CHAPTER-1

Introduction of consumer behaviour

INTRODUCTION

Consumer Behavior
Note: The issues discussed below are covered in more detail at consumer behavior section of this site. Consumer behavior involves the psychological processes that consumers go through in recognizing needs, finding ways to solve these needs, making purchase decisions (e.g., whether or not to purchase a product and, if so, which brand and where), interpret information, make plans, and implement these plans (e.g., by engaging in comparison shopping or actually purchasing a product). Sources of influence on the consumer. The consumer faces numerous sources of influence.

Often, we take cultural influences for granted, but they are significant. An American will usually not bargain with a store owner. This, however, is a common practice in much of the World. Physical factors also influence our behavior. We are more likely to buy a soft drink when we are thirsty, for example, and food manufacturers have found that it is more effective to advertise their products on the radio in the late afternoon when people are getting hungry. A persons self-image will also tend to influence what he or she will buyan upwardly mobile manager may buy a flashy car to project an image of success. Social factors also influence what the consumers buyoften, consumers seek to imitate others whom they admire, and may buy the same brands. The social environment can include both the mainstream culture (e.g., Americans are more likely to have corn flakes or ham and eggs for breakfast than to have rice, which is preferred in 2

many Asian countries) and a subculture (e.g., rap music often appeals to a segment within the population that seeks to distinguish itself from the mainstream population). Thus, sneaker manufacturers are eager to have their products worn by admired athletes. Finally, consumer behavior is influenced by learningyou try a hamburger and learn that it satisfies your hunger and tastes good, and the next time you are hungry, you may consider another hamburger. Consumer Choice and Decision Making: Problem Recognition. One model of consumer decision making involves several steps. The first one is problem recognition you realize that something is not as it should be. Perhaps, for example, your car is getting more difficult to start and is not accelerating well. The second step is information searchwhat are some alternative ways of solving the problem? You might buy a new car, buy a used car, take your car in for repair, ride the bus, ride a taxi, or ride a skateboard to work. The third step involves evaluation of alternatives. A skateboard is inexpensive, but may be ill-suited for long distances and for rainy days. Finally, we have the purchase stage, and sometimes a post-purchase stage (e.g., you return a product to the store because you did not find it satisfactory). In reality, people may go back and forth between the stages. For example, a person may resume alternative identification during while evaluating already known alternatives. Consumer involvement will tend to vary dramatically depending on the type of product. In general, consumer involvement will be higher for products that are very expensive (e.g., a home, a car) or are highly significant in the consumers life in some other way (e.g., a word processing program or acne medication). It is important to consider the consumers motivation for buying products. To achieve this goal, we can use the Means-End chain, wherein we consider a logical progression of consequences of product use that eventually lead to desired end benefit. Thus, for example, a consumer may see that a car has a large engine, leading to fast acceleration, leading to a feeling of performance, leading to a feeling of power, which ultimately improves the consumers self-esteem. A handgun may aim bullets with precision, which enables the user to kill an intruder, which means that the intruder will not be able to harm the consumers family, which achieves the desired end-state of security. In advertising, it is important to portray the desired end-states. Focusing on the large motor will do less good than portraying a successful person driving the car.

Information search and decision making. Consumers engage in both internal and external information search. Internal search involves the consumer identifying alternatives from his or her memory. For certain low involvement products, it is very important that marketing programs achieve top of mind awareness. For example, few people will search the Yellow Pages for fast food restaurants; thus, the consumer must be able to retrieve ones restaurant from memory before it will be considered. For high involvement products, consumers are more likely to use an external search. Before buying a car, for example, the consumer may ask friends opinions, read reviews in Consumer Reports, consult several web sites, and visit several dealerships. Thus, firms that make products that are selected predominantly through external search must invest in having information available to the consumer in neede.g., through brochures, web sites, or news coverage.

A compensatory decision involves the consumer trading off good and bad attributes of a product. For example, a car may have a low price and good gas mileage but slow acceleration. If the price is sufficiently inexpensive and gas efficient, the consumer may 4

then select it over a car with better acceleration that costs more and uses more gas. Occasionally, a decision will involve a non-compensatory strategy. For example, a parent may reject all soft drinks that contain artificial sweeteners. Here, other good features such as taste and low calories cannot overcome this one non-negotiable attribute. The amount of effort a consumer puts into searching depends on a number of factors such as the market (how many competitors are there, and how great are differences between brands expected to be?), product characteristics (how important is this product? How complex is the product? How obvious are indications of quality?), consumer characteristics (how interested is a consumer, generally, in analyzing product characteristics and making the best possible deal?), and situational characteristics (as previously discussed). Two interesting issues in decisions are:

Variety seeking (where consumers seek to try new brands not because these brands are expected to be better in any way, but rather because the consumer wants a change of pace, and Impulse purchasesunplanned buys. This represents a somewhat fuzzy group. For example, a shopper may plan to buy vegetables but only decide in the store to actually buy broccoli and corn. Alternatively, a person may buy an item which is currently on sale, or one that he or she remembers that is needed only once inside the store.

A number of factors involve consumer choices. In some cases, consumers will be more motivated. For example, one may be more careful choosing a gift for an in-law than when buying the same thing for one self. Some consumers are also more motivated to comparison shop for the best prices, while others are more convenience oriented. Personality impacts decisions. Some like variety more than others, and some are more receptive to stimulation and excitement in trying new stores. Perception influences decisions. Some people, for example, can taste the difference between generic and name brand foods while many cannot. Selective perception occurs when a person is paying attention only to information of interest. For example, when looking for a new car, the consumer may pay more attention to car ads than when this is not in the horizon. Some consumers are put off by perceived risk. Thus, many marketers offer a money back guarantee. Consumers will tend to change their behavior through learning e.g., they will avoid restaurants they have found to be crowded and will settle on brands that best meet their tastes. Consumers differ in the values they hold (e.g., some people are more committed to recycling than others who will not want to go through the hassle). We will consider the issue of lifestyle under segmentation.

State Bank, the largest bank in India, offers attractive auto loans. State Bank Auto Loan has low interest rates, easy repayment options, and total transparency. Finance package includes vehicle registration charges, insurance, one-time road tax and accessories. And as State Bank branches are located even in remote areas, it is easy to apply. Loan can be availed for new or old car, jeep or Multi Utility Vehicles.

Features

Low interest rates Repayment period of up to 84 months No administrative charges Expenses for one-time road tax, registration fee, insurance premium and accessories included in finance

One need not pay any advance EMI Interest is levied on daily reducing balance method. When a customer pays one installment, the interest is automatically calculated on the reduced balance thereafter.

Eligibility

Anyone with net annual income of Rs One Lakh is eligible for auto loan of SBI. The individual must be between the age of 21-65 years of age. He must be a permanent employee of State / Central Government, Public Sector Undertaking, Private Company or a reputed establishment or a professional or self-employed individual who is an income tax assessed. People engaged in agriculture and allied activities can also avail SBI loan.

Loan amount

The upper limit for car loan amount is not fixed. The bank could sanction a maximum loan amount of 2.5 times the net annual income. Spouse's income could also be considered if the spouse becomes a co-borrower. The sanction amount includes finance for one-time road tax, registration and insurance. Loan amount for used car has the maximum limit of Rs 15 lakhs.

Documents needed

Applicants need to furnish residence proof, identity proof and income proof besides the copy of PAN card. SBI account holders need not produces proof regarding residence and identity.

Procedure of car loan

Once you have zeroed in on the car that you want to purchase, the next step is apply for car loan. There is a lot less paper work involved than a home loan sine the bank does not have to varify any asset as in the case of home loans. It takes about 3-6 days for you to get a car loan a lot less time than a home loan. Here is a step by step break up of the car loan application process:

Step-1: enquiry with a lender

The 1st step is to get in touch with a lender. You need to get in touch with as many lender as possible and get them to make loan offers for you. Then negotiate with them to get the best interest rate. Check if there are any especial offers. After you have got all the banks to make their offers to you, select your lenders based on the information you have in front of you.

Step-2: documents collection

After you finalize your lender, the lenders direct selling agent will wisit you and collect document supporting proof of income, residence proof, and identity. You may be required to produce copies of IT return, salary sleep,banks statement,passport, driving licence and other relevent document. These requirement vary from lender to lender.

