ACKNOWLEDGEMENT

INDEX

CHAPTER PARTICULARS PAGE NO.

1. INTRODUCTION 7- 40

2. REVIEW OF LITERATURE 41-43

3. RESEARCH METHODOLOGY 44-57

4. DATA ANALYSIS AND 58-75

INTERPRETATION

5. RECOMMENDATION 76

6. CONCLUSION 77

7. BIBLIOGRAPHY 78-79

8. ANNEXURE 80-82

1
 CHAPTER 1

INTRODUCTION

1. COMPANY PROFILE

HDFC Bank's mission is to be a World-Class Indian Bank. The objective is to build sound
customer franchises across distinct businesses so as to be the preferred provider of banking
services for target retail and wholesale customer segments, and to achieve healthy growth in
profitability, consistent with the bank's risk appetite. The bank is committed to maintain the
highest level of ethical standards, professional integrity, corporate governance and
regulatory compliance. HDFC Bank's business philosophy is based on four core values
Operational Excellence, Customer Focus, Product Leadership and People.
HDFC Bank was amongst the first to receive an 'in-principle' approval from the Reserve
Bank of India (RBI) to set up a bank in the private sector from Housing Development
Finance Corporation Limited (HDFC), in 1994 during the period of liberalisation of the
banking sector in India. HDFC India was incorporated in August 1994 in the name of HDFC
Bank Limited". HDFC India commenced operations as a Scheduled Commercial Bank in
January 1995.
HDFC Bank incorporated in 1994. with its registered office in Mumbai, Maharashtra, India.
Its first corporate office and a full service branch at Sandoz House, Worli were inaugurated
by the then Union Finance Minister, Manmohan Singh. As of June 30, 2019, the Bank's in
the financial sector in India.

2
 1.1 FUNCTIONS OF BANK:

Primary functions
 Acceptance of Deposits
 Making loans & advances Loans
 Overdraft
 Cash Credit
 Discounting of bills of exchange

Secondary Functions

 Agency functions
 Collection of cheques & Bills etc.
 Collection of interest and dividends.
 Making payment on behalf of customers
 Purchase & sale of securities
 Facility of transfer of funds
 To act as trustee & executor.

Utility Functions
 Safe custody of customer's valuable articles & securities.
 Underwriting facility
 Issuing of travelers cheque letter of credit.
 Facility of foreign exchanges
 Providing trade information
 Provide information regarding credit worthiness of their customer

3
1.1.2 STRUCTURE OF HDFC BANK

Indian banking system can be classified into nationalized banks, private banks and specialized
banking institutions. The industry is highly fragmented with 30 banking units contributing to
almost 50% of deposits and 60% of advances. The Reserve Bank of India is the foremost
monitoring g body in the Indian Financial sector. It is a Centralized body that monitors
discrepancies and shortcomings in the system. Banking segment in India functions under the
umbrella of Reserve Bank of India (RBI).The regulatory, central bank.

This segment broadly consists of:

1. Commercial Banks

2. Co-operative Banks

The commercial banking structure in India consists of:

1. Schedule Commercial Banks
2. Unscheduled Banks

Schedule Commercial Banks constitute of those banks, which have included second Schedule of
Reserve Bank of India (RBI) act 1934. RBI in turn includes only those banks in this schedule
that satisfy the criteria laid down vide section 42 (60 of the act) this sub sector can broadly
classified into:
1. Public Sector

2. Private Sector

3. Foreign Sector

Public sector banks have either government of India Reserve Bank of India (RBI) as the Majority
shareholder.

This segment comprises of:

1. State Bank of India (SBI) and its subsidiaries

2. Other Nationalized Banks

4
 Industry estimates indicate that out of 274 commercial banks operating in the Country, 223
banks are in the public sector and 51 are in the private sector. These private sector banks include
24 foreign banks that have begun their operations here. The specialized banking institutions that
include cooperatives, rural banks, etc. form a part of the nationalized banks category.

1.1.3 MISSION STATEMENT OF HDFC BANK

 World Class Indian Bank.

 Benchmarking against international standards.

 To build sound customer franchises across distinct businesses Best practices in terms of product
offerings, technology, service levels, risk management and audit &compliance.

1.1.4 VISION STATEMENT OF HDFC BANK

The HDFC Bank is committed to maintain the highest level of ethical standards, professional
integrity and regulatory compliance. HDFC Bank's business philosophy is based on four core
values such as:
1. Operational excellence.

2. Customer Focus.

3. Product leadership.
4. People.

The HDFC Bank plus and the investment advisory services programs have been designed
keeping in mind needs of customers who seeks distinct financial solutions, information and
advice on various investment avenues.

5
1.1.5 OBJECTIVES OF HDFC BANK

1. To know which service quality dimension of bank is performing well.

2. To examine the essential dimension of service quality like reliability, assurance,

tangibility, empathy and responsiveness of hdfc bank and its effect on customer satisfaction.
3. To evaluate and analyse various facts of the performance of company.

4. To determine the liquidity, profitability and efficiency of the project.

5. To study the financial system position of the hdfc bank.

6. To study the organizational structure of the hdfc bank

1.1.6 IMPORTANCE AND SIGNIFICANCE

 To develop close relationship with individuals households.

 To maintain its position as premiere housing finance institution in the country.

 To provide consistently high returns to the shareholders.

 To transforms ideas into variable and creative situation.

 To know customer view points and expectation about the product and services of bank.

1.1.7 BUSINESS STRATEGY

1 Increasing market share in India's expanding banking

2 Delivering high quality customer service

3 Maintaining current high standards for asset quality through disciplined credit risk
management
4 Develop innovative products and services that attract targeted customers and address
inefficiencies in the Indian financial sector.

6
1.1.8 NETWORK DISTRIBUTION

HDFC Bank is headquartered in Mumbai. The Bank at present has an enviable network
of over 1229 branches spread over 444 cities across India. All branches are linked on an online
real-time basis. Customers in over 120 locations are also serviced through Telephone Banking.
The Bank's expansion plans take into account the need to have a presence in all major industrial
and commercial centers where its corporate customers are located as well as the need to build a
strong retail customer base for both deposits and loan products. Being a clearing/settlement bank
to various leading stock exchanges, the Bank has branches in the centers where the NSE/BSE
has a strong and active member base. The Bank also has a network of about over 2526
networked ATMs across these cities. Moreover, HDFC Bank's ATM network can be accessed by
all domestic and international Visa/MasterCard, Visa Electron/Maestro. Plus/Cirrus and
American Express Credit/Charge cardholders.

PROMOTER

HDFCs India's premier housing finance company and enjoys an impeccable track record in India
as well as in international markets. Since its inception in 1977, the Corporation has maintained a
consistent and healthy growth in its operations to remain a 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 segment sand 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.

MANAGEMENT

C.M. Vasudev has been appointed as the Chairman of the Bank with effect from 6th July 2010
subject to the approval of the Reserve Bank of India and the shareholders. Mr. Vasudev has been
a Director of the Bank since October 2006.
A retired IAS officer, Mr. Vasudev has had an illustrious career in the civil services and has held
several key positions in India and overseas, including FinanceSecretary, Government of India,
Executive Director. World Bank and Governments nomince on the Boards of many companies
in the financial sector.
The Managing Director, Mr. Aditya Puri, has been a professional banker for over 25 years, and
before joining HDFC Bank in 1994 was heading Citibank's operations in Malaysia. The Bank's
7
 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.

TECHNOLOGY

HDFC Bank operates in a highly automated environment in terms of information technology and
communication systems. All the bank's branches have online connectivity, which enables the
bank to offer speedy funds transfer facilities to its customers. Multi-branch access is also
provided to retail customers through the branch network and Automated Teller (ATMs).The
Bank has made substantial efforts and investments in acquiring the best technology available
internationally, to build the infrastructure for a world class bank. The Bank's business is
supported by scalable and robust systems which ensure that our clients always get the finest
services we offer.
The Bank has prioritised its engagement in technology and the internet as one of its key goals
and has already made significant progress in web-enabling its core businesses.

1.1.9 BUSINESS

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,

✓ Wholesale Banking Services

The Bank's target market ranges from large, manufacturing companies in the Indian corporate to
small & mid-sized corporates 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.

✓ 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
8
 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 widcarray of retail loan products including Auto Loans, Loans against
marketable securities, Personal Loans and Loans for Two-wheelers.

1.1.10 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 liberalisation of the
financial markets in India, corporates need more sophisticated risk management information.
Advice and product structures.

HDFC Advantage:
Pioneer of Housing Finance in India with over 35 years of lending experience For over 3
decades, shared the hopes and joys of 4.4 million customers who have been nurturing the dream
of home ownership

 Most experienced and empowered personnel to ensure smooth & easy processing

 Transparent dealing. All charges mentioned upfront while giving you the loan quote. No
hidden charges

 Counselling and advisory services for acquiring a property.

 Loan approval even before a property is select.

 Loan from any HDFC office for purchase of home anywhere in India.

 Flexible loan repayment options.

 Free & safe document storage.

9
HDFC Ltd Home Loan:-

.
HDFC Ltd. offers affordable home loans to eligible borrowers with interest rates starting at
8.60% p.a.* (special offer). The EMI starts at Rs. 762* per lakh for loans up to 30 years. The
processing fee associated with these housing loans will be a maximum of Rs.3,000 (plus
applicable taxes) for employed individuals and Rs.5,000 (plus applicable taxes) for self-
employed individual.

10
1.1.11 SWOT Analysis:-
S-STRENGTH OF HDFC BANK:

HDFC bank is the second largest private banking sector in India having 2.201 branches and
7,110 ATM’s HDFC bank is located in 1,174 in India and has more than 800 locations to serve
customers through Telephone banking The bank’s ATM card is compatible with all domestic
and international Visa/Master card. Visa Electron/ Maestro, Plus/cirrus and American Express.
This is one reason for HDFC cards to be the most preferred card for shopping and online
transactions HDFC bank has the high degree of customer satisfaction when compared to other
private banks The attrition rate in HDFC is low and it is one of the best places to work in private
banking sector HDFC has lots of awards and recognition, it has received ‘Best Bank award from
various financial rating institutions like Dun and Bradstreet. Financial express. Euro money
awards for excellence, Finance Asia country awards etc. HDFC has good financial advisors in
terms of guiding customers towards right investments.

W-WEAKNES OF HDFC BANK

HDFC bank doesn’t have strong presence in rural areas, where as ICICI bank its direct
competitor is expanding in rural market HDFC cannot enjoy first mover advantage in rural areas.
Rural people are hard core loyal in terms of banking services. HDFC lacks in aggressive
marketing strategies like ICICI. The bank focuses mostly on high end clients Some of the bank’s
product categories lack in performance and doesn’t have reach in the market the share prices of
HDFC are often fluctuating causing uncertainty for the investors 36.

