A

PROJECT REPORT
ON
“ANALYSIS OF CREDIT APPRAISAL AND RISK RATING OF PERSONAL
LOAN FOR HDFC BANK”

AT HEXAFIN CONSULTANCY.PVT.LTD.

SUBMITTED BY
TEJASWINI BHARAT AWADHOOT

SUBMITTED TO

SAVITRIBAI PHULE PUNE UNIVERSITY

UNDER THE GUIDANCE OF

PROF. DR. AJAY SHUKLA

[PHD in Finance]

IN THE PARTIAL FULFILLMENT OF

MASTER OF BUSINESS ADMINISTRATION

Sankalp Educations Society’s

ISMS Sankalp Business School
Pune – 411 041

1
Academic Year (2022-2024)
CERTIFICATE OF THE INSTITUTE

2
CERTIFICATE OF THE COMPANY

3
 DECLARATION

I, TEJASWINI BHARAT AWADHOOT, hereby declare that the project work

entitled “ANALYSIS OF CREDIT APPRAISAL AND RISK RATING OF
PERSONAL LOAN FOR HDFC BANK”, carried out in HEXAFIN
CONSULTANCY PVT LTD PUNE, which has been submitted to Savitribai Phule
Pune University, is an original work of the undersigned and has not been reproduced
from any other source. Whenever reference has been made to the previous work of
others, it has been clearly indicated as such and included in the bibliography.

Signature of Candidate
Full name: Tejaswini Bharat Awadhoot

Certified by:

Signature of Project Guide

Full name: Prof. Dr. Ajay Shukla.

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 ACKNOWLEDGEMENT

To list who all have helped me is difficult because they are so numerous and the depth
is so enormous.

I would like to acknowledge the following as being idealistic channels and fresh
dimensions in the completion of this project.

I take this opportunity to thank the Savitribai Phule Pune University for giving me
chance to do this project.

I would like to thank our Director, Debraj Banarje Sir and Principal, Dr. Rajendra
Takle Sir for providing the necessary facilities required for completion of this project.

I take this opportunity to thank our Coordinator for his moral support and guidance.

I would also like to express my sincere gratitude towards my project guide Prof. Ajay
Shukla whose guidance and care made the project successful.

I would like to thank my College Library, for providing various reference books and
magazines related to my project.

Lastly, I would like to thank each and every person who directly or indirectly helped
me in the completion of the project especially my Parents and Peers who supported
me throughout my project.

Thank You
Tejaswini Awadhoot

INDEX

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Chapter Sub- Title Page No.
No. chapter
* Title Page Ⅰ

* Certificate of the Institution Ⅱ

* Certificate of the company Ⅲ

* Declaration Ⅳ

* Acknowledgement Ⅴ

* Executive Summary Ⅶ

* Abbreviations Ⅷ

1. Introduction 1

1.1 Credit Appraisal 2

1.2 Risk Rating 3

1.3 Personal Loan 5

2. Literature Review 36

3. Company Profile 30

4. Research Methodology 41

5. Case Study 45

6. Data Analysis and Interpretation 52

7. Findings 64

8. Conclusions 67

9. Suggestions 69

10. Key Learning 71

11. Bibliography 73

12. Annexure 75

EXECUTIVE SUMMARY

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The study is on analysis of credit appraisal and risk rating of personal loan in HDFC
bank. HDFC bank limited is one of the fastest growing Indian banking and financial
services company. It has got very important presence in consumer as well as corporate
sectors I have undertaken a project titled analysis of credit appraisal and risk rating of
personal loan. Credit appraisal is also an important function of the bank it is credit
worthiness of a loan applicant and to evaluate viability of the project.

Personal loans help you to take care of your immediate requirements Without much of
a hassle. The most attractive feature of the personal loan is that you do not have to
give any kind of security to avail this loan. Many time people would have experienced
financial crisis during such events they would have borrowed money from their
neighbors or acquaintance a credit history etc.

The main focus of my project is on the appraisal loan and keep a check on the credit
worthiness of the borrower and the financial & economic viability of loan proposed.

The main objective of the project was to know the loan proposal system of HDFC
bank the analysis of any proposal consist two parts

o Internal

o External

Internal is extract of internal consisting of calculation of tenor as per norms

calculation of eligibility with reference to income shown by an applicant then if
approved to calculate the equated monthly instalments & actual disbursement.

External analysis involves collection of document proofs regarding income profile

residence verification and the end.

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 ABBREVIATIONS

Sr. No. Abbreviation Full form

1 HDFC Housing Development Finance

Corporations.
2 CIBIL Credit Information Bureau India
Limited
3 IIFL India Infoline Finance Limited

4 NRI Non-Resident Indian

5 EMI Equated Monthly Installment

6 ECS Electronic Clearing Service

7 MNC Multi National Corporation

8 MSEB Maharashtra State Electricity Board

9 PAPL Pre- Approved Personal Loan

10 NBFC Non-Banking Financial Services

11 BCG Boston Consulting Group

12 KYC Know Your Customer

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 CHAPTER 1
INTRODUCTION

1
INTRODUCTION

1.1. CREDIT APPRAISAL –

Credit appraisal is a comprehensive assessment process conducted by financial

institutions, such as banks or lending agencies, to evaluate the creditworthiness and
risk associated with extending credit to a borrower. This thorough evaluation helps
the lender make informed decisions about whether to approve or deny a loan
application. The credit appraisal process involves various steps, including analyzing
the borrower's financial history, income sources, repayment capacity, collateral, and
the purpose of the loan. Lenders also consider factors such as the borrower's credit
score, existing debts, and past repayment behavior to determine the likelihood of
timely repayment. Additionally, the appraisal process may involve assessing the
economic and industry trends that could impact the borrower's ability to repay the
loan. Overall, credit appraisal is crucial for minimizing the risks associated with
lending and ensuring the financial stability of both the borrower and the lender.

PROCESS OF CREDIT APPRAISAL-

Credit appraisal is the process that a financial institution uses to evaluate the
creditworthiness of a potential borrower. The process typically involves several key
steps:

1. Collection of Information: Gather relevant information about the borrower,

including financial statements, credit history, business plan, and other relevant
documents.

2. Analysis of Financial Statements: Assess the financial health of the borrower by

analyzing their balance sheets, income statements, and cash flow statements.

3. Evaluation of Creditworthiness: Evaluate the borrower's ability to repay the loan

by examining their credit history, debt-to-income ratio, and other financial ratios.

4. Risk Assessment: Assess the potential risks associated with the loan, such as
market risks, industry risks, and operational risks, to determine the overall risk
exposure of the lending institution.

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5. Loan Structuring: Determine the appropriate loan structure, including the amount,
interest rate, repayment terms, and collateral requirements, based on the borrower's
financial position and the risk assessment.

6. Credit Decision: Make a final decision on whether to approve or reject the loan
application based on the findings from the credit appraisal process.

7. Monitoring and Review: Continuously monitor the borrower's financial

performance and repayment behavior to ensure compliance with the terms of the loan
agreement and to mitigate any potential risks.

1.2. RISK RATING

Risk rating is a method used by organizations, financial institutions, and individuals to

evaluate and quantify the level of risk associated with a particular activity,
investment, or decision. It involves the systematic assessment of various factors to
determine the likelihood of potential losses or adverse outcomes. Typically, the risk
rating process involves analyzing multiple components such as the probability of an
event occurring, the potential impact or severity of the event, the level of
vulnerability, and the effectiveness of existing controls or mitigating measures. These
components help in the creation of a comprehensive risk profile for a specific project,
investment, or entity. The risk rating system often utilizes a scale, which can be
numerical, alphabetical, or categorical, to categorize and communicate the level of
risk associated with a particular situation. This scale allows stakeholders to easily
understand the magnitude of the risk and make informed decisions based on the
identified risk level. Moreover, the process of risk rating is dynamic and subject to
regular updates and adjustments, considering the evolving nature of risks and the
changing business environment. By consistently evaluating and updating risk ratings,
organizations can better manage and mitigate potential threats and uncertainties,
thereby enhancing their overall risk management strategies and decision-
making processes.

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RISK RATING PROCESS AT HDFC BANK-
HDFC Bank, one of the leading banks in India, follows a comprehensive risk rating
process to evaluate and manage various types of risks. This process involves the
following key steps:
1. Risk Identification: The bank identifies various types of risks, including credit
risk, market risk, operational risk, liquidity risk, and others.

2. Risk Assessment: After identifying the risks, the bank assesses the potential
impact and likelihood of each risk. This involves analyzing historical data, market
trends, and other relevant factors.

3. Risk Measurement: HDFC Bank employs various quantitative methods to

measure the magnitude of risks. For credit risk, this may involve analyzing the
creditworthiness of borrowers using credit scoring models and other relevant metrics.

4. Risk Mitigation: The bank then implements measures to mitigate the identified
risks. This may include setting risk limits, diversifying the loan portfolio, using
hedging strategies, and establishing robust internal controls and processes.

5. Risk Monitoring: HDFC Bank continuously monitors the risks to ensure that they
remain within acceptable levels. Regular reviews, stress testing, and other monitoring
mechanisms are used to identify any deviations from the expected risk levels.