Step-3: field investigation agency representive visit

After submiting the documents, a field investigator will visit you your home to double check the facts provided in the documents, such as your place of residence, tenure at work place, and so on. It is essential that you are present during this visit to clarify any query that the investigator might have. Otherwise, the investigator might not get all the facts clearly and could report that the facts you provided do not actually add up- thus forcing the lender to reject your loan application.

Step-4: loan approved

Once the lender is satisfied with the veracity of your document, the loan is approved. The lender then disburses the amount through cheques or demand drafts

Car loan to NRIs

1. Purpose

For construction, purchase/repair/renovation/alteration of a house or for purchase of a plot for the construction of a house for self occupation on return to India.

2. Persons Eligible
A. All Non Resident Indians holding Indian Passports with a regular monthly income of not less than Rs. 10000/b. Spouses and close relatives of Non-Residents, who are residents jointly with the nonresident Indian.

3. Amount of Loan
60 times the Net Monthly Income (NMI) / Average Monthly Income (AMI) for persons up to 45 years and 48 times for persons above 45 years of age. However, the repayment obligation is restricted to Maximum 60% of the NMI/AMI.

4. Margin

Upton Rs.30 lac - 20% Above Rs.30 lac and up to Rs.3 crore - 25%

5. Interest
Linked to our Prime Term Lending Rate and subject to change click on the link for present interest rates

10

6. Disbursement
a. Construction of new building. b. In three stages, 30%. 40% and 30% of the loan amount. The last installment will

be disbursed three or four weeks prior to the completion of the building.

c. Outright purchase 100% to the seller, after payment of the margin by the

applicant.
d. Purchase of plot and construction of the building. e. The loan component for purchase of the plot will be only 30 % of the total project

coat.

7. Repayment
180 months including the repayment holiday of a maximum of 18 months. Repayment will begin on completion of the house or 18 months from the disbursement of the first installment of the loan, whichever is earlier. Repayment can be made either through remittance from abroad or transfer from NRE/FCNR/NRO A/c or by resident relatives. Rental income if any received should go towards repayment of loan. Repayment can be from local sources after returning to India permanently. Premature closure of loan permitted subject to conditions/penalty

8. Security
Mortgage of property by deposit of title deeds.

11

9. Processing Charge
Limit upto Rs.25,000/Nil

Limits above Rs.25,000 to Rs. 2 lacs

0.55% of the loan amount (Max. Rs.500/-)

Limits above Rs.2 lacs

0.55% of the loan amount (Max.Rs.10,000/-)

10. Insurance
Insurance is to be arranged for the total cost of the building.

11. Papers to be submitted to Bank

In addition to the application form (in duplicate) two copies of the passport and two passport size photographs, a declaration-cum-Affidavit in the Bank's approved format, the following papers are to be submitted to the Bank.

11.1

Proof of Income

12

(a) In the case of salaried persons: i. Salary certificate issued by the employer and duly attested by an embassy official ii. iii. Average monthly remittance into NRE A/c. in case of others. Authorizations to deduct monthly installments from NRE/NRO A/c.

11.2 Documents to be submitted for construction/improvement of houses

i. A copy of the plan inclusive of site plan approved by the Corporation/Municipality /Development Authority /Panchayat as required. ii. A copy of the building permit issued by the Corporation/ Municipality/ Panchayat as required. In areas where building permit is not required a no Objection Certificate from the authority concerned. iii. Estimate approved by an official not below the rank of Asst.Engineer (Civil)/ Registered Architect / Chartered Egg. iv. v. vi. vii. Original and prior title deeds Latest tax receipts Possession certificate Encumbrance certificate from the Sub Registrar for the last 15 years.

13

1)

Purpose :

To finance purchase of new Cars or Jeeps

2)

Persons Eligible :

NRIs or spouse of NRIs who have regular Net Monthly Income (NMI) of not less than Rs 10000.

3)

Loan amount :

Up to 30 times the NMI for Cars and Jeeps (The Net Monthly Income of spouse (resident or nonresident) can also be included provided the spouse would also guarantee the loan. In the case of resident employed person, he/she should have permanent employment or be a self employed professional of good standing.) Max 12 lacs

4)

Security:

a) The vehicle should be hypothecated to the bank and the lien noted in the registration certificate book. b) Guarantee of spouse where her / his income is also taken into account for NMI and Loan amount. c) Equitable mortgage of property or third party guarantee of two persons each worth the loan amount.

5)

Margin :

a) 15 % of the cost of the vehicle b) Second hand car upto 2years old 25% of the cost c) Second hand car above 2 years upto 5 years old 40%of the cost

14

6) 7)

Interest : Repayment :

current interest rate

In 84 Equated Monthly Installments [EMI]

8)

Insurance:

Comprehensive insurance is compulsory for all vehicle loans at your cost with suitable bank clause.

9)

Processing Charges :

0.50% of the loan amount subject to a minimum of Rs.500/- and maximum of Rs.10000/-

10) Papers to be submitted :

a) Invoice in duplicate from dealer b) Application in duplicate c) Two passport size photographs d) Salary certificate of employed persons OR evidence of average remittance into bank (NRE) account for past 12 months e) Details of guarantors and property to be mortgaged, if any

15

CHAPTER-2 PROFILE OF STATE BANK

Overview History Competitors Strength & opportunities Different product

16

Overview

State bank of India is the largest and on e of the oldest commercial bank in India. In existence more than 200 years. The bank provides a full range of corporate, commercial and retail banking services in India. Indian central bank namely reserve bank of India is the major share holder of the bank with 59.7% stake. The bank is capitalized to the extent of Rs.647bill.with a public holding 40.3%. SBI has a largest branch and ATM network spread of cross every corner of India. The bank has a branch network of over 14000 branches apart from Indian network it also has a network of 73 overseas offices in 30 country in all time zone , correspondent relationship with 520 international banks in 123 country. In recent past SBI has acquired banks in Mauritius, Kenya, and Indonesia. The bank is listed on the Bombay stock exchange, national stock exchange, Chennai, Kolkata and Ahmadabad stock exchange.

SBI groups accounts for around 25% of the total business of the banking industry while it accents for 35% of the total foreign exchange in India. With this types of strong base SBI has displayed a continued performance in the last few years in scaling up it efficiency level.

MANAGEMENT

The bank has 14 directors on the board and is responsible for the management of the banks business. The board in addition to monitoring corporate also carries out function such as approving the business plan, reviewing &approving the annual budgets &borrowing limits.Mr.O.P.Bhatt is the chairman of the bank. The five year term of MR. Bhatt will expire in March 2011.prior to this appointment, Mr. Bhatt was Managing Director at state bank of Travancore. Mr. Bhatt has more than 30 year of experience in the in din banking industry & is seen as futurist leader in his approach towards technology & customer services.

17

Mr. Bhatt would be a key to SBIs future growth momentum. Mr. T.S Bhattacharya is the managing director of the bank & known as for his vast experience in the banking industry. Recently, the senior management of the bank has been broadened considerably. The position of CFO & the head of treasury have been segregated, & new heads for rural banking & for corporate development & new business banking have been appointed. The managements thrust on growth of the bank in term of network & size would also ensure encouraging prospects in time to come.

Shareholding & Liquidity (Till 30th Sep.2009)

Reserve Bank of India is the largest shareholder in the bank with 59.7% stake followed by

Overseas investors including GDRs with 19.78% stake as on September 06. Indian financial

Institutions held 12.3% while Indian public held just 8.2% of the stock. RBI is the monetary

Authority and having majority shareholding reflects conflict of interest. Now the government is

18

Rectifying the above error by transferring RBIs holding to itself. Post this, SBI will have a further

Headroom to dilute the GOIs stake from 59.7% to 51.0%, which will further improve its CAR

And Tier I ratio.

19

Key Areas of Operations

The business operations of SBI can be broadly classified into the key income generating areas such as National Banking, International Banking, Corporate Banking, & Treasury operations.

20

HISTORY

The origin of the state bank of India goes back to the first decade of the nineteenth century with the establishment of the Bank of Calcutta on 2june 1806.Three years later the bank received its charter and was re-designed as the Bank of Bengal (2January1809).A unique Institution, it was the first joint stock bank of British India sponsored by the Government of Bengal. The Bank of Bombay (15April1840) and the Bank of Madras (1July1843) followed the Bank of Bengal. These three banks remained at the apex of modern banking in India till their amalgamation as the Imperial bank of India on 27 January 1921.

