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CHAPTER 1
HDFC Ltd.
INTRODUCTION:
HDFC was incorporated in 1977 with the primary objective of meeting a social need - that of
promoting home ownership by providing long-term finance to households for their housing
needs. HDFC was promoted with an initial share capital of Rs. 100 million.
Their objective, from the beginning, has been to enhance residential housing stock and promote
home ownership.
Now, their offerings range from hassle-free home loans and deposit products, to property related
services and a training facility. They also offer specialized financial services to their customer
base through partnerships with some of the best financial institutions worldwide.
Business Objectives:
In order to achieve this investment target, the Government needs to make low cost funds easily
available and enforce legal and regulatory reforms
Organizational Goals:
HDFC Founder:
In 1956 he began his lifelong financial affair with the economic world, as General Manager of
the newly-formed Industrial Credit and Investment Corporation of India (ICICI). He rose to
become Chairman and continued so till his retirement in 1972.
At the ripe age of 60, Hasmukhbhai started his second dynamic life, even more
illustrious than his first. His vision for mortgage finance for housing gave birth to the Housing
Development Finance Corporation - it was a trend-setter for housing finance in the whole Asian
continent.
He was a true development banker. His building up HDFC without any government assistance is
itself a brilliant chapter in financial history. His wisdom and warmth drew people from all walks
of life to him, for advice, guidance and inspiration soft spoken man of few words, Mr. Parekh
nevertheless held strong and definite views with a quiet conviction. He was always concerned
with building bridges, improving and encouraging communication between people.
HDFC has a staff strength of 1490 (as on 31st March, 2014), which includes professionals from
the fields of finance, law, accountancy, engineering and marketing. Click here for details of
Senior Management.
PART II
CHAPTER 2
HOME LOAN
PURPOSE
Purchase of flat, row house, bungalow from developers.
Self construction.
MAXIMUM LOAN
85% of the cost of property (including the cost of land) and based on the repayment
capacity of the customers.
MAXIMUM TERM
20 years subject to the retirement age.
ELIGIBILITY
Salaried employees
10
Home improvement loan facilitates internal and external repairs and other structural
improvements like paintings, water proofing, plumbing and electric works, tilling and
flooring, grills and aluminium windows.
PURPOSE
External repairs
11
Bore well
Waterproofing on terrace
MAXIMUM LOANS
For Existing customers : 100% of the cost of improvement
MAXIMUM TERM
15 years subject to retirement age.
HOME EXTENSION LOAN
12
Home extention loan facilitates the extension of an existing dwelling unit. This type of loan
makes it convinient to extend or add space to home.
PURPOSE
This loan is specifically for the extension purpopse. Be it an additional room, a larger
bathroom or even enclosing an open balcony.
MAXIMUM LOAN
85% of the cost of extention.
MAXIMUM TERM
20 years subject to retirement age.
LAND PURCHASE LOAN
PURPOSE
HDFC Land purchase loan is a convenient loan facility to purchase land, whether it be to
build a house or an investment.
MAXIMUM LOAN
85% of cost of land and based upon the repayment capacity of the customer.
13
MAXIMUM TERM
15 years subject to customer retirement age.
PURPOSE
Short Term Bridging loan makes customer realize their dreams of buying a bigger and
better home and give them time to sell their existing property to pay off the loan. This is a
short term loan to help customers with the interim period between the sale of their old
homes and the purchase of a new home. Customers repay the loan by paying
monthlyinstallment or interest on the loan with the lump sum payments within 2 years.
Hence customers gets 2 years to sell the property repay the loan.
MAXIMUM LOAN
90% of the cost of new property
MAXIMUM TERM : 2 years
LOAN TO PROFESSIONALS FOR NON RESIDENTIAL PREMISES
14
This loan facilitates professional to purchase and construct their own office premises or even
renovate their existing office premises.
PURPOSE
Purchase
Constuction
Improvement of office
MAXIMUM LOAN
85% of the cost of property
MAXIMUM TERM
15 years subject to customer retirement age.
HOME EQUITY LOANS
15
HDFC Home equity loans helps to encash the present market value of the property by
taking a loan by mortgaging the property.
PURPOSE
Higher eduation of the children
Marriage expenses
Medical expenses
Business purpose
MAXIMUM LOAN
For Existing customers: 60% of the market value and present loan outstanding.
MAXIMUM TERMS
PROPERTY TYPE
REPAYMENT OPTION
NO. OF YEARS
Residential
EMI Based
15
Non Residential
EMI Based
10
16
Simple Interest
PARTIII
CHAPTER 3
17
MAJOR OBJECTIVES
To have the first hand information on loan procedure, sanctioning and disbursement
in HDFC ltd.
To study about the financial position for the financial year 2014-15 in comparison
with position in financial year 2013-14.
