STUDY ON CAR LOAN TO PROFESSIONAL, SELF EMPLOYED & BUSINESSMAN

2013

Study On Car Loans to Professional, Self employed and Businessman

PREPARED BY DEEPAK KUMAR SAHOO ENROLLMENT NO-12DM075

UNDER THE GUIDANCE OF Mr. SANTOSH KUMAR MOHAPATRA (Chief Manager)

Internship report submitted to SBI in completion of the requirement of Summer Internship at State Bank of India

May 11, 2013 to July 6, 2013

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STUDY ON CAR LOAN TO PROFESSIONAL, SELF EMPLOYED & BUSINESSMAN

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DECLARATION

I, Deepak Kumar Sahoo student of Post Graduate Diploma in Management of Institute of Management & Information Science bearing enrollment number 12DM075 declare that the project entitled STUDY ON CAR LOAN TO PROFESSIONAL, SELF EMPLOYED AND BUSINESSMAN submitted to State Bank of India, BBSR is an original record of work done by me as a part of partial fulfillment of PGDM programme of IMIS, Bhubaneswar.

Date: Place:

Deepak Kumar Sahoo PGDM (2012-2014) Enrollment No:12DM075

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ACKNOWLEDGEMENT
I would like to take the privilege of acknowledging each and everyone for the guidance, concern, inspiration, encouragement, valuable ideas & for showing the right path to travel throughout the project. At first I would like to thank Mr Ishwar Chandra Sahu (HR, LHO) Bhubaneswar for assigning me this topic. I am also grateful to Mr.Santosh ku Mohapatra (Chief Manager, IDCO Tower Branch, BBSR) and Mr.Sambit Bose (RM) my external guide for giving all the required facilities and knowledge to carry out the project. I would also like to show appreciation to Prof. S. P. Padhi (Internal Guide), Prof. Chunku Pani, Prof A.K Mishra, Prof. R.N Patnaik and Prof. Tanmoy de for his excellent guidance & his interest towards the project for the past two months. Without his motivation and consistent support this project could not have materialized. I am grateful to my parents and my sister for supporting & giving me the confidence to complete the project successfully. Apart from the above mentioned people, I would like to thank all the people who have co-operated in different places like Bhubaneswar and Cuttack for the completion of my summer internship program. I dedicated my work to my Lord Jagannath who was constantly with me for this endeavor without whom the project would not have seen the light of the day.

Date: Place:

Deepak Kumar Sahoo 12DM075

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CONTENTS
Sl.No. 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. Topic Certificate of completion Declaration Acknowledgement List of Tables and Graphs Executive summary Introduction Framework of study Theoretical perspective and auto loan procedure of SBI Objectives and scope Methodology Data analysis Conclusion Recommendations References Annexure 17 18 19 28 29 31 32 Pg. No. 2 3 4 6 7 8 9

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LIST OF TABLES AND GRAPHS

Figure 1: Black box model Figure 2: Marketing strategy process Figure 3: 7Ps of marketing Figure 4: Customers Figure 5: Non customers Figure 6: Time taken for loan sanction in SBI Figure 7: Time taken in other banks Figure 8: Factors preferred for taking loan from SBI Figure 9: Documentation procedure in SBI Figure 10: Documentation procedure in other banks Figure 11: Level of satisfaction in Bank services Figure 12: Preference to SBI for future loan Figure 13: Recommend SBI to friends and relatives Figure 14: Reasons for not preferring SBI Figure 15: Car bookings (financed/owned) Figure 16: Banks preferred by customers Figure 17: Banks which dealers recommend to their customer Figure 18: Reasons for choosing the bank Figure 19: Performance of SBI representatives

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EXECUTIVE SUMMARY
Need for the Study
Banks form the major backbone of our economy. Banking products form a part of our vast financial system hence their development is possible only if the customers are happy and satisfied. The market share of an organization can be improved by analyzing the general perceptions of the people about the very organization and also of its competitors. This can be done by peer analysis. This report is meant to determine the general perceptions of Professional, self employed and businessman regarding SBIs Car Loan process. It aims at studying the car loan product of State Bank of India, conducting a market survey to find the acceptability/popularity of the loan product among these categories of customers, to sort out the difficulties faced by the customer and analyzing the findings in order to find out where the bank stands and using the results thus obtained to formulate strategies to improve its market share. For this project, various questionnaires were provided to customers, noncustomers of SBI and the dealers and information was collected from them. Apart from these the car loan scheme of various banks namely HDFC, AXIS, IDBI, Punjab National Bank, Utkal Hyundai, Sky Automobiles, Narayani Automobiles, Jyoti Automobiles were studied and compared with that of SBI. The popularity of the banks loan product was ascertained through a survey. The analysis was done and interpretations were recorded. The results showed that there were many difficulties faced by the customers which differed according to their categories. Though SBI was leading the market but there were certain negative aspects of the bank which if worked on at the right time, could prove to be beneficial to it. Strategies have been formulated taking into consideration the reasons why people havent chosen SBI for availing car loan. Hence this study was meant to know the level of expectation of people for the Car loan product and their satisfaction. This survey also helped me to find out the popularity of car loan product and difficulties faced by the professionals, self employed and businessman.

