A REPORT ON COMPARATIVE ANALYSIS OF HOUSING LOAN

SCHEMES OF HDFC LTD. WITH OTHER FINANCIAL

INSTITUTIONS FOR THE YEAR 2011-12 & 2012-13

SUBMITTED TO: SUBMITTED BY:

Rupinder Singh
MBA 4th
17516
 ACKNOWLEDGEMENT

It gives me immense pleasure to express my deep sense of Gratitude to Miss

Mandeep Mahendru, coordinator, for her valuable guidance and consistent
supervision throughout the course.

I am highly indebted to Mr. Prabhujeev Bajaj, Head, HDFC LTD. Chandigarh for his
very personalized and invaluable help, advice, guidance and encouragement which
culminated in this project. His constructive comments and contributions had been of
immense help for giving a tangible shape to this project. It was a real value added
experience for having worked under his stewardship. At last, I am thankful to all
respondents who cooperated with me by providing information for the compilation of
this project.

I am extremely thankful to Prof. Gunjan Munjal, Faculty Guide, CHANDIGARH

UNIVERSITY, for her timely guidance and support throughout the Final Report work. In
the course of carrying out the Project work.

Finally I am indebted to our other faculty members, my friends who gave their
full-fledged co-operation for successful completion of my project.

It was an indeed a learning experience for me.

 ABSTRACT

During My summer internship in HDFC LTD., Chandigarh, I was assigned a project

regarding Home Loans. This project has been completed in parts. First part consists
of comparative study of “Comparative Study of Home Loans provided by HDFC LTD.
With other financial institutions”
This was a step wise process including collection of data, Company Profile, Product
Features, Analysis of data, and finally concluding the data while putting some
suggestions. The whole study was done with a view that it would help HDFC maintain
its expansion path and improvise their schemes to perform better than other financial
institutions.

It was the best platform being provided as it has increased my horizons and has given
me the opportunity to apply my theoretical knowledge and managerial concepts
practically in the real business.
 DECLARATION

I, Rupinder Singh, student of “Chandigarh university” hereby declare that I have completed this
project on title of “Comparative Analysis of Housing Loan Schemes of HDFC LTD. is an
authentic work done by me and it is my own hard work and effort under the guidance of Mr.
Prabhujeev Bajaj, Head, HDFC LTD. Chandigarh in the academic year 2011-2013.
I declare that the information submitted is true and original to best of my knowledge.

DATE____________ Rupinder Singh

 Table of Contents

CHAPTERS PAGE NO.

1. INTRODUCTION……………………………………………..6-9
2. COMPANY PROFILE……………………………………….10-15
3. OBJECTIVE OF STUDY……………………………………16-17
4. PROCEDURE OF HOME LOAN…………………………...18-29
5. MARKET PLAYERS………………………………………...30-36
6. RESEARCH METHODOLOGY…………………………….37-38
7. DATA ANALYSIS AND INTERPRETATION…………….39-40
- COMPARATIVE ANALYSIS……………………………..41-52
8. LIMITATIONS OF STUDY…………………………………77-78
9. SUGGESTIONS AND RECOMDENTATIONS……………79-80
10. WEBLIOGRAPHY………………………………………….81-82
CHAPTER 1
 HDFC Ltd.

INTRODUCTION:
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.

Their objective, from the beginning, has been to enhance residential housing stock and
promote home ownership.

Now, their offerings range from hassle-free home loans and deposit products, to
property related services and a training facility. They also offer specialized financial
services to their customer base through partnerships with some of the best financial
institutions worldwide.

Business Objectives:

Helping Indians experience the joy of home ownership.

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.
As they found out nearly three decades ago, in 1977, the solution for success is
customer satisfaction. All you need is the courage to innovate, the skill to understand
your clientele and the desire to give them your best. Today, nearly three million
satisfied customers whose dream they helped realize, stand testimony to their
success.

Housing Finance Sector:

Against the milieu of rapid urbanization and a changing socio-economic scenario, the
demand for housing has grown explosively. The importance of the housing sector in
the economy can be illustrated by a few key statistics. According to the National
Building Organization (NBO), the total demand for housing is estimated at 2 million
units per year and the total housing shortfall is estimated to be 19.4 million units, of
which 12.76 million units is from rural areas and 6.64 million units from urban areas.
The housing industry is the second largest employment generator in the country. It is
estimated that the budgeted 2 million units would lead to the creation of an additional
10 million man-years of direct employment and another 15 million man-years of
indirect employment.
Having identified housing as a priority area in the Ninth Five Year Plan (1997-2002),
the National Housing Policy has envisaged an investment target of Rs. 1,500 billion for
this sector. In order to achieve this investment target, the Government needs to make
low cost funds easily available and enforce legal and regulatory reforms.

▶Organizational Goals:
HDFC's main goals are to:

• Develop close relationships with individual households,

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

▶HDFC Founder:
MAN WITH A MISSION: Hasmukhbhai Parekh

If ever there was a man with a mission it was Hasmukhbhai Parekh, their Founder and
Chairman-Emeritus, who left this earthly abode on November 18, 1994.

Born in a traditional banking family in Surat, Gujarat, Mr. Parekh started his financial
career at Harkisandass Lukhmidass - a leading stock broking firm. The firm closed
down in the late seventies, but, long before that, he went on to become a towering
figure on the Indian financial scene.
In 1956 he began his lifelong financial affair with the economic world, as General
Manager of the newly-formed Industrial Credit and Investment Corporation of India
(ICICI). He rose to become Chairman and continued so till his retirement in 1972.
At the ripe age of 60, Hasmukhbhai started his second dynamic life, even more
illustrious than his first. His vision for mortgage finance for housing gave birth to the
Housing Development Finance Corporation - it was a trend-setter for housing finance
in the whole Asian continent.

He was a true development banker. His building up HDFC without any government
assistance is itself a brilliant chapter in financial history. His wisdom and warmth drew
people from all walks of life to him, for advice, guidance and inspiration soft spoken
man of few words, Mr. Parekh nevertheless held strong and definite views with a quiet
conviction. He was always concerned with building bridges, improving and
encouraging communication between people.

