commercial transportation working analysis hdfc bank_2011

7/29/2019 COMMERCIAL TRANSPORTATION WORKING ANALYSIS HDFC BANK_2011

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Acknowledgesment

This trifle project of mine would have been a Zyogate, if it did not

achieved the support, cooperation and blessings of few people. It was indeeda great experience and opportunity for me to do my internship at HDFC

Commercial Transportation Group. Without the proper guidance, I would

not have been able to complete the project.

First of all my humble thanks to Mr. Abhishek Sharma, Relationship

Manager, Commercial Transportation Group for having full belief and faith

in me and giving me an opportunity to do my internship in this esteemed

organization. I am immensely grateful to him for giving me exposure far

beyond my expectation. Without his gracious and genial support I would not

have been able to materialize the project.

I am also grateful to Mr. Chetan Chaddha, Mr. Kanwarjit Singh &

Mr. Arun Kumar of Commercial Transportation Group, who were there

with me throughout my training period, helping me at each step, welcoming

my queries, and also did a lot of value addition to my training not only in my

project but also apart from it, in spite of their busy schedule.

Further more, I am indebted to Mrs Kriti Swaroop the faculty of

Institute of Management Studies for her guidance & support.

Last, but not least I owe a deep sense of gratitude to all the employees

of HDFC Commercial Transportation Group who were cooperative and

kind enough to spare their precious time for me in understanding the

banking in transportation area, without which I could not have completed

the project.

My best wishes to all the people of this venerated organization that

has been able to create such a healthy environment for people to be content

with their work.

(Avinash Kumar Maurya)


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Undertaking

I,Avinash Kumar Maurya, the undersigned, hereby declare that this

project report entitled Commercial Transportation Working Analysis,

has been written & submitted under the guidance ofMr. Abhishek Sharma

and is my original work. The empirical findings in this report are based on

information collected by me.

(Avinash Kumar Maurya)

Commercial Transportation Working Analysis

Created by Avinash Kumar Maurya for HDFC Bank Ltd.2


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Contents

Chapter Pages

Introduction 07

1. Organizational Profile 09

1.1Background & Objectives 10

1.2Promoter & Management 11

1.3Capital Structure 12

1.4Distribution Network 12

1.5Technology 13

1.6Business Profile 14

1.7Rating 16 1.8Product Range 17

1.9Innovative Services 18

1.10 Loans 19

1.11 Awards & Accolades 21

1.12 Branch Internal Divisions 23

2. Theoretical Perspective 28

2.1Commercial Vehicles 29

2.2Working Capital & Credit Norms 31

2.3Some Useful Terms 3




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3. Research Methodology 35

3.1Objectives 36

3.2Marketing Research Process 37

3.3Study Description 38

3.4Sampling 41

3.5Contact Methods 43

4. Data Analysis and Interpretation 47

4.1Data Representation 48

4.2Charts & Comments 50

5. Conclusion, Recommendations & Limitations

5.1 Conclusions 64

5.2 Suggestions & Recommendations 655.3 Limitations 67

6. Annexure6.1Questionnaire 68

6.2 Bibliography 70




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Introduction

Commercial Transportation, as the name suggests, the term deals

with all kinds or modes of transportation, which are commercially available

to transport various kinds of items from one place to another. Indian

scenario in this area of development is popular from a very long period even

before independence. Road transportation is very much famous to make the

various goods & items available in small to small area of living.

There are various kind of industries associated with this field. Some

of those are iron, rubber, plastic, mechanical, coal, petroleum, and most

importantly service sector & information technology.

Commercial Transportation Working Analysis is the study of working

methodology of Transporters, how they operate their functions, theirworking regions etc. The purpose is to find out the market share and impact

of HDFC in Working Capital Market in Transport Sector.

The main considerations in the survey include the Fleet Size, Major

Financiers, Overdraft Facility availed by Transporters, Tyres purchased,

Diesel Buy basis & Oil Co. preferred, Payments made for Insurance,

Permits, Maintenance etc, & Newspaper read by them. Each of these has

some relevance in one or the other sense. This report is conducted in such a

way that all the findings, data & interpretation should be useful for any kind

of reader, whether it belongs to any Tyres Company, Oil Company and so

on.

The beginning includes the brief Organization Profile followed by

Research Methodology and finally with Data Analysis & Interpretation with

Conclusions, Suggestions and Bibliography.




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The survey for analysis is conducted in whole National Capital

Region mainly includes Delhi, Ghaziabad & Faridabad. From the viewpoint

of banking business in field of Commercial Transportation, there is

sufficient increase in financing for Transporters in past few years and it will

definitely go beyond on large scale for the benefits of Transporters. As far

as customers or transporters point of view is concerned, there is well-defined space for their suggestions & recommendations, which are

welcomed & entertained up to some extent if possible.

The most important part of report is of Research Methodology, which

stresses on the objectives, procedure of doing whole survey, sampling, and

limitations is well-defined & presented that how the whole work has been

completed using various research techniques, instruments, methods etc. to

make this survey useful in every sense.

Whatever the data has been collected from the survey, is representedin form of tables as well as charts are also used to show the composition of

various elements in particular area or field. With these charts, few

comments on every chart are also presented to make a chart more

understandable even to a layman.

In the end, suggestions & recommendations given by the transporters

as well as on the basis of analysis are presented to help the reader in

reaching at some conclusions & help in answering what to do, how to do,

when to do, and where to do for the welfare of whole society and especiallyin the field of transportation.




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Chapter 1

1.1 Background & Objectives

1.2 Promoter & Management

1.3 Capital Structure1.4 Distribution Network

1.5 Technology

1.6 Business Profile

1.7 Rating

1.8 Product Range

1.9 Innovative Services

1.10 Loans1.11 Awards & Accolades

1.12 Branch Internal Divisions




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1.1 Background & Objectives

The Housing Development Finance Corporation Limited (HDFC)

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, as part of the

RBI's liberalisation of the Indian Banking Industry in 1994. The bank was

incorporated in August 1994 in the name of 'HDFC Bank Limited', with itsregistered office in Mumbai, India. HDFC Bank commenced operations as a

Scheduled Commercial Bank in January 1995.

HDFC Bank's mission is to be a World-Class Indian Bank. The

Bank's aim is to build sound customer franchises across distinct businesses

so as to be the preferred provider of banking services in the segments that

the bank operates in 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 and regulatorycompliance. HDFC Bank's business philosophy is based on four core

values: Operational Excellence, Customer Focus, Product Leadership and

People.




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1.2 Promoter & Management

HDFC is India's premier housing finance company and enjoys an

impeccable track record in India as well as in international markets. Since

its inception in 1977, the Corporation has maintained a consistent and

healthy growth in its 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 segments and also has a large corporate client base for its housing

related credit facilities. With its experience in the financial markets, a

strong market reputation, large shareholder base and unique consumer

franchise, HDFC was ideally positioned to promote a bank in the Indian

environment.

Mr. Jagdish Capoor took over as the bank's Chairman in July 2001.Prior to this, Mr. Capoor was a Deputy Governor of the Reserve Bank of

India. The Managing Director, Mr. Aditya Puri, has been a professional

banker for over 25 years and before joining HDFC Bank in 1994 was

heading Citibank's operations in Malaysia.

The Bank's Board of Directors is composed of eminent individuals

with a wealth of experience in public policy, administration, industry and

commercial banking. Senior executives representing HDFC are also on the

Board.

Senior banking professionals with substantial experience in India and

abroad head various businesses and functions and report to the Managing

Director. Given the professional expertise of the management team and the

overall focus on recruiting and retaining the best talent in the industry, the




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bank believes that its people are a significant competitive strength.