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INTRODUCTION
Brief Profile of student
Name Deepak kumar sahoo Phone No: 9338361378 Email: deepakkumarsahoo895@gmail.com Pursuing PGDM( Finance and Marketing) at IMIS, BBSR Did schooling from Maharishi vidya mandir, cuttack, 12th from Ravenshaw university, B.com (Finance Hons) from Utkal university. Got an first class throughout the academic career Apart from academics I also learnt O level,Tally,DCA

Organization:
State Bank of India (SBI) is a multinational banking and financial services company based in India. The Corporate Centre is in Mumbai and 14 Local Head Offices and 57 Zonal Offices are located at important cities spread throughout the country. The Corporate Centre has several other establishments in and outside Mumbai, designated to cater to various functions. Its Colleges/Institutes/Training Centres are the seats of learning and research and development to spread the wings of knowledge not only to employees but also other banks/establishments in India and abroad. SBI entered into several alliances and tie-ups with automobile, insurance, mutual fund, project finance and medical equipment companies to boost its business. SBI is an active player in financing passenger vehicles. It extended the tenor of car loans from five to seven years; thereby lowering the monthly debt repayment burden of the loan seeker. SBI has also introduced various interest rates scheme for auto loan from time to time to attract customers. SBI entered into a tie-up with Maruti, the largest automobile manufacturer in India and also with Hyundai. After the scheme was introduced, SBI emerged as the largest financier for Maruti cars in India and the number of Maruti vehicles financed grew.

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FRAMEWORK OF STUDY
THEORETICAL PERSPECTIVE
This report is meant to determine the acceptability/popularity and the general perceptions of Professional, self employed and businessman regarding SBIs Car Loan process. Thus, for this purpose, we need to study the consumer behavior aspect. Consumer behavior is the study of individuals, groups, or organizations and the processes they use to select, secure, and dispose of products, services, experiences, or ideas to satisfy needs and the impacts that these processes have on the consumer. It may be defined as the decision-making process and the physical activity involved in evaluating the various aspects of goods or services in order to initiate a purchase. Customer behaviour study is based on consumer buying behaviour, with the customer playing the three distinct roles of user, payer and buyer. Relationship marketing is an influential asset for customer behaviour analysis. A greater importance is also placed on consumer retention, customer relationship management, personalization, customization and one-to-one marketing. Customer relationship management (CRM) entails all aspects of interaction that the organisation has with its customer, whether it is sales or service-related. CRM is often thought of as a business strategy that enables businesses to:

Understand the customer Retain customers through better customer experience Attract new customer Win new clients and contracts Increase profitably Decrease customer management costs

It helps an enterprise to enable its marketing departments to identify and target their best customers, manage marketing campaigns and generate quality leads for the sales team. The marketing stimuli are planned and processed by the organization, whereas the environmental stimuli are given by social factors, based on the economical, political and cultural circumstances of a society.

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The black box model shows the interaction of stimuli, consumer characteristics, decision process and consumer responses.
Figure 1: Black Box Model

Environmental factors

Buyer's black box Buyer's response Decision Process

Marketing Stimuli

Environmental Stimuli

Buyer Characteristics

Product Price Place Promotion

Economic Technological Political Cultural Demographic Natural

Attitudes Motivation Perceptions Personality Lifestyle Knowledge

Problem recognition Information search Alternative evaluation Purchase decision Post-purchase behaviour

Product choice Brand choice Dealer choice Purchase timing Purchase amount

For providing better consumer value, the bank should have proper knowledge of the needs of the consumer and should formulate plans and strategies for marketing their product. Marketing strategy is defined by Prophet's David Aaker as a process that can allow an organization to concentrate its resources on the optimal opportunities with the goals of increasing sales and achieving a sustainable competitive advantage.
Figure 2: Marketing strategy process

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Marketing strategy includes the formulation of strategies in order to provide superior customer value. These strategies are formulated keeping in mind the 7-Ps i.e. product, price, promotion, place, process, people and physical evidence.
Figure 3. The 7-Ps of Marketing

To understand the likes and dislikes of consumers, extensive consumer research studies should be conducted by the bank. The following should be considered: What the customers thinks of the loan procedure in bank. If the procedure happens to be better, then how can it be improved in their opinion? What is the customers attitude towards the bank and its advertising?

