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Perseverance, inspiration and motivation have played a great role in the success of any venture. It would be incomplete to submit this report without acknowledging the people behind this endeavor and without this report without acknowledging the people behind this endeavor and without whose support I wouldn’t have able to achieve this. It gives us immense pleasure to express our gratitude to everyone who shared with me their precious time and effort during the project. A mammoth job like this calls for both intellectual nourishment and encouragement. I would like to thank ( work on such a fabulous project . ABHISHEK JOSHI M.B.A 2nd SEMESTER AES PGIBM AHEMDABAD. Mr. Rajeev bhargav Branch Head HDFC, Jaipur) for giving me an opportunity to
TABLE OF CONTENTS
S.No. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 Contents Preface Aims of Study Age Profile Introduction Mortgage loan File Process Loans for every need Achievements of HDFC Bank Research Methodology Observation Findings Comparative Analysis Analysis Part Confusion Suggestions/Recommendations SWOT Analysis Appendix or Questionnaire Bibliography
Several researches are conducted every year. But very little care is taken to am important are a relating to research methodology. Due to the ignorance or absence of the research methodology, the study proves to be futile. In the context of planning, organizing and development, the importance of research depend upon its quality and not in quantity. I have use appropriate methodology for my research study. It has planned, organized and developed in a very systematic manner. Great attention has been given towards the quality of the research. I tried to the best of my knowledge, experience, sincerity, cautiousness, and concentration with analytical power for this research study. This research study is conducted for the HDFC BANK branch Jaipur regarding the product and services. But and to the new budding of researchers who will conduct such type of research in future to enhance their work. I would like to convey my sincere gratitude towards Mr. Rajeev Bhargava (Branch Head HDFC, Jaipur) I would also like to thank Mr Taral Pathak(Training and placement officer AES PGIBM) . They guided me at each and every step in our research programme. They motivated me to collect fair, accurate, reliable and unbiased information. I would be failing my duty if I do not express my sincere gratitude towards my parents friend and colleagues. They significantly contributed their support during the course of my project. At last I extend my sincere thankful to all those customer who have given me reliable and valuable information regarding service in service centers.
AIMS OF THE STUDY
The study helps to know about the market position of the bank and the opinion of the customers and respondents about the bank as well as the service provided in respect of various products offered by the bank. The respondents were the customers as well as the non customers. Some of them were the employees of HDFC Bank and other were the non-employee. The aims of the study was to be well aware about the retail financing products or assets like personal Loan, Mortgage Loan, Auto Finance, Home Loan, Commercial Vehicles etc.
HDFC bank HDFCBK was incorporated in Aug. 1994 and promoted by Housing Development Finance Corporation limited (HDFC) India’s premier housing finance company, which also enjoys an impeccable track record in India as well as in international markets. HDFC was amongst the first to receive an in ‘principle’ approval from 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. HDFC bank concentrates in four areas-corporate banking, treasury management, custodial services and retail banking. It has entered the banning consortia of over 50 corporate for providing working capital finance trade services, corporate finance and merchant banking. It is also providing sophisticated. Product structures, sound advice and fine pricing mainly in areas of foreign exchange and derivatives, money markets and debt trading and equity research through its state-of-the –art dealing room with its sophisticated and customer friendly facilities & services including multi-branch access, ATM & cluster deposits and is well positioned and is well positioned to establish a significant niche for itself in retail banking. In Feb. 2000, times bank has been amalgamated with the bank. This is an important milestone in the history of bank as well as Indian banking sector, being the first merger of two private sector banks. This adds significant value to bank in terms of increased branch network, expanded geographic reach, enhanced customer base, skilled manpower, etc. Reverently HDFCBK
& life insurance corporation from alliance for online facility for payment of insurance premium . With this facility, LIC policyholders can now pay their insurance premiums through HDFC bank’s on -line payment facility . HDFCBK has become the first private sector bank to be authorized by the central of direct taxes as well as the RBI to accept direct taxes, commencing April 01,2001. the taxes will be accepted at specified branches of the bank. Also it has announced a strategic tie-up with Bangalore based business solutions software developer tally solution Pvt (TSPL) for developing and offering products and services facilitating on-line accounting and banking services to SME’s (small and medium enterprise). in 2001-02 the bank was listed on the new York stock exchange in the form of ADS. Each ADS represents 3 equity shares. Consequent to the issue . The paid up capital of the bank has increased by RS.37.42 corers.
