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PART I

CHAPTER 1

HDFC Ltd.
INTRODUCTION:

HDFC was incorporated in 1977 with the primary objective of meeting a social need - that of
promoting home ownership by providing long-term finance to households for their housing
needs. HDFC was promoted with an initial share capital of Rs. 100 million.
Their objective, from the beginning, has been to enhance residential housing stock and promote
home ownership.
Now, their offerings range from hassle-free home loans and deposit products, to property related
services and a training facility. They also offer specialized financial services to their customer
base through partnerships with some of the best financial institutions worldwide.

Business Objectives:

Helping Indians experience the joy of home ownership.


The primary objective of HDFC is to enhance residential housing stock in the country through
the provision of housing finance in a systematic and professional manner, and to promote home
ownership.
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Another objective is to increase the flow of resources to the housing sector by


integrating the housing finance sector with the overall domestic financial markets.
As they found out nearly three decades ago, in 1977, the solution for success is customer
satisfaction. All you need is the courage to innovate, the skill to understand your clientele and the
desire to give them your best. Today, nearly three million satisfied customers whose dream they
helped realize, stand testimony to their success.

Housing Finance Sector:


Against the milieu of rapid urbanization and a changing socio-economic scenario, the demand
for housing has grown explosively. The importance of the housing sector in the economy can be
illustrated by a few key statistics. According to the National Building Organization (NBO), the
total demand for housing is estimated at 2 million units per year and the total housing shortfall is
estimated to be 19.4 million units, of which 12.76 million units is from rural areas and 6.64
million units from urban areas. The housing industry is the second largest employment generator
in the country. It is estimated that the budgeted 2 million units would lead to the creation of an
additional 10 million man-years of direct employment and another 15 million man-years of
indirect employment.
Having identified housing as a priority area in the Ninth Five Year Plan (1997-2002), the
National Housing Policy has envisaged an investment target of Rs. 1,500 billion for this sector.

In order to achieve this investment target, the Government needs to make low cost funds easily
available and enforce legal and regulatory reforms

Organizational Goals:

HDFC's main goals are to:

Develop close relationships with individual households,


Maintain its position as the premier housing finance institution in the country,
Transform ideas into viable and creative solutions,
Provide consistently high returns to shareholders, and
To grow through diversification by leveraging off the existing client base.

HDFC Founder:

MAN WITH A MISSION:Hasmukhbhai Parekh


If ever there was a man with a mission it was Hasmukhbhai Parekh, their Founder and
Chairman-Emeritus, who left this earthly abode on November 18, 1994.
Born in a traditional banking family in Surat, Gujarat, Mr. Parekh started his financial career at
HarkisandassLukhmidass - a leading stock broking firm. The firm closed down in the late
seventies, but, long before that, he went on to become a towering figure on the Indian financial
scene.

In 1956 he began his lifelong financial affair with the economic world, as General Manager of
the newly-formed Industrial Credit and Investment Corporation of India (ICICI). He rose to
become Chairman and continued so till his retirement in 1972.
At the ripe age of 60, Hasmukhbhai started his second dynamic life, even more
illustrious than his first. His vision for mortgage finance for housing gave birth to the Housing
Development Finance Corporation - it was a trend-setter for housing finance in the whole Asian
continent.
He was a true development banker. His building up HDFC without any government assistance is
itself a brilliant chapter in financial history. His wisdom and warmth drew people from all walks
of life to him, for advice, guidance and inspiration soft spoken man of few words, Mr. Parekh
nevertheless held strong and definite views with a quiet conviction. He was always concerned
with building bridges, improving and encouraging communication between people.

Organization & Management:

HDFC is a professionally managed organization with a board of directors consisting of eminent


persons, professionals who represent various fields including finance, taxation, construction and
urban policy & development. The board primarily focuses on strategy formulation, policy and
control, designed to deliver increasing value to stakeholders.

HDFC has a staff strength of 1490 (as on 31st March, 2014), which includes professionals from
the fields of finance, law, accountancy, engineering and marketing. Click here for details of
Senior Management.

PART II
CHAPTER 2

HDFC HOME LOAN PRODUCTS


1) Home Loan

2) Home Improvement Loan


3) Home Extension Loan
4) Land purchase loan
5) Short Term Bridging Loan
6) Loan to Professionals for Non Residential Premises
7) Home Equity Loan

HOME LOAN

HDFC offers loans to individuals to purchase (fresh/resale) or construct houses.


Home loan be applied individually or jointly. Proposed owner of the property will
have to be co-applicants. However the co-applicants need not to be the coowners.

PURPOSE
Purchase of flat, row house, bungalow from developers.

Existing freehold properties.

Property in an existing or proposed cooperative society or apartment.

Self construction.

MAXIMUM LOAN
85% of the cost of property (including the cost of land) and based on the repayment
capacity of the customers.

MAXIMUM TERM
20 years subject to the retirement age.

ELIGIBILITY

Salaried employees

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Self employed professionals

Self employed businessman

Applicants can either be Resident or Non-Resident

Age of the applicant should not be more than 65 years

HOME IMPROVEMENT LOAN

Home improvement loan facilitates internal and external repairs and other structural
improvements like paintings, water proofing, plumbing and electric works, tilling and
flooring, grills and aluminium windows.

PURPOSE

External repairs

Tilling & flooring

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Internal & external flooring

Waterproofing and roofing

Plumbing & electric work

Grills & aluminium windows

Construction of underground/ upper water tank

Paving of compound walls (with stone/tiles


etc)

Bore well

Waterproofing on terrace

MAXIMUM LOANS
For Existing customers : 100% of the cost of improvement

For New customers : 85% of the cost of improvement

MAXIMUM TERM
15 years subject to retirement age.
HOME EXTENSION LOAN

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Home extention loan facilitates the extension of an existing dwelling unit. This type of loan
makes it convinient to extend or add space to home.
PURPOSE
This loan is specifically for the extension purpopse. Be it an additional room, a larger
bathroom or even enclosing an open balcony.
MAXIMUM LOAN
85% of the cost of extention.
MAXIMUM TERM
20 years subject to retirement age.
LAND PURCHASE LOAN

PURPOSE
HDFC Land purchase loan is a convenient loan facility to purchase land, whether it be to
build a house or an investment.
MAXIMUM LOAN
85% of cost of land and based upon the repayment capacity of the customer.

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MAXIMUM TERM
15 years subject to customer retirement age.

SHORT TERM BRIDGING LOAN

PURPOSE
Short Term Bridging loan makes customer realize their dreams of buying a bigger and
better home and give them time to sell their existing property to pay off the loan. This is a
short term loan to help customers with the interim period between the sale of their old
homes and the purchase of a new home. Customers repay the loan by paying
monthlyinstallment or interest on the loan with the lump sum payments within 2 years.
Hence customers gets 2 years to sell the property repay the loan.

MAXIMUM LOAN
90% of the cost of new property
MAXIMUM TERM : 2 years
LOAN TO PROFESSIONALS FOR NON RESIDENTIAL PREMISES

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This loan facilitates professional to purchase and construct their own office premises or even
renovate their existing office premises.
PURPOSE
Purchase

Constuction

Improvement of office

MAXIMUM LOAN
85% of the cost of property
MAXIMUM TERM
15 years subject to customer retirement age.
HOME EQUITY LOANS

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HDFC Home equity loans helps to encash the present market value of the property by
taking a loan by mortgaging the property.
PURPOSE
Higher eduation of the children

Marriage expenses

Medical expenses

Business purpose

MAXIMUM LOAN

For Existing customers: 60% of the market value and present loan outstanding.