6. Reporting and Compliance: The bank prepares regular risk reports to provide
insights into the risk exposure and compliance with regulatory requirements. These
reports are shared with internal stakeholders, management, and regulatory authorities
to ensure transparency and adherence to regulatory guidelines.

Overall, the risk rating process at HDFC Bank emphasizes proactive risk management
to maintain a healthy balance between risk and reward, ensuring the stability and
sustainability of the bank's operations.

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1.3. Personal Loan –

 What is personal loan?

Banks are in the Business of lending for big ticket items such as houses and cars, with
this kind of borrowing the banks use the assets (the house or car) as a Guarantee for
Repayment. If you don't repay, they Will Take Possession of your Property.

But What If you just Need Money -not for any big purchase but lots of little once/ Or
an Emergency? Maybe You Need cash for a graduation or wedding Unfortunately you
can't put your degree or marriage certificate down as security.

This is Where personal loan can be useful with a personal loan you can pretty much
do anything you like either the money lent to you but because the bank does not have
a assets to secure your Repayment promise personal loan are harder to get approved
and often come with high interest Rates.

The Bank is taking on a bigger risk by lending to you with no real guarantee of
Repayment so as with any high risk venture they expect to be paid handsomely for it.
Wouldn't you also want a higher Dividend for a Riskier Investment portfolio?

Most Often Personal loan Interest rates are fixed and changed every year on the full
amount you borrowed and not on a reducing balance like a home loan this means that
no matter how much of you loan you repay -even in the final year of payment -you
will be paying the same amount of interest you did on day one

Bank Negara has set the Maximum Number of years for repayment at 10 years,
though the usual amount of time bank will give you is between 7-8 years.

 Advantages of personal loans:

1. One of the biggest advantages of a personal loan is that it can be used in different
ways, unlike home loan where the money can be used only for the purchase or
construction of a house or car loan where money can be used only to buy a cat. A
personal loan can be considered as an purpose loan It is completely up so the
borrower how he or she wants to use it.

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2. To avail most loans you require collateral. However, this is not the case with
personal loans. A financial institution determines your ability to repay and
accordingly decides whether or not extend this lean to you. You are not required
to place any asses as guarantee. If the lender is certain that you will repay, they
will go ahead and process the loan.

3. You can get a personal loan for as low as m 2,000 up to 250,000 depending on
your income level.

4. In most cases the interest rate will remain the same throughout the life of the loan.

5. Many banks offer better interest rate if you have a good credit score.

6. It is easy to apply for a personal loa especially from banks you are already have an
account with.

 Disadvantages of personal loans:

1. Since you do not have to place any act as collateral, the interest rates on such loans
are high. Banks and other lending institutions consider this form of loan as high risk.
To offset the risks, unsecured loans come with very high interest rates. In terms of
interest payments, personal loans can be one of the most expensive loans to avail.

2. Getting a personal loan is not very easy. In order for the bank to process your loan,
you need to have a good credit score. The closet your score is to 900 the easier it
becomes to get a loan. There have been various cases where people have become
ineligible for personal loan just because of their credit rating.

3. The interest amount rates can be high. The larger the amount you borrow and the
longer you take repay it the more you have to pay in interest

4. There will be extra costs such as processing/ documents fees /stamp duties as well
as early settlement fees penalties if you pay off you loan quickly

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  Significance of personal loan:

personal loan is and should be taken to tide over emergencies sly. It should not be
taken on t whims or just because one feels like splurging. They carry high interest
rates or if it is a secured personal loan then you may lose your collateral.

If you are self-employed or salaries, there may be times when you need instant cash
for emergencies of different kinds, then you could go for a personal loan. Timing and
speed are vital factors while choosing a personal loan across various institutions.

Features:

 Some lenders offer secured loans (which need guarantors or collateral

security) while others don't have any eligibility criteria.
 Minimal paperwork.
 Some bank provide loans only to salaried people and not to self-employed
individuals.
 Some institutions take few hours to process the loan, others may take 3-4 days
including one day for field investigation
 Personal loans available up so Rs 20 lakh depending on the type of institution
or bank.
 The credit information report (CIR) play a crucial role in a lender's decision to
approve a loan application.

1.4. What are the uses of a personal loan?

 There are several ways in which a personal loan can be used:

 You can use in to finance higher education. And claim tax benefits on interest
payments

 Weddings are always expensive business. You can pay it back with a personal
loan.

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  You can use it to buy that new laptop or phone with the latest technology

 Are you thinking of buying a house? Or are you planning to renovate your
current hose? You can make it happen with a personal loan, with tax benefits
to begin with.

 You don't need to spend all your savings on the vacation trip of your dreams.
You can finance your travels with a personal travel loan

 Cash flow problems can also be solved with a small personal loan, so you
don't have to sacrifice daily needs during a cash crisis.

1.5. Characteristics of the HDFC personal bank loan

HDFC Bank offers a personal loan for most financial, personal or professional needs,
with attractive features and benefits. These are some of the main features of a
personal bank loan:

1) Special offers for women: HDFC Bank offers discounted programs for women
under the HDFC Personal Loan Diva program. Under this scheme, the HDFC bank
offers pre-approved personal loans of Rs 3 Lakh to female applicants along with
various premium brands and product offerings from the bank.

2) Minimum Documentation: For its existing clients, HDFC Bank offers staff with
KYC documents. However, for new customers, documents relating to an identity
document, income statement, and home details are required.

3) Interesting interest rate: HDFC bank offers very competitive personal loan
interest rates of up to 10.50% per annum for a loan of at least 50,000

4) Personal Injury Coverage: HDFC Bank offers a unique protection plan as an

additional feature of the personal loan. An applicant can pay a nominal premium and
can qualify for personal accident coverage of up to 8 Lakh and also serious illness
coverage of up to 1 Lakh. The cost or premium of these policies is deducted from the
loan amount at the time of disbursement.

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5) Personal Loan Security: HDFC Bank ensures that the applicant's best interest is
always safe and insured under its Sarv Suraksha Pro scheme. In this scheme, the key
restrictions are Credit Shield Cover is an emergency coverage for installments
pending equal to the amount of the outstanding loan in the event of sudden death of
the borrower Accidental hospitalization coverage per borrower up to Rs 8 Lakh
Accidental/permanent death Disability coverage up to Rs 1 Lakh

6) Easy Balance Transfer : With HDFC Bank's Easy Transfer feature, you can now
transfer your existing personal loan to HDFC Bank. The loan comes with a lower
EMI option and can also save you on existing interest payments. The interest rate
offered by the bank is 10.75% on the existing loan transfer and an additional
processing fee of only 1,999/- applies.

1.6. TYPES OF PERSONAL LOANS

A personal loan is one that is borrowed from a bank, construction company or

institution or any other lender as a lump sum. Ideally, the best option would be to
consolidate all debts into one in order to reduce the total amount of monthly
payments.

 Secured Personal Loans

 Unsecured Personal Loans

 Quick Cash Personal Loans

 Military Personal Loans

 No Credit Personal Loans

 Second Chance Personal Loans

 Short Term Personal Loans

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  What is the procedure for approving a personal loan?

A simple set of documentation and a quick finance disbursement have made personal
loans the preferred loan option when a person is in dire need of money. However,
there is a quicker way to qualify for fast funding, without submitting additional
documents. It is known as a pre-approved loan.

A pre-approved personal loan requires little or no paperwork or paperwork with the

least processing time. Banks often offer it to existing customers who have clean
credit. An initial analysis of your financial situation and credibility is carried out to
verify the settlement history of the old instillments and repayment of existing loans.
So, if you have a proven track record, you are eligible for a pre-approved loan.

 Who is eligible for a pre-approved personal loan?

You should check with your bank or through your online account if a pre-approved
personal loan offer is available. Sometimes the bank calls you to advise you on this.
Typically, if you are a long time customer with an excellent existing balance,
substantial savings history,decent income, and payment history. You may be eligible
for a faster personal loan. If you are an HDFC Bank customer, you can log into your
Net Banking account and check your eligibility for a pre-approved offer.

 The important features of a pre-approved loan:

 Immediate processing

 Simple application practice

 Attractive interest rates

 Negligible or absent documents

 Flexibility for the use of funds

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 What are the benefits of a pre-approved personal loan offer?

 Instant funds : Once the bank specifies your eligibility amount and has proof
of your history, the approval time for a pre-approved personal loan is nominal
and the funds are disbursed quickly. A 10 second fund release is available for
your HDFC Bank pre-approved loan client account. However, for non-HDFC
Bank clients, funds are disbursed for a pre-approved loan in less than 4 hours

 Competitive interest rates : Pre-approved loans sometimes have a lower

interest rate. This is because the bank is confident in its repayment capacity
given its financial prudence and income stability. Being a selected customer,
the bank will offer you the most competitive interest rates on the pre-approval
of the personal loan.

 Flexibility of purpose : A pre-approved loan is impressive as it has no

barriers or limitations of use. You can use the funds for any personal need and
you will not be asked how you spend the money.

