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Summer Internship Program – 2018





Submitted by:

Ashween Kaur

Aditya Birla Housing Finance Ltd.





Submitted by:

Ashween Kaur

Aditya Birla Housing Finance Ltd

Distribution List

Dr. M Aruna Mr. Rakesh Gellu

Faculty Guide Company guide
Department of Economics Sales Manager
IBS Hyderabad Aditya Birla Housing Finance

Date of Submission: 9th May, 2018

This is to certify that the report on “Study on Home Loan Competition- Best practices followed
by banking and Non-banking Finance Companies” is carried by Ashween Kaur as a part of her
internship program in Aditya Birla Housing Finance Ltd Company under guidance of Mr.
Rakesh Gellu. The data used in the report was provided as per company‟s policy restrictions so,
this can only be used for reporting purpose and cannot be revealed. The report is submitted in
partial fulfillment of the requirements of MBA program (2017-2019) of IBS Hyderabad.

I would like to express my greatest gratitude towards my faculty guide,
Dr. M Aruna, my mentor, who has supported and guided me throughout the
project. She not only helped me to think out of the box but also informed me about
the proceedings and important dates of program completion and course guidelines.
This project would not have such progress without her support and guidance. This
interim report serves the purpose of reporting the progress of my internship.

I would also like to thank the entire team of ABHFL for their generous and
consistent efforts in grooming and enhancing my skills, their selfless contribution
in enriching my knowledge to the best of my interests. I take the opportunity to
express my sincere thanks to the most important person behind this project, my
company guide, Mr. Rakesh Gellu, Sales Manager, ABHFL, Road no 2,
Banjara hills branch, for his outstanding support. He stood by me at every stage
of my internship to assist and guide me whenever I needed.

He put his best efforts to usher me towards the successful completion of my

project for which I am so very thankful. I would also like to thank
Mr. Anand Vysyaraju (Area head), Mr Vikram Hapawat (Regional Head) and
all members of our Bank who always kept me motivating about my work. Last but
not the least I would like to thank my Friends, colleagues, seniors and family
members whose support made me do my project.


 ABHFL - Aditya Birla Housing Finance Ltd.

 NBFC - Non-banking finance companies
 ABG - Aditya Birla Group
 ABCL - Aditya Birla Capital Ltd.
 ABFSL - Aditya Birla Financial Services Ltd.
 HFC - Housing Finance Companies
 NHB - National Housing Bank
 NOC – No Objection Certificate
 TPT – Tripartite agreement
 AOS – Agreement of Sale
 OCR – Own contribution receipt
 APF – Advance processing Facility
 KYC – Know Your Customer
 EC – Encumbrance Certificate
 BT – Balance Transfer
 HL – Home Loan
 LOD – List of Documents
 FC – Foreclosure
 LRD – Lease Rental Discounting
 LAP – Loan against Property
 RMOE – Registered Memorandum of entry
 ITR – Income Tax Return
 GPA – General Power of Attorney
 NRE – Non-Resident rupee
 NRO – Non-Resident original Rupee
 PAN – Permanent Account Number
 CIBIL – Credit Information Bureau India Ltd.
 ML – Mortgage Loan
 PF – Processing Fee
 FI – Field Investigation
 RCU – Risk Control Unit
 LTV – Loan to Value
 EMI – Equated Monthly Installment
 PL – Personal Loan
 ABB – Average Bank Balance
 CAM – Credit Appraisal Memo
 FOIR – Fixed Obligation Income Ratio

 MV – Market Value
 DM – Disbursement Memo
 SKR – Safe keeping records
 DRF – Disbursement request form
 NACH – National Automated Clearing House
 ECS – Electronic Clearing System
 MITC – Magnetic Ink Character Recognition
 IFSC – Indian Financial System Code
 PDD – Post Date Disbursement
 TAT – Turn Around Time
 CERSAI – Central Registry of Securitization asset reconstruction and security interest in
 OTC – Over the Counter
 SARFAESI – Securitization and reconstruction of Financial Assets and Enforcement of
Security Interest
 NPA – Non- performing asset
 NSFR – Net stable Funding Ratio
 CKYCR – Central KYC Records Registry
 ARC – Asset Reconstruction Companies
 AIFI – All India Financial Institutions
 PD – Primary Dealers
 PSU – Public Sector Undertakings
 ROA – Return on Asset
 ROE – Return on Equity
 PMAY – Pradhan Mantri Awas Yojana
 RERA – Real Estate Regulatory Authority
 DSA – Direct Sales Agents
 CA – Chartered Accountants
 LIC – Life Insurance Corporation
 MQL – Marketing Qualified Lead
 SAL – Sales Accepted Lead
 SQL – Sales Qualified Lead


