FINANCE ANALYSIS OF HDFC CAR LOAN FINANCE

INDEX

1) Executive Summary...............................................................................................1

2) Introduction ...........................................................................................................2

3) Company Profile..................................................................................................10

4) Conceptual Background......................................................................................17

5) SWOT Analysis ...................................................................................................33

6) Objective of the Study.........................................................................................34

7) Research Methodology........................................................................................35

8) Data Analysis........................................................................................................38

9) Findings & Suggestions ......................................................................................42

10) Limitations............................................................................................................43

11) Conclusion............................................................................................................44

12) Bibliography.........................................................................................................45
 EXECUTIVE SUMMARY

A new private sector Bank promoted by housing Development Corporation Ltd. (HDFC), a
premier housing finance company. The bank is the first of its kind to receive an in-principle
approval from the RBI for establishment of a bank in the private sector. Certificate of
Commencement of Business was received on 10th October 1994 from RBI and the bank was
opened by the then finance minister Mr. Manmohan Singh. The Bank transacts both
traditional commercial banking as well as investment banking. The Bank opened its first
branch in Ramon House at Church gate, Mumbai on January 16 th 1995. Subsidiaries and
associate companies of HDFC include HDFC Bank HDFC Mutual Fund, HDFC Standard
Life Insurance, HDFC Realty HDFC Chub General Insurance Company Ltd. Intel net Global
Services Ltd. and Credit information Bureau (India) Limited. HDFC Bank offers various
products for retail customers. It provides the customers with Savings and Current Accounts,
Fixed deposits loans and credit and debit cards. It also provides with Investment, payment,
Forex and insurance services. HDFC Bank has gone on to win several awards right from the
best bank in private sector to best bank in the country. It has received awards from
NASSCOM, Economic Times, Business Today, Forbes Global, Business World, Asian
Banker’s Excellence award and many others. HDFC Bank is one of the major players in the
corporate accounts segment in the country. In JABALPUR there are three major players in
the corporate account segment; viz. Citibank, ICICI Bank and HDFC Bank. JABALPUR is
known as the one of the Information Technology hub of India, and therefore these IT
equipped organizations and software companies and also some small corporate were the
focus of the study. The study was about these organizations and the The study was also to
check the willingness of the organizations to go to a new bank if the bank provided them with
better products and services.

1
 INTRODUCTION
Across the globe, personal financing has been the most spectacular innovation
in the commercial banking sector in recent years. Personal finance comprises consumer credit
for specific purpose and credit for general use.

Personal banking or Car Loan is about providing banking services to

individuals as opposed to wholesale banking, which focuses on industry and institutional
clients. The concept of personal banking is new to the banks. It is now being viewed as an
attractive market segment, which offers opportunities for growth with profits. It is only the
recent times, when it has attracted special attention of the banks, as a solution to some of their
immediate concerns. Its essence lies in individual customers. Here, all the banking need of
the individual customers is taken care of in an integrated manner.

SEGMENTS AND TARGET GROUPS OF RETAIL LOANS:-

The retails loans, for our analysis, mainly comprise the following sub
segments and their target customer groups are:

 Home loans to salaried and self – employed professionals. Home loans account for
about half of total result loans.

 Auto loans (car and two wheelers) to salaried and self – employed professional. This
sub – segment accounts for about one third of total retail loans.

 Loans / advances against shares to high net worth individuals (HNIs), businessman
(includes business women) and traders.

 Personal loans to salaried, self-employed professionals and traders / businessmen.

These loans, for consumption needs and unsecured (i.e. without any tangible
security), are granted on the basic of income flows or net worth of the individual
borrowers.

 Credit card receivables from salaried, self – employed professionals and traders/
businessmen.

GROWTH IN RECENT YEARS:-

There was a time, when given the normal cultural practice, taking a loan was
frowned upon. Under worst situation taking a loan would be restricted to friends or form the
place of work. Borrowing from professional lending companies was taboo. Today, the

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scenario has changed. Now living off debt is a well accepted norm of life. The conservative,
cautions, thrifty, dept-averse middle class of the past seems to have given way to a new
middle class that is free of all inhibitions regarding conspicuous consumption.

“Getting into retail is essential if we have to survive as a business”. K.V.

Kamath, CEO, ICCI EGM, 1998

If a person approached a bank for a home loan or a car loan few years ago,
officials would likely have dissuaded him. But now banks are actively seeking customer’s for
the personal advances and have upgraded their system of disbursements. In 2001-2002,
profits of almost every bank have surged on the back of a big retail push. So much so that
IDBI banks net profit had grown by a whopping 170%, ICCI bank 60%, UTI bank 56% and
HDFC 41%.

According to Kamath, “It has become the new driver of the economy”.

Consumer credit penetration in India is just around 2% of GDP as against the

20% reported in Southeast Asia. In the US, an the other hand, 40% of total bank credit is
give to the household sector.

CAR LOAN IN INDIA:-

The growth of Car Loan is an important millstone in Indian banking sector

development. However, the Car Loan in India is very small by world standards. The retail
loan constitutes less than 67% of the GDP Visavis 18% to 60% for Asian economics, and the
housing loans are just 2.5% of the GDP visavis 25% to 60% in other nations. This reveals
that Car Loan in Indian has not reached its full potential.

The operations of any banking unit are divided into two broad categories, viz,
wholesale banking or corporate banking and Car Loan . The wholesale banking covers the
financial needs of corporate houses, financial institutions, trusts etc., and the size of the
account is quite large. Car Loan , on the other hand, is not a new phenomenon. It has always
been rampant in diverse forms. But, it has become synonymous with main stream banking for
many banks lately. Typically, it refers to dealing with individual consumers both on the
liabilities and asset side of the balance sheet. On the liabilities side, in the form of deposits
such as fixed, current, saving account. Whereas on the asset side, in the forms of various
loans such as personal loans, housing loan, auto loan, educational loans, etc. besides this, the
Car Loan also provides various ancillary services such as mobile – banking, phone –
banking, internet – banking depositary services, etc.
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 The emergence of retail lending has more to do with economic prosperity
improving consumer purchasing power, increasing penetration of middle of high income
households, changing consumer demographics (India is one of the country having 70% of the
population below 35 years of the age), technology advancements, development of the
software industry, increase is treasure income of the banks, decline in interest rates, etc. A
report released by AK Kearney, a global management consultant, which recently identified
that, “India as the second most attractive Car Loan destination of 30 emerging markets”, and
in reality, India has witnessed a shift from wholesale lending to retail lending especially
private sector banks.