 Zero documentation: A pre-approved personal loan for an existing client

generally requires no documentation and is simple

 Online and paperless : When you have a personal loan pre-approval offer,
you can accept the loan online, without leaving your home or office. All you
need to do is contact your bank or a banker and request that the funds be
transferred to your account. Also you can log into your online bank account
and apply for the pre- approved loan there

 Flexible refund : Pre-approved personal loans allow you to choose the

repayment termi of the lows. You can choose a bolding company that
generates pocket EMI. HDFC Bank offers various holdings from 12 months to
60 months, with EMI starting at R2149 per lac for a flexible repayment.

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  Main factors to consider when applying for a pre-approved personal
loan:

 These loans can only be for a specific period, as they are an invitation offer to
apply.

 Always ask about prepayment fees and pre-close fees.

 Learn more about zero processing fees.

 Don't forget to compare the available features and interest rates

1.7. How to apply for a personal loan?

1) Step 1-Enquiry with a financier

The first step is to contact a lender. You need to contact as many lenders as possible
and get them to make loan offers. Then negotiate with them to get the best interest
rate. Check out the special offers. After all the banks have made their offers, select the
lender based on the information provided.

2) Step 2: Collect Documents

After determining the lender, the lender's direct sales agent will visit and collect
documents that support proof of income, proof of residency, and identity. You may
need to send copies of your T1 account statements, pay slips, bank statements, ration
card, passport, driver's license, and other relevant documents. These requirements
vary from one lender to another.

3) Step 3: Visit by the representative of the field investigation agency

After submitting the documents, a field investigator will visit the home to verify the
facts provided in the documents, such as place of residence, stay in the workplace, etc.
It is essential to be present during this visit, otherwise, the investigator could report
that the facts provided do not really coincide, forcing the credit institution to roject the
loan application

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4) Step 4: Loan approval

Once the lender is satisfied with the veracity of the documents provided, the loan is
approved. The lender then pays the amount by check or money order (DD),

1.8. DOCUMENTATION

Compared to other types of loans, personal loans require the production of the least
number of documents. The necessary documents required can be classified into three
identy documents, residence and income

 Proof of identity : A copy of your passport or driver's license, voter ID.

PAN cand, photo credit card, or photo employee ID card. Any of the photo
documents above are proof that you are the same person you profess to be

 Proof of residence: Copy of your passport, ration card or electoral card if you
reside in the same place that was included in the aforementioned documents. If
you reside as a tenant, in a place other than where you were issued your ration
card, passport or voting card, you can present your local bills (electricity or
telephone) as proof of residence.

 Proof of income : The employee income test is different from that of self-
employed worken. Employees must present their last pay check, form 16 from
the lust financial year and their bank statement from the last 6 months. The
self-employed must provide the IT returns for the past 2 years, the balance
sheet and the profit and loss account as proof of income

To the following documents are required together with the personal loan application:

 Proof of identity (copy of passport voter's ID card driver's license Aadhaar)

 Proof of address (copy of passport/voter's ID card/ driver's license/ Aadhaar)

 Account statement for the previous 3 months (Booklet for the previous 6
months

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  The most recent pay check/certificate of pay with the current date with the
most recent form 16

1.8.1 In Case of Salaried Employees:

 ID proof - Pan curd driving license/passport employee ldcard/voter ID

 Residence proof Electricity bill/ration card/telephone bill/water bill

 Latest Months Salary Slip with all deductions

 Form no.16 for income tax return

 Bank statement for the last six months

 One photo self-attested

1.8.2. In Case Self-employed:

 ID proof Pan card /driving license/employee I-cand voter ID passport

 Residence proof Electricity bill telephone bill/water bill ration card.

 Financial statement of the business profession along with copies of Individual

Tax Returns for the last three years certified by Chartered Accountant

 Income tax return OR computation not more than 2 years old.

 Bank Statement not more than 6 months old.

HDFC Bank Personal Loan Top-Up

With HDFC Bank Personal Loan Top-Up offer an extra can be added to your dreams.
Low- interest rates and nominal processing charges make the top-up loan preferable
over a personal loan. The documents required to apply for a top-up loan is also
minimal because the borrower already has a relationship with the bank.

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Features of HDFC Bank Personal Loan Top-Up:

 Easy and hassle-free documentation process as the borrower has an existing

relationship with HDFC Bank

 A borrower can avail a maximum Top Up Loan of Rs.50 lakhs.

 HDFC Bank Personal Loan Top-Up comes at attractive interest rates.

 Simple repayments through monthly installments.

 Wide range of branch network so, a borrower can avail services from
anywhere in India

ELIGIBILITY CRITERIA

The person eligible for a personal loan are a salaried individual, self-employed
individual (own business), or a self-employed professional (doctor, lawyer, etc.).
Other factors such as income, age, residence, work experience, repayment capacity,
past obligations and place of work are also taken into account.

Eligibility Salaried Self-employed/Business

Age 21 to 60 25 to 65

Minimum work experience 2 years also tenure should 5 years at least in current
be a minimum of 1 years business
with current employer

Monthly income/profit Rs 12,000 per month (net Rs 1 lakh per annum

income) minimum

CIBIL SCORE 750+ 750+

Loan amount 25 lakh 15 lakh

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Charges applicable before and after the personal loan

Very often we don't read the fine print on a loan document. The real cost of the
personal loan is visible only when many other fees charged are taken into account. If
you want to compare with other types of loans, it is necessary to take these costs into
account to arrive at the real cost. For example, the processing fee or prepayment fee
for a personal loan will be different from that for a real estate loan.

Below is a list of all the fees that are charged before the loan is disbursed or during
the life of the loan or when the loan is terminated:

1) Processing fee

2) Advance payment fee

3) Late payment charges (loans)

4) Check rebound charges

5) Duplicate Returns Charges

6) Documentation expenses

7) Taxes on services

1. Processing fee: The processing fee is the amount that banks charge to cover the
costs of processing the loan application. Processing fees vary from bank to bank.
Some banks ask you to pay the processing fee upfront even before the loan is
approved. This is often charged when the loan application is submitted along with
supporting documents. The processing fee is generally a percentage of the loan
amount and is between 1 and 2% for personal loans. Some banks charge a flat fee of
Rs 1000 or Rs 2000 upfront, then deduct the balance processing fee (if any) from the
loan amount before disbursement

2. Prepaid Rate: The prepayment fee is the penalty paid by the borrower for closing
the loan before the actual tem of office. Early repayment fees are charged as a
percentage of the outstanding principal of the loan amount. The prepayment fee varies

16
from bank to bank. It ranges from 2 to 5 percent of the outstanding loan amount, if the
repayment amount exceeds 25 percent of the outstanding loan amount

3. Late payment charges: When the monthly fee (EMI) for paying a loan is overdue,
the bank collects the fee along with the fees for the delay. The late fee is abso known
as a late fee or late fee. Late payment fees are set at the time of signing the loan
agreement. This is attributable if you make the payment after the due date. Late
payment fees range from 2 to 3 percent of the EMI

4. Check rebound charges: Bounced checks means that a check has been submitted
for settlement, but the amount written on the check exceeds the available balance in
the account. It is often known colloquially as a bad check. Companies often use the
term had check. If post-dated checks are issued to the bank to debit EMI from the
customer's account, you need to make sure there are sufficient funds in the account
each month. If a single check bounces, the bank charges Rs 250 to Rs 500 as a penalty

5. Charge for duplicate declarations: When the loan is approved, the lender
provides the customer with a statement detailing the payment schedule. In case of
loss, you can ask the bank to issue a duplicate bank statement. The statement shows
the loan balance and remaining EMI. Banks charge Rs 100-500 for issuing duplicate
bank statements.

6. Documentation fees: Banks impose documentation fees on the various documents

provided for the loan application. Many banks employ third party vendors to perform
document verification. The expense for this account is usually passed on to customers,
which ranges from Rs 500 or Rs 1000

7. Service tax: The service tax is a tax applied to service providers who have annual
revenues above 8 lakhs. Bank loans must fall within the scope of the service tax the
service tax is charged at the rate of 12.36%

HDFC bank personal loan interest rates

Interest rate: 10.75% to 22.70%

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Personal Loan Details-
 Loan Amount Rs 25 lakh (up to 15 lakh for self-employed)
 Processing Fee-2.5%
 Late Fee - 24% pa
 Loan Tenure- up to 60 months
 Pre closure Condition-pre closure can be made after the payment

Pre closure Charges-

 13-24 months 4% of the prepaid amount
 25-36 months 3% of the prepaid amount
 Greater than 36 months - 2% of prepaid amount

Why One Will Apply for HDFC Personal Loan?

 After 36 months you have to pay only 2% preclosure charges which is lower
12 EMIS than other banks.
 Zero Hidden Charges, Lowest Processing Foe, and Convenient Repayment
options.
 Minimal paperwork and documentation.