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A popular definition of bank marketing is given by S. Kuppuswami in the following words, "Creation and delivery of financial services suitable to meet the customer's need at a profit to the bank". This definition recognises the imperative need to satisfy customers, the significance of both the creation and delivery aspects of bank services and underlying profit motive.
Deryk Weyer of Barclays Bank defines bank marketing as, Consisting of identifying the most profitable markets now and in future, assessing the present and future needs of customers, setting business development goals, making plans to meet them and managing the various services and promoting them to achieve the plans - all in the context of changing environment in the market.

The perceptions of customers about a bank product is basically dependent on the services provided by the bank such as interest rates, processing time, hassle-free operations, minimal documentation, location advantage, etc.

Auto Loan product offered by SBI

SBI Auto Loan maintains its market leadership by increasing the market share from 16.75% to 19.25% as on June 2012. The Bank continues to be number one in financing Maruti cars pan India for two consecutive years in a row. SBI has increased its presence in the market with higher penetration in major brands like Chevrolet, Hyundai, Tata Motors and Honda Siel cars at 25.7%, 20.7%, 17.1% and 13.8% respectively. The Bank has introduced SBI Advantage Car Loan Scheme which facilitates Businessmen, Proprietary and partnership firms to avail of car loan of Rs.5 lacs and above quickly. Preapproved car loan, Retail Inventory financing for car dealers are a few notable

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schemes which are on the anvil. Special Execution Desks have been created in all Metros / Urban centers for the convenience of the customers to execute their car loan documents at mutually convenient timings and places. The Bank has MoU with all major car manufacturers to achieve highest penetration in the market. Car Loan Origination Software has been introduced in the Bank to facilitate more customer acquisition.

Unique advantages of SBI Auto Loan Scheme:

Lowest interest rates

Complete transparency. Low and No advance EMIs (Equated Monthly Installments). Finance for one-time road tax, registration fee, insurance premium and accessories. LTV 85% of On Road Price of car (includes registration, insurance and cost of accessories worth Rs 25000), 90% in case of Corporate Salary Package accounts Interest Calculated on Daily Reducing Balance. Flexibility of payment of EMI anytime during the month.

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Longer repayment period (7 years). No pre-payment penalty. No hidden costs or administrative charges. Free Accidental insurance; Optional SBI Life cover.

Overdraft facility available.

Purpose for which Auto loan can be availed:

The loan will be sanctioned for the purpose of purchase of new Cars/used cars, Multi Utility Vehicles (MUVs) and Semi Utility Vehicles (SUVs).

Eligibility:
Individual between the age of 21-65 years of age. A Permanent employee of State / Central Government, Public Sector Undertaking, Private Company or a reputed establishment. Professionals, self-employed, businessmen who is an income tax assesses or Person engaged in agriculture and allied activities. Loans can be granted by sanctioning authority to individuals who have sufficient, regular and continuous source of income for servicing the loan repayment beyond 65 years. Loan must be fully repaid before the borrower attains the age of 70 years.

Minimum Income:
Net Annual Income Rs.2, 50,000/- and above for salaried, self-employed and body of associations as per ITR after adding back depreciation and deducting repayment of all existing loans. Income from other sources like bank interest/dividends of listed Companies, rent, agriculture income can be added.

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Features:
1) Maximum loan amount: The maximum loan amount that can be granted would be restricted to 48 times the net monthly income of salaried persons and Up to 4 times the Net Profit or Gross Taxable Income per annum as per ITR after adding back depreciation and deducting repayment of all existing loans. 2) Rate of Interest: 11.25 % p.a.( term loans) / 11.75% p.a.( overdraft). All loans should be given only on a floating rate basis, i.e., the effective interest will increase or decrease with every increase or decrease in Base Rate or whenever the rate of interest on Car Loans are revised without changing Base rate.

