A COMPARATIVE ANALYSIS ON THE TYPES OF

RETAIL LOANS OFFERED BY BANKS AND TO

JUDGE THE CUSTOMER PREFERENCE FOR
THE SAME

Submitted in partial fulfillment of the requirements for

Master of Business Administration (MBA)

By
VIVEK KUMAR GAUR
CLASS OF 2009

ARMY INSTITUTE OF MANAGEMENT & TECHNOLOGY,

PLOT NO M-l, POCKET P-5, GREATER NOIDA-201306 (UP)

July 2010

1
 Acknowledgement
“For any successful work, it owes its thanks to many”

Summer training is one of the most vital and active part of the curriculum of management
students. I did the work as a management trainee at AXIS Bank.

Hard work, knowledge, dedication & positive attitude all are necessary to do any task
successfully but one ingredient which is also very important than others and at times more
important than others is cooperation & guidance of experts and experienced person.

Firstly I would like to extend my heartfelt gratitude to Mr._________________________ the

Branch Manager, for his guidance throughout the project. Without his support and cooperation I
would have failed in my endeavours and targets in the summer training.

I emphatically express the regards and gratitude towards my speculative guide Mr.
__________________________________________________________________For his expert
and invaluable guidance, constant encouragement, and constructive criticism to accomplish such
laborious and exhaustive work timely and perfectly.

I avail the opportunity to

thanks_______________________________________________________who helped to ease
my burden of works and extended their helping hands during my training.

I would also like to thank all the Staff of Axis Bank, lajpat nagar,N.delhi for their invaluable
suggestion and cooperation to complete my project successfully.

2
 Certificate of Originality

I ______________________________________________Roll No_______________
Class of 2009, a fulltime bonafide student of first year of Master of Business Administration
(MBA) Programme of Army Institute of Management & Technology, Greater Noida.

I hereby certify that this project work carried out by me

at_____________________________________________________________________
and| the report submitted in partial fulfillment of the requirements of the programme is an
original work of mine under the guidance of the industry mentor
_____________________________________________________________ and faculty
mentor______________________________________ , and is not based or reproduced from any
existing work of any other person or on any earlier work undertaken at any other time or for any
other purpose, and has not been submitted anywhere else at any time.

(Student's Signature)

Date:
(Faculty Mentor's Signature)

Date:

3
Certificate from industry mentor

4
 EXECUTIVE SUMMARY

INTRODUCTION
I have done my training from Axis Bank, lajpat nagar, New Delhi Branch. I
learned there working and functioning of the bank. This training is surely going to
help me a lot in future. My study is mainly focused on retail loans and after my
training; I am more clear about retails loans.
Axis bank is one of the fastest growing banks in India and has extremely
competitive and profitable banking franchise. Axis bank is the first new generation
private sector bank to be established in India under the overall reform programme
initiated by Government of India in 1991.Axis bank started its operation from
1994.
Earlier it was known as UTI bank, which in the year 2004 transformed into Axis
bank.

5
 CONTENTS
S.NO TOPIC PAGE
Chapter 1 introduction to banking industry in india 13
1.1 Overview 14-17
1.2 Nationalize banks in india 18-19
1.3 Private banks in india 19-20
Chapter 2 Axis bank 21
2.1 About axis bank 22-28
2.2 Profile 29-35
Chapter 3 Loans 36-37
3.1 Types of loan 38-41
Chapter 4 Retail loans 42-43
4.1 Home loan 44-50
4.2 Personal loan 51-55
4.3 Educational loan 56-59
Chapter 5 Comparison of loans 60
5.1 Comparison of home loans 61
5.2 Comparison of personal loans 62
5.3 Comparison of educational loans 63
Chapter 6 Customer survey 64
6.1 Occupation of respondent 65
6.2 Types of loan 66
6.3 Distribution on the basis of sex 67
6.4 Distribution on the basis of age 68
Chapter 7 Limitations and recommendations 69
7.1 Limitations 70
7.2 Recommendations 71

8. Glossary 72-75
9. References 76

6
VI. OBJECTIVE OF THE STUDY

The objective of the study is divided into two parts:-

 Primary objective and
 Secondary objective

Primary objective:- the main objective of the study is to find out the interest
rates, tenure, percentage of funding, eligibility to apply for loans etc.

7
 Secondary objective:- the secondary objective of the study is to find out the
extent to which customer expectations match axis bank performance in retail
loan services.
This was done to help axis bank to recognize their faults in customer dealing.
As in this world customer satisfaction is more important than huge profits, so
customer satisfaction survey will help it in finding out its position.

VII. SOME COMMON TERMS USED IN THE STUDY :-

1.Rate of interest :- fixed rate of interest as the name suggests, is the rate that remain fixed
throughout the tenure of the loan. The rate doesn’t normally changes, till the full repayment of
the loan. Floating rate is the rate is the rate which moves upwards or downwards depending
upon the market forces.

2.Processing fees: - a processing fees is stamp charges. It is charged on the loan amount, when
the loan amount is sanctioned. It starts from 0.5% and Goes till 5%.