18
CHAPTER 4
19
Applicati
on
Login
Scannin
g
Data
Entry
Recommendati
on
Over (ROVR)
Disburseme
nt of the
loan
Double
Checking
Sanctioni
ng
Over
After Sales
Services
20
The representation shown above is not a perfect copy of the actual process. This is because
these stages are taking place simultaneously and one application is being taken care for by
the experienced employees of both HDFC Ltd service centre.
Hence the loan application may or may not shuttle through different stages
APPLICATION STAGE
This is the stage where the Application Form first reaches the concerned Service Centre/
workstation. Here all the documents in the application are reviewed by the experienced staff
present at the workstation.
SCANNING
In this stage the various important documents of the applicant are scanned. This helps to create
their electronic copy which acts as a ready reference, a proof, and can also be shared and utilized
by other employees of HDFC Ltd.
DATA ENTRY
21
The file has been sent to the bank head office or the HUB .At HUB there are many experts with
their own specializations. These officials review the various parts of the file again and perform
many specialized tasks.
The Recommendation over is also referred to as the First Appraisal. At this stage certain
specially appointed persons have been given the responsibility of recommending a loan
These people have to take special care of reviewing every document, and all the small details
that need to be considered before considering the loan application to be valid.
DOUBLE CHECKING OVER
As the name suggests at this stage a specially appointed person will double check all the past
proceedings. They will examine the Loan file for any discrepancies, any missing and /or
misplaced documents, the Credit Appraisal results, etc.
SANCTIONING
An authorized sanctioning authority within HDFC itself will review the remarks of Double
Checker. If it considers the loan suitable to be sanctioned it gives it approval . After it has given
its approval stamp the ILPS system will automatically send a letter to the Applicant that his loan
22
has been sanctioned. After this approval the Applicant can go to whichever Service Centre to get
his loan disbursed.
SPECIAL CASE
A special case can arise if the applicant has not mentioned the property for which he wants to
take a loan. In that case the applicant can let the case be remain pending.
DISBURSEMENT
The last and final stage in the Home Loan process is that of disbursement. After the sanctioning
has taken place the applicant becomes a registered customer of HDFC Ltd .He/She can now take
the disbursement of the loan from any of the various service centre of HDFC .The loan shall be
disbursed in one Lump sum or in suitable installments to be decided by HDFC with reference to
the need and/or progress of construction. The borrower hereby acknowledges the receipt of the
loan disbursed as indicated in the receipt.
CREDIT APPRAISAL
Credit appraisal is one of the most important and significant step in the Home Loan process. In
case of home loans we either create new accounts or maintain pre existing ones. Credit appraisal
is however a part of sanctioning new loans or enhancing the existing one.
23
Credit Appraisal starts from the moment, the documents for Loan from the customers has taken,
which is then sent to back office for processing which is called HUB.
CATEGORIES
In case of Credit appraisal there are three main categories:
1. SALARIED PERSON
Here the Credit Appraisal is done for a salaried person .HDFC try to compute the credit
worthiness of a salaried person .It means that the person should be employed as an employee
in a recognized organization. The organization may be public or private. The person must
have proof to prove his employment like credit documents etc.
24
into a large number of pages due to the multiple numbers of transactions. Apart from that their
income statements are also quite complex due to presence of many components.
Hence in the case of a self employed person demanding a loan the credit appraisal has to be
done very carefully .For this very purpose HDFC Ltd has appointed Specialized Credit
Appraisers and a specialized Self employed Committee. These consist mainly of Chartered
Accountants. They handle the important job of appraising the credit worthiness of the self
employed applicants.
3.
The self employed professionals include people like Doctors, Chartered accountants ,
Engineers etc. Only HDFC recognizes these professionals as a separate category and has
hence developed a comparatively smoother procedure for their Credit Appraisal and
sanctioning of loan.
25
PRECAUTIONS
The credit appraisal is an important step for both the borrower and HDFC .Hence it necessary to
take all precautions.
All calculations must be done with correct figures. The data entry in the system must
match the actual data. Also care should be taken in places like the decimals and
rounding off. The data entries should not be going outside the space provided to
them.
The source of the data should be mentioned so that another person may easily verify the
facts and figures
26
Sometimes it may happen that the Applicant has intentionally or by mistake not
mentioned the full status of his obligations. The common situation in this case are
A.
He has not revealed of any loan that he may be paying off from an
undisclosed bank account in any other bank
HDFC finances upto 85% maximum of cost of property (agreement value + stamp duty +
registration charges)
Repayment capacity takrs into consideration factors such as income, assets,
qualifications, number of dependents, spouse income, liabilities, stability and continuity
of occupation and saving history.
The loan amount of the individual is also subject to Instalment to Income Ratio (IIR)
which is 40% and Fixed Obligation Income Ratio (FOIR) which is 45%.
Maximum loan amount to an individual connot exceed Rs 1crore.
