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Axis Bank- Vehicle Loan-Car Loan

Axis Bank offers its valuable customers a variety of loans in India that will suit
their needs. At Axis bank you are sure to find a loan product that is just meant for
you. We offer loans in various denominations so that you can pursue your dreams
of buying a car, a home or to send your child abroad for higher education. You can
also avail our loan facilities through the internet by providing few basic details and
our representative will promptly respond to your query for getting a loan.
No matter what be your need, our liberal criteria for loan application processing
will see to it that your application is processed in minimum time and in a hasslefree manner.
A car loan is an amount of money taken from a lending provider to purchase a new
or used car. The individuals agree to repay the total amount of the loan along with
the lending interest rate amount to the lender (often banks) as and when required.
Individuals can choose a car from a list of models and manufacturers in India
according to their annual income and budget. Presently, a common man can fulfill
his dreams of purchasing a car by getting an auto loan. According to your
requirements and financial situations, you can get auto loans from a variety of auto
financing services such as Mahindra Finance, Tata Finance, Bajaj Finance and
State Bank of India loans.
For example, if you are thinking about financing options with Bajaj Finance, you
must first give your information regarding the type of loan to the company. The

Bajaj Finance associates will then get in touch with you to assist with the loan
eligibility amount and the different offers and schmes available with their bank.
These days, almost everyone has the desire to buy a car which best suits them
according to their requirements. If you are one that has the desire to have a car,
then simply fill out our form on to get free car loan quotes.
You may also want to apply for car insurance through our site.

Types of Car Loan

There are several different types of auto loans so that every individual will find at
least one auto loan that is able to meet their requirements.

New Car Loan

A new car loan is taken out to purchase new vehicles generally from dealerships.
As citizens of India are getting higher pay packages, many salaried and selfemployed individuals are looking to get their dream car.
Many individuals have the cash in hand and they prefer to purchase a new car on
the spot. This however does not apply to the majority of those falling under this
category. Most people will contact banks for information about their auto loans and
look to proceed from there. At, we provide you with this
information along with the lowest lending interest rate from various auto loans
providers such as Bajaj Finance, Tata and Mahindra.
There are many banks which provide new car loans with low car loan rates in
India. As the financial market fluctuates in India, there may be an increase in the
lending interest rate for new car loans. Because of this situation, be careful when it

comes to getting an auto loan and plan according to your financial situations and
position. Use our loans calculator to calculate the amount which you will need to
pay every month.
Used Car Loans
Used auto loans are taken by the borrower to purchase a used car from either a
second hand car dealer or an individual seller. There are a number of lending
institutions which provide used car loans in India. Before going for a car loan,
check the various offers and schemes from Bajaj Finance and other providers.
Sometimes people cant afford to buy a new car and in such cases, going for a used
car is the best option. The amount of money that you can afford per month should
also be taken into consideration in order to take the right decision for auto loans
from top banks and lenders such as ICICI, AXIS, HDFC, SBI and Bajaj Finance.
To get used auto loans, banks usually charge a high lending interest rate. Its
always good to check with banks about the lending interest rate because buying a
used car in India will definitely be cheaper than purchasing a new car. The
depreciation of used cars is always less than that of a new car. In most cases the
owner of a car will apply for auto insurance for the used car and the cost of
insurance will be lower. Get car loan quotes instantly by filling in your personal
details in our form.
At you will learn more about personal loans, home loans and
two wheeler loans and the you are guaranteed to leave more enriched.

Features & Benefits:-

Axis Bank offers uniquely tailored Car Loan products that take the pain and hassle
out of buying a car. Flexible, transparent, quick, and cost-effective, our Car Loans
put the joy back into owning a car.
At Axis Bank, we realize that owning a car has increasingly become a necessity.
But we also realize that the price tag of your dream car may be just outside your
immediate grasp. Axis Bank's Auto Loans are just what you need to bridge the gap.
Car Loan value calculated on ex-showroom price of the vehicle
Attractive interest rates on Car Loans
LTV up to 95% of the ex-showroom price on select models
Auto loans

available for

salaried and self-employed individuals,

proprietorships, HUF, Partnership firms, Limited Liability Partnership

Firms, Trusts, Societies and Companies
Banking surrogate schemes available
Loans offered from Rs. 1 Lakh onward
Car Loans tenure from 1 year to 7 years
Calculate your monthly outgo with our Car Loan EMI Calculator
Special benefit available for Priority Banking, Wealth Banking and Privee
banking customers. To know more, contact your Relationship Manager

Special Surrogate Scheme available for Club 50 and Channel One Current
Account customers
Special Scheme for Axis Bank Salary A/C customers

Eligibility :Axis Bank offers Car Loans at attractive interest rates to both salaried and selfemployed individuals who meet our age and income eligibility criteria.

Salaried Individuals
Minimum age of applicant: 21 years
Maximum age of applicant at loan maturity: 70 years (Conditions apply)
Income: Minimum Net Annual Salary of Rs. 2.4 Lac p.a. for all approved car
Income eligibility: As per latest salary slip and Form 16
Employment: Minimum 1 year of continuous employment

Self-employed Individuals
Minimum age of applicant : 18 years
Maximum age of applicant at loan maturity : 75 years

Income: Minimum Net Annual Business income of Rs. 1.8 Lac p.a. for
selected models and Rs. 2.0 Lac p.a. for others
Income eligibility - As per latest ITR
Employment: Minimum 3 yrs in same line of business.
Self-employed Non Individuals
Income: Minimum Net Annual Business income of Rs. 1.8 Lac p.a. for selected
models and Rs. 2.0 Lac p.a. for others
Income eligibility: As per latest 2 year ITRs and audited financial of 2 years
along with computation of income
Employment: Minimum 3 yrs in same line of business.
*All of the above is subject to terms and conditions.
Scheme for Priority/Wealth/Privee Customers
Eligibility: All Priority/Wealth/Privee customers with a vintage of 6 months
A minimum Average Quarterly Balance as below:
An AQB of Rs. 1 Lakh for last 2 completed quarters. AQB requirement to be
meeting for both the quarters
Maximum loan amount restricted to 3 times the AQB in the last 2 quarters

Scheme for Salary Customers

All customers having their Salary A/c with Axis Bank since the past 3 months and
working with the following organisation are eligible for this product.

