Auto Loans RAJASTHAN TECHNICAL UNIVERSITY, KOTA A Project Study Report On Training Undertaken at Titled “BUSINESS OF AUTO LOANS THROUGH OFF MARKETING CHANNELS” Submitted in partial fulfillment for the Award of degree of Master of Business Administration (2008-2010) Submitted By: - Submitted to:- 1
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Auto Loans
RAJASTHAN TECHNICAL UNIVERSITY, KOTA
A
Project Study Report
On
Training Undertaken at
Titled
“BUSINESS OF AUTO LOANS THROUGH
OFF MARKETING CHANNELS”
Submitted in partial fulfillment for the Award of degree of
Master of Business Administration (2008-2010)
Submitted By: -
Submitted to:-
Yashomati Goda Manish Kachhawa
MBA 3rd sem.
G.D. MEMORIAL COLLEGE OF MANAGEMENT & TECHNOLOGY
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PREFACE
This project study has been conducted in the lieu of requirement laid down by Rajasthan
Technical University, Kota, for the degree of course of master of business administration.
Under this requirement, every student is supposed to undergo summer training in the
industrial unit or commercial organization. It enables the students to understand the
practical aspect of the conceptual studies learned by them in the commercial subject.
The present report is result of my summer training of HDFC Bank in auto loans in
Jodhpur. The topic chosen for study is Business of Auto loans through off Marketing
Channels provided By HDFC. The study was conducted at the Jodhpur branch by analyzing
the loan facility provided by HDFC and gathering information from Regional Manager and
from market surveys.
The duration of training was 45 days, during which I tried to understand the loan
process of HDFC Bank, Jodhpur Auto Loan Department by observing the actual practice
followed by bank in this regard.
An effort has been made to present this report as cohesive whole of the activities
concerning the auto loan facility provided by HDFC Bank.
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ACKNOWLEDGEMENT
It is great pleasure and privilege for me to present this Project Report titled BUSINESS OF
AUTO LOANS THROUGH OFF MARKETING CHANNELS.
I would like to express my gratitude to Mr. Himanshu Sood (Regional Manager) for having
given me an opportunity to do a project in HDFC Bank.
He has also provided valuable information to complete this work and sincere thanks
to Ms. Kavita Khichi Without whose direction and instruction the project would not have
possible. We pay regards to our parents who have been our source of inspiration and
motivation.
Finally, I am thankful to all the individuals who directly or indirectly rendered their
help in completion of this project work.
(Signature of Student)
Yashomati Goda
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CERTIFICATE
This is to certify that Miss. Yashomati Goda D/o Ratan Lal Ji Goda student of MBA 2nd
semester two year full time course, has satisfactorily completed his summer training on the
topic of BUSINESS OF AUTO LOANS THROUGH OFF MARKETING CHANNELS at
HDFC Bank. He has submitted her training project report in fulfillment of Master of Business
Administration (MBA) program by Rajasthan Technical University, Kota 2008 – 2010.
Date: 16-01-2010 Prof: Manish Kachhawa
(Director)
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EXECUTIVE SUMMARY
In today’s corporate and competitive world, I find that banking sector has the maximum
growth and potential as compared to the other sectors. This growth potential attracts me to
enter in this sector and HDFC BANK has given me the opportunity to work and get
experience in highly competitive and enhancing sector.
The success story of good market share of different market organizations depends
upon the availability of the product and services near to the customer, which can be
distributed through a distribution channel.
Marketing channels helps company in getting good market share and reach to
customer more fluently and for that all big giant in this sector of banking take help of
good marketing channels. Auto loan is a big demand in today’s era and banking
corporations also available in this sector.
Marketing channels are the only way for a company of banking sector through which
policies and benefits of the company can be explained to the customer.
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CONTENTS
S.No. Topic Page No.
1. Introduction of Bank 1
2. Overview & profile of HDFC Bank 2
3. Services Provided 5
4. Meaning & types of Loan 7
5. Objective of Study 10
6. Loans provided by HDFC Bank 11
7. Auto loan (An overview) 12
8. Features & Benefits 13
9. Product offerings 14
10. Application Process 15
11. Documentations Required 16
12. Contact Point Verification 37
13. OFF MARKETING CHANNELS 51
14. Analysis of Survey 52
15. Feed Back 54
16. SWOT Analysis 55
17. Suggestions 56
18. Bibliography 57
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INTRODUCTION OF BANK
Banking is a base of today’s world. The bank word is too old. The origin of the word bank is
shrouded in the mystery. It is made from the word “Banchi” or from Greek word “Banque” or
from the German word “Banch”. The first bank was established in 1148 and its name is
“CASA DE SAN GEIORGIO”.