8
3.Penality:- it is also known as pre-closure charges. If the repayment of loan is done before the
tenure, then penalty charges are changed from the customer of the outstand loan.

4.tenure:-tenure is the duration/time for which loan is taken.

5.funding:- funding means max. percentage of loan to fund to the customer. Generally a small
amount of margin is kept with the bank, rest is given to the customer.

6. Net interest income:-  (NII) is the difference between revenues generated by interest-bearing
assets and the cost of servicing (interest-burdened) liabilities. For banks, the assets typically
include commercial and personal loans, mortgages, construction loans and investment securities.
The liabilities consist primarily of customers' deposits. NII is the difference between (a) interest
payments the bank receives on loans outstanding and (b) interest payments the bank makes to
customers on their deposits.

NII = (interest payments on assets) − (interest payments on liabilities)

7. Net profit:- In simplistic terms, net profit is the money left over after paying all the expenses
of an endeavor. In practice this can get very complex in large organizations or endeavors.

Net profit= Gross profit - Pre-tax profit

8.Market capitalization:- Market capitalization/capitalisation (often market cap) is a

measurement of size of a business enterprise (corporation) equal to the share price times the
number of shares outstanding of a public company. As owning stock represents ownership of the
company, including all its equity, capitalization could represent the public opinion of a
company's net worth and is a determining factor in stock valuation. Likewise, the capitalization
of stock markets or economic regions may be compared to other economic indicators. 

9
9.Assets:- In financial accounting, assets are economic resources. Anything tangible or
intangible that is capable of being owned or controlled to produce value and that is held to have
positive economic value is considered an asset. Simplistically stated, assets represent ownership
of value that can be converted into cash (although cash itself is also considered an asset).

10.charges for the late payment of EMI :- If the borrower doesn’t pay the EMI at its due
date,then he/she will charged with fines. This generally according to the time for which the
payment is delayed.

CHAPTER 1

10
 INTRODUCTION OF BANKING
INDUSTRY IN INDIA

BANKING IN INDIA

1.1 Overview

Banking in India originated in the first decade of 18th century. The first banks were The General
Bank of India, which started in 1786, and Bank of Hindustan, both of which are now defunct.
The oldest bank in existence in India is the State Bank of India, which originated in the "The
Bank of Bengal" in Calcutta in June 1806. This was one of the three presidency banks, the other

11
 two being the Bank of Bombay and the Bank of Madras. The presidency banks were established
under charters from the British East India Company. They merged in 1925 to form the Imperial
Bank of India, which, upon India's independence, became the State Bank of India. For many
years the Presidency banks acted as quasi-central banks, as did their successors. The Reserve
Bank of India formally took on the responsibility of regulating the Indian banking sector from
1935. After India's independence in 1947, the Reserve Bank was nationalized and given broader
powers.

RESERVE BANK OF INDIA

Central Bank and supreme monetary authority

Scheduled Banks Non Scheduled Banks

Cooperative Commercial

Urban Cooperatives State Cooperatives Public Sector Private Sector Foreign Banks

Other Nationalized Banks

SBI & AssociatesRegional Rural Banks

Early History

The first fully Indian owned bank was the Allahabad Bank, established in 1865. However, at the
end of late-18th century, there were hardly any banks in India in the modern sense of the term.
The American Civil War stopped the supply of cotton to Lancashire from the Confederate States.
Promoters opened banks to finance trading in Indian cotton. With large exposure to speculative

12
ventures, most of the banks opened in India during that period failed. The depositors lost money
and lost interest in keeping deposits with banks. Subsequently, banking in India remained the
exclusive domain of Europeans for next several decades until the beginning of the 20th century.
Foreign banks too started to arrive, particularly in Calcutta, in the 1860s. The
Comptoire d'Escompte de Paris opened a branch in Calcutta in 1860, and another in Bombay in
1862; branches in Madras and Pondichery, then a French colony, followed. Calcutta was the
most active trading port in India, mainly due to the trade of the British Empire, and so became a
banking centre.

The Bank of Bengal, which later became the State Bank of India.

Around the turn of the 20th Century, the Indian economy was passing through a relative period
of stability. Around five decades had elapsed since the Indian Mutiny, and the social, industrial
and other infrastructure had improved. Indians had established small banks, most of which
served particular ethnic and religious communities.

The presidency banks dominated banking in India. There were also some exchange banks and a
number of Indian joint stock banks. All these banks operated in different segments of the
economy. The exchange banks, mostly owned by Europeans, concentrated on financing foreign
trade. Indian joint stock banks were generally under capitalized and lacked the experience and
maturity to compete with the presidency and exchange banks. This segmentation let Lord Curzon
to observe, "In respect of banking it seems we are behind the times. We are like some old
fashioned sailing ship, divided by solid wooden bulkheads into separate and cumbersome
compartments."