ADVANTAGES OF PERSONAL FINANCE:-

The Indian consumer is fast changing his habits, borrowing money to buy the
products he wants, not content with buying what he can afford. The resultant consumer boom
is what market strategists explain as the key to success of the Indian personal finance market.
Personal finance today is a win-win system in which everyone stands to gain. For the Indian
consumer, it is an opportunity to upgrade his standard of living right now instead of waiting
for years for his savings to accumulate. For manufactures, it stimulates demands and lowers
inventory. For middlemen, it’s a sales boosting device. For player of personal finance. It is a
means of profit generation. Thus, there is no denying the fact that personal finance is an area
where everyone is benefited. This sector is, therefore, expected to witness robust growth rates
in the near future.

FACTORS RESPONSIBLE FOR GROWTH OF PERSONAL FINANCE:-

Personal finance is identified as a potential avenue because of the following

reasons:

 Growth in income level of people have increased the demand for different types of
deposit products and also loan products for a variety of purpose in order to improve
their standard of living.

 Lending to industry is becoming risky an account of recession.

 Continuous softening of lending rates has improved the borrower’s ability to repay
personal advances.

 Developments in technology which have reduced transaction costs on a large numbers

of borrower accounts is also one of the reason towards retails shift by the banks.

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This is an area, which offers excellent cross-selling opportunities for retaining the customers
and practicing relationship banking. Banks are offering a wide range of personal finance
products:

DETAILS OF CAR LOAN SERVICE:-

Housing loans:-

A home loan is a primary lien against a property. It requires you to pledge your home as the
lender’s security for repayment of your loan. The lender agrees to hold the title or deed to
your property until you have paid back your loan plus interest.

The demand for housing in the country is increasing at a very rapid rate,
propelled by stable property prices, low interest rates, tax concessions and rising income
levels. Consequently the housing finance sector has been recording strong growth rates.

The scope of growth in housing loans is enormous. The salient feature of

home loans is as follows.

 Purpose: Purchase/ construction/ up-gradation/ extension etc. of house.

 Amount of loan: will cover cost of land and construction or price of the flat and
interior decoration.

 Type of borrower: single or joint or corporate

 Period of loan/ Term: medium (3-5 years) to very long period (15-20 years)

Depending on cash flows and choice of the borrower.

 Interest rate: fixed / floating rate.

 Security: first mortgage (Equitable or Registered) of the land house or other

immovable property (being purchased /constructed or already built) by the
borrower in favor of the bank.

 Guarantee: the mortgage charge is registered with Registrar of properties.

 Documents: Promissory note and latter of installments and surety if any.

 Repayment: is generally in the form of EMI (equated monthly installments) for

the period of loan. Emi includes both interest and principal.

Vehicle Loans:-

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The demand for car and two – wheeler loans come from professional and self – employed
persons. Due to shortage of public transport system, demand for loans for auto – rickshaws
and car – taxis is also increasing in most cities.

 Purpose: purchase of vehicles (2/3/4 wheelers) for own use or as taxis.

 Period / term of loan : 3-5 years generally, depending on the estimated income/ cash
flows and nature / cost of vehicle.

 Interest rate: generally floating rate;

 Security: hypothecation of the vehicle purchased in favour of the bank.

 Guarantee: surety or personal guarantee is stipulated in the case of loan for taxis.

 Repayments: EMI

Personal Loan:

Personal loans is an all – purpose loan, which is given in most cases without any kind of
security like a car, home, shares, etc. they are one of the most preferred options for financing
an unforeseen expense or for bridging any short-term need for funds.

Personal loans are completely flexible, and available for purchase of assets and consumer
durables, making tax – saving investments, higher education, holiday and travel, medical
emergency or any other declared legal use.

 Purpose: travel, marriage or other function/ events requiring large expenses.

 Loan term: short – term loan or Demand loan or overdraft/

 Repayment: EMI or as agreed upon.

 Interest rate: floating rate. The rate is higher than other loans in retail segment.

 Security: no tangible security. Banks may ask for tangible security in cases where
the net worth or income / cash flows may not be adequate.

 Guarantee: required, if net worth/ cash flows are not adequate and tangible
security is not available.

 Other: granted mostly to people in high income bracket among salaried, self –
employed professionals, and businessmen.

PERFORMANCE OF THESE SCHEMES:

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With in the balance sheet provided from the branch we can analyze the performance of the
major loans provided are al follows:
PROGRESS REPORT UNDER RETAIL SCHEMES AS ON : 31.03.09

Scheme Till Previous Current year Total Total Out-Standing a On

31/03/0

A/c Amt A/c Amt A/c Amt. A/c Amt.

Car Loan 13 39.23 01 03.00 14 42.23 41 68.3

Housing Loan 32 205.30 09 75.40 41 280.70 283 943.2

Education 16 40.32 01 2.00 17 42.32 55 87

Loan
Under car loan we see- 13 account holders were issued a loan of Rs. 39,23,000 till the
previous years.

01 A/c holder was issued Rs. 3,00,000 in the current year. Total amount.

Loans granted to A/c holders 13+1=14

Total amt. disbursed 39,23,000+3,00,000=Rs. 42,23,000

Total outstanding at the end of the year were 41 A/c holders with total amt of Rs. 68,40,000.