O-OPPORTUNITIES OF HDFC BANK

HDFC bank has better asset quality parameters over government banks, hence the profit
growth is likely to increase the companies in large and SME are growing at very fast pace.
HDFC has good reputation in terms of maintaining corporate salary accounts HDFC bank has
improved it’s bad debts portfolio and the recovery of bad debts are high when compared to
government banks HDFC has very good opportunities in abroad Greater scope for acquisitions
and strategic alliances due to strong financial position.

T- THREATS OF HDFC BANK

The non banking financial companies and new age banks are increasing in India The HDFC is
not able to expand its market share as ICICI imposes major threat The government banks are
trying to modernize to compete with private banks RBI has opened up to 74% for foreign banks
to invest in Indian market 11
INTRODUCTION OF HOME LOAN
Home is a dream of a person that shows the quantity of efforts, sacrifices luxuries and
above all gathering funds little by little to afford one’s dream. Home is one of the things that
everyone one wants to own. Home is a shelter to person where he rests and feels comfortable.
Many banks providing home loans, whether commercial banks or financial institutions, to the
people who want to have a home. Many banks are providing home loans at cheapest rate to
attract consumers towards them. The more customer friendly attitude of these banks, currently
offer to consumers cheapest loan over homes. In view of acute housing shortage in the country,
and keeping in mind the social- economic role of commercial banks in the present times, the RBI
advised banks to encourage the flow of credit for housing finance. With the RBI reducing bank
rate, the home loan market rates nose-diving by 50 basis points. The ICICI Bank and Standard
chartered bank has become the first player in this sector to announce a housing loan for a 20
years period. No doubt it will enhance the end cost of the home but it ko facilitate people to plan
their house over longer duration now, it has been made easy for a person to buy that dream
house which he dreamt of long ago.

A home loan is a loan taken for buying or constructing a home or to make improvements to a
residential property. You can get a loan from banks and registered housing finance companies.

The Home loan sector in India is the pivotal role player in the growth of the real estate
scenario in India. With tax incentives given to the housing finance sector in the annual budget of
2001, transactions related to buying and selling of residential properties increased considerably
and was much higher as compared to previous years. Since the new class of buyers are relatively
younger set of customers who are more aware about legal documentation and approvals, buyers
are now more end-users rather than investors: the property market in India undergoes
transformation to align itself with global standards with an increased emphasis on quality & cost
control and documentation methods.
12
 In the current economy of India, the real estate sector has the maximum propensity to generate
income and demand for materials, equipment and services. It can be said that housing finance
companies were formed for co-existing with buyer’s requirements of housing loans for investing
in properties. Home loans are made available by financial institutions to both Indian and NRI
customers at floating and fixed rate of interest and also at attractive EMI options.

The realty boom in India has given a new dimension to the finance sector in India - both in
Home Loans and Home Insurance segments. This has not only given a competitive edge to the
finance companies to provide attractive options to customers but has also contributed to the
increased investments in the real estate sector. This has resulted in 13 new institutions foraying
into the housing finance business in the last three years.

1.1.12 Home Loan.

“The sun at home warms better than sun elsewhere.”

True isn't it, where else do you find that comfort that makes you feel so special everyday.
Undoubtedly owning a house is the most important phase in one’s life. Not long ago, turning this
dream into a reality. is a daunting task for the common man with property rates going north all
the time. But now, thanks to the proliferation of home loans and housing finance companies, one
can aspire to own a roof over one's head. Many think it is an expensive affair and beyond reach.
Well, that's not always true. It takes a little planning and awareness to get to that home you want
to call your own.

Buying a home for the first time can be daunting to any person but in today's time various banks
are lending a helping hand to the people to purchase their dream house. Thus people look
forward towards choosing a home loan. The primary concern of a housing finance company is to
determine the loan amount that the borrower is comfortably able to repay. The most popular
method of financing a home purchase is with a montage. This is a loan that is secured over the
home. There are a number of different mortgage suppliers and people will have to shop around
in order to get the best deal.
Home Loan is one of the fastest growing retail and mass banking area. It forms an important part
of the country's priority in 5 year plans. Almost all public and private sector banks are offering
home loans at attractive rates for purchasing their dream home.
13
 Home loan usually cover a variety of types. All Banks have come out with home loan products
studded with features and value additions that make the schemes not only attractive but also
serve as a substantial source to the borrowers for owning their dream home.

Banks as financial service providers aims at providing financial support from the banking system
to the needy for purchasing a home to the resident Indians as well as non-resident Indians. The
main emphasis is that every needy person is provided with an opportunity to pursue home loan
with the financial support from the banking system with affordable terms and condition

1.1.13 Objectives Of The Study.

There is no strongest foundation for your dream home, than a cheap loan. Home loans have
become those stronger foundations for people who want to own a home. The main objectives of
the study are as follows:

1) The main objective of this study is to know the Customers perceptions about home loans of
HDFC Bank Ltd.

2) To analyze the history of HDFC ltd.

3) Generating good business to the company by promoting and selling the products of SBI Ltd.

4) To know the ideas of customers about home loan products and services.

5) To make comparative study of Disbursement of home loans by Commercial banks.

6) Fixing the appointments with the customers.

7) To study the satisfaction level of customers about home loans.

8) To study the problems faced by customers in obtaining the home loans.

9) Visiting the customers and closing the deal.

10)To learn about various aspect of HDFC home loan Ltd.

14
1.3.1 Identification Of The Problem.

 To study and learn the various systems and procedures used by the bank in lending to

housing sector.

 To identify the problems faced by the bank in attracting more customers to use its home loan

products.

 To identify the problems faced by the bank at various stages of undertaking the home

loans.

 To understand and identify difficulties in the home loan asset management practices

of the bank.

 To study the valuation of collateral security method followed by the bank while lending the

home loans.

1.3.2 A Solution To The Problem

 To suggest better alternative organizational and operational practices.

 To enhance its capacity to tap potential market in the home loan sector.

 To reduce credit risk

 To enhance the recovery system in the bank giving the home loans.

1.4 Need Of The Study.

It has been felt very useful in future:-

 To study the roles of the staff and the decision making processes in lending to the home

loan borrowers.

 To learn and comprehend thoroughly the systems and Procedures used in financing the segment.

 To analyze the issues relating to various financial aspects of lending.

15
  To calculate the risk involved and how the risk and uncertainty to be assessed and managed

by the bank while lending the home loans.

 To study the valuation of collateral security method followed by bank while lending the home

loans.

1.5 Scope Of The Study.

 The present study is confined to Home loan products offered by the domestic operations of
Housing Development Finance Corporation (HDFC)
 The study is also confined to the internal functional and opera India aspects of the lending
process.
 The data collected here, is specific to:

• Selected branch as said before.

• The time period covering the financial years: FY08-09-Q1FY10.

 The data and the information could be collected here has been taken from the record books
maintained by the branch and from books, websites, newspapers .

1.6 Types Of Home Loan

A housing loan is a specified sum of money borrowed from banks and Housing finance
Companies to purchase a house. Important factors to be considered while seeking a house loan
are interest rate, loan amount, loan tenure, monthly EMIs on house loan and credit score.

To help customers meet their varying housing needs, financial institutions offer different types
of home loans. There are different types of home loans available in the market to cater
borrower's different needs.

 Home Purchase Loan

 Home Improvement Loan

16
 Home Extension Loan

 Home Conversion Loan

 Home Construction Loan

 Land Purchase Loan

 NRI Home loan

 Balance Transfer

 Bridge Loan

An individual can choose a home loan as per the need and affordability.
Mentioned below are the different types of home loan products available in India:

1. Home Purchase Loan:-

These are the basic home loans for the purchase of a new home. These loans are given for
purchase of a new or already built flat/bungalow/row-house. The maximum loan amount offered
by banks is 90% of the present market value of the property. For Non- Banking Financial
Companies (NBFCs), this value is 80%

Eligibility Criteria for Home Purchase Loans

An individual, who wants to avail a home purchase loan, must fulfill the following general
conditions to be eligible for the loan. These criteria may vary from lender to lender.

17
 Documents Required for Home Purchase Loan

Mentioned below are some common documents required for availing a home purchase loan.
However, the requirements may vary from provider to provider.

 Age Proof (Birth certificate, Class 10 marks sheet, etc.)

 Address Proof (Copy of passport, Voter ID, Utility bills, etc.)

 Income Proof (Salary slips and ITR details)

 Identification Proof (PAN card, Passport, Voter ID, etc.)

 Existing Loan Documents (if any)

 Documents of Property to be purchased.

2. Home Improvement Loan:-

These loans are given for implementing repair works and renovations in a home that has already
been purchased by the customer. It may be requested for external works like structural repairs,
waterproofing or internal works like tiling and flooring, plumbing, electrical work, painting, etc.
Home improvement loans are very popular due to low interest rate.

Eligibility Criteria for Home Improvement Loan

Following are the conditions that an applicant must meet to be eligible for availing a home
improvement loan. These criteria may vary from lender to lender.

18
 Documents Required for Home Improvement Loans

Mentioned below is the list of documents required for availing a home improvement Plan.
However, the requirements may vary a bit from provider to provider.

 Age Proof (Birth certificate, Class 10 marks sheet, etc.)

 Address Proof (Copy of passport, Utility bills, Voter ID, etc.)

 Income Proof (Salary slips and ITR details)

 Property Title Deeds (Original)

 Estimated Renovation

3. Home Extension Loan:-

Home Extension Loans are given for expanding or extending an existing home. For example
addition of an extra room, etc. For this kind of loan, customer needs to have requisite approvals
from the relevant municipal corporation.

Eligibility Criteria for Home Extension Loans

Following are the conditions that an applicant must meet to be eligible for availing a
home extension loan. These criteria may vary slightly from lender to lender.

19
 Documents Required for Home Extension Loans

The table below shows the documents required for availing a home purchase loan.
However, the requirements may vary a bit from provider to provider.

 Age Proof (Birth certificate, Class 10 marks sheet, etc.)

 Address Proof (Copy of passport, Utility bills,

Voter ID, etc).

 Income Proof (Salary slips and ITR

 Existing Loan Documents (if any)

 Property/Home Extension-Related Documents

4. Home Construction Loan:-

This type of home loan can be availed by the owner of land to meet the costs of constructing a
new house. The loan can also be taken to finish the construction of an unfinished house.

