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VINAYAKA MISSION UNIVERSITY SELAM

A
Project Study Report On Training Undertaken at

BUSINESS OF THROUGH OFF MARKETING CHANNELS

Titled PERSONAL LOAN

AND

AUTO

LOANS

Submitted in partial fulfillment for the Award of degree of


Master of Business Administration (20011-2012)

PREFACE
This project study has been conducted in the lieu of requirement laid down by Vinayaka mission University, salem, 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 nagpur. The topic chosen for study is Business of personal loans through off Marketing Channels provided By HDFC. The study was conducted at the Nagpur branch by analyzing the loan facility provided by HDFC and gathering information from Regional Manager and from market surveys. The duration of training was 60 days, during which I tried to understand the loan process of HDFC Bank, Nagpur 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 loan facility provided by HDFC Bank.

CONTENT
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 INTRODUCTION OF BANK OVERVIEW AND PROFILE OF HDFC SERVICE PROVIDEC TYPE OF LOAN OBJECT OF STUDY LOAN PROVIDED BY HDFC PERSONAL LOAN,AUTO LOAN (OVERVIEW) FEATURES AND BENEFITS PRODUCT OFFRING APPLICATION PROCESS DOCUMENTATION REQUARE CONTECT POINT VERIFICATION OFF MARKETING CHANNEL ANALYSIS OF SURVEY FEEDBACK SWOT SUGGESTIONS BIBLOGRAPHY

INTRODUCTION OF BANK Banking is a base of todays 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 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 cheq, draft and otherwise. Kenly-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

Over View & Profile of HDFC Bank PROMOTOR HDFC is Indias 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 Banks 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 banks risk appetite. The bank is committed to maintain the highest level of ethical standards, professional integrity, corporate governance and regulatory compliance. HDFC Banks 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 banks equity and about 17.6% of the equity is held by the ADS Depository (in respect) of the banks American Depository Shares (ADS) Issue. Roughly 28% of the equity is held by the Foreign 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 banks 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 Banks 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 Banks 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 banks Chairman in July 2011. 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 Citibanks operations in Malaysia. The Banks 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 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 banks 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 Banks 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 banks 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 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 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 banks 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 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 dont 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 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.

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.

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

Personal loan (over view)

Eligibility Criteria for HDFC Bank Personal Loan


Age of Applicant No. of years in employment Current Experience Net Monthly Income Min-21 years ; Max-60 years. 2 years & above 1 year & above

Rs. 15,000/- & above (cat-A companies) Rs. 20,000/- & above (non-lis companies)

mount offered by HDFC Bank


Funding Funding Rs. 50,000/Rs. 15,00,000/-

enure offered by HDFC Bank


Tenure Tenure 12 months 60 months

ound Time of HDFC Bank Personal Loan


Rs. 75,000 Rs. 75,000 working days (48 hours). 7 working days

ssing Fee of HDFC Bank Personal Loan


2% of loan amount 2.5% of loan amount Salary account holder

c Account holder

ment Charges of HDFC Bank Personal Loan


Payment Charges 4% of outstanding principal (Can be foreclosed after 6 months only)

Salary available for making EMIs


Up to Rs. 25,000 p.m 35% of salary is considered

Bet Rs. 25,000 to Rs. 50,000 p.m. Above Rs. 50,000 p.m

40% of salary is considered 45% - 50% of salary is considered

Documents Required for HDFC Bank Personal Loan


Identity Proof Age Proof Passport/ driving license/PAN card/ Photo credit card (with embossed Signature and last two months statement)/ bankers sign verification PAN Card/ Passport/ Driving Licence/ School leaving certificate/ Voters card/ BirthCertificate/ LIC policy (only for age Proof). Passport/ Telephone bill (BSNL/MTNL)/ Electricity bill/ Title deed of property/Rental agreement/ Driving license/ Election ID card/ Photo-credit card (with last two month statements) Latest salary slip/current dated salary Certificate with latest form 16 Form 16/relieving letter/appointment Letter (for last two months) Bank statements of latest 2 months/ 3 months bank passbook

Address Proof Income Proof Job Continuity Proof Banking History

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.