▶ Organization & Management:

HDFC is a professionally managed organization with a board of directors consisting of
eminent persons, professionals who represent various fields including finance,
taxation, construction and urban policy & development. The board primarily focuses
on strategy formulation, policy and control, designed to deliver increasing value to
stakeholders.
HDFC has a staff strength of 1490 (as on 31st March, 2009), which includes
professionals from the fields of finance, law, accountancy, engineering and marketing.
Click here for details of Senior Management.
CHAPTER 2
 HDFC HOME LOAN PRODUCTS
1) Home Loan
2) Home Improvement Loan
3) Home Extension Loan
4) Land purchase loan
5) Short Term Bridging Loan
6) Loan to Professionals for Non Residential Premises
7) Home Equity Loan

•HOME LOAN
HDFC offers loans to individuals to purchase (fresh/resale) or construct
houses. Home loan be applied individually or jointly. Proposed owner of
the property will have to be co-applicants. However the co-applicants
need not to be the co-owners.
PURPOSE
▶ Purchase of flat, row house, bungalow from developers.
▶ Existing freehold properties.
 ▶ Property in an existing or proposed cooperative society or apartment.
▶ Self construction.

MAXIMUM LOAN

85% of the cost of property (including the cost of land) and based on the
repayment capacity of the customers.

MAXIMUM TERM

20 years subject to the retirement age.

ELIGIBILITY

•Salaried employees
•Self employed professionals
•Self employed businessman
•Applicants can either be Resident or Non-Resident
•Age of the applicant should not be more than 65 years

• HOME IMPROVEMENT LOAN

Home improvement loan facilitates internal and external repairs and other
structural improvements like paintings, water proofing, plumbing and electric
works, tilling and flooring, grills and aluminium windows.

PURPOSE

External repairs Tilling & flooring

Internal & external flooring Waterproofing and roofing

Plumbing & electric work Grills & aluminium windows

Construction of underground/ upper Paving of compound walls (with

water tank stone/tiles etc)

Bore well Waterproofing on terrace

MAXIMUM LOANS
▶ For Existing customers : 100% of the cost of improvement
▶ For New customers : 85% of the cost of improvement
▶
MAXIMUM TERM

15 years subject to retirement age.

• HOME EXTENSION LOAN

Home extention loan facilitates the extension of an existing dwelling unit. This
type of loan makes it convinient to extend or add space to home.

PURPOSE
This loan is specifically for the extension purpopse. Be it an additional room, a
larger bathroom or even enclosing an open balcony.

MAXIMUM LOAN
85% of the cost of extention.

MAXIMUM TERM
20 years subject to retirement age.

• LAND PURCHASE LOAN

PURPOSE

HDFC Land purchase loan is a convenient loan facility to purchase land, whether
it be to build a house or an investment.

MAXIMUM LOAN

85% of cost of land and based upon the repayment capacity of the customer.
 MAXIMUM TERM

15 years subject to customer retirement age.

• SHORT TERM BRIDGING LOAN

PURPOSE

Short Term Bridging loan makes customer realize their dreams of buying a
bigger and better home and give them time to sell their existing property to pay
off the loan. This is a short term loan to help customers with the interim period
between the sale of their old homes and the purchase of a new home. Customers
repay the loan by paying monthlyinstallment or interest on the loan with the lump
sum payments within 2 years. Hence customers gets 2 years to sell the property
repay the loan.

MAXIMUM LOAN

90% of the cost of new property

MAXIMUM TERM : 2 years

• LOAN TO PROFESSIONALS FOR NON RESIDENTIAL PREMISES

This loan facilitates professional to purchase and construct their own office premises
or even renovate their existing office premises.

PURPOSE

▶Purchase
▶Constuction
▶Improvement of office

MAXIMUM LOAN

85% of the cost of property

MAXIMUM TERM

15 years subject to customer retirement age.

• HOME EQUITY LOANS

 HDFC Home equity loans helps to encash the present market value of the
property by taking a loan by mortgaging the property.
PURPOSE

▶ Higher eduation of the children

▶ Marriage expenses
▶ Medical expenses
▶ Business purpose

MAXIMUM LOAN

• For Existing customers: 60% of the market value and present loan
outstanding.

• For new customers: 50% of the market value of the property.

MAXIMUM TERMS

PROPERTY TYPE REPAYMENT OPTION NO. OF YEARS

Residential EMI Based 15

Non Residential EMI Based 10

Residential & Non Simple Interest 2

Residential
CHAPTER 3
 MAJOR OBJECTIVES

• To know about the HDFC home loan and its products.

• To have the first hand information on loan procedure, sanctioning and

disbursement in HDFC ltd.

• To compare the performance of HDFC with other market players.

• To study about the financial position for the financial year 2009-10 in
comparison with position in financial year 2008-09.
CHAPTER 4
 STAGES OF HOME LOAN

Application
Data Entry
Login Scanning

Recommendation

Over (ROVR)

Double Checking
Sanctioning
Disbursement of Over (DCOVR)
the loan

After Sales
Services

The representation shown above is not a perfect copy of the actual process. This is
because these stages are taking place simultaneously and one application is being
taken care for by the experienced employees of both HDFC Ltd service centre. Also the
applicant may be asked to send information or may be asked questions regarding his
requirement and/or his documents for his own convenience
Hence the loan application may or may not shuttle through different stages
 APPLICATION STAGE

This is the stage where the Application Form first reaches the concerned Service
Centre/ workstation. Here all the documents in the application are reviewed by the
experienced staff present at the workstation. The HDFC Ltd employee who reviews the
file checks to see whether all documents are present and in their proper place, if the
documents are duly filled, not fake, attested by authority and present in order. In case
any document is missing the applicant is contacted electronically or by mail or by
telephone and requested for the document to be submitted. This exercise is called
FOLLOW UP. The credit appraisal of the loan application starts at this stage. The
workstation employees compute the gross salary, IIR, FOIR, Loan Eligibility ratio etc.
The credit worthiness of the applicant is calculated here.

It is also at this stage that the QUICK DATA ENTRY of the loan application is done to
create a serial no. of the application. After that another page appears and more data is
entered .It is now that a special and unique LOAN A/C NO. is created under which all
the loan processes will be carried out. The number that has been generated is
communicated to the applicant by means of a letter and/or electronic communication.
The system of electronically recording the data helps to create ready reference, a
proof ,helps in quick and easy processing of the data. It also helps to very easily and
quickly share data with other employees of HDFC.

The next and important processing performed at the workstation is that of

filling up a document known as the INTERVIEW SHEET for processing
individual loans. It contains various simple entries like

1.Name of borrower

2. Name of co-borrower
3. Income details

4. Family background and permanent address etc

5. Gross Salary
6. Rental

7. Other incomes

8. Obligations
9. Remarks: This column contains the various findings that the employee has
found out after thorough review of the applicants documents such as bank
statement, salary slip etc.

Hence the interview sheet contains the important findings which the employee has

Collected after careful review of the various documents .The interview sheet helps
to cut corners and helps save time by not having other employees to go through the
documents again and again .It hence acts as a source of quick reference.