Soon after the people realized the importance of money as a medium of exchange
they recognized the need of storing it. This safe place ultimately evolved into financial
institution that accept deposit and make loans i.e. the modern banking system. As per as
India concerned the original banking operations were in the hands of the indigenous
bankers who dominated the finance to the extended that they credit to the govt. as well.
A bank is an institution which accepts deposits withdraw by cheque and makes loan
and advances for the purpose of earning profits.
The Banking Companies Regulation Act-“The accepting, for the purpose of
lending and investment, of deposits of money from the public, repayable on demand or
otherwise, and withdraw able by cheque, draft and otherwise.”
Kinley-“Bank is an establishment which makes to individuals such advances of
money as may be required and safely made, and to which individuals entrust money when
not required by them for use.”
Thus the following are the functions of a bank:-
Accepting deposits
Advancing money
Collection and payment of credit and other instruments.
Sale and purchase of stock exchange securities.
Acting as information bank
Remittance of fund
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Over View & Profile of HDFC Bank
PROMOTOR
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 operation is 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.
BUSINESS FOCUS
HDFC Bank’s mission is to be a World-Class Indian Bank. The objective is to build sound
customer franchises across distinct businesses so as to be the preferred provider of
banking services for target retail and wholesale customer segments, and to achieve healthy
growth in profitability, consistent with the bank’s risk appetite. The bank is committed to
maintain the highest level of ethical standards, professional integrity, corporate governance
and regulatory compliance. HDFC Bank’s business philosophy is based on four core values
– Operational Excellence, Customer Focus, Product Leadership and People.
CAPITAL STRUCTURE
The authorised capital of HDFC Bank is Rs 550 crore (Rs. 5.5 billion). The paid up capital is
Rs 424.6 crore (Rs. 4.2 billion). The HDFC Group holds 19.4% of the bank’s equity and
about 17.6% of the equity is held by the ADS Depository (in respect) of the bank’s American
Depository Shares (ADS) Issue. Roughly 28% of the equity is held by the Foreign
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Institutional Investors (FIIs) and the bank has about 570,000 shareholders. The shares are
listed on the Stock Exchange, Mumbai and the National Stock Exchange. The bank’s
American Depository Shares are listed on the New York Stock Exchange (NYSE) under the
symbol ‘HDB’.
DISTRIBUTION NETWORK
HDFC Bank is headquartered in Mumbai. The bank at present has an enviable network of
over 1229 branches spread over 444 cities across India. All branches are linked on an
online real-time basis. Customers in over 120 locations are also serviced through
Telephone Banking. The Bank’s expansion plans take into account the need to have a
presence in all major industrial and commercial centers where its corporate customers are
located as well as the need to build a strong retail customer base for both deposits and loan
products. Being a clearing/settlement bank to various leading stock exchanges, the Bank
has branches in the centers where the NSE/BSE has a strong and active member base.
The Bank also has a network of about over 2526 networked ATMs across these
cities. Moreover, HDFC Bank’s ATM network can be accessed by all domestic and
international Vise/MasterCard, Visa Electron/Maestro, Plus/Cirrus and American Express
Credit/Charge cardholders.
MANAGEMENT
Mr. Jagdish Kapur took over as the bank’s Chairman in July 2001. Prior to this Mr. Kapur
was a Deputy Governor of the Reserve Bank of India.
The managing Director, Mr. Aditya Puri, has been a professional banker for over 25
years and before joining HDFC Bank in 1994 was heading Citibank’s operations in
Malaysia.
The Bank’s Board of Directors is composed of eminent individuals with a wealth of
experience in public policy, administration, industry and commercial banking. Senior
executives representing HDFC are also on the Board.
Senior banking professionals with substantial experience in India and abroad head
various businesses and functions and report to the Managing Director. Given the
professional expertise of the management team and the overall focus on recruiting and
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retaining the best talent in the industry, the bank believes that its people are a significant
competitive strength.