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.

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. 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-Employed Individual Partnership Firm Private/Public Ltd. Co. Application form Application Form Application Form Application Form Photograph Photograph Photograph of signing partner Guarantors 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 / company ID limited company or One proof of office address (Utility bill / lease deed / excise or sales tax receipt / shops and Establishment Act Registration) 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 deviation 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 deviation Banking 6 months banking with 6 months L1- For HDFC Bank a/c AQB of 1.5 time of the EMI banking with AQB of 2 times of the EMI with vintage > 3 months AQB of 1 time and 1.5 time respectively LTV 75% for 36 month 65% for 37 to 60 mts 70% for 36 month 60% 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 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 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 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 use but as per CPV vehicle for commercial use L3 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 Required Waived Required salaried with at least one salary

credit with the company name 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. 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. 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 Salaried- 2 yrs in current job Not applicable If working for Landline / WLL at residence is required or post paid mobile in the name of applicant 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 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 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 / partner / director Salaried Big corporates 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 CatA/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 Landline mandatory at office & residence Mobile phone of applicant mandatory 5 yrs in business 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 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 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. 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 25-36 months +10% +5% No Deviation >36months +15% +10% Companies, Firms, HUFs 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 10 % higher than the normal LTV with Repayment satisfying the L3 up to 5 % higher 30 Auto Loans repayment conditions (earlier Loan Amt to be at least 50% of proposed loan amt) 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. Others- With income (for 800 & Omni)

Criteria Credit norms Deviation Eligible borrower segment Salaried, self employed individuals age > 30 yrs, Sole proprietorships age > 30 yrs No Deviation Category For Maruti 800 and omni Min Income Salaried 1.5 Others 1.0 Banking 3 months banking with min. AQB of 1 times of EMI LTV +5% on repayment of 50% of loan amt. OR Banking with AQB > 1.5 time EMI Others- With income below norms Criteria Credit norms Deviation Eligible borrower segment All Eligible borrowers as defined under common criteria No Deviation Income proof Income proof required as defined with the minimum income being For salaried 1 lac For other segment Rs. 0.60 lac No multipliers applicable No Deviation Vehicle segment Salaried 1.5 Others 1.0 No Deviation Banking 3 months banking with min. AQB of 1 times of EMI No Deviation LTV +80 % for 36 months 75% up to 60 months Max loan amount 4 No Deviation Others Contractibility and stability norms as defined above No Deviation

CONECT POINT VERIFICATION POLICY CPV Grid For all cases, the verifications to be done are: Residence verification Office/Business Verification Tele verification Residence Tele verification Office Directory check For cases with co-applicants, the verification is to be done as detailed above for the coapplicant also. CPV Wolvers For the cases meeting the following norms, the verifications can be waived: Residence CPV Business CPV TVR Internal customer F4 preapproved / prequalified / preferred/ imperia Waived Waived Required Internal liability customer salaried with at least one salary Required Waived Required credit with the company name Internal liability customer others Min Six months vintage Waived Required Required Internal asset customer Waived Waived Required CIBIL Matches Waived Waived Required For liability customer: There should not be any instances of cheque book returned (or_ statement returned instance of address not confirmed.) 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 should be 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 loan of address residence/office in the application form should match one of the last two addresses in the CIBIL report. For all cases where CPV has been waived, and TVR is negative, both CPVs to be done &

