provide the best car loan scheme for you.

Salient features:

· No Advance EMI;

· Longest repayment tenure (7 years);

· Low interest rates ;

· Low EMI;

· For borrowers with Net Annual Income upto Rs. 10

lac: LTV 85% of 'On Road Price' of car (includes registration,
insurance and Extended Warranty/ Total Service Package/
Annual Maintenance Contract/ cost of accessories)

For borrowers with Net Annual Income more than Rs. 10

lac: 85% on “ex-showroom price” or 80% on “On-road price”,
whichever selected by the borrower

· Interest Calculated on Daily Reducing Balance;

· Flexibility of payment of EMI anytime during the month;

· No pre-payment penalty;

· Optional SBI Life cover;

· Overdraft facility available.

Purpose
For purchase of new passenger cars, Multi Utility Vehicles (MUVs)
and SUVs.

22
Eligibility

To avail an SBI Car Loan, you should be :

· Individual between the age of 21-65 years of age.

· Regular employee of State / Central Government, Public
Sector Undertaking, Private company or a reputed
establishment.
· Professionals, self-employed,
businessmen, proprietary/partnership firms who is an income tax
assessee.
· Person engaged in Agricultural and allied activities.
· Gross Annual Income :-

a) Salaried:
a) Net Annual Income of applicant and/or co-applicant if any,
together should be Rs. 3,00,000/-

b) Self employed, professionals and Proprietary / Partnership

Firms:
Net Profit or Gross Taxable income of Rs. 4,00,000/-
p.a. ( income of co-applicant can be clubbed together)

c) Agriculturist:
Net Annual income of applicant and/or co applicant together to
be Rs. 4,00,000/-

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Loan Amount

For Salaried: The maximum loan amount is 48 times of the Net

Monthly Income.

For Self employed, professionals and Proprietary/Partnership

Firms : Up to 4 times Net Profit or Gross Taxable income as per ITR
after adding back depreciation and repayment of all existing loans

For Agriculturist: Up to 3 times of Net Annual Income

Documents Required

You would need to submit the following documents along with the
completed application form:

1. Statement of Bank account of the borrower for last 6 months.

2. 2 passport size photographs of borrower(s).
3. A copy of passport /voters ID card/PAN card.
4. Proof of residence.
5. Latest salary-slip showing all deductions
6. I.T. Returns/Form 16: 2 years for salaried employees and 2
years for professional/self-employed/businessmen duly
accepted by the ITO wherever applicable
7. Proof of official address for non-salaried individuals

24
 Margin

For borrowers with Net Annual Income upto Rs. 10 lac: 15% of
'On Road Price' of car (includes registration, insurance
and Extended Warranty/ Total Service Package/ Annual
Maintenance Contract/ cost of accessories)

For borrowers with Net Annual Income more than Rs. 10

lac: 15% on “ex-showroom price” or 20% on “On-road price”,
whichever selected by the borrower.

Repayment

You can enjoy the longest repayment period in the industry with us as
long as 84 months.

Reimbursement of costs of car purchased by own sources

We also reimburse finance for the cars purchased out of own funds
which are not more than 3 month old at rate of interest applicable to
New Car.

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Interest Rates w.e.f. 01.02.2014 (Base Rate 10.00 % p.a.)

SBI CAR LOAN SCHEME

Tenure Rate of Interest

For Term Loan and Overdraft:
For all
0.95% above Base Rate, i.e.
tenures
10.95% p.a.

SBI COMBO LOAN SCHEME

Tenure Rate of Interest

For all tenures For Term Loan
0.95% above Base Rate i.e.
10.95% p.a.

Certified Pre-owned Car Loan scheme

Tenure Rate of Interest

Up to 3 years 6.00% above Base Rate i.e.
16.00% p.a.
Above 3 yrs 6.50% above Base Rate i.e.
16.50% p.a.

Used Vehicles

Tenure Rate of Interest

26
Up to 3 years 7.25% above Base Rate i.e.
17.25% p.a.
Above 3 yrs 7.50% above Base Rate i.e.
17.50% p.a.

Two - Wheeler Loan

Tenure Rate of Interest

Up to 3 years 8.25% above Base Rate i.e.
18.25% p.a.