SUPPORTING DOCUMENTS
First of all when a customer came all documents are checked by the workstation which are
directly in contact with the customers. Necessary documents required are as follows.
FOR ALL APLICANTS
1. Allotment letter of the co-operative society /association of apartment owners.
2. Copy of the approved drawings of proposed construction /purchase /extention.
3. Agreement of sale /sales deed /detailed cost estimate cost from architect.
28
4. If an applicant have been present employment /business or profession for less than a year,
mention on a separate sheet details of occupation for previous five years , giving position
held, reasons for change and period of the same.
5. Applicable proceesing fees.
6. Residence proof and Identity Proof.
RESIDENCE PROOF
IDENTITY PROOF
Ration Card
Driving License
Passport
Passport
Pan Card
7. Certificate of loan outstanding issued by the lender ( for refinance cases only)
8. Any other information regarding your repayment capacity that is necessary and will assist
HDFC in appraising the loan proposal.
29
EMPLOYED CASE
1. Verification of Employment Form with only Part I filled in.
2. Latest original salary slip/salary certificate showing all deductions.
3. If a job is transferable, permanent address where correspondence relating to the applicant
can be mailed.
4. A letter from employer agreeing to deduct the EMI towards repayment of the loan from
applicant salary. This will expedite the processing of loan application.
5. Updated original Bank Passbook/ or Bank Statement for the last six months.
6. Photocopy of Form 16 (issued by the employer) for the last assesment year.
SELF EMPLOYED
1.Balance Sheet , Profit & loss and ITR for the last three years.
2. Business Profile.
3. Copies of individual Tax Challans for the last three years.
4. Copy of advance Tax Challan (if any).
30
5. Updated original Bank Passbook/ or Bank Statement for the last twelve months.
CREDIT APPRAISAL
After the documents are checked by the workstation, documents are rechecked by the Senior
Officer as well as File Credit Investigation Department (FCI) prepares income sheet and check
all documents of the file. After credit appraisal loan is approved an disbursed to the conditions or
requirement.
RATE OF INTEREST TILL 30 JUNE,2015 (DUAL RATE)
Till 30 June, 2015 all applications received will be locked by Dual rate.
SLAB
RATE OF INTEREST
8.25%
9%
PLR 4.75%
RATE OF INTEREST
SLAB
HOUSING
PLOT
LOAN
LOAN
EQUITY LOAN
FIXED RATE
OF
31
INTEREST
Loan against property -11.25% Fixed rate -14%
Upto 30 lakhs
8.75%
9.25%
30-50 lakhs
9%
9.5%
Above 50 lakhs
9.25%
9.75%
REPAYMENT
Loan is repaid in EMI comprising principal and interest. EMI commences from the first of the
month following the month in which the disbursement of the loan has been completed. Due date
of payment of first EMI is the 5th day of the month following such month.
Interest is paid on the portion of the loan disbursed which is called Pre-EMI. Pre-EMI interest is
payable every month from the date of each disbursement upto the date of the commencement of
EMI. Customer may opt to pay the EMIs by direct deduction from their monthly salary. They
32
can also issue post datedcheques and can also issue standing instruction to their bankers or can
pay the installment at any of the HDFC collection centers.
FLEXIBILITY IN REPAYMENT
Following are the repayment option features being offered by HDFC to their customers:
Step up Repayment Facility (SURF): This scheme help young executive to take a bigger
loan today based on an increase in their future income, this will help executives to buy a
bigger home today. In this EMIs of the customer increases in future.
Flexible Loan Installment Plan (FLIP): Often customers, parents and their children wish
to purchase property together. The parents are near to retirement and their children just
started their work. This option help customers to combine their income and take a long
term home loan wherein the installment reduces after the retirement.
Tranching: To help the customers save their interest, HDFC introduced a special facility
known as Tranching. In this customer has the option to start their EMIs even before the
full disbursement of the loan. By this facility customer can repays their loan faster.
PREPAYMENT FACILITY
33
Customer can repay the loan ahead of schedule by making part or full prepayment. If the
prepayment is made within three years of the first disbursement, early redetmption charges of 2%
of the amount being prepaid is payable, but if prepayment is made after three years then no
charges is charged by HDFC.