Under Housing Loan:- 32 A/c Holders were issued a loan of Rs. 205,30,000 till the previous
year

09 A/c holders were issued Rs. 75,40,000 in the current year. Total

Loan granted to A/c holders 32+09 = 41

Total amt disbursed Rs. 280,70,000

Total outstanding at the end of the year were 283 A/c holders with total amt of Rs. 943,
20,000.

Under education Loan:- 16 A/c holders were issued a loan of Rs. 40,32,000 till the previous
year.

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01 A/c holder was issued Rs. 2,00,000 in the current year. Total Loans granted to A/c holders
16 + 01 – 17

total amt disbursed Rs. 42,32,000

total outstanding at the end of the year were 55 A/c holders with total amt of Rs. 87,00,000

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 COMPANY PROFILE
Background

HDFC was incorporated in 1977 with the primary objective of meeting a social need – that of
promoting home ownership by providing long-term finance to households for their housing
needs. HDFC was promoted with an initial share capital of Rs. 100 million.

Business Objectives

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

Organisational Goals

HDFC’s main goals are to a) develop close relationships with individual

households, b) maintain its position as the premier housing finance institution in the country,
c) transform ideas into viable and creative solutions, d) provide consistently high returns to
shareholders, and e) to grow through diversification by leveraging off the Existing client

HDFC Bank

The Organisation.

The Housing Development Finance Corporation Limited (HDFC) was amongst the first to
receive an 'in principle' approval from the Reserve Bank of India (RBI) to set up a bank in the
private sector, as part of the RBI's liberalisation 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 on 16th January 1995. In the year 1998 HDFC Bank had tied up with the
Ahmadabad Stock Exchange (ASE) to act as its clearing bank HDFC bank , has a network of
over 531 branches spread over 228 cities across India . All branches are linked on an online
realtime basis. Bank also has a network of about over 1054 ATMs across these cities..

Business Focus

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HDFC Bank's mission is to be a World-Class Indian Bank. The objective is to build sound
customer franchises across distinct businesses so as to be the preferred provider of banking
services for target retail and wholesale customer segments, and to achieve healthy growth in
profitability, consistent with the bank's risk appetite. The bank is committed to maintain the
highest level of ethical standards, professional integrity, corporate governance and regulatory
compliance. HDFC Bank's business philosophy is based on four core values - Operational Excellence,
Customer Focus, Product Leadership and People

Management

Mr. Jagdish Kapoor took over as the bank's Chairman in July 2001. Prior to this, Mr. Kapoor
was a Deputy Governor of the Reserve Bank of India. The Managing Director, Mr. Aditya
Puri, has been a professional banker for over 25 years and before joining HDFC Bank in
1994 was heading Citibank's operations in Malaysia.

The Bank's Board of Directors is composed of eminent individuals with a wealth of

experience in public policy, administration, industry and commercial banking. Senior
executives representing HDFC are also on the Board. Senior banking professionals with
substantial experience in India and abroad head various businesses and functions and report
to the Managing Director

The management consists of the Chairman Mr Jagdish kapoor and other Directors that assist
him in achieving objectives of the bank.

i. Mr. Jagdish apoor

ii. Mr. Aditya Puri

iii. Mr. Keki M. Mistry

iv. Mr. Vineet Jain

v. Dr. Venkat Rao Gadwal

vi. Mrs. Renu Karnad

vii. Mr. Arvind Pande

viii. Mr. Bobby Parikh

ix. Mr. Ranjan Kapur

x. Mr.Ashim Samanta

xi. Dr. Pandit Palande

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Businesses

HDFC Bank offers a wide range of commercial and transactional banking services

and treasury products to wholesale and retail customers. The bank has three key business
segments.

Wholesale Banking Services

The Bank's target market ranges from large, blue-chip manufacturing companies

In the Indian corporate to the small & mid-sized corporate and agri-based businesses. The
Bank provides a wide range of commercial and transactional banking services, including
working capital finance, trade services, transactional services, cash management, etc. It is
also a leading provider of structured solutions, which combine cash management services
with vendor and distributor finance for facilitating superior supply chain management for its
corporate customers.

Car Loan EMI Calculator

Zeroed in on your dream machine? Want the delivery this festive season? But do now know
how much money you will need to dole out every month for zipping in and out of your dream
machine? How will increasing your down-payment affect your The Loan Amount for your
Car Loan is simply the Total Cost of the Car less the initial down-payment. As you increase
the down-payment, your loan amount reduces. For a given rate of interest, a reduced loan
amount reduces the EMI you have to shell out every month.

The ApnaPaisa EMI Calculator helps you play with different loan amounts to ensure that
your EMI fits into your monthly budget.

Opt for fixed rates of interest : Car loans are available at completely fixed rates of interest
for the entire tenure as well as floating rates of loan. Make sure that the car loan that you are
taking is also fixed for the entire tenure of the loan.

>Be aware about the Processing fees and Pre-payment Charges : Most car loans have
processing fees ranging from 0.50% to 1% of the loan amount . Most car loans will also
charge you a fee if you wish to pre-pay the loan of between 3-5% of the loan amount repaid.
Some lenders will not allow pre-payment for the first 6 months and some lenders do not
allow partial pre-payment.

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 > You do not have to necessarily buy car insurance from the Car dealer :  If this is your
second car and you are selling off the first one and have had a history of no claim bonuses on
the last car then you can transfer the no claim bonus to your new car. Use our car insurance
section to compare the deals available on new car insurance with no claim bonuses.

Used car loan’s,

Borrow up to 80% of the value of the car.

Flexible repayment options, ranging from 12 to 60 months.

Borrow up to 3 times your annual salary (for salaried professionals) and 6

times your annual income (for self employed professionals)**.

Available for almost all car models at attractive interest rates.

fast approvals on your loans with minimal documentation.

Repay with easy EMIs.

Attractive car loan plans - To Fastrack your loan, just choose the plan
that is right for you.

Additional loan on existing loan - If you are a existing HDFC Bank Auto
loan customer with a clear track record of 12 months or more, then you can
get an additional loan to the extent of your existing loan amount at attractive
rate of interest.