After all this has been performed well enough the loan application will be arranged
in a file and all it will be given its loan a/c no which also acts as its file no..

The file is now ready to be sent to the HUB (Senior Officers) where further processing
will take place. Next step is scanning of the documents.

SCANNING

In this stage the various important documents of the applicant are scanned. This
helps to create their electronic copy which acts as a ready reference, a proof, and can
also be shared and utilized by other employees of HDFC Ltd.
DATA ENTRY

The file has been sent to the bank head office or the HUB .At HUB there are many
experts with their own specializations. These officials review the various parts of the
file again and perform many specialized tasks.
Data entry is also one of these tasks .This entry is much more different and
complex as compared to the earlier performed Quick Data Entry. An exhaustive
amount and type of information has to be entered into the ILPS system ranging from
Personal Details, Employment Details to Property Rate History and Customer
Interactions.
RECOMMENDATION OVER (ROVR)

The Recommendation over is also referred to as the First Appraisal. At this stage
certain specially appointed persons have been given the responsibility of
recommending a loan

These people have to take special care of reviewing every document, and all the small
details that need to be considered before considering the loan application to be valid.

After this the file is sent to another specially appointed person as explained below. At
this stage if any correction or mistake is present it can be sent back to the workstation.

DOUBLE CHECKING OVER

As the name suggests at this stage a specially appointed person will double check all
the past proceedings. They will examine the Loan file for any discrepancies, any
missing and /or misplaced documents, the Credit Appraisal results, etc.

This is a very important stage and must be handled with exceptional care. This is
because a mistake at this stage can cause a great loss to the company. The Double
checker is responsible for the ultimate sanctioning of the loan .If any mistake is done
at this stage there is no going back and hence no protection. HDFC takes great care
while appointing double checkers .They should have completed a select number of
years with the company and should have shown exemplary performance and must
possess experience.
SANCTIONING

An authorized sanctioning authority within HDFC itself will review the remarks of
Double Checker. If it considers the loan suitable to be sanctioned it gives it approval .
After it has given its approval stamp the ILPS system will automatically send a letter to
the Applicant that his loan has been sanctioned. After this approval the Applicant can
go to whichever Service Centre to get his loan disbursed.

SPECIAL CASE

A special case can arise if the applicant has not mentioned the property for which he
wants to take a loan. In that case the applicant can let the case be remain pending .
This means that the Applicants loan request will be considered to be complete even
though he has not decided the property. However the Applicant is expected to finalize
the property in a short time

A Property Address is necessary to:

1. Get the loan disbursed

2. Process the Legal and Technical Appraisal of the property and its Papers.

DISBURSEMENT

The last and final stage in the Home Loan process is that of disbursement. After the
sanctioning has taken place the applicant becomes a registered customer of HDFC
Ltd .He/She can now take the disbursement of the loan from any of the various service
centre of HDFC .The loan shall be disbursed in one Lump sum or in suitable
installments to be decided by HDFC with reference to the need and/or progress of
construction. The borrower hereby acknowledges the receipt of the loan disbursed as
indicated in the receipt.

CREDIT APPRAISAL

Credit appraisal is one of the most important and significant step in the Home Loan
process. In case of home loans we either create new accounts or maintain pre existing
ones. Credit appraisal is however a part of sanctioning new loans or enhancing the
existing one.

Credit Appraisal starts from the moment, the documents for Loan from the customers
has taken, which is then sent to back office for processing which is called HUB.
CATEGORIES

In case of Credit appraisal there are three main categories:

1. SALARIED PERSON
 Here the Credit Appraisal is done for a salaried person .HDFC try to compute the
credit worthiness of a salaried person .It means that the person should be
employed as an employee in a recognized organization. The organization may be
public or private. The person must have proof to prove his employment like credit
documents etc.

2. SELF EMPLOYED PERSON

The nature of Credit Appraisal done for a self employed applicant is slightly more
complex. This is due to the presence of enormous bank statements as well as
transactions involved in business. As conducting Business in modern times is a
capital intensive process the bank statements of self employed persons are large
and much more complex. The statement runs into a large number of pages due to
the multiple numbers of transactions. Apart from that their income statements are
also quite complex due to presence of many components.

Hence in the case of a self employed person demanding a loan the credit appraisal
has to be done very carefully .For this very purpose HDFC Ltd has appointed
Specialized Credit Appraisers and a specialized Self employed Committee. These
consist mainly of Chartered Accountants. They handle the important job of
appraising the credit worthiness of the self employed applicants.

3. SELF EMPLOYED PROFESSIONAL

The self employed professionals include people like Doctors, Chartered

accountants , Engineers etc. Only HDFC recognizes these professionals as a
separate category and has hence developed a comparatively smoother procedure
for their Credit Appraisal and sanctioning of loan.
PRECAUTIONS

The credit appraisal is an important step for both the borrower and HDFC .Hence it
necessary to take all precautions.
All calculations must be done with correct figures. The data entry in the
system must match the actual data. Also care should be taken in places
like the decimals and rounding off. The data entries should not be going
outside the space provided to them.
The source of the data should be mentioned so that another person may
easily verify the facts and figures
Sometimes it may happen that the Applicant has intentionally or by mistake
not mentioned the full status of his obligations. The common situation in
this case are
A. He has not revealed of any loan that he may be paying off from an
undisclosed bank account in any other bank
B. He is not disclosing information related to any defaults, Revolving
accounts such as Debit card, Credit card etc.
In these conditions it is difficult to correctly compute the credit worthiness of the
person. As a result an unscrupulous element might get a loan .This will lead to loss to
both HDFC and its honest customers.
The precaution taken by HDFC in this case is that it contacts CIBIL (Credit Bureau of
India Ltd) which is the mega Repository of financial data in India .HDFC electronically
requests CIBIL to reveal information it possesses pertaining to the persons financial
obligations. CIBIL passes on the information by means of a fax containing all revolving
accounts, loans and liabilities.
TERMS AND CONDITIONS OF HDFC HOME LOANS

HDFC has always been market oriented and dynamic with respect resource
mobilisation as well as lending programme. It provides loans to meet all requirements
of the customers to make their house a home. However following are the conditions
which are to be met by the customer before applying for a loan.
LOAN AMOUNT CONDITIONS

✓ HDFC finances upto 85% maximum of cost of property (agreement value +

stamp duty + registration charges)
✓ Repayment capacity takrs into consideration factors such as income, assets,
qualifications, number of dependents, spouse income, liabilities, stability and
continuity of occupation and saving history.
✓ The loan amount of the individual is also subject to Instalment to Income Ratio
(IIR) which is 40% and Fixed Obligation Income Ratio (FOIR) which is 45%.
✓ Maximum loan amount to an individual connot exceed Rs 1crore.