Eligibility Criteria for Home Construction Loan

Following are the conditions that an applicant must meet to be eligible for availing a home
construction. These criteria may vary from lender to lender.

20
 Documents Required for Home Construction Loan

Mentioned below is the list of documents required for availing a home construction loan.

However, the requirements may vary from provider to provider.

 Age Proof (Birth certificate, Class 10 marks sheet, etc.)

 Address Proof (Copy of passport, Utility bills, Voter ID, etc.)

 Income Proof (Salary slips and ITR details)

 Identification Proof (Passport, PAN card, VoterID, etc.

 Existing Loan Documents (if any) Property Documents

5. Home Conversion Loan:-

It is that loan wherein the borrower has already taken a home loan to finance his current home,
but now wants to move to another home. The Conversion Home Loan helps the borrower to
transfer the existing loan to the new home which requires extra funds, so the new loan pays the
previous loan and fulfills the money required for new home.

6. Land-Purchase Loan:-

Land Purchase Loans are available for purchase of land for both home construction or
investment purposes. Therefore, customer can be granted this loan even if customer is not
planning to construct any building on it in the near future. However, customer has to complete
construction within tenure of three years on the same land.

Eligibility Criteria for Land-Purchase Loans

Following are the conditions that an applicant must meet to be eligible for availing a land-
purchase loan.

21
 Documents Required for Land-Purchase Loans

The table below shows the documents required for availing a home purchase loan. However, the
requirements may vary a bit from provider to provider.

 Age Proof (Birth certificate, Class 10 marks sheet, etc.)

 Address Proof (Copy of passport, Utility bills, Voter ID, etc.)

 Income Proof (Salary slips and ITR)

 Existing Loan Documents (if any)

 Property-related Documents

7. NRI Home Loan:-

This type of home loan is taken by Non-Resident Indians for construction of a house or
renovation of an old property in India. The maximum tenure for this loan can go up to 30 years,
and the interest rate can be fixed or floating.

Eligibility Criteria for NRI Home Loans

Following are the conditions that an applicant must meet to be eligible for availing a home
purchase loan. These criteria may vary slightly from lender to lender.

22
 Documents Required for NRI Home Loans

The table below shows the documents required for availing a home purchase loan. However, the
requirements may vary a bit from provider to provider.

 Passport and work visa copy

 Proof of valid work permit

 Copy of employment contract

 Current overseas residential proof three months

 Salary slips of past Salary account statement for past six months

 General power of attorney

 Last year ITR except for NRIs in Middle East nations and Merchant Navy Employees

 Property papers.

8. Balance Transfer:-

Home loan balance transfer can be availed by an individual who wants to transfer an existing
home loan from a bank/NBFC to another provider/lender. The major reason for availing this
loan is getting a lower interest rate from the new lender and availability of top-up facility.

Eligibility Criteria for Balance Transfer

Mentioned below are some of the general conditions that an applicant must meet to be eligible
for availing a home loan balance transfer. However, these criteria may slightly vary from lender
to lender.

23
 Documents Required for Balance Transfer
Following is the list of documents required for availing home loan balance transfer.

 Age Proof (Birth certificate, Class 10 marks sheet, etc.)

 Address Proof (Copy of passport, Utility bills, Voter ID, etc.) Income Proof (Salary slips and

ITR details)

 Bank statement showing repayment of ongoing loan

 Property-related Documents

 Loan statement and list of property documents in possession of the existing lender

9. BridgeLoan:-
This type of home loan is taken by people who want to a buy another property by selling off the
existing one. The fund helps meet short-term fund requirements like down payment for the new
house till the old property is not sold off. Bridge loans are generally offered at higher interest
rates with a maximum repayment tenure of up to 2 years.

Eligibility Criteria for Bridge Loan

Documents Required for Bridge Loan

Following is the list of documents required for availing bridge home loan.

 Age Proof ((Birth certificate, Class 10 marks sheet, etc.)

24
  Address Proof (Copy of passport, Utility bills, Voter ID, etc.)

 Income Proof (Salary slips and ITR)

 Bank statement showing repayment of ongoing loan.

 Property-related Documents.

1.7 Housing Finance Evaluation

Housing Development Finance Corporation (HDFC) was the first housing finance
Company to setup operations in India in 1977. After the National Housing Bank Act. 1987, was
passed NHB came into existence as a Subsidiary of the Reserve Bank of India (RBI) to regulate
housing finance companies and provide them with refinancing to
supplement their fund requirements. Public sector banks were allowed to provide housing loans
directly to retail clients only in 1988.

1.8 Advantages of Home Loan:-

The various benefits of home loans arising to the customers are:-

 Attractive interest rates: The various banks offer attractive interest rates to boost and help their
customers. Many banks provide loans on fixed or floating rates to facilitate consumers as per
their needs.
 Help in owning a home:-The home availed by a person with the help of banks, because they
provide technical and financial assistance to customers for owning their dream home.
 No requirement of guarantor: - The commercial banks now a day, liberlise their laws
regarding home loans. Some of banks don’t even require the guarantor to grant loan to their
consumers. They also make consumers free by reliving him to find a guarantor to complete the
proceedings of availing loan
 Door-Step Services: - These door to step services are provided from enquiry stage to the final
disbursement takes place such services are beneficial for customers in present busy life. Banks
like ICICIbank and standard chartered bank provide door to step services to customers to borrow
loan.
 Loan period: - There are many banks which provide maximum loan tenures upto 15- 20 years
based on the loan amount and the creatibility of customers. This relieves the customers to repay
loan amount till a long period.

25
  For accidental death insurance:-Some banks provide free accidental death insurance with
housing loan which is also beneficial for the customers.
These benefits or advantages of home loans are responsible for making than so popular among
customer that a person who don’t have their home and want to buy, they with home loan. Home
loans help such persons in making their dream home.

1.9 Disadvantage of Home Loan:-

The main disadvantages of home loans are high lightened as below:

 Delay in processing: - Many times, there are huge delays in processing of providing home loans
because various formulations to be fulfilled in this process. Due to these delays customers feel
mentally as well as financially weak.
 Fluctuating interest rates:-Some banks give home loans at floating rates, which fluctuate at
Different intervals due to some reasons. These changes sometimes, may lead to increase in
interest rate which will increase the cost of home loans to the customers
 High Cost: The public sector banks charge high processing cost for home loan’s sanctioning.
They are forced to pay serious charges at various stages to fulfill the requirements. Some
consumers are not able to pay such charges so such people could not avail the benefits of home
Loan schemes.

 Problems in disbursement:-There are many problems in disbursement of home loan amount.

There is some delay in disbursement of loan amount to the customers due to legal formalities.
This causes problems to the customers. These are limitations or disadvantages of home loans.
But sometimes some banks charges high installments to repay loan amount. Such also causes
problem to customers. These limitations can be removed by providing good and promote
services to the customers.

1.10 Disbursement of Home Loan:-

The every bank has its own procedure to disburse the loan amount among customers.
After choosing your right home, the next step is disbursement of home loans. The loan amount is
disbursed after identifying and selecting the property or home that are purchased and submit the
requisite legal documents. In the disbursement of home loans a clear title and full verification to
ensure that a person has full rights on his house. The 230A of seller and /or 371 clearances from the

26
appropriate authority of income tax is also needed.

(I) Eligibility criteria:-

However, if one is a resident or non-resident individual who is planning to buy a house in India,
one can apply for a home loan. If a person has decided to buy a property in near future, he/she
can apply for a loan before even selecting the property. Once the maximum amount to put into
the property has been decided, the Housing Finance Institutions or Banks will let the customer
know that how much he/she is eligible for and this helps to plan out the budget.

(ii) Conditions regarding co-applicants: -

All Housing Finance Institutions lay down conditions on who can be co-applicants. All co-
owners to the property. Need to be co-applicants to the loan necessarily. These institutions do
not permit minors to join in as either co owner or as co-applicants because a minor is not eligible
to enter into a contact as per law. They do not permit even friends or relatives who are not blood
relatives to take a property jointly. However, Income of co-applicants can be clubbed together
to get higher loan eligibility.

Given below is a Table that throw light on acceptable relationship of a co-applicant for
clubbing of income.
Income Clubbing of Co-applicants:- It is as follows: -
Combination Income Clubbing:-
 Husband-Wife: - Income of husband-wife can be clubbed.

Parent - son: - It can be clubbed if only son is there but not if any male sibling exists.
 Brother-Brother: - If they are currently staying together and intend to stay together in
the new property, then only, their income-can be clubbed for above purposes.
 Brother-Sister: - No clubbing-is possible.

 Sister-Sister: - No clubbing is possible.

 Parent-Minor- Child: - No clubbing is possible in this case also.

(iii) General Terms and Conditions: - The following are the terms and conditions applicable to
the basic home loan product only. These are likely to change on the basis of the variations of
the home loan product. Typically, in general home loans, the following conditions are
applicable :-

27
 1) The loan to value ratio (LTV) cannot exceed a particular percentage. This differs from
product to product and from one Housing Finance Institutional Bank (HFI/B) to another. The
components of the value of the Property calculated here are covered under cost of property.

2) The maximum tenure of the bank is nominally fixed by HFI/Bs. However, HFls/Bs do
provide for different tenures with different terms and conditions.

3) The installment that one pay is normally restricted to about-50-per cent of the monthly-gross
income of the candidate.

4) The total monthly outflow towards all the loans that have been availed of, including the
current loan is normally restricted to 50% of the gross monthly income.

5) One will be eligible for a loan amount which is the lowest as per one's eligibility. This is
calculated as per the LTV norms, the HR, norms and the FOIR norms as mentioned above.

6) Most HFls/Bs consider the profile before they judge the repayment capacity. The judgement is
based on age, qualifications, number of dependents, employment details, employer credentials,
work experience, previous track record of repayment of any loans that have been availed of,
occupation, the industry to which the candidate's business relates to, if he/she is self-employed,
then the turnover in the last 3-4 years etc.

7) Some HFIs/Bs insists on guarantees from other individuals for the repayment of the loan. In
such cases, the customers have to arrange for the personal guarantee before the disbursement of
the loan takes place.

8) The property should be technically clear before the HFIs/Bs disburses the loans amount. Most of
institutions and banks have a team of technical experts who visit the site to get a technical report
before the disbursement of loan. This is also beneficial to the customer as they check for the
technical quality and compliance with local laws.

9) The property should be legally clear before one can avail of a disbursement of the loan amount.
Housing-Finance Institutions /Banks (HFIs/Bs) take legal clearance from their lawyers before
28
 the

disbursement of amount. This proves to be beneficial to the customers as a legal expert checks
his/her documentation to ensure that he/she get a proper title to the property.