1.3 Capital Structure

The authorized capital of HDFC Bank is Rs.450 crore (Rs.45 billion).

The paid-up capital is Rs.282 crore (Rs.28.2 billion). The HDFC Group

holds 24.2% of the bank's equity while about 13.1% of the equity is held by

the depository in respect of the bank's issue of American Depository Shares

(ADS/ADR Issue). The Indian Private Equity Fund, Mauritius (IPEF) and

Indocean Financial Holdings Ltd., Mauritius (IFHL) (both funds advised by

J P Morgan Partners, formerly Chase Capital Partners) together holds

about 5.5% of the bank's equity. Roughly 27.5% of the equity is held by FIIs,

NRIs/OCBs while the balance is widely held by about 214,000 shareholders.

The shares are listed on The Stock Exchange, Mumbai and the National

Stock Exchange. The bank's American Depository Shares are listed on the

New York Stock Exchange (NYSE) under the symbol "HDB".

1.4 Distribution Network

HDFC Bank is headquartered in Mumbai. The Bank at present has an

enviable network of over 350 branches spread over 175 cities across the

country. All branches are linked on an online real-time basis. Customers in

90 locations are also serviced through Phone-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 arelocated 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.




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The Bank also has a network of over 900 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.

1.5 Technology

HDFC Bank operates in a highly automated environment in terms of

information technology and communication systems. All the bank's branches

have 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 Machines

(ATMs).

The Bank has made substantial efforts and investments in acquiring

the best technology available internationally to build the infrastructure for a

world-class bank. In terms of software, the Corporate Banking business is

supported by Flexcube, while the Retail Banking business by Finware, both

from i-flex Solutions Ltd. The systems are open, scaleable and web-enabled.

The Bank has prioritised its engagement in technology and the

internet as one of its key goals and has already made significant progress in

web-enabling its core businesses. In each of its businesses, the Bank has

succeeded in leveraging its market position, expertise and technology to

create a competitive advantage and build market share.




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1.6 Business Profile

HDFC Bank caters to a wide range of banking services covering both

commercial and investment banking on the wholesale side and transactional

/ branch banking on the retail side. The bank has three key business areas :-

Wholesale Banking Services The Bank's target market is primarily

large, blue-chip manufacturing companies in the Indian corporate

sector and to a lesser extent, emerging mid-sized corporates. For

these corporates, the Bank provides a wide range of commercial and

transactional banking services, including working capital finance,

trade services, transactional services, cash management, etc. Thebank is also a leading provider of structured solutions which combine

cash management services with vendor and distributor finance for

facilitating superior supply chain management for its corporate

customers. Based on its superior product delivery / service levels and

strong customer orientation, the Bank has made significant inroads

into the banking consortia of a number of leading Indian corporates

including multinationals, companies from the domestic business

houses and prime Public Sector companies. It is recognised as a

leading provider of cash management and transactional bankingsolutions to corporate customers, mutual funds, stock exchange

members and banks.

Retail Banking Services The objective of the Retail Bank is to

provide its target market customers a full range of financial products




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and banking services, giving the customer a one-stop window for all

his/her banking requirements. The products are backed by world-

class service and delivered to the customers through the growing

branch network, as well as through alternative delivery channels likeATMs, Phone-Banking, Net-Banking and Mobile-Banking.

The HDFC Bank preferred program for high net worth

individuals, the HDFC Bank Plus and the Investment Advisory

Services programs have been designed keeping in mind needs of

customers who seek distinct financial solutions, information and

advice on various investment avenues. The Bank also has a wide

array of retail loan products including Auto Loans, Loans against

marketable securities, Personal Loans and Loans for Two-wheelers.

It is also a leading provider of Depository Services to retailcustomers, offering customers the facility to hold their investments in

electronic form.

HDFC Bank was the first bank in India to launch an

International Debit Card in association with VISA (VISA Electron)

and issues the Mastercard Maestro debit card as well. The debit card

allows the user to directly debit his account at the point of purchase

at a merchant establishment, in India and overseas. The Bank

launched its credit card in association with VISA in November 2001.

The Bank is also one of the leading players in the "merchant

acquiring" business with over 25,000 Point-of-Sale (POS) terminalsfor debit / credit cards acceptance at merchant establishments. The

Bank is well positioned as a leader in various net-based B2C

opportunities including a wide range of internet banking services for

Fixed Deposits, Loans, Bill Payments, etc.

Treasury Operations Within this business, the bank has three main

product areas - Foreign Exchange and Derivatives, Local Currency

Money Market & Debt Securities, and Equities. With theliberalization of the financial markets in India, corporates need more

sophisticated risk management information, advice and product

structures. These and fine pricing on various treasury products are

provided through the bank's Treasury team. To comply with statutory

reserve requirements, the bank is required to hold 25% of its deposits




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in government securities. The Treasury business is responsible for

managing the returns and market risk on this investment portfolio.

1.7 Rating

HDFC Bank has its deposit programs rated by two rating agencies -

Credit Analysis & Research Limited (CARE) and Fitch Ratings India Pvt.

Ltd. The Bank's Fixed Deposit program has been rated 'CARE AAA (FD)'

[Triple A] by CARE, which represents instruments considered to be "of the

best quality, carrying negligible investment risk". CARE has also rated the

Bank's Certificate of Deposit (CD) programme "PR 1+" which represents

"superior capacity for repayment of short term promissory obligations".

Fitch Ratings India Pvt. Ltd. (100% subsidiary of Fitch Inc.) has assigned

the "tAAA (ind)" rating to the Bank's deposit programme, with the outlook

on the rating as "stable". This rating indicates "highest credit quality"

where "protection factors are very high". HDFC Bank also has its long-term

unsecured, subordinated (Tier-II) Bonds rated by CARE and Fitch RatingsIndia Pvt. Ltd. CARE has assigned the rating of "CARE AAA" for the Tier-II

Bonds while Fitch Ratings India Pvt. Ltd. has assigned the rating "AAA

(ind)" with the outlook on the rating as "stable". In each case referred to

above, the ratings awarded were the highest assigned by the rating agency

for those instruments.

Corporate Governance Rating

The bank was one of the first four companies which subjected itself toa Corporate Governance and Value Creation (GVC) rating by the rating

agency, The Credit Rating Information Services of India Limited (CRISIL).

The rating provides an independent assessment of an entitys current

performance and an expectation on its "balanced value creation and

corporate governance practices" in future. The bank has been assigned a

CRISIL GVC Level 1' rating which indicates that the bank's capability with




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respect to wealth creation for all its stakeholders while adopting sound

corporate governance practices is the highest.

1.8 Product Range

Savings Account: Apart from the usual facilities, you get a free ATM

Card, Interbranch banking, NetBanking, BillPay, PhoneBanking,

Debit Card and MobileBanking, among others.

HDFC Bank Preferred: A preferential Savings Account where you

are assigned a dedicated Relationship Manager, who is your one-

point contact. You also get privileges like fee waivers, enhanced ATM

withdrawal limit, priority locker allotment, free Demat Account and

lower interest rates on loans, to name a few.

Sweep-In Account: A fixed deposit linked to your Savings Account.

So, even if your Savings Account runs a bit short, you can issue a

cheque (or use your ATM Card). The money is automatically swept in

from your fixed deposit into your Savings Account.

Super Saver Account: Gives you an overdraft facility up to 75% of

your Fixed Deposit. In an emergency, you can access your funds

while your Fixed Deposit continues to earn high interest.