Loan against shares

The main purpose of taking loans against shares is to preserve investment, apart from taking care of
personal needs. People also resort to such a loan to meet their contingencies and get liquidity without
actually selling the shares. It is advisable to take loan against equity (shares & debentures) only when
you are expecting a certain sum of money a few months down the line and you need some funds in the
interim. If you are reinvesting the loan amount, ensure that the benefits you derive are more than the
cost you have to incur (which includes interest and processing fee). Carefully consider the risk
involved in such a move.

Loan against shares is available in the form of an overdraft facility against the pledge of financial
securities like shares/units/bonds. After you submit the loan application with all the share certificates
and other relevant documents, a current account is opened in your name. You can then withdraw up to
the amount sanctioned and interest will be charged only for the number of days you use the amount.
The loan amount that can be sanctioned depends on two factors: the extent of funding on a particular

12
stock and the price (called the base price) considered by the lender for calculating the value of the shares.
No EMIs

 No Post Dated cheques

 No Pre-payment charges

 Interest charged only on utilised amount.

 Exhaustive number of approved securities

 Upto 80% Loan

 Simple and speedy processing

 Term Loan facility also available against select securities The loan is extended against shares of
eligible companies and, in a few cases, units of reputed open-ended mutual funds.

 Generally, a maximum of 20 shares can be pledged, at a time.

 Only fully paid-up shares, in the lender’s approved list of securities, are accepted.

 Shares held in the name of minors, HUFs, NRIs and companies are generally not accepted.

 Loans against mutual fund units are based on their NAV value

Necessary Conditions

 The shares should be on the approved list of the bank, which would be revised from time to time.

 The shares should be fully paid up

 Scrips in the name of corporate, minors, Firms, HUF, and NRIs are not eligible for finance under this
scheme.

 The directors or promoters of companies cannot pledge scrips of the same company.

 All shares should be strictly in their marketable lots.

Promoted in 1995 by Housing Development Finance Corporation (HDFC), India's

leading housing finance company, HDFC Bank is one o India's premier banks providing a
wide range of financial products and services to its over 11 million customers across
hundreds of Indian cities using multiple distribution channels including a pan-India network
of branches, ATMs, phone banking, net banking and mobile banking. Within a relatively

13
short span of time, the bank has emerged as a leading player in retail banking, wholesale
banking, and treasury operations, its three principal business segments.

The bank's competitive strength clearly lies in the use of technology and the ability to deliver
world-class service with rapid response time. Over the last 13 years, the bank has
successfully gained market share in its target customer franchises while maintaining
healthy profitability and asset quality. As on March 31, 2008, the Bank had a network of
761 branches and 1,977 ATMs in 327 cities. For the year ended March 31, 2008, the
Bank reported a net profit of INR 15.90 billion (Rs.1590.2crore), up 39.3%, over the
corresponding year ended March 31, 2007. As of March 31, 2008 total deposits
were INR 1007.69 billion,(Rs.100,769 crore) up 47.5% over the corresponding year
ended

March 31, 2007. Total balance sheet size too grew by 46.0% to INR 1,331.77 billion
(133177 crore). Leading Indian and international Publications have recognized the bank
for its performance and quality.

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 CONCEPTUAL BACKGROUND
HDFC Bank, which was incorporated in 1994, is the fifth largest bank in India by assets. HDFC Bank
provides best Auto loans/Car Loans in India. It offers attractive car finance plans for all car segments
at lowest rate and covers the widest range of cars and multi-utility vehicles. HDFC Bank can offer a
car loan for up to 100% of the value. On BankBazaar.com you can check your eligibility in seconds
for a HDFC car loan by filling in a short form and you can apply online. Read on to learn about the
eligibility and documentation requirements for HDFC car loan.

Documentation needed to apply for an HDFC Bank Car Loan

 1. Photo ID and age proof

 2. Signed application form with photograph

 3. Residence proof

 4. Last 6 months bank statement

 5. Documentation for salaried applicants:

o Last 3 months salary – slips

o Form 16 or Income Tax Returns

 6. Documentation for self-employed applicants:

o Last 3 years Income Tax Returns with computation of Income

o Last 3 years CA Certified / Audited Balance Sheet and Profit & Loss Account

15
HDFC Bank Car Loan Details

Interest Rate (Monthly

10.50% to 14.50%
reducing balance)

Processing Fees Rs.999 to Rs.1750

Loan Tenure 1 year to 7 years

Preclosure permitted after 6 months. 6% of principal outstanding (plus ST)

Pre-closure Charges from 7 to 12 months. 5% (plus ST) in 2nd year. 1.5% (plus ST) between 25-
30 months. No preclosure charges thereafter.

Guarantor Requirement No guarantor required

Overview

HDFC Bank, the largest bank in India, offers several financial products like deposits, loans,
credit cards, investments, insurance, forex and demat accounts. Car loans by HDFC Bank are
quite popular owing to its distinguishing features. The bank offers car loans for new cars, for
pre-owned cars and also offers loans against car or top up car loans.

Car Loans from HDFC Bank

HDFC Bank offers new car loans up to 100% of the cost of the car for certain car models.
Repayment tenures range from 12 months to 60 months and a customer can avail up to 6
times his yearly income as the loan. Loans are offered up to Rs. 1.5 crores.

Car loans are offered to both salaried and self employed individuals running proprietorship
concerns, partnership firms and companies. Documentation differs depending on the
category, but basic documentation includes proof of identity, address proof, income proof and

16
bank statement for 6 months. Pre-owned car loans are given for a maximum amount of Rs. 50
lakhs and a maximum tenure of 60 months. You can borrow upto 80% of the value of the car.

Another car loan product by HDFC Bank is the Loan against Car- wherein you can obtain a
top up loan on your existing car loan till the extent of your original loan amount, provided
you have paid your instalments on time for atleast 9 months.

Why apply for a HDFC Bank car loan through us?