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Interest rate of charges
Fee
Interest Rate
Loan processing charges
Pre-payment in part or full
Pre-payment charges (on Principal Salaried 13-24 Months 4% of Principal
Outstanding)
Part Payment Charges
(on Part Payment amount)
No due certificate/no objection certificate
Duplicate of No Dues Certificate/NOC
Charges for late payment of EMI
floating rate
Stamp duty & other statutory charges
Cheque swapping charges
Loan cancellation charges
Cheque bounce charges
Amount to be paid
Salaried-10.75% to 22.70%
up to 2.30% of the loan amount subject to
minimum of Rs 2,999-&maximum of
Rs. 25,500 for salaried customers
Salaried no pre-payment in part or full
permitted until repayment of 12 EMI
Part payment allowed up to 25% of
principal outstanding it is allowed only
once in the financial year and twice
during the loan tenure
Outstanding.
25-36 Months 3% of Principal
Outstanding >36 Months- 2% of
Principal Outstanding
NILL
NILL
2% per month on EMI/Principal overdue
subject to the a minimum amount of Rs.
200/-
Not applicable
As per applicable laws of the state
Rs 500/-
NIL (However client would be charged
interest for the interim period between
date of loan disbursement and loan
cancellation and processing fees would be
retained)
Rs. 550/- per cheque bounce
19
Comparison of personal loan interest rates in India
Name Min interest Max interest Processing fee Pre- closure
rate rate charges
HDFC 10.75% 22.70% 2.5% 2.4%
SBI 11.85% 15.10% 2% 3%
ICCI 13.25% 19% 2.25% 5%
KOTAK 10.99% 24% 2.5% 5%
BANK
AXIS BANK 15.50% 17.99% 1.5-2% Nill
BANK OF 11.60% 16.6% 2% Nill
BORDH
BAJAJ 12.49% 16% 2.5% 4%
FINSERY
TATA 11.49% 19% 2% 4%
CAPITAL

1.9. LOAN PROCEDURE

HDFC bank adopts the following procedure for the loan:

1. Submit the application

2. Appraisal of loan

3. Documentation

4. Convene to loan applicant

5. Issue draft or pay order

1. Submit your application: - First of all the borrower of the loan has to apply to the
specific bank. The borrower is required to complete a joint application form, which

20
seeks comprehensive information on the origins of the holder and borrower and their
business network, as well as the cost of the project and economic consideration.

2.Loan valuation: - The bank has a good rating system for an effective loan and to
make repayment easy in the future. The main task of the lending bank is to ensure that
the income generated by the loan is sufficient to repay the mortgage payments
according to the terms and conditions of amortization. The risk inherent in the term
loan is much more than the risk in the short term loan because the loans are given to
new businesses, or for the modernization and expansion of existing businesses and for
the duration of the loan. The methods of analysis and the standard to be adopted for
the evaluation of the loan are more similar to the investment decision than to the
short-term loan. The valuation of the loan included the projection of future trends in
production, estimated sales of costs, yields and flow of funds. It is extremely difficult
to have a smart cut formula for term loan valuation as many factors such as the type
of debtor bank and its assets, market potential, management and financial position
must be considered. The loan amount and the repayment period. Another important
factor is whether to give weight to profitability or its broad economic importance in
the development of the economy

A term loan can be assessed by considering four different aspects of the proposal.
Technical feasibility, Economic feasibility, Managerial competence, Financial
feasibility

3. Documentation: - After completing the application phase and the loan evaluation
system. Then the loan applicant has to collect the document to borrow the loan, all the
documents and requirements are needed according to the cooperative bank rate. If the
loan applicant wishes to borrow a huge amount loan, then in a moment strong
documents are presented by the loan applicant against the bank as proof of
shareholders, original and photocopy of ownership documents, photocopy of the tax
return of the last three years, etc. If loan applicants have no shareholder
recommendation, the bank first becomes a shareholder of its bank by issuing shares to
them, then the above types of documents are used to borrow loans and advances from
the bank.

21
4. Convene to loan application:- After gathering the necessary documents, an
official of the beneficiary bank examines it to ascertain whether it is complete for
processing. When the application is considered complete. Then the cooperative bank
held the meeting of its loan applicant and sanctioned the loan in particular. Generally
this meeting is convened on Mondays and Thursdays of each week. Otherwise it
foresees it in other contingent situations and provides date, day and time to delay a
particular meeting.

5. To issue a draft or a payment order: -The last step is that, after the loan applicant
has been summoned and the loan sanctioned, the borrower must pay the stamp duty,
margin and one installment of the loan, then in the stamp document or stamp
procedure. Then the bank gives them a payment order or a bill of exchange. If the
loan borrowers want to buy machinery or vehicles from out of town, so it needs the
quote of that particular company, and finally the hank made a draft of the company
name otherwise if the town area quote at a time the cooperative bank did the payment
order of the company name. It gives them to the company through a loan applicant.

Rejection of the HDFC Bank personal loan

A personal loan is a versatile unsecured loan and can be rejected for a variety of
reasons. More personal loan refusals could increase your tough claims and ultimately
negatively impact your credit score. Extensive investigations indicate that you are
eager for more credit. and lenders can assume that you are a risky borrower. If your
recent personal loan application with HDFC Bank was rejected, you may want to find
out the reasons for the refusal. Read on to learn more about why your personal loan
application may be rejected.

22
Reasons for the decline in HDFC Bank personal loan

The reasons for refusing a personal loan can be determined in general terms in six
reasons, however these vary from one lender to another, each lender has its own
internal policy for determining creditworthiness and risk assessment

 Poor credit score

 Unstable work

 Insufficient income

 He works in a private company excluded from the list

 Don't fall within the age limit

 You live in a place where the defaults are high

 Criteria for Rejection of the HDFC Bank personal loan

Each bank has its own eligibility criteria for personal loan approval. Furthermore, the
reasons for HDFC Bank's decline in personal loans may vary according to the decline
criteria of other banks. The following could be the main reasons why HDFC Bank
personal loan could be rejected.

 Requirement Employment:

HDFC Bank offers personal loans exclusively to individuals, doctors, public

accountants, and employees of private companies, employees of public sector
companies, including central, state and local agencies. If you do not fall into this
category, it is very likely that your personal loan application will be rejected.
Sometimes you may be working for a private company and still have your personal
loan declined. This could happen if the company you work for were included in the
category of companies excluded by the bank

23
  Age criteria:

To be eligible for a personal loan application, you must be at least 21 years old
and no more than 60 years old. If you do not fall within this age range, your
HDFC Bank personal loan application will be rejected. The bank sets an age limit
because they want to make sure you can repay the loan without too much
difficulty.

 Insufficient income:

A stable source of income is proof to any lender that you are able to pay off your
personal loan. Each bank sets a minimum monthly or annual income requirement in
order to qualify for a personal loan. Similarly, HDFC Bank has established a
minimum net monthly income of INR 15,000, but the income limit is not the same in
all cities. People residing in metropolitan cities like Mumbai, Delhi, Bengaluru,
Chennai Hyderabad, Pune, Kolkata, Cochin, Ahmedabad must have a minimum
monthly income of INR 20,000. If you don't meet this minimum income requirement,
your HDFC Bank personal loan application may he rejected.

 Professional instability:

Frequent job changes give the lender the impression that you are not trustworthy for
the organization you work for. With this notion, it may be difficult to obtain a
personal loan, as it is an unsecured loan for which no collateral needs to be pledged
HDFC Bank expects its borrower to have a stable job for at least 2 years and, more
importantly, will be working for the current employer in the last year

 Poor credit score:

Credit score generate a credit score based on credit behaviour. A good score reflects
your responsibility in managing your finances. Lenders consider it an important
criterion for assessing the creditworthiness of borrowers. Having a low credit rating
will damage your eligibility for a personal loan. This could be one of the main reasons
why your HDFC Bank personal loan application may have been rejected

24
  Too many applications in a short time:

This is another criterion that could lead to the refusal of a personal loan. Too many
loan applications give the lender an indirect clue that you are credit hungry and could
become a risky candidate.

 HDFC bank personal loan refusal and its impact on credit score

The answer to this question depends on the level of processing your personal loan
application. The borrower generally applies for a personal loan after checking the If
all your eligibility criteria and submitting the document. In case of difficulty in
providing the relevant documents, the HDFC Bank personal loan may be refused.
Documents are verified, the lenders will check your credit score to assess your
creditworthiness. It's called a difficult investigation. In the worst case, if your credit
score is low and your personal loan is turned down, the harsh investigation will have
less impact on your credit score. Therefore, if you are faced with more difficult
demands, your credit score will surely suffer.

 HDFC Bank Personal Loan Verification Process

HDFC Bank's personal loan approval process is simple and much faster for HDFC
Bank's existing customers. They can apply online and get pre-approved personal loan
offers with attractive interest rates. The loan amount is directly credited to your
account immediately. The application process is different for other clients. The
borrower must apply for a personal loan online or directly download the application
form from the official website or visit the nearest HDFC Bank branch. They can also
call HDFC Bank customer service to continue the application process.

A representative of the HDFC Bank will collect the completed application form and
all documents necessary for verification. The bank will check the background of the
client's personal and professional information. If there is any discrepancy with the
information provided, HDFC Bank's personal loan application will likely be rejected.
After passing the document verification and eligibility criteria, the status of the
approval process moves to the final level. In the final stage, the interest rate and term
are set and submitted for recognition.