For new customers: 50% of the market value of the property.

MAXIMUM TERMS

PROPERTY TYPE

REPAYMENT OPTION

NO. OF YEARS

Residential

EMI Based

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Non Residential

EMI Based

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Residential & Non Residential

Simple Interest

PARTIII
CHAPTER 3

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MAJOR OBJECTIVES

To know about the HDFC home loan and its products.

To have the first hand information on loan procedure, sanctioning and disbursement
in HDFC ltd.

To compare the performance of HDFC with other market players.

To study about the financial position for the financial year 2014-15 in comparison
with position in financial year 2013-14.

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CHAPTER 4

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STAGES OF HOME LOAN

Applicati
on
Login

Scannin
g

Data
Entry

Recommendati
on
Over (ROVR)

Disburseme
nt of the
loan

Double
Checking
Sanctioni
ng

Over

After Sales
Services

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The representation shown above is not a perfect copy of the actual process. This is because
these stages are taking place simultaneously and one application is being taken care for by
the experienced employees of both HDFC Ltd service centre.
Hence the loan application may or may not shuttle through different stages
APPLICATION STAGE

This is the stage where the Application Form first reaches the concerned Service Centre/
workstation. Here all the documents in the application are reviewed by the experienced staff
present at the workstation.
SCANNING

In this stage the various important documents of the applicant are scanned. This helps to create
their electronic copy which acts as a ready reference, a proof, and can also be shared and utilized
by other employees of HDFC Ltd.
DATA ENTRY

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The file has been sent to the bank head office or the HUB .At HUB there are many experts with
their own specializations. These officials review the various parts of the file again and perform
many specialized tasks.

RECOMMENDATION OVER (ROVR)

The Recommendation over is also referred to as the First Appraisal. At this stage certain
specially appointed persons have been given the responsibility of recommending a loan
These people have to take special care of reviewing every document, and all the small details
that need to be considered before considering the loan application to be valid.
DOUBLE CHECKING OVER

As the name suggests at this stage a specially appointed person will double check all the past
proceedings. They will examine the Loan file for any discrepancies, any missing and /or
misplaced documents, the Credit Appraisal results, etc.
SANCTIONING

An authorized sanctioning authority within HDFC itself will review the remarks of Double
Checker. If it considers the loan suitable to be sanctioned it gives it approval . After it has given
its approval stamp the ILPS system will automatically send a letter to the Applicant that his loan

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has been sanctioned. After this approval the Applicant can go to whichever Service Centre to get
his loan disbursed.
SPECIAL CASE

A special case can arise if the applicant has not mentioned the property for which he wants to
take a loan. In that case the applicant can let the case be remain pending.
DISBURSEMENT

The last and final stage in the Home Loan process is that of disbursement. After the sanctioning
has taken place the applicant becomes a registered customer of HDFC Ltd .He/She can now take
the disbursement of the loan from any of the various service centre of HDFC .The loan shall be
disbursed in one Lump sum or in suitable installments to be decided by HDFC with reference to
the need and/or progress of construction. The borrower hereby acknowledges the receipt of the
loan disbursed as indicated in the receipt.

CREDIT APPRAISAL
Credit appraisal is one of the most important and significant step in the Home Loan process. In
case of home loans we either create new accounts or maintain pre existing ones. Credit appraisal
is however a part of sanctioning new loans or enhancing the existing one.

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Credit Appraisal starts from the moment, the documents for Loan from the customers has taken,
which is then sent to back office for processing which is called HUB.
CATEGORIES
In case of Credit appraisal there are three main categories:

1. SALARIED PERSON
Here the Credit Appraisal is done for a salaried person .HDFC try to compute the credit
worthiness of a salaried person .It means that the person should be employed as an employee
in a recognized organization. The organization may be public or private. The person must
have proof to prove his employment like credit documents etc.

2. SELF EMPLOYED PERSON


The nature of Credit Appraisal done for a self employed applicant is slightly more complex.
This is due to the presence of enormous bank statements as well as transactions involved in
business. As conducting Business in modern times is a capital intensive process the bank
statements of self employed persons are large and much more complex. The statement runs

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into a large number of pages due to the multiple numbers of transactions. Apart from that their
income statements are also quite complex due to presence of many components.
Hence in the case of a self employed person demanding a loan the credit appraisal has to be
done very carefully .For this very purpose HDFC Ltd has appointed Specialized Credit
Appraisers and a specialized Self employed Committee. These consist mainly of Chartered
Accountants. They handle the important job of appraising the credit worthiness of the self
employed applicants.

3.

SELF EMPLOYED PROFESSIONAL

The self employed professionals include people like Doctors, Chartered accountants ,
Engineers etc. Only HDFC recognizes these professionals as a separate category and has
hence developed a comparatively smoother procedure for their Credit Appraisal and
sanctioning of loan.

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PRECAUTIONS
The credit appraisal is an important step for both the borrower and HDFC .Hence it necessary to
take all precautions.
All calculations must be done with correct figures. The data entry in the system must
match the actual data. Also care should be taken in places like the decimals and
rounding off. The data entries should not be going outside the space provided to
them.
The source of the data should be mentioned so that another person may easily verify the
facts and figures

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Sometimes it may happen that the Applicant has intentionally or by mistake not
mentioned the full status of his obligations. The common situation in this case are
A.

He has not revealed of any loan that he may be paying off from an
undisclosed bank account in any other bank

B. He is not disclosing information related to any defaults, Revolving accounts


such as Debit card, Credit card etc.
In these conditions it is difficult to correctly compute the credit worthiness of the person. As a
result an unscrupulous element might get a loan .This will lead to loss to both HDFC and its
honest customers.
The precaution taken by HDFC in this case is that it contacts CIBIL (Credit Bureau of India Ltd)
which is the mega Repository of financial data in India .HDFC electronically requests CIBIL to
reveal information it possesses pertaining to the persons financial obligations. CIBIL passes on
the information by means of a fax containing all revolving accounts, loans and liabilities.
TERMS AND CONDITIONS OF HDFC HOME LOANS
HDFC has always been market oriented and dynamic with respect resource mobilisation as well
as lending programme. It provides loans to meet all requirements of the customers to make their
house a home. However following are the conditions which are to be met by the customer before
applying for a loan.
LOAN AMOUNT CONDITIONS
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HDFC finances upto 85% maximum of cost of property (agreement value + stamp duty +
registration charges)
Repayment capacity takrs into consideration factors such as income, assets,
qualifications, number of dependents, spouse income, liabilities, stability and continuity
of occupation and saving history.
The loan amount of the individual is also subject to Instalment to Income Ratio (IIR)
which is 40% and Fixed Obligation Income Ratio (FOIR) which is 45%.
Maximum loan amount to an individual connot exceed Rs 1crore.