BankBazaar.com offers a unique opportunity for instant car loan approval through our portal.
Using our EMI calculator, anyone can check their loan eligibility, understand the monthly
outflow of money as EMI and thereby decide upon the loan amount and tenure. Applicants
also have the opportunity to compare various schemes online and apply with the click of a
button.

Features of HDFC Bank Car Loan

New car loans by HDFC Bank carry interest rates in the range of 10.40% to 13.00%
depending on the segment of the vehicle. Foreclosure and prepayment charges are also
applicable. Processing fees range from Rs.500 to Rs.1,500 depending on the amount of the
loan. Pre-owned car loans carry a higher interest rate in the range of 14.5% to 17.5% and
higher processing fees as well. Rack interest rates on loan against car product ranges between
14.5% and 17.5% as well. You can apply for car loans by visiting a branch or online as well.

The bank claims loan disbursal to be within 2 days which is a huge positive when you wish to
buy your dream car. Transparency, clear communication at every stage of the loan and
funding up to 100% of the value of the loan are other benefits of a HDFC Bank car loan.
Existing HDFC Bank customers have unique schemes as well. You can avail loan against car
in the form of a top up loan, without providing additional income documents. HDFC Bank’s
New Car Bazaar tie up also helps you to select cars, research reviews and find dealers to
make a better choice.

Eligibility

Eligibility criteria vary depending on the type of employment of the applicant. Salaried
individuals should be of minimum age of 21 years (at time of loan application) and less than
or equal to 60 years (at the end of the loan tenure). He should be working for at least 2 years,

17
and a minimum of 1 year with the current employer. The minimum annual income including
the income of the spouse or co-applicant should be Rs. 1.8 lakhs. He should also have a
telephone or post paid mobile connection in his name. Sole proprietors should be in the
business for atleast 2 years and earn a minimum of Rs. 60,000 to Rs. 1 lakh per annum
(depending on the type of car).

The maximum age at the end of the loan in this case is 65 years. In addition to the above
conditions, self employed partners will need to have a minimum annual business turnover of
Rs. 4.5 lakhs and should have a landline at office and residence. The same criteria hold good
for directors in public limited companies. The eligibility can also be checked online on the
bank’s website.

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Quick, competitive and transparent car loans from HDFC Bank

 You no longer have to wait to buy that dream car because HDFC Bank offers great car loan
deals with up to 100% finance. Whether it is a new car, a pre-owner car or even a loan
against a car, we can offer you a car loan at attractive interest rates and flexible repayment
tenures. Fast approvals, personalised service and utmost transparency make us the leader in
car loans in India.

Car Loans
New Car Loans
 Up to 100% funding
 7 year loan tenure
 Faster approvals and doorstep services
View detailsApply Online
Pre-owned Car Loans
 Widest range of authorized dealers
 Up to 100% finance and up to 60 months tenure
View detailsApply Online
Loan against Car
 Pre-approved cash loan for existing Car Loan customers
 No income documents required
View detailsApply Online

Company name-- Hdfc bank limited

Project name- “Car loan schemes & policies-----“
1. Normal Scheme-- If customer is Self Employed then document requirement is
A) KYC (Id & address proof).
B) bank account statement.
C) Income tax return with computation (Income proof).
D) 2 recent passport size Photograph.

Policy-
A) Pan card is mandatory for Id Proof.
B) Aadhar Card/DL/Electricity Bill/Passport for Address Proof.

19
 C) Minimum 6 month update bank account statement.
D) Current or previous year Income tax return with computation Asst year13-14 & Asst
Year 14-15
E) Minimum 2.50 Lac Income Require in ITR then loan funding is 85-90% and if ITR is
Above 3 Lac then loan funding is 90-95%.

In Normal Scheme if customer is Salaried then Document requirement is—

A) KYC (Id & address proof).
B) bank account statement.
C) Salary Slip (Income proof).
D) 2 recent passport size Photograph.

Policy-
A) Pan card is mandatory for Id Proof.
B) Aadhar Card/DL/Electricity Bill/Passport for Address Proof.
C) Minimum 6 month update bank account statement.
D) Minimum last two months Salary Slip.
E) In Salaried Customers Normal funding is 90-100%.

2. Agriculture Scheme— If customers having a Agriculture land then Document

Requirement---
A) KYC (Id & address proof).
B) bank account statement.
C) Agriculture Land Book.
D) 2 Recent Passport size Photograph.

Policy-
A) Pan card is mandatory for Id Proof.
B) Aadhar card/DL/Electricity Bill/Passport for Address Proof.
C) Minimum 6 month update bank account statement.
D) Minimum 3 Acers agriculture land require
E) In New Car customer having a 3-5 Acers agriculture land then the loan funding is
65%, if customer having a 5-7 Acers of agriculture land then the loan funding is 75%
and, if 7-10 Acers of agriculture land then loan funding is 80% and agriculture land is
above 10 Acers then the loan is 85-90%.

20
F) Maximum caping of loan in New Car is 10 Lac.
G) In Used Car if agriculture land is 3 Acers then loan funding is 2.75 lac, if agriculture
land is 5 Acers then loan is 4.50, if Agriculture land is 6 Acers then loan is 5.50 Lac,
if agriculture land is 7 Acers then loan is 6.50 lac and if agriculture land is 8 Acers
then loan is 8 Lac.
H) Maximum Caping of loan in Used Car is 8 Lac.

3. BOP Scheme (Banking and ownership proof)—Document Requirements----

A) KYC (Id & address proof).
B) 6 month updated Bank account statement.
C) Owner ship proof (Electricity Bill minimum last 2 month old).
D) 2 Recent Passport size photograph.
E) In BOP Scheme if loan tenure is 48 month then funding is 75%, and if loan tenure is
36 month then funding is 65%, if loan tenure is 60 month then funding is 50%.
F) Maximum Caping of loan is 5 Lac.
4. Repayment Scheme----Document Requirements----
A) KYC (Id & address proof).
B) 6 month updated Bank account statement.
C) Existing Car loan Repayment Track/ Existing Car loan Statement.
D) 2 Recent Passport size photograph.
E) In Repayment scheme if customer having a Any Existing Car loan track and that loan
track is 3 lac then funding is 2 times of existing loan track amount.