Sr. No Content Page No

Executive Summary 6
Chapter 1: Introduction 7
1.1 About the company 8
1.2 Purpose 9
Chapter 2: Company Profile 10
2.1 Mission 11
2.2 Vision statement 11
2.3 Business strategy 12
2.4 ABC management 12
2.5 ABHFL management 13
2.6 Our businesses 13
2.7 Achievements 14
Chapter 3: Products and services 15
3.1 Products and Documents 16
3.2 Other Documents 20
3.3 Eligibility 25
3.4 Disbursement 28
Chapter 4 Cross Selling & Up selling 30
Chapter 5 Demand Funnel 32
5.1 Introduction 33
5.2 Process 34
Chapter 6 Research objective 35
6.1 Introduction 36
6.2 Market Research 37
Chapter 7: Methodology 38
Chapter 8: Major policy measures 40
Chapter 9 Competition 42
9.1 NBFI 43
9.2 Financial performance 45
9.3 Affordable Housing 46
9.4 Comparison 47
Chapter 10: Impact of RERA on real estate sector 48
10.1 Provisions and impact 49
10.2 Benefits to NBFC 50
Chapter 11 Analysis 51
11.1 Cold Calling 52
11.2 Pie-Chart 53
Chapter 12 Lead Conversion 54
12.1 Meetings 55
12.2 Conversion 56
Chapter 13 Conclusions & References 57

Customer satisfaction these days is one of the main concerns for every industry whether its
Product based or service based. It has also become very important and of great concern in
Banking industry. Banks are striving hard to offer best products and services in order to retain
existing customers and gain new one. Customers on the other hand, want the best products and
services for which they are paying.

The main Objective for the research is to know the extent of competition prevailing in the market
and the corresponding customer satisfaction about ABHFL by the help of existing and new
sourced data, survey questionnaire and to increase it by taking corrective measures to reduce
consumer dissatisfaction. It also focuses on knowing what notions people have about our NBFC
services and what would help them to use those services more and more. Through this research
project we aim at providing overall view of the NBFC Industry where it is continuously focusing
on its major point of differences in order to retain the existing customer base and attract new

Through this study we attempt to compare the extent of competition between Indian Banks and
NBFC. It has been analyzed that even at the time of the Recession, NBFC‟s were more
profitable. The industry is not tightly regulated as there are not many regulatory bodies. So it
becomes important to study the role of NBFCs in the entire banking system.



1.1 About the company

ABG Conglomerate

The Aditya Birla Group is an Indian multinational conglomerate, headquartered in Worli,

Mumbai, India. A US $43 billion corporation, the Aditya Birla Group is in the League of Fortune
500. It has been anchored by an extraordinary force of over 120,000 employees, belonging to 42
nationalities, over 50 per cent of its revenues flow from its overseas operations spanning 35

The Aditya Birla Group has been ranked fourth in the world and first in Asia Pacific in the 'Top
Companies for Leaders' study 2011, conducted by Aon Hewitt, Fortune Magazine and RBL (a
strategic HR and leadership advisory firm). The Group has topped the Nielsen's Corporate Image
Monitor 2014-15 and emerged as the 'No.1 Corporate', the 'Best in Class', for the third
consecutive year.

The Indian Scenario

 A top fashion (branded apparel) and lifestyle player.

 The largest manufacturer of grey cement, white cement and concrete.
 The second-largest player in viscose filament yarn.
 The largest producer in the chlor-alkali sector.
 Among the top three mobile telephony companies.
 A leading player in life insurance and asset management.
 Among the top two supermarket chains in the retail business.


Aditya Birla Capital Limited (ABCL) is the holding company for all the financial service businesses of
the Aditya Birla Group. With a strong presence across the life insurance, asset management, private
equity, corporate lending, structured finance, general insurance broking, wealth management, equity,
currency and commodity broking, online personal finance management, housing finance, pension fund
management and health insurance business, ABCL is committed to serve the end-to-end financial services
needs of its retail and corporate customers.


Aditya Birla Housing Finance Limited ("ABHFL"), a subsidiary of Aditya Birla Capital Limited,
is a fast growing housing finance company ("HFC") in India with a net worth of Rs. 6386 million
and lending book value at Rs. 57,770 million as on September 30th, 2017.

Initially incorporated in 2009 as an investment company, ABHFL commenced its operations in

the housing finance sector in October 2014 and significantly transformed its business by
expanding its footprint to 42 branches and over 2000 channel partners, as of June 2017. ABHFL
is registered with the NHB as a systemically important non deposit accepting housing finance
company. ABHFL aims to enhance its focus on tie-ups with developers and builders, along with
achieving the right balance of sourcing and product mix and increasing its penetration by cross
selling and up-selling.

1.2 Purpose

1. Review and enhance existing knowledge

2. Investigate and resolve problems

3. Provide solutions to problems

4. Explore and analyze relevant issues through detailed research

5. Generate new knowledge




 Investing in promising sectors.

 Building leadership in businesses.
 A platform to drive synergy of resources.
 Delivering best value to all the stakeholders.
 To be a responsible corporate citizen.


 To be a premium conglomerate building leadership in businesses and creating value for

all the stakeholders
 To be a leader and role model in a broad-based and integrated financial services business.