By the 1900s, the market expanded with the establishment of banks such as Punjab National
Bank, in 1895 in Lahore and Bank of India, in 1906, in Mumbai - both of which were founded
under private ownership. Punjab National Bank is the first Swadeshi Bank founded by the
leaders like Lala Lajpat Rai, Sardar Dyal Singh Majithia. The Swadeshi movement in particular
inspired local businessmen and political figures to found banks of and for the Indian community.

13
A number of banks established then have survived to the present such as Bank of India,
Corporation Bank, Indian Bank, Bank of Baroda, Canara Bank and Central Bank of India.

1.2 Nationalized banks in India

Banking System in India is dominated by nationalized banks. The nationalization of banks in

India took place in 1969 by Mrs. Indira Gandhi the then prime minister. The major objective
behind nationalization was to spread banking infrastructure in rural areas and make available
cheap finance to Indian farmers. Fourteen banks were nationalized in 1969. Before 1969, State
Bank of India (SBI) was the only public sector bank in India. SBI was nationalized in 1955 under
the SBI Act of 1955. The second phase of nationalization of Indian banks took place in the year
1980. Seven more banks were nationalized with deposits over 200 crores.

List of Public Sector Banks in India is as follows

➢ Allahabad Bank ➢ State Bank of India (SBI)

➢ State Bank of Indore ➢ State Bank of Mysore
➢ State Bank of Patiala ➢ State Bank of Saurashtra
➢ State Bank of Travancore ➢ Syndicate Bank
➢ UCO Bank ➢ Union Bank of India
➢ United Bank of India s ➢ Vijaya Bank
➢ Andhra Bank ➢ Bank of Baroda
➢ Bank of India ➢ Bank of Maharashtra
➢ Canara Bank ➢ Central Bank of India
➢ Corporation Bank ➢ Dena Bank

14
➢ Indian Bank ➢ Indian Overseas Bank
➢ Oriental Bank of Commerce ➢ Punjab and Sind Bank
➢ Punjab National Bank ➢ State Bank of Bikaner & Jaipur
➢ State Bank of Hyderabad

1.3 Private Banks in India

All the banks in India were earlier private banks. They were founded in the pre-independence era
to cater to the banking needs of the people. But after nationalization of banks in 1969 public
sector banks came to occupy dominant role in the banking structure. Private sector banking in
India received a fillip in 1994 when Reserve Bank of India encouraged setting up of private
banks as part of its policy of liberalization of the Indian Banking Industry. Housing Development
Finance Corporation Limited (HDFC) was amongst the first to receive an 'in principle' approval
from the Reserve Bank of India (RBI) to set up a bank in the private sector.
Private Banks have played a major role in the development of Indian banking industry. They
have made banking more efficient and customer friendly. In the process they have jolted public
sector banks out of complacency and forced them to become more competitive.

List of Private Sector Banks in India is as follows

 Bank of Rajasthan ➢Bharat Overseas Bank

 Axis Bank ➢Catholic Syrian Bank
 Centurion Bank of Punjab ➢Dhanalakshmi Bank
 Federal Bank ➢HDFC Bank
 ICICI Bank ➢IDBI Bank
 IndusInd Bank ➢ING Vysya Bank
 Jammu & Kashmir Bank ➢Karnataka Bank
 Karur Vysya Bank ➢Kotak Mahindra Bank
 SBI Commercial and International Bank ➢South Indian Bank
United Western Bank ➢ YES Bank

15
 CHAPTER 2

COMPANY PROFILE
AXIS BANK

16
 COMPANY PROFILE

2.1 ABOUT AXIS BANK

 Start on 1994

17
  On July 2007 UTI Bank rebrand as Axis Bank

2.1.1 Promoters

 Unit Trust Of India (UTI)

 Life Insurance Corporation (LIC)
 General Insurance Corporation (GIC)
 National Insurance Company Limited
 New India Assurance Company Limited
 The Oriented Insurance Company Limited
 United India Insurance Company Limited

2.1.2 Capitalization

 407.44 crore

Public Holding (other than promoters and GDRs) = 54.51%

2.1.3 Registered Office

 Ahmadabad

Central Office

 Mumbai

2.1.4 DISTRIBUTION

18
  Total Branches

More than 1042 branches (including 56 Service Branches/CPCs as on 30th June 2010).

 ATM

Over 4474 ATMs (as on 30th June 2010) providing 24 hrs a day banking convenience to its
customers.

2.1.5 Bank Strengths

The Bank has strengths in both retail and corporate banking and is committed to adopting the
best industry practices internationally in order to achieve excellence.