the same would be treated as per the normal CPV policy. CPV Criteria The CPV would be considered positive only if (all conditions to be met) The address as given in the application form exists The applicant/co-applicant stay/work at the given address The applicant is normally contactable at the given contact address The standard of living is appropriate with the segment of the car The third party confirmations 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. Observation on Negative Area & HRP 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 agency should also provide information on the usage of the asset (personal or commercial) and if the assets for commercial use, the fleet size (no. of vehicles) of the operator should also be provided. In cases where the CPV is marked as negative basis failure on one of the above criteria, the deviation grid for the same would be as detailed below: 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 use but as per CPV vehicle for commercial use L3 Any other deviations L3 Within these broad guidelines, the CPV policy would be rolled out for each region and any changes to that would be authorized by the regional credit head. Any change to above parameters would require PRH approval. CONTANCT POINT VERIFICATION CPV requirement: Residence CPV Business CPV Telephone CPV Individual Self Employed Yes Yes Yes Individual salaried Yes Yes Yes Partnership Yes Yes Yes Private limited Yes Yes Yes Public limitedDeemed No Yes Yes Public Ltd co-listed No No Yes Cat A list of PL product 1. Telephone verification: PP numbers are not accepted. Post paid mobile are acceptable subject of landline/WLL at residence/office Applicant must have Landline/WLL at either residence (or) office to quality for a loan. 2. Residence CPVs: For private limited companies, residence CPV of the director being taken as guarantor would be required. In a public Limited co., residence CPV of a director is not required but when the director is taken as a guarantor the same will be required. For partnership, residence CPV of the authorized partner would be required 3. If the CPV has been done by a Credit Manager/CPA manager, then a CPV sheet needs to be duly filled by the concerned officer. Such a sheet can be taken in addition to the regular CPV but not in lieu of the same. The same would need to be reviewed.

4. Reference checks through TVR 5. In the case of salaried customers telephonic CPV at the office address has been made mandatory or HR confirmation mail marked to Credit / Ops in the originating mail. Since in the case of salaried business CPV cannot be conducted, such a telephonic CPV will ad act a good surrogate to determine the existence/continuity of the employment of the customer PL cat A list to be attached. OBJECTIVE The objective of CPV policy is to serve as a guide and reference point for Auto CPV agencies, CPV stands for CONTACT POINT VERIFICATION. Purpose CPV is a very critical tool and only physical touch point in the transaction to determine whether to lend to the applicant, based on certain sub criteria as mentioned below: From credit perspective Evaluate car capability Assess the standard of living of the applicant Job / business profile Residence stability Level of business activity Third party validation through Neighbor check Collect negative market information, if any, available Re-confirm certain details of loan application Collections Perspective: Contact ability of the customer Access and verification of the Asset/Car CPV agency is expected to deliver quality service while collecting information on the above. Service delivery parameters essentially cover the following aspects: Adherence to product and process guidelines: The following pages will detail various processes that are to be followed. The agency proprietor/ supervisor will be responsible for management of day to day activities including telecalling, field activities, data collation, data entry, report accuracy and general administration. Scope of policy: Physical verification at residence Physical verification at office CD ROM/BSNL Check at the given telephone nos . Tele verification at the given nos . CPV Guidelines Residence Verification Objective Positive criteria Negative criteria (Any one) Address confirmation Identify Address Reach physically OGL Does not Exist Not reachable / Difficult Slum area Suspicious case / stage managed

Does not reside / resident on a temporary basis Contact ability (Current & Future) Met applicant OR Met family Member OR Neighbor confirmed with details Under construction stays there Met servant Met watchman Entry not allowed in quarters details confirmed over intercom Permanent / parents/ in laws residence Family staysapplicant comes only No such person Not a residence Door locked- unable to confirm even from third party Guest house Shifted Relative address Contact address Under construction does not stay there PG Acc. / lodge Bachelor Accommodation Met a person who refuses to reveal identity on weekends

Residence stability norms Stability norms met else, Salaried with CAT A company Owned residence Confirmation of Application Positive Response to CPV Family member / Applicant says not applied Applicant not interested for other reasons Profile SOL Average & Above Profile mismatch Politically active area Slum area Community Dominated Area Reputation Positive Third party Check Active Politician Negative remarks from family members Met recovery Agency Executive of other Financial Institutions In neg. base of Agency Business Verification Objective Positive criteria Negative criteria (Any one) Address confirmation Identify Address Reach physically Different Name Board/ No Name Board, but applicant

met and TPC confirmation OGL Does not Exist Not reachable / Difficult Unable to Trace Contact ability (Current & Future) Met applicant OR Colleague confirmed with details Receptionist in Big / Busy office Confirms Resident Office Met Security (cms name reflects on ownership Name plate) Entry Not allowed even into reception Details confirmed In Night Shift only C&F agency premises Posted on Site / Location (except construction cos) Receptionist in small No such person Not a office Door locked Does not work here Transferred / Resigned Office dues not function regularly Dealer premises