The 4 pillars of our vision that will help us achieve it are:

 To be a leader – we are committed to being a leader in all facets of our businesses, rather
than being just another participant in this race.
 To be a role model – we will not become leaders by cutting corners or making
compromises. Whatever we do, we will strive to be the best in class. And if we are the
best, then our customer will have no reason to go elsewhere – therefore our leadership is
assured, on pure merit.
 To be a broad-based player – we are committed to meeting all the felt and unfelt needs
of our target customer. And thereby, we can retain him or her across their needs and life-
 We aim to be an integrated player –we believe that this approach gives us a
competitive edge through sharing of best practices, deriving cross – business synergies &
providing talent pool with world of opportunity to grow.


Philosophy- The philosophy of this organization is built upon the idea of “Givers Gain”: By
giving business to others, you will get business in return. This is predicated on the age-old idea
of “What goes around comes around.”

Tradition + innovation -Tradition in an organization tells us where we come from and lays the
foundation of who we are, but we must always be looking for ways to innovate.

Building relationships -Networking is more about farming connections with new contacts than
hunting for them. People want to do business with people they know and trust. It‟s about
cultivating those relationships.


S.NO Name of Director Description

1 Ajay Srinivasan CEO

2 Arun adhikari Independent Director

3 Puranam Hayagreeva Ravikumar Independent Director

4 Subhash Chandra Bhargava Independent Director

5 Vijayalakshmi Rajaram Iyer Independent Director

6 Gaurav Zutshi Chief digital officer

7 Mukesh Malik Chief Operating Officer

8 Pinky mehta Whole time director and CFO

9 Sailesh Kumar Daga Secretary

10. Shriram jagetiya Non-executive director

11. Subhash bhaduri Chief human resource officer


S. NO Name Designation

1. Rakesh Singh CEO

2. Anjali Makhija CFO

3. Netrapal Singh CBO

4. Saral sharma South Zonal Head

5. Vikram Hapawat Regional Head

6. Harshil Product manager


 Protecting
We enable individuals to protect what they value.
 Investing
We enable individuals to realize their aspiration by making their money work for them.
 Financing
We enable individuals to fulfil their needs and desires without any delay.
 Advising
By understanding people‟s lives, we advise them right solutions on the basis of their
money needs.


In pursuit of our leadership vision

 We are among the Top 5 Private Diversified NBFCs in India

 We are one of the largest Private Life Insurance Companies in India
 We are one of the largest Asset Management Companies in India
 We are one of the largest General Insurance Brokers in the country

In pursuit of our desire to be a role model

 We are today, a leading non-bank financial services player with a strong focus on quality
of growth
 We are renowned for risk management, people practices, sales management, investor
education, product innovation & fund management capabilities
 We are among the best 3 financial services players to work for [As per a study by Great
Place to Work Institute, 2016]
 We have continued to build a Broad based & Integrated financial services business
 We continue to be one of the few players in the industry with a diversified portfolio that
allows us to meet almost any customer need across the entire spectrum of his / her
 Our integrated play has helped us gain a competitive edge by allowing us to share best
practices, derive cross-business synergies & provide our talent pool an opportunity to grow
their career through cross-functional and cross-sectoral experience
 Our distributors and partners see tremendous value in association with our businesses
 We are successfully expanding the market for our offerings, along with our market share
in each of our businesses

Financial Achievements as of March 31, 2017

 AUM - Rs.2,463 billion has registered 34% y-o-y growth
 Our Consolidated Lending Book has grown over 40% Y-o-Y to Rs 388 billion




I. Home loans


1. Salaried

Documents Required

 KYC - Signature proof, address proof, ID proof,

 Pay Slips - Latest 3 months
 Form-16 - Latest 2 years
 Bank Statements – Latest 6 months with Salary Credit.

2. Self - employed

 Professionals
 Doctors
 Lawyers
 CA

Documents required

 Bank statements- latest 1 year
 Form-26AS
 Non-professionals
 Traders
 Manufacturers
 Retailers

Documents required

 ITR – Latest 3 years
 Business audit report – proprietor, firm(3CB,3CD), Company(3CD,3CA)


Documents required

 GPA - General power of attorney

 Passport- all 36pages
 Valid employment visa with residence proof
 NRE, NRO with W2 form
 Individual returns

Types of Home Loan transactions

Builder Purchase-

 Cat A
 Cat B
 Cat C

- Documents required for approved properties:-

 Demand Letter
 Construction agreement
 TPT Agreement
 OCR Receipts
 Draft Sale Deed


 Individual ( Seller )

-Documents Required

 KYC (ID Proof, adhaar, address proof)

 Legal linked documents
 Draft sale deed
 Pan of seller
 Customer signatures
 Seller signatures
 Legal-technical report
 Cancelled cheque


-Documents required

 Sale deed
 Plan copy
 Original documents from customers
 Check from legal person
 Estimation letter

Plot + construction

Post purchase construction. It is similar to resale and the amount is released on the basis of slabs.

Documents required

 Plot documents- Submission to bank by third person.

Balance Transfer + Top Up

At ABHFL, we provide attractive BT + Top up offers wherein the customer who already has any
HL can easily transfer the outstanding amount to our organization and additionally can avail top
up benefits.

-Documents Required

 FC
 Irrevocable power of attorney
 Loan record from existing bank

II. Loan against Property

It is similar to self-construction. It can be-

 Commercial
 Residential

Documents required are-

 Original documents mortgage to bank

 Vetting original documents from lawyer.