2.1.6 MANAGEMENT (KEY PEOPLE)

NAME KEY POSITION

Dr. Adarsh Kishore Chairman
Smt. Shikha Sharma M.D. & CEO
Shri M. M. Agrawal Deputy Managing Director
Shri J.R. Varma Director
Dr. R.H. Patil Director
Smt. Rama Bijapurkar Director

19
 Shri R.B.L. Vaish Director
Shri M.V. Subbiah Director
Shri K. N. Prithviraj Director
Shri V. R. Kaundinya Director
Shri S. B. Mathur Director
Shri M. S. Sundara Rajan Director

2.1.7 FINANCIAL STATEMENT OF AXIS BANK

Balance Sheet of Axis Bank ------------------- in Rs. Cr. -------------------
Mar '06 Mar '07 Mar '08 Mar '09 Mar '10

12 mths 12 mths 12 mths 12 mths 12 mths

Capital and Liabilities:

Total Share Capital 278.69 281.63 357.71 359.01 405.17
Equity Share Capital 278.69 281.63 357.71 359.01 405.17
Share Application Money 13.44 0.00 2.19 1.21 0.17
Preference Share Capital 0.00 0.00 0.00 0.00 0.00
Reserves 2,593.50 3,120.58 8,410.79 9,854.58 15,639.27
Revaluation Reserves 0.00 0.00 0.00 0.00 0.00
Net Worth 2,885.63 3,402.21 8,770.69 10,214.80 16,044.61
Deposits 40,113.53 58,785.60 87,626.22 117,374.11 141,300.22
Borrowings 2,680.93 5,195.60 5,624.04 10,185.48 17,169.55
Total Debt 42,794.46 63,981.20 93,250.26 127,559.59 158,469.77
Other Liabilities & Provisions 4,051.03 5,873.80 7,556.90 9,947.67 6,133.46
Total Liabilities 49,731.12 73,257.21 109,577.85 147,722.06 180,647.84
Mar '06 Mar '07 Mar '08 Mar '09 Mar '10

12 mths 12 mths 12 mths 12 mths 12 mths

Assets
Cash & Balances with RBI 2,429.40 4,661.03 7,305.66 9,419.21 9,473.88
Balance with Banks, Money at Call 1,212.45 2,257.27 5,198.58 5,597.69 5,732.56
Advances 22,314.23 36,876.48 59,661.14 81,556.77 104,343.12
Investments 21,527.35 26,897.16 33,705.10 46,330.35 55,974.82
Gross Block 898.68 1,098.93 1,384.70 1,741.86 2,107.98
Accumulated Depreciation 345.33 450.55 590.33 726.45 942.79
Net Block 553.35 648.38 794.37 1,015.41 1,165.19
Capital Work In Progress 14.37 24.82 128.48 57.48 57.24

20
Other Assets 1,679.98 1,892.07 2,784.51 3,745.15 3,901.06
Total Assets 49,731.13 73,257.21 109,577.84 147,722.06 180,647.87

Contingent Liabilities 36,524.72 55,993.04 78,028.44 104,428.39 296,125.58

Bills for collection 8,518.42 11,751.83 16,569.95 29,906.04 35,756.32
Book Value (Rs) 103.06 120.80 245.13 284.50 395.99

2.1.8 FINANCIAL PERFORMANCE IN Q1 YEAR

21
Auditors

M/s. S. R. Batliboi & Co. Auditors Chartered Accountants

Registrar and Share Transfer Agent

M/s. Karvy Computershare Private Limited

1.2. Profile

Axis Bank is one of the fastest growing banks in the country and has an extremely competitive
and profitable banking franchise evidenced by:
Comprehensive portfolio of banking services includes Corporate Credit, Retail Banking,
Business Banking, Capital Markets, Treasury and International Banking.

22
2.2.1 VISION 2015

 To be the preferred financial solutions provider excelling in customer

delivery through insight.
 empowered employees and smart use of technology.

2.2.2 Core Values

 Customer Centricity
 Ethics
 Transparency
 Teamwork
 Ownership

2.2.3 Mission and Values

 Customer Service and Product Innovation tuned to diverse needs of individual and corporate
clientele.
 Continuous technology up gradation while maintaining human values.
 Progressive globalization and achieving international standards.
 Efficiency and effectiveness built on ethical practices.
 Customer Satisfaction through providing quality service effectively and efficiently.
 "Smile, it enhances your face value" is a service quality stressed on Periodic Customer
Service Audits.

23
  Maximization of Stakeholder value.
 Success through Teamwork, Integrity and People.

2.2.4 COMPETITORS

Major Private Sector competitors:

 HDFC
 ICICI
Major Public Sector competitors:

 SBI
 PNB

Axis bank HDFC bank ICICI bank SBI PNB

1994 Aug,1994 1955 July,1955 Lahore,1895 Founded

Dr. Adarsh Jagdish Capoor Mr.K.V. Mr.O.P.BHATT Mr.K.R.kamath Chairmen

Kishore kamath
$19.0 million $ 941.25 $ 1.4 billion 85909.36 crore Rs. 7326 Operating
million income
Crore
RS 742 crore $ 646.01 $ 1.03 billion $2.473 billion Rs. 3905 Net profit
million
Crore
1,47,479 1,67,404 2,02,017 Approx. 300,000 2,49,330 deposites
Rs180,647.87 Approx. $41.23 $ 100.10  $323.043 billion Rs 2,96,633 Total assets
billion billion  crore