3) Loan Repayment tenure: Maximum 84 months (7 years) for all. However, the
repayment period shall, in no case, exceed 70 years of the age of the borrower.

4) Loan to Value Ratio (LTV): Maximum permissible LTV ratio is 85% of on road price
of the car. The On Road Price of Car includes the cost of the vehicle, registration, insurance and cost of accessories worth Rs 25000. 5) Margin: 15% of the on the road price (which includes vehicle registration charges, insurance, one-time road tax and accessories).

6) Processing fee: For Car Loans: -0.50% of the loan amount subject to Minimum of Rs.
500/- and maximum of Rs. 10000/- and for Two-wheeler Loans: - 1.20% of the loan amount subject to Minimum of Rs. 250/- and maximum of Rs. 500/-. 7) Documentation: One needs to submit the following documents along with the completed application form: Statement of Bank account of the borrower for last 12 months. 2 passport size photographs of borrower(s). Signature identification from bankers of borrower(s). Proof of Identity: A copy of passport /voter ID card/PAN card. Proof of residence: (any one of the following) Ration card/Driving licence/Voters ID Card/Passport Copy/Telephone Bill/ Electricity Bill/Life Insurance policy/ PAN Card

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Income proof: Latest salary-slip showing all deductions/ Latest ITR for 2 years. I.T. Returns/Form 16: 2 years for salaried employees/professional/selfemployed/businessmen duly accepted by the ITO wherever applicable to be submitted. Audited Balance sheet, P&L statement for 2 years, Shop & establishment act certificate/sales tax certificate/SSI registered certificate/copy of partnership.

8) Repayment Cycle: For the loan disbursed on or before 15th of the month, the repayment is to be started on the 10th of the following month. For the loan disbursed on or after 16th of the month, the repayment is to be started on the 20th of the following month.

9) Penal Interest: If the irregularity in EMI exceeds a period of one month, then the penal
interest would be charged at 2% p.a. (over and above the applicable interest rate) on the overdue amount for the period of default.

10) Security:
a) Borrower undertakes to get hypothecation to the Bank marked in Registration book of the vehicle immediately after purchase of the vehicle. b) Bank will verify the original RC book for noting down the charges in favor of the Bank.

The various car loan products offered by SBI are:

1. SBI Advantage car Loan 2. SBI NRI Car Loan 3. SBI Used car Loan

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OBJECTIVES AND SCOPE

Objectives:
This project was completed keeping in mind the following objectives: To study the Car Loan procedure provided by SBI. To study the general perceptions of Professionals, Self employed and Businessman regarding the process of sanction and disbursement of SBI loans and the acceptability/popularity of car loan provided by SBI.

From the results thus obtained, to make suggestions for improving SBIs market share and
the strategies to be adopted.

Scope:
To ensure that the project report is useful and could become a source of reference for the bank. To study the practical difficulties in extending car finance to Professionals, self employed and Businessmen To find out the strategies to be adopted by the Bank for better result.

Limitations:
The present data is confined to the Car Loan process offered by State bank of India. The data collected here is specific to the selected branches of the various banks in Bhubaneswar and Cuttack as per the instructions of the organization. The data and information collected here has been taken from the internal circular of the organization and from conversations with customers. The customer feedback collected here is specific to selected customers of limited centers only. Ignorant, non-cooperative and reluctant attitude of respondents was also a major constraint.

Period of study: 8 weeks

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METHODOLOGY
Research methodology is a methodology for collecting all sorts of information & data pertaining to the subject in question. The objective is to examine all the issues involved & conduct situational analysis. The methodology includes the overall research design, sampling procedure & fieldwork done & finally the analysis procedure. For this project i.e. Study of SBIs Car Loan to Professional, Self employed and Businessman, the methodology used is stated below: The research carried out for this project is descriptive in nature. It required the banks internal circular for the car loan and other banks car loan schemes. Sampling Technique: To study the Project, a Simple Random Sampling technique is used. Sample Size: Sample of 150 people was taken into study, and their data was collected. Data Collection: Collection of data is done by Primary and Secondary Data. The primary data has been collected with the help of questionnaire as well as personal observation book, magazine; journals have been referred for secondary data. Data Interpretation: Interpretation of data is done by using statistical tools like Pie diagrams, Bar graphs, and also using quantitative techniques (by using these techniques) accurate information is obtained.

An exhaustive study of the general perceptions of the customers and the dealers. For this purpose, questionnaire method was employed. This gave me an opportunity to gain insight about the acceptability/popularity of SBIs car loan.

