Hdfc and Axis Bank Loan

7/30/2019 Hdfc and Axis Bank Loan

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1. Introduction:

Purchasing the home of your dreams is not an easy task. Especially when you plan to buy a home

on loan. Home loans means that you buy a house on installments. In simpler terms when you

want to own a home and cannot afford to pay the amount in lump sum, you can pay it in monthly

installments with an interest rate. There are number of companies offer cheap loans at a low

interest rate You can avail loan against existing house for renovation or expansion etc. The

demand for home loans will not sag much. The reason is a substantial rise in the income-

generating capability of Indian youth. So this particular section will keep the housing loan

demand high and increased lending rates can only shelve their plans for some time.

.

1.1 Background:The research report also discusses the outlook of Indian housing sector,

role of housing finance companies, growth of housing finance market, housing finance

disbursements and housing loan disbursements by private sector banks.

Every one of us has a dream to own a house I life time. Although home loans are given by

almost all the Banks of India, purchasing the home of our dreams is not an easy task. As the

salaried population living in India is in larger percentage, like any other country, when one

decide to own a house, one cannot afford to pay the entire amount in lump sum. So, the banks in

India are offering housing finance with easy installment schemes with relevant interest rates to

the buyers, which reduces their burden and allow them to decide to own a house without any

hesitant mind.

Providing Home Loans in India came to its full boon in the recent years and now it is spread on a

huge scale as many banks are coming to offer the Home loans in different special schemes to

attract more number of buyers. There are numerous nationalized as well as private banks that

offer Real estate Mortgage Home Loans in a hassle free manner in India these days. The process

of availing a home is made very easy that almost any middle class; especially salaried class

population of India dreams to achieve their own house in their life time.

Though lots of attractive and cheap home loans are available in India, one must be very cautious

to choose the right one. There are numerous factors one must take into consideration while

applying for the right Home loan. For example, one must first see for the first and foremost

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factor that which top finance companies or Banks offer cheap home loans or loan at a low

interest rate. This is too important, since there are number of Banks and finance companies

flooded in the market to disturb the good ideas of the buyers, by their attractive marketing or

complementary offers.

Choosing the right offers means it should satisfy the buyer’s repayment capacity significantly

and the loan should not lead the buyer to trouble or any other dilemma in future.

In India there are many prominent nationalized banks and private banks that offer easy home

loans to the prospective buyers. These banks offer Home loans to the prospective buyers to

purchase either fresh or old house. Further loans are also provided for home upgrading or repair,

extension of houses etc.The facilities provided by these banks include Low interest rates, Door-

step service, Can transfer your existing high-interest rate loan, Free personal accident insurance,

Up to 100% funding for selected properties.

1.2 Industry overview: In India there are many prominent nationalized banks and private

banks that offer easy home loans to the prospective buyers. These banks offer Home loans to the

prospective buyers to purchase either fresh or old house. Further loans are also provided for

home upgrading or repair, extension of houses etc.The facilities provided by these banks include

Low interest rates, Door-step service, Can transfer your existing high-interest rate loan, Free

personal accident insurance, Up to 100% funding for selected properties.

UNIQUE FEATURES OF HOUSE LOAN

• Purpose: For purchase of house from builder/resale and construction/ extension of

existing house.

• Loan Amount: You can avail for Home loans ranging from Rs.1 lakh to Rs.1oo lakh

depending on your eligibility, income, and repayment capacity.

• Security: Home loan is a secured loan wherein collateral are required.

• Loan Tenor: The maximum loan tenure is 25 years.

So if you are planning to avail a home loan, here are some tips:

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Firstly, take your own time and evaluate your expenses and do a market survey about the

property buying process. Buying a house, which is way beyond your range, could affect you

financially; banks help in financing your dream home via home loans.

ELIGIBILITY: Banks determine your eligibility based on your repayment capacity and discuss

about the loan amount upfront. The eligibility for acquiring a home loan is augmented by

clubbing income of your father/spouse/mother/son, by clearing your outstanding debts, by

stretching your loan tenure, Salaried individuals can increase their eligibility by showing their

performance linked income or bonus earned.

Secondly, Do your own analysis and check the impact of your repayment of home loan on your

monthly expenditure, as a thumb rule, it is recommended to make sure the EMI of your home

loan do not exceed more than 40% of your gross monthly income.

INTEREST RATES BEST SUITED: An important factor that goes into your EMI calculations

in the interest rates, which may vary from bank to bank, so do compare them. Also do a complete

and detailed analysis of the various options like the interest rates i.e. fixed and floating rate of

interest.

Thirdly, if two banks give you the same amount of loan but at different interest rates do your

math and work out what’s best for you.

Fixed interest loans charge an interest, which remains the same through out the tenure of the

loan. This means that the consumer is immune to market risk or the possible upward movement

in the interest rates. Hence, fixed rate is a good option when the interest rates are expected to

move in the future.

As for Floating rate loan, a consumer is exposed to market risk and his gain or loss depends

on the interest rate condition prevailing in the market. Floating rate is beneficial if the interest

rate falls in the future. A floating rate is considered non-transparent and is also known as

‘adjustable rate’

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Fourthly, if you decide to opt for a fixed rate loan, you can still switch to a floating rate loan in

the future and vice versa as and when rates go in your favors and if you decide to switch, you

should take into account the cost of doing so and the interest rate benefits of switching. For a

given interest rate, loan with daily or monthly reducing balance is better than an annual reducing

balance loan. Interest rates vary depending on the tenure of the loan, the amount of the loan and

your personal profile.

Insurance cover (an added cost) Also, many banks may insist on getting your home insured to

safeguard their interest. There are various kinds of insurance covers available for you. Apart

from getting the mandatory ones you should try to get insurance as per your circumstances. You

also have a choice of getting insured from another company without any objection from your

bank.

Other costs: The interest rate and EMIs are not the only cost factor. A 1% administration fee

and a 1% processing fee on a Rs.10 lakh loan, would amount to Rs.20,000. Processing fees,

administration fees, valuation fee, legal fee, is to be paid when you apply for a loan and other

fees paid at closing. Many of these fees are negotiable. You should ask for zero processing fees

and zero penalty for pre-payment option. If this were not available, then the lowest cost would be

better. Make sure you work out as to how much these costs add up to. So even though the

interest rate may be lower, it usually adds up to being expensive. If the EMIs come out a lot

more than what you can afford on a monthly basis; try to redo the math with changes in the

tenure and loan amount (if possible).

DOCUMENT REQUIRED: Most importantly, all deals and offers agreed upon are supported

by relevant papers. Self employed and salaried require different documents to support the deal.

So make sure you always ask for a letter on the banks letterhead mentioning the likes of, exact

rate of interest, processing fees, pre-payment charges along with interest-schedule. Before

signing the documents, make sure you recheck all terms and conditions. Do make sure you

understand and agree with each of the clauses in the documents. Do not sign any blank

documents. Even if it takes you a few hours to fill-up the form, please do so. Do not leave

anything for the executive to fill-up. It’s always better to get a legal opinion from someone on

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your loan papers. Do not under any circumstance give any false information. This may amount to

fraud a d could land you in trouble.

Penalties: Once you have received the loan do your best to pay it back as quickly as possible.

But this early payment might invite a pre-payment clause. Banks make their money off the

interest they charge and the sooner you pay back a loan the less money you will have to pay in

interest. When it comes to Home loans, penalties are binding, like if you choose to pay up your

entire money before the tenure, a pre-payment penalty is charged. So you should know about

such penalties beforehand to avoid future misunderstanding between you and the bank.

HOME LOAN TYPES

Owning a piece of land or property is a lifetime dream for every individual. There are many

home loans provider in the market to make your dream come true. But before you opt for any

home loan provider, you need to consider certain factors related to property that you are

interested in buying and also about the salient features offered by a home loan provider and also

study some Home Loans and Home Insurance FAQs which helps in applying a Home Loan in

India.

And the most important thing is you should know about each and every term related with

Home Loans before applying for a loan. It is always advisable to consult a home loan expert or

consultant before applying for a home loan or purchasing a property.

You can take different types of home loans like Bridge loans, Home construction loans,

Home equity loans, Home extension loans, Home improvement loans, Land purchase loans etc

for different schemes available in the market. There are different types of home loans tailored to

meet your needs.

Home Purchase Loans: These are the basic forms of home loans used for purchasing of

a new house.

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Home Improvement Loans: These loans are given for implementing repair works,

healing and renovations in a home that has already been purchased.

Home Construction Loans: These loans are available for the construction of a new

house.

Home Extension Loans: These loans are given for expanding or extending an existing

home. For e.g. addition of an extra room etc.

Home Conversion Loans: These loans are available for those who have financed the

present home with a home loan and wish to purchase and move to another home for

which some extra funds are required. Through home conversion loan, the existing loan is

transferred to the new home including the extra amount required, eliminating the need of

pre-payment of the previous loan.

Land purchase loans: These loans are available for purchasing land for both

construction and investment purposes.