NOTE: ALL INTEREST RATES ARE SUBJECT TO CHANGE,

WITHOUT NOTICE

27
 SWOT ANALYSIS

STRENGTH WEAKNESS

 Strong Brand Image.  Very high price

 Technically Superior.  Major Competitors

 Good After Sales services.

OPPORTUNITIES THREATS

 Young generations need for more  Strong competitors like Indigo

branded. CS, Swift Dezire
Strong advertising by competitors.
 Brand image is necessary for
looking rich

 Proper advertising for brand

building

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 DOCUMENTATION OF CAR LOAN for govt. employee

1. salary certificate

2. address proof

3. Identity proof

DOCUMENTATION OF CAR LOAN FOR NON GOVT. EMPLOYEE

1. Income tax return

2. Address proof

3. Identity proof

Eligibility

To avail an SBI Car Loan, you should be :

· Individual between the age of 21-65 years of age.

· Regular employee of State / Central Government, Public
Sector Undertaking, Private company or a reputed
establishment.
· Professionals, self-employed,
businessmen, proprietary/partnership firms who is an income tax
assessee.
· Person engaged in Agricultural and allied activities.
· Gross Annual Income :-

a) Salaried:

29
 a) Net Annual Income of applicant and/or co-applicant if any,
together should be Rs. 3,00,000/-

b) Self employed, professionals and Proprietary / Partnership

Firms:
Net Profit or Gross Taxable income of Rs. 4,00,000/-
p.a. ( income of co-applicant can be clubbed together)

c) Agriculturist:
Net Annual income of applicant and/or co applicant together to
be Rs. 4,00,000/-

Loan Amount

For Salaried: The maximum loan amount is 48 times of the Net

Monthly Income.
For Self employed, professionals and Proprietary/Partnership
Firms : Up to 4 times Net Profit or Gross Taxable income as per ITR
after adding back depreciation and repayment of all existing loans

For Agriculturist: Up to 3 times of Net Annual Income

Documents Required

You would need to submit the following documents along with the
completed application form:

1. Statement of Bank account of the borrower for last 6 months.

2. 2 passport size photographs of borrower(s).

30
 3. A copy of passport /voters ID card/PAN card.
4. Proof of residence.
5. Latest salary-slip showing all deductions
6. I.T. Returns/Form 16: 2 years for salaried employees and 2
years for professional/self-employed/businessmen duly
accepted by the ITO wherever applicable
7. Proof of official address for non-salaried individuals
Margin

For borrowers with Net Annual Income upto Rs. 10 lac: 15% of
'On Road Price' of car (includes registration, insurance
and Extended Warranty/ Total Service Package/ Annual
Maintenance Contract/ cost of accessories)

For borrowers with Net Annual Income more than Rs. 10

lac: 15% on “ex-showroom price” or 20% on “On-road price”,
whichever selected by the borrower.

Repayment

You can enjoy the longest repayment period in the industry with us as
long as 84 months.

Reimbursement of costs of car purchased by own sources

We also reimburse finance for the cars purchased out of own funds
which are not more than 3 month old at rate of interest applicable to
New Car.

31
Interest Rates w.e.f. 01.02.2014 (Base Rate 10.00 % p.a.)

SBI CAR LOAN SCHEME

Tenure Rate of Interest

For Term Loan and Overdraft:
For all
0.95% above Base Rate, i.e.
tenures
10.95% p.a.

SBI COMBO LOAN SCHEME

Tenure Rate of Interest

For all tenures For Term Loan
0.95% above Base Rate i.e.
10.95% p.a.

Certified Pre-owned Car Loan scheme

Tenure Rate of Interest

Up to 3 years 6.00% above Base Rate i.e.
16.00% p.a.
Above 3 yrs 6.50% above Base Rate i.e.
16.50% p.a.
Used Vehicles

Tenure Rate of Interest

Up to 3 years 7.25% above Base Rate i.e.
17.25% p.a.