HDFC Bank Plus: Apart from Regular and Premium Current

accounts we also have HDFC Bank Plus, a Current Account and then

some more. You can transfer up to Rs. 50 lakh per month at no extra

charge, between the four metros. You can also avail of cheque

clearing between the four metros, get cash delivery/pickup upto Rs.


http://www.hdfcbank.com/RI/RI-pb-sav-reg-intro.htmhttp://www.hdfcbank.com/RI/ri-pb-sav-pref-intro.htmhttp://www.hdfcbank.com/RI/RI-PB-FD-sweep-intro.htmhttp://www.hdfcbank.com/RI/RI-PB-FD-super-intro.htmhttp://www.hdfcbank.com/RI/ri-pb-cur-plus-intro.htmhttp://www.hdfcbank.com/RI/RI-pb-sav-reg-intro.htmhttp://www.hdfcbank.com/RI/ri-pb-sav-pref-intro.htmhttp://www.hdfcbank.com/RI/RI-PB-FD-sweep-intro.htmhttp://www.hdfcbank.com/RI/RI-PB-FD-super-intro.htmhttp://www.hdfcbank.com/RI/ri-pb-cur-plus-intro.htm


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25,000/-, home delivery of Demand Drafts, at-par cheques, outstation

cheque clearance facility, etc.

Demat Account: Conduct hassle-free transactions on your shares.You can also access your Demat Account on the Internet.

1.9 Innovative Services

PhoneBanking: 24-hour automated banking services with 39

PhoneBanking numbers available.

ATM24-hour banking: Apart from routine transactions, you can also

pay your utility bills and transfer funds, at any of our ATMs across

the country all year round.

Inter-city/Inter-branch Banking: Access your account from any of our

350 branches in 175 cities.

Net-Banking:Access your bank account from anywhere in the world,

at anytime, at your own convenience. You can also view your Demat

Account through Net-Banking.

International Debit Card: An ATM card you can shop with all over

the country and in over 140 countries with. You can spend in any

currency, and pay in Rupees.

Mobile-Banking:Access your account on your mobile phone screen atno airtime cost. Use SMS technology to conduct your banking

transactions from your cell-phone.

Bill-Pay: Pay your telephone, electricity and mobile-phone bills

through our ATMs, Internet, phone or mobile phone. No more

standing in long queues or writing cheques.


http://www.hdfcbank.com/RI/ri-pb-de-intro.htmhttp://www.hdfcbank.com/ri/RI-EAGE-PHB-intro.htmhttp://www.hdfcbank.com/Ri/RI-EAGE-ATM-intro.htmhttp://www.hdfcbank.com/RI/RI-branch1.htmhttp://www.hdfcbank.com/ri/RI-EAGE-NETBK-intro.htmhttp://www.hdfcbank.com/RI/RI-EAGE-INT-DEBIT-intro.htmhttp://www.hdfcbank.com/ri/RI-EAGE-MobileBanking-intro.htmhttp://www.hdfcbank.com/RI/RI-EAGE-BP-intro.htmhttp://www.hdfcbank.com/RI/ri-pb-de-intro.htmhttp://www.hdfcbank.com/ri/RI-EAGE-PHB-intro.htmhttp://www.hdfcbank.com/Ri/RI-EAGE-ATM-intro.htmhttp://www.hdfcbank.com/RI/RI-branch1.htmhttp://www.hdfcbank.com/ri/RI-EAGE-NETBK-intro.htmhttp://www.hdfcbank.com/RI/RI-EAGE-INT-DEBIT-intro.htmhttp://www.hdfcbank.com/ri/RI-EAGE-MobileBanking-intro.htmhttp://www.hdfcbank.com/RI/RI-EAGE-BP-intro.htm


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1.10 Loans

Now, our loans come to you in easy-to-pay monthly instalments, and

are available with easy documentation and quick delivery.

Personal Loans: Take a loan of up to Rs. 3 lakh for a wedding,

education, purchase of a computer or an exciting holiday.

New Car Loans andUsed Car Loans: Finance up to 90% of the cost

of a car, new or used! And the loans come to you with easy

documentation and speedy processing at attractive interest rates.

Loans against Shares: Get an overdraft up to Rs. 10 lakh at an

attractive interest rate against physical shares, up to 50% of the

market value of your shares. In case of Demat Shares, you can get

loans against Shares of up to 65% of the market value of your shares,

till Rs. 20 lakh.

Commercial Vehicle Loans: HDFC offers loan for all types of

commercial vehicle. We provide funding for all models of Telco,

Ashok Leyland, Eicher, Swaraj Mazda, Volvo etc. HDFC spread over22 locations across the country and expanding rapidly. If anybody

have already taken a loan from elsewhere, at a higher rate can avail

of HDFCs Balance Transfer facility by exchange their old loanfor a commercial vehicle loan from HDFC Bank at a much lowerrate.


http://www.hdfcbank.com/ri/RI-loan-personal-intro.htmhttp://www.hdfcbank.com/RI/RI-loan-newcar-intro.htmhttp://www.hdfcbank.com/ri/RI-LOAN-USED-CAR-intro.htmhttp://www.hdfcbank.com/RI/RI-LOAN-LAS-intro.htmhttp://www.hdfcbank.com/ri/RI-loan-personal-intro.htmhttp://www.hdfcbank.com/RI/RI-loan-newcar-intro.htmhttp://www.hdfcbank.com/ri/RI-LOAN-USED-CAR-intro.htmhttp://www.hdfcbank.com/RI/RI-LOAN-LAS-intro.htm


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Two Wheeler & Consumer Loans: To help you buy the best durables

for your home.

Demat Account: Protect your shares from damage, loss and theft, bymaintaining your shares in electronic form. You can also access your

demat account on the internet.

Current Account: Get a personalised cheque book, monthly account

statements, inter-branch banking and much more.

Mutual Funds: Apart from a wide choice of mutual funds to suit your

individual needs, you benefit from expert advice on choosing the rightfunds based on in-depth market analysis.

International Credit Card: Get an option of Silver, Gold, or Health

Plus Credit card, accepted worldwide from a world-class bank. If you

have outstanding balance on your other credit card, you can transfer

that balance to this card at a lower interest rate.

NRI Services: A comprehensive range, backed by unmatched features

and world-class service, ensures NRIs all the banking support they

need.

Forex Facilities: Avail of foreign currency, travellers cheques,

foreign exchange demand drafts, to meet your travel needs.

Insurance: HDFC Bank now brings you Life Insurance and Pension

Solutions like Risk Cover Scheme, Savings Scheme, Childrens Plan

and Personal Plan from HDFC Standard Life Insurance Co. Ltd.


http://www.hdfcbank.com/RI/RI-loan-consumer-intro.htmhttp://www.hdfcbank.com/ri/ri-pb-de-intro.htmhttp://www.hdfcbank.com/ri/ri-pb-cur-reg-intro.htmhttp://www.hdfcfund.com/http://www.hdfcbank.com/creditcard/cc_home.asphttp://www.hdfcbank.com/nri/nri-home.htmhttp://www.hdfcbank.com/nri/nri-vas-forex.htmhttp://www.hdfcinsurance.com/http://www.hdfcbank.com/RI/RI-loan-consumer-intro.htmhttp://www.hdfcbank.com/ri/ri-pb-de-intro.htmhttp://www.hdfcbank.com/ri/ri-pb-cur-reg-intro.htmhttp://www.hdfcfund.com/http://www.hdfcbank.com/creditcard/cc_home.asphttp://www.hdfcbank.com/nri/nri-home.htmhttp://www.hdfcbank.com/nri/nri-vas-forex.htmhttp://www.hdfcinsurance.com/


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1.11 Awards & Accolades

HDFC Bank began operations in 1995 with a simple mission: to be a

"World-class Indian Bank". HDFC Bank realized that only a single-minded

focus on product quality and service excellence would help us get there.