Primarily Anglo-Indian creations, the three presidency banks came into existence either as a result of the compulsions of imperial finance or by the felt needs of local European

21

commerce and were not imposed from outside in an arbitrary manner to modernize India economy .their evolution was ,however ,shaped by ideas culled from similar development in Europe and England and was influenced by changes occurring in the structure of both the local trading environment and those in the relations of the Indian economy to the economy of Europe and the global economic frame work.

Group Photograph of Central Board (1921) Business

The three banks were governed by royal charters, which were revised from time to time. Each charter provided for a share capital, four-fifth of which were privately subscribed and

22

the rest owned by the provincial govt. the members of board of directors, which managed the affairs to each bank, were mostly proprietary directors representing the large European managing agency houses in India. The rest were govt. nominees, invariably civil servants, one of whom was elected as the president of the board.

The business of the banks was initially confined to discounting of bills of exchange or other negotiable private securities, keeping cash accounts and receiving deposits and issuing and circulating cash notes. Loans were restricted to rs. 1lakh and the period of Indian banking system in to the exciting field of national development.

23

Competitors and other player in the field

Top performing public sector banks

Andhra bank Allahabad bank Punjab national bank Dena bank Vijaya bank

24

Top performing private sector bank

HDFC bank ICICI bank AXIS bank Kotak Mahindra bank Centurion bank of Punjab

Top performing foreign bank

Standard chartered HSBC bank ABN AMRO bank American express

25

Strength & opportunities

The growth of SBI in the coming years is likely to be fueled by the following factor:

Continued effort to increase low cash deposit would ensure improvement in NIMs & hence earning.

Growing retail & SMEs thrust would lead to higher growth.

Strong economic growth would generate higher demand for funds pursuant to higher corporate demand for credit on account of capacity expansion..

Weakness/ Threats:
The risks that could ensue to SBI in time to come are as under:

SBI is currently operating at a lowest CAR. Insufficient capital may restrict the growth prospects of the bank going forward.

Stiff competition, especially in the retail segment, could impact retail growth of SBI and

26

hence slowdown in earnings growth.

Contribution of retail credit to total bank credit stood at 26%. Significant thrust on growing retail book poses higher credit risk to the bank.

Delay in technology up gradation could result in loss of market shares.

Management indicated a likely pension shortfall on account of AS-15 to be close to Rs50bn.

Slow down in domestic economy would pose a concern over credit off-take thereby

27

SBI DIFFERENT PRODUCT

Deposit

Loans

Cards

Different credit cards

Saving account

Home loans

Consumer cards

SBI international cards

Life plus senior citizens saving account Fixed deposit

Loan against property

Credit cards

SBI gold cards

Personal loans

Travel cards

SBI gold master cards

Security deposit Recurring deposit Tax-saver fixed deposit

Car loans Loan against security Two Wheeler

Debit cards Commercial card

Your city your cards Your city your cards

Corporate cards

Partnership card

28

Salary account

Preapproved Loan

Prepaid card

Advantages Woman saving account Rural saving account Peoples savings accounts freedom

Retail assets

Purchase card

SBI employee cards

Farmer finance

Distribution card

Business installment loans Flexi cash

Business cards

SBI advantages cards

merchant

29

CHAPTER-3 RESEARCH METHODOLOGY

30

RESEARCH METHODOLOGY

Research is a systematic gathering; recording and analysis of data collected by various parameters related to give project and accordingly prepared report base on which company can take correct decision.

Data Sources:

The source including primary data and secondary data.

Primary data:

Primary data consist of original information gather for the purpose. Primary data collected through questionnaire.

Secondary data:

Web site & company broacher.

31

Research Approach:

The primary data was collected through survey. For the survey personal interview technique was adopted. Survey was undertaken to find out the information needed for the study.

Sampling:
Sampling was done in order to cover the major car showrooms of Nagpur city such as Maruti (Kamptee road), Toyota (Kamptee road), Chevrolet (Kamptee road), Mahindra Kamptee road), Skoda (Amravati road), Hundai (Amravati road), Tata (V.C.A. stadium old), Honda (Khamla road), any many more to Explore the potential market.

RESEARCH INSTRUMENT:
The research instrument use for collecting a primary data was questionnaires Prepared.

OBJECTIVES:

First and foremost objective is to find out the reasons for using of advance product form STATE bank of India.

To find out the services that other bank given to their customer. To generates the leads through the survey. To sort out the prospective leads from the data I have collected through the survey.

32

To build the relationship with the customers and to follow of them, make sure that they are satisfied with the product.

To maintain good relationship with the corporate employees. To get more references from the customer and generate new leads by following a chain process.

To place SBI Advance Product ahead of the competitors. To find out the customer awareness on booming Advance Product market and to find out the using patterns of the people.

To make the customer aware of the benefit of the Product convince in to go for SBI Advance Product.

HYPOTHESIS:

33

State bank of India is the only bank which is providing the widest rang of products i.e. various type of loan schemes such as margin money scheme, advance EMIS schemes and deposit payment schemes etc. as compared to other financial institute.

State bank of India is offering the lowest interest rates in comparison to the banks providing CAR Loans.

With the appointment sales manager it has managed to approach the customer directly at their showroom and hence providing a better services to their customer which, only a few other institutions have managed to do.

Car loan are the best option you can go for to finance a new finance a new Car. State bank of India offers you the most convenient and practical Car loan plans to suit your needs. With so many attractive features in every type of Car loans we offer.

State bank of India Car loan insure that you get the best deal, in terms of interest rate and other facilities also, in the most convenient way. With our varied offering Car loan and Home finance, State bank of India give an opportunity to select the perfect Car loan as per our need.

ADVANTAGES OF SBI

Excellent service and lower costs. A quick survey of similar schemes available elsewhere and you will find that SBI Car Loans for new and old vehicles offer you:

34

Lowest interest rates Longer repayment period of upto 84 months. No hidden costs or administrative charges. Finance for one-time road tax, registration fee, insurance premium and accessories No advance EMIs. (Some Banks/companies ask you to pay one or more EMIs at the time of disbursement of loan, thereby effectively reducing your loan amount.)

Complete transparency: We levy interest on daily reducing balance method. When you pay one installment, the interest is automatically calculated on the reduced balance thereafter. When you pay interest on an annual reducing balance, as charged by many other companies/banks, the interest amount for the coming year is determined on the amount outstanding at the beginning of the year. You continue to pay interest even on the amounts you repay during the year.

Loan Amount
There is no upper limit for the amount of a car loan. A maximum loan amount of 2.5 times the net annual income can be sanctioned. If married, your spouse income could also be considered provided the spouse becomes a co-borrower in the loan. The loan amount includes finance for one-time road tax, registration and insurance! Loan amount for used car is subject to a maximum limit of Rs. 15 lacs.

35

36

MARKETING STRATEGY

1. PREAMBLE Scope: l(a)

FAIR LENDING PRACTICES CODE (FLPC for short) is a voluntary code adopted by our Bank, which aims to achieve synchronization of best practices while dealing with Customers in India. It aims to provide valuable inputs to Customers and facilitates effective interaction of customers with the Bank. Extent: l(b) FLPC would be applicable in the Bank from the date it is placed in the Bank's web site or is otherwise publicised through the media. FLPC contains 8 important declarations from us, the spirit of which pervades the entire FLPC provisions.

2. Important declarations: The Bank declares and undertakes

To provide in a professional manner, efficient, courteous, diligent and speedy

services in the matter of retail lending.

Not to discriminate on the basis of religion, caste, sex, descent or any of them. To be fair and honest in advertisement and marketing of Loan Products. To provide customers with accurate and timely disclosure of terms, costs, rights
and liabilities as regards loan transactions.

If sought, to provide such assistance or advice to customers in contracting loans. To attempt in good faith to resolve any disputes or differences with customers by
setting up complaint redressal cells within the organization.

37

 To comply with all the regulatory requirements in good faith. To spread general awareness about potential risks in contracting loans and
encourage customers to take independent financial advice and not act only on representations from banks.