Competition of axis bank with other private banks

24
 Last Price Market Cap. Net Interest Net Profit Total Assets
(Rs. cr.) Income
ICICI Bank 912.85 101,768.65 25,706.93 4,024.98 363,399.71
HDFC Bank 2,038.60 93,712.55 16,172.91 2,948.69 183,270.78
Axis Bank 1,389.95 56,632.47 11,638.02 2,514.53 180,647.87
Kotak Mahindra 769.75 26,833.05 3,255.62 561.11 37,436.31
Yes Bank 301.85 10,293.69 2,369.71 477.74 36,382.50
IndusInd Bank 212.05 8,703.69 2,706.99 350.31 35,369.52
Federal Bank 355.05 6,069.38 3,673.23 464.55 38,850.88
ING Vysya Bank 349.05 4,190.24 2,232.90 242.22 33,880.24
JK Bank 795.50 3,856.41 3,056.88 512.38 37,693.26
Karur Vysya 602.60 3,280.29 1,757.94 336.03 21,993.49

2.2.5 COMPARISON OF AXIS BANK WITH HDFC BANK AND ICICI BANK ON THE
BASIS OF MARKET CAP,NET INTEREST INCOME,NET PROFIT AND TOTAL
ASSETS

25
400,000.00

350,000.00

300,000.00

250,000.00

ICICI
200,000.00
HDFC
Axis bank

150,000.00

100,000.00

50,000.00

0.00
market cap N.I.I. net profit total assets

CHAPTER 3

26
 LOAN

3. LOAN

A loan is a type of debt. Like all debt instruments, a loan entails the redistribution of financial
assets over time, between the lender and the borrower.

In a loan, the borrower initially receives or borrows an amount of money, called the principal,
from the lender, and is obligated to pay back or repay an equal amount of money to the lender at
a later time. Typically, the money is paid back in regular installments, or partial repayments; in
an annuity, each installment is the same amount. The loan is generally provided at a cost,

27
referred to as interest on the debt, which provides an incentive for the lender to engage in the
loan. In a legal loan, each of these obligations and restrictions is enforced by contract, which can
also place the borrower under additional restrictions known as loan covenants. Although this
article focuses on monetary loans, in practice any material object might be lent.

Acting as a provider of loans is one of the principal tasks for financial institutions. For other
institutions, issuing of debt contracts such as bonds is a typical source of funding.

3.1 TYPES OF LOAN

1.3. Secured loan

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

A subsidized loan is a loan that will not gain interest before you begin to pay it. It is known to be
used at multiple colleges.

A unsubsidized loan is a loan that gains interest the day of disbursement.

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

In some instances, a loan taken out to purchase a new or used car may be secured by the car, in
much the same way as a mortgage is secured by housing. The duration of the loan period is
considerably shorter — often corresponding to the useful life of the car. There are two types of
auto loans, direct and indirect. A direct auto loan is where a bank gives the loan directly to a

28
consumer. An indirect auto loan is where a car dealership acts as an intermediary between the
bank or financial institution and the consumer.

A type of loan especially used in limited partnership agreements is the recourse note.

A stock hedge loan is a special type of securities lending whereby the stock of a borrower is
hedged by the lender against loss, using options or other hedging strategies to reduce lender risk.

A pre-settlement loan is a non-recourse debt, this is when a monetary loan is given based on the
merit and awardable amount in a lawsuit case. Only certain types of lawsuit cases are eligible for
a pre-settlement loan. This is considered a secured non-recourse debt due to the fact that if the
case reaches a verdict in favor of the defendant the loan is forgiven.

2.Unsecured

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

 credit card debt

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

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

3.Demand loan

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

29
4.Personal or commercial loan

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

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

Generally there are two type of lending:-

1. Retail loans
2. Business loan

CHAPTER 4

30
 RETAIL LOANS

2.Types of retail loans provided by axis bank:-

1. Home loan
2. Personal loan
3. Educational loan
4. Car loan
5. Loan against share
6. Loan against property
7. Loan against security
8. Consumer loan

31
 1. Home loan

4.1.1 Features of Power Home Loan

 Attractive interest rates
 Balance Transfer facility
 Doorstep service
 Nil Prepayment charges

Self Employed
Criteria Salaried Individual Professionals
Individuals

2 (3 if current employment
Min. work exp (Years) 3
<1 year)

Min net income (Rs.) 15000pm 1.50 lacs pa

>24 ~ <= than

Min ~ Max age (Years) superannuation at loan >24 ~ <= 65 at loan termination
termination

Min ~ Max Tenor

Maximum 240 Maximum 240 Maximum 240
(Months)

32
 Maximum LTV 80%

Clubbing of Income Allowed for spouse only

Pre payment penalty NIL

Processing fee 1% of loan amt + 10.30% Service Tax as applicable

Other Products / Variants

Takeover of existing
HL from other
Allowed
financier (Balance
Transfer)

Refinance Option Allowed for properties purchased in last 6 months

4.1.2 Documents required for Home Loan:

Proof of Identity, Signature & Age:

 Passport
 Voter's Card
 Driving License
 PAN card

33
 Photograph

Proof of Residence:

 Ration Card
 Passport
 Latest Electricity Bill
 Latest Telephone Bill
 Latest Credit Card Bill.