Today, HDFC Bank is proud to say that it is well on its way towards that

goal. It is extremely gratifying that our efforts towards providing customer

convenience have been recognized both nationally and internationally.

In 2004, HDFC Bank was named "Best Overall Local/Domestic

Bank India" in the Corporate Cash Management Poll conducted by

the Hong Kong-based Asiamoney magazine. In 2003, Forbes Global again named us in its ranking of "Best Under

a Billion, 200 Best Small Companies for 2003".

Hong Kong-based Finance Asia Magazine rated us "Best Domestic

Commercial Bank in India" in 1999, 2000 and 2001 respectively and

"Best Local Bank in India" in 2002 and 2003.

HDFC Bank has been namedBest Domestic Bank in India Region in

The Asset Triple A Country Awards 2003.

Leading Indian business Magazine Business Today in a survey rated

us "Best Private Sector Bank" in India in 1999 and "Best Bank inIndia" in 2003.

NASSCOM and economictimes.com have named us the "Best IT User

in Banking" at the IT Users Awards 2003.

Leading Personal Finance magazine in India Outlook Money named

HDFC Bank the "Best Bank in the Private Sector" for the year

2003.




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Leading business newspaper The Financial Express named HDFC

Bank the "Best New Private Sector Bank 2003" in the FE-Ernst &

Young Best Banks Survey 2003.

There have been some other proud moments as well:

London-based Euromoney Magazine gave us the award for "Best

Bank - India" in 1999, "Best Domestic Bank" in India in 2000, and

"Best Bank in India" in 2001 and 2002.

Asiamoney Magazine has named us "Best Commercial Bank in India

2002".

The Economic Times has conferred on us The Economic Times

Awards for Corporate Excellence as the Emerging Company of the

Year 2000-01.

For our use of information technology we have been recognized as a"Computerworld Honors Laureate" and awarded the 21st Century

Achievement Award in 2002 for Finance, Insurance & Real Estate

category by Computerworld, Inc., USA. Our technology initiative has

been included as a case study in their online global archives.

The Economic Times has conferred on us The Economic Times

Awards for Corporate Excellence as the Emerging Company of the

Year 2000-01.

Leading Indian business magazine Business India named us "India's

Best Bank" in 2000

In the year 2000, leading financial magazine Forbes Global named us

in its list of"The 300 Best Small Companies" in the world and as

one of the "20 for 2001" best small companies in the world.

We are aware that all these awards are mere milestones in the

continuing, never-ending journey of providing excellent service to our




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customers. We are confident, however, that with your feedback and

support, we will be able to maintain and improve our services

1.12 Branch Internal Divisions

The Commercial Transportation Group functioning in Gurgaon

Branch located at HDFC Bank Ltd, 2nd Floor, SCO-15, Sector 14,

Gurgaon-122001 has mainly seven divisions under Retail Asset Head.

These are Commercial Vehicles, Channel Business, Construction

Equipment, Working Capital, Credits, Collections, and Operations. Thisgroups main area of concentration is National Capital Region i.e. Delhi,

Ghaziabad, Gurgaon, Faridabad, Noida, & even Bhilai.

The Organizational Structure of four divisions Commercial Vehicles,

Channel Business, Construction Equipment, & Working Capital is same.

The rest three i.e. Credits, Collections & Operations have the same

Organization Structure in respect of the levels with only difference is in the

name of designations.




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Commercial Channel Construction Working

Vehicles Business Equipment

Capital



Retail Asset Head

Business

H

Regional

M

Relationship

M

Business

H

Regional

M

Relationship

M

Business

H

Regional

M

Relationship

M

Business

H

Regional

M

Relationship

M

Country

H

Country

H

Country

H

Country

H


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Fig Organization Chart (4 Divisions)

Commercial Vehicles Division This is the internal division of Businessunder the Commercial Transportation Group. Its main concern is with the

financing of Commercial Vehicles for transporters & Fleet Owners. There

are various categories of customers, which are classified for the purpose of

financing on the basis of number of vehicles owned by them, their financial

background etc. After collecting all the details, these have to be forwarded

to Credits Department, to check, verify the details.

Channel Business This is an another internal division of Business under

the Commercial Transportation Group, which provides the loans to needycustomers for purchasing the Commercial Vehicles used in transportation of

goods. Under this division, the work has been done for the customers who

owned less than three Vehicles. It is done through various Small Financial

Divisions spread over the region, who treat or called as Channel Partners.

The job of Channel Partners are sourcing where Channel Partners have to

identify the needy borrowers and convince them to get their vehicles

financed from HDFC, Post Disbursements Documents, in which Channel

Partners have to collect, check, verify, and send the various

documents/papers, which are required, by the bank for the approval of

loans, and lastly is Equated Monthly Installment, where Channel Partnershave to collect the EMIs from the clients on which the commission is

governed by the bank.

Construction Equipment This is the third internal division of Business

under the Commercial Transportation Group. This department deals with

the financing of all kinds of Equipment, used in construction of roads,




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buildings, flyovers, mines etc. like RT-20, GE-404, cranes, road rollers etc.

These are the movable property, costly & thats why a huge importance is

given while financing of such vehicles.

Working Capital Under this fourth internal division of Business in the

Commercial Transportation Group, the facility of credit or Overdraft

Facility is provided by bank to the needy customers. An account is open in

the bank with zero balance & credit limit is ranging from 20 to 200Lacs.

This range is wholly divided among various categories A, B, & C on the

basis of their financial capacity & fleet size, etc.

Credits Collections Operations



Retail Asset Head

Risk Head

Local Credits

Man

Risk Head

Local Collections

Manage

Risk Head

Local Operations

Manage

Country Head

Regional Credits

Man

Country Head

Regional Collections

Manage

Country Head

Regional Operations

Manage


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Fig Organization Chart (3 Divisions)

Credits This is a department directly under Commercial Transportation

Group. This department has to look after all the four divisions of Business.

There are various Credit Managers, who look after the four Business

Internal Divisions separately. Here, the jobs of these managers are to check,

verify & then finally give decision of acceptance or rejection of the partys

proposal. And then the other formalities will be done. Local Credits

Manager has to report to Regional Credits Manager, who as to report to

Country Head, who as to report to Risk Head, who finally has to report totop boss i.e. Retail Asset Head.

Collections This department has to collect all the documents, papers etc.

from the parties, whose cases has been approved by Credits Department. In

other words, here the job is of disbursements. Local Collections Manager

has to report to Regional Collections Manager, who as to report to Country

Head, who as to report to Risk Head, who finally has to report to top boss

i.e. Retail Asset Head.

Operations This department has to look after all the internal operations of

all the four internal divisions of Business Department. Again the various

operations managers likewise Credits. Local Operations Manager has to

report to Regional Operations Manager, who as to report to Country Head,

who as to report to Risk Head, who finally has to report to top boss i.e.

Retail Asset Head.




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The difference between the four above mentioned & three divisions

regarding the organization structure is of the heads position under Retail

Asset Head.

Chapter 2

2.1 Commercial Transportation

2.2 Working Capital & Credit Norms

2.3 Some Useful Terms




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2.1 Commercial Transportation

Commercial vehicles are defined as those involved in the

transportation of goods or the provision of commercial passenger road

transport services. This is an extremely diverse market, including vehicles

ranging from 1.5-tonne microvans to 44-tonne tractor/trailer combinations.