SUPPORTING DOCUMENTS
First of all when a customer came all documents are checked by the workstation
which are directly in contact with the customers. Necessary documents required are
as follows.

FOR ALL APLICANTS

1. Allotment letter of the co-operative society /association of apartment owners.

2. Copy of the approved drawings of proposed construction /purchase /extention.
3. Agreement of sale /sales deed /detailed cost estimate cost from architect.
4. If an applicant have been present employment /business or profession for less
than a year, mention on a separate sheet details of occupation for previous five
years , giving position held, reasons for change and period of the same.
5. Applicable proceesing fees.
6. Residence proof and Identity Proof.
RESIDENCE PROOF IDENTITY PROOF

Ration Card Driving License

Passport Passport
Bank Account Statement Pan Card

Voters Identity Card Voters Identity Card

Letter from recognized public authority Identity Card issued by Employer(if

employed in state/central Govt.)

7. Certificate of loan outstanding issued by the lender ( for refinance cases only)
8. Any other information regarding your repayment capacity that is necessary and
will assist HDFC in appraising the loan proposal.

EMPLOYED CASE

1. Verification of Employment Form with only Part I filled in.

2. Latest original salary slip/salary certificate showing all deductions.
3. If a job is transferable, permanent address where correspondence relating to
the applicant can be mailed.
4. A letter from employer agreeing to deduct the EMI towards repayment of the
loan from applicant salary. This will expedite the processing of loan
application.
5. Updated original Bank Passbook/ or Bank Statement for the last six months.
6. Photocopy of Form 16 (issued by the employer) for the last assesment year.

SELF EMPLOYED
1.Balance Sheet , Profit & loss and ITR for the last three years.

2. Business Profile.

3. Copies of individual Tax Challans for the last three years.

4. Copy of advance Tax Challan (if any).

5. Updated original Bank Passbook/ or Bank Statement for the last twelve
months.
CREDIT APPRAISAL

After the documents are checked by the workstation, documents are rechecked by the
Senior Officer as well as File Credit Investigation Department (FCI) prepares income
sheet and check all documents of the file. After credit appraisal loan is approved an
disbursed to the conditions or requirement.
RATE OF INTEREST TILL 30 JUNE,2010 (DUAL RATE)

Till 30 June, 2010 all applications received will be locked by Dual rate.

SLAB RATE OF INTEREST

Till March 2011 8.25%

Till March 2012 9%

Next Floating rate PLR – 4.75%

RATE OF INTEREST

SLAB HOUSING PLOT LOAN EQUITY LOAN FIXED RATE

LOAN OF
INTEREST

Upto 30 lakhs 8.75% 9.25% Loan against property -11.25% Fixed rate -14%

30-50 lakhs 9% 9.5%

Above 50 lakhs 9.25% 9.75%

PROCESSING FEES AND OTHER CHARGES

A processing fees of 1% of the loan amount is charged from the applicant which
includes all the fees and the charges at the time of sanctioning of the loan application.
Service tax is also applicable and will be charged on the fees collected.
REPAYMENT

Loan is repaid in EMI comprising principal and interest. EMI commences from the first
of the month following the month in which the disbursement of the loan has been
completed. Due date of payment of first EMI is the 5th day of the month following such
month.
Interest is paid on the portion of the loan disbursed which is called Pre-EMI. Pre-EMI
interest is payable every month from the date of each disbursement upto the date of
the commencement of EMI. Customer may opt to pay the EMI’s by direct deduction
from their monthly salary. They can also issue post dated cheques and can also issue
standing instruction to their bankers or can pay the installment at any of the HDFC
collection centers.
FLEXIBILITY IN REPAYMENT

Following are the repayment option features being offered by HDFC to their customers:
✓ Step up Repayment Facility (SURF): This scheme help young executive to take a
bigger loan today based on an increase in their future income, this will help
executives to buy a bigger home today. In this EMI’s of the customer increases
in future.
 ✓ Flexible Loan Installment Plan (FLIP): Often customers, parents and their
children wish to purchase property together. The parents are near to retirement
and their children just started their work. This option help customers to
combine their income and take a long term home loan wherein the installment
reduces after the retirement.
✓ Tranching: To help the customers save their interest, HDFC introduced a special
facility known as Tranching. In this customer has the option to start their EMI’s
even before the full disbursement of the loan. By this facility customer can
repays their loan faster.

PREPAYMENT FACILITY
Customer can repay the loan ahead of schedule by making part or full prepayment. If
the prepayment is made within three years of the first disbursement, early redetmption
charges of 2% of the amount being prepaid is payable, but if prepayment is made after
three years then no charges is charged by HDFC.

DISBURSEMENT OF THE LOAN

HDFC disbursed the loan after the property has been technically appraised, all legal
documentation has been completed. The loan will be disbursed in full or in suitable
instalments (normally not exceeding three in number) taking into account the
requirements of the funds and progress of construction.

Vijay is a maintenance engineer with a private firm. His monthly takehome salary is
around Rs 35,000. With many public sector banks offering singledigit interest rates,
Vijay feels this is the best time to invest in his dream house. A two-bedroom house on
the outskirts costs about Rs 16 lakhs. Will any banker lend him this money? Is he
eligible for a home loan of Rs 16 lakhs?

There are numerous factors that banks take into consideration when computing your    
loan eligibility. Age of the applicant, his salary, repayment/credit history, savings,
profession, location of property, health condition and other debts have a direct bearing
on the loan amount sanctioned. Some professions are categorised as negative or risky
by the lenders. People in such professions may find it difficult to get a loan sanctioned.
On the contrary, some jobs are considered more stable with lesser probability of
.default. They are on the preferred list of most lenders

It is imperative that the property an applicant wishes to purchase falls within the    
geographical limits as defined by the bank. As a thumb rule, banks will lend to
applicants who can set aside 40 percent of their monthly income towards their home
loan repayments. Based on
this, an individual's loan eligibility is calculated. It is assumed that a person who earns
.more can set aside more money towards his EMI repayments
?How does a bank compute your loan eligibility
   
Most loan eligibility calculators available on the Internet are based on a formula. The
home loan eligibility, in lakhs, is arrived at by dividing the amount available for the loan
repayment with the borrower by the loan installment per lakh for the given tenure.
The simplest way to increase your loan eligibility is by increasing the loan tenure.
Consider Vijay's case. At 9 percent rate of interest and for a tenure of 10 years, banks
will sanction him not more that Rs 12 lakhs. However, for a greater tenure of 20 years
his loan amount shoots up to Rs 18 lakhs. However, the longer the tenure of the loan,
greater is the cost of borrowing.
Applying jointly, with your parent or spouse, increases your loan eligibility. The
incomes of both applicants are combined when computing the loan eligibility. You can
.almost double your loan eligibility with a joint loan
CHAPTER 5
 OTHER MARKET PLAYERS

1. State Bank of India

2. ICICI Bank
3. Axis Bank

SBI -STATE BANK OF INDIA

State Bank of India(SBI), the country largest and oldest commercial bank with a
branch network of over 11000 branches and six associate banks located even in the
remotest parts of India. SBI offers a wide range of banking products and services to
corporate and retail customers.