Proof of Income:

 Latest 3 salary slip showing all deductions

 IT Returns
 Computation of income
 Balance Sheet and P/L A/c for the last 2 years certified by a C.A.

Bank Statement:

 Last 6 months where salary/income is credited

Proof of Qualification:

 Degree / Diploma - proof of professional qualification

4.1.3 Interest Rate

Sr. No Type Loan amount (Rs.) Rate Of Interest (p.a.)

1 Floating Up to 30 Lacs 8.75%

34
 Above 30 Lacs 9.25%
2 Fixed Irrespective of the loan amount 14.00%

scheme Proce Prepayme No due Solvency Charges for Charges for

ssing nt certificate certificate Late Payment changing
charg charges of EMI from fixed to
es floating rates
of interest

Power 1% + Nil Na Na Rs 500 + taxes per Min. Rs.

Servi
Home cheque bounce and a 5000 or
ce tax
as penal interest @24% 1% of the
applic
per annum i.e. @ 2% outstand-
able
per month on the ing
overdue installment/s amount
which-
ever is
higher

Charges for changing from floating to fixed rates of interest:-

Min. Rs. 5000 or 1% of the outstanding amount whichever is higher

Switching Cost: Switching from the Floating rate scheme to the Fixed rate scheme and vice
versa is permissible. If a fixed rate customer wants to reschedule the loan to a lower interest rate,
the same is also permissible.

35
4.1.4 Terms and Conditions
 Repayment
 Repayment period for home loans shall not exceed 25 years.
 Repayment period of pre-allotment bookings of housing loans shall not exceed 1½ year
 Repayment period of improvement or renovation or extension of existing property shall
not exceed 10 years.
 Security
 Equitable mortgage of the property to be financed by way of deposit of title deeds.
 Disbursement
 The loan will be disbursed in full or in suitable installments, taking into account the
requirement of funds and progress of construction, as assessed by the Bank directly to
seller or builder or local development authority or supplier of materials etc.
 Processing charges or admission fee
 Processing fee equivalent to 1% of the loan amount (applied for) will be collected along
with the application form (taxes as applicable).
 Penalty for early closure
 Nil.

Other Conditions
 Bank reserves the right to reject any application without assigning reasons thereof
 The applicant will undertake to inform the Bank as and when there is a change in address
or employment
 The terms and conditions mentioned above and elsewhere under the scheme are subject
to modification from time to time solely at Bank's discretion.

4.2 Personal Loan

4.2.1

Criteria Salaried Individual Normal

36
 Interest rate as per category As per category grid

1 year of cumulative experience for both salaried

Min. work exp (years) individual/professional.

Min net income (Rs. p.m.) 15,000

Min ~ Max age > 21 & < superannuation at loan termination

1.25- Rs 10 lacs (1.25 lacs loan is only available for

Min ~ Max loan amt (Rs.) customers having salary power relationship)

12 ~ 60 months (For CAT C and D employees maximum

Min ~ Max Tenor (months)
tenor is 48 months)

Security/Collateral/Guarantor Optional

Cat A & B - Last 3 months

Banking relationships
Cat C & D - Last 6 months

Phone landline / mobile / WLL mandatory

Processing fee 2% of loan amt

Max loan =(Net monthly income - obligations) x

Eligibility calculation Multiplier. Multiplier varies from 5 to 13 depending
upon tenure.

Residence Present residence => 6 months

37
 Salaried Individual Prof (MBA, Engineer, Architect, CA,
Criteria
CS, ICWA)

Interest rate as per category As per category grid

Min. work exp (years) 2

Min net income (Rs. p.m.) 15,000

Min ~ Max age > 21 & < superannuation at loan termination

1.25 - 20 lakhs (1.25 lakh loan is only available for

Min ~ Max loan amt (Rs.)
customers having salary power relationship)

Min ~ Max Tenor (months) 12 ~ 60

Security/Collateral/Guarantor Optional

Cat A & B - Last 3 months

Banking relationships
Cat C & D - Last 6 months

Phone landline / mobile / WLL mandatory

Processing fee 2% of loan amt

Max loan =(Net monthly income - obligations) x

Eligibility calculation Multiplier. Multiplier varies from 5 to 15 depending upon
tenure.

38
 Residence Present residence => 6 months

Degree / Diploma - proof of professional qualification

Criteria Salaried Doctors

Doctor in Cat B/C/D at a min of MBBS/BDS/ MS/MD =

Interest rate as per category
Cat B rate

Min. work exp (years) 3

Min net income (Rs. p.m.) 15,000 (gross)

Min ~ Max age >24 and <65 at loan termination

1.25 – 20 lakhs (1.25 lakh loan is only available for

Min ~ Max loan amt (Rs.)
customers having salary power relationship)

Min ~ Max Tenor (months) 12 ~ 60

Security/Collateral/Guarantor Optional

Banking relationships Last 6 months

Phone landline / mobile / WLL mandatory

Processing fee 2% of loan amt+service tax as applicable

Max loan = (Gross monthly salary - obligations) x

Eligibility calculation Multiplier. Multiplier varies from 5 to 15 depending upon
tenure.