A loan is a kind of advance made with or without security. In the case of a loan two banks makes a Lump sum payment to the borrowers. It is given tour a fixed period at an agreed rate of interest. In a present scenario it is loan that is running the life in more meaningful manner. Through loan or Borrowing or credit or funding a part of society (middle +Lower) enjoy well in advance. I think loan is getting alone with our life.
a) Being a career objective develop understanding about the retail loan assets i.e mortgage loan, personal loan, auto loans, home loan. b) Why the NPA’s are taking place in commercial Banking. c) Policy of credit management which approves (credit approval memo). d) Making the competitive study about the different segments of loans. e) To know the valuation criteria of technical feasibility, financial viability and role of F.I agency. f) Key-Criteria of Loan Funding.
Conditions of Funding Financing:(Policy Snapshot) i) ii) iii) iv) Loan Amount Minimum =Rs2 Maximum = 1 Crore. Minimum Property Value Residential = 8 Laces Commercial = Rs 15 Lacs. Income of Maximum 3 persons to be considered for eligibility calculations Age Angle minimum = 21 years maximum = Salaried – (60 years) Self – employed – (65 years) v) Age of property should not exceed 40 years at the end of the Loan.
Property to not be situated in Negative area List as per HDFC Bank. Financing Pattern TV (Property) Residential Commercial Retail 55% 45% Premium 60% 50%
RETAIL MORTAGE PRODUCTS (i) (ii) (iii) (iv) (v) (vi) 1. RMT a) Loan Amount up to Rs. 50 Local b) Minimum Repayment track records of 18 months with maximum 2 bounces. c) Loan Eligibility = Principal + (No. of EMI’s X EMI paid) 2. PMT Loan Amount = 50-100 Lecs. Loan eligibility = According to RMT. 3. LIP a) Applicable for traders Service industry etc. (NON-Manufacturing concerns) Retail mortgage take-over (RMT) Premium mortgagee takeovers (PMT) Liquid Income products (LIP) Gross Turnover Product (GTP) Gross Receipts Products (GRP) Banking Products (BKP)
b) Maximum & Minimum criteria Minimum = RS 5 Lacs Maximum = 25 Lacs. c) Documentation :- Normal including financial & 12 months Bank Statement. (4) GTP (Gross Turnover Product):a) b) c)
Applicable for Traders, Distributors & Businesses (NonManufacturing) 10% of gross turnover to be taken as net profit Loan Eligibility – As per normal calculation based on re-
worked net profit. Gross Receipts Product (GRP) a) Applicable – Doctors & Architects only. b) Maximum – 25 Lacs c) 50% of Gross Receipts to Take as net profit (6) Banking Product (BKP):a). Loan Range – 25 Lacs. b) No Financial or income documents required c) Only Saving & current A/C Customers will be evaluated. d) Maximum LTV will be 40% (both Residential & Commercial) e) Banking Norms. i) (ii) (iii) AV. balance (an a daily basis) to be calculate adjusted for cheques returns (Last 12 months statement) Not more than 2 cheques bouncing over 6 month’s period. Loan’s funding Up to Rs. 15 Lacs = Average balance / EMI should be 2 times
Up to Rs 25 Lacs = Average Balance / EMI Should be 3 times
Documentation Requirement: Duly filled application form. Recent passport size photograph of applicants. Form-16 for last 2 years for salaried applicants. Acknowledged copies of income lax returns & computation of income for last 2 years. Resident / ID proof of all applicants. For non-Salaried applicants Copies of audited financial statement s for last 2 years for the firm company in which the applicant / co-applicnts is the partner /owner/ Director (As the Case may) certified by a C.A.(Along with name & M.N.)
