DR.

RAFIQ ZAKARIA CAMPUS

MAULANA AZAD EDUCATIONAL TRUST’S
MILLENNIUM INSTITUTE OF
MANAGEMENT

PROJECT REPORT ON
Study of Car Loan Facilities With
Reference to HDFC BANK LIMITED
SUBMITTED BY
MR. RAM N. MAHAJAN
MBA (Ist SEMESTER)
ROLL NO:-89

GUIDED BY DIRECTOR
Ms. GHOUSIA M.I. DR. SHAIKH SALEEM

ACADEMIC YEAR
2010-11

Dr.Rafiq Zakaria Campus

Millennium Institute of Management

DR.BABASAHEB AMBEDKAR
MARATHWADA UNIVERSITY
 CERTIFICATE
I Ms. Ghousia M.I., hereby certify that,
Mr. Ram Nareshrao Mahajan is a student of the Master of
Business Administration Course at Millennium Institute of
Management, Dr. Rafique Zakaria Campus, Rauza Bagh,
Aurangabad, has competed a project on “STUDY CAR
LOAN FACILITIES WITH REFERENCE TO HDFC
BANK LTD.” under my guidance during this year.
His work and output has been found to be satisfactory.

Date:

Place: (Signature of the Guide)

 DECLARATION
I hereby declare that, the project report submitted by me in partial
fulfillment of M.B.A. Degree course is a genuine work.
It has not been submitted either fully or partially to their or any
other Institute prior in any other connection. I have done the
project as per the guidelines of our respected guide.

RAM N. MAHAJAN
 ACKNOWLEDGEMENT
Completing a task is never a man’s effort. It is often the result of
the invaluable contribution of number of individual in a direct or
indirect manner.
First and foremost in wish to gratefulness to HDFC BANK Ltd.
For giving me an opportunity to do my mini project.
I express my intentness to my guide Ms. Ghousia M.I., for their
valuable guidance & suggestions during the course of training help
me to learn maximum about HDFC BANK CAR LOAN
FACILITIES.

Ram N. Mahajan
 INDEX
Sr. No. Topic
1. Company Profile
2. Introduction of Project
3. Objectives of Study
4. Book Review on car loan facilities
5. Scope of Studies
6. Methodology of Study
7. Data Analysis and Interpretation
8. Limitations of the study
9. Summary
10. Conclusion
11. suggestions
12. bibliography
 Company Profile
The Housing Development Finance Corporation Limited (HDFC) was
among the first to receive an ‘in principle’ approval from the Reserve Bank
of India (RBI) to set up a bank in the private sector, as part of the RBI’s
Liberalization of the Indian Banking Industry in 1994. The bank was
incorporated in August 1994 in the name of the ‘HDFC Bank Limited’. With
its registered office in Mumbai, India. HDFC Bank commenced operations
as a Scheduled Commercial Bank in January 1995.HDFC is India’s premier
housing finance company and enjoys an impeccable track record in India as
well as in international markets. Since its inception in 1977, the Corporation
has maintained a consistent and healthy growth in its operations to remain
the market leader in mortgages. Its outstanding loan portfolio covers well
over a million dwelling units. HDFC has developed significant expertise in
retail mortgage loans to different market segments and also has a large
corporate client base for its housing related credit facilities. With its
experience in the financial markets, a strong market reputation, large
shareholders base and unique consumer franchise, HDFC, was ideally
positioned to promote a bank in the Indian environment.
 INTRODUCTION OF PROJECT
My topic for project is study of car loan facilities with reference to
HDFC BANK LIMITED.
This topic helps to know about all the procedure or required stages
to make avail the car loan from HDFC BANK.
It also includes the book review on car loan at HDFC BANK.
This topic includes requirement of documents for taking loan from
the bank.
This topic mainly includes the policies and strategies of lending
loan to whether an individual, salaried, self employed,
professional, businessman.
 Basic Concepts
Loan: loan is type of debt. All material things can be lent like all
debt instruments; a loan entails the redistribution of financial assets
over time, between the lender and the borrower. The borrower
initially receives an amount of money from the lender, which they
pay bank usually bit not always in regular installments, to the
lender. This service is generally provided at a cost, referred to as
interest on the debt. A borrower may be subject to certain
restrictions known as loan covenants under the terms of the loan.