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DATA ANALYSIS
For the study 150 samples were taken, out of which 100 were customers and 50 were non customers including Professionals, self employed and businessman.
Figure 4: Customers Figure 5: Non customers

40

30

professional self employed Businessman

20

15

professional self employed Businessman

30

15

The data and information collected here is with the help of Primary methods of Data collection i.e. Questionnaire Surveys.

Figure 6: Time taken for loan sanction in SBI

Figure 7: Time taken in other banks

Fast service to customer

27% yes 73% no

Fast Service process in other Bank

40% 60% yes no

Interpretation: From the above chart it can be seen that, almost 73% customers of SBI got
fast service and their car loan was sanctioned within 2-7 days, while the data collected from non customers shows that 60% of them got their loan sanctioned within 1 week in other banks while about 40% of them got delayed service.

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STUDY ON CAR LOAN TO PROFESSIONAL, SELF EMPLOYED & BUSINESSMAN Figure 8: Factors preferred for taking loan from SBI

2013

Factors preferred for loan from SBI

Low interest rates 4% 18% Fast service process Minimum processing fee 10% 60% 8% Low Emi Longer repayement period

Interpretation: Studies from the collected data revealed that most customers of SBI
preferred to take car loan from this bank due to its low interest rates. Almost 60% went with the cause. 18% customers preferred SBI for its low EMI. 10% went with minimum processing fee, 8% with fast service process and about 4 % with longer repayment period and other factors. The facilities provided by the bank towards car loans has resulted in increased demand of the car loan product of various banks.
Figure 9: Documentation procedure in SBI

90 80 70 60 in % 50 40 30 20 10 0

85

80 60 40 20

satisfied not satisfied

15

Professional

Self employed

Businessman

Satisfaction of customers in documentation procedure in SBI

Interpretation: From the survey done among the 100 respondents of SBI, when they were
asked about the convenience in the documentation procedure of availing car loan, varying responds were noticed from the different classes of customers. While 85% of

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professionals and about 80% of self employed were satisfied with the procedure, only 60% of the Businessmen found the documentation procedure convenient. Rest of the customers were not satisfied with the procedure of which maximum were businessmen, about 40%. These included mostly the non-resident businessmen who faced problem while providing the residence proof. Some of them were also unwilling to provide their proper documentation regarding income proof and IT returns. Remaining 15% professionals and 20% of self employed faced some minor difficulties in documentation procedure.

Figure10: Documentation procedure in other banks

90 80 70 60 in % 50 40 30 20 10 0

78

82 75

satisfied 22 25 18 not satisfied

Professional

Self employed

Businessman

Satisfaction of non customers in respestive Banks

Interpretation: The data collected from the non customers shows that almost 78% of
professionals, 82% of self employed and 75% of businessmen were satisfied with the documentation procedure of their respective banks, while remaining faced similar difficulties while providing proper documents required for availing the loan facilities. But still above data reveal that businessmen find the documentation procedure more suitable for them in other banks than in SBI.

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STUDY ON CAR LOAN TO PROFESSIONAL, SELF EMPLOYED & BUSINESSMAN Figure11: Level of satisfaction in Bank services

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Level of satisfaction in Bank services

Terms explanation High speed access Staff consideration Convinient location Protect personal information Provide accurate information Easy to find correct information 0% 20% 40% 60% 72% 70% 90%

80% 73% 75% 70% 78% 84% 85% 90% 85% Non customer SBI customer

70% 78% 80% 100%

Interpretation: Questionnaire were provided to both SBI customers and non customers and
they were asked to rank the bank services provided to them according to their level of satisfaction and from the above collected data various information were obtained. Regarding explanation of terms and conditions SBI customers were highly satisfied providing maximum score to this i.e. 90%, while non customers were satisfied upto 70% with their service provider. SBI scored 73% in High speed access but the non customers gave almost 80% score to their banks. Staff consideration in SBI scored about 70%, while it is 75% in other banks. When asked about convenience in location SBI scored 84% while non customers gave 78% to their banks. This shows that SBI has reached most places for convenience of the customers. Regarding protection to personal information customers found SBI to be more secure and gave 90% to SBI, while non customers gave 85% score to their service provider. SBI scored 85% in providing accurate information and 78% in ease to find correct information, while other service providers lagged behind SBI by scoring 72%