There are numerous factors that banks take into consideration when computing your loan
eligibility. Age of the applicant, his salary, repayment/credit history, savings, profession, location
of property, health condition and other debts have a direct bearing on the loan amount
sanctioned. Some professions are categorised as negative or risky by the lenders. People in such
34
professions may find it difficult to get a loan sanctioned. On the contrary, some jobs are
considered more stable with lesser probability of default. They are on the preferred list of most
.lenders
It is imperative that the property an applicant wishes to purchase falls within the geographical
limits as defined by the bank. As a thumb rule, banks will lend to applicants who can set aside 40
percent of their monthly income towards their home loan repayments. Based on
this, an individual's loan eligibility is calculated. It is assumed that a person who earns more can
.set aside more money towards his EMI repayments
?How does a bank compute your loan eligibility
Most loan eligibility calculators available on the Internet are based on a formula. The home
loan eligibility, in lakhs, is arrived at by dividing the amount available for the loan repayment
.with the borrower by the loan installment per lakh for the given tenure
The simplest way to increase your loan eligibility is by increasing the loan tenure. Consider
Vijay's case. At 9 percent rate of interest and for a tenure of 10 years, banks will sanction him not
more that Rs 12 lakhs. However, for a greater tenure of 20 years his loan amount shoots up to Rs
.18 lakhs. However, the longer the tenure of the loan, greater is the cost of borrowing
Applying jointly, with your parent or spouse, increases your loan eligibility. The incomes of
both applicants are combined when computing the loan eligibility. You can almost double your
.loan eligibility with a joint loan
35
36
37
CHAPTER 5
MARKET PLAYERS
38
ELIGIBILITY
Minimum Age 18 years as on the date of sanction.
Maximum Age For a home loan borrower is fixed at 70 years i.e the age by which
the loan should be fully repaid.
There should be availability of sufficient, regular and continuous source of income for
serving the loan repayment.
DOCUMENTS
Two photographs of each applicant/gurrantor.
Latest & original salary slip of employees/ Business proof for businessman.
Two years IT Returns /Form 16 for employees and three years IT Return with
computation sheets for busineesman/Self Employed.
Balance sheet for last three years for business man.
40
Six months salary account statements for employees and savings account statement
for Businessman/self employed.
Copy of Agreement to Sale.
SECURITY
Equitable Mortgage of the property.
Other tangible security of adequate value like NSCs, Life Insurance Policies etc, if
the property cannot be mortgaged.
41
RATE OF INTEREST
YEAR
RATE OF INTEREST
1st Year
8%
2nd Year
9%
3rd Year
9%
PROCESSING FEES
A processing fees of .50% of the loan amount is charged from the applicant which includes all
the fees and the charges at the time of sanctioning of the loan application. Service tax is also
applicable and will be charged on the fees collected.
MAXIMUM REPAYMENT PERIOD
For Applicants upto 45 years of age: 25 years
42
In lump sum direct in favour of the builder/ seller in respect of outright purchase.
In case of constuction of house/flat etc, depending upon the actual progress of work.
Purpose
43
Eligibility
Quantum of
Finance
44
20%
25%
40%
Building
Margin
(Borrowers
contribution)
Processing
Charges/ Upfront
fee
45
01.09.2015 TO 31.12.2015
Security
Repayment
Likely rental income, if the property is to be let out may also be added for
determining the repaying capacity.
Repayment
Holiday/
EMI chart
MONTHLY INSTALMENT OF LOAN OF Rs.1,00,000/- AT
DIFFERENT (EX-TAX) INTEREST RATES FOR DIFFERENT
LOAN REPAYMENT PERIODS
ON ARREAR BASIS - ROI COMPOUNDED MONTHLY
R.O.I.
5 Yr
10 Yr
15 Yr
20 Yr
25 Yr
30 Yr
10.00
2125
1322
1075
965
909
878
10.25
2137
1335
1090
982
926
896
10.50
2149
1349
1105
998
944
915
10.75
2162
1363
1121
1015
962
933
11.00
2174
1378
1137
1032
980
952
11.25
2187
1392
1152
1049
998
971
11.50
2199
1406
1168
1066
1016
990
11.75
2212
1420
1184
1084
1035
1009
12.00
2224
1435
1200
1101
1053
1029
47
II.
1. Eligibility
Customers who are below the age of 50 years and existing Housing loan borrowers who have
availed loan under our Housing Loan scheme for public subject to fulfillment of all terms &
conditions of this variant :
2. Purpose
For all puposes as per details described under Housing Finance scheme except for purpose of
land/plot.
3. Nature of Facility
Term Loan - 80% and overdraft 20%
4. Extend of Loan
First enhancement allowed after 3 years, Overdraft limit can be enchanced maximum
upto 50% of the total loan amount sanctioned. Extent of enchancement equal to
reduction in Term Loan Amount.
Borrowers are entitlement for 20% increase in the original total limit sanctioned after a
lapse of five years.
48
Enchancement(s) is/are for personal needs is/are allowed in the shape of a seperate
Overdraft limit.
5. Rate of Interest
Interest Rate : 11%
6. Margin
20% and 25%:
7. Repayment
Term Loan component: As per Housing Loan Scheme for Public.
Overdraft component:
- For Borrowers below 55 years: Servicing of Interest as and when charged i.e. on Monthly
Basis.
- For 55 years and above: On monthly reducing drawing power maximum upto the age of 70
years.
5. Nature of Facility
In the shape of an Overdraft limit.
6. Margin
However LTV of 80% and 75% on (Housing Loan + Over Draft Limit) realizable value of
House / flat to be required.