Customers – DCA- BANKS- CPA (Central Processing Agency – FI Agency) – Personal – Meeting or Interview – Survey Conducted – Back to Bank with report attached – CAM decides about Sanction of Loan – Approves – cheques in the hands of customers.
LOANS FOR EVERY NEED
Now, our loans come to you in easy –to –pay monthly installments, and are available with easy documentation and quick delivery. Personal loans: Take a loan of up to Rs. 15 lacs for a wedding, education, purchase of a computer or an exciting holiday. New car loans and used car loans :- finance up to 90% of the cost of a car ,new or used ! and the loans come to you with easy documentation and speedy processing at attractive interest rates. Loans against shares:- Get an overdraft up to Rs. 10 lacs at an attractive interest rate against physical shares ,up to 50% of the market value of your shares. In case of Demate shares, you can get a loans Against shares of up to 65% of the market value of your shares, till Rs. 20 lacs. Two wheeler & consumer Loans :- To help you buy the best durables for your home . Demat account:- protect your shares from damage , loss and theft, by maintaining your shares in electronic form. you can also access your demate account on the interest . Current Account :- Get a personalised cheques book , monthly account statements , inter-branch banking and much more.
Mutual funds :- Apart from a wide choice of mutual funds to suit customer needs you benefit from export advice on choosing the right funds based on in depth market analysis. International credit card:- Get an option of silver ,gold ,or Health plus credit card accepted worldwide from a world-class bank . NRI Services : A comprehensive range, backed by unmatched features and world-class service, ensures NRI’s all the banking support they need . Forex Facilities: Avail of foreign currency, travellers cheques, foreign exchange demand drafts, to meet travel needs . Insurance : HDFC Bank now brings Life Insurance and Pension solutions like risk cover Scheme, Children’s Plan and Personal Plan from HDFC standard Life Insurance Company Ltd . * Insurance is the subject mater of solicitation.
ACHIVEMENTS OF HDFC BANK
The bank was selected for the economics times award-corporate excellence foe emerging company. The bank has continued to receive awards and gain recognition from various leading domestic and international publications during200203. The bank was selected as “best bank in India 2002” by Euro money,” best local bank in India 2002 by finance Asia. The bank was also rated as the “best domestic commercial bank 2002” by Asia money . The bank was selected from amongst over 400 nominations from 24 countries, to be a recipient of the computer world honors 2002 award in the finance, insurance and real estate category for its use of information technology.
DATA SOURCE:- New and previous record of existing customers. RESEARCH APPROACH:- survey Approach RESEARCH INSTRUMENT:- Structured questionnaire SAMPLE PLAN:-
ELEMENT: Existing and new customers
SAMPLE UNIT: Delhi and jaipur SAMPLING METHOD: Random sampling SAMPLE SIZE: 200 DATA COLLECTION: Personal Interview Method
CONTACT METHOD: Personal interview of the entire respondent was carried out . TARGATE CUSTOMER: CORPORATE Houses Corporate Houses Covered: Times of India Building
Sterling group of companies Godrej Group of Companies L & T Head Office HPCL BPCL BCE Taj President Birla Sunlife Insurance East Coast Pvt Ltd Samsung India Sansui India Print Info Tech Kodak
1. People are of the view that initially bank provides very good services and later on it starts deteriorating. 2. People are afraid of the hidden cost which most of the banks generally charges later on . 3. Transaction Rate of the De-mate A/C is very High as Compared to other DP. 4. People are very unsatisfied with HDFC ATM Network . 5. Instead of Folio maintenance charges , transation charges should be lowered down.