Sale deed of a particular flat is required in advance to the rest of the mandatory basic documents.

III. Lease rental discounting

Under this product, interest payments are directly collected from tenant through an account
called escrow account. It is applicable in case of multiple rentals and unlike the monthly PRD, it
is considered over a period of time. Collateral and rental income are considered from same

Documents required are-

 Details and properties of tenants

 Original documents of rental income.
 RMOE is mandatory.
 Lease deed

Pure Rental Discounting

When there is no salary, no business we consider purely rental income for the loan requirements.
Rental agreement documents are required over the basic mandatory documents.

IV. Home Extension Loans - Apart from Home loans, we provide Home extension loans for
improvement, renovation purposes.

3.2 Other Documents

MITC- Most important terms and conditions

This document includes the major terms and conditions of the housing loan agreed between the
borrowers and the company. It includes-

1. Loan Details –
 Loan amount sanctioned
 Purpose of the loan
 Rate of Interest
 Tenure
2. Fee and other Charges –
 Part payment/ Pre closure charges
 Cheque return charges/ ECS Failure charges
 Accrued Interest
 Cancellation charges if any
 CERSAI charges
 Pre- Closure quote
 Repayment Schedule

GST @18% is levied on these charges.

Loan Agreement Book

It includes the details of applicant and co-applicant, current and transfer property address, tenor,
location, Indemnity, Favoring, application date and sanctions letter date.

DRF – Disbursement Request Form

NACH form – National automated clearing house

It is the centralized solution for bulk payments; it facilitates interbank transactions and electronic
transfers. Here any kind of payment can be made through ECS (Electronic clearing system)
across the nation which includes MICR code, IFSC code.

Legal & Technical Report

Legal and technical verification is the mandatory part of every Sanction without which the
process cannot be completed.

Documents required for the verification are-

 15-20 years Linked documents

 Encumbrance Certificate
 Cersai Report
 Vetting Report
 Plan Copy
 Technical estimation sheet

Vetting report is the proof of authenticity by the lawyer

APF – Advance Processing Facility is used to eliminate the cumbersome Legal and technical
verifications of project at the time of each Login. Under this, project approvals are done first post
which officially the business commences. Once the APF code is generated, it becomes
convenient for home loan buyers to get hassle free disbursements without thinking of legal and
technical discrepancies.


 Group House Facility

 Cost saving
 Shorter TAT
 Seal of Authenticity

Documents need to be submitted by the Developers are-

a) NOCs
b) Title Deeds
c) Sale deeds
d) Approved plans
e) Freehold/Leasehold documents
f) Government Clearances
g) Project Feasibility Report
h) Builder profile
i) Latest 2 years audited Financials of the builder
j) 6 month bank statement


KYC documents
Financial statements
Dockets (SUD)
Sanction letter
Underwriting dockets
Legal-technical report
Customer acknowledgement





ML #

in R


Pre-disbursement documents are verified by RCU

Post-disbursement documents are verified legally by the lawyer.

Following is the process from Data entry to the final completion activity stage.

In CA tray, Loan eligibility and obligations are taken into consideration post which PD is
prepared by Credit manager. Deviations i.e., the negative remarks and Mitigates i.e., the positive
remarks are then compiled in recommendation letter prepared by him.

3.3 Eligibility

1. Sanction

Methods for calculating eligibility are-

 Cash profit method- This is the most widely used method for calculating eligibility
majorly in case of salaried people. We take net profit which is the real income and we
add back expenses like depreciation because we obligate these expenses for EMI.

Net profit + Depreciation + interest on capital + partner’s remuneration

+ Interest paid on HL, PL = Cash profit

 Gross turnover- This method is used when the turnover of company is huge but net profit
shown is very low which makes it not eligible under cash profit method. In order to
calculate the eligibility industry margin is applied under this method.
 Banking turnover- when all the transactions are reflected in bank but he is not showing,
then banking turnover method is used where the industry margin is applied on the
business credits.
 Average bank balance- when all the transactions are not reflecting but the banking
overall is good we use ABB method where we take 50% of 1 year ABB as EMI.
 Low LTV- When we are not able to compute the exact information through the documents
and where there is less clarity we go ahead with 50% of the purchase cost under low LTV
 Mortgage takeovers- this is also called balance transfer where the customer is already
paying EMI somewhere and we enhance, extend the loan. We take into consideration at
least 1 year‟s track record after which the EMI‟s get multiplied.
 Pure rental program- where there is no salary, no business we consider rental income for
the eligibility criteria. When rental agreements with bank credits are shown or when it is
reflected in the ITR we consider 100% but in case of cash rentals we consider only 25%.
 Gross receipts- This method is used only in case of professionals where in case of
doctors the multiplier is 3 whereas in case of chartered accountants the multiplier is 2 for
eligibility criteria.

2. CAM- credit appraisal memo

Factors like:-

 Age
 Income
 Co-applicant details
 Nature of employment
 Continuity of employment
 Repayment capacity
 Previous loans

All these factors are considered while appraising the credit worthiness of a person and CAM is
the electronic medium, a computer aided device to find out the eligibility criteria.