SUPPORTING DOCUMENTS
First of all when a customer came all documents are checked by the workstation which are
directly in contact with the customers. Necessary documents required are as follows.
FOR ALL APLICANTS
1. Allotment letter of the co-operative society /association of apartment owners.
2. Copy of the approved drawings of proposed construction /purchase /extention.
3. Agreement of sale /sales deed /detailed cost estimate cost from architect.
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4. If an applicant have been present employment /business or profession for less than a year,
mention on a separate sheet details of occupation for previous five years , giving position
held, reasons for change and period of the same.
5. Applicable proceesing fees.
6. Residence proof and Identity Proof.

RESIDENCE PROOF

IDENTITY PROOF

Ration Card

Driving License

Passport

Passport

Bank Account Statement

Pan Card

Voters Identity Card

Voters Identity Card

Letter from recognized public authority

Identity Card issued by Employer(if employed


in state/central Govt.)

7. Certificate of loan outstanding issued by the lender ( for refinance cases only)
8. Any other information regarding your repayment capacity that is necessary and will assist
HDFC in appraising the loan proposal.

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EMPLOYED CASE
1. Verification of Employment Form with only Part I filled in.
2. Latest original salary slip/salary certificate showing all deductions.
3. If a job is transferable, permanent address where correspondence relating to the applicant
can be mailed.
4. A letter from employer agreeing to deduct the EMI towards repayment of the loan from
applicant salary. This will expedite the processing of loan application.
5. Updated original Bank Passbook/ or Bank Statement for the last six months.
6. Photocopy of Form 16 (issued by the employer) for the last assesment year.

SELF EMPLOYED
1.Balance Sheet , Profit & loss and ITR for the last three years.
2. Business Profile.
3. Copies of individual Tax Challans for the last three years.
4. Copy of advance Tax Challan (if any).
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5. Updated original Bank Passbook/ or Bank Statement for the last twelve months.

CREDIT APPRAISAL
After the documents are checked by the workstation, documents are rechecked by the Senior
Officer as well as File Credit Investigation Department (FCI) prepares income sheet and check
all documents of the file. After credit appraisal loan is approved an disbursed to the conditions or
requirement.
RATE OF INTEREST TILL 30 JUNE,2015 (DUAL RATE)
Till 30 June, 2015 all applications received will be locked by Dual rate.

SLAB

RATE OF INTEREST

Till March 2011

8.25%

Till March 2012

9%

Next Floating rate

PLR 4.75%

RATE OF INTEREST

SLAB

HOUSING

PLOT

LOAN

LOAN

EQUITY LOAN

FIXED RATE
OF
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INTEREST
Loan against property -11.25% Fixed rate -14%

Upto 30 lakhs

8.75%

9.25%

30-50 lakhs

9%

9.5%

Above 50 lakhs

9.25%

9.75%

PROCESSING FEES AND OTHER CHARGES


A processing fees of 1% of the loan amount is charged from the applicant which includes all the
fees and the charges at the time of sanctioning of the loan application. Service tax is also
applicable and will be charged on the fees collected.

REPAYMENT
Loan is repaid in EMI comprising principal and interest. EMI commences from the first of the
month following the month in which the disbursement of the loan has been completed. Due date
of payment of first EMI is the 5th day of the month following such month.
Interest is paid on the portion of the loan disbursed which is called Pre-EMI. Pre-EMI interest is
payable every month from the date of each disbursement upto the date of the commencement of
EMI. Customer may opt to pay the EMIs by direct deduction from their monthly salary. They
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can also issue post datedcheques and can also issue standing instruction to their bankers or can
pay the installment at any of the HDFC collection centers.

FLEXIBILITY IN REPAYMENT
Following are the repayment option features being offered by HDFC to their customers:
Step up Repayment Facility (SURF): This scheme help young executive to take a bigger
loan today based on an increase in their future income, this will help executives to buy a
bigger home today. In this EMIs of the customer increases in future.
Flexible Loan Installment Plan (FLIP): Often customers, parents and their children wish
to purchase property together. The parents are near to retirement and their children just
started their work. This option help customers to combine their income and take a long
term home loan wherein the installment reduces after the retirement.
Tranching: To help the customers save their interest, HDFC introduced a special facility
known as Tranching. In this customer has the option to start their EMIs even before the
full disbursement of the loan. By this facility customer can repays their loan faster.

PREPAYMENT FACILITY

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Customer can repay the loan ahead of schedule by making part or full prepayment. If the
prepayment is made within three years of the first disbursement, early redetmption charges of 2%
of the amount being prepaid is payable, but if prepayment is made after three years then no
charges is charged by HDFC.

DISBURSEMENT OF THE LOAN


HDFC disbursed the loan after the property has been technically appraised, all legal
documentation has been completed. The loan will be disbursed in full or in suitable instalments
(normally not exceeding three in number) taking into account the requirements of the funds and
progress of construction.
Practical example to explain how banks arrive at eligibility of home loan applicants
Vijay is a maintenance engineer with a private firm. His monthly takehome salary is around Rs
35,000. With many public sector banks offering singledigit interest rates, Vijay feels this is the
best time to invest in his dream house. A two-bedroom house on the outskirts costs about Rs 16
?lakhs. Will any banker lend him this money? Is he eligible for a home loan of Rs 16 lakhs

There are numerous factors that banks take into consideration when computing your loan
eligibility. Age of the applicant, his salary, repayment/credit history, savings, profession, location
of property, health condition and other debts have a direct bearing on the loan amount
sanctioned. Some professions are categorised as negative or risky by the lenders. People in such
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professions may find it difficult to get a loan sanctioned. On the contrary, some jobs are
considered more stable with lesser probability of default. They are on the preferred list of most
.lenders

It is imperative that the property an applicant wishes to purchase falls within the geographical
limits as defined by the bank. As a thumb rule, banks will lend to applicants who can set aside 40
percent of their monthly income towards their home loan repayments. Based on
this, an individual's loan eligibility is calculated. It is assumed that a person who earns more can
.set aside more money towards his EMI repayments
?How does a bank compute your loan eligibility
Most loan eligibility calculators available on the Internet are based on a formula. The home
loan eligibility, in lakhs, is arrived at by dividing the amount available for the loan repayment
.with the borrower by the loan installment per lakh for the given tenure
The simplest way to increase your loan eligibility is by increasing the loan tenure. Consider
Vijay's case. At 9 percent rate of interest and for a tenure of 10 years, banks will sanction him not
more that Rs 12 lakhs. However, for a greater tenure of 20 years his loan amount shoots up to Rs
.18 lakhs. However, the longer the tenure of the loan, greater is the cost of borrowing
Applying jointly, with your parent or spouse, increases your loan eligibility. The incomes of
both applicants are combined when computing the loan eligibility. You can almost double your
.loan eligibility with a joint loan

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CHAPTER 5
MARKET PLAYERS

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OTHER MARKET PLAYERS

1. State Bank of India


2. PNB Bank
3. Axis Bank
4. ICICI Bank

SBI -STATE BANK OF INDIA


State Bank of India(SBI), the country largest and oldest commercial bank with a branch network
of over 11000 branches and six associate banks located even in the remotest parts of India. SBI
offers a wide range of banking products and services to corporate and retail customers.
SBI HOME LOAN
PURPOSE
Purchase/Constuction of a house/flat

Purchase of a plot of land for constrution of house.

Extention/ Repair/ Renovation or Alteration of an existing house/flat


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Purchase of Furnishings and Consumer Durables as a part of project cost.