10) The disbursement of the loan is as per the progress of construction of the property unless it is
a ready property in which case the disbursement will be by one single cheque.PEMI or simple
interest on the loan amount disbursed to the customer in case of a part disbursement will be
payable by the customer on the disbursement.

11) The disbursement in most cases will be favouring the builder or the seller or the society or
the development authority as the case may be. The disbursement will come in the customer's
favour under special circumstances only.

12) The repayment of loan can be made either through deduction against salary, post dated
cheques, standing instructions or Auto debit instructions to bank.

13) The principle is amortized either on annual reducing or monthly reducing basis as the case
may be.
The above terms and conditions are generally true for most Housing finance Institutions/Banks with
respect to the general Home Loans. However, the specific terms and conditions vary with respect to
special Housing Finance Institutions or Banks.

(iv) Charges applicable to home loans:-

The different kinds of charges applicable to home loans are discussed below:

a) Processing fees:-
First of all, comes the process fee. This is a charge that is levied by most HFls/Bs. This has to
be paid at the time of submission of the application form. It's normally charged as a
percentage of the loan amount sanctioned. Some HFls also charge a flat fee based on the loan
amount instead of a percentage. When a lower amount is sanctioned the excess fees paid at
the time of submission of the application is adjusted with the charges, which one make to the
HFI/B subsequently. Most HFls/Bs refund the processing fee if the loan application is rejected.

29
b) Administrative fees:-
This charge is again, normally, a percentage of the loan amount sanctioned. It is collected by the
HFI/B for the maintenance of customer's records, issuing interest certificates, legal charges, technical
charges, etc. though the tenure of the loan. It is payable by the customer when he/she accepts the
offer letter given by the HFI/B. This payment has to be made before the availment of the
disbursement. The mode of collection of these fees varies from one HFI/B to another.

c) Rate of interest:-
This is the rate of interest applicable on the loan amount through the tenure of the loan. It is
charged on the principal monthly reducing method. Most HFIs/Bs give an option to select either
a fixed rate of interest or a variable rate of interest.

d) Legal Charges:-
Some HFIs/Bs mainly Public Sector Banks levy legal charges that they incur on getting
the property documents vetted by their panel of lawyers.

e) Technical charges:-
These charges are also levied by certain Housing Finance Institutions/Banks (HFIs/Bs) to meet
their expenses on the technical site visits to the customer's property. This ensures quality of
construction and construction within the norms as stipulated by the respective approval
authority.

f) Stamp duty and registration charges:-

HFIs that go in for a registered mortgage pass these charges on to the customer. These are rather
heavy in certain states depending on the laws laid down by the state where one buy a property.

g) Personal Guarantee from Charges:-

Since the personal guarantee provided by the customer need to be stamped, these charges are
also recovered from the customer. They are charged to him by HFIs who demand for
Guarantees.

h) Cheque Bounce Charges:-

In case the cheques through which one make a payment to HFls get dishonored, some
Minimum charges are levied by the HFI. The same are recovered from the customer. 30
 (i) Delayed payment charges:-
HFls/Bs charge delayed payment charges from the customer if he/she delays the
Payment of installments beyond the due date.

(j) Additional charges:-

These are levied as a percentage on the delayed payment charges by most HFls. They
are levied if one fail to pay the dues within the stipulated time after a delay has taken place.

(k) Incidental charge:-

This is payable in case the HFI/B sends a representative from their organization to collect
their outstanding dues. It is normally charged at a flat rate per visit. These charges are levied
by most HFls/Bs.

Prepayment Charges:-
This is a penalty charged by HFls/Bs from when one makes either a part prepayment
Or a full repayment of the loan. This charge is levied only on lump sum payments and not on
the EMls that one pays. This charge is levied on the amount prepaid by one and not on the
entire outstanding principal. These charges are gradually being discount. So, these are the
charges levied by most Housing Finance Institutions and Banks while granting home loan to
the customers. Now, the decision on the repayment capacity shall be talked about as follows.

(v) Judgement regarding repayment capacity on the basis of income :-

To understand how the income of a customer is considered to arrive at his repayment
Capacity, it is first necessary to classify customers into salaried and self employed
Individuals.

(i) The income of the salaried individual is considered in the following manner:-

Gross monthly income as it appears on the salary slip

Less: - Any non regular variable income appearing on the salary slip (including overtime,
etc.)
Add: - 50 per cent of the average variable income of the last six months.

31
Add: - Any fixed cash/voucher payments for which proof can be submitted.

Add: - 50 per cent of the average variable cash/voucher payments with proof like traveling

Reimbursement etc.

Add: - HRA receivable if not being received already in the salary slip.
The above income calculated for the calculation of eligibility using IIR and FOIR norms.
For calculation of FOIR, the installments of all the loans that one has availed of currently
for which repayment is being made is taken into account as well. The lower of the two
Eligibilities is considered as the maximum repayment capacity.

b) To consider income of Self-employed individuals we further classify them into

Professionals and non-professionals.

• Professionals: - Comprising doctors, chartered accountants, lawyers, architects, etc.

For calculation of eligibility of professional's income is computed by most HFIs using
the gross professional receipts instead of the Net profit as in the case of self- employed
non-professionals.

Non-Professionals: - The income of non-professionals is normally calculated by HFIs in the

following manner: -

Average of the net profits of last 2 years as it appears in the profit and loss account (Returns
need to be filed for the same. They should be filed regularly before the due date is over).

Less: - Any income, which is unusual and non-recurring in nature like sale of some asset,
etc. which affects profits substantially

Add: - Any expense that is unusual and non-recurring in nature like repairs and
maintenance that has not been capitalized and effect profit adversely.

Add: - 50 per cent of the average depreciation of the last two years. The above income is
calculated for the calculation of eligibility using IIR and FOIR norms.
For calculation of FOIR the installments of all the loans that one has availed of currently for
which repayment is being made is taken into account and the eligibility is worked out.
The lower of the two eligibilities is considered as the
maximum repayment capacity.

32
(vi) Credit documentation:

Given below is the exhaustive list of credit documents- that need to be submitted for
a general home loan product. The documents vary from one HFI/B to another based on one's
employer, qualifications experience etc. the general requirements are as follows:
-
(a) Income Documents: -
For salaried slips for the last three months appointments letter-salary certificate- retainership
agreement, if appointed as a consultant-Form 16 issued by the employer in Customer’s name income
document for self employee - last three years profit and loss Account statement duly attested by
Chartered Accountants. Last three years Balance Sheets duly attested by Chartered Accountant, last
three years Income Tax Returns with computation chart duly filed and certified by the Income Tax
authorities.

b) Proof of employment: -
Identify card issued by the employer- Visiting card.

Employer's details (In case of private limited companies): -

Profile of employer on employers letterhead (to be signed by a senior person in the

organization) comprising
• Name of promoter/directors

• Background of promoters/directors

• Nature of business activity of your employer

• Number of employees

• List of branches/factories

• List of suppliers

• List of clients/customers

• Turnover of employer

• Annual reports of the employer for the last two to three years
33
(c) Proof of age (Anyone of the following) : -
Passport- Voter's ID card-PAN card-Ration card-Employer's identity card-School leaving
certificate-Birth certificate.

(d) Proof of residence (Anyone of the following) :

Ration card-Passport- PAN card-Rent agreement, if the customer is staying currently on rent-
Bank Pass book-Allotment letter from the company if he/she is residing in company quarters.

(e) Proof of name change (If applicable) : -

A copy of the official gazette –A copy of a newspaper advertisement publicizing the name
change-Marriage certificates.

(f) Proof if investment (If required) :-

Bank statement for the last six months of all operating and salary accounts - Bank statements
for the last six months of all current accounts, if self-employed-any other photocopies of
investments held, if required by the HFC.

(vii) Legal documentation:-

Legal Documentation the typical legal documents that need to be submitted to
the HFC arc discussed here. Given below is a list of legal property documents that need tobe
submitted to the HFC for mortgage of the property. The name and the list of documents vary
from state to state and also depend on the type of property being financed. A broad outline of the
documents required is given below.
a) Acceptance copy of the offer letter issued by the HFC/B.
b) Title documents of the property that include -sale agreement duly
Registered-Own contribution receipts - Allotment letter-Registration receipt-Land documents
indicating ownership, if applicable- Possession letter-Lease agreement, if applicable (Property
bought from a development authority) - Mortgage deed if the HFC
opts for a registered mortgage.
c) No Objection Certificate from the developer, society or development authority as
applicable.
d) Personal Guarantees, if applicable. 34
e) In case of alternator additional security, documents for the same depending upon the
security details.

f) Post dated cheques for the EMls.

The above documents are only indicative in nature and do not cover the entire list. It may,
also be noted that in a resale case, the previous chain of agreement also need to be taken.

(viii) The tax benefits that are applicable to housing loans for individuals: -
Currently Tax Benefits to individuals are available only for the Home Loans and
Home Extension Loans products. The benefits available are covered under these sections.

Property Insurance:-

Is it compulsory to insure the property? Some HFls insist on a mortgage redemption life
insurance policy. In this case the customer gets a benefit of an interest rate reduction. Though
the HFI may not insist, it is better to go in for property insurance to safeguard the asset against
any sort of damage or loss. The customer can select the tenure for the
Property insurance. The insurance premium is changed up front. Most insurance companies
provide for huge discounts on the rate of premium for larger tenures. The premium charged
currently is seventy-seven for every lakh of property for a year. So a customer has to fulfill
various conditions to be eligible for availing home loan from a Housing Finance Institution/Bank
After fulfilling these conditions, a customer can avail loan at low interest rate i.e. fixed rate
floating rate. A decision on whether one should go in for a fixed-rate loan or a floating-rate loan
now is a function of two factors i.e. One's perception of where interest rates in the economy are
headed and one' capacity to ride the interest rate changes. A floating-rate loan let one take
advantage of further falls in interest rates but one stand to loose if interest rate, rise again.
However this decision is based on the perception of the consumer.

35
 CHAPTER 2

REVIEW OF LITERATURE

HDFC home loan is an ideal solution for those who are looking for charges like public sector
banks and services like private sector banks. HDFC which basically started off as financial
institutions for home loans in India is still the pioneer in the field. HDFC bank Home loans are
still one of the best home loans in India. One of the major problems with private financial
institutions in India is that they often hike interest rates. And Public banks are hard to get
through.

2.1 Summary

After going through previous studies of Home loans I came to conclude that

 There is growth of home loans after 2008.