Bridge Loans: These loans are designed for people who wish to sell the existing home

and purchase another one. The bridge loans help finance the new home, until a buyer is

found for the home.

Steps of Home Loans

Buying a house is no longer a distant dream for hordes of people with modest means. For now

they can apply for home loans to finance a new home. The different banks of India offers people

the most convenient and practical home loan plans to suit individual needs. There are so many

attractive features in different type of home loan in India offered by these banks that creating the

home you always wanted would no longer remain a distant dream. But you have to know the

right steps of home loan. While applying for a home loan you have to know how to go about it

and the different eligibility criteria of home loans.

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The one of the initial steps of home loan is to calculate the amount of money which you would

require to build your dream home or buy an ideal apartment. Then you have to choose the right

bank from where you plan to apply for the loan. Some people prefer to take a loan from

nationalized banks like Allahabad Bank, Central Bank of India, State Bank of India while others

give priority to private banks like ICICI and Housing Development Finance Corporation (HDFC)

etc.

There are customized home loan plans for different people and the interest rates are also varies

on whether you chose floating or fixed interest rate. Determining whether you want to opt for a

floating rate or a fixed rate is another important step of home loan. One of the key steps of home

loan is to decide whether you want short term loans or you want loans for a longer tenure like a

maximum period of twenty five years.

Other major steps of home loan are fulfilling different eligibility criterion for applying for a

home loan. You have to show proper documentation to show your source of income and hence

the repayment of the loan. This applies for both service holders and self employed people. The

repayment capacity of the applicant or applicant are determined by the bank on the basis of on

factors such as income, age, qualifications, number of Dependants, spouse's income, assets,

liabilities, stability and continuity of occupation and savings history. The reason for all these

calculations is that the banks want to make sure you can comfortably repay the loan amount.

INFORMATION RESOURCE FOR HOUSING LOANS IN INDIA

For many millions of Indians, the single greatest achievement in life was to own a home,

and thanks to a range of banking services now available, home loans are a simple affair now. In

fact, home loans are now sold as a product and the applicant is treated like a customer. Gone are

the days when ordinary folk depended on a lifetime of savings and resorted to the local

moneylender to build or buy a house. Home loans make it possible to move into your own home,

almost as soon as you can afford the down-payment and keep paying for it while you also live in

it. But the home loan is actually a mortgage and you could lose the home in case you are not able

to pay it. Most banks have standard guidelines for applying for a home loan and a set of rules,

which may vary, from one finance institution from the other.

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The term of the loan may range from one year to thirty years, with varying interest rates. The

longer the term, the higher the interest charged, usually. However, having decided on a longer

term, a pre-payment of the loan also leads to pre-payment penalty- which usually ranges from

one to two percent.

For instance, most home loan applicants have to be between twenty-one and fifty-eight years of

age, or at least the guarantor has to be. There may be age limit extensions of government

employees or self-employed people who will not be forced to retire at sixty.

Applicants for home loans must prove to be credit-worthy before a loan is sanctioned by the

bank or the finance institution concerned. For one, they will demand to see proof of income or

some proof that the applicant now referred as a customer-has the resources to repay the loan. The

EMI or the monthly installments will be a certain percentage of your income.

Taking a home loan also has tax advantages, which makes it a doubly good investment, as

compared to other conventional forms of savings. Most banks have standard guidelines for

applying for a home loan and a set of rules, which may vary, from one finance institution to the

other.

Home Loan Interest Rate

If you are keen on acquiring a new house then taking a home loan might be a great

option for you. No matter what your requirement the different home loan interest rates and offers

made by different banks will surely have an appropriate plan for you. Most of these home loan

plans are for salaried or self-employed Resident Indians. You can Get the best deals ever and

finance the perfect home from the different nationalized and private banks of India. With the

varied offering of house loans and home finance gives you an opportunity to select the perfect

home loan as per your needs of a dream home.

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The are customized home loan plans for different people and the home loan interest rates are also

varies on whether you chose floating or fixed interest rate. The different banks of India offer a

plethora of home loans for resident Indians. You can choose from an array of home loan rates

like Adjustable Home Loan Interest Rate Home Loan or Fixed Home Loan Interest Rate. But if

you want the best of the both world you can even opt for the Part Fixed and Part Floating Home

Loans Interest Rate etc.

With the help of home loans you can not only experience the joys of possessing your own house

e but there are quite a few tax benefits due to home loans too.

There are various on line portals where you can compare home loan interest rates of leading

banks of India. You can compare and contrast the various floating home loan rate and fixed

home loan rates given by the different banks. Low home loan interest rates would in turn make

your Equated Monthly Installments (EMIs) which comprises of principal and interest.

HDFC BANK-WE UNDERSTAND YOUR WORLD

INTRODUCTION

The HOUSING DEVELOPMENT FINANCE CORPORATION LIMITED (HDFC) was

amongst the first to receive an “in principal” approval from The Reserve bank Of India (RBI)to

set up a bank in the private sector, as part of the RBI ’s liberalization of the Indian Banking

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Industry in 1994.The bank was incorporated in August 1994 in the name of ‘HDFC BANK

LIMITED’, with its registered office in Mumbai,India.HDFC Bank commenced operations as a

Scheduled Commercial Bank in January 1995.

HDFC is India’s premier housing finance company and enjoys an impeccable track record in

India as well as in International markets. Since its inception in 1977, the Corporation has

maintained a consistent and healthy growth in its operations to remain the market leader in

mortgages. Its outstanding loan portfolio covers well over a million dwelling units.HDFC has

developed significant expertise in retail mortgage loans to different market segments and also

has a large corporate client base for its housing related credit facilities. With its experience in the

financial markets, a strong market reputation, large shareholder base and unique consumer

franchise.HDFC was ideally positioned to promote a bank in the Indian environment. HDFC

bank began operations in 1995 with a simple mission: to be a “WORLD CLASS INDIAN

BANK”. We realized that only a single minded focus on product quality and service excellence

would help us get there.Today,we are proud to say that we are well on our way towards that goal.

COMPANY PROFILE

Table-1

March 2007 March 2008 March 2009Cities 316 327 528

Branches 684 761 1412

ATMs 1605 1977 3295

As of march 31st 2009, the bank’s distribution network was at 1412 branches and 3295 ATMs in

528 cities as against 761 branches and 1977 ATMs in 327 cities as of March 31st 2008.During the

year as a result of the CBoP merger and the step-up in retail acquisition, deposit accounts

increased from 8.7 million to just over 15 million. Total cards issued (debit and credit cards)

crossed 13 million including over 4 million credit cards.

At the beginning of the financial year, on account of the CBoP merger the Bank’s gross NPAs as

of March 31st 2009 were at 1.98% of advances as against 1.91% as of December 31 st2008.In

addition, applications received for loan restructuring which were yet to be approved or

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implemented amounted to Rs.305 crores,of which Rs.254 crores were classified as NPAs.Total

standard assets which have been restructured or where restructuring is under consideration were

therefore,0.1% of the bank’s gross advances as of march31st2009.

HDFC GROUP SUBSIDIARIES

HDFC Securities

• A trusted financial service provider promoted by HDFC Bank and JP Morgan

Partners and their associates

HDFC Mutual Fund

• HDFC Mutual Fund is one of the largest mutual funds and well established fund-

house in the country.

HDFC Standard Life

• Offers a bouquet of insurance services and solutions like Life Insurance, Investment

Options, Financial Planning, and Pension.

HDFC Bank

HDFC Realty

• Offers wide range and different types of property in India.

HDFC ERGO

• Motor Insurance, Health Insurance, Home Insurance from HDFC ERGO.

HDFC

• Home Loans, Housing Loans and Home Loans in India.

HDFC BANK COMPETITORS

ICICI Bank www.icicibank.com

ICICI Bank is India’s second largest bank.

IDBI Bank www.idbibank.com

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http://www.icicibank.com/

http://www.idbibank.com/





Provides financial products and banking services in India.

TECHNOLOGY USED IN HDFC BANK

In the era of globalization each and every sector faced the stiff competition from their rivals. And

world also converted into the flat from the globe. After the policy of liberalization and RBI

initiatives to take the step for the private sector banks, more and more changes are taking the part

into it. And they create competition among the private sector banks and public sector banks.

Private sector banks are today used the latest technology for the different transaction of day to

day banking life. As we know that Information Technology plays the vital role in each and every

industry and gives the optimum return from the limited resources.

Banks are service industries and today IT gives the Innovative technology application to banking

industries. HDFC BANK is the leader in the industries and today IT and HDFC BANK together

combined they reached the sky. New technology changed the mind of the customers and changed

the queue concept from the Indian banking transaction. Today there are different channels

available for the banking transactions We can see that how the technology gives the best results

in the below diagram. There are drastically changes seen in the use of Internet banking, in a year

2001(2%) and in the year 2008(25%).These type of technology gives the freedom to retail

customers.