25
 CHAPTER 2

LITERATURE REVIEW

26
LITERATURE REVIEW

Inda Dens says, personal loan deals with the social, economic and psychological
mechanisms that increase the likelihood of repayment, including social sanctions, peer
monitoring and the mutual interdependence created by joint ability. Loan have also
received new interest in the aftermath of the mortgage crisis, with research addressing
such diverse topics as foreclosure, prepayment, predatory lending practices, risk-
ratings and misaligned by both borrowers and lenders. Beyond the obvious
differences in the parties involved in personal loans, personal loans also differ on a
number of other dimensions. With personal loans, in contrast to commercial loans,
there typically no written contract, interest is rarely paid or expected, and they are
almost never collateralized. Given the absence of a formal contract. and the lack of
collateral and intermediation, personal loans can be considered a kind of relational
contract. Personal loans rely heavily on good will and trust between the borrower and
lender. This reliance on trust has both tip-side and down-side potential.

A number of studies related to performance of co-operative banking sector in India

have been conducted. Here, an attempt is being made to provide an overview of
various aspects and issues of this study through the review of existing literature. Some
of the main studies selected for review have been discussed below.

Bhatia (1978), in his study titled, "Banking Structure and Performance - A Case
Study of the Indian Banking System" attempted to analyze the economic performance
of Indian banking system as reflected by its output, price and profitability during the
period 1950-68. He found that profit of the Indian banking system during the said
period had an upward trend. The study suggested deregulation of interest rates to
enhance the profitability of financial institutions and to ensure a competitive banking
environment which would ultimately result in better services

Kulkarni (1979), in his study titled, "Development Responsibility and Profitability of

Banks" stressed upon social responsibilities of banking sector. He was of the view
that looking for profit maximization only was not true profitability of banks as social
benefits arising out of bank operations cannot be ignored. He observed that while
fulfilling the social responsibility, banks should try to make the basic banking

27
business as successful as possible, reduce cost, improve banking system and increase
the overall profitability.

Markand (1979), in his book titled, "Social Priority Index of Public Sector Banks"
evaluated the performance of public sector banks. With the help of performance index
consisting six quantitative indicators such as branch expansion, priority sector credit,
24and wage cost, he concluded that the priority sector financing was essential, and
necessary. For better performance in this sector he suggested that lending power
should be delegated to the branch managers.

Kalyankar (1983) in his study titled. "Wilfull Default in Loans of Co-operatives"

examined the trends in deposits, share capital, working capital, loans outstanding,
advances, overdue and recoveries at the district level financing institutes. Socio
economic factors responsible in projecting and promoting future development in the
operations and approaches of the co-operative credit organizations were also
considered to examine the specific progress made by Central Co-operative Bank of
Parbhani District. The study revealed that the cropping intensity, irrigation facility
and working capital of the societies were the major factors for explaining overdue at
primary agricultural credit societies' level. The socio-economic factors were not
responsible for increasing overdue at the burrowers level, but overdue were mainly
mounted due to the non-economic factors in case of will defaulters.

Kurulkar (1983), in his published work on agricultural finance in backward region.

reported glaring defects in the set-up of co-operative credit systems. He pointed that
out of the ten sample owners who obtained long-term credit from the co-operative
banks, 30% could out secure short-term credit. Lack of short- term or production
credit to the farmers who availed long-term credit rested in lower output per acre.
thereby resulting in overdue

Reddy (1985), in his study titled, "Overdue Appraisal and Management in Banking
analysed the relationship between the lending and recovery of an apes bank. His
findings suggested that the lending and recovery of the apex bank had not 25been
proportionate, i.e., either the apex bank could not meet the entire credit needs of the
primary husks or the latter could not borrow the funds from the apex bank. The
primary banks were constituted by people a far co-operative services but for their
vested interests. With the help of Coefficient of Variation technique, he proved that

28
there was a wide dispersion in leading followed by recovery. He finally concluded
with the help of test that the association between lending and recovery was not
satisfactory.

Chopra (1987), in her book, studied operational efficiency of some selected public
sectors hunks. She found the lack of professionalism in banking industry and stressed
for the introduction of scientific management practices to enhance profits and
profitability of public sector banks. She recommended comprehensive management of
costs as well as earnings of the banks.

Devadas (1987), in his book titled, "Co-operative Banking and Economic

Development studied the rule of Assam Co-operative Apex Bank Ltd in economy of
the State. He found that apart from working as a commercial bank it had to discharge
three other functions, i.e., to finance primary credit societies, in act as banking center
for primary societies, and to undertake supervision of primary societies. He found that
bank had not been able to achieve much in these three fields due to lack of adequate
support from government of the state.

29
 CHAPTER 3
ORGANIZATIONAL PROFILE

30
ORGANIZATIONAL PROFILE

INTRODUCTION
3.1. Organizational Profile- (Internship Company)

Company Name Hexagon Service

Brand Hexafin Consultancy Pvt Ltd
Industry Financial Service
Established Date 19/04/2006
Office Address Office No. 101, Block3 Lloyds
Chambers,Mangalwar Peth Pune-411011
CEO Mr. Sanjeev Kokru
Official Pattern IIFL
Contact 8956528911
Website www.hexafin.com
Email Address Costmanagement@hexafin.com

Hexafin is India's leading financial service seller. We bring together a wide range of
financial institutions under one roof and have more than fifteen years of experience
and leverage our domain expertise to bring matchless value to our customers. We
understand customer needs intimately, providing a complete product range for our
clients and total commitment to service we are the largest retail distributor for several
financial institutions. We believe in ligature with partners who share our values and
spirit. Our partners are reputed players in the financial services industries who believe
in providing the most suitable products to our customers, we are partners with some

31
of the best known Indian & Foreign banks, as also with leading Non-Banking Finance
& Housing Finance Companies.

Hexafin Consultancy is one of the largest loan service providers on its online portal
which is located in Pune City. It provides its services pan India and have various
products for the customers which are business loan. Personal loan, credit card, car
loan, loan against property, etc through various Banks and NBFCs. Hexafin
consultancy have tie ups with 50+ Banks and NBFCs so as the customer do have
various options while receiving services through this digital platform. Deals of Loan
provides Banking Services in a digitalized way with minimum documentation and
with faster approvals to its customers.

Hexafin consultancy is engaged in B2B with Direct Service Agents(DSA) also known
as Partners and Provides Banking and all types of Loan services online. The company
is based in Pune, India and provides services in most of state in India such as
Maharashtra Haryana, Delhi, Bihar Odisha, Rajasthan and other. Hexafin Consultancy
specializes in loan comparison on quotes from various banks and private financing
organizations and provide customers loans, DSAS (Direct service Agents) are the
mediums between the platforms and the customers to who they are proving services
on the organization's behalf. DSA’s. Daily thousands of loan seekers visit the site and
apply for loans as per their requirements. In the organization I was engaged in Home
Loan Department and about the same I have studied Credit Appraisal System
regarding Personal Loan that what kind of customers are eligible for the Personal
Loan.

I have completed the Internship for a duration of two months from date 8th August
2023 to 8th October 2023,

I have performed various tasks in the organization:

o Dealing with DSAK

o Maintaining Relationships with DSAS.

o Guiding DSAs regarding Persona Loan.

o Loan file Processing

o Solving queries of the DSAs.

32
 o Providing, Home Loan information and solving queries.

The Internship had given me a lot of corporate world experience and insight of the
working class. It helped me in enhancing my communication skills as well as gain
ample amount of knowledge in the Loan Department.

 HISTORY

Hexafin Consultancy Private Limited is a Non-govt company, incorporated on 27

Aug, 2013. It's a private unlisted company and is classified as 'company limited by
shares.Company's authorized capital stands at Rs 5.0 lakhs and has 100.0% paid-up
capital which is Rs 5.0 lakhs. Hexafin Consultancy Private Limited last annual
general meet (AGM) happened on 30 Sep, 2017.

The company last updated its financials on 31 Mar, 2017 as per Ministry of Corporate
Affairs (MCA). Hexafin Consultancy Private Limited is majorly in null business from
last 10 years and currently, company operations are active. Current board members &
directors are SANJEEV KOKRU and MEERA KOKRU

Start-up: Hexafin Consultancy Pvt Ltd

Founders: SANJEEV KOKRU and MEERA KOKRU

Year it was founded: 2006

Where it is based: Pune

Sector: Financial service

The problem it solves: The platform allows users to get loans online India's lending
market is on the growth track. A recent report from the Boston Consulting Group
(BCG) predicts the entire market will become a $1 trillion opportunity in the next five
years, with a greater part of that opportunity existing in Tier II and Tier III cities in
India.

Sanjeev kokru realized this in 2006, when he was heading operations for financial
house Hexagon Service in Pune, which dealt with gold, business and commercial
vehicle loans. Prior to this, he worked with the NSE- and BSE-listed debt financing
institution Capital First.

33
 PRODUCT PROFILE

 Secured Loan-

o Home Loan
o Loan Against Property
o Auto Loan
o Machine Loan
o Gold loan

 Unsecured Loan-

o Bussiness Loan
o Personal Loan
o Professional loan

 ACHIEVEMENTS
175000+ 50+
Partners Partner Banks

1000cr+ 1000+
Disbursement Location Covered

• Hexafin Consultancy Pvt Ltd had over more than 175000 partners all over
India who use to provide financialand banking services to their customers.
• Hexafin Consultancy Pvt Ltd is partnered with more than 50 Financial
Institutions which includes Banks as well as NBFCs.
• More than amount of 1000 crores disbursement.
• Hexafin Consultancy work on PAN India level and more than 1000 locations
had been covered by it.