3. FAIR PRACTICES: 3.1. Product Information:

(a) A prospective customer would be given all the necessary information adequately explaining the range of loan products available with the Bank to suit his / her needs. (b) On exercise of choice, the customer would be given the relevant information about the loan product of choice. (c) The Customer would be explained the processes involved till sanction and disbursement of loan and would be informed of timeframe within which all the processes will be completed ordinarily at our bank. (d) The Customer would be informed of the names and phone numbers of branches and the persons whom he can contact for the purpose of loan to suit his needs. (e) The Customer would be informed the procedure involved in servicing and closure of the loan taken.

3.2. Interest Rates 3.2.1. Interest Rates for different loan products would be made available through and in anyone or all of the following media, namely: (a) In the Bank's Web site (b) Over phone, if Tele Banking services are provided (c) Through prominent display in the branches and at other delivery points

38

(d) Through other media from time to time

3.2.2 Customers would be entitled to receive periodic updates on the interest rates applicable to their accounts.

3.2.3 On demand, Customers can have full details of method of application of interest

3.3 Revision in Interest Rates: (a) The Bank would notify immediately or as soon as possible any revision in the existing interest rates and ranked them available to the customers in the media listed in Para 3.2.1. (b) Interest Rate revisions to the existing customers would be intimated within 7 working days from the date of change through notifications in the Banks Website / media/ notice board at branches.

3.4. Default Interest/Penal Interest: (a) The Bank would notify clearly about the default interest/penal interest rates to the prospective customers.

3.5. Charges: (a) The Bank would notify details of all charges payable by the customers in relation to their loan account. (b) The Bank would make available for the benefit of prospective customers all the details relating to charges generally in respect of their retail products in the media specified in Para 3.2.1. (c) Any revision in charges would be notified in advance and would also be made available in the media as listed in Para 3.2.1.

39

3.6. Terms and Conditions for Lending:

(a) The Bank would ordinarily give an acknowledgement of receipt of loan request and if demanded by the customer, a copy of the application form duly acknowledged would also be given, as soon as the customer chooses to buy a product of or service of his choice. (b) Immediately after the decision to sanction the loan, the Bank would show draft of the documents that the customer is required to execute and would explain, if demanded by the customer, the relevant terms and conditions for sanction and disbursement of loan. (c) Loan Application forms, Draft documents or such other papers to be signed by a customer shall comprehensively contain all the terms and conditions relating to the product or service of his choice. (d) Reasons for rejection of loan applications would be conveyed to all barrowers irrespective of the size of the loan. (e) Before disbursement of loan and on immediate execution of the loan documents, the Bank shall deliver a copy of the documents to the customers.

3.7. Accounting Practices: (a) The Bank would provide regular statement of accounts, unless not found necessary by the customers. (b) The Bank would notify relevant due dates for application of agreed interest, penal interest, default interest, and charges if they are not mentioned in the Loan applications, documents or correspondence.

40

(c) The Bank would notify in advance any change in accounting practices which would affect the customer before implementation.

3.8. Information Secrecy (a) All personal information of the customer would be confidential and would not be disclosed to any third party unless agreed to by customer. The term 'Third party' excludes all Law enforcement agencies, Credit Information Bureaux, Reserve Bank of India, other banks/ financial and lending institutions. (b) Subject to above Para, customer information would be revealed only under the following circumstances;

If our Bank is compelled by law. If it is in the Public Interest to reveal the information. If the interest of the Bank require disclosure.

3.9. Financial Distress: a) The Bank would sympathetically reckon cases of customer's financial distress. b) Customers would be encouraged to inform about their financial distress as soon as possible. c) The Bank would adequately train the operational staff to give patient hearing to the Customers in financial distress and would try to render such help as may be

41

possible in their view.

3.10. Grievance Redressal a) The Bank would have in place a Grievance Redressal Cell/ Department/ Centre. b) The Bank would make available all details, namely;

Where a complaint can be made How a complaint should be made When to expect a reply Whom to approach for redressal of grievance etc.,
to the customers individually on demand and through the media listed in Para 3.2.1.

c) Response to a complaint whether positive or negative or requiring more time for redressal would generally be given within a maximum period of four weeks from the date of receipt of complaint, unless the nature of complaint is such that requires verification of voluminous facts and figures.

42

43

CHAPTER-4 DATA ANALYSIS & COLLECTION

44

Capital adequacy ratio

16 14 12 10 8 6 4 2 0 2006-2007 2007-2008 2008-2009 2008-2009 8.01 9.14 8.53 9.38 4.33 4.87 4.44 tire-2 tire-1

4.4

Highlights
FOR THE YEAR
Total Income (Rs. crores) Total Expenditure (Rs. crores) Net Profit (Rs. crores) Earnings per Share

2007-2008
57645

2008-2009
76497

% change
32.67

44538

58564

31.49

6729 126.62

9.121 143.77

35.56 13.54

45

(Rs.) (Basic) Return on Average Assets (%) Return on Equity (%) Profit per Employee (Rs. thousands) 1.01 1.04 2.97

17.82 372.57

15.73 473.77

(-) 11.73 27.16

46

March AT THE END OF Paid-up capital and reserve & surplus (Rs. Crores) Deposit (Rs. Crores) Advance (Rs. Crores) Number of domestic branches Number of foreign branches/offices Capital adequacy ratio (%) Net npa (%) 2008
49,033

March 2009
57,948

% change

18.18

5,73,404

7,42,073

38.08

4,16,768

5,42,503

30.17

10,186

11,448

12.39

84

92

9.52

12.64

14.25

12.74

1.78

1.76

(-) 1.12

47

Business per employee

60000

55600

50000

45800

40000

35700 2006-2007

30000

2007-2008 2008-2009

20000

10000

0 Series 1

48

Profit Per employee

49

Series 1
500 450 400 350 300 250 200 150 100 50 0 2006-2007 2007-2008 2008-2009 Series 1

50

Return on assets

Series 1
1.2 1 0.8 0.6 0.4 0.2 0 2006-2007 2007-2008 2008-2009 Series 1

51

Net nap ratio

52

Series 1
1.8 1.78 1.75 1.7 1.65 1.6 1.57 1.55 1.5 1.45 2006-2007 2007-2008 2008-2009 Series 1 1.76

53

Deposit & advance

800000 700000 600000 500000 400000 300000 200000 100000 0 2006-2007 2007-2008 435521 337336 537404 416758

742073

542503

deposits advances

2008-2009

During the year, India continued to remain the second fastest growing economy in the world, because of large domestic demand, especially from rural India, Govt. investments, a stable financial services sector, Fall in inflation and prompt coordinated policy action on multiple fronts. This is despite the fact that the scenario of global economy

54

during the year gone by was one of the most challenging. Its effects are not going to be completely wiped out even in the current year.

Its impact on India, however notwithstanding todays globalised world, has not been very severe, though it did somewhat affect industrial production, GDP growth and exports. On the macro-economic front, we believe that the worst is over. The Indian economy is showing signs of revival with growth reviving across sectors like cement, steel, auto, telecom, banking and FMCG. Further, demand from the rural sector which was the mainstay of the economy last year is expected to continue to propel growth in the current year. With a new, stable Government in place, our expectation for the GDP growth in 2009-10 is in excess of 7%. Even in this slowdown, both global and domestic, your Bank has turned in a brilliant performance with a splendid growth of Rs. 3,30,404 crores in total business, impressive rise in profits and containment of NPAs. At the same time, your Bank continued to be on the growth trajectory during FY-09 in respect of branch expansion with as many as 807 new branches being opened, a majority of which (481) were in rural And semi-urban areas. The Bank also increased its ATM network by An impressive 44% to 8581 by the end of FY-09. Another important milestone achieved by your Bank during the year was the extension Of coverage under the Core Banking Platform to cover all its 11448 Branches. This is one of the largest core banking networks in the world and growing, and is no small achievement. Another significant event during the year was acquisition of State Bank of Saurashtra, a wholly owned Associate of your Bank, by your Bank. You will be happy to note that your Bank showed an impressive growth of 35.55% in Net Profit from Rs.6, 729 crores in FY-08 to Rs. 9,121 crores in FY-09. Operating Profits too posted a smart growth of 36.68% to Rs. 17,915 crores in FY-09 on the back of a healthy increase of 22.63% in Net Interest income to Rs.20, 873 crores in FY-09, driven by growth in advances and increase in yields as also an increase of 45.96% to Rs.12,691 crores in other income.