Centralized Processing UnitsDerived Economies of Scale

Electronic Straight throughReduced Transaction Cost Processing

Data Warehousing (CRM)Improve Cost Efficiency, Cross Innovative Technology

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HDFC BANK is the very consistent player in the New Private Sector Banks. New Private Sector

Banks to withstand the competition from public sector banks came up with innovative products

and superior service.

HDFC BANK’S PRODUCTS AND SERVICES

The bank operates on the following basic segments:

• Personal Banking: Encompasses all financial dealings between a commercial bank

and an individual

• Wholesale Banking: Deals with all sorts of financial dealings with corporates,

medium and small enterprises, financial institutions and trusts as well as the

government sector.

• NRI Banking: Consists of personal banking relations with the Non-Resident

Indians(NRIs)

Table-2

Personal Banking

• Savings Account

• Salary Accounts

• Current Accounts

• Fixed Deposits

• Demat Accounts

• Safe Deposit Lockers

• Loans

• Credit Cards

• Debit Cards

• Prepaid Cards

• Investment and Insurance

NRI Banking

• Rupee Savings Account

• Rupee Current Account

• Rupee Fixed Deposits

• Foreign Currency Deposits

• Accounts For Returning Indians

• Quickremit (North America, UK,

Europe, Southeast Asia)

• IndiaLink (Middle East, Africa)

• Cheque Lock Box

• Telegraphic/Wire Transfer

• Funds Transfer Through

Cheques/DDs/TCs

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• Forex services

• Payment Services

• Net Banking

• InstaAlerts

• Mobile banking

• InstaQuery

• ATM

• Mutual Funds

• Private Banking

• Portfolio Investment Schemes

• Loans

• Payment Services

• Net Banking

• InstaAlerts

• Mobile Banking

• InstaQuery

• ATM

• Phone Banking

1.2.1 Major players: All nationalize, nonnationalize, and private financer

Details of home loan of different players:

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Home Loans Interest Comparison

Chart

Bank/Housing

Finance

Corporation

Processing

Fee

Pre-Payment

Penalty0-10Years 10-20 Years

Fixed Floating Fixed Floating Floating

ABN-Amro 0.50%

No penalty if upto 25% of

loan is cleared per year. Else

2% on theamount inexcess of 25%

7.75 7.25 7.75 7.75 7.25

Allahabad

Bank 0% 7.75 7.25 8.25 7.75 7.75

Andhra Bank 2% 8.50 8.00 9.25 8.75 9.00

Bank Of Baroda

0% Upto 3% 9.0 7.50 9.5 8.0 8.25

Bank of India 8.5 7.5 9.25 7.75 8.25

Bank of

Maharashtra- 7.5 - 8.0 8.25

Bank of Punjab 11.75 7.50 11.75 7.50 7.50

Bank of Rajasthan

8.0 7.5 8.25 7.5 8.0

Birla HomeFinance

8.00 8.00 8.5 8.5 8.75

Central Bank of India

0% 0 8.5 8.0 9.0 8.5 9.0

CorporationBank

0% 0 8.0 7.5 9.00 8.25 8.50

Canara Bank 8.0 7.50 9.00 8.00 8.00

Can Fin Homes 7.75 7.25 8.75 8.0 8.0

Citibank 8.25 8.25 8.25 8.25 8.25

Dena Bank 0.50% 0% 8.75 7.25 9.25 7.75 8.0

DewanHousing

0 0 8.5 8.0 8.5 8.0 8.0

15

http://www.abnamroindia.com/ProductsnServices/Consumer/Loan_Products/index.htm

http://www.allahabadbank.com/rl_housingloan.htm


http://www.bankofbaroda.com/pfs/homeloans_more.asp


http://www.bankofindia.com/home/productsservices/homeloans.asp

http://www.maharashtrabank.com/


http://www.bankofpunjab.com/

http://www.bankofrajasthan.com/


http://www.birlahome.com/


http://www.centralbankofindia.co.in/home/


http://www.corpbank.com/asp/0100text.asp?presentId=54&headId=19


http://www.canbankindia.com/interest/riloansroi-ind.html

http://www.canfinhomes.com/

http://www.online.citibank.co.in/portal/citi_home_center.jsp

http://www.abnamroindia.com/ProductsnServices/Consumer/Loan_Products/index.htm





http://www.bankofindia.com/home/productsservices/homeloans.asp



http://www.bankofpunjab.com/









http://www.canbankindia.com/interest/riloansroi-ind.html

http://www.canfinhomes.com/

http://www.online.citibank.co.in/portal/citi_home_center.jsp



Finance LtdDHFL

Federal Bank - 7.25 - 7.5 8.0

GIC Housing

Finance9.75 7.5 9.75 8.0 8.25

HDFC Bank 1.0% 2% 8.75 8.25 8.5 8.0 7.5

HSBC 1.8%

Up to 25% of the loan

amount everyfinancial year -

NIL, For

amount over 25% of loan

amount inevery financialyear- 2% of

amount prepaid

8.0 7.75 8.0 7.75 7.75

IDBI 0.75% 2% 9.25 7.5 9.25 8.0 8.25

ICICI 0.50% 2% 9.0 8.0 9.0 8.0 8.0

Indian Bank 0 0 7.75 7.25 8.25 7.75 7.50

Indian

Overseas Bank 0.5% 8.25 7.75 9.25 9.25

Kotak

Mahindra Bank Nominal fee 8.5 8.5 8.25 7.25 7.5

LIC HousingFinance

1% 8.0 7.5 8.0 7.5 7.5

Oriental Bank of Commerce

8.0 7.5<span

style

1.2.2 Competition: In private sector the basic competition between HDFC ,

ICICI., Axis Bank, HSBC, Citi bank

1.2.3 Marketing & Business strategies:

HDFC BANK mission is to be “a World Class Indian Bank”, benchmarking themselves

against International standards and best practices in terms of product offerings, technology,

service levels, risk management and audit and compliance. The objective is to build sound

customer franchises across distinct businesses so as to be a preferred provider of banking

services. The objective is to build sound customer franchises across distinct businesses so as to

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http://www.federal-bank.com/

http://www.hdfc.com/Loans/homeloans_main.asp?tn=2&N=0

http://www.hsbc.co.in/1/2/personal/loans/home-loan


http://www.icicibank.com/pfsuser/loans/homeloans/hlhomepage.htm

http://www.indian-bank.com/homeloan.htm

http://www.iob.com/his.asp


http://www.kotak.com/Kotak_BankSite/residentindian/homefinance.htm


http://www.lichousing.com/


http://www.obcindia.com/


http://www.federal-bank.com/

http://www.hdfc.com/Loans/homeloans_main.asp?tn=2&N=0

http://www.hsbc.co.in/1/2/personal/loans/home-loan


http://www.icicibank.com/pfsuser/loans/homeloans/hlhomepage.htm

http://www.indian-bank.com/homeloan.htm











be a preferred power of banking services for target retail and wholesale customer segments, and

to achieve a healthy growth in profitability, consistent with the Bank’s risk appetite.

HDFC’s business strategy emphasizes the following:

Increase our market share in India’s expanding banking and financial services industry by

following a disciplined growth strategy focusing on quality and not on quantity and

delivering high quality customer service.

Leverage our technology platform and open scaleable systems to deliver more products to

more customers and to control operating costs.

Maintain our current high standards for asset quality through disciplined credit risk

management.

Develop innovative products and services that attract our targeted customers and address

inefficiencies in the Indian financial sector.

Continue to develop products and services that reduce our cost of funds.

It involves standard rules and policies.It establish checklist to facilitate autonomous

Focus on high earnings growth with low volatility.

INSIDE HDFC BANK

FIVE “S” PART OF KAIZEN

WORK PLACE TRANSFORMATION

FOCUS ON EFFECTIVE WORK PLACE ORGANIZATION

BELIEVE IN

“SMALL CHANGES LEAD TO LARGE IMPROVEMENT”

Every successful organization has their own strategy to win the race in the competitive market.

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They use some techniques and methodology for smooth running of business.HDFC BANK also

acquired the Japanese technique for smooth running of work and effective work place

organization.

Five ‘S’ Part of Kaizen is the technique which is used in the bank for easy and systematic work

place and eliminating unnecessary things from the work place.

BENEFIT OF FIVE “S”

It can be started immediately.

Everyone has to participate.

Five “S” is an entirely people driven initiatives.

Brings in concept of ownership.

All wastages are made visible.

FIVE “S” MEANS

1) S-SORT SEIRI:It focuses on eliminating unnecessary items from the workplace.It is an

excellent way to free up valuable floor space.It segregates items as per “required and

wanted”.

2) S-SYSTEMATIZE SEITON: Systematize focus on efficient and effective storage

method.It means it identify, organize and arrange retrivel.It largely focus on good

labeling and identification practices. Its objective is “A place for everything and

everything in its place”.

3) S-SPIC_N_SPAN SEIRO: It focuses on regular clearing and self inspection. It brings in

the sense of ownership.