Public Limited & Private Limited Companies
Permanent employees of State / Central Government
Permanent employees of Public Sector Undertakings
Permanent employees of reputed schools / colleges

Minimum age of applicant: 21 years
Maximum age of applicant at loan maturity: 70 years
Income: Minimum Net Annual Salary of Rs. 2.40 Lac p.a.
Income eligibility: As per latest salary slip and Form 16
Employment: Minimum 1 yrs of continuous employment

Documentation:List of Car Loan documents required

Age proof
ID proof
Application form
Residence proof
Income proof
Bank statement
Signature verification proof
Pro-forma Invoice or Rate List
Documentation for salaried applicants:
Last 3 months salary-slip
Form 16 or Incomne tax return
Documentation foe self employed applicant
Last 3 years Income Tax Returns with computation of Income

Last 3 years CA Certified/Audited Balance Sheet and Profit & Loss


Post Sanction / Pre Disbursement Documentation

Loan Agreement duly signed along with RTO set
Standing Instruction (SI) Request / ECS Form / Post Date Cheques (PDCs).
Security Cheques required for SI and ECS
Margin money receipt

Interest Rates & Charges:One of the prime considerations while seeking car finance is the Car Loan interest
rate. This is not surprising because the interest rate is one of the factors that
determine how much EMI you will work out.
Axis Bank offers some of the most attractive Car Loan rates in India, besides the
benefits of simple processes, flexible tenures, and unmatched customer service.
Our low Car Loan rates allow you to bring down your monthly outgo. Even as Car
Loan finance rates fluctuate based on external market conditions, Axis Bank
ensures that your auto loan interest rates are competitive and reasonable.

Car Loan Interest Rate

The Axis Bank interest rates are among the most attractive Car Loan rates in India
today. Our auto loan rates ensure that you have to pay less every month.
Rates of Interest
11.50% - 12.50%

Processing Fee*
Rs. 3500 to Rs. 5500

Documentation Charges*

* Inclusive of Service Tax

Car Loan Other Charges

We offer our Car Loans at attractive interest rates. In addition, our processing
charges are transparent and kept to a minimum so that you pay less upfront. Here's
what you have to pay:


Cheque Bounce / Instrument Return
Cheque / Instrument Swap Charges
Duplicate Statement issuance charges


issuance charges
Duplicate No Dues Certificate / NOC
Late repayment penalty
Loan cancellation / Re-booking

Foreclosure Charges

Part payment charges **

10 Stamp Duty
11 Issuance of Credit Report

Rs 500/ Instance
Rs 500/ Instance
Rs 500/ Instance
Rs 500/ Instance
Rs 500/ Instance
2% per month
Rs 1000/ instance
5% of the Principal Outstanding plus
service tax
5% of the Part Payment amount plus
service tax
At Actuals
Rs 50/ Instance

Service Tax as applicable will be levied

Part payment will be allowed twice in a loan calendar year and once in a loan
calendar month.
The minimum amount accepted for part payment will be equal to one EMI and
maximum amount will be 25% of the balance principal in one year.

Axis Bank vehicle Loan Details

Interest Rate
(Monthly reducing balance)

-10.50% to 15.00%

Processing Fees


Loan Tenure

-1 year to 5 Years

Pre Closer Charges

-10% (plus services tax) of prepaid amount

Within first six month. 5%

You are probably eligibility for an Axis Bank Vehicle Loan if you are
Less than 75 years old.
Salaried or self-employed with regular income.
Earn more thsn the minimum income required.
Axis Bank Car Loan amount eligibility is based on these factors
Minimum income required Rs. 20,000 per month
Loan capped @95% of the ex_show room price
EMIs of other loans lower your eligibility
Increase your eligible Axis Bank Car Loan amount by these steps
Pay of your credit card bills
Choose longer Tenure loan up to 5 years.

2.1 Review of Literature
2.2 Research Methodology
2.3 Hypothesis of the Study
2.4 Limitations of the Study
::29 ::

Health of banking industry indicates the health of the economy of

a country. Indian Banking industry has witnessed changes after the
liberalization of the trade of country. Earlier the Indian banks were slow
in functioning and it was not much according to the customers needs. The
government controls on Banking system were tighter but now within the
last two decades the Banks are adjusting themselves towards the Marketing
concept bringing more products suitable as per the demand of market. In
Indian market the Public sector Banks and Private sector Banks are
operating. Both sector banks are operating in the competitive market and
aspiring for growth. Various views on Public and Private sector Banks
are as follows :
Sarkar and Das find Public Sector Banks comparing poorly with
the other two categories. However, they caution that no firm inference
can be derived from a comparison done for a single year1.

Satyamurthy clarified the concepts of profits, profitability &

productivity applicable to the banking industry organized by the bank
managements that the pressure on the profitability is more due to the
factors beyond their control2.
Singh & Kumar analyzed that deposits is a major determinant of
spread followed by borrowings and labor. The study again concluded
1. Sarkar, P.C. & Das, (1997) Development of composite index of banking
efficiency: The Indian case, RBI occasional papers, 18(1): 67-75
2. Satyamurthy, B(1994). A study on interest spread in commercial banks in
India. NIBM, working paper
::30 ::
that average technical and allocative efficiency are the highest in foreign
Das concluded that while there is a welcome increase in emphasis
on non- interest income, banks have tended to show risk-averse behavior
by opting for risk- free investments over risky loans4.
Singla & Arora studied the comparative performance of Canara
Bank and Indian Bank that both the banks have improved their financial
performance during the study period where Canara Bank has an upper
hand in growth of deposit, advances and average working funds. In case
of productivity it is rising in both the banks but remained much higher
in Canara Bank.5
Swamy concludes that in many respects New Private Sector Banks
are much better than Public Sector Banks, even they are better than
foreign sector banks.6
Dr Firdos T. Shroff says that Indian Banking industry will have
to adopt latest information technology not only for the survival of Banks