SBI HOME LOAN

PURPOSE
▶ Purchase/Constuction of a house/flat
▶ Purchase of a plot of land for constrution of house.
▶ Extention/ Repair/ Renovation or Alteration of an existing house/flat
▶ Purchase of Furnishings and Consumer Durables as a part of project cost.
▶ Takeover of an existing loan from other Banks/Housing Finance Companies.
ELIGIBILITY

▶ Minimum Age – 18 years as on the date of sanction.

▶ Maximum Age – For a home loan borrower is fixed at 70 years i.e the age by
which the loan should be fully repaid.
▶ There should be availability of sufficient, regular and continuous source of
income for serving the loan repayment.
DOCUMENTS

▶ Two photographs of each applicant/gurrantor.

▶ Proof of residence of each applicant/gurrantor.
▶ Copy of PAN Card for identity proof.
▶ Latest & original salary slip of employees/ Business proof for businessman.
▶ Two years IT Returns /Form 16 for employees and three years IT Return with
computation sheets for busineesman/Self Employed.
▶ Balance sheet for last three years for business man.
▶ Six months salary account statements for employees and savings account
statement for Businessman/self employed.
▶ Copy of Agreement to Sale.
▶ Copy of Registry of house/ plot/flat plus old registries.
▶ Copy of Allotment letter/Re-allotment letter of House/plot/Flat.
▶ Latest Jamabandi of Plot/Flat/House, Builders approval letter to develop
the project and copy of license.
▶ Latest Non Encumbrance Certificate of Plot/Flat/House.
▶ Copy of approved Map/ approved site plan of builder.
 ▶ Estimate cost of constuction from Govt. Approved Architect for
construction/ Renovation cases.
▶ List of documents held with other Bank from whom Housing loan is to be
taken over.
SECURITY
▶ Equitable Mortgage of the property.
▶ Other tangible security of adequate value like NSCs, Life Insurance Policies
etc, if the property cannot be mortgaged.

RATE OF INTEREST

YEAR RATE OF INTEREST

1st Year 8%

2nd Year 9%

3rd Year 9%

PROCESSING FEES
A processing fees of .50% of the loan amount is charged from the applicant which
includes all the fees and the charges at the time of sanctioning of the loan application.
Service tax is also applicable and will be charged on the fees collected.
MAXIMUM REPAYMENT PERIOD

For Applicants upto 45 years of age: 25 years

For Applicants above 45 years of age: 15 years

PREPAYMENT

Customer can repay the loan ahead of schedule by making part or full prepayment.
Prepayment Charges – If paid from own source – nil

In other case – 2% on principal amount prepaid.

DISBURSEMENT

• In lump sum direct in favour of the builder/ seller in respect of outright

purchase.
In case of constuction of house/flat etc, depending upon the actual progress of
work.

• ICICI-INDUSTRIAL CREDIT AND INVESTMENT CORPORATION OF INDIA

ICICI Bank ( Industrial Credit and Investment Corporation of India) is a major banking
and financial services organization in India. It is the 4th largest bank in India and the
largest private sector bank in India by market capitalization. The bank also has a
network of 2014+ branches (as on 31 March 2010) and about 5219 ATMs in India and
presence in 19 countries. ICICI Bank offers a wide range of banking products and
financial services to corporate and retail customers through a variety of delivery
channels and specialization subsidiaries and affiliates in the areas of investment
banking, life and non-life insurance, venture capital and asset management. (These
data are dynamic.) ICICI Bank is also the largest issuer of credit cards in India. ICICI
Bank is India's second-largest bank with total assets of Rs. 3,634.00 billion (US$ 81
billion) at March 31, 2010 and profit after tax Rs. 40.25 billion (US$ 896 million) for the
year ended March 31, 2010.
HOME LOAN
Home loans are provided to individualsto own a residential property.

ICICI Bank offers easy home loan for

▶ First purchase in ready constuction.
▶ Under constuction property.
▶ Purchase in Resale case.
▶ Self construction – extention of existing living space.

DOCUMENTS

EMPLOYED SELF EMPLOYED

Duly complete application Form with one Duly complete application Form with one
passport size photograph passport size photograph

Identity, Residence and Age proof Identity, Residence and Age proof

Fee Cheque Income tax return/ Computation of total

income/ Auditors report/ Balance Sheet/
Profit Account certified by Chartered
Accountant for last two years( 3 years for
home equity)

Signature Verification Proof Signature Verification Proof

Last three months salary slip Business Profile

Form 16 Board Resolution in case of a company

Bank Statement for last six months from Bank Statement for last six months from
salary Account operating Account
Repayment track record of existing loan/ Repayment track record of existing loan/
loan closure letter loan closure letter

ELIGIBILITY

▶ Loan must terminate before or when the borrower turns 65 years of age or
before retirement whichever is earlier.
▶ Minimum Age – 25 years of age.
▶ Applicant must be Self employed or Employed with a regular source of income.
▶ In case of Indian Resident both Self Employed or Employed can apply for loan
but in case of Non Resident only Employed can avail a loan.
▶ The loan amount can be upto 80% of the cost of property.

RATE OF INTEREST

YEARS UPTO 30 LAKHS ABOVE 30 LAKHS FIXED RATE

1ST Year 8.75% 8.75% Fixed rate – 16%

2nd Year 9% 9.25%

3rd Year 9% 9.25%

PROCESSING FEES

A processing fee of .5% of the loan amount is charged from the applicant which
includes all the fees and the charges at the time of sanctioning of the loan application.
Service tax is also applicable and will be charged on the fees collected. .25% fee is
negotiable if applicant is an existing customer.
PREPAYMENT CHARGES

There is no charge on part of prepayment but in case of full prepayment – 2% of the

principal outstanding at the time of foreclosure is charged by ICICI Bank.