Notwithstanding the economic slowdown evidenced in the FY-09, your Bank registered an impressive increase in interest income which rose by 30.31% as also a significant increase in core fee income which showed a growth of 28.7%. Even though operating expenses rose by 24.11%, attributable primarily to increase in staff costs on account of additional provisions for pension and wage revision and recruitment of additional staff during the year; cost to income

55

ratio was brought down significantly (2.41%) from 49.03% in FY-08 to 46.62% in FY-09. Despite pressure on interest spreads and intense competition, your Bank could still record a Net Interest margin (NIM) of 2.93% in FY-09. During the year 2008-09, your Bank saw excellent growth in all businesses/market segments in which it operates. A significant feature during the year was your Banks high growth in both Advances and Deposits which exceeded the industry average, leading to a significant increase in its market share.

Deposits of your Bank grew by 38.08% in 2008-09 against Other Scheduled Commercial Banks (OSCB) growth of 16.55%, leading to a spurt in its market share in deposits by 2.31% to 17.72% by March 2009. With continued focus on low cost CASA deposits which registered a growth of 23% during the year, your Banks market share in demand deposits also rose sharply by 3.67% to 17.53%. As a part of strategy, your Bank reduced its reliance on bulk deposits as a percentage of total deposits to 10.81% from 14.13% in FY-08. Similarly, the Banks advances portfolio witnessed a robust growth (30.17%) of Rs.1,25,735 crores. This growth of 30.17% in advances as against OSCB growth of 16.13% pushed up your Banks market share in advances by 0.83 % to 16.03% by the year end. The growth in advances was well rounded with every Segment (Large advances 47%, Mid Corporate advances 23%, SME advances 20%, Retail advances 18%, Agri. advances 19%, International advances 54%), contributing to the overall growth in advances. Retail lending continued to occupy centre stage with a growth in Education Loans (50%), Auto Loans (36%) and Housing Loans (21%) during the year. This also helped improve market share from 17.48% to 19.74% in respect of Home Loans and from 10% to 12% in respect of Auto Loans for new vehicles. To offer timely help to SMEs, which were reeling under the impact of slow down in the economy particularly exports, your Bank launched two new schemes SME CARE and SME HELP offering the affected SMEs, finance on liberalized terms at a concessional rate of interest of 8%.

In advances to the Agriculture segment, your Bank continued to be above the 18% benchmark stipulated by RBI for the second time consecutively. It also surpassed the targets set by the Govt. of India in respect of credit flow by way of fresh disbursements as also the number of new farmers financed. In pursuit of its desire to be the Banker to every Indian, your Bank has gone in for aggressive expansion in the number of Customer Service Points/BCs/BFs to 17,979which now cater to 52,782 previously un-banked villages, with plans to cover additional 50,000 unbanked villages in the current year. Your Bank is firm in its resolve to achieve total financial inclusion

56

through the use of the latest and best technology. As at the end of 2008-09, as many as 23.61 lakh Smart Cards, which work on biometric validation of the customers, had been issued. In the international arena too, your Bank, despite the global meltdown, achieved a significant growth of 17.7% (in USD terms) in credit to USD 17.07 billion and continued to focus on its core strategy of Capturing India related business in high potential countries. While two of the Banks subsidiaries in Mauritius were merged during the Year to create a new entity called SBI (Mauritius) Ltd., your Bank along with its subsidiaries and Joint Ventures abroad opened 9 new Offices, including full-fledged retail operations in Singapore, taking the total network of overseas offices to 92 spread over 32 countries. Amidst turmoil in global markets, your Banks foreign offices maintained a comfortable liquidity position and could raise US $ 686 million under Banks Medium Term Notes (MTNs) programme and bilateral loans.

Another noteworthy feature of your Banks performance during the year 2008-09 has been in the area of controlling NPAs. While Gross NPAs declined marginally to 2.84% in FY-09 from 3.04% in FY-08, Net NPA level too was practically stable at 1.76% as against 1.78% in FY-08. Similarly, your Banks Capital Adequacy Ratio (CAR) in terms of prescriptions of BASEL-II increased to 14.25% in FY-09. This healthy ratio not only meets the requirements of the regulators worldwide but is also comparable to the best banks globally. You will be happy to know that the performance of the Associates of your Bank during FY-09 has also been noteworthy with an increase of 24.7% in net profit to Rs.2774 crores and 18.95% in total assets. The non-banking subsidiaries, too, put up a good show with consolidation of their position/ranking in their space in the financial services arena. Your Bank embarked on several new business initiatives during the last two years which have started bearing fruit? During the year

57

Competitor of SBI bank

If you are looking for flexible scheme, quick processing of your loans, attractive interest rates at the click of a mouse, then your search ends here. SBI bank car loans is the most preferred financier for car loan in the country and offers you all the with unbelievable ease.

Our car loan interest charges differ according to the car model, the tenure of the loan, the customer and his location

Bank/product name Interest rate type

Loan Tenure (in years) Action 1 2 3 4 5 6 7

Sponsored Results South Indian Bank Saraswat Bank The Ratnakar Bank J&K Bank SBT- EZEE Car Loan Scheme Fixed Fixed Fixed Floating Fixed 14.25 10.0 12.5 11.0 8.0 14.25 10.0 12.5 11.0 8.0 14.25 10.0 12.5 11.0 8.0 14.25 10.5 12.5 11.0 8.0 14.25 10.5 12.5 11.0 8.0 NA 11.0 NA 11.5 8.0 NA 11.0 NA 11.5 8.0

58

Karur Vysya Bank ABN Amro Indian Overseas Bank HDFC Bank State Bank of Patiala Dena Bank Corporation Bank State Bank of Travancore Syndicate Bank Oriental Bank of Commerce United Bank of India Bank of Maharashtra Punjab National Bank Central Bank of India ICICI Bank Bank of Baroda

Fixed Fixed Fixed Fixed Floating

11.5 15.0 11.5 14.0 11.0

11.5 15.0 11.5 14.0 11.0 10.75 10.5 11.0 12.0 10.25 10.0 10.75 10.5 11.0 10.0 14.25 9.75 11.75 11.0

11.5 15.0 11.5 14.0 11.0 10.75 10.5 11.0 12.0 10.25 10.0 10.75 10.5 11.0 10.0 14.25 9.75 11.75 11.0

11.5 15.0 11.5 14.0 11.25 11.0 11.0 11.0 12.0 10.75 10.0 11.25 10.5 11.0 11.0 14.25 10.25 12.25 11.0

11.5 15.0 11.5 14.0 11.25 11.0 11.0 11.0 12.0 10.75 10.0 11.25 10.5 11.0 11.0 14.25 10.25 12.25 11.0

NA NA NA 14.0 11.5 11.0 11.25 11.25 12.0 10.75 10.0 11.25 10.5 11.0 11.0 14.25 10.25 NA NA

NA NA NA 14.0 11.5 NA 11.25 11.25 NA 10.75 NA 11.25 10.5 11.0 11.0 14.25 10.25 NA NA

Floating 10.75 Fixed Fixed Floating 10.5 11.0 12.0

Floating 10.25 Fixed 10.0

Floating 10.75 10.5 11.0 10.0

Fixed

Floating

Floating 14.25 Floating 9.75

Tamilnad Floating 11.75 Mercantile Bank Ltd Abhyuday Co-op Fixed 11.0

59

Bank Ltd IDBI Bank Apna Sahakari Bank Ltd Floating Fixed 8.5 14.0 8.5 14.0 8.5 14.0 8.5 14.0 8.5 14.0 NA NA NA NA

Dhanalakshmi Bank Floating Ltd State Bank of Indore Floating State Bank of Hyderabad Bank of India

13.5 11.5

13.5 11.5 10.25 9.75 14.0 10.0 13.75 10.5 11.75 10.5 8.5 11.25 11.5 11.0 11.25 11.25 10.0

13.5 11.5 10.25 9.75 14.0 10.0 13.75 10.5 11.75 10.5 8.5 11.25 11.5 11.0 11.25 11.25 10.0