Always on Field/tour firms confirms HO/Branch Address Confirmation of Application Positive Response to CPV Not interested due to repeated verification Colleague Refused to Provide Details Profile Profile mismatch to be flagged for poor SOL. segment A2 (segment B) No / Low Biz activity No office infrastructure Designation differs substantially No employees found Trader / Manufacturer No stocks Found Office Cum Residence with No clearly defined Biz space (exclusive CA, Doctors, Advocates) Office appearance poor Office Area < 150 sq. ft Shared Biz premises NTP Biz Wine shops etc. Reputation Colleague confirms app already owes money to lot of people Political flags/photos sighted Political contacts

Note: HRP/ NTS Profiles

Negative Area For above cases the CPV would not be flagged as negative but the report should carry it as BOLD qualitative comment. Residence Telephone Verification Objective Positive criteria Negative criteria (Any one) Address confirmation Phone call connected to the Number SDCA No (95,91 calls) Mobile / Will no RNR Does not Exist Perpetually Engaged STD Call PP No Service Temporarily Withdrawn Disconnected Number Changed Contact ability (Current & Future) Spoke to Applicant Family Member Spoke to servant Permanent / Parent / In Laws Residence Wrong No Not a Residence Unable to Confirm No such person Shifted Relative Address Guest House

Bachelor Accommodation PG Accommodation Person who refuses to reveal identity Confirmation of Application Positive Response to CPV Not interested due to repeated verification Family member / Applicant says not applied Applicant says not interested Family Member Refused to provide Details Details do no tally Reputation Family member saying dont Give

Indicates applicant is being followed up by collection agencies of other banks Residence Telephone Verification Objective Positive criteria Negative criteria (Any one) Address confirmation Phone call connected to the Number SDCA No (95,91 calls) Mobile / Will no RNR Does not Exist Perpetually Engaged STD Call PP No Shared No Service Temporarily Withdrawn Disconnected

Number Changed Contact ability (Current & Future) Spoke to Applicant OR Colleague Spoke to Receptionist OR Security OR a person who refuses to reveal Wrong No Not an office Unable to Confirm Required Extension / Dept to connect No such person Shifted Friends / Relatives No identity Permanent / parents / In Laws Residence Dealer No Confirmation of Application Positive Response to CPV Not interested due to repeated verification Applicant says not interested / Applied Details do not tally Colleague Refused to Provide Details Profile NTP Biz / Salaried Reputation Colleague says dont Give CD Rom Check mandatory and status to be updated in TVR Positive / Negative CD ROM / BSNL check

Name & Address matches Name matches Only address matches Name & address does not match Not found / other TELCOS Positive Negative (Positive if ownership proof provided of the same address) Positive Negative Neutral Only address matches required proof of relationship The status as per matrix be updated in TVR in LOS For negative flagged cases proper reasoning to be documented in CAM if overridden CPV Waiver Residence CPV Business CPV TVR Internal liability customer - salaried Waived Waived Required Internal liability customer - self employed Waived Required Required Internal asset customer salaried Waived Waived Required Internal asset customer self employed Waived Waived Required Internal customer asset and liability- firms & companies Waived Required Required CIBIL matches salaried Waived Required Required CIBIL matches self employed Waived Required Required CIBIL matches firms & companies Waived Required Required Conditions 1. For internal liability customer minimum account vintage should be 3 months and there should be minimum six transactions in last 3 months excluding interest and any other charges debited or credit in the account. There should not be any instances of cheque book returned (or) statement returned instance of address not confirmed. The address in the bank statement / Finware should match with the address in the application form