7. Repayment
Account to be renewed annually.
:
8. Rate of Interest
BR+ 0.50%
9. Security
By extension of charge on the immovable property mortgaged.
10. Processing Fee & Documentation Charges
Upfront fee NIL
Documentation Charges - Rs. 450/- + Taxes.
50
ICICI Bank ( Industrial Credit and Investment Corporation of India) is a major banking and
financial services organization in India. It is the 4th largest bank in India and the largest private
sector bank in India by market capitalization. The bank also has a network of 2014+ branches (as
on 31 March 2015) and about 5219 ATMs in India and presence in 19 countries. ICICI Bank
offers a wide range of banking products and financial services to corporate and retail customers
through a variety of delivery channels and specialization subsidiaries and affiliates in the areas of
investment banking, life and non-life insurance, venture capital and asset management. (These
data are dynamic.) ICICI Bank is also the largest issuer of credit cards in India. ICICI Bank is
India's second-largest bank with total assets of Rs. 3,634.00 billion (US$ 81 billion) at March 31,
2015 and profit after tax Rs. 40.25 billion (US$ 896 million) for the year ended March 31, 2015.
HOME LOAN
DOCUMENTS
EMPLOYED
SELF EMPLOYED
size photograph
size photograph
Fee Cheque
Business Profile
Form 16
Account
Account
closure letter
closure letter
ELIGIBILITY
Loan must terminate before or when the borrower turns 65 years of age or before
retirement whichever is earlier.
Minimum Age 25 years of age.
In case of Indian Resident both Self Employed or Employed can apply for loan but in
case of Non Resident only Employed can avail a loan.
The loan amount can be upto 80% of the cost of property.
RATE OF INTEREST
53
YEARS
UPTO 30 LAKHS
ABOVE 30 LAKHS
1ST Year
8.75%
8.75%
2nd Year
9%
9.25%
3rd Year
9%
9.25%
FIXED RATE
Fixed rate 16%
PROCESSING FEES
A processing fee of .5% of the loan amount is charged from the applicant which includes all the
fees and the charges at the time of sanctioning of the loan application. Service tax is also
applicable and will be charged on the fees collected. .25% fee is negotiable if applicant is an
existing customer.
PREPAYMENT CHARGES
There is no charge on part of prepayment but in case of full prepayment 2% of the principal
outstanding at the time of foreclosure is charged by ICICI Bank.
AXIS BANK
54
Axis Bank Ltd was incorporated in the year 1994 as UTI Bank Ltd which provided corporate
and retail banking products and was the first private banks to have begun operations in 1994,
after the Government of India allowed new private banks to be established. At present the bank is
the third largest private sector bank comprising of 1000 branch offices and extension counters
and 4055 ATMs.
Axis bank was formed as UTI when it was incorporated in 1994 when government of India
allowed private players in the banking sector. The bank was sponsored together by the
administrator of the specified undertaking of the Unit Trust of India, Life Insurance Corporation
(LIC) And General Insurance Corporation Ltd and its subsidiaries namely National Insurance
Company Ltd, New India Insurance Company, The Oriental Insurance Corporation and the
United Insurance Company Ltd. However the name of the UTI was changed because of the
disagreement on terms and conditions of the bank authority over certain stipulations including
royalty charged over the name from UTI AMC. The bank was also wanted to have a new name
from its Pan-Indian as well as international business perspective. So from July 30,2007 onwards
the UTI Bank was named as Axis Bank.
DOCUMENTS
EMPLOYED
SELF EMPLOYED
55
Form 16
Processing fees
Processing fees
RATE OF INTEREST
INCOME SLAB
RATE OF INTEREST
Upto 30 lakhs
8.75%
Above 30 lakhs
9.25%
REPAYMENT TERM
Monthly EMIs
56
Loan amount offered for both employed and self employed is Rs 1lakh to 50 lakhs.
Loan must terminate before or when the borrower turns 60 years of age or before
retirement whichever is earlier.
PROCESSING FEES
A processing fee of .5% of the loan amount is charged from the applicant plus service tax as
applicable.
PREPAYMENT CHARGES
57
Axis Bank do not charge any prepayment charges from its customers.
CHAPTER 6
RESEARCH
METHODOLOGY
58
RESEARCH METHODOLOGY
59
SECONDARY DATA
Secondary data refers to the one which has already been collected by someone else .The
secondary data was collected from the office account records and annual report of the company.
Secondary data sources for this study are:
PRIMARY DATA
Primary data is collected from different banks of Lucknow (shown above as Major Players)
regarding the comparative analysis of housing loan schemes offered by different financial
institutions.
60
CHAPTER 7
a) Nationalized
b) Private
Sales
Nationalized
46
Private
54
Interpretation: As we can see that the respondents are very aware and only 46% of the
respondents would choose nationalized banks for housing loans and the rest prefer private
banks.