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and 70% respectively. This shows that SBI has outrun other banks in many aspects but still it needs to improve a lot in many.
Figure 12: Preference to SBI for future car loan

Preference to SBI for future car loan

80% 70% 60% 50% 40% 30% 20% 10% 0% 65% 70%

customer 20% 10% 15% 20% non customer

yes

no

may be

Interpretation: From the survey done above we can see that More than 65% of the
respondents expressed that they would prefer taking loan from SBI if required in future, citing multiple reasons. While non customers about only 10% expressed interest in trying SBI next time and almost 70% were not interested as they were satisfied with their service provider and also may be due to lack of proper information regarding loan procedure in SBI. 20% of the SBI customers also refused to take car loan next time, may be due to the difficulties faced this time. Remaining were not sure for their decision. But still about 65% of the respondents were ready to recommend SBI to their friends, relatives and associates for taking car loan.
Figure 13: Recommend SBI to friends and relatives?

Recommend SBI to friends and relatives?

35% 65%

Yes No

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STUDY ON CAR LOAN TO PROFESSIONAL, SELF EMPLOYED & BUSINESSMAN Figure 14: Reasons for not preferring SBI

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Reasons for not preferring SBI

High interest rate 5% 18% 15% Delayed service process 12% 15% Callous attitude of employees 10% 25% Unsuitable documentation procedure others High processing fee Floating interest rates

Interpretation: Out of the non customers who did not choose SBI as their preferred bank for
car loan cited the reason as to the delay in processing of their loan request. Nearly 25% of them were of the view that SBI takes a lot of time in processing their documents and disbursing the loan. About 18% found the interest rates higher than their service provider and about 12% were not interested due to floating interest rates. About 15% of them found the documentation procedure unsuitable to their profile. There were many others who could not opt for SBI as their income did not match the eligibility criteria of the bank. Some of them stepped back due to callous attitude of the bank employees. About 10% found the processing fee to be higher. Other reasons for not choosing the bank include various perceptions of the respondent about the bank.

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The data collected from various dealers have been analyzed and the findings are as follows:
Figure 15: Car bookings

36%

Financed 64% Owned

Interpretation: The data collected from various car dealers reveals that the number of
vehicles financed is more than the number of vehicles owned by 28%. In other words, people these days are more dependent on banking institutions to avail car loan facilities.
Figure 16: Banks preferred by customers

60% 50% 40% 30% 20% 10% 0%

56%

24%

20%

SBI

Other banks

Non banking finance companies

Interpretation: According to dealers, SBI happens to be the most preferred bank with more
than 56% of the bookings opting for SBI to avail car loan. Other banks like HDFC and AXIS share around 24% followed by Non banking finance companies having a demand of around 20%. Thus we can see that banks tend to be the leading market players in the car loan segment over non banking finance companies.

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STUDY ON CAR LOAN TO PROFESSIONAL, SELF EMPLOYED & BUSINESSMAN Figure 17: Banks which dealers refer to their customers

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90% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% SBI HDFC AXIS Others 20% 50% 80%

Interpretation: From the above diagram, it can be inferred that SBI and HDFC are the two
most referred banks. SBI tops the dealer referral and counts about 90% followed by HDFC counting about 80% of the referral. AXIS follows suit with a share of around 50% while other banks are rarely referred to with a count of 20%.
Figure 18: Reasons for choosing the bank

90% 80% 70% 60% 50% 40% 30% 20% 10% 0%

80% 70%

85% 75% 60% 45% 40% 70% 75% 65% 60% 72% 68% 60% SBI HDFC AXIS Finance companies

50% 35%

Low interest rate

Quick disposal

Location convinience

Transperancy

Interpretation: According to dealers, customers prefer SBI and HDFC the most. More than
80% prefer SBI due to lower interest rates. HDFC lags a little behind in this aspect but outruns SBI by 75% when it comes to easy and quick disposal of loans. As inferred earlier, SBIs biggest drawback is the delay involved in the processing of loans. But

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again SBI tops the list from location point of view grabbing a share of more than 75%. In terms of transparent dealing, yet again SBI leads the market with more than 85% of the respondents choosing the bank. AXIS bank, although referred to by various dealers, hasnt been able to capture a good market share as we can see that in terms of lower interest rates it is the least preferred bank with merely 40% share, as low as nearly 35% when it comes to quick disposal and less than 50% from the location point of view. Regarding non banking financial companies some of the dealers refer them still they lag behind due to their high interest rates but due to quick disposal accounting around 70% these are preferred by mostly businessmen and customers who prefer to have their car quickly.
Figure 19: Performance of SBI representatives

Acc. to Dealers
4% 10% Excellent Good 24% 62% Average poor

Interpretation: When asked about the performance of SBI representatives in car loan
marketing 62% dealers considered it to be excellent. 24% said good and 10% said average. This shows that SBI has to work more on its marketing skills and need to perform more nicely.