Takeover of an existing loan from other Banks/Housing Finance Companies.

ELIGIBILITY
Minimum Age 18 years as on the date of sanction.

Maximum Age For a home loan borrower is fixed at 70 years i.e the age by which
the loan should be fully repaid.
There should be availability of sufficient, regular and continuous source of income for
serving the loan repayment.
DOCUMENTS
Two photographs of each applicant/gurrantor.

Proof of residence of each applicant/gurrantor.

Copy of PAN Card for identity proof.

Latest & original salary slip of employees/ Business proof for businessman.

Two years IT Returns /Form 16 for employees and three years IT Return with
computation sheets for busineesman/Self Employed.
Balance sheet for last three years for business man.
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Six months salary account statements for employees and savings account statement
for Businessman/self employed.
Copy of Agreement to Sale.

Copy of Registry of house/ plot/flat plus old registries.

Copy of Allotment letter/Re-allotment letter of House/plot/Flat.

Latest Jamabandi of Plot/Flat/House, Builders approval letter to develop the project


and copy of license.
Latest Non Encumbrance Certificate of Plot/Flat/House.

Copy of approved Map/ approved site plan of builder.

Estimate cost of constuction from Govt. Approved Architect for construction/


Renovation cases.
List of documents held with other Bank from whom Housing loan is to be taken over.

SECURITY
Equitable Mortgage of the property.

Other tangible security of adequate value like NSCs, Life Insurance Policies etc, if
the property cannot be mortgaged.

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RATE OF INTEREST

YEAR

RATE OF INTEREST

1st Year

8%

2nd Year

9%

3rd Year

9%

PROCESSING FEES
A processing fees of .50% of the loan amount is charged from the applicant which includes all
the fees and the charges at the time of sanctioning of the loan application. Service tax is also
applicable and will be charged on the fees collected.
MAXIMUM REPAYMENT PERIOD
For Applicants upto 45 years of age: 25 years

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For Applicants above 45 years of age: 15 years


PREPAYMENT
Customer can repay the loan ahead of schedule by making part or full prepayment.
Prepayment Charges If paid from own source nil
In other case 2% on principal amount prepaid.
DISBURSEMENT

In lump sum direct in favour of the builder/ seller in respect of outright purchase.

In case of constuction of house/flat etc, depending upon the actual progress of work.

PNB Housing Loan Procedure:


Housing Loan for Public
Objective

To ensure availability of Housing Loan at attractive rates and ensure


a house for all.

Purpose

For construction of house/ flat;

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For purchase of built house/flat.

For purchase of under construction house/flat from Housing


Boards/ Development Authorities/ Co-operative Societies/
Approved Private Builders/ Projects.

For carrying out Additions to the house/flat.

For carrying out repairs/ renovation / alterations/ cost of


furnishing to the house/flat.

For meeting cost escalation in the cases of under-construction flats


to existing Housing Loan borrowers.

Eligibility

For purchase of land/plot for house building.

Individuals or Joint owners.

Quantum of
Finance

For Construction/Additions/Purchase of House/Flat: Need


based loan depending upon the project cost and repaying
capacity.

For purchase of Land/ Plot for House Building: Maximum


Rs.100 lacs for State Capitals and Metro and Rs. 50 lacs for other
centers; (Higher amount may be considered on individual merit of
case)

For repairs / renovation / alterations: Maximum Rs.25 lac.

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Cost of furnishing may be included in the project cost with


maximum upto 10% of eligible Housing loan with a maximum
upto Rs.5.00 lac.

Housing Loan Upto Rs.75 lac

20%

Housing Loan Above Rs.75 lac

25%

Purchase of Land/Plot for House

40%

Building
Margin
(Borrowers
contribution)

Charges e.g. stamp duty, registration charges and other documentation


charges shall be borne by the borrower and shall not be
considered towards margin money. However such charges may be added
to the cost of the house/dwelling unit for the purpose of calculating LTV
ratio in cases where the cost of the house/dwelling unit does not exceed
Rs.10 lakh.

Under floating Rate option: @ Base Rate


Rate of Interest
Under fixed rate option: @ Base Rate+0.50%

Processing

UptoRs 300 lacs

Charges/ Upfront
fee

0.50% of loan amount, max Rs


20000/- exclusive of service tax

Above Rs 300 lacs

Rs 50000/- exclusive of service tax

PRESENTLY WAIVED UNDER FESTIVAL BONANZA FROM

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01.09.2015 TO 31.12.2015

Rs 1350/- exclusive of service tax subject to change from time to time


Documentation
Charges

PRESENTLY WAIVED UNDER FESTIVAL BONANZA FROM


01.09.2015 TO 31.12.2015

Security

Equitable/registered mortgage of the property in question.

Loan for carrying out repairs/ renovation / alterations to the


house/flat: Max.15 years inclusive of moratorium period, if any.
Loan for Others: Max. 30 years inclusive of moratorium period, if any.

The income of the spouse and earning children(whether married


or unmarried) and of the joint owners can be added for
determining the income for the purpose of borrowers repaying

Repayment

capacity. In such cases, they should be made co-borrower.

Father/Mother can also be made as co-borrower in cases where


property is in the single name of his/her son and also clubbing of
their income be permitted for the purpose of eligibility/repayment
of loan.

Likely rental income, if the property is to be let out may also be added for
determining the repaying capacity.

Repayment

For Construction/ Additions of House/ Flat: Till completion of

Holiday/

construction (including additions) or 18 months, from the date of


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disbursement of first installment of the loan, whichever is earlier.


For carrying out repairs/ renovation / alterations to the house/ flat:
Till completion of repairs/ renovation / alterations or 6 months, from
Moratorium

the date of disbursement of first installment of the loan, whichever is


earlier.
For purchase of ready built House/ flat OR land/plot: Till the date of
possession or 3 months from the date of advance, whichever is earlier.

EMI chart
MONTHLY INSTALMENT OF LOAN OF Rs.1,00,000/- AT
DIFFERENT (EX-TAX) INTEREST RATES FOR DIFFERENT
LOAN REPAYMENT PERIODS
ON ARREAR BASIS - ROI COMPOUNDED MONTHLY
R.O.I.

5 Yr

10 Yr

15 Yr

20 Yr

25 Yr

30 Yr

10.00

2125

1322

1075

965

909

878

10.25

2137

1335

1090

982

926

896

10.50

2149

1349

1105

998

944

915

10.75

2162

1363

1121

1015

962

933

11.00

2174

1378

1137

1032

980

952

11.25

2187

1392

1152

1049

998

971

11.50

2199

1406

1168

1066

1016

990

11.75

2212

1420

1184

1084

1035

1009

12.00

2224

1435

1200

1101

1053

1029

47

Interset Rate : Click Here

PNB FLEXIBLE HOUSING LOAN


This variant provides the borrowers advantage of substantial savings on the interest component
on account of facility to:
I.

Deposit their surplus funds in the overdraft account; and

II.

Withdraw the same at their choice as per their needs.