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4) S-STANDARDIZE SEIKETSU: It focuses on simplification and standardization

maintenance of workplace.It assigns responsibility for doing various jobs and decides on

Five S frequency.

5) S-SUSTAIN SHITSUKE: It focuses on defining a new status and standard of

organization workplace.Sustain means regular training to maintain standards developed

under S-4.It brings in self-discipline and commitment towards workplace organization.

HUMAN RESOURCES

The Bank’s staffing needs continued to increase during the year particularly in the retail banking

businesses in line with the business growth. The bank continues to focus on training its

employees on a continuing basis, both on the job and through training programs conducted byinternal and external faculty.

The bank has consistently believed that broader employee ownership of its shares has a positive

impact on its performance and employee motivation. The Bank’s employee stock option scheme

so far covers around 10,000 employees.

BOARD OF DIRECTORS

Table-4

Managing Director Aditya Puri

ExecutiveDirector Paresh Sukhthankar

Executive Director Harish Engineer

Chairman Jagdish Kapur

Equities and Private Banking and NRI

Business

Abhay Aima

Information Technology and Legal Anil Jaggia

Treasury Ashish Parthasarthy

Merchant Services Bharat Shah

Audit and Compliance G Subramanyam

19



Credit and Market Risk Kaizad Maneck Bharucha

Human Resources Administration and

Infrastructure

Mandeep Maitra

Branch Banking Navin Puri

Assets and Credit Cards Pralay MondalRetail Liabilities,Marketing and Direct

Banking Channels

Rahul N Bhagat

Operations Rajan Ananthanarayan

Finance Shashi Jagdishan

Treasury Sudhir Joshi

AWARDS AND RECOGNITIONS

Below are some of the prominent awards HDFC Bank won in 2008 under the stewardship of

Mr.Puri

Table-5

Business India “Best bank” 2008

Forbes Asia Fab 50 companies in Asia Pacific

Asian Banker Excellence In Retail Financial

Services

Best Retail Bank 2008

Asia money Best Local Cash Management bank Award

Voted By Corporate

Business Today-Monitor group One Of India’s most Innovative companies

Financial Express-Ernst and Young Award Best Bank Award In The Private Sector

Category

Global HR Excellence Awards-Asia Pacific

HRM Congress

‘Employer brand Of The Year 2007-

2008’award-First Runner Up

Business Today ‘Best Bank’ Award

20



SWOT ANALYSIS

STRENGTH:

Right strategy for the right products.

Superior customer service vs. competitors.

WEAKNESSES:

Some gaps in range for certain sectors.

Customer service staff needs training.

Sectoral growth is constrained by low unemployment levels and competition for staff.

OPPURTUNITIES:

Could extend to overseas broadly.

Fast-track career development opportunities on an industry wide basis.

Could seek better customer deals.

THREATS:

21



Very high competition prevailing in the industry.

Lack of infrastructure in rural areas could constrain investment.

High volume/low cost market is intensely competitive.

COMPETITIVE SWOT ANALYSIS WITH AXIS BANK:

STRENGTH WEAKNESS OPPURTUNITIES

S-O STRATEGIES

Strength: Large capital base

Oppurtunity: Market Expansion

Strategy: Deep penetration into rural market

W-O STRATEGIES

Weakness: Workforce responsiveness.

Opurtunity: Outsourcing of Non-Core Business.

Strategy: Outsource customer care and other E-Helps.

THREATS

S-T STATEGIES

Strength: Low operating costs.

22



Threat: Incresed competition from other private banks.

Strategy: Steps to ensure loyalty by old customers.

W-T STRATEGIES

Weakness: Not equal to International Standards.

Threat: Entry of many foreign banks.

Strategy: Consider additional benefits

HDFC HOME LOANS

Home loans offered by HDFC Bank encompasses a wide range of loan options which are subject

to various parameters like term of loan, financial status of the individual seeking loan and the

purpose of loan. Owing to these diversifications, HDFC Home loans have grown in popularity

over the years.

HDFC is India’s largest housing finance company with a market share of 55% in loan

disbursals.BeingBeing in the business for over 25 years; HDFC has an impressive loan portfolio

for varied housing finance needs. In the home loan segment, HDFC offers loans for individuals

to purchase (fresh/resale) or construct houses.

There is a great flexibility and variety in the home loans as it is open to salaried and self

employed individuals alike, to both resident and non-resident Indians and requires no guarantor,

charges one time processing fees and offers choice of variable and fixed rate loans. It offers

loans to construct/buy a new home, loans for home extension, home repairs and purchase of

plots.

In addition to the attractive loan schemes, HDFC customers can avail of a host of related benefits

like Loan Cover Term Assurance Plan, automated repayment of home loan EMI and in-house

scrutiny of property documents. Existing HDFC Bank home loan customers can avail of other

loans such as Personal loans and Car loans at lower interest loans.

23



The advantages associated with HDFC Home Loans are:

An individual can undergo a Home Loan Counseling where HDFC shares its experiences

of providing Home Loans for 29 years.

Wide range of products which offers multiple choices to an individual to choose the loan

plan that suits him/her the best.

Multiple Repayment Options gives a customer a wider scope of repayment according to

his/her financial situations.

Wide network of financing also enables the individuals to get his/her loan sanctioned

from a place of his/her choice and also pay the installments duly no matter where he/she

is.

The HDFC Bank with its varied offering of house loan and home finance offers the buyers an

opportunity to select the perfect loan as per their individual needs. There is a wide range of home

loans available with HDFC to choose from according to the needs of the buyers:

Home Extension Loans: These loans are given for expanding or extending an existing

home. For example: Adition of an extra room, a larger bathroom or even enclosing an

open balcony.

FEATURES:

MAXIMUM LOAN:

24



The maximum amount of the loan is 85% of the cost of extension.

MAXIMUM TERM:

The maximum term of the loan is 20 years subject to the age of your retirement.

Land Purchase Loan: These loans are available for purchasing land for both

construction and investment purposes.

FEATURES:

MAXIMUM LOAN:

The maximum amount of the loan is 85% of the cost of the land and based on the repayment

capacity of the customer.

MAXIMUM TERM:


HOME IMPROVEMENT LOANS: These loans are available for improvement of the

house. For Example: External Repairs, Tiling and Flooring,etc.

FEATURES:

25



MAXIMUM LOAN:

For existing customers the maximum amount of loan is 100% of the cost of improvement.

For new customers the maximum amount of the loan is 85% of the cost of improvement.

MAXIMUM TERM:


SHORT TERM BRIDGING LOAN: It makes you realize your dream of buying a bigger and

better home and gives you time to sell your existing property to pay off the loan.

This is a short term loan to help customers with the interim period between the sale of your old

home and purchase of a new home. You can take the loan even if you are an existing customer of

HDFC.

-

FEATURES:

MAXIMUM LOAN:

The maximum amount of the loan is 90% of the cost of property.

MAXIMUM TERM:

The maximum term of the loan is 2 years.

HOME EQUITY LOANS: HDFC Home Equity loans helps you encash the present market

value of the property by taking a loan by mortgaging the property.

26



FEATURES:

PURPOSE:

Loan can be for any purpose.However, the funds should not be used for speculation or any other

purposes. Customers have benefited by taking loans to meet the following funding requirements

• Education

• Marriage Expenses

• Medical expenses

MAXIMUM LOAN:

For existing customers the maximum amount is the balance of 60% of the market value and

present loan outstanding.

For new customers the maximum amount is 50% of the market value of the property (including

the cost of the land).It is subject to minimum market value of the property being Rs.5,00,000 for

Residential Property and Rs.7,50,000 for Non Residential Property.

MAXIMUM TERM:

Table-6

Property type Repayment option Number of years

Residential EMI Based 15

27



Non Residential EMI Based 10

Residential and Non

residential

Simple Interest 2

REPAYMENT FACILITIES:

HDFC provides Multiple Repayment Facilities to its customers. These facilities include Step up

Repayment Facility, Flexible Loan Installments Plan, Tranche Based Equated Monthly

Installments, and Accelerated Repayment Scheme.

Step Up Repayment Facility:

This facility helps young executives a much bigger loan today based on an increase in

their future income, this helps executives buy a bigger home today.

Flexible Loan Installments Plan:

Often customers, parents and their children, wish to purchase properties together. The

parent is nearing retirement and their children have just started working. This option

helps such customers combine the incomes and take a long term home loan where in the

installments reduces upon retirement of the earning parent.

Tranche Based Equated Monthly Installments:

Customers purchasing an under construction property need to pay interest (on the loan

amount drawn based on level of construction) till the property is ready. To help

customers save this interest, they have introduced a special facility of Tranche Based

Equated Monthly Installments (EMIs).Customers can fix the installments they wish to

pay till the property is ready.The minimum amount payable is the interest on the loan

28



amount drawn. Anything over and above the interest paid by the customer goes towards

principal repayment. The customer benefits by starting EMI and hence repays the loan

faster.