TECHNOLOGY
HDFC Bank operates in a highly automated environment in terms of information technology
and communication systems. All the bank’s branches have online connectivity, which
enables the bank to offer speedy funds transfer facilities to its customers. Multi-branches
access is also provided to retail customers through the branch network and Automated
Teller Machines (ATMs).
The bank has made substantial efforts and investments in acquiring the best
technology available internationally, to build the infrastructure for a world class bank. The
Bank’s business is supported by scalable and robust systems which ensure that our clients
always get the finest services we offer.
The Bank has prioritised its engagement in technology and the internet as one of its
key goals and has already made significant progress in web-enabling its core businesses. In
each of its businesses, the Bank has succeeded in leveraging its market position, expertise
and technology to create a competitive advantage and build market share.
SERVICES PROVIDED
HDFC Bank offers a wide range of commercial and transactional banking services and
treasury products to wholesale and retail customers.
The bank has three key business segments:
1. Wholesale Banking Services
The bank’s target market ranges from large, blue-chip manufacturing companies in the
Indian corporate to small & mid-sized corporate and agri-based businesses. For these
customers, the Bank provides a wide range of commercial and transactional banking
services, including working capital finance, trade services, transactional services, cash
management, etc. The bank is also a leading provider of structured solutions, which
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combine cash management services with vendor and distributor finance for facilitating
superior supply chain management for its corporate customers. Based on its superior
product delivery / service levels and strong customer orientation, the Bank has made
significant inroads into the banking consortia of a number of leading Indian corporate
including multinationals, companies from the domestic business houses and prime public
sector companies. It is recognized as a leading provider of cash management and
transactional banking solutions to corporate customers, mutual funds, stock exchange
members and banks.
2. Retail Banking Services
The objective of the Retail Bank is to provide its target market customers a full range of
financial products and banking services, giving the customer a one-stop window for all
his/her banking requirements. The products are backed by world-class service and
delivered to the customers through the growing branch network, as well as through
alternative delivery channels like ATMs, phone Banking, Net Banking and Mobile Banking.
The HDFC Bank preferred program for high net worth individuals, the HDFC Bank
plus and the investment Advisory services programs have been designed keeping in mind
needs of customers who seek distinct financial solutions, information and advice on various
investment avenues. The Bank also has a wide array of retail loan products including Auto
Loans, Loans against marketable securities, Personal Loans and Loans for Two-wheelers. It
is also a leading provider of Depository Participant (DP) services for retail customers,
providing customers the facility to hold their investments in electronic form.
HDFC Bank was the first bank in India to launch an International Debit Card in
association with VISA (VISA Electron) and issues the MasterCard Maestro debit card as
well. The bank launched its credit card business in late 2001. The Bank is also one of the
leading players in the “merchant acquiring” business with over 50,000 point-of-sale (POS)
terminals for debit / credit cards acceptance at merchant establishments.
3. Treasury
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Within this business, the bank has three main product areas – Foreign Exchange and
Derivatives, Local Currency Money Market & Debt Securities, and Equities. With the
liberalization of the financial markets in India, corporate need more sophisticated risk
management information, advice and product structures. These and fine pricing on various
treasury products are provided through the bank’s Treasury team. To comply with statutory
reserve requirements, the bank is required to hold 25% of its deposits in government
securities. The Treasury business is responsible managing the returns and market risk on
this investment portfolio.
MEANING AND TYPES OF LOAN
MEANING OF LOAN
Loan means a credit facility where the money is disbursed in the beginning, mostly in one
stroke, and later on only recoveries in the forms of installments take place in the account.
Very often the two words ‘Loans’ and ‘Advance’ are interchangeably used without observing
any difference in their meanings. But there exists a fine degree of distinction between the
two words. Loan means a credit facility where the money is disbursed in the beginning,
mostly in one stroke, and later on only recoveries in the forms of installments take place in
the account. In case of ‘Advance’, credit facility is availed of as and when needed and
continuous debit and credit operations are made in the account, within the prescribed limit.
Thus, credit facilities repayable in installments are ‘loans’ and credit facilities like cash credit
and overdrafts where cheque book facility is also given ‘advances’. In case of loan, except
initial disbursal, no further debits are allowed barring interest being debited by the bank. The
account will have credit entries only by the way of recovery and balance outstanding will
gradually decline. But in case of Advance, cheque book remains with the borrower and any
number of debits and credits are permitted with in the agreed limit. In banking parlance,
mostly the deposits are payable on demand including term deposits, which too can be
discounted at any time and as such ‘Advances’ are preferred as compared to ‘Loans’ for
simple reasons that advance can be recalled on demand whilst loan will be repaid only in
installments over a long period. Although the logic of such preference is practically not
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visible since the cash credit accounts are never repaid and only limits are enhanced every
year while the loans are at least paid back gradually. However, traditionally banks prefer
facilities which are payable on demand. Moreover, for granting loans, others specialized
agencies like State Financial Corporations have been promoted and they don’t sanction
advances.