1. Eligibility
Customers who are below the age of 50 years and existing Housing loan borrowers who have
availed loan under our Housing Loan scheme for public subject to fulfillment of all terms &
conditions of this variant :
2. Purpose
For all puposes as per details described under Housing Finance scheme except for purpose of
land/plot.
3. Nature of Facility
Term Loan - 80% and overdraft 20%
4. Extend of Loan

First enhancement allowed after 3 years, Overdraft limit can be enchanced maximum
upto 50% of the total loan amount sanctioned. Extent of enchancement equal to
reduction in Term Loan Amount.

Borrowers are entitlement for 20% increase in the original total limit sanctioned after a
lapse of five years.

48

Enchancement(s) is/are for personal needs is/are allowed in the shape of a seperate
Overdraft limit.

5. Rate of Interest
Interest Rate : 11%
6. Margin
20% and 25%:
7. Repayment
Term Loan component: As per Housing Loan Scheme for Public.
Overdraft component:
- For Borrowers below 55 years: Servicing of Interest as and when charged i.e. on Monthly
Basis.
- For 55 years and above: On monthly reducing drawing power maximum upto the age of 70
years.

9. Processing Fee & Documentation Charges:


As applicable under Bank's regular Housing Loan Scheme for public.
For more details, please contact our nearest branch.

Overdraft Facility to Existing Housing Loan Borrowers for Personal needs


1. Objective
Seeks to provide additional facility in the shape of Overdraft for personal use to our
existing/new/takeover Housing Loan borrowers.
2. Eligibility
All Housing Loan borrowers including existing / new / take over cases. Loan is not permitted
49

for any trade / business or for any other speculative purposes.


3. Purpose
For Personal needs/use.
4. Extent of Loan
Minimum Rs. 50,000/-, Maximum Rs. 25 lac.

5. Nature of Facility
In the shape of an Overdraft limit.
6. Margin
However LTV of 80% and 75% on (Housing Loan + Over Draft Limit) realizable value of
House / flat to be required.
7. Repayment
Account to be renewed annually.
:
8. Rate of Interest
BR+ 0.50%
9. Security
By extension of charge on the immovable property mortgaged.
10. Processing Fee & Documentation Charges
Upfront fee NIL
Documentation Charges - Rs. 450/- + Taxes.

50

ICICI-INDUSTRIAL CREDIT AND INVESTMENT CORPORATION OF INDIA

ICICI Bank ( Industrial Credit and Investment Corporation of India) is a major banking and
financial services organization in India. It is the 4th largest bank in India and the largest private
sector bank in India by market capitalization. The bank also has a network of 2014+ branches (as
on 31 March 2015) and about 5219 ATMs in India and presence in 19 countries. ICICI Bank
offers a wide range of banking products and financial services to corporate and retail customers
through a variety of delivery channels and specialization subsidiaries and affiliates in the areas of
investment banking, life and non-life insurance, venture capital and asset management. (These
data are dynamic.) ICICI Bank is also the largest issuer of credit cards in India. ICICI Bank is
India's second-largest bank with total assets of Rs. 3,634.00 billion (US$ 81 billion) at March 31,
2015 and profit after tax Rs. 40.25 billion (US$ 896 million) for the year ended March 31, 2015.
HOME LOAN

Home loans are provided to individualsto own a residential property.


ICICI Bank offers easy home loan for
First purchase in ready constuction.
51

Under constuction property.

Purchase in Resale case.

Self construction extention of existing living space

DOCUMENTS

EMPLOYED

SELF EMPLOYED

Duly complete application Form with one passport

Duly complete application Form with one passport

size photograph

size photograph

Identity, Residence and Age proof

Identity, Residence and Age proof

Fee Cheque

Income tax return/ Computation of total income/


Auditors report/ Balance Sheet/ Profit Account
certified by Chartered Accountant for last two
years( 3 years for home equity)

Signature Verification Proof

Signature Verification Proof

Last three months salary slip

Business Profile

Form 16

Board Resolution in case of a company


52

Bank Statement for last six months from salary

Bank Statement for last six months from operating

Account

Account

Repayment track record of existing loan/ loan

Repayment track record of existing loan/ loan

closure letter

closure letter

ELIGIBILITY
Loan must terminate before or when the borrower turns 65 years of age or before
retirement whichever is earlier.
Minimum Age 25 years of age.

Applicant must be Self employed or Employed with a regular source of income.

In case of Indian Resident both Self Employed or Employed can apply for loan but in
case of Non Resident only Employed can avail a loan.
The loan amount can be upto 80% of the cost of property.

RATE OF INTEREST

53

YEARS

UPTO 30 LAKHS

ABOVE 30 LAKHS

1ST Year

8.75%

8.75%

2nd Year

9%

9.25%

3rd Year

9%

9.25%

FIXED RATE
Fixed rate 16%

PROCESSING FEES
A processing fee of .5% of the loan amount is charged from the applicant which includes all the
fees and the charges at the time of sanctioning of the loan application. Service tax is also
applicable and will be charged on the fees collected. .25% fee is negotiable if applicant is an
existing customer.

PREPAYMENT CHARGES
There is no charge on part of prepayment but in case of full prepayment 2% of the principal
outstanding at the time of foreclosure is charged by ICICI Bank.
AXIS BANK

54

Axis Bank Ltd was incorporated in the year 1994 as UTI Bank Ltd which provided corporate
and retail banking products and was the first private banks to have begun operations in 1994,
after the Government of India allowed new private banks to be established. At present the bank is
the third largest private sector bank comprising of 1000 branch offices and extension counters
and 4055 ATMs.
Axis bank was formed as UTI when it was incorporated in 1994 when government of India
allowed private players in the banking sector. The bank was sponsored together by the
administrator of the specified undertaking of the Unit Trust of India, Life Insurance Corporation
(LIC) And General Insurance Corporation Ltd and its subsidiaries namely National Insurance
Company Ltd, New India Insurance Company, The Oriental Insurance Corporation and the
United Insurance Company Ltd. However the name of the UTI was changed because of the
disagreement on terms and conditions of the bank authority over certain stipulations including
royalty charged over the name from UTI AMC. The bank was also wanted to have a new name
from its Pan-Indian as well as international business perspective. So from July 30,2007 onwards
the UTI Bank was named as Axis Bank.

DOCUMENTS

EMPLOYED

SELF EMPLOYED

55

Application Form with photograph

Application Form with photograph

Identity and Residence proof

Identity and Residence proof

Latest salary slip

Education qualification certificate and proof of


business existence

Form 16

Business profile and last three years profit & loss


and balance sheet

Last six months bank statement

Last six months bank statement

Processing fees

Processing fees

RATE OF INTEREST

INCOME SLAB

RATE OF INTEREST

Upto 30 lakhs

8.75%

Above 30 lakhs

9.25%

REPAYMENT TERM
Monthly EMIs
56

FOR 25 YEARS 822 per lakh


FOR 20 YEARS 884 per lakh
FOR 15 YEARS 999 per lakh
FOR 10 YEARS 1253 per lakh
ELIGIBILITY

Loan amount offered for both employed and self employed is Rs 1lakh to 50 lakhs.

Minimum Age 24 years of age.

Loan must terminate before or when the borrower turns 60 years of age or before
retirement whichever is earlier.

The loan amount can be upto 85% of the cost of property.

Applicant must be Self employed or Employed with a regular source of income.

PROCESSING FEES
A processing fee of .5% of the loan amount is charged from the applicant plus service tax as
applicable.
PREPAYMENT CHARGES

57

Axis Bank do not charge any prepayment charges from its customers.