62
percentage
25
Yes
No
75
Interpretation: As we can see from the above pie chart that the about 75% of the people
who entered the office were regular customer of HDFC bank the rest said that they are
here for the inquiry purpose and also would like to join the organization.
63
percentage
24
Yes
No
76
Interpretation: 76% of the respondents say that they are summarized with the policies of
the bank, rest said that they are not at all provided with the facts and happening of the
bank.
64
Percentage
Yes
40
No
60
Interpretation: As we can see that about 40% of the respondents are already loaners of the
bank and the rest have not taken any kind of loan and the rest are not loan benefeciaries
from the bank.
65
percentage
22
YES
No
78
Interpretation: 22% respondents that ive talked to, say that they are interested in taking
housing loans from the bank and the rest said that they are not currently in the need of the
loaning process.
6) Does HDFC provide better loaning services than other private banks?
a) Yes
b) No
66
percentage
Yes
32
No
68
Interpretation: About 68% of the respondents say that they are satisfied with the loaning
services of the HDFC rather than other banks
7) Does HDFC tells you or advertise about the loaning schemes currently based on
present going on policies?
a) Yes
b) No
67
Percentage
15
Yes
No
85
Interpretation: 85% of the respondents say that the bank do advertise about the current
schemes and facilities provided by the bank the rest said that they are not at all aware
about the advertisement happenings of thr schemes by the bank.
8) Are you satisfied with the duration taken by your bank to sanction home loan?
a) Yes
68
b) No
Percentage
6
Yes
No
94
69
Interpretation: About 94% of the respondents say that they are satisfied with the time
duration taken by the bank to sanction the amount for home loan i.e. about 7 days are
required for disbursement of the money and 3 days to get the money in hand.
9) Do you think that the processing fees charged by HDFC are high?
a) Yes
b) No
Percentage
30
Yes
No
70
70
Interpretation: 70% of the respondents feel that the processing fee charged by the bank is
too high in comparison with other banks and the rest say that the fees charged is sufficient
and legitimate according to the current bank policies and norms.
10) What do you think about the paper formalities people have to go through?
a) Justified
b) Too much
percentage
Yes
40
No
60
Interpretation: 60% of the respondents feel that the paper work involved in the processing
of the loan is justified and rest feel that its way too much and the other40% said that the
paper work is subsequently enough for the loan provided by the bank.
71
CHAPTER 7(A)
COMPARATIVE
ANALYSIS
BUSINESS PROFILE(for self employed people)
72
BANKS
STATE BANK OF
PNB BANK
AXIS
ICICI BANK
1. SALES DEED
ITR &
ALL
ALL SAME
2. MUTATION
BALANCE
SAME
3. LEGAL SEARCH
SHEET &P/L
REPORT(BANK
(LAST 2
ADVOCATE)
YEARS)
4. DESIGN &
&
ESTIMATE
OTHERS
(ARCHITECT) 5.
SAME
INDIA
DOCUMENTS
VALUATION
REPORT
6. ITR (LAST 3
YEARS)
7.BALANCE SHEET
& P/L (LAST 3
YEARS)
8. BANK
STATEMENT
(CURRENT &
SAVINGS, 6
MONTHS)
73
9. BUSINESS
PROFILE
10. ID PROOF
11. RESIDENCE
PROOF
12. PHOTOS
13. PROPERTY
PAPERS
RATE OF
UPTO 30 LAC
UPTO 30 LAC
UPTO 5
UPTO 30
INTEREST
8.75%
8.75%
YEARS
LACS
9%
1st YEAR
9%
5 10
8.25%
> 50 LACS
YEARS
2nd YEAR
9.25%
9.25%
9%
10-15
3rd YEAR
YEARS
9%
30- 50
LACS
9%
> 50 LACS
9.25%
30- 50
LACS
9.5%
15- 25
MORE
YEARS
THAN 30
9.5%
LACS
74
1st YEAR
8.25%
2nd YEAR
9.25%
3rd YEAR
9.25
PROCESSING
0.5% OF LOAN
1% OF LOAN
0.5% OF
0.5% OF
FEES
TAKEN
TAKEN (.5%
LOAN
LOAN TAKEN
NEGOTIABLE
TAKEN +
( IF LOAN
FOR GOVT
1500
ALREADY
EMPLOYEES)
LAWYERS
EXIST THEN
FEES (NOT
NEGOTIABLE
NEGOTIA
.25%)
BLE)
REPAYMENT
A. MAX 60% OF
BELOW 55
FOR
MAX 20
TERMS
NET INCOME
YEARS -MAX
FLAT/PLO
YEARS OR 60
B.BELOW 55
20 YEARS
T MAX
YEARS OF
YEARS -MAX 20
REPAYMENT
YEARS -
AGE
YEARS
PERIOD OR
20 YEARS
REPAYMENT
65 YEARS OF
CONSTRU
PERIOD OR 65
AGE
CTION
75
YEARS
MAX
YEARS 10 YEARS
ELIGIBILITY
GROSS
OF LOAN
property OR 4 times
of property
INCOME -
of property OR
AMOUNT
( below 30
4 TIMES
100% of the
(Avg of 3 years'
lakhs) OR 80%
MAX NET
amount of
income)
of the cost of
INCOME -
registry.