AXIS BANK
Axis Bank Ltd was incorporated in the year 1994 as ‘UTI Bank Ltd’ which provided
corporate and retail banking products and was the first private banks to have begun
operations in 1994, after the Government of India allowed new private banks to be
established. At present the bank is the third largest private sector bank comprising of
1000 branch offices and extension counters and 4055 ATMs.
Axis bank was formed as UTI when it was incorporated in 1994 when government of
India allowed private players in the banking sector. The bank was sponsored together
by the administrator of the specified undertaking of the Unit Trust of India, Life
Insurance Corporation (LIC) And General Insurance Corporation Ltd and its
subsidiaries namely National Insurance Company Ltd, New India Insurance Company,
The Oriental Insurance Corporation and the United Insurance Company Ltd. However
the name of the UTI was changed because of the disagreement on terms and
conditions of th bank authority over certain stipulations including royalty charged over
the name from UTI AMC. The bank was also wanted to have a new name from its
Pan-Indian as well as international business perspective. So from July 30,2007
onwards the UTI Bank was named as Axis Bank.

DOCUMENTS

EMPLOYED SELF EMPLOYED

Application Form with photograph Application Form with photograph

Identity and Residence proof Identity and Residence proof

Latest salary slip Education qualification certificate and

proof of business existence

Form 16 Business profile and last three years profit

& loss and balance sheet

Last six months bank statement Last six months bank statement

Processing fees Processing fees

RATE OF INTEREST

INCOME SLAB RATE OF INTEREST

Upto 30 lakhs 8.75%

Above 30 lakhs 9.25%

REPAYMENT TERM

Monthly EMI’s

FOR 25 YEARS – 822 per lakh

FOR 20 YEARS – 884 per lakh

FOR 15 YEARS – 999 per lakh

FOR 10 YEARS – 1253 per lakh

ELIGIBILITY

• Loan amount offered for both employed and self employed is Rs 1lakh to 50
lakhs.
• Minimum Age – 24 years of age.
• Loan must terminate before or when the borrower turns 60 years of age or
before retirement whichever is earlier.
• The loan amount can be upto 85% of the cost of property.
• Applicant must be Self employed or Employed with a regular source of income.

PROCESSING FEES

A processing fee of .5% of the loan amount is charged from the applicant plus service
tax as applicable.

PREPAYMENT CHARGES

Axis Bank do not charge any prepayment charges from its customers.
CHAPTER 6
 RESEARCH METHODOLOGY

SCOPE OF THE STUDY:

The study focuses on prevailing rate of interest, percentage of funding, tenure of home
loan, fee etc being charged by other banks in comparison to HDFC.

From this study, HDFC can identify the difference between the schemes and charges charged
in comparison to with its competitors. Hence HDFC can change their schemes to perform
better than other banks and can attract more customers. The present study focuses on
analyzing the balance sheet and profit and loss statement of HDFC for the last two years.

METHODS OF COLLECTION OF DATA

For the project number one i.e. The Comparative Study of Home Loans provided by
HDFC LTD. With other financial institutions various banks like SBI, ICICI, AXIS Bank
etc. were surveyed. The whole procedure of the disbursement of loan, various
schemes, interests rates etc. Factors were obtained from various banks. The whole
data was the organized in excel files and later on considering all the factors the whole
data was analyzed.

SECONDARY DATA

Secondary data refers to the one which has already been collected by someone else .
The secondary data was collected from the office account records and annual report
of the company. Secondary data sources for this study are:

• Websites of HDFC and other financial institutions

• Pamphlets/Brochures/Magazines
• Annual report
• Newspaper/ Articles
• Mangers of different banks deal in housing loans.

PRIMARY DATA

Primary data is collected from different banks of Chandigarh (shown above as Major
Players) regarding the comparative analysis of housing loan schemes offered by
different financial institutions.

.
CHAPTER 7
DATA ANALYSIS AND FINDINGS
A) Comparison of home loans

The comparative study of HDFC home loan products and process was conducted with
similar services offered by other financial institutions. The study was done on the
leading market players like ICICI, SBI, AXIS Bank etc. The study illustrates prevailing
rate of interests, percentage of funding, tenure of home loan and fees , documentation
and repayment options features etc being launched in other banks .
From this study, HDFC can identify the difference between their
schemes and charges charged by other banks. Therefore this can help HDFC to
change their schemes accordingly so as to perform better than other financial
institutions.

B) Financial Analysis
The study of Balance Sheet and Profit and loss A/c of HDFC Ltd. for two years i.e.
2008-09 and 2009-10.The financial statements for these two years help me out in
preparation of Ratio Analysis and Cash Flow Statement of HDFC Ltd.
From this study of Ratio Analysis and Cash Flow Statements to
interpret the results that the future of HDFC Ltd. is bright.
 CHAPTER 7(A)

BUSINESS PROFILE(for self employed people)

BANKS STATE BANK OF INDIA IDBI BANK UBI

DOCUMENTS 1. SALES DEED ITR & BALANCE SHEET ALL SAME
2. MUTATION &P/L (LAST 2 YEARS)
3. LEGAL SEARCH &
REPORT(BANK OTHERS SAME
ADVOCATE)
4. DESIGN & ESTIMATE
(ARCHITECT) 5.
VALUATION REPORT
6. ITR (LAST 3 YEARS)
7.BALANCE SHEET & P/L
(LAST 3 YEARS)
8. BANK STATEMENT
(CURRENT & SAVINGS, 6
MONTHS)
9. BUSINESS PROFILE
10. ID PROOF
11. RESIDENCE PROOF
12. PHOTOS
13. PROPERTY PAPERS

RATE OF INTEREST UPTO 30 LAC – 8.75% UPTO 30 LAC – 8.75% UPTO 5 YEARS – 9%
30- 50 LACS – 9% 30- 50 LACS – 9% 5 – 10 YEARS – 9.25%
> 50 LACS – 9.25% > 50 LACS – 9.25% 10-15 YEARS – 9.5%
15- 25 YEARS – 9.5%

PROCESSING FEES 0.5% OF LOAN TAKEN 1% OF LOAN TAKEN (.5% 0.5% OF LOAN TAKEN
NEGOTIABLE FOR GOVT 1500 LAWYERS FEES (
EMPLOYEES) NEGOTIABLE)

REPAYMENT TERMS A. MAX 60% OF NET BELOW 55 YEARS -MAX FOR FLAT/PLOT MAX
INCOME B.BELOW 20 YEARS REPAYMENT YEARS - 20 YEARS
55 YEARS -MAX 20 YEARS PERIOD OR 65 YEARS CONSTRUCTION MAX
REPAYMENT PERIOD OR OF AGE YEARS - 10 YEARS
65 YEARS