CHAPTER 6
RESEARCH
METHODOLOGY

58

RESEARCH METHODOLOGY

SCOPE OF THE STUDY:


The study focuses on prevailing rate of interest, percentage of funding, tenure of home loan, fee
etc being charged by other banks in comparison to HDFC.
From this study, HDFC can identify the difference between the schemes and charges charged in
comparison to with its competitors. Hence HDFC can change their schemes to perform better
than other banks and can attract more customers. The present study focuses on analyzing the
balance sheet and profit and loss statement of HDFC for the last two years.
METHODS OF COLLECTION OF DATA
For the project number one i.e. The Comparative Study of Home Loans provided by HDFC LTD.
With other financial institutions various banks like SBI, ICICI, AXIS Bank etc. were surveyed.
The whole procedure of the disbursement of loan, various schemes, interests rates etc. Factors
were obtained from various banks. The whole data was the organized in excel files and later on
considering all the factors the whole data was analyzed.

59

SECONDARY DATA
Secondary data refers to the one which has already been collected by someone else .The
secondary data was collected from the office account records and annual report of the company.
Secondary data sources for this study are:

Websites of HDFC and other financial institutions


Pamphlets/Brochures/Magazines
Annual report
Newspaper/ Articles
Mangers of different banks deal in housing loans.

PRIMARY DATA
Primary data is collected from different banks of Lucknow (shown above as Major Players)
regarding the comparative analysis of housing loan schemes offered by different financial
institutions.

60

CHAPTER 7

DATA ANALYSIS AND FINDINGS


1) Would you choose a Nationalized/Private bank to get a home a loan?
61

a) Nationalized
b) Private

Sales

Nationalized
46

Private

54

Interpretation: As we can see that the respondents are very aware and only 46% of the
respondents would choose nationalized banks for housing loans and the rest prefer private
banks.

2) Are you a account holder of HDFC bank?


a) Yes
b) No

62

percentage

25

Yes
No

75

Interpretation: As we can see from the above pie chart that the about 75% of the people
who entered the office were regular customer of HDFC bank the rest said that they are
here for the inquiry purpose and also would like to join the organization.

3) Are you satisfied with the policies of HDFC bank?


a) Yes
b) No

63

percentage

24

Yes
No

76

Interpretation: 76% of the respondents say that they are summarized with the policies of
the bank, rest said that they are not at all provided with the facts and happening of the
bank.

4) Have you ever purchased a loan?


a) Yes
b) No

64

Percentage

Yes
40

No

60

Interpretation: As we can see that about 40% of the respondents are already loaners of the
bank and the rest have not taken any kind of loan and the rest are not loan benefeciaries
from the bank.

5) Are you interested in applying for a Housing loan?


a) Yes
b) No

65

percentage

22

YES
No

78

Interpretation: 22% respondents that ive talked to, say that they are interested in taking
housing loans from the bank and the rest said that they are not currently in the need of the
loaning process.

6) Does HDFC provide better loaning services than other private banks?
a) Yes
b) No

66

percentage

Yes

32

No

68

Interpretation: About 68% of the respondents say that they are satisfied with the loaning
services of the HDFC rather than other banks

7) Does HDFC tells you or advertise about the loaning schemes currently based on
present going on policies?
a) Yes
b) No

67

Percentage

15
Yes
No

85

Interpretation: 85% of the respondents say that the bank do advertise about the current
schemes and facilities provided by the bank the rest said that they are not at all aware
about the advertisement happenings of thr schemes by the bank.

8) Are you satisfied with the duration taken by your bank to sanction home loan?
a) Yes

68

b) No

Percentage

6
Yes
No

94

69

Interpretation: About 94% of the respondents say that they are satisfied with the time
duration taken by the bank to sanction the amount for home loan i.e. about 7 days are
required for disbursement of the money and 3 days to get the money in hand.

9) Do you think that the processing fees charged by HDFC are high?
a) Yes
b) No

Percentage

30

Yes
No

70

70

Interpretation: 70% of the respondents feel that the processing fee charged by the bank is
too high in comparison with other banks and the rest say that the fees charged is sufficient
and legitimate according to the current bank policies and norms.

10) What do you think about the paper formalities people have to go through?
a) Justified
b) Too much

percentage

Yes
40

No
60

Interpretation: 60% of the respondents feel that the paper work involved in the processing
of the loan is justified and rest feel that its way too much and the other40% said that the
paper work is subsequently enough for the loan provided by the bank.
71

CHAPTER 7(A)
COMPARATIVE
ANALYSIS
BUSINESS PROFILE(for self employed people)

72

BANKS

STATE BANK OF

PNB BANK

AXIS

ICICI BANK

1. SALES DEED

ITR &

ALL

ALL SAME

2. MUTATION

BALANCE

SAME

3. LEGAL SEARCH

SHEET &P/L

REPORT(BANK

(LAST 2

ADVOCATE)

YEARS)

4. DESIGN &

&

ESTIMATE

OTHERS

(ARCHITECT) 5.

SAME

INDIA
DOCUMENTS

VALUATION
REPORT
6. ITR (LAST 3
YEARS)
7.BALANCE SHEET
& P/L (LAST 3
YEARS)
8. BANK
STATEMENT
(CURRENT &
SAVINGS, 6
MONTHS)
73

9. BUSINESS
PROFILE
10. ID PROOF
11. RESIDENCE
PROOF
12. PHOTOS
13. PROPERTY
PAPERS

RATE OF

UPTO 30 LAC

UPTO 30 LAC

UPTO 5

UPTO 30

INTEREST

8.75%

8.75%

YEARS

LACS

9%

1st YEAR

9%

5 10

8.25%

> 50 LACS

YEARS

2nd YEAR

9.25%

9.25%

9%

10-15

3rd YEAR

YEARS

9%

30- 50

LACS

9%
> 50 LACS
9.25%

30- 50

LACS

9.5%
15- 25

MORE

YEARS

THAN 30

9.5%

LACS
74

1st YEAR
8.25%
2nd YEAR
9.25%
3rd YEAR
9.25
PROCESSING

0.5% OF LOAN

1% OF LOAN

0.5% OF

0.5% OF

FEES

TAKEN

TAKEN (.5%

LOAN

LOAN TAKEN

NEGOTIABLE

TAKEN +

( IF LOAN

FOR GOVT

1500

ALREADY

EMPLOYEES)

LAWYERS

EXIST THEN

FEES (NOT

NEGOTIABLE

NEGOTIA

.25%)

BLE)
REPAYMENT

A. MAX 60% OF

BELOW 55

FOR

MAX 20

TERMS

NET INCOME

YEARS -MAX

FLAT/PLO

YEARS OR 60

B.BELOW 55

20 YEARS

T MAX

YEARS OF

YEARS -MAX 20

REPAYMENT

YEARS -

AGE

YEARS

PERIOD OR

20 YEARS

REPAYMENT

65 YEARS OF

CONSTRU

PERIOD OR 65

AGE

CTION
75

YEARS

MAX
YEARS 10 YEARS

ELIGIBILITY

85% of the cost of

85% of the cost

GROSS

85% of the cost

OF LOAN

property OR 4 times

of property

INCOME -

of property OR

AMOUNT

the amount of income

( below 30

4 TIMES

100% of the

(Avg of 3 years'

lakhs) OR 80%

MAX NET

amount of

income)

of the cost of

INCOME -

registry.