FINDINGS:a) 50% People of country is covered by loan umbrella. b) Private Banks (Specially ICICI & HDFC) are playing a key-role in mortgage loan segments. c) People seems to be problematic with regards to nationalised Banks so for as formalities is concerned. d) 5% Defaulter cases were estimated in entire project. e) In cut-throat competition rate of interest (ROI) plays vital role in sanctioning to loan. f) Private finance companies like GE country wide are taking market shore of entire loan segment. g) Deposit the money in nationalised Banks due to high ROI, Pick-up the money from private banks due to lower ROI. h) Working capital management credit management, risk management system is up to the mark. i) In my finding it seems that loan has become part and parcel in every corner of life.
We also did analysis about net banking and come to a conclusion that:HDFC bank gives a convenient way of accessing your bank account from anywhere and at any time. When your register for net banking, HDFC bank issues you a password, which you can use with your customer identification number to do all your banking transactions, round the clock. All you can do through Net banking of HDFC bank are:1. Account balance enquiry. 2. Account statement enquiry. 3. F.D. Enquiry. 4. Net F.D. request. 5. Funds. 6. TDS Enquiry. 7. Demand Draft. 8. Stop payment request. 9. Cheque status enquiry. 10.Cheque book request. 11.Demat on the net. Experience a live Demo of net banking. Log on to www.hdfcbank.com. whereas Global trust bank provides such facilities like: 1. Account information.
2. Depository enquiry. 3. Requests. 4. Transfers.
Loan Segment Type of Loan ROI Roll EMI PER LACS 1. Mortgage (Loan Against Property ) 2. HOME construction Loan 3. 4. Personal or Cash Loan Auto Finance Unsecured 5-6% Rs. 778 Mutually agreed -HighUnsecured 24-32% Rs. 3612 Rs. 10 Lacs - Less Requirements Unsecured 8% Rs. 956 Less than Mortgage - do Secured 11% Rs. 1378 SANCTION OF LOAN Rs. I Crore DOCUMENTTION PROCESS More
Mortgage Loan Auto
10% 16% 21%
Commercial Loan Home Loan
(1) Huge-crowd on the road due to auto finance (2) Personal Loan is kecking out the personal problems of people. (3) Loan against property (Mortgage Loan) is also growing concept due to rising in price of land due to not being charged of depreciation on Land. (4) Home Loan is also building block to build up the building of every dreams exist in society
SUGGESTIONS / RECOMMENDATIONS
On the Analysis with the peer banks, following weaknesses in the system were found out. The possible remedy is also suggested hereunder: (i) (ii) (iii) (iv) (v) Branch expansion should be expanded to small cities to capture huge market share. Documentation, Must be Minimize for easy disbursement. NPA mechanism must be made easy for the betterment of the Banks. Branch expansion should be touching the entire Jaipur City because all the buildings of banks exist is c-scheme mostly. Should also make attention to the capital market services i.e. Depository services, custodian, de-mat through its subsidiary following the ICICI. Bank with subsidiary I-CEK. (vi) Analysis the policies of ICICI Bank, standard chartered. Banks & make the action plan understanding the expectations of borrowers. (vii) There are so may people who are interested in opening their account in HDFC Bank. (viii) Majority of people access to net. (ix) Most of the people are aware of net banking. But very few people use it, as they say that they think net is not safe and doing banking transaction on net would not prove safe.
A, lot of people agree to this thing that net is convenient and time saving. Higher ATMS in Jaipur rather than any other banks in Jaipur. very with tight security.