TYPES OF LOANS
Banks grant loans for different periods- short, medium and long, and for different purposes.
Broadly, the loans granted by banks are classified as Error! Bookmark not defined.
1. Short term loan
Short term loans are granted to meet the working capital needs of the borrowers. These
loans are granted for granted less than a year. These loans are granted against the security
of tangible assets- mainly the movable assets like goods and commodities, share,
debentures etc. since April, 1995 reserve Bank of India has made in mandatory for the
banks to grant a portion of bank credit to big customers in the form of loans, which may be
the various maturities. The reserve bank of India has also permitted the banks to roll over
such loans, i.e., to extent loan for another period at the expiry of the tenor of the first loan.
2. Medium term loan & long term loan
Medium and long term loans are usually called ‘Term Loan’. Medium terms loans are
granted for more than a year and less than three years and long term loans are granted for
more than three years and are meant for purchase of capital assets for the establishment of
new units and for expansion or diversification of an existing unit. Bank usually grants such
loans together with specialized financial institutions like Industrial Finance Corporation of
India, Industrial Credit and Investment Corporation of India etc.
3. Bridge loans
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Bridge loans are essentially short term loans which are granted to industrial undertakings to
meet their urgent and essential needs during the period when formalities for availing of the
term loan sanctioned by financial institutions are being fulfilled or necessary steps are being
taken to raise funds from the capital market. These loans are granted by banks or by
financial institutions themselves and are automatically repaid out of amount of the term loan
or the funds raised in the capital market.
4. Composite loan
When a loan is granted both for buying capital assets and for working capital purposes it is
called a composite loan. Such loans are usually granted to small borrowers, such as
artisans, farmers, small industries etc.
5. Consumption loan
Though normally banks provide loans for productive purposes only, but as an exception
loans are also granted on a limited scale to meet the medical needs or the educational
expenses relating the marriages and other social ceremonies etc. of the needy persons.
Such loans are called consumption loans.
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OBJECTIVES OF STUDY
To study the various complexities involved in the loan the HDFC.
To know the various loan provided by the HDFC bank.
To know the various requirements fulfilled by customers to get from HDFC bank.
To study the various facilities provided by HDFC bank to customers for taking loans.
Recommend the valuable suggestion which may increase the faith of new customers.
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LOANS PROVIDED BY HDFC
Home Loans
Personal loan
Car loan
Two wheeler loan
Commercial Vehicle loan
Loan against securities
Farm Equity Loans
Construction Equipment loan
Office Equipment loan
Medical Equipment loan
AUTOLOAN (Car loans) AN OVERVIEW
A basket of options available – New cars/Used cars/ Car N cash.
Market leader in the auto loans business.
Evolved distribution and capacities.
HDFC Bank is operational in excess of 550 locations within the country.
Widely experienced in the auto loans business across the value chain.
Over 425 dedicated resources to handle the Auto loans business.
Loan facilities will be offered at all centers where your branch is operational (subject
to being auto approved locations).
Highly process oriented. Great emphasis on customer delight.16
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FEATURES AND BENEFITS of AUTO LOAN
Choose any car manufactured in India within a certain age.
Borrow up to 80% of the value of the car.
Flexible repayment option, ranging from 12 to 60 months.
Borrow up to 3 times your annual salary (for salaried professionals) and 6 times
your annual income (for self employed professionals).
Available for almost all car models at attractive interest rates.
Repay with easy EMIs.
Attractive car loan plans – To Fastrack your loan, just choose the plan that is right
for you.
Additional loan on existing loan – If you are an existing HDFC Bank Auto loan
customer with a clear track record of 12 months or more, then you can get an
additional loan to the extent of your existing loan amount at attractive rate of
interest.
Customer Privileges
Special benefits for HDFC Bank account holders.
If you have had preferred Account or a Corporate Salary Account with HDFC
Bank for more than six months, you can get fast approvals on your loans with
minimum documentation.