property (above
5 TIMES
30 lakhs)
&
MAX
AMOUNT 50 LACS
& FOR ( 7
METROS)100 LACS
OWN SOURCE NIL
NIL ( AFTER 6
90%
MONTHS)
PREPAYMEN
T ANYTIME
REFINANCE
2%
2%
STARTING
FROM THE
NEXT
76
MONTH OF
THE LOAN.
12 EMI TO
RUN AFTER
THAT.
INSURANCE
YES (OPTIONAL)
OF THE
YES
NO
(OPTIONAL)
YES
(OPTIONAL)
PROPERTY
AREAS OF
NOT
FUNDING
or outside
OUTSIDE
or outside
condition being it
tricity the
THE
tricity the
condition being
TRICITY
condition being
given on GPA or
it should not
it should not
through Share
have been
transfer
on GPA or
given on GPA
through Share
or through
transfer
Share transfer
GURRANTOR
Guarantor is
NOT
DEPENDS
NOT
required(one who is
REQUIRED
UPON
REQUIRED
an Income Tax
CASE
has to have an
account in State bank
of india)
ADDITIONAL
SECURITY
N/A
DEPENDS
DEPENDS
UPON CASE
UPON
N/A
CASE
78
BUSINESS
PROFILE(for self
employed people)
BANKS
UBI BANK
BANK OF INDIA
HDFC Ltd.
DOCUMENTS
ALL SAME
1.PHOTOGRAPHS
1.BALANCE SHEET
2.IDENYITY PROOF
2. BUSINESS PROFI
3. COPIES OF INDIV
6 MONTHS)
CHALLANS FOR TH
THREE YEARS.
4. COPY OF ADVAN
(LAST 3 YEARS)
7.PROOF OF WORTH
5.BANK STATEMEN
8.SALE AGRREMENT
MONTHS)
RATE OF INTEREST
PROCESSING FEES
1% OF LOAN AMOU
AMOUNT
REPAYMENT TERMS
MONTHLY EMI
MAX TO 20 YEARS
LOAN AMOUNT
PROPERTY OR 55% OF
PROPERTY OR 4 TIMES
RATIO)
= EMI/GROSS INCO
AVERAGE ANNUAL
INCOME
REDUCE
B. FOIR
= ALL OBLIGATION
INCOME
OWN SOURCE
80
,M
REFINANCE
NIL
NIL
INSURANCE OF THE
NIL
0.65%
YES (OPTIONAL)
YES (OPTIONAL)
APPROVED PROJEC
FLATS TRANSFERA
PROPERTY
AREAS OF FUNDING
ADDITIONAL SECU
GPA
DEPENDS UPON CA
NOT REQUIRED
LOCAL GURRANTOR IN
DEPENDS UPON CA
81
COMPARATIVE ANALYSIS OF VARIOUS BANKS FOR HOME LOANS (for employed people)
STANDARD CHART.
BANK OF INDIA.
HDF
85%
property
prop
8.5% floating
till 3
appl
rece
lock
dual
2011
Mar
30 lakhs - 50 lakhs
3rd
Floa
4.75
hous
30 la
30 -
abov
82
9.25
Plot
lakh
50 la
abov
9.75
follo
give
pers
loan
( loa
prop
top u
10.2
educ
upto
9.75
lakh
50 la
Processing charges
0.55%
1%
amo
83
Pre-payment charges:
51,229.20
fixe
amo
own source
Nil
Refinance
0.65%
repa
25%
bala
Broken Interest Charges
adju
the a
repa
25%
bala
with
the d
disb
Additional security
in case of GPA
not required
in ca
opti
land
Area of funding
any
proj
appr
MC
is al
84
with
secu
time
the G
Guarantor
depe
case
area
by M
85
(years)
(2)Balance sheet and Income statement
not required
not required
(applicant + guarantor)
(10) R C Photocopies
not required
not required
not r
(years)
COMPARATIVE
ANALYSIS OF
VARIOUS BANKS
FOR HOME LOANS
86
(for employed
people)
STATE BANK
AXIS
IDBI BANK
ICICI
OF INDIA
BANK
Maximum loan
85% of the
85% of the
85% of the
amount
cost of
cost of
property ( below
cost of
property OR 4
property
30 lakhs) OR 80%
property OR
times the
of the cost of
100% of the
amount of
property (above 30
amount of
income (Avg
lakhs)
registry.