property (above

5 TIMES

30 lakhs)

&

MAX

AMOUNT 50 LACS
& FOR ( 7
METROS)100 LACS
OWN SOURCE NIL

NIL ( AFTER 6

90%

MONTHS)

PREPAYMEN
T ANYTIME

REFINANCE

2%

2%

STARTING
FROM THE
NEXT
76

MONTH OF
THE LOAN.
12 EMI TO
RUN AFTER
THAT.
INSURANCE

YES (OPTIONAL)

OF THE

YES

NO

(OPTIONAL)

YES
(OPTIONAL)

PROPERTY
AREAS OF

Any area inside or

Any area inside

NOT

Any area inside

FUNDING

outside tricity the

or outside

OUTSIDE

or outside

condition being it

tricity the

THE

tricity the

should not have been

condition being

TRICITY

condition being

given on GPA or

it should not

it should not

through Share

have been given

have been

transfer

on GPA or

given on GPA

through Share

or through

transfer

Share transfer

GURRANTOR

Guarantor is

NOT

DEPENDS

NOT

required(one who is

REQUIRED

UPON

REQUIRED

an Income Tax

CASE

Assessee and he/she


77

has to have an
account in State bank
of india)
ADDITIONAL
SECURITY

N/A

DEPENDS

DEPENDS

UPON CASE

UPON

N/A

CASE

78

BUSINESS
PROFILE(for self
employed people)
BANKS

UBI BANK

BANK OF INDIA

HDFC Ltd.

DOCUMENTS

ALL SAME

1.PHOTOGRAPHS

1.BALANCE SHEET

2.IDENYITY PROOF

ITR (LAST THREE Y

3.LOCAL ADDRESS PROOF

2. BUSINESS PROFI

4.BANK STATEMENT (LAST

3. COPIES OF INDIV

6 MONTHS)

CHALLANS FOR TH

5.ITR (LAST 3 YEARS)

THREE YEARS.

6.BALANCE SHEET & P/L

4. COPY OF ADVAN

(LAST 3 YEARS)

CHALLAN (IF ANY)

7.PROOF OF WORTH

5.BANK STATEMEN

8.SALE AGRREMENT

MONTHS)

9.COPY OF APPROVED MAP.


10ESTIMATION OF
CONSTRUCTION.
11. COPY OF TITLE DEED &
PREVIOUS TITLE DEED
79

RATE OF INTEREST

UPTO 30 LACS - 8.75%


ABOVE 30 LACS
9.25%

PROCESSING FEES

0.5% OF LOAN TAKEN

.55% OF THE LOAN

1% OF LOAN AMOU

AMOUNT
REPAYMENT TERMS

MONTHLY EMI

15 YEARS - 1029 PER LACS

FOR 25 YEARS - 822

10 YEARS - 1267 PER LACS

MAX TO 20 YEARS

FOR 20 YEARS - 884


FOR 15 YEARS - 999
FOR 10 YEARS 1253
ELIGIBILITY OF

85% OF THE COST OF

75% OF THE COST OF

A. IIR (INCOME INS

LOAN AMOUNT

PROPERTY OR 55% OF

PROPERTY OR 4 TIMES

RATIO)

THE NET INCOME

LAST THREE YEARS

= EMI/GROSS INCO

AVERAGE ANNUAL

MAX 40%, IN CASE

INCOME

REDUCE
B. FOIR

= ALL OBLIGATION
INCOME
OWN SOURCE

80

,M

REFINANCE

NIL

NIL

INSURANCE OF THE

NIL

0.65%

YES (OPTIONAL)

YES (OPTIONAL)

REQUIRED FOR BUILDING

APPROVED PROJEC

NOT FOR LAND

FLATS TRANSFERA

PROPERTY
AREAS OF FUNDING

& ALSO FUNDED W

ADDITIONAL SECU

TIMES THE GPA PR


GURRANTOR

Any area inside or

Any area inside or outside

outside tricity the

tricity the condition being it

condition being it should

should not have been given on

not have been given on

GPA

DEPENDS UPON CA

GPA or through Share


transfer
ADDITIONAL
SECURITY

NOT REQUIRED

LOCAL GURRANTOR IN

DEPENDS UPON CA

CAES OF OUTSIDE TRICITY,


MIGHT REQUIRE KEEPING
THE PROPERTY INTO
CONSIDERATION

81

COMPARATIVE ANALYSIS OF VARIOUS BANKS FOR HOME LOANS (for employed people)

Maximum loan amount

STANDARD CHART.

BANK OF INDIA.

HDF

75% of the cost of the

75% of the cost of Property or

85%

property

four times the avg income of

prop

last three years


Rate of interest: ( FLOATING )
below 30 lakhs

8.5% floating

9.25%(for 10 years n above)

till 3

appl

rece

lock

dual

2011

Mar
30 lakhs - 50 lakhs

9% ( for below 10 years)

3rd

Floa

more than 50 lakhs

4.75

hous

30 la

30 -

abov
82

9.25

Plot

lakh

50 la

abov

9.75

follo

give

pers

loan

( loa

prop

top u

10.2

educ

upto

9.75

lakh

50 la
Processing charges

0.55%

1%

amo

83

Pre-payment charges:

51,229.20

fixe

amo
own source

Nil

Refinance

0.65%

repa

25%

bala
Broken Interest Charges

adju

the a

repa

25%

bala

with

the d

disb
Additional security

in case of GPA

not required

in ca

Insurance of the property

required for building

required for building not for

opti

land
Area of funding

anywhere except GPA

any

proj

appr

MC

is al
84

with

secu

time

the G
Guarantor

depends on case to case

local guarantor in case of

depe

outside tricity. Might require a

case

guarantor in tricity keeping


property into consideration.
Resale of the property
Additional documents

sale agreement, copy of the title

area

deed and previous title deeds,

by M

copy of the approved map duly


signed, estimation of the
construction/ renovation cost,
any other statutory permission
as required by the local
authority.
DOCUMENTS REQUIRED:
(1)Income tax return with computation

85

(years)
(2)Balance sheet and Income statement

(3) Six months bank statement

(4) Residence proof

(5) Pan card

(6)Landline bill original

(7) Business Profile

not required

not required

(8) Property paper

(9) Passport size photograph

(applicant + guarantor)

(10) R C Photocopies

not required

not required

not r

(years)

COMPARATIVE
ANALYSIS OF
VARIOUS BANKS
FOR HOME LOANS
86

(for employed
people)

STATE BANK

AXIS

IDBI BANK

ICICI

OF INDIA

BANK

Maximum loan

85% of the

85% of the

85% of the cost of

85% of the

amount

cost of

cost of

property ( below

cost of

property OR 4

property

30 lakhs) OR 80%

property OR

times the

of the cost of

100% of the

amount of

property (above 30

amount of

income (Avg

lakhs)

registry.