13.5 11.5 10.5 10.25 14.0 10.0 13.75 11.0 11.75 10.75 8.5 11.25 11.5 11.5 11.5 11.25 10.5

13.5 11.5 10.5 10.25 14.0 10.0 13.75 11.0 11.75 10.75 8.5 11.25 11.5 11.5 11.5 11.25 10.5

13.5 11.75 10.75 10.25 NA 10.0 NA NA NA 11.0 8.5 11.5 NA 12.0 NA 11.25 NA

13.5 11.75 10.75 NA NA 10.0 NA NA NA 11.0 NA 11.5 NA 12.0 NA NA NA

Floating 10.25 Floating 9.75 14.0 10.0 13.75 10.5

Lakshmi Vilas Bank Floating State Bank of Bikaner& Jaipur Catholic Syrian Bank Federal Bank Floating Fixed Fixed

Punjab & Sind Bank Floating 11.75 State Bank of Mysore Canara Bank SBI UCO Bank J&K Bank Andhra Bank Vijaya Bank Union Bank of India Floating Fixed 10.5 8.5

Floating 11.25 Floating Fixed 11.5 11.0

Floating 11.25 Floating 11.25 Fixed 10.0

60

The Kapol Co-op Bank Ltd Indian Bank Allahabad Bank Axis Bank Kotak Bank

Fixed Fixed Floating Fixed Floating

12.5 11.0 10.5 9.5 15.5 12.5

12.5 11.0 10.5 9.5 15.5 12.5

12.5 11.0 10.5 9.5 15.5 12.5

12.5 11.25 10.5 9.5 15.5 12.5

12.5 11.25 10.5 9.5 15.5 12.5

NA NA 10.5 9.5 15.5 NA

NA NA 10.5 9.5 15.5 NA

Full Results South Indian Bank Saraswat Bank The Ratnakar Bank Karur Vysya Bank Dena Bank State Bank of Travancore United Bank of India Oriental Bank of Commerce Bank of Maharashtra Punjab National Bank Central Bank of India Bank of Baroda Fixed Fixed Fixed Fixed 14.25 10.0 12.5 11.5 14.25 10.0 12.5 11.5 10.75 11.0 10.0 10.25 14.25 10.0 12.5 11.5 10.75 11.0 10.0 10.25 14.25 10.5 12.5 11.5 11.0 11.0 10.0 10.75 14.25 10.5 12.5 11.5 11.0 11.0 10.0 10.75 NA 11.0 NA NA 11.0 11.25 10.0 10.75 NA 11.0 NA NA NA 11.25 NA 10.75

Floating 10.75 Fixed Fixed 11.0 10.0

Floating 10.25

Floating 10.75 10.5 11.0 10.0 9.75

10.75 10.5 11.0 10.0 9.75

10.75 10.5 11.0 10.0 9.75

11.25 10.5 11.0 11.0 10.25

11.25 10.5 11.0 11.0 10.25

11.25 10.5 11.0 11.0 10.25

11.25 10.5 11.0 11.0 10.25

Fixed

Floating Floating

61

Tamilnad Floating 11.75 Mercantile Bank Ltd Abhyuday Co-op Bank Ltd Apna Sahakari Bank Ltd IDBI Bank Fixed 11.0

11.75

11.75

12.25

12.25

NA

NA

11.0

11.0

11.0

11.0

NA

NA

Fixed Floating

14.0 8.5 13.5 11.5

14.0 8.5 13.5 11.5 10.25 14.0 10.0 11.75 11.25 8.5 13.5 11.0 11.25 12.5 10.0 10.5

14.0 8.5 13.5 11.5 10.25 14.0 10.0 11.75 11.25 8.5 13.5 11.0 11.25 12.5 10.0 10.5

14.0 8.5 13.5 11.5 10.5 14.0 10.0 11.75 11.25 8.5 13.5 11.5 11.5 12.5 10.5 10.5

14.0 8.5 13.5 11.5 10.5 14.0 10.0 11.75 11.25 8.5 13.5 11.5 11.5 12.5 10.5 10.5

NA NA 13.5 11.75 10.75 NA 10.0 NA 11.5 8.5 NA 12.0 NA NA NA 10.5

NA NA 13.5 11.75 10.75 NA 10.0 NA 11.5 NA NA 12.0 NA NA NA 10.5

Dhanalakshmi Bank Floating Ltd State Bank of Indore Floating State Bank of Hyderabad

Floating 10.25 14.0 10.0

Lakshmi Vilas Bank Floating State Bank of Bikaner& Jaipur Floating

Punjab & Sind Bank Floating 11.75 SBI Canara Bank City Union Bank J&K Bank Andhra Bank The Kapol Co-op Bank Ltd Union Bank of India Allahabad Bank Floating 11.25 Fixed Fixed Fixed 8.5 13.5 11.0

Floating 11.25 Fixed Fixed Floating 12.5 10.0 10.5

62

Axis Bank Kotak Bank J&K Bank SBT- EZEE Car Loan Scheme Karnataka Bank Indian Overseas Bank ABN Amro State Bank of Patiala HDFC Bank Corporation Bank Syndicate Bank ICICI Bank Bank of India Catholic Syrian Bank Federal Bank State Bank of Mysore UCO Bank Vijaya Bank Indian Bank

Fixed Floating Floating Fixed Fixed Fixed Fixed Floating Fixed Fixed Floating

9.5 15.5 12.5 11.0 8.0 11.25 11.5 15.0 11.0 14.0 10.5 12.0

9.5 15.5 12.5 11.0 8.0 11.25 11.5 15.0 11.0 14.0 10.5 12.0 14.25 9.75 13.75 10.5 10.5 11.5 11.25 11.0

9.5 15.5 12.5 11.0 8.0 11.25 11.5 15.0 11.0 14.0 10.5 12.0 14.25 9.75 13.75 10.5 10.5 11.5 11.25 11.0

9.5 15.5 12.5 11.0 8.0 12.25 11.5 15.0 11.25 14.0 11.0 12.0 14.25 10.25 13.75 11.0 10.75 11.5 11.25 11.25

9.5 15.5 12.5 11.0 8.0 12.25 11.5 15.0 11.25 14.0 11.0 12.0 14.25 10.25 13.75 11.0 10.75 11.5 11.25 11.25

9.5 15.5 NA 11.5 8.0 NA NA NA 11.5 14.0 11.25 12.0 14.25 10.25 NA NA 11.0 NA 11.25 NA

9.5 15.5 NA 11.5 8.0 NA NA NA 11.5 14.0 11.25 NA 14.25 NA NA NA 11.0 NA NA NA

Floating 14.25 Floating Fixed Fixed Floating Floating 9.75 13.75 10.5 10.5 11.5

Floating 11.25 Fixed 11.0

63

64

DOCUMENTS REQUIRED

INDIVIDUAL
*2 YEARS INCOME STATEMENT * ADDRESS PROOF * BANK STATEMENT * PHOTOGRAPH * SALARY CERTIFICATE (FROM 16 IF EMPLOYED)

PARTERSHIP
*2 years computation of income along with IT returns.

* audited balance sheet and profit & loss account. * Partnership deed * Partnerships authority later * address proof *bank statement for 6 month

65

*PRIVATE LTD & LITIMED COMPANY

Loan Type Ex-Showroom/On Road Loan Amount Tenure Interest Rate Time to Process Loan Preferred Manufacturers

New Car Term Loan On Road Min. - Rs 50000 Max. - Rs 85 Min. - 12 Yrs. 11.75 % 4 days Chevrolet, FIAT, Ford, GENERAL MOTORS INDIA, HINDUSTAN MOTORS, Honda, Hyundai, Mahindra, Marti, Mercedes-Benz, Mitsubishi, Nissan, Riva, SAN Engineering, Skoda, Tata Motors, Toyota

Used Car Term Loan Ex-Showroom Min. - Rs 25000 Max. - Rs 60 Min. - 12 Yrs. 15.25 % 7 days Chevrolet, FIAT, Ford, GENERAL MOTORS INDIA, HINDUSTAN MOTORS, Honda, Hyundai, Mahindra, Marti, Mercedes-Benz, Mitsubishi, Nissan, Riva, SAN Engineering, Skoda, Tata Motors, Toyota

*2 years IT return (audited balance sheet & p& L account) * Board resolution * Memorandum & articles of association

Highlights

66

Fees & charges

Stamp Duty Pre-Payment Charges Legal, Repossession and Incidental Charges

New Car As Per Actual 2% As Per Actual

Used Car As Per Actual 2% As Per Actual

Eligibility Criteria
67

Income Age Current Employment Years Total Employment Years

Rs 12000 Min.: 21 Yrs. Max.: 58 Yrs. 1 Yrs. 2 Yrs.