Eligibility can be calculated manually with the help of excel function PMT which has been
illustrated in the following snapshot.

It shows the comparison of financial and property eligibility valuation with the applicability of
FOIR. How much is the equated monthly interest when loan requirement and property values are
considered separately. Under FOIR, deviations are possible but are not considered under LTV
which is determined on the basis of MV.

FOIR- Fixed obligations to income ratio is a parameter which banks use to determine loan
eligibility. Under this, existing obligation in terms of EMI if any are deducted from Net Salary
and then FOIR is applied to arrive at eligibility which vary from Bank to Bank.

E.g. If monthly income is Rs50000 and there are other loans with EMI 15000, Banks would
approve a loan with maximum EMI of Rs10000 per month (taking FOIR as 50%).

Recommendation letter-

This is prepared by Credit Manager after Personal discussion with the customer which includes
details like-

 Parties to loan ( Income and age )

 Profile of borrower ( Qualification, age, work experience )
 CIBIL details ( Both applicant and co-applicant )
 Banking ( Salary credit )
 Eligibility ( Method e.g. Cash profit )
 Review remarks of appraiser

3.4 Disbursement

After the bank is ensured on the legal and technical clearance of the property and all the original
documents pertaining to transfer of ownership have been submitted, all the required loan
agreements have been executed, then comes the payment time. This is the time when the
borrower actually receives the cheque in hand but before this the borrower has to serve his own
contribution receipts (OCR). Post submission of this proof, banks releases part disbursement of
the loan.

Note: - Banks normally charge interest on the loan amount from the day cheque has been made
whereas we at Aditya Birla charge interest on the loan from the day cheque is handed over to the

Disbursement in Stage-

Normally banks disburse loans on the basis of the stage of construction of property. This happens
in case of under-construction properties

Part Disbursement- In case of under-construction property, loan is partially disbursed

i.e., the payment is made in parts also known as part disbursement. In such scenario,
banks does not start EMIs immediately because EMI is calculated on total loan amount at
a specific rate of interest for a given tenure. To avoid this problem, simple interest is
charged on the partially disbursed loan amount which continues until the final
disbursement takes place. This is also known as PRE-EMI scheme. At this stage banks
take 6 postdated cheques on account of Pre-EMI.
Final Disbursement- In case of ready to move-in property, the banks disburses the entire
loan amount to either reseller or the builder.

DM- Disbursement Memo


Customer ID


SKR – Safe Keeping Records

Loan Collateral Nature of Type of

Application ML #
amount Details date



4.1 Introduction

Both Cross selling and up selling are a medium to provide additional value to clients. Aditya
Birla has many Cross-Selling teams which prove to be one of the greatest sources of lead
Generation and enhances the overall business requirements. These includes-

 Wealth Management
 Real Estate Team
 Business Loan
 Mortgage Team
 Corporate Banking
 Capital Banking
 Asset Management Company
 Direct Sourcing Agents
 Connector Models

Cross Selling helps in eliminating the costs of many marketing channels.

Up Selling

This concept is followed for encouraging customers to purchase a higher value product. It is a
sales technique, a strategy where the sales manager provides complementary products and
services ending up making larger sales. Aditya Birla in addition to Loan furnish Insurance to the
customers with attractive deals.

Types of Insurance provided By ABHFL is:

 Life Insurance ( 20 years coverage)

 Health Insurance
 Reliance general insurance ( maximum tenor is 5 years )


Demand Funnel

5.1 Introduction

Demand funnel is a concept which we have learnt in the training period. Under this we are taught

 Plan our requirements and needs as per the available sources.

 Be well organized and work on market channels.
 Build connectors and set target files for a particular month.

Sources of business

 Builders
 Property agents
 Referral partners
 CAs
 Architects
 Insurance agents
 Direct References
 Real estate agents
 Corporate activities
 Campaigning
 Doctors

We at ABHFL follow this concept to qualify and nurture our prospective customers from first
interaction till closing thereby funneling each individual lead through their first click and
ensuring a seamless process throughout.

5.2 Process

Funnel stage Incharge Description

Inquiry Marketing Getting a respondent through marketing campaign but
does not meet qualification criteria.
MQL Marketing An inquiry generated which meets the minimum fit
criteria enough to be handed over to sales
SAL Sales Further qualifications are done to meet pipeline-
SQL Sales A SAL that has progressed and is now committed to go
Closed win Sales A final opportunity which resulted in a closed won

The final stage to ensure our demand funnel works as we intended is to manage our leads
throughout the entire process which is-

 Lead scoring
 Content delivery
 Integrated lead scoring and lead nurturing
 Rinse, recycle, and repeat.




In order to know the aggressiveness and exact competition prevailing in the market between the
banking and non-banking sector, a survey questionnaire has been designed recently whose
responses are yet to be analyzed.


 To understand the customer satisfaction of ABHFL in comparison to other Banks.

 The factors which influence customer satisfaction.
 To check the banking penetration of ABHFL.
 To grow business through sourcing, building and maintaining clients and enhancing
 To comprehend what factors affect the quality of services provided by our NBFC in
relation to other banks and focus on our strengths and weaknesses
 To make recommendations with the result and analysis of the survey and take correcting
measures to overcome them.