However, based on weight and end use, it is possible to break the

market down into three main sectors:

Light Commercial Vehicles (LCVs)goods-carrying vehicles weighing

less than 3.5 tonnes

Heavy Goods Vehicles (HGVs)goods-carrying vehicles weighing in

excess of 3.5 tonnes

Buses and Coachessingle- and double-decker models

Light Commercial Vehicles

LCVs comprise by far the largest single sector of the commercial

vehicles market and include goods vehicles with a gross weight of up to 3.5

tonnes. Within this broad sector, there are three main segments:




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light vans, which consist of vehicles with a gross weight of up to 1.8

tonnes

medium and heavy vans, with a gross weight of between 1.8 tonnes

and 3.5tonnes

4x4 utilities.

Heavy Goods Vehicles

HGVs can be defined as goods-carrying vehicles with a gross weight

of between 3.5 tonnes and 44 tonnes. The market for HGVs can be further

broken down into a number of different categories based on weight and axle

configuration. The largest of these segments is that of 2-axle rigids.

Comprising a range of vehicles from 3.5 tonnes to over 15 tonnes, this

segment also includes a diverse range of body styles, from small minibusesto tipper/dump trucks. Box vans account for over a third of all 2-axle

registrations, with the rest being spread fairly evenly between the other

body styles.

Buses and Coaches

Generally speaking, the bus and coach sector is considered to be one

of the most complexes of all the commercial vehicles markets. The overall

sector for buses and coaches can be split into fare-stage Public ServiceVehicles (PSVs) and coaches. These two categories can then be further

subdivided into single- and double-deckers. Fare-stage PSVs can also be

divided into midis, which are over 3.5 tonnes, up to 9 metres in length and

single-decker only; and those over 9 metres long and either single- or

double-decker. The coaches segment can be further divided into lightweight

single-decker and heavyweight coaches, which can be either single- or




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double-decker. An interesting feature of the bus and coach sector is that

entire vehicles are seldom manufactured by single companies. It is common

for one manufacturer to produce the chassis, which is then transported to

another company which fits the bodywork.

2.2 Working Capital &

Credit Norms

Working Capital can be defined as the capital need by business to

operate the day-to-day operations regarding receivables, payments to

creditors, cash requirements etc. The credit norms can be explained as the

norms or rules set by the banks to fulfill the demands of customer regarding

the working capital.

The main objectives for the Working Capital Business by HDFC are

as follows:

To serve the needs of Working Capital for transporters & other such

companies.

To meet the cash needs for day to day operations of companies.

Basis of the Product

There are basically two kinds of products offered by HDFC Bank are

of Working Capital & Bank Guarantees by the Working Capital Division.

These are certain assumptions on which the product is offered to Fleet

Operators:




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Transporters usually ply their vehicles for either fulfilling a

transportation contract awarded by the principal or for loads from

the market.

The credit period for any such contract is usually 2-3 months.

These terms of contracts and day-to-day need of Categorization of

Fleet Operators funds give rise to the need of Working Capital.

There is a daily need for consumables like fuel, tyres, repairs, salary,

maintenance etc.

Categorization of Fleet Operators

LFO Large Fleet Operators, who own more than 50 vehicles

MFO Medium Fleet Operators, who own between 10 to 50 vehicles

SRFO Small Road Fleet Operators, who own less than 10 vehicles

Product Details

There are mainly two kinds of products offered to the customers,

which are Fund Based, & Non Fund Based. There are various

considerations on which the agreements have been made like the worth,

sales, turnover, and also the number of qualitative factors and further the

customer has been put into A, B & C category. The maximum overdraft limit

offered of Rs200lacs for A category, Rs100lacs for B category, & Rs20lacs

for C category under Funds Based. In case of Non Fund Based, Bank

Guarantee limit of Rs50lacs offered to A, & Rs25lacs offered to B category.

Non Fund Based is not applicable for C category.

There are certain essential securities demanded by the bank against

the products offered like Hypothecation of free vehicles to the extent of 75%.

These kinds of securities are essential on the part of bank as in case of

defaulters, the bank can manage to get back its funds against them.




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In this wide financial service sector, there is always a need arises of

proofs, on which the demands of the customer fulfilled by the banks. These

proofs, when combined, they form a complete documentation. This

documentation contains all the copies of papers demanded by the financialinstitutions or banks. In this Working Capital product also, banks demand

certain papers like Vehicle List of the customer, Financials of past few

years, contracts in hand of customer, partnership deed in case of

partnership firm, papers of assets under security, etc. This whole

documentation should contain all the details demanded by the bank, as well

as the complete overview of business of the customer.

2.3 Some Useful Terms

SRTO Small Road Transport Operators This term is used for all

those transport operators who owned not more than 10 vehicles, and

for these customers, banks need details of all the owned vehicles

details.

MFO Medium Fleet Operators This term is used for all those

transport operators who owned between 10 to 50 vehicles, and for

these customers, banks need details of at least 5 owned vehicles

details.

LFO Large Fleet Operators This term is used for all those

transport operators who owned more than 50 vehicles, and for these

customers, banks need details of at least 3 owned vehicles details.

LTV Loan to Value It is an amount of sum, which is provided as

loan out of the total sum of purchase of any vehicle by the

transporters.




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CPV Contact Point Verification This is the document describing

the details find out at the time when contact is made with the

customer regarding its vehicles running & other workings.

POA Power of Attorney It is the procedure or document, which

transfers the rights & duties or power of one to another person so

that all works done by latter in case of former is absent.

PDC Post Dated Cheques These are bankers cheques, which

drawn in advance for any future date. These cheques are drawn by

customer in favor of banks for the payment of EMIs.

LOV List of Vehicles This is the list containing the details ofvehicles running and owned by the customer like their making, model,

number etc.

ETR Excellent Track Record This term is used for those type of

customers who are having excellent record, which make them eligible

for even heavy loans or who are paying the installments well in time.

GTR Good Track Record This term is used for those type of

customers who are having good record, which make them eligible for

loans or who are paying the installments well in time but they are less

reliable then those who are belong to ETR.

TVR Telephone Verification Report This report is made &

prepared by the employees containing all the details of information,

which is given by the person who attend the telephone call made by

an executive for the verification of details provided by the customer.

FI Report Field Investigation Report As in TVR, this report is

made on the basis of analysis of customer by go into the field, where

all the workings of customer are going on.




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FTU First Time User This term is used for those customers who

apply for the loan for the first time with the bank.

PDD Post Disbursement Documents These documents are

preserved separately by the banks after all transactions between the

bank & customer have been completed.

EMI Equated Monthly Installment This is the sum of amount

decided by the banks for the payment of loan by the customer on

monthly basis, which includes principle & interest.

CG Cash Generation This is an amount, generated by the

customer or transporter for a period & it is equated by addingDepreciation into Net Profit.

Chapter 3




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3.1 Objectives3.2 Marketing Research Process

3.3 Study Description

3.4 Sampling

3.5 Contact Methods

3.1 Objectives

The main objectives are as follows:

Assessment of Transport Market related to Commercial Vehicle

Financing

To know the average capacity of transporter related to Working

Capital

To access the Transporters Financing Problems

To know HDFC Market Share in the field of Commercial Vehicles

Financing & Working Capital in Transporter Sector




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3.2 Marketing Research Process

Research may be defined as prose word. It means analysis of thesubject based on borrowed materials with suitable acknowledgement and

consultation in the main body of paper.

Marketing Research can be defined as the systematic design,

collection, analysis, & reporting of data & findings relevant to a specific

marketing situation facing the company.




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Fig Marketing Research Process

3.3 Study Description

The type of research here is Exploratory Research Design. This

kind of design is used for more precise investigation or of developing the

working hypotheses from an operational point of view. It has inbuilt

flexibility, which is needed because the research problem, broadly definedinitially, is transformed into one with more precise meaning in exploratory

studies, which in fact may necessitate changes in research procedure for

gathering relevant data.