32
Above 3 yrs 7.50% above Base Rate i.e.
17.50% p.a.

Two - Wheeler Loan

Tenure Rate of Interest

Up to 3 years 8.25% above Base Rate i.e.
18.25% p.a.
NOTE: ALL INTEREST RATES ARE SUBJECT TO CHANGE,
WITHOUT NOTICE
RATE OF INTEREST FOR CAR LOAN
1. rate of interest in SBI CAR LOAN is 10.39%
2. rate of interest in MAGMA LOAN is 11.40%
3. rate of interest in ICICI BANK is 10.79%
4. rate of interest in HDFC BANK is 10.86%
5. rate of interest in TATA MOTORS is 11.27%

33
 OBJECTIVE OF THE STUDY
1. To know various type of car loan available in Indian market.

2. To analysis the car loan in all segment

3. To know the loan in car loan is more profitable

4. The growth of car loan.

RESEARCH METHODOLOGY

The report is the result of a survey which was undertaken in SBI CAR
LOAN Lucknow . The objectives of the project has been fulfilled by
getting response from the Consumer associated to these segments through a
personal interview in the form of a questionnaire. The responses available
through the questionnaire are used to evaluate the satisfaction level for
consumer Car loan in SBI CAR LOAN Lucknow.
The project also covers an analysis of the effect of Car loan in their
investment.

34
 THE RESEARCH PROBLEM

The problem formulation is the first step to a successful research process.

The project undertaken the problem of analyzing the customer satisfaction
level for Car loan of SBI CAR LOAN. To find the satisfaction of the
working environment in the organisation.

THE RESEARCH DESIGN

The research design used in the project is Descriptive Research.

The investigation is carried upon the customer’s in SBI CAR LOAN
Lucknow. The reason for choosing this design is to get responses from the
Consumer so that their perception about the Organization.
Sample design : Simple random sampling

35
 THE DATA SOURCE
The data has been taken from two sources
 Primary data source
The primary data source has been collected through questionnaire by
personally interviewing each respondent on a number of queries structured
in a questionnaire.
 Secondary data source
Secondary data was collected from following sources
Prior research reports
Websites
Books
Newspaper
Personal consultation

36
 THE AREA OF WORK
The field work is conducted in the SBI CAR LOAN
LUCKNOW in various branch situated in different location all over the
premises.
THE ANALYTICAL TOOLS USED

The analytical tools used are mostly graphical in nature which

include
 Pie charts
 Cylindrical charts
 Column charts
 Tables showing percentage

37
 THE SAMPLE SIZE

The sample size consists of 100 Respondent out of which the most logical
and non biased response are selected thus the sample size is taken out to be
100 respondent.

38
 PROBLEMS AND LIMITATIONS

It is not possible to remove the limitation of any investigators. So this

project also has certain limitation that is:

1) Information was gathered through the rating of the subject, thus

biasness is possible.

2) As the sample size was small it is possible that it may not represent

the precise picture.

3) Consumers of the organization may hide the fact.

4) The management did not agree to disclose all the confidential data.

5) Number of respondents are very less, so clear conclusion can’t be

drawn.

39
 ANALYSIS

1 Are you wanted to take loan for your car?

yes 73
No 27

40
2 In which institution you want to loan to your car ?

SBI 33
Magna loan 23
ICICI BANK 27
HDFC BANK 7
OTHERS 10

41
3 Do you interested loan for car loan in Nationalize bank or pvt bank ?

Nationalized bank 91
Pvt. bank 9

42
4. Why you interested to loan your car in nationalized bank ?

Low interest 91
security purpose 9

43
5 why you are not take loan in pvt. sector ?

high interest 91
Non Security 9

44
6:- are you think that SBI car loan car loan given more security better than

other institution?

Yes 91
no 9

45
7 why you intrested to take car loan?

Yes 89
No 11

46
8:- Do you think that loan of your car in nationalize bank is better than other

institution?