3. Singh, I& Kumar, P.(2006) Liberalization and efficiency: The case of Indian
banking. Indian management studies journal, 10(4): 77-93
4. Das, A (1999). Profitability of public sector banks: A decomposition model.
RBI occasional paper, 20(1): 45-56
5. Singla & Arora, R.S. (2005). Financial performance of public sector banks: A
comparative study of Canara bank and Indian bank. Punjab journal of Business
studies, (1): 87-93
6. Swamy, B.N.A (2001). New competition, Deregulation and emerging changes
in Indian banking: An analysis of the comparative performance of different
bank groups. Bank QuestThe journal of India institute of banking and finance,
72(3): 3-22
::31 ::
but also to operate with greater efficiency and flexibility. Banks which
invest wisely in IT and turn their investments into successful application
will be the leaders in the competitive economy of twenty first century.7
Saghir Ahmed wrote that in the Indian context, a major element
of financial sector reforms has been the adaption of a set of prudential
measures relating to capital adequacy, income recognition, asset
classification and provisioning, exposure norms, disclosures, investment
and risk management as well as asset liability management aimed at
imparting strength to the banking system.8
Vittal mentioned that after the Industrial Revolution we now have
the Technology Revolution. Technology is changing the way we live, the
way we work and the nature of work life itself. As science continues to
advance we will increasingly see technology being integrated as a natural
part of our day-to-day existence. All this will mean products that are
readily accessible at reduced costs to all those who want it. For architects

it could be designing , for environmentalists this could be a means of

increasing awareness and perhaps, avoiding disasters throughout the world,
authors may have a wider canvas to sketch on, for stock market traders
this could mean better decision while dealing in many markets for
manufacturing giants this could aid in inventory and distribution
management, and for financial markets this would mean catering to the
7. Dr Firdos T. Shroff (2007). Modern Banking Technology, Northern book centre,
Daryaganj, New Delhi, Pages 1 & 2
8. Saghir, Ahmed, Financial reforms in India, Mittal publications, 2006, New
Delhi, Page 46
::32 ::
smallest financial needs of customers in increasingly competitively
Zeithaml & Gremler are of the view that as a customer continues
to make purchases from a firm and to receive value in the exchange
relationship, the firm begins to acquire specific knowledge of the customers
needs, allowing it to create an offering that directly addresses the
customers situation.10
Adrian Payne is of the view that the three levels beyond the core
or generic product represent the opportunities to provide added value to
customers. This added value may be solely at the emotional level it is
nevertheless real to the customer. Value is added through the creation of
strong brand names and the owners of the brands can command premium
prices for them. Branding has an important role in helping customers be
assured of uniform service quality.11
Kotlar said that Marketing came into banks in the late 1950s, not
in the form of marketing concept, but in the form of advertising and

9. Vittal, N (2001). The emerging challenges: Strategies and solutions for Indian
banking. IBA Bulletin 23 (3): 9-15
10. Zeithaml & Gremler Services marketing TATA McGraw-Hill, 2008, Pages
184 & 185
11. Payne. A. (2003) The Essence of services marketing, Prentice Hall of India,
New Delhi, Page 127
12. Kotler, P. (1980) Marketing Management: Analysis, Planning and Control,
Prentice Hall of India, New Delhi, Page 12.
::33 ::
Saxena says that in India, however, the importance of marketing
was realized much later. During 1950s, Indian banks were more
conservative and inward looking, concerned mainly with their profits. As
a matter of fact, competition was not in existence. On the one side of the
fence was State Bank of India alone, enjoying Government patronage and
on the other side were private commercial banks, local by orientation,
primarily serving the interests of the controlling business houses. It was
the phase of select banking and even the communication through the
media was looked down upon with contempt as something against the
tenets of banking culture. Even the advertisements released till 1966 were
very few and far between13.
Rajan says that, after nationalization of fourteen major commercial
banks in 1969, banks woke up from their splendid isolation and found
themselves in a highly competitive and rapidly changing environment,
with competition becoming fierce day by day. Banks approach towards
customers and market underwent a change and focus was gradually shifted
to marketing their products. The first major step in this direction of

marketing was initiated by State Bank of India when in 1972 it reorganized

itself on the basis of major market segments - small industries and small
businesses, agriculture, commercial and institutional, and personal and
service banking. Again in 1973, the State Bank of India took yet another
13. Saxena, K.K (1988) Bank Marketing: Concepts and Appplications, Skylark
publications, New Delhi, Page 147
::34 ::
major leap forward in the direction of marketing when it took upon the
responsibility of involving itself in the neighborhood affairs and winning
the cooperation of community development efforts. Realizing the duty
towards community development, individual banks, in order to have close
contact with the masses, also started actively participating in many of the
social, economic and education functions/ceremonies arranged by different
Ajit, Bhattacharya and Ghose wrote that in the early 1980s,
banks started thinking in terms of product development, market penetration
and market development.Banks also accelerated their process of equipping
their staff with the marketing capabilities and attitudes through different
programmes.15 & 16
Ghose wrote that apart from unprecedented growth and functional
diversification, there has, in fact, been a change in the concept, precept
and outlook of banking.17
Sundaram said that the post-nationalization era witnessed a
14. Rajan, N.N. (1992) Marketing of bank services The banker, vol 39, No 9,
November, Page 20
15. Ajit, S. (1986) Training for Bank Marketing, Financial express, Bombay,
December 31, Page 6

16. Bhattacharya, B.N. and Ghose, N.K. (1989) Marketing of bank services,
Problems and perspectives, Economic and political weekly, February 25, Vo.
24, No. 8.
17. Ghose, B.K. (1990) productivity in banks, State Bank of India, Monthly
Review, August, Page 34
::35 ::
complete transformation of Indian banking from class banking to mass
banking, from asset based lending to production oriented lending and
from elite banking to social banking. This present phase of marketoriented
banking or bank marketing started in early eighties. It could be
concluded that adoption of marketing concept in Indian banking as a
conscious and organized effort is of recent origin. Marketing has emerged
now as the core business philosophy for financial service companies and
successes belongs to ones who excel in customer mindedness and
responsiveness. Now the products are designed keeping in mind the needs
and wants of customers.18
Kotler wrote that the Business Environment is characterized by
economic, legal and technological changes. In a competitive environment,
companies can react by emphasizing operations and financial efficiency
and/or more focused product and market strategies.19
Bhattacharya, Muniraj, Nageswar, and Ramchandra in their
studies highlighted branch expansion particularly in rural areas as one of
the contributing factors in decreasing customer dissatisfaction. This
dissatisfaction can be removed when product variants are designed
according to the needs of rural customers. Lot of dissimilarities exists
between a rural and urban area. Each of them is far from being
18. Sundaram, S. (1984) Customers service in banks at cross roads, the journal