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PRODUCT OFFERINGS
New Car loans:
Funding of up to 100% of ex-showroom value
Tenors from 12-84 months
Competitive pricing
Unique credit shield offered along with loan-suraksha Kawatch
Insurance of car facilitated by the bank
Used car Loans:
Funding of up to 85% of valuation of car
Tenors from 12-60 months
Competitive pricing
Unique credit shield offered along with loan- suraksha Kawatch
Insurance of car facilitated by the bank
Car N Cash:
Refinance on your existing car
APPLICATION PROCESS
The applicant may contact the nearest HDFC Bank branch for the
best deal available on the car of his choice.
The applicant need not visit HDFC Bank for documentation. The
documents may be handed over the HDFC Bank direct marketing associate/ dealer he
is dealing with.
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If applicant wish to cancel his loan application and the loan has not
yet been disbursed, no letter is required. But if the loan has been disbursed, a letter is
requirement requesting for cancellation of the loan.
The applicant can apply for another loan and HDFC Bank shall
sanction the loan based to verify applicant status, contact the representative who is
processing his loan application.
DOCUMENTATION REQUIRED
Salaried Individual Self-EmployedIndividual
Partnership Firm Private/Public Ltd. Co.
Application form Application Form Application Form Application Form
Photograph Photograph Photograph of signing partner
Guarantor’s Photograph(for private limited company only)
Proof of bank account continuity
One proof of income (ITR for the last two years)
Last two years’ income proof (audited account or ITRs+CA certified financials)
Last two years audited financials
One income proof for the last two years (ITR, Form 16, salary slip)
One proof of residence (driving license / voters’ identity card / ration card / passport / utility bills for the last 3 months)
Partnership deed Certified true copy of the MOA & AOA
One proof of identity (driving license / voters’ identity card / Passport / PAN card / photo credit card/ photo ration card)
One proof of residence (driving license / voters’ identity card / ration card / passport / utility bills for the last 3 months)
Partners authority letter
Board resolution (format available on request)
One proof of residence (laminated driving license / voters’ identity card / ration card / passport / utility bills for the last 3 months /
One proof of office address (Utility bill / lease deed / excise or sales tax receipt / shops and Establishment Act Registration)
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company ID limited company or
Self employed staying in Negative Area
Criteria Credit norms Deviation
Eligible borrower
segment
Salaried, Self employed individuals age > 30
yrs. Sole proprietorships age> 30 yrs
No Deviation
Age Salaried > 25 yrs Self Employed > 30 yrs No Deviation
Vehicle segment .A1, A2, A3, A4 and MUV To meet premium Car
Norms
Minimum income Salaried – 2 lacs annual
Others – 1.5 lacs annual income for
No Deviation
Repayment Mandatory for HRP2
Mandatory for A3, A4 and MUV segment
Self Employed Staying in Negative Area
Criteria Banking and ownership proof Deviation
Vehicle
Segment
A1 and A2
Banking 6 months banking with AQB of 1.5 time of
the EMI
L1- for HDFC Bank a/c with
vintage > 3 months AQB of 1
time
LTV 65% for 36 month No deviation20
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Maximum loan
amt.
3 lacs for A1 and A2 No deviation
Profile HRP 2 not to be funded
Others No Income
Criteria Banking & ownership proof Only Banking Deviation
Vehicle Segment A1,A2 and A3 A1,A2 and A3 No deviationBanking 6 months banking with
AQB of 1.5 time of the EMI6 months banking with AQB of 2 times of the EMI
L1- For HDFC Bank a/c with vintage > 3 months AQB of 1 time and 1.5 time respectively
LTV 75% for 36 month65% for 37 to 60 mts
70% for 36 month60% for 37 to 60 months
No deviation
Maximum loan amt.
3 lacs for A1 and A2 4 lacs for A3
3 lacs for A1 and A2 4 lacs for A3
No deviation
Self Employed Individuals Age < 30 yrs
Criteria Credit norms Deviation
Eligible Borrower
segment
Self employed Individuals, sole proprietorships with age less than 30 yrs but greater than 21 yrs. Not to be an RCO – rented residence.