Yes 91
No 9

47
48
9:- If yes why:-

Low interest 65
security reason 35

49
10:- why you trusted in Car loan?

Yes 78
no 22

50
11:- are you satisfied from your Car loan ?

Satisfied 99
Unsatisfied 1

51
12:- if yes why?

More profitable 71
Less profitable 29

52
13:- do you think that car loan is trustable?

yes 92
No 8

53
14:- do you think that Car loan give you an opportunity to purchase a car?

yes 83
No 17

54
15:- do you think that without Car loan not possible to purchase car in

lucknow city?

yes 87
No 13

55
 16. are you satisfy with Car loan?

yes 77
No 23

56
 17. Do you think that possibility of Car loan in SBI CAR LOAN is play

vital role?

yes 93
No 7

57
 RECOMMENDATIONS

The following recommendations on the basis of the data collected can be

made the concerned authorities of Car loan

It was found that the only few respondent were particularly dissatisfied with

the Car loan. In consonance with the Maslow’s hierarchy of needs theory

the monetary remunerations is required for full filling the first two lower

level needs, which is not up to the mark and fails to satisfy the Consumers .

Maximum respondent need more profits to their investment so they invest

their money in Car loan.

In accordance with the Herzberg dual structure model of investing handling

procedure the motivators such as profit of their investment, supervision, Car

loan policies and administration, technical supervision, working condition

should be improved to increase the among the Consumers . And factors like

advancement that is the hygiene factors.

Car loan Loan have a better opportunity in lucknow city. The possibility of

Car loan Loan much better because maximum respondent invest money in

Car loan and without they think without Car loan Loan can’t invest or

purchase a Car in lucknow city.

SUGGESTION

58
The suggestions given for the betterment are explained below:

 Provide the opportunity to the respondent to express their views.

 Mission and goals should be cleared to respondent.

 car loan interest rates are growing too much so maximum

respondent invest their money in this field.

 Mental relaxation & social cultural development of Consumers ,

who strive hard for the organization.

 Reward or Praise individuals and motivate them for work.

 Role should be defined so based on that individuals could plan

their work accordingly.

 Regular review and compare current & past performance to detect

gradual deterioration in the strategy.

59
 CONCLUSION

Maximum respondent purchase a Car because the appreciation of Car loan

is much better than other field. Where the appreciation is too much. In

lucknwo city Car rate is very high so the respondent can’t purchase a Car

without Car loan Loan. So, the possibility of Car loan Loan lucknow have a

bright future.

In our observation maximum respondent secure that their Car loan because

the growth of the Car loan is day by day increases because population India

is increase so residence problem also increase in our country.

SBI Lucknow is one of most popular and reliable banking sector to provide

Car loan their interest rate is also very nominal.

60
 APPENDIX

QUESTIONNAIRE

ANALYSIS

1 Are you wanted to take loan for your car?

yes
No

2 In which institution you want to loan to your car ?

SBI
Magna loan
ICICI BANK
HDFC BANK
OTHERS

3 Do you interested loan for car loan in Nationalize bank or pvt bank ?

Nationalized bank
Pvt. bank

4. Why you interested to loan your car in nationalized bank ?

Low interest
security purpose

5 why you are not take loan in pvt. sector ?

61
 high interest
Non Security

6:- are you think that SBI car loan car loan given more security better than

other institution?

Yes
no

7 Are you interested to take car loan?

Yes
No
8:- Do you think that loan of your car in nationalize bank is better than other

institution?

Yes
No

9:- If yes why:-

Low interest
security reason

10:- why you trusted in Car loan?

Yes
no

62
 11:- are you satisfied from your Car loan ?

Satisfied
Unsatisfied

12:- if yes why?

More profitable
Less profitable

13:- do you think that car loan is trustable?

yes
No

14:- do you think that Car loan give you an opportunity to purchase a car?

yes
No

15:- do you think that without Car loan not possible to purchase car in lucknow

city?

yes
No
16. are you satisfy with Car loan?

yes
No

17. Do you think that possibility of Car loan in SBI CAR LOAN is play

vital role?

63
yes
No

64