 Home loans have an inverse relation with interest rates i.e. when interest rate low the

demand of home loans increase. (Ojha 1987)

 People are going more towards home loans than private mortgage insurance.
(Bernstein2008)
 Government taking various steps to encourage people to go toward home loans.
(Haavio, Kauppi 2000)
 Growth of home loans are due to increase of living standard of people, shifting From
joint family to nuclear family (Lacourr, Micheal 2007)
 There are some problems also attach with these home loans such as time i.e. filling of
application of loan to closing people have their own specified needs from these home loans
which are not fulfilling. (Lacour Micheal 2006).
 SBI provide a very low interest rate on home loans as compared to other banks. (SBI May
2000)

36
2.2 Now after this conclusion the details of reviews are below

Rao and Pahuja (2005)revealed that during 2002-03 housing loans by banks grew at a hefty
growth rate of more than 100%. The factors that contributed to this aggressive growth in the
portfolio of housing loans of banks and HFC are: Tax intensives on repayment of principal and
interest, rising income level of middle class, falling interest rate, stable real estate prices, easy
availability of housing loans, low returns on the investment opportunities available in the
market. They also concluded that although there is strong growth in housing loans by financial
situations in India, we are still behind the developed countries in terms of housing loans to GDP
ratio. In India it is around 2.5% compared to 57% in the UK and 54% in the US. It shows that
there is a vast scope for housing loans in India. One economist has argued that every rupee spent
on the housing sector will increase the GDP by more than 75 paise. It also creates a labour
intensive. Despite the immense growth in housing loans there are certain challenges that the
banks might face in the time to come, e.g. falling rate of interest, rising mismatch in the assets
and liabilities of the bank, rising NPA in the housing loan portfolio, etc.

Bhalla et al. (2009) showed that the main business of housing finance in India is concentrated
around a few players like banks and major housing finance companies. The HH Index as an
indicator of market concentration shows increasing trend both on the basis of market share of
individual players in disbursement of loans as well as on assets base. It shows decreasing
competitive ability of small players. Small housing finance companies are losing the battle to the
bigger players. Small players in the sector are facing threat from the banks to capture their share
because of their wider network and reach. Growing concentration of major share of housing
loans disbursements in the hands of larger banks and giant housing finance companies has forced
the small housing finance institutions to identify the challenging areas in this field to capture the
future market and ensure their remarkable place. Another aspect regarding the competitive
dynamics in housing finance is that the indicators showing HFCs and other players as luring
customers to get housing finance are not mainly because of the stiff competition but because of
the need to change the attitude of the Indian people towards the phenomenon of loan and
to bring them into the formal system of housing finance.
In India, even today 60 per cent of the households approach informal sources or financiers to
borrow funds, which mean an untapped market for housing finance (Analysts 2001). Housing
finance institutions particularly housing finance companies (HFCs) have to spread out
geographically while ensuring consistency in the processing and service standards to compete
37
with the banking sector. The performance of these institutions has been influenced by

more than just customer demand. Stricter NPA norms, rising interest rates, and stiff competition
in mobilizing low-cost deposits have all affected the supply- side factors, which in turn has
influenced the performance of these institutions in terms of volume and competitiveness (NHB
2005).

Chandrasekhar (2010) tried to analyse the structure of the newly liberalised housing finance
market of India and analyse its affect on the Indian housing market. The first section of the paper
introduced housing finance markets around the world. The paper analysed the history, structure
and current trends in the housing markets of two developed economies namely: USA and the
UK. Secondly the paper analysed the interaction of the housing finance market and housing
demand in the above countries. A comparative analysis with international housing finance
markets improved our comprehension of the Indian market and the challenges it faces.

The second section of the paper presented a clear picture of the structure, composition and
functioning of housing credit markets in India. The third section of the paper analysed the
relationship between Housing finance variables such as House disbursements and Interest rates
and Housing demand variables such as Housing sales and Housing demand for a city in India
namely; Hyderabad. The last section of the paper discussed policy initiatives which could help
boost the Indian housing and housing finance markets.

Chauhan and Shah (2010) found that housing shortage in India is increasing rapidly, mainly
because supply is much less than the housing demands. In urban area, the problem is more
complex and complicated as the pressure for houses and services due to both natural increase
and migration. The most important resources required to purchase House is finance. Housing
plays an important role in a country’s economy, typically accounting for 10 to 20 per cent of
total economic activity. In this present paper investigations have been made on all the Housing
finance Institutes in India and their mechanism in system.

38
 CHAPTER 3

RESEARCH METHODOLOGY

Introduction to Research Methods: Definition of research, role and objectives of

research, applications and types of research, research process and steps in it. Collecting and
reviewing the literature, conceptualization and Formulation of a research problem, Identifying
variables, constructing hypothesis, Synopsis.

3.1 Introduction

Research is a scientific investigation. Investigation means a search for new facts and ideas in any
branch of knowledge. Thus, we can say that research is a search for knowledge. Research may
be considered as a movement, a movement from the unknown to the known. It is actually a
voyage of discovery.

Research is carried out for two purposes; one is the discovery of new facts and the second,
verification of the old ones. The object of every business organization, of course, is the
discovery of new facts, new relationship, and new laws governing the business phenomena. But
constant verification of the old concepts is also needed especially in dynamic business
environment.

Common sense knowledge, based on the accumulated experiences, prejudices and beliefs of the
people is often contradictory and inconsistent. On the other hand, scientific observations are
based on verifiable evidence or systematic body of proof that can be cited. For example, some
common sense statements are: man is more intelligent than woman; married men remain happier
than single people; rural people are more hardworking than urban people etc. Contrary to this,
the scientific research or scientific inquiry finds that woman is as intelligent as man; there is no
association in happiness and marriage; hard work is not related to environment alone. Thus, a
statement based on common sense is just a guess or prejudice or mistaken interpretation, though
at times it may be true, wise and a useful bit of knowledge. But it is not based on any scientific
evidence. A scientific statement is based on accumulated systematic knowledge through
research.

39
2.2 Meaning and Definition of Research

In order to plan and carry out research, it is necessary to know what we mean by research-in
general, as well as in the specialized fields of business management.

“Research is an Organized and Systematic way of Finding answers to Questions.”

Systematic because there is a definite set of procedures and steps which you will follow. There
are certain things in the research process that are always done in order to get the most accurate
results.

Organized in that there is a structure or method in going about doing research. It is a planned
procedure, not a spontaneous one. It is focused and limited to a specific scope.

Finding answers is the end of all research. Whether it is the answer to a hypothesis or even a
simple question, research is successful when we find answers. Sometimes the answer is no, but it
is still an answer.

Questions are central to research. If there is no question, then the answer is of no use. Research
is focused on relevant, useful, and important questions. Without a question, research has no
focus, drive, or purpose.

The word research is derived from the Latin word meaning to know. It is a systematic and a
replicable process, which identifies and defines problems, within specified boundaries. It
employs well-designed method to collect the data and analyses the results. It disseminates the
findings to contribute to generalizeable knowledge.

Definitions: Various social and behavioural scientists have defined the word research in
different ways. Some of the most popular definitions are:

1. “Endeavour to discover facts by scientific study, course of critical investigation”, by

Pocket Oxford Dictionary.

2. “Systematic investigation to establish facts or collect information on the subject”, by

Collins Concise Dictionary.

3. “Research is systematized effort to gain new knowledge”, by Redman and Mory.

40
4.“Research is the manipulation of things, concepts or symbols for the purpose of generalizing to
extend, correct or verify knowledge, whether that knowledge aids in construction of theory or in
the practice of an art”, by Encyclopedia of Social Sciences.

Thus, we can say that research is a systematic and objective attempt to study a business problem
for the purpose of deriving general principles. In other words, research is a systematic,
controlled, empirical and critical investigation of hypothetical propositions about the presumed
relations among phenomena.

3.3 Characteristics of Research

A well-organized research must possess certain characteristics features, which are as follows:

1. Solution Oriented: The problem of research must be clearly defined and stated. The motive
of research must be mentioned in the beginning of research work. The research should provide a
solution of a business problem.

2. Logical: In a research we find out facts about a phenomenon and draw conclusions about it.
The inferences and generalizations thus made must be logical. For example, all illiterate people
in the village live longer than the educated people in the cities leads to the conclusions that
illiteracy is the cause of longevity. This is an example of illogical research conclusion.

3. Objective: Observing true picture of a phenomenon without being affected by observers own
opinion is termed as ‘objective’. Objectivity means knowing reality. The criterion of objectivity
is that all researchers should arrive at the same conclusion about the phenomenon on which they
are pursuing research.

4. Impartiality: A dishonest research may select data items of individuals to draw conclusions
to his favour. This brings bias into research, which affects the objective of the study. Therefore a
true research must be impartial and unbiased.

5. Accuracy: A research worker needs to gain some expertise in the study he is undertaking.
This expertise results in achieving the accuracy in the solution drawn. The accuracy of
conclusions is a sensitive issue as it may affect the whole decision-making.
6. Systematic: In a research there should be well-defined steps. Each step should be sequentially
linked with another, so that, the whole research work is an organized structure.
7. Verifiability: the results of a research are subjective to verifications. For building a sound
basis for decision making one verifies the research results by replicating the study.
41
.

8. Empirical: A research is an empirical process and involves data collection. The results are
based on observed experience or empirical evidence. Research rejects assumptions and dogma as
methods of established knowledge. It accepts only what is verified by empirical observations

3.4 role and Significance of Research

A research study plays a very vital role in studying, understanding and solving a business
problem. Research is a process of obtaining dependable solutions through systematic and
scientific investigations. In the modern business environment where operational problems are of
complex nature, research provides a solution oriented carefully designed procedures.

Research helps us to discover the functional relationships among various phenomena that
exist in a business or a government organization. Decision-making under uncertainty is a fact
in every sphere of a business. Research provides us inferences and generalizations that help
in forecasting the future happenings in the organization. All private or government
organizations form their policies on the basis of researches conducted.

3.5 Objectives of Research

The main goal of research is to improve the quality and level of living in the society. The
purpose of a research study is to find out the hidden facts about a business phenomenon. The
obvious function of research is to add new knowledge to the existing store. It serves the
government and the business organizations in forming their future policies. The objectives of a
research study are listed below:

1. Understanding a business problem: The first and foremost objective of any study is to
understand, analyze and explore a business problem. Once complete familiarity with the
phenomenon is achieved, it is easier to decompose the complex problem into smaller once.

2. Identifying the cause and effect relationship: Individuals form groups, and groups form
organizations. They are interdependent. It is very important for a researcher to identify the
functional relationships among various components of an organization. A scientific investigation
is necessary in studying the cause and effect relationship of variables involved in a business
phenomenon.