of the Indian institute of bankers, vol 55, No 4, pp 21-29

19. Kotler, P. (1999) Marketing Management: The Millennium Edition, Prentice
Hall of India, New Delhi, Page. 50
::36 ::
homogeneous. The income trends and financial assets vary considerably
and therefore rural banking deserves different approach.20, 21, 22 & 23
Gurdeep, observed three areas which merit special attention for
the bankers as: (i) quick receiving and payment of cash; (ii) remittance
of funds, whether by means of drafts, mail transfers or telegraphic transfers,
with a minimum of delay; and (iii) collection of cheques, bills, dividend
warrants, etc., at maximum speed. In all the three areas, he believes that
banks have a lot of say, and by cutting the delay at each stage, the
customer satisfaction can be improved significantly regarding financial
products. To overcome growing customer dissatisfaction banks should
adopt two-fold strategy include creation of wide range of products, suitable
and beneficial to the customers 24
State Bank of Indias home loan portfolio has recorded a 73.86 per
cent growth against Rs 62,338 crore (Rs 623.38 billion) as on September
30, 2009. The countrys largest bank, the State Bank of India (SBI), is
20. Bhattacharya, B.N. and Ghose, N.K. (1989) Marketing of Banking Services
in the 90s, Problems and Perspectives, Economic and Political weekly, February
25, Vo 24, No.8
21. Muniraj, R. (1994) Strategies to Improve Customer Service in Banks, The
Banker, June, pp.31-34.
22. Nageswar, R. (1987) Customer Service in Banks Must Improve, Yojana,
Vol. 31, No.13, pp.20-31.
23. Ramachandra, R.B. (1992) Where the Bankers are not Market-Friendly, The

Banker, 39(9):26-28.
24. Gurdeep, S. (1994) Marketing of Services , Rawat publications, New Delhi,
Page 90.
::37 ::
eyeing aggressive targets as it looks at doubling its home loan portfolio
over the next three years.
We are hoping to have a home loan portfolio worth Rs 2 lakh
crore (Rs 2 trillion) by March 31, 2015. As on September 30, it stands
at Rs 108,381 crore (Rs 1.08 trillion), said a senior bank official.
The home loan portfolio implies the opening balance of loans plus
loans disbursed, after deducting loans repaid in a year.
According to an SBI official, the bank will target Tier-I and TierII cities for growth in home loans. The bank is also increasing the number
of retail assets central processing centres (RACPC).
Growth in cities like Mumbai may be slow but we are seeing
growth in other cities. This financial year, we opened 23 additional
RACPCs so far, which took the total number to 121 centres. We may add
another 10-12 centres during the remaining part of the financial year,
said the official. The increase in RACPCs will help the bank to sanction
more loans.
SBIs home loan portfolio has recorded a 73.86 per cent growth
against Rs 62,338 crore (Rs 623.38 billion) as on September 30, 2009.
However, a major part of this growth was due to SBIs controversial
teaser loans scheme, launched in February 2009.
According to Vaibhav Agrawal, vice-president (research) at Angel
Broking, SBIs home loan target is a bit on the higher side.
SBI may not be able to reach a portfolio size of Rs 200,000 crore

(Rs 2 trillion) but I think they will surely manage to reach Rs 1,70,000
crore (Rs 1.7 trillion) home loans portfolio by March 31, 2015.
::38 ::
Because home loans is under-penetrated and there is scope for
higher growth. If that happens, then SBIs home loans portfolio will grow
at a faster rate than the industry growth, he said.
According to Agrawal, SBI could afford to offer loans at competitive
interest rates as it has lower cost of funds and wider branch network. He
estimates the cost of funds of SBI at about 40-50 basis points lower than
its peers.
The SBI reduced the processing fee on home and auto loans by 50
per cent for loans availed till December 31, 2009. With this reduction, the
bank is quoting the lowest processing fee on both home and auto loans
in this festive season.
According to a senior SBI official, the reduction in processing fee
on home loans will result in a Rs 5,000-crore (Rs 50 billion) growth in
portfolio by December 2009-end.25
Amandeep said that for nationalized banks, the share of fixed
deposits which was 54.20% of total deposits in 1976, increased to 57.55%
in 1985 while the share of current deposits declined from 20.8% to 17.96%
over the same period ( the share of saving deposits also declined slightly
that is from 24.98% in 1976 to 24.48% in 1985). For public sector banks,
the proportion of current deposits declined from 23.74% in 1976 to 20.28%
in 1985 while the fixed deposits and savings deposits witnessed an increase.
Fixed deposits increased from 53.39% to 55.69% and the savings deposits
from 22.66% to 24.02% over the period 1976-85. For State bank group


::39 ::
and private sector Indian banks the savings deposits share increased from
18.13% to 23.02% and from 23.01% to 26.97% respectively over the
period 1976-85 however the share of fixed deposits of these two categories
of banks has shown a slight decline.26
The ICICI bank has adopted a conscious strategy of focusing on
current and savings account deposits and reducing its wholesale term
deposits base. Current and savings account deposits increased 16% to Rs
66,914 crore (US $14.2 billion) at September 30, 2007. Current and
savings account (CASA) deposits constituted 30% of total deposits at
September 30, 2008 compared to 25% at September 30, 2007.27
Mishra is of the view that the ICICI bank has been very successful
in transforming itself into a truly universal financial services firm. A look
at the firms financials illustrates the success that ICICI has experienced.
Between FY 1996 and FY 2000 total income rose 291% to Rs 84.6
billion. PAT rose 27.6% and total assets climbed 280% to Rs 653.9 billion.
During the same period, disbursements grew 363% to Rs 258.36 billion.
ICICI bank total assets increased to Rs 1252.28 billion at March 31,
2001. Total deposits increased 315.86% to Rs 681.09 billion at March 31,
2001. In addition, savings account deposits increased 345.08% to Rs
87.72 billion in fiscal 2004 from Rs 18.81 billion in fiscal 2000.28
26. Amandeep, January 1993 Profits and profitability in commercial banks Deep
and Deep publications, Pages 47 & 48