Documents Required:
ID Proof Residence Proof Income Proof Telephone Photograph Bank Statement Signature Proof Yes Yes Yes Yes Yes Yes Yes

68

69

Income Age Total Employment Years

Rs 10000 Min.: 21 Yrs. Max.: 65 Yrs. 3 Yrs.

Documents Required:
ID Proof Residence Proof Income Proof Telephone Photograph Bank Statement Signature Proof Yes Yes Yes Yes Yes Yes Yes

Self Employed

DOCUMENTATION OF CAR LOAN

The first financier for car loans in the country

70

Network of more than 1800 channel partner in over 1000 locations. Tie-up with all leading automobile manufacturers to ensured the best deals.

Flexible schemes and quick processing. Hassle-free application process.

CAR LOAN

PARTICULARS SALARIED INDIVIDUAL

The applicant should be at least 21 years old at time of application, and bellow 60 years of age of time maturity of the loan

SELF EMPLOYED INDIVIDUAL

Any proprietor, partner, professional or director above 21 years of age but bellow 65 at the time of loans maturity.

PARTENERSHIP PRIVATE & PUBLIC LTD FIRM CO.

Limited companies should have been in existence for at least 2 years

AGE CRITERIA

INCOME CRITERIA

Gross annual salary above Rs.100,000 / annual

Gross annual income above Rs.60,000

Firm should have a minimum PAT (profit after tax) income of Rs.60,000

Minimum PAT ( profit after tax) of Rs.60,000

71

CAR LOAN FAQS

How do I get an Auto Loan?

First, shop around for all the various finance schemes on Auto Loans available in the market by applying on deal4loans.com. You can then decide from margin money schemes, advance EMI's schemes and deposit payment schemes. Usually margin money schemes offer the best terms, but at the end of the day, effective interest rate of the loan is what essentially matters. This method provides a common podium for assessment of different schemes by discounting on the basis of cash flows.

How much loan can I get?

The amount of the loan depends upon: 1. The cost of the vehicle. 2. The type (standard/premium). 3. The percentage financing offered. If you are buying a new car, you can get up to 90% financing but some banks have a limit beyond which they do not offer loans. Also different banks have different terms for different models (standard/premium, new/old) The percentage of finance the banks give on cars is also determined on the basis of second-hand market value of that particular car. This is for cases, if default by any chance, the banks can get a higher resale value for the car. This makes the banks comfy enough to give higher percentage finance.

72

What documents do I need to establish proof of income?

For income proof, most banks look at your IT returns for the last two years and also at the nature of income. However some banks do not consider speculative income - from the stock market, rental or agricultural income. Some banks discount such income by up to 50% in their workings.

What documents do I need to establish proof of income?

For income proof, most banks look at your IT returns for the last two years and also at the nature of income. However some banks do not consider speculative income - from the stock market, rental or agricultural income. Some banks discount such income by up to 50% in their workings

Is it necessary to have an account with the bank from which you take a loan?
There is no such compulsion for you to have an account with the bank. Normally banks have no problem in giving auto loans to people who do not have an account with them. However there may be certain privileges you may enjoy with having an account of the same bank you take a loan from

Is it better to go to my current bank for loans?

Well if you have a good repayment record for an earlier transaction, YES! You are also most likely to get a lower lending rate and your process is sure to move faster. However, do check out some other offers from other banks as well, before taking a final decision. And this is where deal4loans.com can assist in getting you multiple quotes from various banks really fast.

73

Is credit profile important?

To banks, your credit profile is the most important factor they will consider before funding you. Your credit profile tells banks if one is able to and intend to pay back the loan.

What are the detailed components of my credit profile?

The components of credit profile are age, profession/occupation, income/financials, previous credit history etc

What can I do if my credit profile does not match the banks requirements?
If your credit profile does not match the banks requirement you can reinforce it by bringing in a co-applicant/guarantor who would be able to match the requirement

Can I get auto loan without the submission of income documents?

Yes you can, under the No Income Proof scheme offered by some banks.

Can I increase the amount of loan that I can take and how?
Yes, you can. You can increase the amount of loan sanctioned by clubbing your spouse's income. The spouse then becomes the co-applicant

Do I need a guarantor and who all qualifies as one?

Yes, you need a guarantor. The guarantor could be your father, mother, son, daughter, husband, brother, sister, son's wife etc et cetera. However for consideration of these relatives as guarantors for the loan, they should comply with the age and other such norms of the company

What is the extent of liability of a co-applicant and the guarantor?

A co-applicant has as much responsibility as the primary applicant and is equally liable to the banks from which the loan is taken. The guarantor however, promises to pay the bank in case the applicant(s) default on the payment. Both the co-applicant and the guarantor are liable for re-payment and the banks have the right to collect from either or them.

Is EMI a proper measure for comparing the deals of various players?

Not really. There are other charges like processing fees, advance EMI's, other up-front

74

payments (stamp charges), registration charges, insurance which need to be factored in before comparing the various deals.

How is annual reducing balance different from monthly reducing balance?

In an annual reducing basis, the outstanding principal gets adjusted once a year while in the monthly reducing balance; the principal gets adjusted on a monthly basis. Therefore, more of your principal gets repaid in monthly reducing basis than in annual basis. However, some banks, calculate EMI's on a daily or a quarterly basis too.

Floating rate of interest or a fixed rate of interest?

A loan taken on floating rate of interest is a better option when the interest rates are falling, but when the interest rates are rising, opt for a fixed rate loan. Also if you go for a fixed rate loan, you will know in advance what your EMI's will be like and this will help you in your financial budgeting. If you choose a floating rate, you may not be able to budget properly. So do the math and choose wisely.

What is Flat interest rate and Reducing Balance interest rate?

Suppose you have taken a loan of Rs.10 lac at 5% interest. You repay Rs.50,000 in the first installment. If the 5% interest continues to be applicable on Rs.10 lac after your first repayment, you are paying a Flat Interest Rate. But, if 5% interest is applicable now on Rs.9.50 lac, you are paying a Reduced Balance Interest Rate

Can

pay

off

my

car

loan

before

the

tenure

is

up?

Yes you can pay-off your car loan before the tenure is up by pre-paying your loan amount. But there may be certain rules regarding the pre-payment that your bank may have. Also you may have to pay a small penalty, normally, a percentage of the loan amount that remains outstanding. Some banks however do not penalize you if you decide to pre-pay. Take this aspect into consideration when you choose a bank to take loans from because if later on, you can get a loan at a lower rate of interest, this penalty could compensate whatever you could save through the interest rate differential. Apply for a Car loan now

Can I change the tenure and amount of loan taken after the loan amount has been disbursed?

75

Yes you can change the tenure and amount of the loan. But this would imply that the interest rate and the amount of installment will change accordingly.

Can

get

temporary

relief

from

paying

my

installments?

Yes, in some cases you can. You need to inform your bank in advance. This should only be for a few days and you will have to pay delayed payment charges Upgraded to a new one. The dealer will purchase your car at a price depending on the model, year and the condition of the car. The value of your old car is then adjusted against the purchase price of the new car. You could also get the balance amount financed.

What

is

Zero

Interest

Scheme?

Zero Interest Scheme is just that, Zero Interest Scheme. In this scheme you are not charged any interest and you only pay back the principal amount. But under such scheme, the amount financed is low and the tenure is short. However there are hidden costs involved under this scheme as well.

What

happens

after

have

paid

the

last

EMI?

After the last payment is made, get the lien of the bank on your car cancelled. The bank will issue Form 35 with a covering letter (NOC) to the RTO for canceling their name from the R/C book. A similar NOC will also be issued to the insurance company requesting for the deletion of their name from the policy.

Can

get

finance

for

insurance

and

registration?

Most financiers do not cover Insurance and registration. The ex-showroom price is considered which does not cover insurance and registration charges.