5. FD Scheme (Fix Deposit)--- Document Requirements---

A) KYC (Id & address proof).
B) 6 Month update bank account statement.
C) Original FD.
D) 2 Recent Passport size Photograph.
E) If Customer wants to a loan is 2 Lac then the FD is Rs 1 Lac.
6. Only Banking Scheme---- Document Requirements---
A) KYC (ID & Address Proof)
B) 6 Month update bank account statement.
C) 2 Recent Passport size Photograph.

21
 D) In Only Banking scheme Banking is 4 times of Emi.
E) And Funding is 50-55%.

HDFC Bank offers Car Loan for up to 100% Car Finance

Owning your dream car is now easy. HDFC Bank can offer a car loan for up to 100% of the
value! Simply visit the nearest HDFC Bank branch and learn about exciting offers on loans
for private cars as well as multi-utility vehicles.
Why take a Car Loan from HDFC Bank? Apply now for an HDFC Bank Car Loan.
Features
 Up to 100% finance
 Check Car Loan eligibility in 1 minute. Approval of Car loan in 30 minutes.
 Fixed interest rates
 No Income Document Scheme
 Flexible tenure of up to 7 years
Check Eligibility
Benefits
 Fast and hassle free loan processing
 Stability in EMI repayment, not affected by fluctuating market rates
 Lowest down payment and best deals for customers
 Lower EMI
Fastrack your car loan:
You can now fastrack your loan with our attractive car loan plans which help us to serve you
faster.
Know more Check Eligibility
Car Loan EMI Calculator
Use our Car Loan EMI Calculator to find out how much EMI you will have to pay for your
Car Loan.
Status of Loan Application

Why avail a New Car Loan from HDFC Bank?

HDFC Bank offers a wide range of car loans that can be tailored to your needs. This
comprehensive product offering and a robust disbursal process make HDFC the frontrunner
for car loans. Enjoy three-fold benefits when you avail a new car loan from HDFC bank.

22
  Quick Disbursal – We offer hassle-free car loan at your doorstep. Experience ease of
documentation, quick sanction and disbursal.

 Attractive Interest Rates – Our car loan interest rates and processing charges are
highly competitive.

 Customer-Friendly Policies – Our loan process is completely transparent, with no

hidden charges. We handhold you at each stage of the process and offer continuous
status updates for your loan application.

HDFC Bank Car Loan @10.50% Interest Rates 2015

HDFC Bank Car Loan ✓ Quick and Easy car loan Documents ✓ Low EMI Rs.1,686 ✓
Lowest Interest Rates ✓ upto 100% finance ✓ Apply online through Deal4loans.com.

Why to Choose or Apply with HDFC Bank Car Loan

✓ HDFC Bank Car Loan Interest Rate 10.50% – 12.50% ( New Rates Last Updated on
17 August 2015)
✓ Up to 2.5 Lakhs: Rs. 3220/-, (Above 2.5 Lac – Rs.4390/- to Rs.5870/-.)
✓ Flexible tenure of up to 7 years
✓ No Income Document Scheme
✓ Up to 100% finance on New Cars
✓ Loan disbursal within 30 Minutes (New biometrics technology linked with Aadhaar Card)
✓ No foreclosure allowed within 6 months from date of availing the car loan

23
- See more at: http://www.deal4loans.com/loans/car-loan/hdfc-car-loan-eligibility-interest-
rates-and-documents-requirement-for-apply-hdfc-bank-car-loans/#sthash.ubjNpA0T.dpuf

Foreclosure Charges and Prepayment charges Details on HDFC Bank Car Loan

Description of charges New Car Loans

Foreclosure Charges 6% of Principal Outstanding for preclosures within 1 year

from 1st EMI

5% of Principal Outstanding for preclosures within 13-24

months from 1st EMI

3% of Principal Outstanding for preclosures post 24 months

from 1st EMI

No foreclosure allowed within 6 months from date of

availing the car loan

Part payment charges 5 % on the part payment amount in case part prepayment is
would be applicable on within 13-24 months from 1st EMI
the part prepayment 3% on the part payment amount in case part prepayment is
amount post 24 months from 1st EMI

Part-payment is allowed subject to completion of 12 months

(i.e., Post payment of 12 EMIs)

Part payment will be allowed twice only

At any point of time, part payment will not increase beyond

25% of Principal Outstanding

Features & Benefits of HDFC Bank Car Loan

✓ Check Car Loan eligibility in 1 minute. Approval of Car loan in 30 minutes.

✓ Fixed interest rates
✓ No Income Document Scheme
✓ Fast and hassle free loan processing
✓ Lowest down payment and best deals for customers
✓ Easy loans up to Rs. 1.5 Cr.

24
Documents Required for HDFC Bank Car Loan:

Salaried Self employed Self employed Self employed Self employed

employee individual (Partnership (Private (Public
Firms) Limited Limited
Companies) Companies)