39
 Residence Present residence => 6 months

Degree, Registration with respective state medical

Proof of Qualification councils Or Dentists Association.

4.2.2 Documentation:

Documents Required

Passport/ Voter's Card/ Driving License/ PAN card &

Proof of Identity, Signature & Age
Photograph.

Latest bill of landline/ mobile/ WLL stating name of

Proof of Telephone Bill
borrower or address of borrower.

Ration Card/ Passport/ Latest Electricity Bill/ Latest

Proof of Residence
Telephone Bill/ Latest Credit Card Bill.

Latest salary slip showing all deductions and Last 2 years

Proof of Income
Form 16 along with current dated salary certificate

Bank Statement / Pass Book where

Cat A & B - Last 3 months, Cat C & D - Last 6 months
salary is Credited

40
4.2.3 Interest Rate Grid:

Interest Rate Grid

Personal Loans ROI (only Fixed)

Salaried - Cat A 14~15.00%

Salaried - Cat B 17.00%

Salaried - Cat C 19.00%

Salaried - Cat D 21.00%

4.3. EDUCATION LOAN

Axis Bank's Study Power aims to provide financial support to deserving students for pursuing
higher professional or technical education in India and abroad. The loan would be provided to
students who have obtained admission to career-oriented courses eg, medicine, engineering,
management etc., either at the graduate or post-graduate level.

4.3.1 Quantum of loan:

The quantum of finance under the scheme is capped at Rs.10 lacs for studies in India and RS 20
Lacs for studies abroad, which cover tuition fees, hostel charges (if any), cost of books, etc. The
minimum amount of loan would be RS 50000.

41
4.3.2 Margin

No margin for loans upto Rs 4 lacs. For loans above Rs 4 lacs, 5% margin for studies within
India and 15% for higher studies overseas.

4.3.3 Rate of interest

Interest rates linked to PLR.

4.3.4 Role of the Guardian

The parent(s) or guardian of the student would be treated as a co-applicant of the loan. His or her
role would be, necessarily, like the primary debtor.

4.3.5 Security

Third party guarantee and/or collateral security may be asked for in appropriate cases.

Additional Security

Assignment of LIC Policy in favour of the Bank for the sum assured being at least 100% of the
loan amount. The policy is kept alive during the currency of the loan. To ensure this, the annual
premium may be include in the computation of the loan requirement, along with the tuition fees
and other recurring charges. Further, the future income of the student needs to be assigned in
favour of the Bank for meeting the instalment obligations.

4.3.6Disbursement
The loan will be disbursed in full or in suitable instalments taking into account the requirement
of funds and/or fee schedule as assessed by the Bank directly to the educational institution or
vendor of books or equipment or instruments.

42
 Penalty for early closure
Nil

4.3.7 Interest Rates & Charges

rate of processing Payment No due Solvency Charges for Charges Charges

interest fees charges certificate certificate late for for
payment of changing changing
EMI from from
fixed to floating to
floating fixed
rates of rates of
interest interest
13.75% - Nil Nil Na Na Rs 500 + Na Na
15.75% taxes per
*Repaya cheque
ble in bounce and
maximu a penal
m 7 years interest
from the @24% per
commenc annum i.e.
ement of @ 2% per
instalmen month on
t. the overdue
installment/
s

43
CHAPTER 5

44
 COMPARISON OF LOANS

5.1 COMPARISON OF HOME LOANS

Name Type Loan Interest rates EMI Processing

eligibility(in Rs. fees

45
 lacs)
ICICI BANK floating 18-26 8.25%* 19,405 0.5% of loan
amount
HDFC BANK fixed 13-19 14.25% 26,972 0.5-1% of loan
amt.
SBI BANK fixed 20-28.8 8%* 19,113 0.5% of loan
amt.
AXIS BANK fixed 13-19 14% 26,635 1% of loan
amt.
PNB BANK fixed 17-24 9.25% 20,724 0.5% of loan
amt.

5.2 COMPARISON OF PERSONAL LOAN

BANK NAME TYPE LOAN INTEREST EMI (rs. ) PROCESSING

ELIGIBILITY(rs.) RATE(%) FEES
ICICI BANK floating 4.15-5.53 14-18 3,418-3,615 2% of loan amt.
HDFC BANK Floating 3.93-5.24 15.5-22 3,491-3,819 2.5% Of loan amt.
SBI BANK Floating 4.39-5.85 14 3,418 2-3% of loan amt.
46
AXIS BANK fixed 3.98-5.31 14-21 3,418-3,768 2% of loan amt.
PNB BANK fixed 50,000-4.0* 11-15* 1.8% of the loan
amount + Service Tax
& Education Cess