Types of loans
Secured loan
Unsecured loan

Secured loan: Secured loan is a loan in which the borrower

pledges some assets (car or property) as collateral for the loan. A
secured loan is a very common type of debt instrument used by
many individuals to purchase car.
Unsecured loan: unsecured loan are monetary loans that are not
secured against the borrowers assets. These may be available from
financial institutions under many different marketing packages.
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.
 Objectives of Study
⇒ To complete the partial fulfillment of the part of syllabus of the

M.B.A. Ist Semester.

⇒ To understand the various policies and strategies at HDFC BANK
LTD.
⇒ TO study the concept of various car loan facilities for various types of
customer profile i.e. Salaried or Self Employed.
⇒ To understand the basic loans eligibility concepts and terms of
calculations.
⇒ To read and study financial documents and statements.
⇒ To look after the documents of customers are verified or not.
⇒ To get the practical knowledge of study on car loan facilities with
reference to HDFC BANK LTD.
⇒ To study the book review or literature review on car loan at HDFC

BANK LTD.
 BOOK REVIEW ON STUDY OF
CAR LOAN FACILITIES WITH
REFERENCE TO HDFC BANK
LIMITED:
⇒ You need to have net annual income of Rs 100000 as
well as a residential telephone.
⇒ self employed individuals, one has to be between 21
and 65 years of age before the loan tenure is over to be
eligible for new car loan from HDFC Bank.
⇒ HDFC Bank has finance plans for a wide variety of cars
and multi-utility vehicles in India. The bank offers loans up to 90%
of the invoice value of the vehicle but the minimum amount one
can avail is Rs. 100000.
⇒ For some car models, the bank offers 100% finance
options too.
⇒ Another case in which the bank may cover the full cost
of the new car which is for customers who have fixed deposit with
the bank in which case installments may be paid separately or out
of the deposit if the latter is large enough.
 Eligibility Conditions
⇒ Both salaried and self employed people can avail of
HDFC New Car Loans. If you are a salaried
professional, you need to be at least 21 years old or less
than 60 at the end of the loan tenure.
⇒ You need to be employed for two years of which one
year must be in your present position
⇒ you need to be in business of at least three years and
will be required to show net annual profit of Rs 60000
for standard cars as well as net annual profit of Rs
100000 for mid-size and premium cars. You also need
to need to have a telephone at your residence.
⇒ The Partnership Firm, Public and Private limited
Companies and Hindu undivided Families can also for
car loan at HDFC Bank on the condition that:
⇒ The minimum net profit of Rs 60000 for standard cars
and Rs 100000 for cars from mid-segment and luxury
segment
⇒ The companies need to show an annual turnover of at
least Rs 4.5 lacs and the presence of one phone at
business premises. For partnership firms, the loan
 executing partner too needs to possess a residential
phone.

Requirement of Document for

car loan at HDFC BANK:
For salaried professionals, the documentation necessary to
apply for HDFC New Car Loan includes:
⇒ Proof of identity which can be a copy of the
Passport/PAN Card/Voters ID Card/or Drivers License.
⇒ Income Proof which include the most recent salary slip
and form 16.
⇒ Proof of Address as present in any one of the following:
Ration Card, Driving License, Voters Card, Passport
Copy, Telephone Bill, Electricity Bill, Life Insurance
Policy, PAN Card.
⇒ Bank Statement is not necessary for salaried professional
who possess all the above documents.
 Self-employed people need to bring the following documents
order to avail of new car loan from HDFC Bank:

⇒ Proof of identity which van again be a copy of the

Passport/PAN Card/Voters ID Card/or Drivers License.
According to bank regulations the copy of the Drivers
License needs to be recent laminated and legible.
⇒ Income Proof of the applicant. For self employed
professionals, this will be latest Income /tax Returns.
⇒ Address Proof for which one can opt from a copy of
Ration Card, Driving License, Voters Card, Passport
Copy, Telephone Bill, Electricity Bill, Life Insurance
Policy, and PAN Card.
⇒ Bank statement when applying for loan to finance mid-
size and luxury segment cars. In case of loan for small
cars one need not produce bank statement. Again if the
applicant’s annual income is more than Rs. 1.5 lacs, then
this requirement may be waived according to the
discretion of the bank.
HDFC BANK claims quick processing of all new car loans.
According to the information on banks available in the
official books or magazines published weekly or monthly. It
takes only 48 hours to approve car loans after all the
documentation is complete. Other than these customers who
have a Preferred Account or a Corporate Salary Account with
HDFC will have the privilege of speedy loan processing
provided all the necessary documents are present.
HDFC Bank offers its customers a range of repayment
options suited to their convenience and financial resources.
The tenure of the loan products can vary from 12 to 84
months for few cars and the borrower can even pre pays the
loan any time after 6 months of availing the loan. However
there is a pre payment fee on the outstanding loan amount.
This fee range from 6% of POS for preclosures within 1 year
from first EMI to 5% of POS for preclosures within 13-24
months from first EMI and 3% of POS for preclosures after
24 months from the first EMI.
In certain cases like applicants income falling short of the
minimum requirement the applicant for HDFC new car loan
may need to produce a guarantor who will stand surety for
the loan. However if the applicant meets all the income
requirements of the loan a guarantor is generally not
required.
The HDFC Bank does not explicitly mention the range of
interest rate it changes on new car loans. However it does
state that existing account holders with HDFC can avail of
special rates. Among other benefits for HDFC account
holders are an Auto Takeover Plan where they can apply for
new car loan if they have a at least 9 month old loan with
approved financier and clear loan repayment record. Holders
of HDFC International Credit Card or several other Gold
Credit cards can also have their new car loans approved at a
faster rate. In some cases HDFC Bank allows income proof
to be waived for new car loans- like in loans where the
maximum amount is 60% of the car invoice value and which
has to be repaid within 3 years.
The processing fees for HDFC New Car Loans are Rs.2150
up to loan amount of Rs.2.5 lacs, Rs.3150 from 2.51 to 4 lacs
and Rs.3650 for amount above Rs.4 lacs. Late penalty
payment is 2% per month.
Other than offering attraction finance options for new cars,
HDFC Bank also has loan products for used cars. The
eligibility and documentation required for used car loans are
much the same as those for new car loans. However loan
amount for used cars cover 80% of the value of car and the
loan tenure is from 12 to 60 months.
The HDFC Bank website has an online application form for
new and used car loans. Other than this those interested in
knowing more about the car loan products can contact the
bank on phone or visit the nearest HDFC Bank branch.
 APPLICATION FOR LOANS
AND THEIR PROCESSING
The bank would have loan application forms for retail advances
and credit cards. These would include information about the
fees/charges, if any, payable for processing, the amount of such
fees refundable in the case of non acceptance of application, pre-
payment options and any other matter which affects the interest of
the borrower, so that a meaningful comparison with that of other
banks can be made and an informed decision can be taken by the
borrower.
As part of the wholesale banking business, the bank has various
segments to which credit facilities are provided for their business
requirements. These include a wide range of customers and range
from small & medium enterprises to large corporate borrowers.
The bank has a process for identification of target customers to
whom facilities can be provided based on customer selection and
risk assessment for that segment. Thus, the focus is on contacting
prospective customers and encouraging them to avail of banking
services from HDFC Bank based on the incremental value we can
add to a customer's business, rather than customers making
applications to the Bank for facilities / services.
Thus, for the wholesale banking segment, we do not have any
standardized application forms to be submitted by prospective
customers.
The bank would give an acknowledgement for receipt of all retail
loan applications. Time-frame within which loan applications will
be processed would be indicated in the acknowledgement of such
applications.
The bank would verify the loan applications within a reasonable
period of time. If additional details / documents are required, it
would intimate the borrowers immediately.
In the case of all borrowers seeking loans, the bank would convey
in writing, the main reason/reasons which, in the opinion of the
bank after due consideration, have led to rejection of the loan
applications. In case the proposal does not meet the internal risk
parameters of the bank, the borrower would be intimated
accordingly.
 LOAN APPRAISAL AND ITS
CONDITIONS
The bank would ensure that there is proper assessment of credit
application made by borrowers. The assessment would be in line
with the bank's credit policies & procedures and relevant
regulatory guidelines.
The bank would convey to the borrower the credit limit along with
the terms and conditions thereof and obtain the borrower's
acceptance of these terms and conditions, given with his full
knowledge on record.