8.75%
8.25% for
BANK
of 3 years'
income)
Rate of interest:
( FLOATING )
below 30 lakhs
8.75%
8.75%
first year;
9% for
second year;
87
9.25%
onwards
30 lakhs - 50 lakhs
9%
9%
9%
8.25% for
first year;
9% for
second year;
9.25%
onwards
9.25%
9.25%
9.25%
8.25% for
first year;
9% for
second year;
9.25%
onwards
Processing charges
0.50%
0.50%
1% (negotiable)
0.5% ;
0.25%( if
loan already
existing)
Pre-payment charges:
90%
prepayment
88
anytime
starting from
the next
month of the
loan. 12
EMIs to run
after that.
own source
Nil
nil
Refinance
2%
nil
2%
Broken Interest
Charges
Additional security
not required
not required
case
Insurance of the
Yes
yes
optional
not required
property
89
Area of funding
Any area
inside or
outside tricity
the condition
being it should
not have been
given on GPA
or through
Share transfer
Guarantor
Guarantor is
Not
yes in case of
required(one
required
business,no in case
who is an
not required
of salaried
Income Tax
Assessee and
he/she has to
have an
account in
State bank of
india)
Resale of the property
Allowed
allowed
allowed with
allowed
security
90
Additional documents
Registered
Not
Map and
Sale deed,
required
case
Area to be
Mutation copy,
approved by
map and
the MC
estimate
approved by
the authority
DOCUMENTS
REQUIRED:
(1)Income tax return
with computation
(years)
(2)Balance sheet and
Income statement
(years)
(3) Six months bank
statement
91
(6)Local Address
not required
not required
Proof
photograph
CONCLUSION
I have studied the attached Balance Sheet of HOUSING DEVELOPMENT FINANCE
CORPORATION LIMITED (the Corporation) as at March 31, 2015,
92
The Profit and Loss Account and the Cash Flow Statement of the Corporation for the year ended
on that date, both annexed thereto & have made an interpretation of the company via ratio
analysis.
I have come to the conclusion that the company is on the high level of success. It is growing day
by day. Its long term as well as short term stability is solid. It is capable of generating more &
more returns in coming future. After analyzing, I have no doubt that if in coming future any
contingent liability raises before company, it is able to face the challenge. Moreover the investors
& creditors (short & Long Term) both are satisfied by the company because it is declaring high
profits & returns & repaying creditors in time.
So, the companys future is Bright.
CHAPTER 8
93
LIMITATION
LIMITATIONS
Every study conducted may have certain shortcomings and unfortunately mine is also a similar
case. A few errors have crept in despite mine best efforts to avoid them but it is expected that still
mine study and findings are very much relevant.
An error may have been due to the samples taken not conforming to the actual
There are several customers who dont show proper interest in filling the questioner as
they feel that they wont get any benefit after filling the questioners and its just a waste
of time for them.
95
Another is the Title deeds and NOC Documentation Problem. The Title deeds and NOC
Documents have to be furnished in the banks format. Borrowers who dont provide
them in proper format, will ruin the entire exercise and wont get any loan.
Most of the customers face problems regarding the rate of interest. HDFC must inform its
customers about the change in ROI, It automatically changes but there is decrease in rate of
and clear .
Customers should be given proper information about EMI. They are generally not told how
their EMI are calculated they should know EMI is calculated and of what amount.
After sale service is an issue of concern. Customers facing problems are not attended on
time. Employees are generally cooperative only when the loan is sanctioned and disbursed.
Therefore after sale service should be improved up to the satisfaction level of the customer.
96
Website of HDFC should give more options and features to customers so that they get
adopted.
Company should enter into tie ups with reputed builders and development authorities.
HDFC should increase their reach by penetrating into rural and semi urban areas .They
97
BIBLIOGRAPHY
www.hdfc.com
www.ansalapi.com
www.moneycontrol.com
www.hdfcbank.com
www.hdfcinsurance.com
www.hdfcfund.com
www.hdfcergo.com
www.hdfcrealty.com
www.credila.com
ANNEXURE
1)
a)
b)
c)
d)
e)
f)
General Information:
NAME: .
AGE: .
SEX: M/F
OCCUPATION: ..
NAME OF HOUSING FINANCE BANK: ..
AMOUNT OD HOUSING LOAN: ..
a) Yes
b) No
2) Are you a account holder of HDFC bank?
a) Yes
b) No
3) Are you summarized with the policies of HDFC bank?
a) Yes
b) No
6) Does HDFC provide better loaning services than other private banks?
a) Yes
b) No
7) Does HDFC tells you or advertise about the loaning schemes currently based on
present going on policies?
a) Yes
99
b) No
8) Are you satisfied with the duration taken by your bank to sanction home loan?
a) Yes
b) No
9) Do you think that the processing fees charged by HDFC are high?
a) Yes
b) No
10) What do you think about the paper formalities people have to go through?
a) Justified
b) Too much
100