42
3. To innovate new ideas: One of the objectives of a researcher is to bring constant
improvement in the techniques of his trade. Apart from verifying and testifying the existing
assumptions, one of the functions of a research is to add new knowledge to the state of the art.
Research invokes the innovation of new concepts, theories and idea in a business study. Apart
from this, research also removes and discards worthless theories that are prevalent in the society.

4. To improve the quality: The whole exercise of any activity is done for the improvement of
quality of a product, machinery, or life of human beings. For a business organization it is almost
important to improve the quality of its products. This can be achieved by a systematic and
critical investigation i.e. research

3.6 Types of Research

Research is a multidimensional activity. It comes in various forms and is used in all social,
behavioural, educational, economical and management sciences. According to the approach and
method involved in a research, one can classify the

following types of research.

1. Descriptive v/s Analytical research

Descriptive research basically describes what is. It mainly involves collection, recording,
describing and analyzing the facts related to the study. It tries to find the existing status, trend
and state of affairs in a phenomenon. Descriptive research involves surveys, but they are not
merely data collection as they also involve measurement, classification, analysis, comparison
and interpretation.
In this type of research the variable under study are uncontrollable. One can only observe and
report what is happening in a situation. Analytical research, on the other hand deals with what
will be. In this type of research, the variables involved are carefully and scientifically controlled
and manipulated. Analytical research is also known as experimental research and is a very
sophisticated technique. This kind of research is based on four important characteristics namely;
control, manipulation, observation and replication.

2. Applied v/s Fundamental research

Applied research is action oriented or solution oriented. The main goal of an applied research is
to obtain an immediate, specific and practical solution of a problem that a business organization
is facing right now. It gives here and now solutions in actual problem situations. It involves
scientific investigations but the methods are not so rigorous as in fundamental research. It finds
solutions to be applied in local environment and they may not be universally acceptable. Applied
43
research does not promise to add new knowledge to the discipline.
.

Fundamental research is carried out to scientifically enhance the organized body of knowledge
of a discipline. Also know as basic research, it is concerned with formulation of theory and
generalizations of principles. To evaluate and expand a formulated theory it may use empirical
data. Basic research involves systematic, highly sophisticated scientific techniques. Fundamental
research may not suggest the solutions of immediate problems, it rather draws long term
conclusions.

3. Quantitative v/s Qualitative research

Quantitative research is based on quantitative variables, which can be measured in appropriate

units. These involve objects and individuals that vary in size, quantity, amount, scale or degree.
For example, prices of commodity can be measured in rupees, weight of a product is measured
in kilograms and the mileage of vehicle is measured in kilometers per litre.

Qualitative research, on the other hand, is based on qualitative variables, which vary in quality
of type. These variables cannot be measured on a scale or in any units. Social scientists use
qualitative research for studying human behaviour. In market research surveys qualitative
research is carried out to investigate the likes and dislikes of customers. It helps in
understanding the current pattern of demand of a company’s products

4. . Conceptual v/s Empirical research

Conceptual research involves the development of new theories, abstract ideas, and generalized
principles. Philosophers, intellectuals and thinkers carry out this kind of research. On the basis of
their conceptual knowledge they build theoretical models. Conceptual research is an intellectual
process to develop and verify knowledge. Empirical research is based on observation and
experimentation. The information collected in the form of facts develops the conclusions and
theories about a phenomenon. The models, so developed, can again be verified by a replication
of data collection. To test a given hypothesis empirical research is most popular and powerful
tool in the modern world.

5. Other types of research:

Any research study is derivation of one or the other of above four types of research. One can
further classify a research on the basis of its purpose, time taken and the discipline of knowledge
it relates to. For example, Historical research is the study of past events, historical documents,
remains and relics. Clinical research is employed to study the effects of a new drug. Market
research is performed to forecast the potential demand of a product. One- time research is carried
out on a small scale in short period with a specific purpose. Educational research is directed
44
towards the study and development of educational system.

Social research is concerned with the social problems of the society. Field research is done by
going out in the field or market, where as Laboratory research is carried out with in four walls of
a laboratory.

3.7 Research Process

Research is a search for knowledge. It helps in taking appropriate decisions. Research involves
asking a question and then trying to find an answer to it. Research is essentially a systematic,
scientific and structured inquiry seeking facts through objective methods. Therefore a research
must have a clearly defined step-by-step process. Knowledge of the research process is essential
both for those who conduct the research and for those who wish to be benefited by the
conclusions drawn from the research. A meaningful knowledge should have a definite purpose
and direction. In developing a research process, one would like to list the sequence of step-by-
step activities. In a research process these steps are inter- dependent and may overlap each other.
They may not follow a strict sequence and the researcher has to be vigilant of their order
continuously throughout the research process. However, one can broadly enlist the main steps
involved in a research process as a procedural guideline to the researcher. These steps are:

1. Problem formulation

2. Literature survey

3. Development of hypothesis

4. Research design

5. Choice of sample design

6. Data collection

7. Analysis and interpretation of data

8. Hypothesis testing

9. Interpretation of results

10. Report writing

1. Problem formulation

Formulation of a problem is the first and foremost step in a research process. It is not always
45
easy to identify and define a problem in an ever-changing business environment.

A researcher not only discovers and defines a problem area but also a specific problem within
that area concerning his interest in business. The problem should be clearly and precisely stated.
The statement of the problem must be complete.

The problems in a business may sometimes be obvious and one can pinpoint them. Many a
problems is not so apparent and needs explorations. Thus, first of all one has to identify a
problem specifically and thoroughly, and then it has to be expressed in scientific terms so that
statistical analysis can be performed on that problem.
2.Literature survey

After the formulation and identification of a problem, the next important step is the review of
literature survey. An exhaustive and critical review of professional literature familiarizes the
researcher with the current state of knowledge. It helps in understanding of the problems and
hypothesis that others have studied. It clarifies the concepts, theories, major variables involved,
operational definitions and research methods used in the past. This contributes to the cumulative
nature of scientific knowledge.

Every year thousands of articles, books and monographs are published in any field of study.
Therefore, it is important to sort out the relevant literature connected with the field of one’s
interest. It is best to begin any search for literature with one of the guides to published literature.
These guides are increasingly computerized and include bibliographies, indexes and abstracts.
With the advent of Internet the modern life has changed drastically. One can find an ocean of
information within the four walls of one’s study room through Internet. Some of the popular
search engines like Google, yahoo and rediff are becoming more popular in searching for
literature on any topic.

3. Development of hypothesis

Once a problem is defined and a review of literature is made, the next step is to define clearly the
hypothesis in a research problem. A hypothesis is a tentative assumption in a research problem,
which has to be tested empirically with the help of observed data. When formulating a
hypothesis, a researcher does not know whether it will be rejected or accepted. A hypothesis is
constructed and tested; if it is rejected, another one is formulated; if it is accepted, it is
incorporated in the scientific body of knowledge.

One should arrive at a clear and specific working hypothesis for which research methods already
exist. A good hypothesis states a research problem in concise and precise terms so that the
researcher is focused on the problem at hand.
46
4. Research design

A research design is a well-defined plan of action. It is a planned sequence of the entire research
process. It is a blue print of research activity. In a big business scenario designing a research
study is very complex. Therefore, a research design may change during the operation of a
project. A good research design must use minimum of resources like time, money and
manpower. A research design must be able to translate the general scientific model into a
practical research operation. A scientifically developed research design possess the
characteristics like (i) objectivity (ii) Reliability ( iii) Validity (iv) Generalization.

5. Choice of sample design

In any investigation the group of all items, objects or individuals under study Is called
‘population’ or ‘universe’. For all purpose of determining population Characteristics, instead of
enumerating entire population, some items of the population, Called a sample, are observed.
Then the sample characteristics are utilized to Approximately determine or estimate the
population. For example, on examining the Sample of particular product, we arrive at a decision
of purchasing or rejecting that Product. There will be surely some error in such an approximation
and is inherent and Unavoidable in any and every sampling scheme. But samples results in
considerable gains In terms of time, money, accuracy and efforts.Drawing a sample of some
predetermined size from an entire population is not A child’s play. These have to be a systematic
plan to choose the sample items. This plan Or a technique of drawing a sample is known as
sample design or sample plan or Sampling technique. Researchers have suggested various
sample designs. One research Situation may be different from another, therefore, simple random
sample, though most Popular, may not be suitable in each case. Depending on the requirement of
a situation

One can choose one of the following sample designs:

1. Purposive or Judgment Sampling

2. Simple Random Sampling
3. Stratified Random Sampling
4. Systematic Sampling
5. Cluster Sampling
6. Area Sampling
7. Multi-stage Sampling
47
 8. Multi-phase Sampling

6. Data collection:

Once a sample design is formulated, the next step in a research process is the Collection of
relevant data. There can be two sources of data (i) Internal data that refers to the happenings
and functions of a business organization. For example, the sale-Purchases details of a company.
(ii) External data, which is related to outside sources and External agencies. There are two types
of data (a) Primary data (b) Secondary data. Primary data are those observations, which are
collected by an investigator for the first Time, Secondary data are already available in the
records and have been collected by Some other researcher for the purpose of studying a similar
problem.

Methods of collecting primary data are:

 By observation and experimentations

 By direct personal interview

 By direct interviews through phone, sms and email.

 By indirect personal interview

 By mailed / emailed Questionnaire

 By schedules through enumerators.

Methods of collecting secondary data:

 International organizations like WHO, UNO etc.

 Government publications like economic survey, CSO, NSSO.

 Journal and Newspapers

 Research articles

 Reports of business organization and financial institutions.

A method and source of data collection is chosen by an investigator taking into account the
objectives and requirements of the inquiry. The adopted method should incur minimum cost
and time should have a reasonable level of accuracy and unbiasedness.
48
 7. Analysis and interpretation of data

After the collection of data, what we have is a huge chunk of observations and numerical
values. The data at the beginning are in raw form. For the purpose of applying further
statistical techniques, one has to put the raw data in a useful form by classification,
tabulation and categorization of data. If one has to feed the data in a computer, the data
should bear the same form as required by the software used. This kind of processing of data
involves one or more of the following activities
(i) coding (ii) labeling (iii)editing (iv) tabulation (v) classification.

8. Hypothesis testing

After analyzing and processing of data, it is time now to test the hypothesis that were formed
in step 3 of the research process. A hypothesis is skeptically formulated regarding the
relationship between phenomena and variables involved in a study. Then by empirical
investigation the hypothesis is tested for possible acceptance or rejection. In other words, the
researcher decides on the basis of the observed facts that he has collected, whether or not an
assumption is valid. A hypothesis is tested by making use of a predefined decision rules
established in statistical methods. Some of the popular statistical tests are, Z- test, Chi- square
test, t- test and F- test.