34
3.2Company Profile – ( HDFC BANK)

Housing Development Finance Corporation Limited (HDFC) is an Indian financial

services company headquartered in Mumbai, India. It is one of the leading home
finance providers in India. It is also present in banking, life and general insurance,
wealth management, venture capital, real estate, education, deposits and educational
loans. HDFC Bank Limited is an Indian banking and financial services company
headquartered in Mumbai, Maharashtra. It has a permanent employee base of 104,154
as of June 30, 2019. HDFC Bank is the largest private sector bank in India by activity.
It is the largest bank in India by market capitalization as of March 20

HDFC Bank was one of the first to receive "in principle" approval from the Reserve
Bank of India (RBI) to establish a private sector bank from Housing Development
Finance Corporation Limited (HDFC), in 1994 during the period of liberalization, of
the banking sector in India. HDFC India was incorporated in August 1994 under the
name "HDFC Bank Limited". HDFC India began operating as a scheduled
commercial bank in January 1995

HDFC India offers a variety of products such as personal loans, home loans, standard
life insurance, mutual funds. securities, credit cards etc , HDFC has branches in major
cities of India such as Calcutta, Chennai, Delhi, Bangalore, Hyderabad, Ahmedabad,
in addition to HDFC Mumbai.

35
  History Of the HDFC Bank –
HDFC BANK LTD was incorporated in August 1994 in the name of "HDFC Bank
Limited", with its registered office in Mumbai, India. HDFC Bank began operating as
a scheduled commercial bank in January 1995. If there was ever a man on a mission,
he was. Hasmukh Bhai Parekh, founder and president emeritus of the HDFC group.
HDFC BANK LTD was one of the first to establish a bank in the private sector. The
bank was incorporated on August 30, 1994 under the name of "HDFC Bank Limited"
with its registered office in Mumbai. 11 began operating as a scheduled commercial
bunk on January 16, 1995. The bank has grown steadily and is now a major player in
the industry HDFC is India's leading domestic finance firm and has an impeccable
track record in India and international markets. Since its inception in 1977, the
Corporation has maintained steady and healthy growth in its operations to remain the
leader in the mortgage market. Its outstanding loan portfolio covers more than one
million housing units HDFC has developed significant retail mortgage lending
experience for different market segments and also has a large corporate customer base
for its home-related credit lines. With its experience in the financial markets, a strong
reputation in the market, a large shareholder base and a unique consumer franchise.
HDFC was ideally placed to promote a bunk in the Indian environment in a history
transaction in the Indian banking sector. Times Bank merged with HDFC Bank Ltd.
effective February 26, 2000,
HDFC Bank Lid is one of the leading hunks in India. Headquartered in Mumbai
HDFC Bank is a nest generation private sector bank offering a wide range of banking
services covering commercial and investment banking on the wholesale side und
banking/branch operations on the retail side. As of 30 September 2017, the bank's
distribution work consisted of 4,729 branches and 12,259 ATMs in 2,669 cities and
Towns, HDFC Bank also has an overseas wholesale banking branch which makes
Bahrain a branch in Hong Kong and two representative offices in the United Arab
Emines and Kenya. The Bank has two subsidiaries, namely HDFC Securities Lid and
HDB Financial Services Ltd. The Bank has three main business segments, namely,
wholesale banking and treasury business. The retail banking segment serves retail
clients through a network of branches and other distribution channels
The segment offers loans, non-financial services and transaction services to public

36
sector business units, government agencies, financial institutions and midsize
companies. The treasury segment includes net interest income from the Bank's
investment portfolio, All Visa/MasterCard Visa Electron Maestro Plus Cirrus and
American Express Credit Charge cardholders can access the Bank's ATM network
The Bank's shares are listed on the Bombay Limited Stock Exchange and Indu
National Stock Exchange Lal. The Bank's American Depositary Shares (ADS) are
listed on the New York Stock Exchange (NYSE) and the Global Certificates of
Deposit (GDR) of the Bank. Bank on the Luxembourg Stock Exchange HDFC Bank
Ltd was formed on August 30, 1994 by Housing Development Finance Corporation
Ltd. In 1994, Housing Development Finance Corporation Lid was one of the first to
receive in principle approval from the Reserve Bank of the United States, establish a
private sector bank as part of the RBI's liberalization of the Indian banking sector,
HDFC Bank began operating as a registered commercial bunk in January 1995.
Ramon House Church gate branch opened on January 16, 1995 as the bank's first
branch. In March 1995, HDFC Bank launched an initial public offering (IPO) of Rs
50 million (holding shares of Rs 5 million to Rs 10 each at par, resulting in a record
55 times the number of subscriptions in excess HDFC Bank was listed on the Bombay
Stock Exchange on May 19, 1995. The bank was listed on the National Stock
Exchange on November N 1995. In 1996, the Bank was designated as a clearing bank
by the NSCCL Real investment advisory services were launched in 1997,

LOGO AND TAGLINE OF HDFC BANK

LOGO-

TAGLINE- We understand your world

 Mission & Vision of HDFC Bank-

MISSION

1. World Class Indian Bank

2.Benchmarking against international standards.
3.To build sound customer franchises across distinct businesses

37
4. Best practices in terms of product offering, technology, service levels, risk
management and audit & compliance.

VISION

The HDFC Bank is committed to maintain the highest level of ethical standards,
professional integrity and regulatory compliance. HDFC Bank's business philosophy
is based on four core values such as
1.Operational excellence.
2.Customer Focus
3.Product leadership
4.People
The objective of the HDFC Bank is to provide its target market customers a full range
of financial products and banking services, giving the customer a one-step window for
all his/her requirements. The HDFC Bank plus and the investment advisory services
programs have been designed keeping in mind needs of customers who seeks distant
financial solutions, information and advice on various investment avenues.

 Achievements and awards-

HDFC BANK began operations in 1995 with a simple mission to be a word class
Indian bank we realize that only a Sigle minded focus on product quality and service
excellence would help us get there today we are proud to say that we are well on our
way towards that goal.
It is extremely gratifying that our efforts towards providing customer convenience
have been appreciated both nationally and internationally

• QIMPRO Awards 2019-QIMPRO Platinum Standard Awards 2019 - National

Statesman for Quality in Business
• The economic time. No Slowdown in Demand During Early Festive Season •
QIMPRO Awards 2019 Will use tax breaks to grow, pass ou benefits, says Puri The
Economic Times.
• Brand Top 75 Most Valuable Indian Brands - HDFC Hank - India's Mon Valuable

38
Brand for 6th year in a 2019 row 1.
• Instructional Investor All- Asia (Ex-Japan) Executive Company List Team 2019
survey-Among The Most Honored company list
• Euromoney Awards for Excellence 2019-India's Best Bank
• Governance now BDSE awards 2019 digital bank, tec trendsetter
•The banker bank of the year awards2018 bank of the year India
•The banker global private banking award2018-best private bank in India
• Forbes world best bank report no -1 bank in India

 Products and Services –

A. Account & deposits
B. Loans
C. Investments & Insurance
D. Payments Services
E. Cards
F. Access your Banks
G. Forex Services
H. NRI Banking Services
I. Wholesale Banking Services

 SWOT Analysis of HDFC Bank –

STRENTH
 Right strategy for the right products.
 Superior customer service vs. competitions
 Great Brand Image
 Products have required accreditations
 High degree of customer satisfaction.
 Good place to work
 Lower response time with efficient and effective service.

WEAKNESSES

39
 Some gaps in range for certain sectors.
 Customer service staff need training.
 Processes and system etc.
 Management cover insufficient.
 Sectorial growth is constrained by how unemployment levels and competition
for staff

OPPORTUNITIES

 Profit margins will be good.

 Could extend to overseas broadly
 New specialist applications
 Could seek better-customer deals.
 Fast-track career development opportunities on an industry-wide Hunks
 An applied research centre to create opportunities for developing techniques to
provide added-value services.

THREATS

 Legislation could impact.

 Great risk involved.
 Very high competition prevailing in the industry.
 Vulnerable to reactive.
 Attack by major competitors.
 Lack of infrastructure in rural areas could constrain investment.

40
 CHAPTER 4
RESEARCH METHODOLOGY

41
4.1 IMPORTANCE OF THE STUDY

 To know the general criteria to be fulfilled to be eligible for a personal loan

 To find the difference between different Policies for personal loan of a Bank
 To know the difference between the target customers in case of business loan
of a Bank and an NBFC
 To compare the creditworthiness between the customers of Banks and NBFCS
 To see the formalities and procedures of Banks from cheking the documents of
the customer to granting that particular file.

4.2 Objectives of the study:

1. To study the credit policies of financial institutions.

2. To study the credit appraisal and risk rating.

3. To access the viability of the project and minimization of the credit risk.

4. To study the documents required for loan sanctioning procedure.

5. To study about personal loan disbursement by HDFC Bank.

6. To Gain insights into the credit risk management activities of HDFC bank.

4.3 Scope of the study:

A lender typically compares your loan amount, income, EMIs, repayment capacity,
and your overall expenses in order to determine if you are eligible or not to get a
personal loan or any other loan. Generally, hanks take a look at certain ratios in order
to check your loan eligibility

42
4.4 Types of Research Design

 Financial Analysis

The study of financial statements of the business by considering the amount of loan
given by the financial institutions.