28. M.N. Mishra edited by M.C. Pande and Subodh kumar, (2005) Banking
trends and practices Anamika publishers and distributors private ltd, Daryaganj,
New Delhi, Page- 125
::40 ::
Ashok Som wrote that ICICI established its international banking
group in 2002 in hopes of extending its success for domestic branchless
expansion. We started with the premise that we would follow the Indian
diaspora, which was located in various countries outside India, which led
us to look at markets like Canada, the UK and the USA, where we
initially established our footholds. Said Vinod Easwaran, ICICIs head for
retail banking for Russia. The strategic focus in these countries had been
fee based services such as remittances (rather than deposit expansion).
ICICI saw an opportunity to help these customers, who were supporting
families back at home as well as buying properties there. ICICI later
expanded its products offering by adding India centric products for
mortgages and car loans. For customers living abroad who wanted to buy
a car or a house for their parents these types of services proved invaluable,
especially since local banks practically ignored this need29.
Indian auto market has more than 35 financers that offer auto
financing solutions to the intended car buyers. Being one of the fastest
growing automobile markets in the world, the Indian automobile market
has got so much of potential and hence a number of auto finance companies
have come up to tap the booming market. It can be added here that the
passenger vehicle market constitutes almost 80% of automobile sales. In
2008, the stock passenger car was about 11 per 1,000 people. The
production of passenger vehicle is further expected to go up at a CAGR

29. Ashok Som, International Management (2010), TATA McGraw Hill

New Delhi. Page 72.
::41 ::
of about 10% from 2009-10 to 2012-13. So, sensing this market potential,
many financial companies in India have given special attention on auto
During the 2000s, the auto finance in India was dominated by
private banks, when Citibank was the market leader. But its market share
dropped from 27 per cent during 90s to less than 8 percent during early
2000. ICICI Bank became the new leader with almost 29.2 per cent
market share during 2003-04. The journey continued till 2008 when HDFC
bank took the lead. However, the current trend shows that the PSU banks
like SBI, PNB, Bank of Baroda, Bank of India, Canara Bank, Syndicate
Bank and Union Bank etc. are leaving behind their private sector
counterparts in the 22,000 crore passenger car and 2-wheeler loan market.
The reason behind this is the fact that, private banks have been compelled
to reduce their exposure to the sector owing to increased delinquencies.
State Bank of India (SBI) is one of the leaders in the auto finance
segments in India. Recently it has slashed down its rate of interest for the
new cars, which, in turn, has attracted a number of customers. Its long
repayment option and extensive network of more than 12,150 branches
have also made it quite popular among the customers. Recently SBI has
inked a deal with General Motors for car finance. In 2008-09, SBI
registered a net profit of 9,121 crore, which was 35.55% bigger than the
last financial years profit of 6,729 crore.
ICICI Bank was the market leader in auto finance in India till

2008. Though currently not on the top, it still remains amongst the top
::42 ::
10 auto finance companies in India. However, to regain its lost reign,
ICICI Bank is putting car loans on fast track. In the current financial year,
ICICI Bank has doubled auto loan disbursement amount to more than
1,500 crore, comparing to the last financial year (ended March 2009).
ICICI Bank registered a net income of 35,769.5 million in the last financial
year (ended March 31, 2009)30.
Bindisha Sarang is of the view that the State bank of India, Indias
largest bank, has raised its interest rates on some domestic term deposits
by up to .5 percentage points effective 1 June 2008. The new rates on
deposits of 2-3 years have increased by .25 percentage points. 3-5 years
by .35 percentage points and over five years by .5 percentage points.
Yogesh Aggarwal, chairman and managing director, IDBI bank
said SBI may have increased its interest rates to increase its market share
and the competitive edge over other banks.
However this edge will be temporary as other banks will also have
to increase their deposit rates to survive the competition.31
Public sector banks have overtaken their private sector counterparts
as the biggest lenders to retail consumers in the Rs 22,000 crore passenger
car and two-wheeler loan market. This is largely due to private banks
reducing their exposure to the sector due to increased delinquencies,
while PSU banks have stepped up their lending activity.
31. Bindisha Sarang Article- Theres nothing fixed about FDs Outlook Money
Magazine 5-18 June 2008, Page 19

::43 ::
PSU banks such as SBI, Bank of Baroda, PNB, Canara Bank,
Syndicate Bank, Bank of India and Union Bank of India are jointly
lending around Rs 1,000 crore every month in the Rs 1,800 crore auto
loan market, while the private banks accounts for the rest. Just a year ago
the private banks dominated the auto loan market with a combined market
share of 75-80%32.
L.M. Bhole and Jitendra Mahakud mentioned that the investors
prefer short term deposits, despite low returns, while waiting for investment
opportunities with higher returns. Banks on the other hand prefer short
term deposits with low short term interest rates, banks are able to mobilize
resources at lower cost to well rated business firms to contain defaults on
their loans. In the Indian context, it is observed that foreign and private
sector banks have relatively high share of low cost deposits. Incidentally,
these bank groups also have high profit margin and low NPA levels.
Group wise, deposits of new private sector banks grew at the highest
rate (38.8%), followed by foreign banks (32.6%), public sector banks
(22.9%) and old private sector banks (6.0%) in the year 2006-07.
Continuing the trend of the last few years, the share of new private sector
banks in total deposits increased further during the year while that of
public sector banks and old private sector banks declined33.
33. L.M. Bhole and Jitendra Mahakud, (2009) Financial institutions and markets
fifth edition, TATA McGraw Hill, New Delhi, Page 258
::44 ::
The countrys largest lender, State Bank India (SBI), has captured