No Deviation
Vehicle Segment A1,A2,A3,A4 and MUV L4- for any other vehicle
Minimum Income 1.5 lacs annual income No deviation
Repayment Vehicle Segment
A3 A4 & MUV No deviation
Min Repayment 3 Lacs 5 Lacs
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Loan Eligibility Others 4 times of the annual income L1 – up to 10 & higher with
repayment track
LTV Without repayment 5% lower LTV as defined in LTV
matrix 10 % lower for tier 3 category of
vehicle with repayment Normal LTV +5%
L2 – up to 5% higher
L3 – up to 10% higher
CPV Guidelines
Contact point verification (CPV) includes:
Physical verification of residence and office
Tele verification at residence and office
Directory Check
Please Note: For co-applicant also all the above has to be done
Status of the CPV will be based on all the factors mentioned below:
The address as given in the application form exits
The applicant / Co – applicants stay / work at the given address
The applicant is normally contact able at the given segment of the car
The standard of living is appropriate with the segment of the car
The third party confirmation are positive & there is no negative remark
Directory check confirming the address and the name of the customer including
relatives.
The vehicle should be for self/family/company use.
Please Note: Observations on Negative Area & HRP ½ would not result in the CPV
being termed as negative. In all such cases, the agency to highlight the observations –
but mark the CPV based on the above criteria only. For negative area cases, as
highlighted by CPV agency, the policy for negative area will be applicable. The CPV
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agency should also provide information on the usage of the asset (Personal or
commercial) and if the asset is for commercial use, the fleet size (no. of vehicles) of the
operator should also be provided.
CPV Deviation Matrix
In cases where the CPV is marked as negative the below mentioned deviation grid will be
applicable
Condition Deviation Level
The address as given in the application from
does not exist
No deviation
The correct address to be obtained at CPV
conducted at the right address.
The applicant/Co-applicant do not stay/work
at the given address
No deviation
The correct address to be obtained at CPV
conducted at the right address.
The applicants normally not contactable at
the given contact address
No deviation
The correct address to be obtained at CPV
conducted at the right address.
No of times CPV fired on new addresses
excluding the application address
Exceeds 2
Exceeds 4
L2
L3
The standard of living is not appropriate with
the segment of the car
L2
The third party confirmation are not positive
or there may be some negative remarks
L2
Third party usage L3
As per application form vehicle for personal L3
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use but as per CPV vehicle for commercial
use
Any other deviations L3
CPV Waivers
The CPV can be waived for cases meeting norms as mentioned below:
Criteria Residence CPV Business CPV TVR
Internal customer – F4 per
approved/pre qualified/
Preferred/ Imperia
Waived Waived Required
Internal liability customer –
salaried with at least one salary
credit with the company name
Required Waived Required
Internal liability customer –
others
Min six months vintage
Waived Required Required
Internal asset customer Waived Waived Required
CIBIL matches Waived Waived Required
For all liability customers
There should not be any instances of cheque book returned (or) statement
returned instance of address not confirmed.
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The address in the bank statement / Finware should match with any one the
address – residence / office in the application form.
For internal asset customer following conditions should be met for CPV
waivers if the loan is live
Account should be live at the time of new loan origination.
The address in Finnone should match with any one of the address – residence/office
in the application form
Closed loan – Loan should not have closed more than 6 months before the
application date.
For CIBIL Matches
The match should be a good match of an installment loan with at least a 12 month
vintage and loan amount to be >=50% of the applied loan amount,
Any one of address – residence/office in the application form should match one of the
last two addresses in the CIBIL report.
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Contact ability
Segment Residence/ office stability
Job/Business stability
Contractibility
F4 Hotkey NA NA Landline / WLL at residence is required Or post paid mobile in the name of applicant.
Landline / WLL of office is required.
Repayment 2 yrs at current residence.
Not Applicable: If residence is
owned or for self employed office is owned or
Salaried working for super Cat A, Cat A & Cat B companies OR Repayment of at least 24 month
Salaried- 2 yrs in current job
Not applicable – If working for super Cat A, Cat A & Cat B companies
Self employed – 2 yrs in business
Not applicable – if office / business premises is owned
Landline / WLL at residence is required or post paid mobile in the name of applicantLandline / WLL at office is required
Corporates NA Self Employed – 2 yrs in business
Or co-applicant to meet the norms
Mandatory landline at office (Max. 8 digit telephone number)
Mandatory Residency Number / Mobile number of co applicant /
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partner / director
Salaried – Bigcorporates
Salaried – 1 year in current job and total work experience of 3 yrs. OR
Post graduate having 1 year of work experience
NA Landline at office AND
Mobile No OR Residence number of applicant
Premium Cars For self employed – 2 yrs at current residence AND to be owned (Parents name is acceptable)
For salaried – 5 years in current resi OR Company leased acco (super Cat-A/CatA) OR to be owned
Salaried – 1 year in current job and total work experience of 10 yrs.