In a situation where no hypothesis is formulated in a study, the observations are made on the
data directly and conclusions are drawn to formulate new generalizations and assumptions
for future purposes.

9. Interpretations of results

After the data collection and testing of hypothesis one has to reach to the conclusions of the
research study. These conclusions are the most vital outcomes of the study and have to be
dealt with very carefully. On the basis of findings of the researchwork done we draw
inferences about the phenomenon under study. This is a useful activity as without any
outcome a research study is fruitless. The results obtained from the analysis of data are to be
interpreted skillfully. A wrong interpretation my lead to wrong decisions. Interpretation may
also lead to generalizations of the phenomena understudy. It may also help in developing
new theories and can suggest new research

problems to be explored in future.

49
10. Report writing

Last but not the least is the step of reporting the facts and findings of the research study. A
report is a summary of the whole research process. The layout of a report must be attractive.
The words used in the text must be easily comprehensive to a reader. Even a non- technical
person understands a good report. In the beginning of the report one should give the title,
time period of work, acknowledgement and preface. In the main text an introduction to the
problem, summary of findings, results and inferences, and then the recommendations of the
researcher are given. The report should conclude with appendices, bibliography and a subject
or / and author indexes.

3.8 Significance of Research

In any scientific inquiry research has been the most powerful tool for knowledge seeking
people. Research is a kind of power with which one can foresee the implications of a
particular phenomenon. Research is all pervading and is used in every discipline of study.
Some of the applications of research are listed below.

1. In psychology, research is done to study psychological, cultural and motivational factors

of different types of persons.

2. In sociology, research studies are performed to analyze changing relationships among age
and sex groups, emerging class patterns, social mobility and social values etc.

3. In economics, planned development of a country and an organization is achieved through

research. It helps us in deciding the wages, salaries of all employees, profit and risk involved
in a business activity, and the effects of government policies on the economic structure.

4. In geography, research is used to study environmental control, climatic complexities,

geographical appraisal of a country’s foreign policy, geographical patterns of changes in
agricultural wastelands.

5. In education, research helps in the improvement of teaching methods, inter- relationship and
students, expenditure share of primary, technical and higher education.

6. In medical science, clinical trials are performed to study the effects of medicine. No medicine
or medical treatment is accepted by medical associations without completing a thorough research
process on the medicine or treatment.

7. In the field of business management, marketing research is the backbone of marketing a

product. Before launching a new product, market surveys are conducted to
50
identify the needs and satisfaction level of customers. It helps not only in solving existing
problems but also in identifying new opportunities. In every manufacturing industry there is a
research and development section, which is involved in improving the quality of products.
Research is carried out inproduction units to decide the amount, time and potential customers of
its products. Research methods are applied in statistical quality control and maintaining the
optimum inventory level. For a human resource manager it is important to have the knowledge
of its employee’s, salary structure, and satisfaction level, cost of living performance appraisal.
The HR department achieves the objective through research studies

8. The government cannot function without having clear and true picture of what is happening in
its state with its subjects. Every government department has a research officer with separate
section on research. The collection of data is done round the year in every department and the
government policies, budget, development programs take shape on the basis of these research
surveys.

3.
9 Problems Encountered by Researchers

Research plays a vital role in the development of a country or business organization. The
developed countries are developed because they have strong research support system. In India
the state of research was not very good before independence. The government realized the
importance of research in framing the policies for the development of the country later on. In the
modern times the business organizations have realized the importance of research in last three to
four decades only. India being a developing country is striving hard to achieve higher levels of
research. But , Researches in India face several problems are listed below.

1. Lack of skilled researchers:

Research is a scientific and systematic investigation into a problem. In India there is scarcity of
competent researchers due to the lack of scientific training in research methodology.
2. Lack of code of conduct

The researcher in India does not have a well-defined code of conduct. They do not have ethical
or moral guidelines for becoming good researcher. Therefore, they often face non-co-operation
in team members. There is a clean need of proper distribution of work, assignment of
responsibility and answerability and a well-defined code of conduct for researchers in India.

51
3. Insufficient interaction

There is a wide gap between university research departments, other research institutions, and the
policy-making bodies. This leads to the confusion for research workers what data are to be
collected and analysis to be performed. The policy maker should provide a well-defined problem
and a guideline of the data to be collected, to the researchers. There should be regular meetings
of the decision makers and the field researchers.

4. Overlapping research studies:

Due to the lack of proper information and inter-departmental interaction many times there is a
duplication of research studies. Some time two or more research studies overlap one another
leading to confusion and misleading results.

5. Lack of confidence

In India we lack confidence in research organizations and its people. Business organizations are
reluctant to provide information about their companies for it may be misused. In the surveys of
individuals common public is shy or secretive in providing personal information. Therefore,
research organizations in India will have to win the confidence that the data obtained from
companies and individuals will be kept strictly confidential and will not be misused.

6. Lack of funds and facilities:

In a developing country like India research is kept at a last priority where as for fast and
organized development research should be first priority. Researcher in India face the difficulties
of lack of funds, secretarial assistance, trained staff and computational facilities. Efforts should
be made to provide and meet the requirements of research studies by the government agencies as
well as business enterprises.

7. Lack of literature:

The management of published data is quite poor in libraries and other official sources. The
researcher has to spend unnecessarily a lot of time in tracing books, journals and reports relevant
to his study. Even the supply of government publications is not timely and regular. Through
Internet has given some relief to researchers and a lot of research material is available on
Internet. But authenticity of data on Internet is doubtful.

52
 CHAPTER 4

ANALYSIS AND INTERPRETATION

The analysis is based on the responses given by customers through questionnaires.

1.Are you interested in taking Home Loan?

72 RESPONSES

INTERPRETATION:
The above graph Shows that 52.8% are interested in taking Loan and 47.2% are not interested in
taking Loan.

OPTION RESPONSE PERCENTAGE

YES 38 52.8%
NO 34 47.2%

53
2. Are you aware of Home Loan product offered by HDFC Bank ?

72 RESPONSES

INTERPRETATION:
From the above graph it can seen that 54.2% respondent are aware of the Home Loan product
Offered by HDFC Bank and 45.8% are not aware of the Home Loan offered by HDFC Bank.

OPTION RESPONSES PERCENTAGE

YES 39 54.2%
NO 33 45.8%

54
3. Have you ever taken Home Loan before ?

72 RESPONSES

INTERPRETATION:
From the above graph it can be seen that 44.4% of the respondent have taken Home Loan before
and 55.6% of the respondent haven’t taken Home Loan before .

OPTION RESPONSES PERCENTAGE

YES 32 44.4%
NO 40 55.6%

55
4. When you have taken Home Loan from HDFC Bank ?

72 RESPONSES

INTERPRETATION:
From the following graph it can be seen that 61.1% respondent have taken Home Loan one year
before , 8.3 % respondent have taken Home Loan two year before and 30.6% respondent have taken
Home Loan more than three years before .

OPTIONS RESPONSES PERCENTAGE

ONE YEAR BEFORE 44 61.1%
TWO TO THREE YEARS 06 8.3%
BEFORE
MORE THAN THREE YEARS 22 30.6%
BEFORE

56
5. Reasons for taking Home Loan from HDFC Bank ?

72 RESPONSES

INTERPRETATION :
From the following graph it can be seen that 48.6% people’s are taking Home Loan from HDFC
Bank because of Faster processing , 30.6% people’s because of Interest rates , 11.1% people’s
because of Brand image of the Bank , and 9.7% respondent are taking Home Loan because of
Margin amount .

OPTIONS RESPONSES PERCENTAGE

FASTER PROCESSING 35 48.6%
INTEREST RATES 22 30.6%
BRAND IMAGE OF THE BANK 08 11.1%
MARGIN AMOUNT 07 9.7%

57
6. How much Loan amount you took ?

72 RESPONSES

INTERPRETATION :
From the following graph it can be seen that 51.4% repondent have taken loan less than 1 lakh , 20.8%
Respondent have taken loan between 1-5 lakhs , 6.9% respondent have taken loan between 5-10 lakhs
and 20.8% have taken loan of More than 10 lakhs .

OPTIONS RESPONSES PERCENTAGE

LESS THAN 1 LAKH 37 51.4%
1-5 LAKH 15 20.8%
5-10 LAKH 05 6.9%
MORE THAN 10 LAKHS 15 20.8%

58
7. How do you rate the interest Rate charged by HDFC Bank ?

72 RESPONSES

INTERPRETATION :
From the following graph it can be seen that 56.9% respondent are highly satisfied by the interest
rate charged by HDFC Bank , 26.4% respondent are satisfied with the interest rate , 13.9% respondent
have given average satisfactory rate , 1.4% respondent are dissatisfied with the interest rate and 1.4%
respondent are highly dissatisfied with the interest rate charged by HDFC Bank.

OPTIONS RESPONSES PERCENTAGE

HIGHLY SATIISFACTORY 41 56.9%
SATISFACTORY 19 26.4%
AVERAGE SATISFACTORY 10 13.9%
DISSATISFACTORY 01 1.4%
HIGHLY DISSASTISFACTORY 01 1.4%

59
8. While taking Loan, which things attract you the most ?

72 RESPONSES

INTERPRETATION :
From the following graph it can be seen that 62.5% respondent are attracted because of Interest rates,
6.9% respondent are attracted because of Payback period , 9.7% respondent are attracted by service
Providede by HDFC Bank , 9.7% respondent by schemes of HDFC Bank and 11.1% respondent are
attracted by other reasons.

OPTIONS RESPONSES PERCENTAGE

INTEREST RATES 45 62.5%
PAYBACK PERIOD 05 6.9%
SERVICE PROVIDED 07 9.7%
SCHEMES 07 9.7%
OTHER 08 11.1%

60
9. Even if the interest rate is High for Home Loan, you will go for it ?

72 RESPONSES

INTERPRETATION :
From the following graph it can be seen that 65.3% respondent will go for Home Loan if the
interest rate are high and 34.7% respondent will not go for Home Loan when the interest rate are
High.

OPTION RESPONSES PERCENTAGE

YES 47 65.3%
NO 25 34.7%

61
10. How do you rate the documentation procedure of HDFC Bank ?

72 RESPONSES

INTERPRETATION :
From the following graph it has seen that respondent given rate to the documentation procedure of
HDFC Bank mostly people have Rated Excellent , Very good , good and fair but only few people
have Rated poor.