5.3 COMPARISON OF EDUCATIONAL LOANS

BANK INTEREST INTEREST MAX. MAX. MARG- PROCESSI

NAME TYPE RATE LOAN REPAYMEN-T IN NG FEES
AMT. TENURE
(yrs)
ICICI floating 11.25 -13% 10,00,000 7 5% 1% of loan
BANK amt.
HDFC Fixed 12-14% 10,00,000 7 5% 1% of loan
BANK amt.
SBI BANK floating 12.75% 10,00,000 7 5% NIL

47
AXIS fixed 13.75-15.75% 10,00,000 7 5% NIL
BANK

PNB BANK floating 11.25% 10,00,000 7 5% NIL

CHAPTER 6

48
 CUSTOMER SURVEY

CUSTOMER SATISFACTION SURVEY

In the study, random sample only existing customers of the Axis Bank. The
customers studied under this survey were mostly walk-in customers proper care
was taken to approach those customers who could easily fill up the questionnaire
and fill up the questionnaire and were rational in their response. But there could be
some errors in the analysis which could have crept into due to lazy respondents,
human errors and other factors.
Sampling procedure - convenience sampling.

49
 Sample size - 50
Sample extent - bulandshahr (u.p.)

6.1.Occupation of respondents

occupation wise break-up

salaried
self-employed
retire
others

 In the survey, we found that majority of people who have taken loan are salaried
person, followed by self-employed and then retire persons.

6.2.Types of loan

tyes of loan
home loan
personal loan
educational loan
other loans

 On the basis of survey we found that home loan is most popular,followed by

educational loan and personal loans.

6.3. DISTRIBUTION OF CUSTOMER ON THE BASIS OF SEX

50
 sex

male
female

 male customer prefer more loan as compare to female customers.

6.4.AGE- WISE DISTRIBUTION

age
below 25
25-35
above 35

51
VII. RESEARCH METHODOLOGY

52
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ti
3
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method.
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,-
The purpose of methodology is to describe the research procedure and the data collection

The study is mostly descriptive in nature. Both secondary as well as the primary data has been

used for the research. The primary data is collected through questionnaire, interviews and

personal visit to the banks. The total sample size used for the collection of the primary data was

50. The sample unit were the customers who visited the bank during the study duration.

53
The secondary information was gathered from the files, documents, records and sources of the

company. Basically the data was drawn from the Internet and secondary sources that are

available in research.

The different tools used in the study are charts, graphs, and tables.

54
 CHAPTER 7

FINDINGS,LIMITATION
AND
RECOMMENDATIONS

55
7.1 LIMITATIONS

While working on a project following limitations and constraints were found.

As the study was done within branch of axis bank didn’t cover the broad spectrum of customers.
Lack of expertise being a trainee in analyzing data .The sample size is limited due to constraint
of time.
Some respondents were not cooperative and lazy enough, they didn’t respond to the
questionnaire very well.
Some respondents gave biased information so as to promote their bank in which they are dealing
and have account.
Some customers are lazy enough or they don’t have to fill the questionnaire , so i have to
manually fill some forms on the basis of their response.

7.2 SUGGESTIONS AND RECOMMENDATIONS

During the study, it was found that the customers had to wait too long for the loans to get
disbursed. The processing time is too long. Customers had to wait for their loan processing
done by the staff. Efforts should be made to reduce it.

It was found out that there is lot of formalities in the loan disbursement process. Too much
documentation is done. Customers is not aware of all the formalities to be done, which he/she
asked to do . reading loan agreement at the time of taking loan is time consuming. Therefore
paper work should be more friendly and clear.

After sales service is not upto the mark. Customers facing problems should be attended on
time.
Staff is generally co-operative only at the time of loan is sanctioned and disbursed. Therefore
after sales service be improved upto satisfaction level of customer.
Customers should be given proper information about EMI. They are generally not told how
to calculate EMI. They should know its calculation and its amount.

56
Pubic dealing hours should be increased to some later time period because majority of the
customers were found out to be salaried in the survey.

Bank should make efforts to attract more and more customers through increased
advertisement.

57
 ABBREVIATIONS AND ACRONYMS (GLOSSARY)

RBI : Reserve Bank of India

SOL : Service Out-let
ATM : Automatic Teller Machine
PIN : Personal Identification Number
FII : Foreign Institutional Investor
AMFI : The Association of Mutual Funds in India
IRDA : Insurance Regulatory and Development Authority
SEBI : Security and Exchange Board of India
CBIL : Credit Information bureau (India) Ltd.
CRR : Cash Reserve Ratio
SLR : Statutory Liquidity Ratio
ALM : Assets liability Management
ALCO : Assets Liability Committee
REPO : Reverse Purchase Order
GDR : Global Depository Receipt
ADR : American Depository Receipt

58
 7. REFERENCES

www.axisbank.com
www.hdfcbank.com
www.icicibank.com
www.sbi.co.in
www.pnb.com
www.wikipedia.com
www.google.com
www.apnaloan.com
www.moneycontrol.com
www.thehindu.com
www.businessline.com
www.bankbazaar.com

59