17% of the domestic housing finance market share, same as HDFCs

share as on March 2010.
According to ICRA report on Performance review of housing
finance companies and Indian mortgage finance market for 2009-10,
both SBI and HDFC have 17% market share each while the ICICI
Bank which has slowed down its housing finance exposure has
13% share. LIC housing finance and IDBI Group have 8% and 4%,
As of March 31, 2010, HDFC (along with HDFC Bank), State
Bank of India, ICICI Bank (along with ICICI Home Finance,) and LIC
Housing Finance (LIC HFL) clearly dominate the domestic mortgage
market, together accounting for 55% of the total housing credit in India,
said the report.
Apart from these big players, there are some housing finance
companies (HFCs) with relatively smaller credit portfolios operating in
their respective geographies or serving niche customers.
While small HFCs, over the past few years, have been growing
their portfolio rapidly, the rating agency expects the currently dominant
players to continue maintain their market share, henceforth.
Meanwhile, banks which together hold around 70% of the total
individual home loan market, are expected to maintain a sizable market
share, even as HFCs are likely to grow by offering superior service levels
and by tapping underdeveloped segments. Further, significant growth plans
::45 ::
of some of the new HFCs could also increase the overall market share of
HFCs, said the report.34
S. Saveeta is of the view that in case of Public sector banks, the

proportion of fixed deposits rose 49.7 percent in 1970 to 55.7 percent in

1985, thereafter it declined and stood at 51.5 percent in the year 1990 and
again rose to 58.8 percent in 1996. Thus fixed deposits constituted the
largest proportion of aggregate deposits of Public sector banks. The
proportion of fixed deposits was also the highest (as compared to savings
and current deposits) for the Indian Private Banks in the year 1996(after
registering a fluctuating trend during the period 1970 to 1990)
The proportion of Savings deposits in case of public sector banks
remained more or less stable during the period 1970 to 1985, increased
to 30.8 percent in 1990 and declined thereafter to 25.9 percent in 1996.
In case of Indian private banks too this proportion after registering an
increasing trend during 1970-1985, continued declining since 1990.35
March is just a month away and tax investments are probably
taking priority. The usual suspects are insurance, equity-linked saving
schemes (ELSS), PPF to seek some tax exemptions. Another instrument,
which is getting popular among tax savers, is the five-year tax-saver
fixed deposits (FDs).
35. S. Saveeta, (2005) Commercial banks in India Deep and Deep publications,
New Delhi, Page 51
::46 ::
In Budget 2006, the government extended tax benefits to five-year
tax-saver deposits. As per the existing provision, you are eligible for
exemption on five-year deposits on investments up to Rs 1 lakh. These
fixed deposits will be locked for a five-year period from the effective
policy date. So, you cannot exercise the option of premature withdrawal.

Secondly, you cannot pledge the term deposit as collateral to secure a

loan to meet your liquidity needs. Similarly, banks do not offer overdraft
facility on tax-saver deposits.
Unlike the plain vanilla fixed-deposit products, these tax-saver FDs
do not have the sweep-in facility. This implies, you cannot link fixed
deposit to the savings account whereby the surplus funds in the savings
account can be automatically invested in this fixed deposit.
In addition, there is no overdraft facility available on the tax-saver
FD. As this instrument of saving money is special due to its tax-saving
status, banks do not extend relationship benefits on the tax-saver FD.36
Pankaj Anup Toppo said that many factors led State bank of India
to the winners position. In fact it was a cut above the rest and performed
very well across all parameters. In terms of reach it scored nine out of
ten. While most financial institutes has to deal with a drop in number of
disbursals. State bank of India registered a double digit growth in number
of loans disbursal in FY 08 further strengthened its position.
However the fact that really pulled State Bank of India on the top
was its low interest rate. Among all the parameters, interest rate carried
::47 ::
the maximum weight because it is the first thing that a prospective loan
taker looks at when shopping for home loans.
In terms of convenience also the Public sector bank fared well.
Low charges further buffeted the banks scores-it does not levy pre payment
penalties and does not have administration and transfer fees. The bank
does however charge a nominal processing fee. Closing an account and
getting your property papers does not take much time either. To top it all,

the bank also offers debt counseling centers. The only area where the
bank failed was that it did not offered realty search facilities.37
The largest private sector lender in the country, ICICI Bank has
said that it expects its credit growth for the financial year 2010-11 to be
somewhere around 15%. The bank has estimated this figure based on the
fact that demand in key segments is showing a rising trend.
The economic slowdown had shown its effects on ICICI bank too
as the credit growth of the bank showed a decline in the past year.
The bank had reported a growth trend in its home and auto
Bank Managing Director and CEO Chanda Kochhar.
Ms. Kochhar also quoted that the bank has shown improvement in
project financing segment also and that she expects the trend to pick up
as the year unfolds.
While the Reserve Bank of India has forecasted a credit growth of
16% in the upcoming fiscal, ICICIs projection strengthens.
37. Pankaj Anup Toppo, Outlook Money Magazine 5 Nov 2008", Vol 7, issue
22, Page 44
::48 ::
In contrary to the other contemporary banks like HDFC Bank and
IDBI Bank which have hiked their deposit rates following a rise in the
CRR, ICICI Bank deos not show any plans of increasing deposit rates,
said Ms. Kochhar.38
Shrivastva, Pandey and Vidyarthi are of the view that as regards
the deposit scenario, already by 1997 almost 65 percent of the base in the
banking system was coming from the retail sources. These sources have
been saving/term deposits, deposits through personal banking and
agricultural small savings accounts. The retail segment deposits totaled

US $ 85 billion in 1997. The changing macro scenario in fact has a

stronger growing impact on the loans segment of the retail products. This
sector is expected to grow at a rate of 30 percent in India over the next
decade. (Chanda Kochar, ED, ICICI bank). The housing loan segment
has been the fastest growing retail credit market for the Indian banking
sector. As a result there has been a surge in bank finance to the housing
sector increasing by 55 percent during 2002-03.39
Declining interest rate, less paper work, fast processing time, rebate
on income tax, flexibility to repay, attractive schemes have led for the
significant growth of Indian Loan Market.
India loan market is estimated to generate Rs 9,324.3 billion in
2011 and is expected to reach Rs 21,980.6 billion by 2016 with a CAGR
39. Mohan Prasad Shrivastva, Pradeep Kumar Pandey, V.P. Vidyarthi, (Banking
reforms and globalization), 1 Jan 2007, APH publishing, Daryaganj, New
Delhi, Page 315
::49 ::
of 18.7% from 2011-2016. The loans which constitutes and plays a crucial
role in Indian loan market includes home loans, education loan, auto
loan, personal loan, consumer durable loan and much hyped gold loans.
According to TechSci Research, in 2010, home loan holds the largest
market share of 46.1% in Indian loan market. Declining interest rates,
flexibility to repay, increased dwelling of housing societies have led for
its growth.40
Sunaina Vasudev wrote that most experts believe that banks with
access to low cost deposits will be in a better position to preserve margins.