OPTION RESPONSES PERCENTAGE

EXCELLENT 41 56.9%
VERY GOOD 09 12.5%
GOOD 15 20.8%
FAIR 06 8.3%
POOR 01 1.4%

62
11. Do you own a House ?

72 RESPONSES

INTERPRETATION :
From the following graph it has seen that mostly 77.8% respondent own a house and 22.2%
respondent not own a house.

OPTION RESPONSES PERCENTAGE

YES 56 77.8%
NO 16 22.2%

63
12. Have you get if Financed ?

72 RESPONSES

INTERPRETATION :
From the following graph it is shown that 70.8% respondent Home are financed and 29.2%
respondent Home are not financed.

OPTION RESPONSES PERCENTAGE

YES 51 70.8%
NO 21 29.2%

64
13. What is the reason of getting it Financed ?

72 RESPONSES

INTERPRETATION :
From the following graph it can be seen that 56.9% respondent get financed because of Non-
availability of funds, 18.1% respondent get financed because of tax benefit and 25% respondent
get financed because of any other reasons.

OPTION RESPONSES PERCENTAGE

NON-AVAILABILITY OF FUNDS 41 56.9%
TAX BENEFIT 13 18.1%
ANY OTHER REASON 18 25%

65
14. Are you Satisfied with the service provided ?

72 RESPONSES

INTERPRETATION :
From the following graph it can be seen that services provided by HDFC Bank are Highly Satisfied
by 63.9% respondent , 26.4% respondent are Neutral and only few respondent are dissatisfied.

OPTION RESPONSES PERCENTAGE

HIGHLY SATISFIED 46 63.9%
NEUTRAL 19 26.4%
DISSATISFIED 07 9.7%
.

66
15. Is the rate of interest on Home Loan are low of HDFC Bank as compared to others Banks ?

72 RESPONSES

INTERPRETATION :
From the following graph it can be seen that 70.8% respondent says that the rate of interest on
Home Loan are Low as compared to others banks and 29.2% respondent says that the rate of
interest on Home Loan are not Low as compared to others banks.

OPTIONS RESPONSES PERCENTAGE

YES 51 70.8%
NO 21 29.2%

67
16. In near future you would be interested to take Home Loan from HDFC BANK ?

72 RESPONSES

INTERPRETATION :
From the following graph it has seen that 80.6% respondent are interested to take Home Loan
from HDFC Bank in near Future and 19.4% respondent are not interested to take Home Loan
from HDFC Bank in Future.

OPTION RESPONSES PERCENTAGE

YES 58 80.6%
NO 14 19.4%

68
17. From where you get information about Home Loan services of HDFC Bank ?

72 RESPONSES

INTERPRETATION :
From the following graph it can seen that most of the respondent get information about Home Loan
services of HDFC Bank from Newspaper , Hoardings and some respondent by Magazines and word
of mouth.

OPTION RESPONSES PERCENTAGE

NEWSPAPER 41 56.9%
HOARDINGS 09 12.5%
MAGAZINES 04 5.6%
WORD OF MOUTH 18 25%

69
18. What problems did you faced while taking Home Loan ?

72 RESPONSES

INTERPRETATION :
From the following graph it can be seen that 81.9% respondent faced lack of knowledge while
taking home loan and 18.1% respondent faced issues because of procedure delays and Non co-
operation .

OPTION RESPONSES PERCENTAGE

LACK OF KNOWLEDGE 59 81.9%
PROCEDURE DELAYS AND 13 18.1%
NON CO-OPERATION

70
 CHAPTER 5

RECOMMENDATION

 Reliability is an obvious place to start. Customers of the bank want to know their resources are
safe and within trust worthy institutions. A way to ensure this peace of mind would be to take
steps to ensure bank employees are well trained, so each bank associate is able to offer complete
and comprehensive information at all times. Consistent policies combined with a knowledgeable
staff will foster a high degree of institutional cohesion and reliability.
 Responsiveness, again when associated with a well-trained staff and timely answers to service-
related questions, would make significant inroads into causing HDFC bank be regarded as
responsive. Staff should be encouraged to present relevant options to banking customers in a
manner that does not resemble salesmanship so much as a desire to serve.
 Intangibles please customers just as much as tangibles in the banking industry. People tend to
visit the same branch of a bank over and over again. Usually, this is a location close to their
home or their workplace. It is natural that customers become comfortable and habituated to these
branch banks, for the same reason they develop familiarity with a neighbourhood supermarket or
convenience store. It makes sense that bank employees would be encouraged to leam to
recognize these regular customers, learn their names, and begin to identify their basic service
requirements.
 Learning to understand customers" needs will allow bank associates to offer enhanced services,
perhaps lowering customers" banking costs and increasing their investment potential. This could
also open up the possibility of increased profits for banks, for when perceived as more service
and customer oriented, they will, in effect, become a useful and pleasant way to "shop."
 Keeping the bank with up-to-date technologically are important factors. Modern equipment, new
improved technology should be replaced with the old ones. If the staff inside is pleasant and
well-informed, in an aesthetically pleasing environment, then customer satisfaction will be high.

 The five-dimensional structure could possibly serve as a meaningful framework for tracking a
bank" s service quality performance over time and comparing it against the performance of
competitors. Items on some dimensions should be expanded if that is necessary for reliability.
 Thus, the banking industries must continuously measure and improve these dimensions in order
to gain customers" loyalty.

71
72
 CHAPTER 6

CONCLUSION

 In my study we came to know that many people’s are interested to take a home loan from
HDFC LTD to construct their homes.
 Home loans have long period when compare to other personal loans and other loans. So
peoples are confused to take a home loan.
 The interest rates also somewhat high when compare to other banks.

 The loan sanction process is low when compare to other banks.

 For disbursement process is also it will take low time when compare to other banks

 Even though the interest rates are high peoples are willing to take a loan from HDFC LTD due
to some reasons.

Finally the whole research was carried out in a systematic way to reach at exact results. The
whole research and findings were based on the objectives. However, the study had some
limitations also such as lack of time, lack of data, non-response, reluctant attitude and illiteracy
of respondents, which posed problems in carrying out the research. But proper attention was
made to Carry out research in proper way and to make accurate conclusion for the HDFC LTD
which may beneficial for banks to enhance their customer base.

73
 CHAPTER 7

BIBLIOGRAPHY

✓ REVIEWS

 Berstain David(2008), "Home equity loans and private mortgage insurance Recent Trends &
Potential Implications", Vol.3 No.2, August 2008, Pp. 41-53.
 Dr. Rangarajan C. (2001), "A Simple Error Correction Model of House Price" Journal of
Housing Economics Vol. 4, No. 3.pp 27-34.
 Fanning (1982). "The Demand for Home Mortgage Debt" Journal of Urban Economics, Vol 11
No 2, November, pp. 770-774
 Godse (1983), "looking a fresh at banking productivity", Journal of Real Estate Literature, Vol.
No. 13, Page 141 to 164.
 Haavio, Kauppi(2000) "Residential Lending to Low-Income and Minority families evidence
from the 1992 HMDA Data," Federal Reserve Bulletin, Vol no 80(2), December 2000 Pp-79-
108
 Kulkarni (1979), "Development responsibility and profitability of banks" Journal of Economic
Perspectives, Vol 9 No 1 pp. 26-32.
 La courr, Micheal(2007). "Economic Factors Affecting Home Mortgage Disclosure Act
Reporting The American Real Estate and Urban Economics Association, Vol.2No. 2 May 18,
2007, Pp. 45-58
 La cour Micheal(2006), "The Home Purchase Mortgage Preferences Of LowandModerate
Income Households", Forthcoming in Real Estate Economics, Vol 18,No 4, December 20, 2006,
p. 585.
 Vandell kerry D(2008). "Subprime lending and housing bubble tail wag dog? International
Journal of Bank Marketing, vol 21,no 2, pp. 53-7Brochure on home loans from HDFC LTD.

74
 ✓ NEWS PAPERS :-

 The Times of India

 Financial Express

✓ WEB PAGES :-

 http://www.hdfeindia.com/
 http://www.hdfcindia.com/others/popup/news/hdfe fin result june 30 08.html
 www.hdfc.com
 http://www.iloveindia.com/real-estate/housing-finance companies/hdfc.html
 http://www.loansnews.info/Home-loan/hdfe-home-loans/
 http://www.hdfeindia.com/loans/hm-loan-documents.asp.
 http://www.thinkplaninvest.com/2009/01/hdfc-will-cut-home-loan-rates/
 http://www.suncorp.com.au/suncorp/personal/home loans/tips/faq.aspx

75
 CHAPTER 8

ANNEXURE

Name:-

Gender:-

Age:-

Profession:-

Q.1.Are you Interested in taking Home Loan?

a) yes. b) no

Q.2.Are you aware of the home loan product offered by HDFC Bank?

a) yes. b) no

Q.3.Have you ever taken home loan before?

a) yes. b) no

Q.4.When you have taken home loan from HDFC Bank?

a) one year before. b) two to three years before. c) more than three years before

Q.5.Reasons for taking Home loan from HDFC Bank?

a) Faster processing. b) Interest rate c) Brand image of the Bank

d) Margin amount

76
Q.6.How much loan amount you took?

a) less than 1 lakh. b) 1-5 lakhs. c) 5-10 lakhs d) more than 10 lakhs

Q.7.How do you rate the Interest Rate charged by HDFC Bank?

a) Highly satisfactory. b) Satisfactory. c) Average Satisfactory

d) Dissatisfactory. e) Highly Dissatisfactory

Q.8.While taking loan, which things attract you the most?

a) Interest rates. b) Payback period. c) Service Provided

d) Schemes. e) other

Q.9.Even If the Interest Rate is high for home loan, you will go for it?

a) yes b) no

Q.10.How do you rate the documentation procedure of HDFC Bank?

a) Excellent b) Very Good. c) Good. d) Fair. e) Poor

Q.11.Do you own a Home?

a) Yes. b) No

Q.12.Have you get it Financed?

a) Yes. b) No

77
Q.13.What is reason for getting it financed?

a) Non availability of Funds. b) Tax Benefit. c) Any other Reason

Q.14Are you satisfied with the services provided?

a) Highly dissatisfied. b) neutral c) Dissatisfied.

Q.15.Is the rate of interest on home loan are low of HDFC compared to other banks?

a) Yes. b) No

Q.16.In near future you would be interested to take home loan from HDFC Bank?

a) Yes. b) No

Q17.From where you get information about home loan services of HDFC Bank?

a) Newspaper. b) Hoardings. c) Magazines d) word of Mouth

Q.18.What problem did you faced while taking Home Loan?

a) Lack of Knowledge. b) Procedure delays and non Cooperation

78