Or Post graduate
working for super Cat A, Cat A and Cat B companies having 5 years of work experience
Self Employed – 5 yrs in business
Landline mandatory at office & residence
Mobile phone of applicant mandatory
Example of Higher LTV for Higher income without Deviation
LTV for salaried working for super cat A company
Vehicle Swift Dzire
Lone amount 6 lacs
Customer 1 Customer 2 Customer 3 Customer 4
Income 7 lacs 5 lacs 4 lacs 3 lacs
Loan amount/
income ratio
0.86 1.20 1.50 2.00
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Eligible for LTV
(without
deviations)
Upto 100% Upto 10%
higher
Upto 5% higher Upto 5% higher
LTV For self employed going for premium car
Vehicle Honda accord
Lone amount 17 lacs
Customer 1 Customer 2 Customer 3 Customer 4
Income 12 lacs 10 lacs 8 lacs 5lacs
Loan amount/
income ratio
1.42 1.70 2.13 3.40
Eligible for LTV
(without
deviations)
Upto 15%
higher
Upto 10%
higher
Upto 10 %
higher
Upto 5% higher
LTV for a salaried customer in other segment
Vehicle Honda City
Lone amount 7 lacs
Customer 1 Customer 2 Customer 3 Customer 4
Income 4 lacs 3 lacs 2.5 lacs 1.5 lacs
Loan amount/
income ratio
1.75 2.33 2.80 4.67
28
Auto Loans
Eligible for LTV
(without
deviations)
Upto 5% higher Normal Normal Not eligible for
7 lacs
Repayment
Definition
The repayment should be from the Banks, NBFC or Financial institution, who
share customer database with CIBIL.
Valid repayment proof – CIBIL, Statement of account, 12 months Bank EMI debit
Minimum 12 months clean repayment track or track of at least 50% competed
tenor whichever is less required
Loan should not have been completed before 18 months prior to the date of
application
There should not be more than 2 bounces in every completed 12 months
payment
There should not be more than 1 bounces in the last 12 months of the loan tenor
It should not have been more than once 30 days past due and should be current if
live.
29
Auto Loans
Repayment – Policy
Criteria Credit norms Deviation
Vehicle segment A1, A2, A3 and MUV segment vehicle as defined in
LTV matrix
No Deviation
Loan Eligibility Please Note: Eligible loan amount will be the lower of
EMI multiplier and loan amt. multiplier for applied
tenor <= 36 months and higher if applied tenor is > 36
month
L1 – for Funding
> Loan eligibility
up to 5%
L2 – for funding
> Loan eligibility
up to 10%
Product EMI multiplier Loan amt.
Multiplier
AL 50 times 1.5 times
PL 50 times 1.5 times
CV 25 times 0.5 times
LTV Repayment
(Vintage)
Int. Repayment Ext.
Repayment
12-24 months Normal Normal
No Deviation25-36 months +10% +5%>36months +15% +10%
30
Auto Loans
Companies, Firms, HUF’s and Trust
Definition:
The eligible borrower segment should have cash profit in the current year and earlier losses
should not be more the capital (Subscribed share capital + reserves and surplus)
Criteria Credit norms Deviation
Minimum
income
1.5 lacs income required L1 – up to
10% lower
L2 – up to
20% lower
Loan
Eligibility &
LTV
criteria Income Multiplier
One car 4 3-3.99 2-2.99 <2
Multiple
Car
6-5 4-4.99 2-3.99 <
LTV Normal +5% +10% 100%
Vehicle
category
ALL ALL Only for
tier 1 & 2
Only for
tier 1 & 2
LTV As given above OR L3 – up to
31
Auto Loans
10 % higher than the normal LTV with Repayment satisfying the
repayment conditions (earlier Loan Amt to be at least 50% of
proposed loan amt)
5 % higher
Please Note: For Multiple cars – POS of all EMI obligations – only installment loans to be
considered (Banks, NBFC or any other – as evidenced by CIBIL / Bank statement) including
the current borrowing to be less than 6 times of the annual income.