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CONCLUSION
After Studying the popularity and general perceptions of the car loan product of SBI and keeping in mind our categories of customers gave me an insight as to what strategies should be adopted by the bank which will help it improve its market share. From the findings it can be clearly seen that SBIs market share is already high but there are certain crucial points where the bank needs to work on in order to attract more customers. SBI tops the list of banks most preferred for car loan. Most of the respondents who already have taken loan from SBI are satisfied with its services and hence, would opt for the same in respect to car loan. Since more people would like to finance their vehicles, they would prove to be more prospective for SBI if the bank works on its negative aspects of the loan product. It can be seen that most of the people who havent chosen SBI for availing car loan have cited the reason that they find the attitude of the bank officials to be negative and repulsive. This is a very significant aspect of any organization because this is one of the most important criterions which determine the satisfaction/dissatisfaction of customers. Therefore, the bank needs to improve on this aspect. Moreover, the processing of loan and the documentation procedure followed by the bank is quite lengthy and therefore, poses a major drawback for the bank. If the processing time is shortened and the bank gives way for minimal documentation then this can prove to be of much use to the bank thus, increasing the number of the people seeking its Auto Loan. Moreover the bank needs to improve its marketing skills, and all the bank representatives must give their best performance to attract more customers. Many drawbacks of SBI can be cited from this study and needs to be worked over to increase its market share in auto loan.

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RECOMMENDATIONS
On the basis of the data collected through questionnaire, SBI should focus on the following strategies in order to improve its market share: Since the bank possess different categories of customers including professionals, self employed and businessman accordingly their problems are also different. These must be sorted individually as most of the businessmen are dissatisfied with the bank. The nonresident businessmen are facing more difficulties in the documentation procedure i.e. in providing residence proof or income proof, so some new criteria can be introduced for them so that they may also find ease in availing car loan. Since the main reason for people not choosing SBI for availing car loan is the problem of delayed processing. SBI should work on this negative aspect and take necessary corrective measures in order to attract more customers. Another reason put forth by many respondents for not choosing SBI is the negative attitude of the bank officials. This is a very crucial aspect to any organization because this aspect decides the satisfaction/dissatisfaction of customers. Though interest rates of the bank regarding car loan product is comparatively less than other organization but still some problems are faced by the customers due to the floating rates, so the bank needs to work on it and as much as possible try to provide a fixed rate of interest to the customers. There should be a proper procedure to collect customer feedback with respect to processing time, documentation, choice/preference of the customer towards the loan product. This feedback should be properly processed and the processed data should be reviewed by higher authorities to bring the improvements. Those customers who find that the documentation procedure dont match their profile must also be considered to be important and SBI should search some way out for them so that the bank could prevent losing its customer to other organization.

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Since the Rural approach of SBI is least, the bank should try to provide proper public awareness of their car loan scheme and their benefits in rural areas. A system should be developed wherein in addition to the dealing officials, other staff in a branch should also possess adequate knowledge of various loan schemes to share the information with other customers, as a whole should be educated to the extent possible which can result in a group marketing of products.

Bank representatives must also give their best performance. The bank should employ hassle-free procedures for the sanctioning of loan to the customers. SBI should extend its concern on fast settlement of customer grievances. SBI should provide spot financing for purchasing car in the dealers premises during festival seasons. Conducting more number of car loan melas in order to attract more customers.

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REFERENCES
Primary data collected: Questionnaires filled in by customers. Primary data collected: Questionnaires filled in by non customers. Primary data collected: Questionnaires filled in by dealers. Documents available from the Bank website: www.sbi.co.in. Information gathered from SBI officials. Information gathered from the bank officials through face-to-face conversation. Information gathered from Utkal Hyundai officials. Information gathered from Sky Automobiles. Information gathered from Narayani motors. http://www.axisbank.com/personal/loans/car-loan/car-loan-features.aspx http://www.hdfc.com Information gathered from Jyoti Automobiles. Information gathered from Aditya motors.