76

What

happens

if

the

car

meets

with

an

accident?

In the event of an accident, the first step is to inform the insurance company. The company then sends a surveyor to assess the extent of damages to the car. Your claim is then processed and paid directly to the banks, unless you have taken an NOC from the banks, in which case the payment will be made by the insurance company in your favor. The bank normally gives you an NOC if you are regular in your payments. In case of a complete loss, the bank would receive the payment directly from the insurance company.

What

is

De-Dupe?

Most banks have compiled a list of defaulters. It has compiled defaulters from its own bank and also from other available sources from other banks. Details of all clients are run through this list to check if the same client had applied for a loan. If the client is the same, the file is rejected. Read more about car loan!

77

CAR LOANS INTEREST RATE

w.e.f. 29.06.2009 (SBAR 11.75%)

SBI EZEE CAR LOAN SCHEME

SL. No 1 2

PARAMETER SCHEME Applicable to Scheme Period

DETAILS All New Car Loans to Public From July 1, 2009 to September 30, 2009 Interest Rate will be reset on the anniversary

Reset Period

date of the loan to the applicable card rate contracted as on the date of sanction under the

78

respective new car loan schemes i.e. Spreads below/above SBAR as applicable on the date of Sanction as per the agreement. 5 Processing fee Fully waived up to 30th September 2009

New Car including NRI Car Loan

Tenure

Rate of Interest

Up to 3 years (for loans Rs. 7.5 lac & above) 0.75% below SBAR i.e. 11.00% p.a. Up to 3 years (for loans below Rs. 7.5 lac) Above 3 yrs up to 5 yrs (for all loans) 0.50% below SBAR i.e. 11.25% p.a. 0.50% below SBAR i.e. 11.25% p.a.

Car Loan Overdraft: New Car only

Tenure

Rate of Interest

Up to 3 years (for loans Rs. 7.5 lac & above) 0.25% below SBAR i.e. 11.50% p.a. Up to 3 years (for loans below Rs. 7.5 lac) Above 3 yrs up to 5 yrs (for all loans) Above 5 yrs up to 7 yrs (for all loans) At SBAR i.e. 11.75% p.a. At SBAR i.e. 11.75% p.a. 0.25% above SBAR i.e. 12.00% p.a.

79

Used Vehicles

NOTE: ALL INTEREST RATES ARE SUBJECT TO CHANGE, WITHOUT NOTICE.

Tenure

Rate of Interest

Up to 3 years Above 3 yrs up to 7 yrs

3.00% above SBAR i.e. 14.75% p.a. 3.25% above SBAR i.e. 15.00% p.a.

80

81

CHAPTER-5 FINDINGS & OBSERVATION

82

OBSERVATION & FINDINGS

From this project it is found that SBI advance product having the 1st place in the market At Bhubaneswar, there is a great opportunity to compete with ICICI Bank & to retain its Customer by fulfilling the requirement of customer in SBI advance product. It has been observed that approximately 85% correspondents are using advance Product of SBI and 15% are not using any type of advance product of SBI in Bhubaneswar. All of SBI customers are satisfied with the services provided by the bank.

83

 Many of these customers satisfied with the low interest rate and longer repayment Period of the advance product. Most of the customers at Jalandhar prefer to take loan from SBI. Approximately 43% of advance product users said that the service of SBI in advance Product is excellent. A response from customer care is so clear & good. Many customers have no time to call customer care so that they are not able to know About the service & features of SBI advance product. Most customers are shifted from other banks advance product to SBI because of Hidden charges, high interest rate, less repayment period.

Government employees are more concern than private employees for advance product.

84

REASON S FOR HIGHLY USE OF SBI ADVANCE PRODUCT:

LESS PAPER WORK ATTRACTIVE INTEREST RATES TRANSPARENCY SIMPLE & FAST PROCESSING LONGER REPAYMENT PERIOD QUICK PROCESSING

85

CHAPTER-6 CONCLUSION & SUGGESION

86

CONCLUSION

87

From the analysis part it can be conclude that customers have a good respond towards SBI advance products in Bhubaneswar. SBI is in 1st position having large number of customers & Providing good services to them. The bank has a wide customer base, so the bank should concentrate on this to retain these customers.

In present scenario SBI is the largest advance product issuer in India. Within a very short period of time the achievement made by SBI is excellent, what a normal bank cannot expect, but it is being done by SBI. It happens due to employee dedication towards the organization, fastest growing Indian economy, & brand image.

To be the largest advance product issuer, SBI should focus on Launch Innovative product Customized advance products Better customer services Fastest customers problem solving techniques Customer retention

Apart from all the above, SBI believe in providing good customer services to their customers which is a key factor for success in future.

88

SUGGESTION

Customer awareness programmed is required so that more people should attract towards Advance product. if there is any kind of hidden charges than that must disclose to customer before Giving loan to them. SBI must take some steps so that customers can get their loan in time. Like phone Verification by customer care that one customer is got their loan on time or not .It must Be before a certain date so necessary steps can be taken. SBI should more concern about physical verification rather than phone verification so it Will avoid fraud or cheating. Advance product selling agents must not give any type of wrong information regarding Advance product.

89

 for the better service new offers would be requiring. SBI customer care should more concern about the fastest settlement of customers Problems.

before deducting or charging any monetary charge SBI must consult with customer. Agents should be trained well educated & proper trained to convince the people about Different advance product.

It is the duty of the bank to disclose all the material facts regarding advance product, like Interest charged, repayment period, other types of charges, etc. Special scheme should be implemented to encourage both customer and agents.

The bank should increase the period for repayment of loan. SBI should more focus on Retaining existing customers.

SBI must focus on Segmentation based on customer knowledge Product offering based On customer demand. SBI must take feedbacks of customers regarding features & services.

90

Suggestions given by the consumers at the time of survey:

There is more time period for repayment of education loan. (Namrata Das)

Education loan should be providing to private college also which is not under AICTE or Any kind of University. (Pinky BAL)

SBI should take steps to solve customer problems immediately. (Gopinath Mahapatra)

Agents should be trained well educated & proper trained to convince the people about Different advance product. (P.Anish Nath)

Loan sanction date should be according to customer convenient. (Joytirmaya Behera)

A customer awareness programme should be taking place in rural area.

BIBLIOGRAPHY
91

Text Books:

Solomon, Michael R. (2002), Consumer Behavior: Buying, Having, and Being. 5th Ed.

New Jersey: Prentice Hall

Wilson A. (2003), Marketing Research: An Integrated Approach

Naresh Ku. Malhotra, Marketing Research: An Applied Orientation, Fifth Edition

Internet:

www.google.co.in www.sbi.com www.sbi.co.in

92

www.pnb.com

Questionnaire

Name - _____________________________________ Occupation-__________________________________ Contact Detail -_______________________________

Q. On which bank you depend for your regular transaction? a) SBI

93

b) ICICI Bank c) HDFC Bank d) Other Bank, Specify (_____________)

Q. Are you aware of products & services provided by SBI? a) YES b) NO

Q. If yes are you aware of the advance products (Loan segments) of SBI? a) YES b) NO

Q. Which bank you prefer for taking loans? a) SBI b) ICICI Bank c) HDFC Bank d) Other Bank, Specify (_____________)

Q. If you prefer SBI for taking loan than what influence you to take Loan from SBI? ______________________________________________________________________ __________

94

______________________________________________________________________ __________ ______________________________________________________________________ __________ _____________________________________________________.

Q). which loan product of SBI you have used?

a) Home Loan b) Education Loan c) Car Loan d) Personal Loan e) Other Loans, Specify (______________)

Q. What do you feel about the services providing by SBI in advance product? a) Bad b) Satisfactory c) Good d) Excellent

Q. Which features you like most in Loan segments of SBI?

a) Less paper work b) Attractive interest rate

95

c) Transparency d) Simple & fast processing e) Flexibility to choose an EMI base loan or an overdraft f) Longer tenure lone for ease of repayment g) Specially design product for self employed h) Any other feature, specify (_____________)

Q) Any suggestion you want to give for the betterment of SBI advance Product. ______________________________________________________________________ __________ ______________________________________________________________________ __________ ______________________________________________________________________ __________ ___________________________________________________________.

96

97

98