2. Internal asset customer following conditions should be met for CPV waivers. Account should be live at the time of new loan origination. The address in finnone should match with the address in the application form 3. For CIBIL Matches: The address in the CIBIL report should match with the application form The proof of the same should be in the file. Should not be a bad match Interpretation of CPV: Base don above criteria on each of the parameters over all status of the CPV report has to be marked positive/Neutral/Negative Positive: Address confirmed and reachable Customer to be Residing/Employed/Business exists at the given address and should not be figuring in the negative criteria as per the grid Third party confirmation of the customer details Residence/Business/Employment Negative: Customer and Address doesnt exists (or) does not live there Negative feedback on profile & reputation parameters in the grid Below are the minimum credit parameters which are required at the time of Login. A) Common Credit parameters Residence ownership proof required in the name of applicant or blood relative in resi cum office cases. In NRI and foreign national cases, resident Indian having owned residence in India must stand as co applicant. Net worth of Pvt. Ltd. Company/Ltd Company must be positive. (Subscribed share capital + reserves Amount not written standing in asset side of balance sheet.) B) Program wise Credit parameters 1. F4 Hockey program Pre approved and pre qualified Landline/WLL at office is compulsory required in addition to Landline/WLL/post paid mobile the name of applicant at residence. Firm/company should stand as co applicant if partner/director wants loan based on income of business entities and vice versa. Not to be funded to Trust and HUF, hence file not to be login. 2. Repayment Track program Minimum 12 months repayment track or track of at least 50% completed tenor whichever is less required. Loan should not have been completed before 18 months prior to the date of

application. A4 segment vehicles not eligible under repayment track program, hence no file to be logged in. Self employed individuals having residence in negative area, HRP 1 and HRP 2 not to be funded under the program, hence no file to be logged in. Only one vehicle can be funded under this program but can fund maximum 2 vehicles to CV customer. Minimum repayment of Rs. 1 Lacs for A1 and A2 segment car, Rs. 3 lacs for A3 segment car and Rs. 5 Lacs for MUV required at the time of login. Not to be funded to Trust and HUF, hence files not to be logged in. 3. Companies, Firms, HUFs and Trust Customer should have cash profit in the current year and earlier losses should not be more than the capital (subscribed share capital + Reserves and surplus). One of director/partner/karta/trustee should be co applicant. Co applicant not required for companies having turnover > 100 crores OR Profit > 1 Crore. Landline at office (8 digits) compulsory required along with Landline/Mobile/WLL at residence of partner/director/karta/trustee. HUF cannot be a partner in partnership firm and hence files not to be logged in. 4. Salaried-Big corporate Applicant should be employed with super CAT A/ CAT A/ CAT B/ CSA holder with HDFC bank with 6 consecutive salary credits are eligible. If applicant is not working at above companies but if blood relatives (parents, spouse or children) are employed with above companies and stands as co applicant then can be logged in with income of co applicant. 5. Premium cars Minimum annual income should be 7.5 lac for salaried and Rs 5 Lac for others Repayment of of proposed loan or salaried having credit card limit of 3 lac documentary proof should be there. Bank statement should be provided at the time of login.

6. Deep geography Vehicle segment under this category should be A1, A2, A3, A4 and MUV no other vehicle should be logged in. Land line and resident and office mandatory

Resident ownership proof mandatory Banking with 3 Months statement at the time of login 7. Taxi Segment Salaried employees file under this program should not be logged in. No of RC should be there as per the policy norms To calculate the DSCR and D/E ration financials are must for logged in the files. Repayments should be there. 8. NID (other than HRP/NTS) Only eligible models A1, A2 and A3 should come for logged in with cap on Max Loan amount and LTV should be adhere. 6 month bank statement should be provided at the time of logged in. 9. HRP1 And HRP Appl. Should come for eligible vehicle segment A1,A2,A3,A4 and MUV Repayment mandatory for HRP 2 Min age norms of 25 yrs for salaried and>30 yrs for self employed should adhere. 10.Self employed>30 yrs Repayment for A3 and MUV is mandatory No rented resi cum office should be logged in.