In respect of approved credit proposals, terms and conditions and

other caveats governing credit facilities given by the bank would
be reduced in writing and duly certified by a bank official. A copy
of the loan agreement along with a copy each of all enclosures
quoted in the loan agreement may be furnished to the borrower if
asked for.
The sanction letter or the loan agreement would stipulate if the
credit facilities are solely at the discretion of the bank. The bank
may disallow facilities that involve drawings beyond the
sanctioned limits, honoring cheques issued for the purpose other
than specifically agreed to in the credit sanction, and drawing on a
borrower account on its classification as a non-performing asset or
on account of non-compliance with the terms of sanction.
Further the bank does not have an obligation to meet additional
requirements of the borrowers on account of growth in business
etc. without proper review of credit limits. Any increase/additional
limits/changes in facilities requested by the customer would be
considered by the Bank based on its internal policies and
assessment and the Bank is not under any obligation to accede to
the specific request of the borrower.
 DISBURSEMENT OF LOANS
INCLUDING CHANGES IN TERMS
AND CONDITIONS
The bank would ensure timely disbursement of loans sanctioned in
conformity with the terms and conditions governing such sanction.
It would give notice of any change in the terms and conditions
including interest rates, service charges etc.

For facilities linked to other benchmark rates, these are revised as

per prior agreement with the customer, the process for which is
covered in the sanction letter duly accepted by the customer on the
loan agreement. For all other facilities, any change in interest rates
is with prior intimation to the customer. All revisions in other fees
and charges are also informed to the customer in advance.
 POST DISBURSEMENT
SUPERVISION
The bank would carry out post-disbursement supervision in
accordance with normal banking practice, the terms of sanction,
and the guidelines issued by the Reserve Bank of India from time
to time.
Before taking a decision to recall / accelerate payment or
performance under the agreement or seeking additional securities,
the bank would give notice to borrowers, as specified in the loan
agreement or a reasonable period, if no such condition exits in the
loan agreement.
The bank would release all securities on receiving payment of loan
or realisation of loan subject to any legitimate right or lien for any
other claim that it may have against borrowers. If such right of set
off is to be exercised, borrowers shall be given notice about the
same with full particulars about the remaining claims and the
provisions under which the bank is entitled to retain the securities
till the relevant claim is settled/Paid.
 SCOPE OF STUDIES
• The project will give rise to know the time period of
avail of loan i.e.
• Instant car loan.
• Attractive Car Loan plans to fastrack loan.
• Flexible repayment option.
• To know various car loan schemes.
• To know about policy of car loan.
• To know about the tenure of the car loan.
• To know the amount of maximum loan can be sanctioned to
its Customer.
• To know about the repayment programme of the loan
amount.
• To know to whom loan can be sanctioned on the basis of age
limit and on the basis of period of the self employment or
period of work in any Company.
• Provides all the crucial company information required
for business and competitor intelligence needs.
 • Contains a study of the major internal and external
factors affecting the company in the form of a SWOT
analysis as well as a breakdown and examination of leading
product revenue streams

METHODOLOGY OF STUDY

• COLLECTION OF Data
Data Collected Through

• Internet

• Web site of HDFC BANK LTD.

• Web site of Different banks

• Magazines

• Various Types of News Papers

• Times of India

• Indian Express

• Economic Express

• Also through various articles on banks from the internet

• The special book review from the articles on Internet.

 DATA ANALYSIS AND
INTERPRETATION
Requirement of document for the sanction of loan:
1) Photo
2) Photo ID
One of the following
 PAN Card
 Driving License
 Passport Copy
 Election Card
 Government ID Card
3) Address Proof (Latest)
One of the following
 Election Card
 Telephone Bill
 Ration Card
 Passport Copy
 Government Letter Head
 Sales Agreement
4) Income Proof
 One of the following
 Form 16 if customer is salaried
 Two years latest IT return for self employed
5) Bank statement last 6 months
6) Quotation of the car.
The car should not greater than 10 years Older at the end of the tenure.