ACCELERATED REPAYMENT SCHEME:

Accelerated repayment Scheme offers you a great opportunity to repay the loan faster by

increasing the EMI, whenever you get an increment, increase in your disposable income

or have lump sum funds for loan repayment, you can benefit by:

Increase in EMIs means faster loan repayment.

Savings of interest because of faster loan repayment.

You can invest lump sum funds rather than use it for loan prepayment. The return

from the investments also gives you the comfort of paying the increased EMI.

ELIGIBILITY TERMS FOR HDFC HOME LOAN

Due to varied offering of house loans and home finance, attractive loan interest rate and

numerous other facilities besides a basic home loan, you would be sure that HDFC Bank Home

Loans provides the perfect home loan for you. The eligibility norms for availing of home loans

are easy and simple to follow. They have different norms for the different types of property loans

available to you. These eligibility norms for home loans are applicable to all Resident Indians

looking to avail of their home loans.

CONDITIONS OF HOME LOAN

You must be at least 21 years of age when the loan is sanctioned. The loan must terminate before

or when you turn 65 years of age or before retirement, whichever is earlier. You must be

employed or self-employed with a regular source of income.

29



LOAN AMOUNT

The home loan amount depends on your repayment capability and is restricted to maximum of

85% of the cost of property or the cost of construction as applicable.

Table-7

Description Of Charges Interest Rate

Loan Processing Charges 1%

Administrative Charges 0.5%

Prepayment Charges 2%

Floating Rate Of Interest 8.50%

Fixed Rate Of Interest 8.25%

DOCUMENTS REQUIRED FOR HOME LOAN SANCTION:

HDFC Bank the leading Home Loans Provider, offers attractive interest rates and unbeatable

benefits to ensure that you get the best deal without any hassels.Keeping your convenience in

consideration, they ask you for minimal mandatory documents for the sanctioning of your home

loan.

At HDFC BANK HOME LOANS they require the following documents to sanction your home

loan:

a. COMMON FOR ALL APPLICANTS:

30



i. Allotment letter of the co-operative society/association of apartment owners.

ii. Copy of approved drawings of proposed construction/purchase.

iii. Agreement for sale/sale deed/detailed cost estimate from architect/engineer for the

property to be purchased/constructed.

iv. If you have been in your present employment/business or profession for less than a year,

mention details of occupation for previous 5 years, giving positions held reasons for

change and period of the same.

v. Applicable Processing Fees.

vi. Any other information regarding your repayment capacity that is necessary and will assist

HDFC in appraising the case.

b.ADDITIONALLY, IF YOU ARE EMPLOYED:

i. Latest salary slip/salary certificate showing all deductions.

ii. If your job is transferable, permanent address where correspondence relating to the

application can be mailed.

iii. A letter from your employer agreeing to deduct the monthly installments towards

repayment of the loan from your salary.This wills expediate the processing of your loan

application.

C.IF YOU ARE SELF-EMPLOYED:

i. Balance Sheets and Profit and Loss Accounts of the business/profession along with

copies of Individual Income Tax Returns for the last three years certified by a Chartered

Accountant.

ii. A note giving information on the nature of your business/profession, form of

organization, clients, suppliers, etc.

Please take photocopies of all documents that are submitted to HDFC (including the

application form) for your personal account.

31



AXIS BANK-THE POWER OF BELIEF

COMPANY PROFILE: AXIS BANK

Axis Bank India, the first bank to begin operations as new private banks in 1994 after the

Government of India allowed new private banks to be established. Axis Bank was jointly

promoted by the Administrator of the specified undertaking of the

Unit Trust of India (UTI-I)

Life Insurance Corporation of India (LIC)

General Insurance Corporation Ltd.

Also with associates viz. National Insurance Company Ltd., The New India Assurance

Company, The Oriental Insurance Corporation and United Insurance Company Ltd.

Axis Bank in India today is capitalised with Rs. 232.86 Crores with 47.50% public holding other

than promoters. It has more than 200 branch offices and Extension Counters in the country with

over 1250 Axis Bank ATM proving to be one of the largest ATM networks in the country. Axis

Bank India commits to adopt the best industry practices internationally to achieve excellence.

Axis Bank has strengths in retail as well as corporate banking. By the end of December 2004,

Axis Bank in India had over 2.7 million debit cards. This is the first bank in India to offer the AT

PAR Cheque facility, without any charges, to all its Savings Bank customers in all the places

across the country where it has presence.

With the AT PAR cheque facility, customers can make cheque payments to any beneficiary at

any of its existence place. The ceiling per instrument is Rs. 50,000/-.The latest offerings of the

bank along with Dollar variant is the Euro and Pound Sterling variants of the International Travel

Currency Card. The Travel Currency Card is a signature based pre-paid travel card which

enables traveler’s global access to their money in local currency of the visiting country in a safe

32



and convenient way. The Bank has strengths in both retail and corporate banking and is

committed to adopting the best industry practices internationally in order to achieve excellence

EVOLUTION:

UTI was established in 1964 by an Act of Parliament; neither did the Government of India own it

nor contributes any capital. The RBI was asked to contribute one-half of its initial capital of Rs 5

crore, and given the mandate of running the UTI in the interest of the unit-holders. The State

Bank of India and the Life Insurance Corporation contributed 15 per cent of the capital each, and

the rest was contributed by scheduled commercial banks which were not nationalized then. This

kind of structure for a unit trust is not found anywhere else in the world. Again, unlike other unit

trusts and mutual funds, the UTI was not created to earn profits.

In the course of nearly four decades of its existence, it (the UTI) has succeeded phenomenally in

achieving its objective and has the largest share anywhere in the world of the domestic mutual

fund industry.'' The emergence of a "foreign expert" during the setting up of the UTI makes an

interesting story. The announcement by the then Finance Minister that the Government of Indiawas contemplating the establishment of a unit trust caught the eye of Mr. George Woods, the

then President of the World Bank. Mr. Woods took a great deal of interest in the Indian financial

system, as he was one of the principal architects of the ICICI, in which his bank, First Boston

Corporation Bank, had a sizeable shareholding. Mr. Woods offered, through Mr. B.K. Nehru,

who was India's Executive Director on the World Bank, the services of an expert.

The Centre jumped at the offer, and asked the RBI to hold up the finalization of the unit trust

proposals till the expert visited India. The only point Mr. Sullivan made was that the provision to

limit the ownership of units to individuals might result in unnecessarily restricting the market for

units. While making this point, he had in mind the practice in the US, where small pension funds

are an important class of customers for the unit trusts. The Centre accepted the foreign expert's

suggestion, and the necessary amendments were made in the draft Bill. Thus, began corporate

33



investment in the UTI, which received a boost from the tax concession given by the government

in the 1990-91 Budget. According to this concession, the dividends received by a company from

investments in other companies, including the UTI, were completely exempt from corporate

income tax, and provided the dividends declared by the investing company were higher than the

dividends received.

The result was a phenomenal increase in corporate investment which accounted for 57 per cent

of the total capital under US-64 scheme. Because of high liquidity the corporate sector used the

UTI to park its liquid funds. This added to the volatility of the UTI funds. The corporate lobby

which perhaps subtly opposed the establishment of the UTI in the public sector made use of it for

its own benefits later. The Government-RBI power game started with the finalization of the UTI

charter itself. The RBI draft of the UTI charter stipulated that the Chairman will be nominated byit, and one more nominee would be on the Board of Trustees. While finalizing the draft Bill, the

Centre changed this stipulation. The Chairman was to be nominated by the Government, albeit in

consultation with RBI. Although the appointment was to be made in consultation with the

Reserve Bank, the Government could appoint a person of its choice as Chairman even if the

Bank did not approve of him.

BUSINESS DESCRIPTION:

The Bank's principal activities are to provide commercial banking services which include

merchant banking, direct finance, infrastructure finance, venture capital fund, advisory,

trusteeship, forex, treasury and other related financial services. The Bank has 463 branches and

263 extension counters throughout India. During April, 2006 the Bank open-end 1 overseas

branch in Singapore.

PROMOTERS:

UTI Bank Ltd. has been promoted by the largest and the best Financial Institution of the country,

UTI. The Bank was set up with a capital of Rs. 115 crore, with

UTI contributing Rs. 100 crore,

LIC - Rs. 7.5 crore

GIC and its four subsidiaries contributing Rs. 1.5 crore each.

SUUTI SHARE HOLDINGS-27.33%

34



Erstwhile Unit Trust of India was set up as a body corporate under the UTI Act, 1963, with a

view to encourage savings and investment. In December 2002, the UTI Act, 1963 was repealed

with the passage of Unit Trust of India (Transfer of Undertaking and Repeal) Act, 2002 by the

Parliament, paving the way for the bifurcation of UTI into 2 entities, UTI-I and UTI-II with

effect from 1st February 2003.