The range of amount of business loan offered by a Bank and an NBFC.

 Business Analysis or Company Analysis

This includes analysis of industry type, market position of the company, operating
efficiency of the company and legal position of the company.

 Economic Analysis

It reviews the study of the firm's financial, market-related, environmental and

organizational issues. Its objectives include future prediction, recognition and
clarification of business, and establishing relations between different aspects.

4.5 Data Required

 The policies and procedures of a Bank and an NBFC.

 Criteria for the same.

 Credit policies from the official websites.

 Background Information the Host Company.

 Material from the Host Company about the work performed

4.6 Sources of Data:

Primary data and secondary data were collected for present study:

43
1. Primary Data: The information collected in the primary data is based on personal
interview, questionnaire and follow up method.

2. Secondary Data: Secondary data are data, which has been collected and compiled
in advance for another needed purpose. Secondary data is an important method to
know the present problem faced by the account holders in the field of HDFC Bank.
Newspapers, articles , books, magazines etc.

4.7 Method use for deciding the sampling plan:

The researcher used random sampling method to collect data.

4.8 Sampling Plan:

The sample size constituted of 85 respondents in family, friends, HDFC customer,

different types bank customers, seniors and Pune City area.

4.9 Data collection instrument:

The type of instrument used for data collection for surveying was Questionnaire.

4.10 Rating Scale:

Likes scale was used in the questionnaire.

4.11 Data processing and analysis plan:

The data was processed and analyzed with the help of percentages using excel sheet.

44
CHAPTER 5
CASE STUDY

45
 Case study-1

Personal loan of HDFC bank (customer)

Name: Rohit Shivaji Patil

Date of birth: 27-07-1990

Gender: Male

Marital status: Unmarried

Existing Relationship: Yes

Residential Address: Aradhya apartment Room No 5 near Axis bank ATM Ravet
411044

Name Of Employer: Technohertz Pune

Address of Employer: Techno City behind HDFC Bank Baner,Pune 411045

Number of year sine employment: 3year

Mobile No:8454807330

Residence type: Rented

Live in the city of residence for: Since2016

Live in the current residence for: 2year

Monthly EMI: 5595

Number of EMI paid: 22

Current loan rate: 14%

You Want to lean of Rs: 2,68,000

46
Banking Relationship details

Login documents provided:

No documents required for pre-approved personal loan(PAPL)

After the file logged in properly it went to contact point verification For telephone
then it is Initiated as tell calling ok

Additional documents required:

ITR copy of 2006, to see in come from business & profession in case is under self-
employed For Business continuity the 2006 copy demanded.

After it went to credit then physical verification was initiated.

VR done at office, met this Taff, prime location prop conformed, setup activities.

Then CIBIL report checked CIBIL reports Crediting Information bureau India
Limited report.

After found target loans reflect in CIBIL with clear track. It will go to eligibility, and
then it will process for disbursement.

Disbursement Documents required:

 Agreement

 New application form (No correction over writing)

 Applicants photograph

 Post-dated cheque 60 cheque

 If ECS then 9 cheques required For security purposes

 ECS done by the bank only which submitted in primary level

 If the cheque given by current account,Then sole proprietor declaration is

required

47
Applicant loan Eligibility: 5,00,000

Applicant sanction Loan: 2,68,000

Rate of interest (ROI): 14%

Tenure: 60months

Loan type: Pre-Approved personal loan(PAPL)

EMI Rs: 5595

Loan processing fees: 2680

Advance EMI: 0

Case Study-2

Name: Nikhil Shinde

Date of Birth: 25-07-1975

Gender: Male

Martial status: Married

Existing Relationship: NO

Residential Address: Pino 22, Punanand Soc. Sadashiv Peth, Pune: 411030

Name of Buisness Entity: Sanchi Silk

Business Address: Laxmi Road, Pune 411012

Proprietor Name: Siddharth Dixit

No of years in Business: 12 yrs

Telephone No: 24216545

Mobile No: 9560542165

Residence Type: Self

48
Live in the city of Residence for: since Birth

Live in the current residence for: 10 yrs

Detail of Spouse: Name: Yogini

Occupation: House Wife

Number of Dependant: 2

Surrogate Lean 1: HDFC Bank

Type of Loan: Auto Loan (SECURED LOAN)

Monthly EMI: 22550

No of EMI Paid: 15

Current Loan Rate: 20%

You want a loan of Rs: 5,00,000

Banking Relationship Detail

Login Documents Provided:

1) Application Form

2) Pan Card

3) MSEB Bill Xerox

4) Renewal Shop Act

5) Telephone Bill Xerox Of Sanchi Silk

6) EMI reflected banking only, Bank Ale Statement, Current A/e from Janata sah
Bank

7) Welcome Letter

8) Repayment Schedule

9) 2 References who knows the applicant their telephone

10) Photograph

49
Customer attestation is compulsory on each document: Sign behind the
Photograph is must

STEP 2

After the file logd in properly it went to Contact Point Verification for Telephone
Verification Then it is initiated as Telicalling Ok

Additional Document Required:

ITR Copy of 2002, to see Income from Business & Profession the case is under self
employed. For business continuity the 2002 copy demanded.
After it went to credit Then Physical verification was initiated.
VR done at Residence, Resi Owned, Prime Location, Met Wife
VR done at Office, Met the Staff. Prime Location prop conformed, set up activity
seen
Then CIBIL Report Checked, CIBIL. repon is Credi Information Burma India
Limited Report.
CIBIL: All information Contained in this credit report has been collated by Credit
Information Bureau India Limited based on information provided by its various
members Consequently CIBIL disclaims any and all responsibility on the accuracy,
completeness, and veracity of any and all such information provided. The information
is current and up to date to such extent as provided by its members. Any information
contained herein does not reflect the views of CIBIL. or its directors or employees
The use of this report is governed by the terms and conditions of rules for CIBIL and
its members. CIBIL report gives details about All MNCS Loans & Credit Cards
History

After found Target Loans reflect in CHBIL with Clear track. It will go to Eligibility,
and then it will process for Disbursement.

50
Disbursement Documents Requires
A. Agreement
B. New Application Form (NO Correction,
Overwriting)
C. Applicants Photograph D. Post Dated Cheque 60 cheque
E. If its ECS then 9 cheques required for security
F. ECS done by the Bank only which submitted in primary Level
G. If the Cheque given by current are then Sole Proprietor Declaration is require

Applicant Loan Eligibility: 20,00,000

Applicant Sanction Lean: 5.06,000
Rack Intrest Rate: 19%
Processing Fee: 2%
Tenure: 60 Months
Program Surrogate Self Employed Auto Loan
EMERS:11, 133.00
Advance EMI 0

51
 CHAPTER 6
DATA ANALYSIS AND INTERPERTION

52
DATA ANALYSIS AND INTREPRETION

1) TABLE SHOWING DISTRIBUTION OF AGE

AGE GROUP PERCENTAGE COUNT
20-30 82.35% 70
30-40 14.12% 12
40-Above 3.35% 3
Total 100% 85

ANALYSIS -
The above table shows that-

82.35% of the respondents fall under the age group of 20 - 30 years,

14.12% of the respondents fall under age group of 30 - 40 years and

3.35% of the respondents belonging to age group of 40 and above years.

Age Group

3%

14%

20-30
30-40
40-above

82%

INFERENCE -Hence it clearly shows that he majority of the respondents fall under
the age group of 20-30 years i.e. 82.35%

53
 2) TABLE SHOWING DISTRIBUTION OF GENDER
GENDER PERCENTAGE COUNT
Female 56.47% 48
Male 43.53% 37
Total 100% 85

ANALYSIS-
The table shows that there are 43.53% of male respondents

Gender

Female
44% Male

56%

INFERENCE-
Thus the table clearly shows that the majority of the respondents are female i.e.
56.47%.

54
3) TABLE SHOWING DISTRIBUTION OF MONTHLY SALARY
Monthly salary Percentage Count
Less than Rs 15000 50.59% 43
Rs 15000-Rs 30000 35.29% 30
More than Rs 30000 14.12% 12
Total 100% 85

Sales

14.12%

Less than Rs 15000

Rs 15000-Rs 30000
More than Rs 30000
50.59%

35.29%

INFERENCE -
The table clearly shows that the majority of the respondents have more than Rs
15,000 of monthly net take home salary that is 50.59%.