The characteristic features of research are as follows:

Flexible Design



Define theProblem

Develop the

Research Plan

Collect the

Information

Analyze the

Information

Present the

Findings

Make the

Decision


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Non-Probability Sampling Design

No pre-planned design for analysis

Unstructured instruments for collection of data No fixed decisions about the operational procedures

Data Sources

The data gathering can be from secondary data, primary data or

both. Secondary data are data that are collected for another purpose and

already exist somewhere. Primary data are data freshly gathered for a

specific purpose or for a specific research project.

The cost incurred in collecting primary data is more than secondary

data. The secondary data available orally in this research, therefore whole

data is collected primarily.




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Research Approaches

Primary Data can be collected in five ways:

Observational Research

Focus Group

Surveys

Behavioral Data

Experiments

In Observational Research, fresh data can be gathered by observing

the relevant factors & settings. An environment is created to judge the

response of respondents in that situation.

In Focus Group, a group of 6 to 10 people invited to spend few hours

with a skilled moderator to discuss product, service, organization or any

other marketing entity.

Surveys are best suited for descriptive research. Companies

undertake surveys to learn about peoples knowledge, beliefs, preferences,

and satisfaction, and to measure the magnitudes in the general population.

Behavioral data is collected from the visits to shops, where the

customers come & leave traces of their purchasing behavior in store

scanning data, catalog purchases, and customer databases.Experimental Research is the most significantly valid research among

all above. It studies the cause & effect relationships by eliminating

competing explanations of observed findings.

What is done here?

The research approach in this research is followed is of survey. Here

the movement in to the field of transport areas, meet the fleet owners,

observer their workings, fill questionnaires personally according to answers

given by them as most of the transporters feel uncomfortable in filling

questionnaires themselves.




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Research InstrumentsThere is a choice of mainly three instruments in collecting primary

data:

Questionnaires

Psychological Tools

Mechanical Devices

Questionnaire consists of a set of questions presented to respondents.

Because of its flexibility, the questionnaire is by far the most common

instrument used to collect primary data. Questionnaires need to be carefully

developed, tested & debugged before they are administered on a large scale.

Psychological Tools such as laddering techniques, depth interviews &

rorshach tests can probe a buyers deeper beliefs & feelings. Laddering

involves the points set in ascending order, Depth Interview involves the

questioning deeply, & rorshach involves some kind of pictures

representation, graphs etc. to check the perception of respondent.

Mechanical Devises are occasionally used in marketing research. All

kinds of scientific instruments & mechanics used to measure the respondents

characteristics.

What is done here?

The Questionnaire is used as research instrument in this research.

This technique is useful as the same type of questions asked to all the

transporters. It is non-disguised structured questionnaire, which is used to

pull out important information from the secret pockets of transporters

because generally transporters refuse to give any kind of information.




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3.4 Sampling

Sampling Plan

Sampling can be defined as the technique through which an idea can

be generated out of whole market by taking just a small part of it. The

sampling process has the following steps:

Define the population

Establish the frame of population

Choose method of sampling Determine the sample size

Write instructions for identification of sample

Under this process, the sampling plan has to be designed. This plan

deals with basically three decisions:

Sampling Unit Who is to be surveyed?

Sample Size How many people should be surveyed? Sampling Procedure How should the respondents be chosen?

Sampling Unit By the sampling unit, the target market has to be

defined that will be sampled. Once the sampling unit has been determined, a

sampling frame must be developed so that everyone in the target population

has an equal or known chance of being sampled.

The sampling unit in this research is of transporters providing

services for transportation of goods all over India from whole NCR region

spread mainly over Sanjay Gandhi Transport Nagar, Tis Hazari, Delhi-UP

Border, Bata Railway Crossing-FDB, Sadar Bazar, Punjabi Bagh Transport

Center, Okhla Industrial Area, etc. National Capital Region includes Delhi,

Ghaziabad, Faridabad, Noida, & Gurgaon.




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Sample Size Large Samples give more reliable results than small

samples. However, it is not necessary to sample the entire target populationor even a substantial portion to achieve the reliable results. Samples of less

than 1 percent of a population can often provide a good reliability.

In this research of Commercial Transportation, the Sample Size is

400. Although there are more than 7000 transporters in whole NCR

providing services, the sample size is around 5.5 percent of the target

population.

Sampling Procedure To obtain a representative sample, a

probability sample of the sample should be drawn. Probability Sampling

allows the calculation of confidence limits for sampling error. Thus, one

could conclude after the sample is taken that the interval 5 to 7 trips per

year has 95 chances in 100 of containing the true number of trips taken

usually by 1st class passengers flying between Chicago & Tokyo. Even non

probability samples are useful in many circumstances; even they do not

allow sampling error to be measured. Probability Sampling is of many types

zlike Simple Random Sampling, Systematic Sampling, Stratified Sampling,

Cluster Sampling, & Area Sampling etc.

The type of sampling in this research is Cluster Sampling under

Probability Sampling. The common group here is of Fleet Owners, who run

their fleets all over India. This group is extracted out of various transport

areas, which are mentioned in the Sampling Unit.




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3.5 Contact Methods

Once the sampling plan has been determined, the decision now is totaken regarding how the subject should be contacted:

Mail Questionnaire

Telephone

Personal

Online Interview

Mail Questionnaire is the best way to reach people who would not

give personal interviews or whose responses might be biased or distorted bythe interviewers. Mail Questionnaires require simple & clearly worded

questions.

Telephone interviewing is best method for gathering information

quickly; the interviewer is also able to clarify questions if respondents dont

understand them.

Personal Interviewing is most versatile method. The interviewer can

ask more questions and record additional observations about the

respondent, such as dress & body language.

Online Interview is best suited for educated people or who can

answer the questions through Internet. This is the economical method as at

the same time, there is huge collection of responses.

What is done here?

Personal interview method is used to find the data in this research

due to following reasons:

Transporters careless behavior towards mails

Transporters believe ness in face to face interaction

Transporters located in large in same area Transporters dont have to fill questionnaires by self

Transporters personally give more suggestions/comments




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Chapter 4

4.1 Data Representation

4.2 Charts & Comments




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4.1 Data Representation

Particular

s

Top (%) Average (%) Bottom (%)

1. Fleet Size 20-50(36) 5-20(34),

Above50(19)

0-5(11)

2. Major

Financiers

Others/Private(25

)

TATA(21),

ALFinance(13),

KotakMahindra(11),

HDFC(11)

Citibank(10),

ICICI(09)

3. O/D

Composition

Not Availed(72) Availed(28)

4. Availed

O/D

Composition

Regional &

Nationalized

Banks(87)

HDFC(8) Citibank(5)

5. Not

Availed O/D

Reasons

Not Interested(55) Financial

Soundness(45)

6. Tyres MRF(29) CEAT(26),

Apollo(23)

JK Tyres(22)




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7. Tyres

Life(km)

50000 to 60000

(52)

Above 60000

(35)

Below 50000

(13)

8. Pair of

Tyres Cost

per

month(Rs)

7000 to 10000

(55)

10000 to 15000

(45)

9. Insurance

& PermitPayments per

annum(Rs)

40000 to 50000

(43)

30000 to 40000(26),

Above 50000 (17)

20000 to 30000

(14)

10.

Maintenance

Cost per

month

4000 to 5000

(41)

3000 to 4000 (33),

2000 to 3000 (16)

Above 5000 (10)

11. Diesel

Buy Basis

Cash basis (94) Credit (6)

12. Oil

Company

BPCL (41) HPCL (28),

IOC (27)

Others (4)

13. Type ofVehicles

HGV (72) LCV (10),MDV (10)

Multi-Axle (8)

14.