For any industry customer satisfaction is the key to earn market share and profits. In case of
Banks due to intense competition and much focus on the products and other allied factors the
focus on customer satisfaction is getting neglected day by day. Since our ABHFL is the recently
growing NBFC and a subsidiary of a reputed multinational conglomerate ABG, our core focus is
on providing quality to our customers, hassle free procedure with the least possible TAT.
This study would serve as guideline for the Banks with the help of which they can retain their
customers with proper customer service. This study would go a long way to:
1. Add to the store of knowledge of ABC and in general the whole Banking industry.
2. It would also serve as a guideline for implementing and reframing the policies with respect to
the services.

3. Help to know the customer behavior and perception on what they think about Bank and what
would make them improve their perception.

4. Make a path for further such studies and research by NBC.


In our field, market research is important to keep a track record of the ongoing projects within
the city limits. For this purpose I‟ve collected some area based data which has been summarized
below. From these areas I‟ve collected details of the ongoing projects after which we‟ve visited
along with the sales manager and got some APF leads through it.

Locality Total Projects Ready Under Wt.Avg. Available

Projects Construction Price Units

Narsingi 38 24 14 4388 1046

Manikonda 130 117 13 4172 876

Kondapur 123 113 10 4436 1336

Nanakramaguda 22 11 11 5291 1506

Nallagandla 37 31 6 4447 1025

Kokapet 23 16 7 4544 843

KPHB 34 30 4 4675 994

Chandanagar 47 40 7 3995 1285

Kompally 69 58 11 3509 675

Moosapet 17 14 3 4769 739


Chapter 7


There were mainly few decisions to be taken to arrive at the best methods which are-

1. Population
2. Sample size
3. Research Instrument: questionnaire, one two one talk, cold calls.
4. Data collection.

Three different methods were used to build clientele and retain the existing one.

For generating Leads and Informing customers about offers on Loans the following methods
were used.

 Cold calling: To call the customer and inform them about the offers we are providing.
 Word of mouth: visiting builder sites, fixing appointments, pitching and building
references where word of mouth plays a strong role.

For analyzing the competition and understanding the customer requirements and needs the
following method has been applied.

 Questionnaire: This method has recently been implemented to get the customer
perception about the Banking and non-banking sector and what problems are faced by
them where we can take some corrective actions to overcome them.

In a market research context, I have used both primary as well as secondary sources for the
purpose of collecting data. Both existing and new data have been used for approaching
customers; the already available data has been filtered and sorted to suit the purpose. I used
secondary data methodology (also known as desk research), which involves synthesis of existing
research and primary data methodology for getting new and updated data through detailed

Research can happen at any stage of the creative process. Each process involves 4 steps that can
be repeated as necessary:

1. Identifying the subject domain and where to acquire the information.

2. Gathering existing data.
3. Comparing data from different sources, if necessary and if feasible and
4. Analyzing it.



CERSAI- On November 15, 2015 the central registry of securitization asset reconstruction and
security interest in India was marked as the central KYC records registry (CKYCR) for receiving
and storing the records of customers in digital form. This was done to ensure a single
applicability of KYC across all the financial products which in turn made the financial access
more appropriate.

OTC- On May 28, 2015 net stable funding ratio (NSFR) as a part of liquidity risk management
was drafted for measuring the funding of a bank over a longer period of time. This will promote
funding stability. On June 22, 2016 a draft on counter-party credit risks and exposures to central
counter-parties in over-the-counter (OTC) derivative transactions. When any documents are
missing at the time of final disbursement, the sales manager has the option to approve by the way
of OTC to avoid any delay.

SARFAESI- Securitization and reconstruction of financial assets and enforcement of security

interest act, 2002 is an act which allows banks and non-banking financial institutions to auction
residential or commercial properties in order to recover loans. Under section 13 of SARFAESI
Act, if a borrower makes any default in the repayment of loan and his account has been classified
as NPA by the secured creditors then it is in the hands of creditors to take possession of secured
asset after providing him a notice period of 60 days for the full repayment. They can do so
without any intervention of court or tribunal.

This law does not apply to-

 Unsecured loans
 Loans below 100000
 Remaining debt is below 20% of the original principal

Under this act, Asset Reconstruction Companies (ARC) is created which allows banks and non-
banking institutions to sell their NPAs and is permitted to take the possession of collaterals
without the intimation from courts.

Under „payment and settlement systems in India- vision 2018‟ the system will be broadened to
take into consideration the following 5 Cs namely – coverage, convenience, confidence,
convergence and cost.



9.1 NBFI

Under non- banking financial institutions, RBI regulates-

 All India financial institutions ( AIFI )

 Non- banking finance companies ( NBFC )
 Primary dealers ( PD )

AIFIs largely undertake long term financing in specific sectors, NBFCs specialize in meeting the
credit needs of niche areas whereas PDs perform an important role in making government
securities in both primary and secondary markets.