55
 4) Service of bank you like most?
Service Percentage Count
Traditional 7.06% 6
Modern 32.94% 28
Both 58.82% 50
None of them 1.18% 1
Total 100% 85

Service
1.18%

7.06%

Traditional
Modern
Both
32.94% None of them

58.82%

INFERENCE -
The table clearly shows that the majority of the respondents have both like service of
like most 59% people is like of traditional modern both

56
 5) Types of interest you prefer on the loan
Types of interest Percentage Count
Fixed rate 67.06% 57
Flexible rate 32.94% 28
Total 100% 85

Types of interest

32.94%
Fixed rate
Flexible rate

67.06%

INFERENCE -
The table clearly shows that the majority of the respondents have fixed rate of interest
you prefer on the loan 67.06%

57
 6) Types of customer you are?
Types of customer Percentage Count
Industrist 10.59% 9
Salarid person 61.18% 52
Shopkeeper 14.12% 12
Farmer 1.18% 1
Other 12.94% 11
Total 100% 85

Types of customer

1.18% 12.94% 10.59%

Industrist
Salarid person
Shopkeeper
14.12% Farmer
Other

61.18%

INFERENCE -
The table clearly shows that the majority of the respondents Salaried person of
customer 61.18%

58
 7) Rate the services of HDFC bank on scale of 5?
Rate of service Percentage Count
Outstanding 16.47% 14
Very good 44.71% 38
Good 17.65% 15
Average 17.65% 15
Poor 2.35% 2
Other 1.18% 1
Total 100% 85

Rate of service
2.35% 1.18%

16.47% Outstanding
17.65% Very good
Good
Average
Poor
Other
17.65%

44.71%

INFERENCE -
The table clearly shows that the majority of the respondents Very good Rate of the
services of HDFC bank on scale of 44.71%

59
 8) How important are the benefits & facilities provided by HDFC bank for
personal loan?
Option Percentage Count
Very important 50.59% 43
Somewhat important 45.88% 39
Not so important 2.35% 2
Not at all important 1.18% 1
Other 0% 0
Total 100% 85

Option
2.35% 1.18%

Very important
Somewhat important
Not so important
Not at all important
50.59% Other
45.88%

INFERENCE -

The table clearly shows that the majority of the respondents Very important 50.59%
important are the benefits & facilities provided by HDFC bank for personal loan

60
 9) how important are the bank interest rates according to you?
Option Percentage Count
Very important 65.88% 56
Somewhat important 30.59% 26
Not so important 3.53% 3
Not at all important 0% 0
Total 100% 85

Option
3.53%

Very important
Somewhat important
30.59% Not so important
Not at all important

65.88%

INFERENCE -
The table clearly shows that the majority of the respondents Very important 65.88%
important are the bank interest rates

61
 10) how important is the easy monthly instillment to you?
Option Percentage Count
Very important 65.88% 56
Somewhat important 29.41% 25
Not so important 4.71% 4
Not at all important 0% 0
Total 100% 85

Option
4.71%

Very important
Somewhat important
29.41% Not so important
Not at all important

65.88%

INFERENCE -
The table clearly shows that the majority of the respondents Very important 65.88%
important is the easy monthly installment

62
11) How will you rate the HDFC bank in maintaining good customer
relationship?
Options Percentage Count
Good 64.4% 43
Average 27.1% 39
Poor 7.1% 2
No idea 1.2% 1
Total 100% 85

Sales
1.20%

7.10%

Good
Average
Poor
27.10%
No idea

64.40%

INFERENCE -
The table clearly shows that the majority of the respondents rate the HDFC bank in
maintaining good customer relationship GOOD 64.4%

63
CHAPTER 7
FINDING

64
INTRODUCTION
From the above data, we have concluded that there are certain things which affect the
loan process such as net home salary of individual, amount of interest, amount of
EMI, popularity of institution and also which institution they are applying in for
personal loan. We have taken four different institution of loan such as HDFC, Money
view, Indusind and IIFL. We have also studied which loan popular among customers.

FINDINGS

1. The majority of the HDFC bank's customers are satisfied, but a minority of
customers are still looking for improvements.

2. HDFC Bank has strong customer relationships. Whether it is customer service

or after-sales service, HDFC Bank provides excellent service to its customers

3. Disbursement ratio of Indusind is higher than IIFL and HDFC

4. There is a mixed response to the processing fees and time. More customers
would prefer that the processing and fees be changed.

5. In comparison to HDFC Bank, most banks charge high monthly installments

for loan repayment.

6. Very few customers are satisfied from Money View Financial Institution from
its services.

7. Majority are satisfied from the interest rate Money View is providing.

8. IIFL has strong built up in form of reputation and approvals.

9. Indusind has fair amount of approvals for personal loan.

10. Indusind allows large amount of loan easily.

11. Amount of EMI plays very important role in loan processing.

12. HDFC is most popular loan among customers while comparing with Indusind

13. HDFC personal loan is preferred by customers due to its reputation.

65
14. Money view loan is preferred by customer because of its reputation mostly
and approvals are more money view.

15. Indusind personal loan is preferred mostly because of its service mainly and
reputation.

16. IIFL personal has good feedback because of which customer prefers it most.

17. Amount of disbursement is high in HDFC

18. Disbursement in Money view is more than others.

19. All bank and financial institutions demand different kinds of consumer
profiles.

20. As a result, we should make it easier for customers to obtain personal loans
and offer a variety of other banking schemes to personal loan customers.

66
 Chapter 8
CONCLUSION

67
Conclusion:

The whole study is to conduct through survey of the customers in Pune city.
Customers are satisfied with HDFC loan Process but few of them are looking for
improvement in Processing time. HDFC bank tans good and healthy relationship with
customers and also with Exuberant System. Customer are looking for more approvals
in Indusind, Money View and IIFL financial institutions. Now a days Personal Loan
have a high demand in Loan market. Amount of EMI is very high with respect to
other Banks. Sometimes Bank charges High rate of interest rate around 13% and
sometimes even more.

HDFC have to give some scheme and offer to their existing customer. The criteria
should be changed now because HDFC give Personal loan only for salaried person
who are having Net salary of Rs 25000. Indusind bank offer loan to cutomers having
net salary of more than 25000. Money view and IIFL approves loan having net salary
of more than 15000.

The study shows that HDFC Personal loan has product portfolio for satisfying
different consumer needs in Profitable manner but, the bank provide the benefits like
SMS alert and other features so as to make the personal loans more attractive.

The personal loan segment can be extended to the NRI segment; this would provide
the bank a cutting edge and larger share of the personal loan market. The bank can
contemplate on decentralizing the operations however taking into consideration the
experience and expertise of the members at Loan Department enters.

IIFL and Indusind has highest amount of approvals when profile of customer is
according to criteria. Criteria is most important for customers for approval of loan.
Credit card approval is for customers who have high amount of salary and has high
CIBIL score.

68
 Chapter 9
SUGGESTION

69
Suggestions:

1. The processing time, which is now 10 days, must be reduced to 9 days, so that
more and more people can apply for the urgent loan for unforeseen disasters.

2. Schedule periodic promotional activities such as sheds, company visits, etc. to

know more and more people about the loan possibilities based on their salary,
or "Personal loan".

3. More amount of scheme is provided at the current salary with HDFC Bank
with different characteristics

4. Adequate and general instructions on the product with the latest changes and
performance characteristics for the executive.

5. The liberalization of interest rates for each client based on his salary and
company profile.

6. The loan financing process should be simpler so that the customer can
understand the product according to their needs.

7. There should be more executives, especially in the large and crowded

branches in the main part of the city.

8. There should be special plans for employees of small businesses in the sector,
as well as a new package of offers and discounts for people with a high
network.

70
 Chapter 10
KEY LEARNING

71
LEARNING THROUGH THE INTERNSHIP:

 Learnt about the working of the company.

 Learnt about how to work in the corporate.

 Learnt how organization culture is important.

 Gained first hand knowledge experience

 Learnt to work under pressure and to achieve targets at time.

 Learnt how to solve a problem.

LEARNING THROUGH THE PROJECT:

 Learnt about personal loan's process of various financial institutions.

 Learnt about how different financial institutions rejection and approval

criteria.

 In depth study of how customer responds about their experience from loan
process

 Learnt about loan process of the organization.

 Learnt about rejection of loan process.

 Learnt about ratio of disbursement chances of loan.

72
 Chapter 11
BIBLIOGRAPHY

73
BIBLIOGRAPHY

REFERENCES:
1) Newspaper

2) Web references

3) Articles

4) Company website

5) Journals

WEB-REFERENCES:

1) Learn about Personal Loan Instant Disbursal - Piramal Finance

2) Top 5 Benefits of Personal Loan, Advantages of Personal Loan (moneyview.in)

3) Apply for Instant Personal Loan Online - Indusind Bank

4) Apply for Instant Personal Loan Online Upto 5 Lakhs - Moneyview

5) What is Direct selling agents (DSA), and How it works? (lendingkart.com)

74
Chapter 12

ANNEXURE

75
Questionnaire

1. Age
 20-30
 30-40
 40 <Above

2. Gender
 Male
 Female

3. Net Salary Level

 <Rs. 15,000
 Rs.15.000-Rs 30,000
 >Rs.30,000

4. which service of bank you like most ?

 Traditional
 Modern
 Both
 Non of them

5.what types of interest you prefer on the loan?

 Fixed rate
 Flexible rate

76
6. what types of customer you are?
 Industrialist
 Salaried person
 Shopkeeper
 Farmer

7.Rate the services of HDFC bank on scale of 5 ?

 Outstanding
 Very good
 Good
 Average
 Poor

8. How important are the benefit & facilities provided by HDFC bank for personal lo
 Very important
 Somewhat important
 Not so important
 Not at all important

9.How important are the bank interest rates according to you?

 Very important
 Somewhat important
 Not so important
 Not at all important

10. How important is the easy monthly instillment to you?

 Very important

77
  Somewhat important
 Not so important
 Not at all important

11. How will you rate the HDFC bank in maintaining good customers relationship?
 Good
 Average
 Poor

78