Given that market sentiment is bad and liquidity in the banking sector is
evaporating because of the central banks move to hike reserve
requirements, banks with a higher share of current and savings account
(CASA) deposits are better positioned to grow without compromising on
Among private banks, HDFC bank and Axis bank have a CASA
ratio of 54 percent respectively, ICICI bank has a low CASA share but
the management has shifted strategic focus from balance sheet growth to
CASA and margin improvement now, which augurs well for its core
operating profitability according to Manish Karwa, banking analyst with
Motilal Oswal Securities.41
State Bank of Indias disbursements on home loans under its New
happy home loan scheme have grown at Rs 1,500 crore monthly. This is
41. Article by Sunaina Vasudev, Outlook profit Magazine 25 July 2008, Page 17
::50 ::
about Rs 400 crore more than the monthly average of Rs 1,100 crore it
did in the first two months since the scheme was announced. Till March
we had done Rs 2,348 crore. Subsequently we are sanctioning Rs 1,500
crore every month, P. Nandakumaran, Chief General Manger, Personal
Banking, SBI, told Business Line.
In the first week of February, SBI had announced that it will offer
an interest rate of 8 per cent for one year the lowest so far in the
industry. In the second year, the rates applicable will be the prevailing
rates then. The banks move was to stimulate demand in the housing
market at a time when many buyers postponed their purchasing decisions

amid economic uncertainty and fear of job losses. The scheme has now
been extended till September. The bank also offers other schemes, which
will be valid till the month-end. Under this, it offers a home loan between
Rs 5 and 20 lakh at a fixed interest rate of 9.25 per cent a year for five
years, after which rates will be re-set.
SBI, which claims to have the highest growth in its home loan
portfolio last fiscal, saw its advances swell to Rs 54,063 crore. This is a
21-per cent increase from Rs 44,626 crore in the previous fiscal. During
the same period, the banks market share grew to 19.74 per cent from
17.48 per cent.42
During the year ended March 31, 2010, the ICICI Bank has
significantly strengthened its deposit franchise. This is reflected in the

::51 ::
strong growth in savings and current account deposits and increase in the
CASA ratio. The Bank continues to invest in expansion of its branch
network to enhance its deposit franchise and create an integrated
distribution network for both asset and liability products.
CASA deposits increased 34% to Rs. 84,216 crore (US$ 18.8 billion)
at March 31, 2010 from Rs. 62,668 crore (US$ 14.0 billion) at March 31,
2009 and the CASA ratio increased from 28.7% at March 31, 2009 to
41.7% at March 31, 2010. Total deposits of the Bank were Rs. 202,017
crore (US$ 45.0 billion) at March 31, 2010, compared to Rs. 218,348
crore (US$ 48.6 billion) at March 31, 2009.
The branch network of the Bank has increased to 1,741 branches

at April 24, 2010 giving the Bank a wide distribution reach in the country.
The loan book of the Bank decreased to Rs. 181,206 crore (US$
40.4 billion) at March 31, 2010 from Rs. 218,311 crore (US$ 48.6 billion)
at March 31, 2009 mainly due to the repayments from the retail loan
portfolio and the loan portfolio of overseas branches.43
Rajesh Chakraborti wrote that by 2006, SBI the flag bearer of
Indian banking was under pressure. In the short span of twelve years,
ICICI bank had come from nowhere (that is if you discount ICICIs
background as one of Indias three largest term lending institutions) to
emerge as the second largest bank in India.44
44. Rajesh Chakraborti, Grit, Guts and Gumption: Driving change in a state
owned giant, Penguin books India, New Delhi, Nov 2010, Page 15
::52 ::
C.K. Prahlad wrote that the Financial information network and
operations (FINO), a technology solutions company, provides innovative
technology solutions to enable financial providers to reach millions of
underserved people. One of FINOs key solutions is a biometric enabled,
multiapplication smart card and a portable point of sale terminal, which
combines with backend software. The smart card forms the basis for
ICICI banks micro savings product. ICICI Lombard is also using financial
information network and operations biometric cards to lower cost of
enrollment and claims processing in the micro health insurance scheme.
In partnership with Manipal group of hospitals, smart cards have been
piloted for some clusters, where enrollment stations have been established
equipped with laptops for online enrollment of members into the health
insurance program. The card will also be used for premium collection in

the near future. 45

The ICICI Bank continued to invest in expansion of its branch
network to enhance its deposit franchise and create an integrated
distribution network for both asset and liability products. The branch
network of the Bank has increased to 2,016 branches at June 30, 2010,
the largest branch network among private sector banks in the country.
CASA deposits increased 32% to Rs 84,618 crore (US$ 18.2 billion) at
June 30, 2010 from Rs 63,977 crore (US$ 13.8 billion) at June 30, 2009
and the CASA ratio increased to 42.1% at June 30, 2010 from 30.4% at
45. C. K. Prahalad, (2010) The fortune at the bottom of the pyramid: Eradicating
poverty through profits FT Press, Page 317
::53 ::
June 30, 2009. Total deposits of the Bank were Rs 200,913 crore (US$
43.3 billion) at June 30, 2010, compared to Rs 202,017 crore (US$ 43.5
billion) at March 31, 2010. The loan book of the Bank increased to Rs
184,378 crore (US$ 39.7 billion) at June 30, 2010 from Rs181,206 crore
(US$ 39.0 billion) at March 31, 2010. The total assets of the Bank at June
30, 2010 were Rs 363,997 crore (US$ 78.4 billion).46
Swapna Pradhan is of the view that the Retail banking in India
is not new phenomenon. The typical products offered in the Indian retail
banking segment are housing loans, consumption loans for purchase of
durables, auto loans, credit cards and educational loans. While new
generation private sector have been able to create a niche in this area of
loans and financing the public sector banks have not lagged behind.
Leveraging their vast branch network and outreach, public sector banks
have aggressively forayed to garner a larger slice of the retail pie.47