BOARD OF DIRECTORS:

The Bank has 11 members on the Board. Dr. P. J. Nayak is the Chairman and Managing Director

of the Bank. The members of the Board are:

NAME DESIGNATION

Dr. P.J. Nayak Chairman & Managing Director

Shri Surendra Singh Director Shri N.C. Singhal Director

Shri A.T. Pannir Selvam Director

Shri J.R. Varma Director

Dr. R.H. Patil Director

Smt. Rama Bijapurkar Director

Shri R.B.L. Vaish Director

Shri S.B. Mathur Director

Shri M.V. Subbiah Director

Shri Ramesh Ramanathan Director

MISSION AND VALUES:

OUR VALUES: Customer Service and Product Innovation tuned to diverse needs of individual and

corporate clientele.

Continuous technology upgradation while maintaining human values.

Progressive globalization and achieving international standards.

Efficiency and effectiveness built on ethical practices.

CORE VALUES:

Customer Satisfaction through

o Providing quality service effectively and efficiently

o "Smile, it enhances your face value" is a service quality stressed on

o Periodic Customer Service Audits

Maximization of Stakeholder value

35



Success through Teamwork, Integrity and People.

COMPETETIVE ANALYSIS AND ADVANTAGES OF AXIS BANK:

Below in the table is shown a comparative analysis of AXIS Bank with the other major players

in the banking industry.

Bank

No of No of

Business

Per

Profit

Per

Capital

Reserves Interest

Deposits InvestmentBranches Employees Employee employee

&

Surplus Income

ICICI 563 24479 905 10 22556 13784 165083 717547

HDFC 515 14878 758 7.39 5300 4475 55797 28394

AXIS/UTI 348 6553 1022 8.69 2886 2889 40114 21527

YES 6 4189 677.86 8.56 573 190 2910 1350Kotak

Mahindra 78 3597 352 4.15 865 694 6566 2856

DATA: 2010-2011

ELIGIBILITY TERMS FOR AXIS BANK LOANS FOR

RESIDENT INDIANS

Due to varied offering of house loans and home finance, attractive loan interest and numerous

other facilities besides a basic home loan, you would be sure that AXIS Bank Home Loan

provides the perfect home loan for you. The eligibility norms for availing of home loans are easy

and simple to follow. They have different norms for the different types of property loans

available to you. These eligibility norms for home loans are applicable to all Resident Indians

looking to avail of their home loans.

CONDITIONS OF HOME LOAN

You must be at least 21 years of age when the loan is sanctioned. The loan must terminate before

or when you turn 65 years of age or before retirement, whichever is earlier. You must be

employed or self-employed with a regular source of income.

36



LOAN AMOUNT

The home loan amount depends on your repayment capability and is restricted to a maximum of

85% of the cost of property or the cost of construction as applicable.

Table-10

Description Of Charges Home Loans

Loan processing charges/Renewal charges Home Loans: 0.5% of loan amount as

Administrative fee or Rs.2,000 whichever

is higher. Loan overdraft against property

or office premises: 1% of loan amount or

Rs.2,000 whichever is higher. Fees are

Non-refundable.

Prepayment Charges 2% on the principal outstanding on full

prepayment

Charges For Late Payment(loans) Home Loans: 2% per month. Home OD:

1.5% of the outstanding amount subject to

minimum of Rs.500 and maximum of

Rs.5,000.

Interest Rate Swiping Charges 1.75% on principal outstanding

Cheque swap Charges Rs.500

Document retrieval charges Rs.500

Cheque Bounce Charges Rs.200

DOCUMENTS REQUIRED FOR HOME LOAN SANCTION

37



AXIS Bank, the leading Home Loans Provider, offers attractive interest rates and unbeatable

benefits to ensure that you get the best deal without any hassles. Keeping your convenience in

consideration, they ask you for minimal mandatory documents for the sanctioning of your home

loan.

At AXIS Bank Home Loans they require the following documents to sanction your home loan:

DOCUMENTS

Bank statement for the last six months.

Income Document e.g. Latest Form 16, Certified IT returns for latest 3 years.

Administration Fee Cheque.

Loan Enclosure Letter.

Other Documents.

For Individual borrowers:

Photo Id Proof

Residence Address Proof

For Non Individual borrowers:

Id Proof

Office Address Proof

38



1.3 Purpose of the study:

Purchasing the home of your dreams is not an easy task. Especially when you plan to buy a home

on loan. Home loans means that you buy a house on installments. In simpler terms when you

want to own a home and can not afford to pay the amount in lump sum, you can pay it in

monthly installments with an interest rate.There are number of companies offer cheap loans at a

low interest rate You can avail loan against existing house for renovation or expansion etc.

The demand for home loans will not sag much. The reason is a substantial rise in the income-

generating capability of Indian youth. So this particular section will keep the housing loan

demand high and increased lending rates can only shelve their plans for some time.The research

report also discusses the outlook of Indian housing sector, role of housing finance companies,

growth of housing finance market, housing finance disbursements and housing loan

disbursements by private sector banks.

Every one of us has a dream to own a house I life time. Although home loans are given by

almost all the Banks of India, purchasing the home of our dreams is not an easy task. As the

salaried population living in India is in larger percentage, like any other country, when one

decide to own a house, one can not afford to pay the entire amount in lump sum. So, the banks in

India are offering housing finance with easy installment schemes with relevant interest rates to

the buyers, which reduces their burden and allow them to decide to own a house without anyhesitant mind.

Providing Home Loans in India came to its full boon in the recent years and now it is spread on a

huge scale as many banks are coming to offer the Home loans in different special schemes to

attract more number of buyers. There are numerous nationalized as well as private banks that

offer Real estate Mortgage Home Loans in a hassle free manner in India these days. The process

of availing a home is made very easy that almost any middle class; especially salaried class

population of India dreams to achieve their own house in their life time.

39



2. Research objectives: The demand for home loans will not sag much. The reason is a

substantial rise in the income-generating capability of Indian youth. So this particular section

will keep the housing loan demand high and increased lending rates can only shelve their plans

for some time.

The prime objective of the study are

To undertake the comparative analysis of privatize banks (HDFC bank and AXIS bank )

in housing loan sector.

To study consumer preference for the above two mentioned housing finance players.

To know the market size and get the market potential of the target segments catered to.

This done by simple random survey of the potential buyers

To analyze the satisfaction level of privatize banks (HDFC Bank and AXIS Bank)

Home Loan Customers.

To know the strengths of the HDFC & AXIS brand and also those which can be daily to

strength the brand image.

.

40



3- Research Methodology: To know the strengths of the RELIANCE ads/promotion and

also those which can be daily to strength the brand image.

3.1 Research Design: A research design is the specification of methods and procedures for

acquiring the information needed.It is the overall operational pattern or framework of the project

that stipulates what information is to be collected from which source by what procedures.

Research design denotes the description of the research design.The aim was to collect relevant

information,which fulfill our requirement and can be analyzed at a later stage of study without

any problem.This was to be done in minimum expenditures and least efforts and in a set period

of time.For my research I select ‘DESCRIPTIVE RESEARCH DESIGN’ to know the

Comparative Study Of The Home Loan Scheme Offered By AXIS Bank And HDFC Bank

and Assessing The level of Consumer Satisfaction in Muaffarnagar City.This helped us in

having enough provision for protection against bias and maximizes reliability.

Descriptive study, as its name implies,is designed to describe something –for example, the

characteristics of the users of a given product,the degree to which product use varies with

income,age,or other characteristics.

ADVANTAGES OF DESCRIPTIVE STUDY:

Involve relatively large number of observations.

Analysis is more objective.

Averages and percentages are calculated.

DATA COLLECTION METHOD

The methodology reveals the methods of data collection.There may be primary sources or

secondary sources of data collection.

41



Collecting Secondary Data:

After deciding my objective I looked for collecting and studying secondary data.It included

extensive study of literature available in reports of HDFC bank and AXIS

Bank,articles,newspapers,journals,magazines,handouts,pamphlets describing the banks.

Study of secondary data gave me an insight into the problem into hand.It also provides me

with clues and helped in designing primary research.It provided us a more accurate picture about

the functioning of various service providers in the Sagar city.

Extensive use of secondary information in the form of magazines, journals, newspaper

clippings,such as Business World,Business Today,Business India,Economic Times,etc.Internet

websites of HDFC Bank and AXIS Bank.

Collecting Primary Data:

The objective of Primary data is formulated on the basis of research objectives.Objectives set the

guidelines and directions of research planning .Formulating the objectives offers the best feasible

means of solution.The primary data for my study was being collected by conducting survey.To

analyze buying behavior and in order to gain an insight into the buyer need-satisfaction level, a

questionnaire was formulated and administered among 100 people.The tools for data collection

used was following types:

TELEPHONE INTERVIEW:

The telephone interview is used in lieu of personal interviews.It is used because information has

to be collected quickly and inexpensively.By it I asked the customer about their satisfaction

about HDFC Bank and AXIS Bank Home Loan procedure.The direct and structured questions

are asked by customers.