Proof of ✔ Proof of ✔ Proof of ✔ Proof of ✔ Proof of

Identity: Passp Identity: Identity: NA Identity: NA Identity: NA
ort copy, PAN Passport copy, ✔ Income ✔ Income ✔ Income
Card, Voters Id PAN Card, Proof: Audited Proof: Audited Proof: Audited
card, driving Voters Id car, balance sheet, balance sheet, balance sheet,
licence( Lamina driving Profit & Loss Profit & Loss Profit & Loss
ted, Recent, licence( Laminat Account for Account for Account for
Legible) ed, Recent, latest two years latest two years latest two years
✔ Income Legible) and the latest 2 and the latest 2 ✔ Address
Proof: Latest ✔ Income years IT returns years IT Proof: Telepho
salary slip with Proof: Latest of the company returns of the ne
form 16. ITR ✔ Address company Bill/Electricity
✔ Address ✔ Address Proof: Telephon ✔ Address Bill/Shop &
Proof: Ration Proof: Ration e Bill/Electricity Proof: Telepho Establishment
card/Driving card/Driving Bill/Shop & ne Act
licence/Voters licence/Voters Establishment Bill/Electricity certificate/SSI
card/passport card/passport Act Bill/Shop & registered
copy/telephone copy/telephone certificate/SSI Establishment certificate/Sale
bill/ electricity bill/ electricity registered Act s Tax
bill/Life bill/Life certificate/Sales certificate/SSI certificate
insurance insurance policy Tax certificate registered ✔ Bank
policy PAN PAN Card ✔ Bank certificate/Sale Statement: N
Card. ✔ Bank Statement: Wai s Tax A
✔ Bank Statement: Wai ved for small certificate
Statement:Last ved for small cars, for mid – ✔ Bank
6 months cars, for mid – sized and Statement: N
sized and premium cars if A

25
 premium cars if income Is greater
income is greater than Rs. 1.5 lacs
than Rs. 1.5 then bank
Lakhs then bank statement
statement requirement can
requirement can be waived
be waived.

Eligibility Required for HDFC Bank Car Loan:

Salaried Self employed Self employed Self employed Self employed

employee individual (Partnership (Private (Public Limited
Firms) Limited Companies)
Companies)

✔ Be between ✔ Be between ✔ Earn at least ✔ Earn at least ✔ Earn at least

the age of 21 the age of 21 Rs. 60,000 per Rs. 60,000 per Rs. 60,000 per
years (at the years (at the annum if you are annum if you annum if you
time of time of looking to buy a are looking to are looking to
application) application) and standard car and buy a standard buy a standard
and <= 60 <= 65 years (at at least Rs. car and at least car and at least
years (at the the end of the 1,00,000 per Rs. 1,00,000 per Rs. 1,00,000 per
end of the loan loan tenure) annum for ✔ annum for ✔ annum for ✔
tenure) ✔ Be in mid-sized and mid-sized and mid-sized and
✔ Have had a business for at premium cars premium cars premium cars
job for at least least 3years ✔ Have a ✔ Have a ✔ Have a
2 years, and a ✔ Earn at least minimum minimum minimum
minimum of 1 Rs. 60,000 per turnover of Rs. turnover of Rs. turnover of Rs.
year with your annum if you 4,50,000 per 4,50,000 per 4,50,000 per
current are looking to annum annum annum
employer buy a standard ✔ Have a ✔ Have a ✔ Have a
✔ Earn at car and at least landline at your landline at landline at
least an Rs. 1,00,000 per office and office office
income of Rs. annum for ✔ residence.
1,80,000 mid-sized and

26
 annually, premium cars.
including the ✔ Have a
income of your telephone at
spouse your residence
✔ Have a tele-
phone/ post
paid mobile

Car Loan Plans By HDFC Bank

Auto Loan Takeover Plan NRI Loans Past re-payment history

No Income-Document 100% Loan Plan with Fixed Advantage platinum Credit

Loan Plan Deposit Lien Card Plan

Do I have the option to pre-pay the entire loan amount?

Yes. You can pre-pay the loan any time after 6 months of availing of the loan. You just have
to pay a small pre-payment fee on the outstanding loan amount.

Do I need a guarantor for New Car Loans?

No, but if your income does not meet our credit criteria then you may be required to have a
Gurantor/co-applicant. To stand surety for your loan.

What is the maximum amount I can borrow with an HDFC Bank New Car Loans?

You can borrow up to 3 times your annual salary if you are a salaried professional and 6
times your annual income if you are a self-employed professional **.
**Offers on specific models .Terms & conditions apply.

What are the tenure options available?

The choice is yours. You can choose any repayment option from 12 to 84 months all
specially designed to suit your requirements.

Which cars can be financed for New Car Loans?

We finance most passenger cars and multi-utility vehicles manufactured by India’s leading
automobile companies.

27
CAPITAL STRUCTURE OF HDFC BANK

The authorised capital of HDFC Bank is Rs.450 crore (Rs.4.5 billion). The paid-up capital is
Rs.311.9 crore (Rs.3.1 billion). The HDFC Group holds 22.1% of the bank's equity and about
19.4% of the equity is held by the ADS Depository (in respect of the bank's American
Depository Shares (ADS) Issue). Roughly 31.3% of the equity is held by Foreign Institutional
Investors (FIIs) and the bank has about 190,000 shareholders. The shares are listed on the
The Stock Exchange, Mumbai and the National Stock Exchange. The bank's American
Depository Shares are listed on the New York Stock Exchange (NYSE) under the symbol
"HDB".
DISTRIBUTION NETWORK OF HDFC BANK

HDFC Bank is headquartered in Mumbai. The Bank at present has an enviable

network of over 1227 branches and 2577 ATMs spread over 444 cities across the country
i.e. after its acquisition of Centurion Bank of Punjab. All branches are linked on an online
real-time basis. Customers in 90 locations are also serviced through Phone Banking. The
Bank's expansion plans take into account the need to have a presence in all major industrial
and commercial centres where its corporate customers are located as well as the need to build
a strong retail customer base for both deposits and loan products.

The Bank also has a network of 2577 networked ATMs across these cities.
Moreover, HDFC Bank's ATM network can be accessed by all domestic and international
Visa/MasterCard, Visa Electron/Maestro, Plus/Cirrus and American Express
Credit/Charge cardholders.

28
 SWOT ANALYSIS
STRENGTH
 Multi-channel distribution and one of the largest
 Distribution networks in India.
 Implementing Six-Sigma process.
 Customer center products and services.
 Superior investment and risk management framework
 Training process of the company is very strong.
 Different plan for different people
 According to the change in surrounding environment

WEAKNESS:
 Company does not penetrate on the rural market at a time
 There is no plan for the low income group.
 Fees for the advisor is high than the other company.
OPPORTUNITY:
 Insurance market is very big, where company can expand its horizon in insurance
industry.
 Though in investment and insurance it is easy to top Indian customers.
 The huge insurance market (60%) is left so company has opportunity to expand our
products.
 To associate with the more number of HNI.
THREATS:
 OLD HABITS DIE HARD: Its still difficult task to win the confidence of public
towards private company.
 The company is facing major threats from LIC -which IS an only government
company.
 Plans for all income groups are not available which can create adverse later on the
market share of the company.