(xii) We came to conclusion that people think net banking should be (xiii) Bank must strive continuously to come out with the product innovation ahead of its competitors. For this, the bank needs to identify and enter into a niche market. For example, it might focus on the youth / student oriented products and tap its huge potential. (xiv) Kotler says, “Its 5 times as costly to make a new customers and just not believing in increasing their numbers. This requires giving more attention to its existing base of customers by way of better after sales service. For example, motivation should be set high for the employees of the bank to attend and provide solution to the customer’s query and if possible check out with the preferred customers at regular intervals. (xv) The bank must rejuvenate its housing loan plans (earlier core activity) . it has lost substantially to its rivals in this sector . it must come out with some attractive policies in this regard. (xvi) The bank focuses mainly on the Metropolitan cities. It lacks geographical reach in other important centers (semi urban and rural) in the country which are considered to be the main mobilization centers. It must take a lead to its competitors by opening up more and more branches and there by registering its presence in these important areas. (xvii) Creating awareness in the customers to make use of net banking / phone banking facilities would enable bank to cut down its cost of
teller transaction, The money, thus saved, could be utilized in providing better service to its customers. (xviii)Cross selling of products to customers could enhance the company’s bottom line to a great extent. The most important aspect is none but the people working in the organization. Without their willing co operation, all other efforts are rendered useless. So, the bank must continuously see to it that their employees are always satisfied. The perks given to them should match the perks prevailing in the industry. Some discretion can also be given to them in certain regards. Thy must always be appreciated for the good work done by them.
1. STRENGTHS:(a) (b) (c) Leader in home loan segment Account having in HDFC Bank will get more facilities. Credits at the sole discretion of HDFC Bank.
2. WEAKNESSES:(a) (b) (c) (d) Strict Policy of funding Disbursement mechanism is not unto the mark. Personal Loan Policy of bank is not up to the mark compared to ICICI Bank Defaulter cases.
3. OPPORTUNITY:(a) (b) (C) To tap the huge market share. To maintain the leadership in home loan segment. To tape the opportunities lying in Auto finance.
(a) (b) (c) Major Private players like ICICI, standard chartered. May lose the leadership position in any time if competitors wins the game. RBI Policy.
. HDFC BANK. JAIPUR
“Corporate Finance and Merchant Banking”
As a prerequisite for two years full time regular degree course of
Master in Business Administration
Submitted To:Mr Rajeev Bhargava (Branch Head,HDFC, Jaipur)
APPENDIX OR QUESTIONNAIRE QUESTIONNAIRE FOR CUSTOMERS Name_________________________________________ Address_________________________________________ Sex___________________ Age___________________ Education ______________________________________ Occupation_____________________________________
Q.1 You are banking with (Tick the appropriate option)?
A. Private Banks B. Nationalized banks.
Q.2. Which type of account do you operate in (Tick the appropriate option)? A. Saving Bank Account B. Fixed Deposit Account C. Current Account. D. Recurring Deposit Account E. Internet Account
Q.3 What made you open the Account in HDFC bank?
Q.4 What time it took you to open the Account? Q.5 Are you aware about the debit cum ATM card provided by bank (Tick the appropriate option)?
A. YES B. No
Q.6 Are you aware of 8 to 8 working of HDFC bank (Tick the appropriate option)? A. YES B.NO Q.7 Is ATM convenient to you ( Tick the appropriate option)? A. YES B. NO Q. 8 Have you ever faced any problem in operating ATM(Tick the appropriate option)? A. YES B. NO Q.9 How often do you use ATM for banking operation? Q.10 Do you feel ATM is safe and secure (Tick the appropriate option) ? A. YES
B. NO Q.11 What is the behaviour of bank employees towards you (Tick the appropriate option)? A. WELL B. FAIR C. BAD Q. 12 Have you ever made complaint against any employee (Tick the appropriate option)? A. YES B. NO Q.13 Do personal relationships with the employees help cut short the waiting time (Tick the appropriate option)? A. YES B. NO Q.14 Is the space and environment of the bank is suitable and comfortable for customers (Tick the appropriate option)? A. YES B. NO Q.15 Do you feel there is need of more ATM’s in the city(Tick the appropriate option)? A. YES B. NO Thank you
• Annual report 2003-2004 HDFC bank • HDFC Manual
• Indian Bank Association Library, Cuffe Parade, Mumbai
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