42



QUESTIONNAIRES:

This method of data collection is quite popular,particularly in case of big enquiries.A

questionnaire is a method of obtaining specific information about a defined problem so that

data,after analysis and interpretation,results in a better appreciation of the problem.

In order to motivate respondents and to get best of the information from them,I was tried to

build questionnaire that is interesting,serve my objective,unambiguous and easy to complete and

is not burdensome.The aim was to enable ease in analysis and facilitate easy classification of

response to get meaningful outcome within acceptable limits.

A few were in disguised,where the true purpose was hidden but was sufficient to bring in

the right information from respondents.Depending on the requirement,the questionnaire was

prepared.The sequence of questions in questionnaire was kept in a logical order.It included

questions based on Simple Category scale where the respondent just have to say yes or

no,Multiple Choice Single Response scale where the respondent can choose from many available

options,Likert Scale where attitude was to be studied and Rank Order scale where ranking was

required.After following a series of Trial and changes the finally evolved questionnaire was

being used for survey work.

EXECUTION OF SURVEY WORK:

The survey work is that was done to collect primary data.I conducted “Consumer Survey”by

using questionnaires.I individually approached to individuals and got the questionnaire filled by

them.The individuals were randomly chosen.

43



ANALYSIS AND INTERPRETATION:

After collecting the questionnaire filled,I scanned each of entry ensuring that all relevant

information required for analysis is available and is in the form through which I can

analyze.Adjustment was made where required keeping in mind that it does not hampers the

outcomes of my objectives.Editing of data collected was done to detect errors and omissions and

such corrections were made where required.

Further,coding of responses to assign numerated or symbols was done for easy and fast

analysis.Adopting suitable classes like Poor,Fair,Good,Very Good and Excellent helped in

grouping and categorization of responses.The data after collection,correction and classification

was processed and analyzed and compared in accordance with the outline made for the purpose

at the time of developing research plan. The classified data was finally subjected to cross

tabulation analysis and represented graphically for easy interpretation of results.

The methodology adopted was as follows:

44

Industry Scenario Sketch (utilizing secondary

information)

Extensive Interviews held withPrimary/Secondary Sources

Interview with consumer (Home Loan)

Formulation and administration of a questionnaire



SYSTEM OF RESEARCH METHODOLOGY:

Instrument Used Questionnaire

Technique Of Survey Personal Interview

Sampling Unit Customer

Sampling Extent Sagar, Region

Sampling Random

Method Used For Research Survey Method

45

Formulation of the Recommended Strategy on thebasis of the above mentioned Primary and

Secondar information



3.5 Limitations:

This research study was time bound and due to this only few topics were taken up for

study.

This research study was taken in a limited area only (i.e. sagar city) and findings may

vary if the area of study is increased or changed.

Some of the respondents might have been biased in their responses as such the analysis

could vary to some extent.

While analysis of data, some human errors could have been possible.

Sample drawn through convenience sampling, for customer survey can not be well

associated with the attributes of population.Here I got the questionnaire fill from people

selected arbitrarily who happened to be those: we are familiar with e.g.our neighbors, our

frinds,etc. The majority of the respondents were from educated middle class and perhaps

this is the section of society which is being targeted by the Home Loan Companies.This

is because of two reasons:

a) The huge size of middle class population.

b) Their increasing need and awareness for home loans in this class.

Thus the sample drawn here was not a true representative of the people of sagar city but

was fairly a sample of the segment targeted as potential customers by the Home loan Providing

institutions..

Sample drawn through non-probability convenience sample for home market survey where

the customer related attributes were being asked by the agents of different companies may give

deviating results because different companies have different mission, vision, philosophy towards

their service and the customer. These aspects can well differ in the segment (S) targeted by the

46



company. In other words the perception of the agents about the perception of the customer on

various home loan related aspects can be specified to the organization he is associated with. Thus

the perception of agent about the customer’s perception may not necessarily depict the

customer’s perception exactly.

4- Data Analysis and Interpretation : The following analysis was done to

obtain the findings in accordance with our objectives determined during the course of study. To

know about comparative study of home loan scheme offered by HDFC Bank and AXIS Bank

and assessing the level of consumer satisfaction. Following questions asked in the questionnaire:

The questionnaire was filled by 300 respondents. Out of 100,35% are females and 65% are

males. The age of the respondents lie between 20years to 60 years. There are15% respondents lie

between age group of 20-30 years,26%respondents are of 30-40 years of age,30% respondents

are of age group of 30-40 ,14% respondents lie between age group of 40-50 years and 15%

respondents are of age group 50-60 years.

47



Q.1.In which type of job you are?

Table-11

Types Of Job Government

sector

Private Sector Business Others

No.Of Persons

(%) 23% 39% 24% 14%

Chart 1

On The Basis Of Job

23%

39%

24%

14%

Govt sector Private sector Business Others

ANALYSIS

Out of 300 respondents, there are 23% persons who are in government sector,39% persons are

from private sector,24% persons have their own business and 14% belongs to others category.

48



Q.2.What is your salary structure slab(Per Month)?

Table-12

Salary <10,000 10,000-20,000 20,000-30,000 >30,000

No. Of

Persons(%) 29% 38% 25% 8%

Chart 2

Salary Structure

29%

38%

25%

8%

<10,000 10,000-20,000 20,000-30,000 >30,000

ANALYSIS

Among 300 respondents,the salary of 29% persons are below Rs.10,000,salary of 38% persons

lies between Rs.10,000-Rs.20,000,salary of 25% persons lies between Rs.20,000-Rs30,000,and

salary of 8% persons is more than Rs.30,000.

49



Q.3.What is your opinion regarding the home loan procedure?

Table-13

Opinion Complex Difficult(own

safety)

Simple Cant Say

No.Of

Persons(%)

26% 37% 20% 17%

Chart 3-

Opinion Regarding Home Loan

26%

37%

20%

17%

Complex Difficult(own Safety) Simple Cant Say

ANALYSIS

Among 300 respondents,26% persons think that the home loan availing procedure is

complex,37% persons believe that it is difficult (requires own safety),20% persons think that it issimple and there are 17% persons who do not have any opinion about it.

Q.4 Which type of interest rate have you preferred?

Table-14

50



Types of

interest

Fixed Floating Adjustable Others

No.Of

persons(%) 51% 38% 9% 2%

Chart 4

Interest Rate

51%38%

9% 2%

Fixed Floatind Adjustable Others

ANALYSIS

Among 300 respondents, 51% persons are interested in fixed rate of interest at the time of home

loan, 38% persons are interested in floating rate of interest, 9% persons prefer adjustable rate of

interest and 2 % prefers other interest rates.

Table-15

51



Criteria Lower Rate

Of Interest

Easy

Availability

Flexible

Repayment

Period

Quality Of

Service

Lower

Processing

Fees

No. Of

Persons(%) 29% 17% 13% 25% 16%

Chart 5

Criteria Considering Home Loans

29%

17%13%

25%

16%

Lower rate of interest Easy availability

Flexible repayment period Quality of service

Lower processing fees

ANALYSIS

Among 300 respondents, 29% persons consider lower rate of interest while taking home loan,

17% consider easy availability, 13% consider flexible repayment period, 25% consider quality of

service and 16% persons consider lower processing fees while taking home loan.

Q.6.Are you satisfy with the bank or financial institution from where you have availed the

home loan?

Table-16

Satisfaction Yes No

52



No. Of Persons(%) 65% 35%

Chart 6

Satisfaction Level

65%

35%

Yes No

ANALYSIS

Among 300 respondents, 65% persons satisfy with the bank or financial institution from where

they have availed the home loan but 35% persons are not satisfied with the bank or financial

institution from where they have availed the home loan.

Q.7.How did you come to know about the specific financial institution offering home loan?

Table-17

Source Of

Information

Phone Internet Television Friends/

Relatives

Brochures Press

No. Of

53



Persons(%) 22% 26% 28% 9% 8% 7%

Chart 7

Sources Of Information

22%

26%28%

9%

8%7%

Phone Internet Television

Friends/Relatives Brochure Press

ANALYSIS

Among 300 respondents, 22% persons came to know about home loans through phone, 26%

persons came to know through internet, 28% persons came to know through television, 9%

persons through friends/relatives, 8% through brochures and 7% persons came to know about

home loans from press.

Q.8.Which bank you prefer to take personal loan?

Table-18

Bank HDFC Bank AXIS Bank Others

No. Of Persons(%) 37% 29% 34%

Chart 8

54



ANALYSIS

Among 300 respondents, 37% persons prefer HDFC Bank to take personal loan, 29% persons

prefer AXIS Bank and 34% persons prefer other banks to take personal loan.

Q.9.Which bank provide home loan at lower rate of interest?

Table-19


No. Of Persons(%) 31% 28% 41%

Chart 9

Preference Of Bank

37%

29%

34%

HDFC Bank AXIS Bank Others

55



ANALYSIS

Among 300 respondents, 31% persons say that the interest rate is lower in HDFC Bank, 28%

persons says that it is lower in AXIS bank and 41% persons says that the interest rate is lower in

other banks.