Newspaper

Read

Punjab Kesri (37) Times of India (25),

HindustanTimes(16)

, Dainik Jagran (10)

Hindustan (6),

NavbharatTimes(6

)




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4.2 Charts & Comments

1. Fleet Size

Fleet Size

11%

34%

36%

19%

0 to 5 5 to 20 20 to 50 Above 50

Comments

The large number of transporters has 20-50 (36%) Fleets specially inSanjay Gandhi Transport Nagar.

The second largest number of transporters has 5-20 (34%) Fleets

followed by 0-5 (19%) Fleets and the remaining are minimum has 50

& above Fleets.




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The average fleet size is 30.

2. Major Financiers

Major Financiers

11%9%

10%

11%13%

21%

25%

HDFC ICICI Citibank

Kotak Mahindra AL Finance TATA FinanceOthers/Pvt

Comments

The large number of transporters finances their fleets from

Others/Pvt (25%) like Chola Mandalam, Sundram Finance etc. due toless serving time and also less formalities with easy terms &

conditions.

The second largest number of transporters finances from TATA

Finance (21%) due to widely availability & well entertained the

customers followed by Ashok Leyland Finance (13%).




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HDFC holds the share of 11% in financing of fleets with Kotak

Mahindra.

3. Overdraft Composition

O/D Composition

72%

28%

Transporters not availing O/D Transporters availing O/D

Comments

The large number of transporters does not avail the Overdraft

Facility i.e. 72% because they are not aware about overdraft schemesand even if interested, then nobody there to entertain them.

Only 28% of the transporters avail the Overdraft Facility from

various regional & nationalized banks.




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4. Availed Overdraft Composition

Availed O/D Composition

87%

8% 5%

Regional & Nationalized Banks HDFC Citibank

Comments

In 28% Availed Overdraft Facility Transporters, they availed this

facility from the Regional & Nationalized Banks i.e. 87%.

HDFCs share is 8% out of whole and Citibank is having 5%. This is

due to trustworthiness among nationalized banks & even the

transporters not aware of private banks policies especially HDFC.

Among the private banks HDFC holds the share of 62% and the

remaining is of Citibank, as in private sectors Working Capital




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Facility is provided by these two only and ICICI is yet to start by

August, 2004.

5. Not Availed Overdraft Reasons

No O/D Reasons

55%

45%

Not Interested Financial Soundness

Comments

In 72% Not Availed Overdraft Facility Transporters, there are about

55% who say they are Not Interested. This is because, they dont want

to open their financial details or they feel it as a complex procedure.

Rests 45% say that they are Financial Sound, and they dont need any

Overdraft or any such Credit Facility.

On this basis, out of 100, 72 doesnt have any Overdraft Facility and

HDFC has to convince those 40 transporters, who say they are Not

Interested which is 55% of 70.




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6. Tyres Purchased

Tyres Purchased

23%

26%22%

29%

Apollo Ceat JK Tyres MRF Tyres

Comments

The above picture of Tyres Purchased by Transporters give the

2largest preference to MRF Tyres, which holds the market share of

29% in Transport Sector.

The second largest Tyre Co. Share in Transport Sector is of CEAT

(26%) followed by Apollo (23%) & rest is of JK Tyres.

On this basis, there is a tough competition among all the well known

companies & MRF holds largest share just due to solidity, reliability

in long travels.




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7. Tyres Life

Tyre's Life (kms)

13%

52%

35%

0 to 50000 50000 to 60000 Above 60000

Comments

Most of the Transporters Fleets Tyre gives a drive for 50,000 to

60,000 Kilometers, which make their composition of 52%.

There are 35% of transporters, who says that their tyres run above

60,000 Kilometers & rest of the transporters tyres life is of less than

50,000 Kilometers.

On an average, the tyres will run for 55,000kms approximately.




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8. Pair of Tyres Cost p.m.

Tyres' Pair Cost p.m. (000s)

55%

45%

7 to 10 10 to 15

Comments

Most of transporters pay around Rs7000 to Rs10000 i.e. about 55%,

which shows that they buy minimum 2 pair of tyres for every fleet.

Rest is all depend on the number of shifts for which the fleets are

running.

Then rest 45% pay from Rs10000 to Rs15000 or above to maintain

the life of tyres at good speed & reliability.

This is the analysis conducted for the purpose of measuring the

Working Capital requirements of the transporters as this

consideration forms the major portion of it.




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9. Insurance & Permit Payments per annum

Insurance & Permit Paid p.a.

14%

26%43%

17%

20000-30000 30000-40000 40000-50000 Above 50000

Comments

The large number of transporters which are 43%, who paid Rs40,000

to Rs50,000 yearly as an expenditure on Insurance & Permit.

The second largest composition is of 26% transporters, who paid

Rs30,000 to Rs40,000 as Insurance & Permit Payments per annum

followed by 17% who paid more than Rs50,000 and rest paid

Rs20,000 to Rs30,000 for the purpose.

This whole analysis & outcome regarding Insurance & Permit is

based on the number of fleets, the transporters running, their lifetime& especially how much the fleets run & at what distance i.e. the

number of shifts.

On an average, the Insurance & Permit Payments are of Rs40,000 to

Rs42,000.




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10. Maintenance Cost per month

Maintenance Cost p.m.

16%

33%41%

10%

2000-3000 3000-4000 4000-5000 Above 5000

Comments

The large number of transporters which are 41%, who paid Rs4,000

to Rs5,000 monthly as an expenditure on Maintenance of their fleets.

The second largest composition is of 33% transporters, who paid

Rs3,000 to Rs4,000 as Maintenance Cost per month followed by 16%

who paid Rs2,000 to Rs,3000 and the rest paid more than Rs5,000 for

the purpose.

This whole analysis & outcome regarding Maintenance Cost is again

based on the number of fleets, the transporters running, and their

lifetime as the more old the vehicle is, the larger its Maintenance.

On an average, the Maintenance Cost per month paid by transporters

is Rs2,900 to Rs3,400.




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11. Diesel Purchased Basis

Diesel Buy Basis

94%

6%

Cash Credit

Comments

The large numbers of transporters buy their fuel or diesel by mode of

cash payment i.e. 94%. The reasons for cash as mode of payment for

diesel are due to convenience in payments & easily availability

because in India there are various areas where Credit or Debit Cards

facility is not available.

The reasons behind such a low percentage of only 6% who avail the

credit facility for buying diesel are illiteracy, inconvenience, & may

be complexity.




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12. Oil Company Preference

Oil Co. Preferred

28%

41%

27%4%

HPCL BPCL IOC CNG/Others

Comments

Bharat Petroleum Corporation Limited holds the largest market shareto serve fuel in Transport Sector as about 41% of transporters give

preference to BPCL. The reasons for such large share are due to

purity, better service & reliable brand.

Hindustan Petroleum Corporation Limited & Indian Oil Company

holds 28% and 27% respectively.

From this composition, there is tough competition in between HPCL

& IOC, and the both companies have to do a tough job to win theheart of transporters in advertising as well as purity with interesting

schemes, if they want to give tough competition to BPCL.




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13. Type of Vehicles Owned

Owned Vehicles

10%10%

72%

8%

LCV MDV HGV Multi-Axle

Comments

Most of the transporters owned Heavy Goods Vehicles (72%). These

HGVs are trucks normally have 6 to 10 tyres, which anybody can

easily vie on the roads. Reasons for this are due to normal capacity,

& these vehicles can take a load which is highly preferred.