HDFC Bank Car Loan Highlights

 Repayment (Tenure) options ranges from 12-84 months.
 Borrows up to 3 times annual (salary for salaried, professional) and 6
times annual income (for self employed professional).
 HDFC Bank account holders of can get fast approval on car loans with
minimum documentation.
 For existing HDFC Bank car loan customers with a clear repayment of
12 months or more, the bank offers to top-up car loan to the extent of
the original loan value.
 With HDFC Bank’s Overdraft against car, you can get an overdraft
against your car utilized the money for your personal or business needs.

The sanction process

Normally, it would take 2-3 working days for the sanction of process from
the date of receipt of all the documents at HDFC Bank Ltd. car loan
department. You call bank representative visits customer and explains the
loan product. Customer provide bank with income and personal documents
as listed along with the application form and processing fee as applicable.
Banks representative visits customer to validate information.
Documents are credit appraised and decision taken on the sanction of the
loan.
Personal meeting with customer.
Giving two references of same city.
Bank offer letter along with a list of documents required is delivered to the
customer.

Document Check List for A New

Car
Car loans require very few documents with compared to other types of loans.
They can be classified into three categories, document supporting to your
identity, your residence and your income.
Identity of Proof:
A copy of any document that can prove your identity:
You’re Passport, Driving License, Voter ID or PAN Card. Any of the above
documents with your photograph is proof that you indeed are the person you
process to be.
Proof of Residence:
A copy of your Passport, Drivers License, Ration Card, and Voter ID if you
reside at the same place as entered in the above mentioned documents will
do. If you stay as a tenant, different from one mentioned on your Ration
Card, Passport or Voter ID, you can produce utility bills of the place as
proof of residence.
Income Proof:
Salaried people need to submit their latest salary slip, Form 16 for the last
financial year, and their bank statement for the last 6 months. Self employed
people need to provide their IT returns for the last 2 years as proof of
Income.

Limitations of the Project

Report
Limitations of the project is the critical view of the project studies critically
evaluation is an important part of the project as if we examine the project
critically we can find many flows in the project in the project which is very
useful to understand project more precisely.
Limitations are as follows:
 No where during the project I was involved with the actual operation
of the products as their national processing are done there only.
 We had no sufficient time because of the semester pattern

examinations. Which comes in the short span of period of time.

 Duration of the study was limited.

 It was very difficult to collect the confidential data of the bank which
is not disclosed to any irrelevant persons.
 There were too many obstructions about collection of data.
 Summary
Data monitor's HDFC Bank Limited SWOT Analysis company
profile is the essential source for top level company data and
information.
The report examines the companies key business structure and
operations, history and products, and provides summary analysis of
its key revenue lines and strategy.
HDFC Bank specializes in the provision of banking and other
financial services to corporate and institutional clients.
The company's services include commercial, transactional and
electronic banking products. It also provides treasury services,
retail banking and capital markets infrastructure.
The company primarily operates in India. HDFC Bank is
headquartered in Mumbai, India and employs about 14,900 people.
The company recorded revenues of INR 124, 928 million
(approximately $3,131.9 million) during the fiscal year ended
March 2008, an increase of 51.9% over 2007.
The net profit was INR15901.8 million (approximately $398.7
million) in fiscal year 2008, an increase of 39.3% over 2007.

CONCLUSION
HDFC is one of the leading banks in Financial Sector.
The share of financial institutions in providing loans to the people
is tremendous.
In today’s global era with changes in the life style of the people the
need luxurious things has increased & to fulfill these needs they
required large amount of funds and for this,
They do approach to various financial institutions for taking loan.
During doing this project report I came to know various things like
procedures, policies and schemes offered by banks.
In this competitive world all the financial institutions do provide
loans but along with this they don’t provide the efficient services
to customers but HDFC BANK LTD. as a family provides
customer care services.
Here by, I conclude that the customers of HDFC BANK like the
products and services provided by the bank.

SUGGESTIONS
The HDFC BANK can perform in better manner by using or
implementing following suggestions
To perform in better manner the HDFC Bank may increase the
branches in every city.
It can also increase vacancies the back office or in the marketing
and finance specialization that helps in using appropriate strategies
for the development of the activities performed in the daily routine
work.
They can also appoint the development officers and team leader
who helps in promotion and motivation of the people working in.
 BIBLIOGRAPHY

 www.hdfcbank.com
 www.google.com
 www.yahoo.com
Reference Books
 Financial Management
 Annual report
 Indian Financial System