ELIGIBILITY OF LOAN 85% of the cost of 85% of the cost of GROSS INCOME - 4 TIM
AMOUNT property OR 4 times the property ( below 30 MAX NET INCOME - 5
amount of income (Avg of lakhs) OR 80% of the TIMES & MAX
3 years' income) cost of property (above AMOUNT - 50 LACS
30 lakhs) FOR ( 7 METROS)- 100
LACS
OWN SOURCE NIL NIL ( AFTER 6 MONTHS)

REFINANCE 2% 2%

INSURANCE OF THE YES (OPTIONAL) YES (OPTIONAL) NO

PROPERTY
AREAS OF FUNDING Any area inside or outside
tricity the condition being
it should not have been
given on GPA or through
Share transfer
Any area inside or NOT OUTSIDE THE TRI
outside tricity the
condition being it should
not have been given on
GPA or through Share
transfer

GURRANTOR Guarantor is required(one NOT REQUIRED DEPENDS UPON CASE

who is an Income Tax
Assessee and he/she has
to have an account in
State bank of india)

ADDITIONAL SECURITY N/A DEPENDS UPON CASE DEPENDS UPON CASE

BUSINESS
PROFILE(for
self employed
people)
BANKS AXIS BANK BANK OF INDIA HDFC Ltd.
DOCUMENTS ALL SAME 1.PHOTOGRAPHS 1.BALANCE SHEET , P
2.IDENYITY PROOF & L AND ITR (LAST
3.LOCAL ADDRESS THREE YEARS)
PROOF 4.BANK 2. BUSINESS PROFILE
STATEMENT (LAST 3. COPIES OF
6 MONTHS) INDIVIDUAL TAX
5.ITR (LAST 3 CHALLANS FOR THE
YEARS) LAST THREE YEARS.
6.BALANCE SHEET & 4. COPY OF ADVANCE
P/L (LAST 3 YEARS) TAX CHALLAN (IF
7.PROOF OF WORTH ANY)
8.SALE AGRREMENT 5.BANK STATEMENT (
9.COPY OF LAST 12 MONTHS)
APPROVED MAP.
10ESTIMATION OF
CONSTRUCTION.
11. COPY OF TITLE
DEED & PREVIOUS
TITLE DEED

RATE OF UPTO 30 LACS -

INTEREST 8.75%
ABOVE 30 LACS –
9.25%
PROCESSING 0.5% OF LOAN .55% OF THE LOAN 1% OF LOAN AMOUNT
FEES TAKEN AMOUNT
REPAYMENT MONTHLY EMI 15 YEARS - 1029 MAX TO 20 YEARS
TERMS FOR 25 YEARS - PER LACS 10 YEARS -
822 1267 PER LACS
FOR 20 YEARS -
884
FOR 15 YEARS -
999
FOR 10 YEARS –
1253
ELIGIBILITY OF 85% OF THE COST 75% OF THE COST A. IIR (INCOME
LOAN AMOUNT OF PROPERTY OR OF PROPERTY OR 4 INSTALMENT RATIO)
55% OF THE NET TIMES LAST THREE = EMI/GROSS INCOME
INCOME YEARS AVERAGE MAX 40%, IN CASE

44
 ANNUAL INCOME MORE EMI REDUCE
B. FOIR
= ALL
OBLIGATION/GROSS
INCOME , MAX
TO 35%
OWN SOURCE
REFINANCE NIL NIL
INSURANCE OF NIL 0.65% YES (OPTIONAL)
THE PROPERTY
AREAS OF YES (OPTIONAL) REQUIRED FOR APPROVED PROJECTS
FUNDING BUILDING NOT FOR ONLY & FLATS
LAND TRANSFERABLE ON
GPA & ALSO FUNDED
WITH ADDITIONAL
SECURITY i.e 1.5
TIMES THE GPA
PROPERTY
GURRANTOR Any area inside or Any area inside or DEPENDS UPON CASE
outside tricity the outside tricity the
condition being it condition being it
should not have should not have
been given on GPA been given on GPA
or through Share
transfer
ADDITIONAL NOT REQUIRED LOCAL GURRANTOR DEPENDS UPON CASE
SECURITY IN CAES OF OUTSIDE
TRICITY, MIGHT
REQUIRE KEEPING
THE PROPERTY
INTO
CONSIDERATION

COMPARATIVE ANALYSIS OF VARIOUS BANKS FOR HOME LOANS (for employed people)

Maximum loan amount 75% of the cost of the 75% of the cost of Property or
property four times the avg income of
last three years
Rate of interest: ( FLOATING )

45
below 30 lakhs 8.5% floating 9.25%(for 10 years n above) t

30 lakhs - 50 lakhs 9% ( for below 10 years)

more than 50 lakhs

Processing charges 0.55%

Pre-payment charges: 51,229.20 f

own source Nil t

Refinance 0.65%
a
Broken Interest Charges
t

46
Additional security
Insurance of the property
Area of funding
Guarantor
Resale of the property
Additional documents
DOCUMENTS REQUIRED:
(1)Income tax return with
computation (years)
(2)Balance sheet and Income
statement (years)
(3) Six months bank statement
(4) Residence proof
(5) Pan card
(6)Landline bill original
(7) Business Profile
(8) Property paper
(9) Passport size photograph
(10) R C Photocopies
in case of GPA not required
required for building required for building not for
land
anywhere except GPA
t
t
depends on case to case local guarantor in case of
outside tricity. Might require t
a guarantor in tricity keeping
property into consideration.
sale agreement, copy of the
title deed and previous title
deeds, copy of the approved
map duly signed, estimation
of the construction/
renovation cost, any other
statutory permission as
required by the local authority.
3 3
3 3
√ √ √
√ √ √
√ √ √
√ √ √
not required not required √
√ √ √
√ √(applicant + guarantor) √
not required not required
47
48
 Cash Flow Statement of HDFC LTD. for the
year ended March 31,2010

Current Year Previous year

(2009-10) (2008-09)

Rupees Rupees

A] CASH FLOW FROM OPERTAING ACTIVITIES

Profit Before Tax 39159898200 32190427543

Adjustment For:

Depreciation And Amortization 182023071 174563928

Provision For Contingencies 580000000 500000000

(Gains)/Loss On Translation Of Foreign Currency Monetary

Assets

And Liabilities And Mark To Market Derivatives -295703919 2611652309

Employee Stock Option Expense(Net Of Options Exercised) -43790 -48969

Provisions For Employees Benefits 80382284 110954902

Profit On Sale Of Investments -2248303068 -252300208

Surplus From Deployment In Cash Management Schemes Of

Mutual Funds -1898442216 -1579731748

Profit In Sale Of Fixed Assets (Net) -4587887 -5874605

Operating Profit Before Working Capital Changes 35555222675 33749643152

Adjustments For:

Current Assets -840719487 -2821781029

Current Liabilities 552821112 6652700403

Cash Generated From Operations 35267324300 37580562526

49
Advance Tax Paid -11010619403 -9781572839

Net Cash From Operations 24256704897 27798989687

Loans Disbursed(Net) -128772620312 -117632036043

Corporate Deposits 7189413000 2336673400

Net Cash Used In Operating Activities -97326502415 -87496372956

B] CASH FLOW FROM INVESTING ACTIVITIES

Purchase Of Fixed Assets -348309049 -123665189

Sale Of Fixed Assets 10708086 32160579

-337600963 -91504610

Investment In Subsidiaries -2863800000 -4155000000

Investment In Cash Management Schemes Of Mutual Funds -1349455987700 870590000000

Other Investments -89046447459 -10706949930

Sale Proceeds Of Investments:

In Cash Management Schemes Of Mutual Funds 1388598000886 848904287525

In Other Companies And Properties 54228732324 2493273220

Net Cash From/(Used)In Investing Activities 1122897088 -34145893795

C] CASH FLOW FROM FINANCING ACTIVITIES

Share Capital- Equity 26563120 4159250

QIP Warrants 3012269150 -

Securities Premium 3242077645 510876154

Securities Issue Expenses -64147933 -

50
 1385301353565
Borrowings 135154524943 3

Dividend Paid- Equity Shares -85368106520 -7105985821

Tax Paid On Dividend -1255798590 -1066273179

Shelter Assistance Reserve- Utilization -84845183 -52159522

Net Cash From Financing Activities 131493832532 130820752535

Net Increase In Cash And Cash Equivalents 35290227205 9178485784

Cash And Cash Equivalents As At The Beginning Of The

Year[As Per Note 8(i)] 16956082911 7777597127

52246310116 16956082911
Cash And Cash Equivalents As At The End Of The Year[As
Per Note 8(i)] ========== ==========

51
CHAPTER 8

52
 LIMITATIONS:
Every study conducted may have certain shortcomings and unfortunately mine is also
a similar case. A few errors have crept in despite mine best efforts to avoid them but it
is expected that still mine study and findings are very much relevant.

• An error may have been due to the samples taken not conforming to the actual
population; this is because the sample was a convenience sample.
• Certain questions which are not properly responded by the Respondents.
• Personal bias or personal error of the interviewer might also have crept in,
some cases, while interpreting the respondents.
• There are several customers who don’t show proper interest in filling the questioner as
they feel that they won’t get any benefit after filling the questioners and it’s just a
waste of time for them.

COMMON PROBLEMS FACED BY HDFC HOME LOAN CUSTOMERS:

• Rejection at the first stage due to incompatibility between the borrower’s

qualifications and lenders requirements. It could be the age criteria, income
criteria, improper documents, the institution not being able to verify the
customer’s details properly etc.
• With every application form for home loans, HDFC require about 0.25% to 1% of
the loan amount to be submitted as the processing fees. The processing fees
are generally non-refundable. In simple words this means that for whatever
reasons, if the institution finds that customer doesn’t deserve the home loan
this fee won’t be returned.
• Another limitation is that desired loan is usually not sanctioned. The loan
amount sanctioned is mostly based on repayment capacity of the borrower.
The monthly income, financial history or other unpaid loans with the borrower,
past payment record, credit card usage history, if any bounced cheque, average
balance with the banks, total years in employment etc. . These factors all
clubbed together help in the institution to decide whether it will be able to
recover its money satisfactorily or not.
• The interest rate dilemma
• Another major limitation is Difference in property valuation. The company has
its own experts for legal, technical and financial appraisal of the property in
question. It evaluates the property on its established parameters and assigns a
value to it .This value can be significantly lower than the price the customer
quoted for the property. This can cause a significant gap between what is
needed and what the company is willing to lend.
• Another is the Title deeds and NOC Documentation Problem. The Title deeds and NOC
Documents have to be furnished in the bank’s format. Borrower’s who don’t provide
them in proper format, will ruin the entire exercise and won’t get any loan.

53
CHAPTER 9

54
SUGGESTIONS AND RECOMMENDATIONS

All one need is the courage to innovate, the skill to understand clientele and the desire
to give them the best .Likewise following are some of the suggestions which would
help HDFC in improvising their working styles and performance.

• Most of the customers face problems regarding the rate of interest. HDFC must
inform its customers about the change in ROI, It automatically changes but there is
decrease in rate of interest , it doesn’t change automatically.
• Any change in the policies must be intimated to all the customers .HDFC should
provide proper information to its customers.
• There is lot of formalities in the loan disbursement process .Too much
documentation is done . Customer is no aware of all the formalities. Therefore
paperwork should be more friendly and clear .
• Customers should be given proper information about EMI. They are generally not
told how their EMI are calculated they should know EMI is calculated and of what
amount.
• After sale service is an issue of concern. Customers facing problems are not
attended on time. Employees are generally cooperative only when the loan is
sanctioned and disbursed. Therefore after sale service should be improved up to
the satisfaction level of the customer.
• Website of HDFC should give more options and features to customers so that they
get maximum information sitting at home
• Employees of HDFC should be more prompt towards customer’s grievances and
problems
• HDFC should provide personalized services to customers.
• Comparative pricing in terms of lower interest rates and front end changes should
be adopted.
• Company should enter into tie ups with reputed builders and development
authorities.
• HDFC should increase their reach by penetrating into rural and semi urban areas .
They should also capitalize on present customer base by generating referrals
• Aggressive marketing and great publicity through newspapers, hoarding,
websites and other medias should be done.

55
CHAPTER 10

56
 Webliography

• www.wikipedia.org
• www.google.com
• www.hdfc.com
• www.ansalapi.com
• www.moneycontrol.com
• www.hdfcbank.com
• www.hdfcinsurance.com
• www.hdfcfund.com
• www.hdfcergo.com
• www.hdfcrealty.com
• www.credila.com

57
0

Schedule March 31,2009

Rupees Rupees Rupees

1 2871063070 2844499950

2 149105523520 128529378563

151976586590 131373878513

3 965653088314 838560807874

111762967490
4 969334686387

58
 4 979669905923 851981057761

5 107274545227 104687498861

2857280715 2158210179

6 74391491127 55708340552

7 48784689701 46634472308

25606801426 9073868244

5244557998 4938523820

3023416385 2904472478

2221141613 2034051342

111762967490
4 969934686387

14

15

ofit

59
60