OFF MARKETING CHANNELS OFF MARKETING CHANNELS are basically involve into their primary business or profession like Chartered accountants, stock Brokers and as an extra source of income they work as the channel partners for different companies or financial institutes by selling their different products. E.g. Loan investment etc. to their own existing customer base. This leads to a two way benefit both to the channels as well as the companies they are associated to. For these channels it is an extra source of income for which they need to search customers as they are existing customers for the financial institutes. Resulting it leads to a low cost business as they need not to pay high commission to these channels and most importantly it gives a non delinquent customer base to these institutes. Identified Off-Marketing channels till date:1. KARVY 2. ANAND RATHI SECURITIES 3. HDFC LTD. 4. BAJAJ CAPITAL 5. CHARTERED ACCOUNTANTS CHARTERED ACCOUNTANTS Benefits cost efficient Business gained is at low cost as compared to marketing channels. Commission given to marketing channels is near about 4-5% whereas in the case of off-marketing channels it is about 2%. More clientage High profile clientage Good business

ANALYSIS OF SURVEY - UNIVERSE (MAHARASHTRA) 5089 - SAMPLE TAKEN (MAHARASHTRA) -294 - BIZ SOURCE (MAHARASHTRA) 88 MAY TGT V/S ACHIVEMENT OPEN Location Business volume Total DSA DDSA HBL CA MUMBAI 800 596 238.06 357.94 600 543.71 344.15 199.56 200 25.9 25.9 0 400 357.15 0 0 357.15 0 NASIK 100 86.18 34.94 19.1 32.14 0 AHMEDNAGAR 300 290.82 176.05 43.82 70.95 7.75 NAGPUR 300 293.12 199.78 67.44 25.9 4.8 AURANGABAD 225 185.67 131.54 0 54.13 13.77 PUNE 500 459.38 3852.21 19.87 57.3 16.31 VARDHA 525 531.54 305 119.25 107.29 8.1 AAKOLA 150 123.21 49.62 0 73.59 0 MAHARASHTRA 4100 3492.68 1887.25 826.98 778.45 50.73 JUNE TGT V/S ACHIVEMENT OPEN Location Business volume Total DSA DDSA HBL CA MUMBAI 600 513.05 258.89 254.16 600 538.1 348.19 189.91 65 0 0 27.96 285 339.2 339.2 AAKOLA 80 103.51 23.91 2 77.6 0 AURANGABAD 225 238.54 91.92 96.04 50.58 7.05 NASIK 250 317.71 152.48 117.64 47.59 1.8 VARDHA225 156.28 98.92 3.04 54.32 18.99 PUNE 400 360.31 251.77 33.81 74.73 8.25 NAGPUR 450 441.56 204.97 155.43 81.16 15 BHANDARA 120 103.34 41.45 0 61.89 7.23 3300 3111.6 1472.5 852.03 787.07 86.28

CONCLUSION As the result of the survey, a positive feedback was observed. The CAs are excited by the new avenues of the income. According to them it gave them an effortless extra source of income on one side and also helps them to strengthen their relationship with existing customers. The customers are also benefited with this venture as previously they had to deal with the dealers but now they can avail the products and services with the help of the type between the bank and the channel. Moreover this also gives an additional customer base to these channels as they get references from their existing customers who avail these services. CAs are happy to be a channel of the bank. They showed excitement and satisfaction towards the work process and the services of HDFC. In total to sum up it can be said that this new channel policy seems to be beneficial and fruitful for all the three parties i.e. company, channel and customers.

SWOT ANALYSIS STRENGTHS Low in cost Quality business High profile clients WEAKNESS CAs generally tend to be busy, so approaching them is difficult. Gaining attention towards the proposal becomes difficult OPPURTUNITY Anand Rathi securities Karvy HDFC ltd. Bajaj capital THREAT Delinquency control Collateral on records.

SUGGESTIONS Loans should be provided very easily. There should be less formality for taking loan. Terms and conditions should be easily understandable. Loan should be provided as soon as possible. Interest rate should be less as compare to other banks. The customers should be comfortable while taking loans as compared other banks.

BIBLIOGRAPHY By the help of Manuals HDFC Bank report 2011 and internet By the help of Other Sources By the Heads & the consultant of HDFC bank By Personal Surveys By the helps of Websites www.HDFCBank.com www.google.com