Light Commercial Vehicles & Medium Density Vehicles owned by

10% transporters and the rest owned Multi-Axle Vehicles.

The makers of HGVs among all kinds of Transport Vehicles are at toplike TATA-2213, TATA-1516 etc.




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14. Newspaper Reading

Newspaper Read

25%

16%6%6%10%

37%

Times of India Hindustan Times Navbharat Times

Hindustan Dainik Jagran Punjab Kesri

Comments

Most of the transporters read Punjab Kesri (37%). The reasons for

this are the illiteracy among some transporters, especially the

workers working over there. They can easily read Hindi Newspaper.

Secondly is the low price.

Most of the transporters then prefer to read Times of India (25%)

followed by Hindustan Times (16%) and Dainik Jagran (10%). The

rest include Hindustan & Navbharat Times.

On this basis, the companies should prefer to give theiradvertisements in Punjab Kesri & Times of India with Hindustan

Times.




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The Transporters Society needs to learn more in field of education to

understand the world happenings in this sector as the English

Newspapers govern better knowledge of world.

Chapter 5

5.1 Conclusion

5.2 Suggestions & Recommendations5.3 Limitations




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5.1 Conclusions

The whole survey on Commercial Transport Working & Financing

draws out some conclusions from the data, which has been already

explained in previous chapter are explained in detail nowhere.

The whole survey is based on Questionnaire, which ask the very first

question regarding the Fleet Size. All other questions, whether related to

financiers part or tyres life or Insurance & Permit payments etc. are based

on the Fleet Size.

1. Working Regions On the basis of whole study, the main

areas or locations of Transporters in National Capital Region

are Sanjay Gandhi Transport Nagar on G T Karnal Road, TisHazari, Punjabi Bagh Transport Center, Qutab Industrial Area

in Delhi, and Bata Railway Crossing in Faridabad, and Delhi-

UP Border in Ghaziabad. Although, the transporters who

provide services for All India but large number of transporters

located in NCR provide for Delhi, UP, Haryana, Punjab,

Gujrat, & Rajasthan.

2. Fleet Size Regarding the fleet size, the normal size is of 30,which is sufficient to provide the service to potential customers

exclude the case of high demand. The results show that the

large number of fleet owners owned 20-50 vehicles, followed by

5-20 vehicles. In respect of8 Working Capital Division of

banks, the large number of fleet owners belong to MFO i.e.

Medium Fleet Owners.




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3. Major Financiers As already mentioned above that the large

part of financing for transport sector is done by private

institutions or small bankers because due to trustworthy &

reliable relationships. Secondly, the reach of these small

lenders is very high in comparison to other bankers like HDFC,

ICICI, Citibank etc. As far as the question of TATA Finance isconcerned, transporters feel very energetic towards it. The

reason behind this is lifelong reliable brand relationship.

Secondly, any customer prefer to get financed its product from

the maker of the product itself.

4. Overdraft Facility Overdraft term is used in place of Working

Capital in questionnaire because large numbers of transporters

are not aware of the term Working Capital. Again large part

not availed this facility from anywhere, and if availed, then thelist of such banks is too large to make. Then transporters

generally not interested to avail due to inconvenience & further

large number of formalities.

5. Tyres In the field of tyres, no one can compete with MRF just

due to its strong ness, stability, solidity, economy & last but not

least is its reliability. Others like CEAT, Apollo, & JK Tyres

are giving a tough competition to each other.

6. Insurance, Permit & Maintenance Payments As far as

Insurance, Permit & Maintenance Payments are concerned,

they are the fixed expenditures and all these payments are

based on the fleet size, the transporters owned.




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7. Diesel & Oil Company The cash mode of payment for dieselis given high preference is just due to illiteracy & easy

availability of cash in transport sector. BPCL is enjoying the

largest market share in field of Oil Services. Even some of the

transporters are enjoying & satisfied with the facility of Petro

Card, which works just like prepaid schemes in mobiles.

8. Newspaper Last, but not least, the largest reading preference

given to Punjab Kesri just because anyone can read Hindi, theneconomy & further the masala news, which most of the lower

class enjoyed during their free time. Therefore, the companies,

which are directly or indirectly deal with Transport Sector

should have to give advertisements in Punjab Kesri, Times of

India and even Hindustan Times.

Example

According to results on data collected, the average number oftransporters owned 30 vehicles. If a transporter owned 30 vehicles, on an

average he has financed his 8 vehicles from others or on indigenous bankers

or financial institutions. Again, out of those 30, he has owned 22 Heavy

Goods Vehicles, which run on average 55,000kms. If his major regions of

working are Haryana, UP, Delhi, & Punjab & every truck has a shift of 2

days in a week, then in an year the insurance & permit payments is around

Rs30,000. Then, out of 30, 20 vehicles are 5 to 7 years old, then

maintenance cost paid at least Rs3,000 to 4,000. In this way, the answers to

rest of the questions related to operations of fleets are all based on the fleetsize, the transporters owned.




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5.2 Suggestions & Recommendations

There are various suggestions given by the transporters regarding

their welfare, as well as for the improvement of Transport Sector in all

aspects. Those suggestions are as follows:

1. Diesel Prices Almost all the fleet owners, and transporters

demand for decrease in diesel prices. Especially after the

change in government, after Congress came in to power, the

prices of diesel as well as petrol going up day by day. There is

an increase in diesel prices by around Rs6/litre. This rise

increases the expenditures of transporters, which leads to rise

in contract amounts of transporters & dealers. Heavy payments

will then be curbed by the suppliers, wholesalers & further

there will rise in prices of various products, especially Fast

Moving Consumer Goods (FMCG) category.

In this aspect, the duties charged by the govt. on diesel

distribution should be curbed with low sales tax to serve thepoor part of economy the Physiological needs.

2. Toll Taxes Toll Tax is a kind of tax, which is charged by the

govt. for crossing the state boundaries. The rise in rates of toll

taxes will again pay by transporters, which leads to same kind

of results like rise in diesel prices.

In this aspect, the rates of toll taxes should be curbed by thegovt. for the happiness & welfare of economy.

3. Bank Formalities As far as the facility of loans, overdraft or

working capital provided by the banks, most of the transporters




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are not satisfied by the long list of papers demanded by the

banks. Large numbers of papers always increase the serving

time by banks. These kinds of complaints mainly come from

small fleet owners.

In this aspect, the banks should have to make the special

resolution regarding such small fleet operators, which are

spread on large scale among all the transporters. Further,

these small fleet operators are the main source of income for

the indigenous bankers, & private lenders, who already hold

the largest market of financing.

4. Time Consumption As already mentioned above, that the

large number of formalities leads to increase in serving time.

Some complaints also came from the transporters, that banks

call again & again for a simple financing.

In this aspect, although the serving time is reduced in previous

years, but still there are large number of transporters, who feel

this kind of problem due to low reachable capacity by the banks

to those. Therefore, the banks should have to increase their

reaching capacity from smallest to largest customer to capturethe market on a large scale.




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3.7 LimitationsAs no research is full fledged, there are certain limitations of

research which are as follows:

1. Biased or Dishonest Responses This is a main drawback in

this kind of survey or personal exploratory research based on

questionnaire. The respondent may give false information or

even hide the actual figures may be due to Income Tax or

Government Interference. Even after telling by the researcher

that he doesnt belong to any organization, the respondent still

feel uncomfortable. And, this research deals with the

transporters, who easily not believe anybody.

2. Respondents Absenteeism Most of the information in the

questionnaire is directly asked to the fleet owners because only

they can answer the questions regarding tyres, payments,

financiers etc. Further, most of the time they are busy in

outings, and in that case, oth