Amongst these NBFIs, our focus area is the composition of housing loans with Banks and
NBFCs in India where we shall concentrate majorly on non-deposit taking NBFCs.

In entire retail loan portfolio, Housing loan component constitutes more than 50% and occupies
the major share in the retail sector under priority sector lending followed by personal loans
component as shown in Figure 1.

Figure 1

NPA – NBFCs outshined Banks under the credit growth sector. NBFCs registered a 15.5%
credit growth in 2015-16 as compared to only 9% by commercial banks. NPAs of NBFC sector
remained lower as against the NPAs of Banking sector as shown in

It is clear from figure 2 that By March 2017, NPAs recorded in banks were double then that of
NBFCs. As on date, ABHFL has zero NPAs.

Figure 2

Source: Annual accounts of Banks

Undoubtedly, India‟s private sector banks are doing better than the PSU banks. Gross NPA of
PSU banks stands at roughly 12% whereas that of whole industry is at 9.1% in figure 4 below.

Source: world development bank

9.2 Financial Performance

From the period 2014-2017, the major indicators of profitability- ROA and ROE shows a
substantial decline as compared to previous years. Though, NBFCs have registered a double digit
growth in income due to increase in interest income but with expenditure exceeding income,
operating profits and net profits showed a decline.

Figure 3

Source: banks annual accounts

9.3 Affordable housing

Pradhan Mantri Awas yojana (PMAY) urban, a scheme launched in 2015 targeted 50 million
houses to be built by 2022. For this government has even increased its budget from Rs11600cr in
FY2016 to Rs29043cr in FY2018. Government of India took an initiative on „housing for all by
financial year 2022‟ where Indira Awas Yojana was renamed as PMAY. Since last 3 years,
demand for affordable housing has been increased due to shortage of around 4cr houses,
nuclearisation of families, migration to urban areas, etc.

Growth in housing loan sector has seen a noticeable decrease in figure 5 from year 2015-2017
due to affordable housing which saw a rise of 28% in 2016-17.

Figure 5

Today, the lending institutions are increasingly opting for floating rate products besides the fixed
rate ones with the options available to the borrower for conversion against a nominal payment at
any point in the course of loan payment. Moreover, the speedier processing and disbursement,
efficient advisory services, waiver associated up-front fees have also become common tactics for
acquiring the maximum possible share in the market.

Housing loans from banks do not involve prepayment charges, if borrowing is undertaken on a
floating rate but HFCs in this segment have a superior pricing power due to limited competition
from banks.

9.4 Major point of comparison between banks and NBFCs are-

Basis Bank Home Loans NBFC Home Loans

Governed by RBI Companies Act, 1956
Interest Rates MCLR + Spread PLR less spread
Credit score requirement Moderate to stringent Relaxed
Overdraft Some banks offer Don‟t offer
Paperwork Comparatively stringent Relaxed
Loan eligibility Typically up to 80% Comparatively higher
TAT 1 week-10 days 5-7 days
Major Point of attraction Security Subvention Scheme

Decision Making Cumbersome, often the incentive Quick decision making

structure is not fully aligned.
Processing fee More No or comparatively less

MOE Charges Up to 0.5% of the loan amount Not charged




10.1 Introduction

Real Estate Regulation and Development act. 2016 is a real estate regulatory authority which has
been implemented majorly to protect the interests of Home Buyers.


 Post May1, 2017 developers were required to register their projects by the end of July,
2017. This was done to ensure better accountability and transparency.
 In order to prevent time lags. The authority has been given a charge to dispose of
applications within a maximum period of 60 days.
 Every Real estate Project where total area exceeds 500sq.m has to be registered with
 Existing projects are also required to be registered where the completion or occupancy
certificate is not yet issued within a period of three months from the date of
commencement of project.
 Real estate appellate authority has been created for appeals and grievance redressal


 No launch is permitted before registering with RERA.

 Prior approval of 2/3rd allottees is mandatory for transferring majority rights to 3rd party.
 Under RERA act, developers become bound to share all the information regarding project
plans, layout, Government approvals, land title status, sub- Contractors, etc.
 There is increased assertion on timely completion of projects under RERA act.
 Improved quality of construction is ensured due to defect liability period of 5 years which
provides a unified legal regime.
 Home buyers can monitor the progress of project on RERA Website where promoters
will be required to make periodic submissions.
 The builder needs to tell and quote the price in CARPET AREA. No other units like
built-up, super built-up, etc. is allowed. This is done to bring uniformity in price terms
used by builders.

10.2 Benefits to NBFC’s

According to a recent report by Ambit Capital, Post RERA act, the total exposure of lenders to
developer financing is Rs4 trillion, with banks having an exposure of Rs1.8 trillion and NBFCs
and housing finance companies (HFCs) contributing the rest. “While banks have been reducing
their exposure, NBFCs have significantly increased their exposure to the realty sector, backed by

One of the advantages which NBFCs have is that we can adopt various tools for corporate debt
restructuring without resorting to refinancing, as we are not under the regulations that guide the
commercial banks.

We can even buyout inventory and sell them at any point of time as these are not limited by
product structures.