Research methodology gives the glimpse through which research

is conducted. The method, the way and the helping tools in conducting
research are described in research methodology. The headings which are
given below take us to the tour of research methodology.
(a) Research Design : A research design is a frame work or
blue print for conducting the research work. A research design lays the
foundation for conducting the research work. A descriptive research design
47. Swapna Pradhan, (2009) Retailing Management third edition, TATA McGraw
Hill education, New Delhi, Page 87
::54 ::
is used to describe the characteristics of relevant groups, such as consumers,
sales people, organizations or market areas. It is also used to estimate the
percentage of units in a specified population exhibiting a certain behavior.
In our research work the comparative analysis mostly depends on the
survey of bank customers. Hence a descriptive research design is the
most suitable one. In this hypothesis is formulated before conducting the
research work and we have formulated the hypothesis for further research
(b) Data Collection Plan : For any research data collection is of
prime importance. Research work depends on it. Since our topic revolves
around the comparative study of public sector representative State Bank
of India and private sector representative ICICI Bank much emphasis is
given on Primary data collection but Secondary data is also considered
(i) Secondary Data Collection : It was collected through
searching from various books containing the relevant material
on banking topics especially covering the financial products

considered for our research work. Secondary data was

collected from various websites and through searching into
magazines the published research papers were also considered.
Secondary data was also collected through visits to both the
(ii) Primary Data Collection-It was very essential for the
research work. The data was collected with the help of
::55 ::
questionnaire. The questions were asked from the banks
customers to collect information. The information gathered
through this was used in comparative analysis of products of
both the banks. Structured undisguised questions which were
closed ended (various options were given) were used in
seeking information from bank customers.
(c) Sampling Plan : It is vital in case of primary data collection.
For the survey of bank customers a proper sampling design was formulated
which is explained below
(i) Target Population : The target population was bank
customers from SBI and ICICI Bank and the branches of
both the SBI and ICICI banks were located in Meerut.
(ii) Sampling Technique : The probability sampling technique
was considered. As it is more accurate in results in
comparison to non probability sampling.In probability
sampling the simple random sampling was selected. Here
the each element has known and equal chance of being
selected. This implies that every element is elected
independently of every other element.

(iii) Sample Size : The sample size considered for research work
is of 400 bank customers. 200 customers from SBI and 200
customers from ICICI Bank were interviewed. All important
::56 ::
demographic characteristics like age, level of education, level
of income, profession were noted during survey process.100
customers from one branch of SBI and 100 customers from
another branch of SBI were interviewed. In the similar manner
100 customers from one branch of ICICI Bank and 100
customers from another branch of ICICI Bank were taken.
All the branches are chosen from the prime locations of
Meerut to make study result more effective.
(d) Data Analysis : For data collected from customers the
percentage method is used to make an analysis. The percentages helped
in doing the comparative analysis of products of both the banks. The data
which is gathered from the banks and from other sources, logical inferences
are drawn in doing the comparative analysis of products of both the
Hypothesis postulated in this research are as under :
m Though the basic products of both the SBI and ICICI Bank
may be same but difference exists in the product variants of
these banks.
m The time taken in providing financial products by Private
sector representative ICICI bank is less, compared to Public
sector representative SBI.
m Though the formalities to obtain products (Form filling,
documents required) may be more or less same but the

::57 ::
satisfaction status of customers of SBI and ICICI Bank
towards these formalities have difference.
m The customers of Public sector representative SBI and Private
sector representative ICICI bank are of the view that the
number of the Product variants should be increased.
m The overall satisfaction status of customers towards all the
five products, considered for research work has difference if
comparison is done between Public sector representative SBI
and Private sector representative ICICI bank.

(i) Limitation of funds was the problem. In this research work

the customers are interviewed at their homes, offices and
shops also. Expenses were incurred on approaching them.
Due to several visits to all the four branches, to the libraries
expenses were incurred. Best research work is tried in the
limited budget.
(ii) The topic is interesting and of importance in nature but due
to the scarcity of time further more research work was not
possible however in this tenure best possible research has
been tried.
(iii) Some sort of biased ness on the part of customers could not
be ruled out.
(iv) Customers are human beings and humans have a tendency to
show changes in their attitudes and opinions. Their views
can not remain constant for a long period of time.

Terms & Condition: The Bank reserves the right to reject any application without assigning
reasons thereof. It shall be the sole right of the Bank to consider the proposal
on case to case basis after taking into consideration, the credentials/credit
worthiness of each of the customers.
The applicant will undertake to inform the Bank as and when there is a
change in address or employment.
Axis Bank may, at its sole discretion, utilize the services of external service
provider/s or agent/s and on such terms as required or necessary, in relation
to its products.
The interest rates and processing fees are subject to change without prior
notice and the offer expiry date mentioned is subject to interest rate
fluctuations and will only be accommodated on a best effort and nonobligatory basis by the bank.
Axis Bank or its agent(s) shall not be responsible for the delivery/Model/
colour/make/performance of the asset applied for under this application. The
borrower undertakes to hypothecate the vehicle in favour of the Bank
immediately after purchase of the vehicle.
Bank is not responsible for the contract entered into by the Customer with
Vehicle Dealer nor Bank makes any representation as regards the Dealer or
the Vehicle supplied by the Dealer.

Axis Bank is authorized to disclose from time to time any information

relating to the loan to any credit bureau (Existing or Future) approved by
Government of India and Reserve Bank of India without any notice to the
borrower. Axis Bank is also authorized to make inquiries with the Credit
Information Bureau of India (CIBIL) and get the applicants Credit
Information Report.
In case of default i.e. if the amount due is not paid by due date, the customer
will be sent reminders from time to time for payment of any outstanding on
his loan account, by post, fax, telephone, email, SMS messaging and/or
through third parties appointed for collection (as per RBI Guidelines)
purpose to remind, follow-up and collect dues.
The product and services of the bank are subject to applicable law and
regulations and would be modified / discontinued based on the prevailing
law / regulation at any point of time and neither party shall be under any
liability or obligation or continue the product and services of the bank till
such time the terms are modified by the Parties as per the prevailing/
amended law at that point of time. In the event, that the product and services
of the bank cannot be continued without total compliance of the prevailing
law at any point of time, the product and services of the bank shall be
deemed to be discontinued forthwith from the date when the amended law
restricting / prohibiting the product and services of the bank comes into
Any dispute relating to the Offer or the terms and conditions shall be subject
to the jurisdiction of the courts in Mumbai only.

The terms and conditions mentioned above and elsewhere under the scheme
are subject to modification from time to time solely at Bank's discretion.

Conclusions:1. People using a car for their business purpose can claim part of the interest
and deprecation charges as expenses against taxable income.
2. Monthly payments can be directly debited from your bank account.
3. If youre paying fixed payments, the terms of the agreement allow for more
accurate budgeting and protect you against any interest rate fluctuations.