Q.10.Easy availability is an important factor for home loans.Do you agree?

Table-20

Opinion Totally

Disagree

Disagree Agree Totally

Agree

No. Of

Lower Interest Rate

31%

28%

41%


56



Persons(%) 17% 20% 35% 28%

Chart 10

Opinion about Easy Availability

17%

20%

35%

28%

Totally Disagree Disagree Agree Totally Agree

ANALYSIS

Among 300 respondents, 17% persons says that they totally disagree with the fact that easy

availability is an important factor for home loan, 20% persons disagree with it, 35% persons says

that they agree and 28% persons says that they totally agree with the fact that easy availability is

an important factor for home loan.

Q.11.Which bank easily provide home loan?

Table-21

57




NO. Of

Persons(%) 33% 39%

28%

Chart 11

ANALYSIS

Among 300 respondents, 33% persons say that HDFC Bank easily provide home loan, 39%

persons says that AXIS Bank easily provide home loan and 28% persons says that other banks

easily provide home loan.

Q.12.Flexible repayment period plays an important role while taking home loans.What is

your opinion?

Table-22

Opinion Indifferent Agree Totally Agree

Easy Availability

33%

39%

28%


58



No. Of Persons(%) 36% 42% 22%

Chart 12

Opinion About Flexible Repayment

Period

36%

42%

22%

Indifferent Agree Totally Agree

ANALYSIS

Among 300 respondents, 36% persons are indifferent about flexible repayment period, 42%

persons says that they agree with the fact that flexible repayment period plays an important role

while taking home loan and 22% persons totally agrees with the fact.

Q.13.Which bank provide flexible repayment period?

Table-23

Bank HDFC Bank AXIS Bank OthersNo. Of Persons(%) 38% 30% 32%

Chart 13

59



ANALYSIS

Among 300 respondents, 38% persons say that HDFC Bank provide flexible repayment period,

30% says that AXIS Bank provide flexible repayment period and 32% persons says that other

banks provides flexible repayment period.

Q.14.Do provisions of more insurance affect your selection of mortgage from banks?

Table-1

Table-24

Flexible Repayment Period

38%

30%

32%


60



Opinion Agree Disagree

No. Of Persons(%) 67% 33%

Chart 14

Opinion About Insurance

67%

33%

Agree Disagree

ANALYSIS

Among 300 respondents, 67% persons agree with the fact that insurance affect their selection of

home loan from banks and 33% persons disagree with it

Q.15.Prepayment penalty need to be taken into consideration while taking home loan.Whatis your opinion?

Table-25

Opinion Indifferent Agree Totally Agree

No. Of Persons(%) 29% 36% 35%

61



Chart 15

Opinion About Prepayment Penalty

29%

36%

35%

Indifferent Agree Totally Agree

ANALYSIS

Among 300 respondents, 29% persons are indifferent about prepayment penalty, 36% says that

they agree with the fact that prepayment penalty need to be taken into consideration while taking

home loan and 35% persons totally agrees with it.

Q.16.Which bank charges lower prepayment penalty?

Table-26


No. Of Persons(%) 27% 38% 35%

Chart 16

62



ANALYSIS

Among 300 respondents, 27% persons says that HDFC bank charges lower prepayment penalty,

38% persons says that AXIS bank charges lower prepayment penalty and 35% person says that

other banks charges lower prepayment penalty.

5- Findings :

Out of 300 respondents, there are 23% persons who are in government sector, 39%

persons are from private sector, 24% persons have their own business and 14% belongs

to others category.

Among 300 respondents, the salary of 29% persons are below Rs.10,000,salary of 38%

persons lies between Rs.10,000-Rs.20,000,salary of 25% persons lies between

Rs.20,000-Rs30,000,and salary of 8% persons is more than Rs.30,000

Lower Prepaymen Penalty

27%

38%

35%


63



Among 300 respondents,26% persons think that the home loan availing procedure is

complex,37% persons believe that it is difficult (requires own safety),20% persons

think that it is simple and there are 17% persons who do not have any opinion about it

Among 300 respondents, 51% persons are interested in fixed rate of interest at the time

of home loan, 38% persons are interested in floating rate of interest, 9% persons prefer

adjustable rate of interest and 2 % prefers other interest rates.

Among 300 respondents, 29% persons consider lower rate of interest while taking

home loan, 17% consider easy availability, 13% consider flexible repayment period,

25% consider quality of service and 16% persons consider lower processing fees while

taking home loan

Among 300 respondents, 65% persons satisfy with the bank or financial institution

from where they have availed the home loan but 35% persons are not satisfied with the

bank or financial institution from where they have availed the home loan

Among 300 respondents, 22% persons came to know about home loans through phone,

26% persons came to know through internet, 28% persons came to know through

television, 9% persons through friends/relatives, 8% through brochures and 7% persons

came to know about home loans from press.

Among 300 respondents, 37% persons prefer HDFC Bank to take personal loan, 29%

persons prefer AXIS Bank and 34% persons prefer other banks to take personal loan.

6-Suggestions:

Rate of interest should be competitive with other financial institutions.

Free accident insurance cover for home loan customers should be provided.

Proper credit appraisal of the customers should be done.

64



Daily reducing option should be introduced.

Relevant information should be provided to customers time to time.

Emphasis should be given on retaining customers.

People who deal with customers should have complete knowledge about the housing

finance industry.

To penetrate in the rural market.

To provide plans for the low-income group.

To decrease the training fees compare to Competitors (fees of advisors training).

To increase the incentive package.

To open more number of branches in different cities.

To make training time flexible.

Hope these points will be taken into consideration.

7-Conclusions: After doing a lot of research and studying the materials available on

internet, newspapers, magazines and journals. I want to conclude that people prefers HDFC Bank

more than AXIS Bank for personal loans in private sector. As private banks are coming daily in

our country still, Mostly people prefers government banks for loans, especially older persons are

more dependent on government banks. It is true that younger population preference is changing

and they prefer more private banks because of services and facilities provided by private banks.

65



The interest rate is lower in government banks but services are not up to the mark. The

appearance of banks also becomes very important for the present generation and private banks

put their complete efforts on this, which is lacking in government banks. At last I can only say

that HDFC Bank enjoys leading position in personal loan sector

References:

BOOKS

Kotler, Philip and Armstrong, Graw-Principles Of Marketing, Pearson Education, New

Delhi 2004

66



Kotler, Philip – Marketing management: Analysis, Planning, Implementations and

control, Pearson Education, New Delhi. 2003, 11th edition.

Sharma J K- Business Statistics (Pearson Education).

Beri –marketing Research (Tata McGraw-Hill), 1993, 2nd edition.

Cooper and Schindler- Business Research Methods, 9 th edition.

JOURNALS

Business World

Business Today

The Economic Times

INTERNET

www.hdfc.com

www.hdfcbank.com

www.AXISbank.com

www.google.com

QUESTIONAIRE

(To undertake the comparative analysis of HDFC Bank and AXIS Bank in home loan sector)

Gender:

67

http://www.hdfc.com/

http://www.hdfcbank.com/


http://www.google.com/

http://www.hdfc.com/

http://www.hdfcbank.com/


http://www.google.com/



Age:

1. In which type of job you are?

• Government sector

• Private sector

• Business

• Others

2. What is your salary structure slab (Per Month)?

• <Rs.10,000

• Rs.10,000-Rs.20,000

• Rs.20,000-Rs.30,000

• >Rs.30,000

3. What is your opinion regarding the home loan procedure?

• Complex

• Difficult(Own Safety)

• Simple

• Can’t say

4. Which type of interest rate have you preferred?

• Fixed

• Floating

• Adjustable rates

• Others

5. What criteria is considered by you while selecting the home loans?

• Lower rate of interest

• Easy availability

• Flexible repayment period

• Quality of service

• Lower processing fees

68



6. Are you satisfy with the bank or financial institution from where you have availed the home

loan?

• Yes

• No

7. How did you come to know about the specific financial institution offering home loan?

• Phone

• Internet

• Television

• Friends/Relatives

• Brochure

• Press

8. Which bank you prefer to take personal loan?

• HDFC Bank

• AXIS Bank

• Others

9. Which bank provide home loan at lower rate of interest?

• HDFC Bank

• AXIS Bank

• Others

10. Easy availability is an important factor for home loans. Do you agree?

• Totally Disagree

• Disagree

• Agree

• Totally Agree

11. Which bank easily provide home loan?

• HDFC Bank

• AXIS Bank

• Others

69



12. Flexible repayment period plays an important role while taking home loans. What is your

opinion?

• Indifferent

• Agree

• Totally Agree

13. Which bank provide flexible repayment period?

• HDFC Bank

• AXIS Bank

• Others

14. Do provisions of more insurance affect your selection of mortgage from banks?

• Agree

• Disagree

15. Prepayment penalty need to be taken into consideration while taking home loan. What is

your opinion?

• Indifferent

• Agree

• Totally Agree