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ANNEXURE 1 Questionnaire for Customer availing car loan from SBI

I am a student of IMIS, Bhubaneswar and presently doing a project on Study of Car loans to professional, self employed & businessman. I request you to kindly fill in the questionnaire below and I assure you that the data generated shall be kept confidential.
_______________________________________________________________________

Name: _______________________________ Occupation: ____________________________________________ Annual Income (Optional): _________________________________ Cell no. : __________________________________

1. How did you find the loan sanction process in your preferred bank? a) Very good b) good c) average d) bad e) worst 2. In how many days loan was sanctioned? a) b) c) d) 2-3 days 5-7 days 15 days 1 month

3. What made you decide on taking loan from your preferred bank? a) low interest rate b) faster service process c) min processing fee d) caring attitude of Employees e) Others please specify___________________________

4. Is the documentation procedure is convenient? a) Yes b) May be c) No

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5. Rank the following factors according to your expectation for the services provided by your service provider. (1 Being lowest and 5 Being highest). Sl No. 1 2 3 4 Factors Explains all terms clearly High-speed access Staff are considerate Convenient location Protects personal information Provides most up-to-date and accurate information Easy to find the correct information 1 2 3 4 5

6. For any future car loan purpose would you like to contact SBI? a) Yes b) May be c) No

7. Would you recommend this bank to your friends, relatives, associates? (a) Yes [ ] (b) No [ ]

8. Any suggestion for improvement of car loan procedure in SBI:

-------------------------------------------------------------------------------------------------------------Thank you for taking the time to fill in this survey

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ANNEXURE -2 Questionnaire for Non Customer of SBI availing Car loan

I am a student of IMIS, Bhubaneswar and presently doing a project on Study of Car loans to professional, self employed & businessman .I request you to kindly fill in the questionnaire below and I assure you that the data generated shall be kept confidential.
_______________________________________________________________________

Name: _______________________________________ Occupation: _________________________________________ Annual Income (Optional): _______________________________ Cell no. : _____________________________

1. From Where have you taken the car loan_______________________

2. How did you find the loan sanction process in your preferred bank? a) Very good b) good c) average d) bad e) worst 3. Do you have any knowledge about the loan facility in SBI? a) Yes b) No c) may be

4. Did the dealer explain you loan process of SBI at the first instance? a) Yes b) No

5. Why have not you taken loan from SBI? a) High interest rate b) delay service process c) high processing fee d) Callous attitude of Employees e) Others please specify___________________________ 6. What made you decide on taking loan from your preferred bank?

a) Allow interest rate b) faster service process c) min processing fee d) Caring attitude of Employees e) Others please specify___________________________

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7. Rank the following factors according to your expectation for the services provided by your service provider. (1 Being lowest and 5 Being highest).
SL NO 1 2 3 4 Factors Explains all terms clearly High-speed access Staff are considerate Choice of payment methods Convenient location Protects personal information Provides most up-to-date and accurate information Easy to find the correct information Nice and clean environment Good queuing system 1 2 3 4 5

5 6

10

8. How will you rate SBI against your preferred bank? a) Very good b) good c) average d) not good e) bad 9. Would you like to be contacted by a bank representative? a) Yes b) No 10. Given a choice would you like to shift your car loan to SBI? a) Yes b) No c) may be 11. Would you recommend this bank to your friends, relatives, associates? a) Yes [ ] b) No [ ] -------------------------------------------------------------------------------------------------------------Thank you for taking the time to fill in this survey Students of IMIS

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ANNEXURE -3 Questionnaire for Dealers

I am a student of IMIS, Bhubaneswar and presently doing a project on Study of Car loans to professional, self employed & businessman .I request you to kindly fill in the questionnaire below and I assure you that the data generated shall be kept confidential.

1. How many vehicle inquiries do you get every day? _______________________ 2. How many booking are financed? ____________________________ 3. Which bank is most preferred? ___________________________ 4. Are non bank finance companies are preferred than SBI? a) Yes b) No 5. Which bank do you refer your customers to and why? _________________ _____________________________________________________________________ 6. Reason for customers preferring non-banking finance companies over banks? ________________________________________________________________________ 7. How you will rate SBI against any other bank? a. satisfactory b. good c. average d. excellent 8. Performance of SBI representative at your showroom? a. poor b. good c. satisfactory d. excellent 9. Your view at SBI financing service in comparison to other finance? a. poor b. good c. satisfactory d. excellent 10. Any suggestion for SBI car loan :-

Thank you

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