8.75%

8.25% for

BANK

of 3 years'
income)
Rate of interest:
( FLOATING )
below 30 lakhs

8.75%

8.75%

first year;
9% for
second year;

87

9.25%
onwards
30 lakhs - 50 lakhs

9%

9%

9%

8.25% for
first year;
9% for
second year;
9.25%
onwards

more than 50 lakhs

9.25%

9.25%

9.25%

8.25% for
first year;
9% for
second year;
9.25%
onwards

Processing charges

0.50%

0.50%

1% (negotiable)

0.5% ;

(.50% for govt

0.25%( if
loan already
existing)

Pre-payment charges:

90%
prepayment
88

anytime
starting from
the next
month of the
loan. 12
EMIs to run
after that.
own source

Nil

nil

nil (after 6 months)

Refinance

2%

nil

2%

Broken Interest

Charges
Additional security

not required

not required depends upon the

not required

case
Insurance of the

Yes

yes

optional

not required

property

89

Area of funding

Any area
inside or
outside tricity
the condition
being it should
not have been
given on GPA
or through
Share transfer

Guarantor

Guarantor is

Not

yes in case of

required(one

required

business,no in case

who is an

not required

of salaried

Income Tax
Assessee and
he/she has to
have an
account in
State bank of
india)
Resale of the property

Allowed

allowed

allowed with

allowed

security
90

Additional documents

Registered

Not

depends upon the

Map and

Sale deed,

required

case

Area to be

Mutation copy,

approved by

map and

the MC

estimate
approved by
the authority

DOCUMENTS
REQUIRED:
(1)Income tax return

with computation
(years)
(2)Balance sheet and
Income statement
(years)
(3) Six months bank
statement

91

(4) Residence proof

(5) Pan card

(6)Local Address

not required

not required not required

(7) Business Profile

not required

(8) Property paper

(9) Passport size

Proof

photograph

CONCLUSION
I have studied the attached Balance Sheet of HOUSING DEVELOPMENT FINANCE
CORPORATION LIMITED (the Corporation) as at March 31, 2015,

92

The Profit and Loss Account and the Cash Flow Statement of the Corporation for the year ended
on that date, both annexed thereto & have made an interpretation of the company via ratio
analysis.
I have come to the conclusion that the company is on the high level of success. It is growing day
by day. Its long term as well as short term stability is solid. It is capable of generating more &
more returns in coming future. After analyzing, I have no doubt that if in coming future any
contingent liability raises before company, it is able to face the challenge. Moreover the investors
& creditors (short & Long Term) both are satisfied by the company because it is declaring high
profits & returns & repaying creditors in time.
So, the companys future is Bright.

CHAPTER 8
93

LIMITATION

LIMITATIONS
Every study conducted may have certain shortcomings and unfortunately mine is also a similar
case. A few errors have crept in despite mine best efforts to avoid them but it is expected that still
mine study and findings are very much relevant.

An error may have been due to the samples taken not conforming to the actual

population; this is because the sample was a convenience sample.


Certain questions which are not properly responded by the Respondents.
Personal bias or personal error of the interviewer might also have crept in, some cases,
while interpreting the respondents.
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There are several customers who dont show proper interest in filling the questioner as
they feel that they wont get any benefit after filling the questioners and its just a waste
of time for them.

COMMON PROBLEMS FACED BY HDFC HOME LOAN CUSTOMERS:


Rejection at the first stage due to incompatibility between the borrowers qualifications
and lenders requirements. It could be the age criteria, income criteria, improper
documents, the institution not being able to verify the customers details properly etc.
With every application form for home loans, HDFC require about 0.25% to 1% of the
loan amount to be submitted as the processing fees. The processing fees are generally
non-refundable. In simple words this means that for whatever reasons, if the institution
finds that customer doesnt deserve the home loan this fee wont be returned.
Another limitation is that desired loan is usually not sanctioned. The loan amount
sanctioned is mostly based on repayment capacity of the borrower. The monthly income,
financial history or other unpaid loans with the borrower, past payment record, credit card
usage history, if any bounced cheque, average balance with the banks, total years in
employment etc. . These factors all clubbed together help in the institution to decide
whether it will be able to recover its money satisfactorily or not.
The interest rate dilemma
Another major limitation is Difference in property valuation. The company has its own
experts for legal, technical and financial appraisal of the property in question. It evaluates
the property on its established parameters and assigns a value to it .This value can be
significantly lower than the price the customer quoted for the property. This can cause a
significant gap between what is needed and what the company is willing to lend.

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Another is the Title deeds and NOC Documentation Problem. The Title deeds and NOC
Documents have to be furnished in the banks format. Borrowers who dont provide
them in proper format, will ruin the entire exercise and wont get any loan.

SUGGESTION AND RECOMMENDATION


All one need is the courage to innovate, the skill to understand clientele and the desire to give
them the best .Likewise following are some of the suggestions which would help HDFC in
improvising their working styles and performance.

Most of the customers face problems regarding the rate of interest. HDFC must inform its
customers about the change in ROI, It automatically changes but there is decrease in rate of

interest , it doesnt change automatically.


Any change in the policies must be intimated to all the customers .HDFC should provide

proper information to its customers.


There is lot of formalities in the loan disbursement process .Too much documentation is done
. Customer is no aware of all the formalities. Therefore paperwork should be more friendly

and clear .
Customers should be given proper information about EMI. They are generally not told how

their EMI are calculated they should know EMI is calculated and of what amount.
After sale service is an issue of concern. Customers facing problems are not attended on
time. Employees are generally cooperative only when the loan is sanctioned and disbursed.
Therefore after sale service should be improved up to the satisfaction level of the customer.

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Website of HDFC should give more options and features to customers so that they get

maximum information sitting at home


Employees of HDFC should be more prompt towards customers grievances and problems
HDFC should provide personalized services to customers.
Comparative pricing in terms of lower interest rates and front end changes should be

adopted.
Company should enter into tie ups with reputed builders and development authorities.
HDFC should increase their reach by penetrating into rural and semi urban areas .They

should also capitalize on present customer base by generating referrals


Aggressive marketing and great publicity through newspapers, hoarding, websites and other
medias should be done.

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BIBLIOGRAPHY

www.hdfc.com
www.ansalapi.com
www.moneycontrol.com
www.hdfcbank.com
www.hdfcinsurance.com
www.hdfcfund.com
www.hdfcergo.com
www.hdfcrealty.com
www.credila.com

ANNEXURE
1)
a)
b)
c)
d)
e)
f)

General Information:
NAME: .
AGE: .
SEX: M/F
OCCUPATION: ..
NAME OF HOUSING FINANCE BANK: ..
AMOUNT OD HOUSING LOAN: ..

1) Would you choose a Nationalized/Private bank to get a home a loan?


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a) Yes
b) No
2) Are you a account holder of HDFC bank?
a) Yes
b) No
3) Are you summarized with the policies of HDFC bank?
a) Yes
b) No

4) Have you ever purchased a loan?


a) Yes
b) No

5) Are you interested in applying for a Housing loan?


a) Yes
b) No

6) Does HDFC provide better loaning services than other private banks?
a) Yes
b) No

7) Does HDFC tells you or advertise about the loaning schemes currently based on
present going on policies?
a) Yes
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b) No

8) Are you satisfied with the duration taken by your bank to sanction home loan?
a) Yes
b) No

9) Do you think that the processing fees charged by HDFC are high?
a) Yes
b) No

10) What do you think about the paper formalities people have to go through?
a) Justified
b) Too much

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