Reserve account

Builders are required to keep 70% of their funds in an escrow account which is a reserve account
in the name of the project. This is done to stop developers/builders to invest one project‟s funds
into other project and thereby causing delay in completion. If any builder is found violating the
rule can be heavily penalized and jail too.




There were some astonishing results which I got when I studied the data which was given to me
by the sales manager for calling. The results are stated below:

Table: Responses of customers

% of
Response of customers for Loan Total Total

Getting Loan from somewhere else with a Lower Rate of

interest 23 2.34%

Interest Rate is High 36 3.66%

Already Taken a Loan 177 18.02%

Already got call 15 1.52%

Out of reach/Switched off 78 7.94%

Interested 19 1.93%

NO not in service/wrong number 118 12.01%

Follow up 155 15.78%

Not Required 212 21.58%

Need Later Will call when Needed 27 2.75%

In search of properties 62 6.31%

Language problem 29 2.95%

DND 31 3.15%

Total 982

Now Drawing Pie graph of the Result obtained

In search of 3% 4%
6% 2%
Need Later Will DND
call when Needed 3%


22% 1%

NO not in

16% 12%

Out of

2% 8%



12.1 Introduction-

The main purpose of this summer internship program was to gain practical exposure in the field
of housing finance and at the same time generate some revenue as pay- back for the efforts put in
by the company in training and grooming us. Since the beginning, we were provided with some
existing data by one of the sales persons and were imparted with the training to approach and
pitch the prospective customers in a way they get attracted towards our organization. From lead
generation to lead conversion, we are now equipped with sourcing the clients, offering builders
and developers with project approvals, real estate consultants with connector/ referral code.
Throughout this period, we have received immense support from our company guide where we
never felt differentiated from any of the working employees. From time to time we were actively
exposed to sites where we got opportunity to interact with the walk-in clients.

Through cold calling, we set appointments with the Developers, clients, brokers and visit their
offices with the sales manager to close the deals. Apart from the assigned data by the sales
officers and sales manager, we have also sourced some data through internet from sites like,, just dial,,, etc. Through these, we
have generated some good positive leads, APF approvals, Referral codes.


Usually each intern was assigned to one of the sales officers by our company guide for visiting
site locations in weekends. We use to visit those projects where we have already built sound
relations and meet walk-in customers, understand their requirements and pitch accordingly. In
weekdays, normally we stayed at office, sort and filter the data for calling and in between we go
out for meetings with our particular set of appointments.

I have personally attended around 30 meetings including the developer meets, project visits,
brokers as well as customers. Amongst these meetings I‟ve learnt how to tackle differently
depending upon their personal requirements.

12.2 Conversions

In terms of value addition to the company, I with the help and support of other team mates have
converted 4 LEADS, 3 PROJECT APPROVALS and 2 CONNECTOR CODES. One property
consultant has visited our office premises and has signed our referral kit in the presence of sales
team. All these conversions are in progress and will generate business for the company in future.

As per the task allotted by the area head Mr. Anand vysyaraju, I have collected the data on the
ongoing residential projects in Hyderabad with detailed specifications like

 Builder Name
 Project name
 Location
 Unit size
 Built up area
 Price
 Availability
 Possession date
 Contact Details
 APF requirements

In addition to this, I have compiled all the calling data in an excel sheet with their status which
will help the company to filter and keep track of the prospects in future.

Survey Questionnaire

I‟ve designed a Customer Satisfaction and feedback form to record the responses of existing
customers and trace the requirements of new ones. Being a new player in the market, this form
has been formed purely in the interest and sake of the company.
It has been handed over to company guide Mr. Rakesh Gellu and Area head Mr. Anand
Vysyaraju who shall be circulating from time to time to get feedback. Data being confidential
cannot be shared and will be kept for record purpose. It shall further be utilized for bringing
improvements in the processing of loan.





To conclude, in major banks home loans are more complicated than competitive. It is found that
opaque pricing of discounts are offered on residential rates due to which customers get confused
at the time of making choices. Banks today are more interested in maintaining their current
positions than offering real choice to the borrowers. There is a lack of transparency where it
becomes difficult for customers to obtain accurate information on interest rate and related
comparisons unless they invest more time and efforts.

Customers opting for basic loans are under false notions that they are paying low and saving
money but actually they end up paying more than the standard loans in same bank. Through this
research study, it is revealed that banks and HFCs are luring customers by cutting down their
interest rates and aggressively selling their products with floating interest rates.

Existing borrowers generally pay more than new customers

Banks are always in a habit of luring new borrowers with discounts due to which the existing
customers are found paying more in average to the new ones.

The competition in Housing sector is seen more like oligopoly where the lending institutes are
always interested in avoiding the disruption of mutually beneficial pricing results and rather they
largely focus on each other when they go for headline interest rates or discounts on interest rates.

Turnaround Time for NBFCs is found to be the lowest when compared to the nationalized or
private banks. This is the major point of difference through which the new customers are
attracted. Another point is a subvention scheme where in case of ongoing projects the borrower
is free from any EMI till the time property is in his possession. Till the completion of project the
dealing will only be between the builder and the bank and the borrower will not be involved.


Following websites have been used for understanding the concepts and collection of data.