29
 OBJECTIVE OF STUDY
Primary: -
1. Analysis and evaluation of customer s satisfaction with respect to product performance.
2. To determine the main characteristic which customers look upon while purchasing and
selecting the product?
3. To determine the other brand those are competing with the same product rang.
Secondary: -
1. Service level and channel associate approach.
2. To find the level of brand awareness.
3. To find out the company market share.

30
 RESEARCH METHODOLOGY
Research Design:
“Prior to begin this project I had designed my whole procedure, which means I arranged the
conditions for collection and analysis of data in a manner that aims to combine relevance to
the research purpose with economy in procedure. In which I had included the following
decision:
What is the study about?
Why is the study being made?
Where will the study be carried out?
What type of data is required?
Where can the required data are found?
What periods of time will the study include?
What will be the sample design?
What techniques of data collection will be used?
How will the data be analyzed?
In what style will the report be prepared?

Sampling:

When field studies are undertaken in practical life, consideration of time and cost almost
invariably lead to a selection of respondents i.e., selection of few items. In short, Sampling is
the study of the part of the population or universe, or selecting a part of an aggregate, on the
basis of which any conclusion can be taken out for whole aggregate. In other words we can
say that sampling is the collection of information about an entire population through
examining a part of it. So I have selected 60 corporate as sample to conduct my research.

Types of Sampling:

Probability Sampling

Non-Probability Sampling

There are various types of sampling under the head of both sampling methods, while I had
selected judgmental sampling under the head of NON-PROBABILITY sampling. According
to this particular sampling method, I had selected the sample on the basis of my analysis after
considering the banks requirements and conditions which should followed by the corporate.

31
Methods of Data Collection:

While deciding about the method of data collection to be used for the study, I had kept in my
mind two types of data viz., primary and secondary.

Primary Data:

I had collected my primary data through my questionnaire which I had designed for the
corporate selected as a sample.

Secondary Data:

According to me secondary data are as important as primary data for any research because
there are various data which is needed to complete the research on time. This can be done
only through secondary data. I had collected my secondary data through internet & books
such as company detail information, major clients of HDFC Bank & other related data. The
secondary data are those which have already been collected by someone else and which have
already been passed through the statistical process. We can collect secondary data through
following ways:

Publications of central, state or local governments

Publications of foreign governments or of international bodies and their subsidiary

organization

Technical and trade journals

Books, magazines, newspapers and internet

Reports and publications of various associations connected with business and industry, banks,
stock exchanges, etc.

Data Interpretation:

After collecting and analyzing the data, I had accomplished the task of drawing inferences
followed by report writing. This had done very carefully, otherwise misleading conclusions
might be drawn and the whole purpose of doing research may get vitiated. It is only through
interpretation that the researcher can expose relations and processes that underlie his findings.

32
DATA ANALYSIS

33
34
35
 FI
NDINGS & SUGGESTIONS
Personal segment advances requires tremendous commitment, expertise,
understanding and above all discipline. Sheer branch network is not enough at least on the
asset side. HDFC Bank got to be alert while moving in this personal financing activity. It has
to adopt a careful and methodical approach to expand retail financing. The banking sector as
a whole is seeing structural changes. In the faster HDFC adapts to these changes dynamics,
the faster is it expected to gain the advantage.

These suggestions will help the bank to reduce the growing non-performing
assets in personal segment advances and becomes the leader in this sector.

 Improving and Maintaining Performance/ Efficiency.

 Segmentation of Customers.

 Tapping Semi-Urban and Rural Markets.

 Opening Specialized Branches

 Tie-Ups

 Technological Up gradation

 Marketing – the Need of the Hour

 Enhancing Knowledge and General Awareness Among the staff

36
 LIMITATIONS OF THE STUDY

i. AREA LIMITATION: The study was limited to Jabalpur city only. Hence findings may differ
from other parts of India where I have not visited

ii. NON-RESPONSE ERROR: It is almost impossible to obtain data from each & every respondent
covered in sample. There are always some respondents who refuse to give information

iii. LIMITED SOURCE OF DATA COLLECTION: Sources of data for collection of secondary
data were limited

iv. TIME CONSTRAINT: There was time constraint to this project. The project has to be completed
within 2 months.

v. BUSY RESPONDENT: Many times respondents were so busy that they didn’t t give reply. There
were biased replies also.

vi. OTHER REASONS: There were heavy rains during the period of survey. So there was many
times problem in conducting survey & transportation.

37
 CONCLUSION
The whole project has been an enriching experience and has taught me how to
utilize my talent & power. I am happy as I performed my duty to best of my potential in
HDFC Bank. I have evaluated the process of Car Loan in HDFC Bank. I have learnt more
about the practical aspects of Car Loan .

At the end I would like to conclude that:

 I have Examined the process of Car Loan and I would to conclude that the process of
Car Loan is virtually improved from last few years and it has enhanced the process of
Car Loan by establishing Retail Boutiques all over India.

 The scenario of Car Loan has been increased rapidly in HDFC Bank from last few
years.

 From the comparative study done we can also conclude that Car Loan is doing fairly
well as compared to its competitors.

 The bank is Performing fairly well as far as Car Loan is concerned.

38
 BIBLIOGRAPHY

Websites
 www.hdfcbank.com
 www.banks.com
 www.google.com
 www.bankspower.com
 www.business.com/directory/financial

Books
 Philip Kotler: Marketing Management
 C.R Kothari: Research Methodology
 K. Nageswara Rao: Banking Strategy vol II

39