home loan - hdfc&icici bank

8/22/2019 Home Loan - Hdfc&Icici Bank

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ADissertation Report

ONComparative study of Home Loans

provided by HDFC and ICICI Bank on

the basis of customer satisfaction,

different schemes, sales-A case studyin Yamunanagar

Submitted to

Kurukshetra University,Kurukshetra in partial fulfilment

for the degree of Master ofBusiness Administration (Session

2005-2007)

Under the supervision of:- Submitted By:-

Ms. Kiranpreet KaurPriyanka KunduFaculty MBA Rollno. 1152/05


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TIMTreg.no. 02-RK-1062

University Roll

No..MBA-final.

Tilak Raj Chadha Institute of Management &

Technology, Yamuna Nagar (TIMT). Approved by AICTE

and Affiliated to Kurukshetra University,

ACKNOWLEDGEMENT

In this world of cut throat competition my project report is a combination of boththeoretical as well as practical efforts.

Comparative study of Home Loans provided by HDFC and ICICI Bank on the

basis of customer satisfaction, different schemes, sales-A case study in

Yamunanagar

I thank almighty god to give me strength to work sincerely during the course of the

project.

I express my sincere gratitude to Dr. R.K.Garg(Director) without whose guidance,

keen interest and regular encouragement my project would not have been compiled. Im

also thankful to Dr. Vikas Daryal (Assistant Professor,HOD-MBA,TIMT ) for his


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inspiration and helpful attitude. I would also like to grab the opportunity to thank Ms.

Kiranpreet Kaur for his helping hand in the compilation of the report.

Last but not the least I would like to thank my parents for their support.

(Priyanka Kundu)

EXECUTIVE SUMMARY

The concept of this project is to check whether HDFC Bank and ICICI Bank areperforming well year after year or are lacking in performance. The performance ismajorly evaluated by having a look on the sales, customer satisfaction, and brand imageamong customers.

The purpose of this project is to evaluate the performance of two banks that are HDFCBank and ICICI Bank. It primarily aims at learning the various factors that can help inevaluation process. It also aims at providing innovative services and by attaining costefficiency. I have tried to find out whether customers are satisfied with the bank fromwhere they have taken loan or not. I have also tried to find out the areas of improvementin these two banks.

The project encompasses HDFC and ICICI Bank of Yamunanagar region who visitedtheir respective banks to get the resolution of their problems.

Number of respondents are from a sample of hundred each of HDFC and ICICI bankrespectively.

The first part of the report is about the History of both the banks that are beingundertaken for study. The second part includes a brief description about the Consumer,his Behaviour/Preferences, and the Consumer Decision Making Process. The third part


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presents an overview of Objective of the Study and Literature Review. The fourth partconsist of Research Methodology which includes Sampling, Data Collection, Statisticaland Analytical tool and the Limitations of the study. And the last part covers theInterpretation of the findings and Recommendations along with Bibliography andannexure. The sample size taken by me is two hundred customers so that maximum

information will be obtained.

The sample design used is judgement sampling and the data used are both: theprimary data and secondary data.


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CONTENTS

Serial No. Page No.

1. Introduction

Profile of the study 1

Significance of the study 21

2. Objective of the study 22

3. Literature Review 234. Research Methodology

Sampling & Sample Design 26

Data Collection 29

Analytical Tools 30

Hypothesis Testing 39

Limitations of the study 425. Result & Discussions/Findings 43

6. Recommendation 60

7. Bibliography 63

8. Annexure 65


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INTRODUCTION


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Introduction of the Project

This project is about the preferences of consumer regarding the type of home loan theyprefer and from which bank in the Yamuna Nagar (in special context of HDFC Bank andICICI Bank).

Personal unsecured loans can be very expensive because of the interest rates charged, andthe reasons that banks and lenders charge such high rates on these loans is because theloan is based on trust alone, which is a high risk for the lender. Because of this, theseloans can also be far more difficult to get, and unless you have an unblemished credithistory you could run into trouble. Home loans are different in that they are securedloans, which is a lower risk for the lender. This means that you have more chance ofgetting the loan you want, and you will find far lower interest rates attached to these

home loans simply because they are secured.

Loan Process Overview

Step 1: Loan Application & FormsThe loan application and accompanying forms allow the loan officer to gather essentialinformation relating to your loan. Additionally, at the point of application, the borrowernormally supplies the loan officer all the necessary documents and records required for

loan submission.

Step 2: Loan Selection & LockAfter consulting with the client(s) and reviewing all loan documents, the loan officer willidentify several loan options best suited to meet the clients short and long term goals.When the best loan is identified, the loan officer will lock the interest rate with the lenderfor 30 to 45 days depending on loan requirements.

Step 3: Order the Appraisal

An appraisal is a requirement for most loans and it represents a professional appraiser'sevaluation and estimate of.

Step 4: Open Escrow

Order Title Preliminary Report


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Lender Good Faith Estimate (GFE)- By law, the lender is required to send a Good

Faith Estimate to you. This GFE may not reflect the same numbers as the GFEprovided by Provident. Please note, the GFE provided to the client by Providentrepresents the truest estimate of the loan fees and will be used as the guideline forthe loan.

Step 5: Process The Loan

Before a loan can be submitted for lender approval, the processor must assemble acompleted loan file that includes required lender documentation. Items listed belowreflect a sample list of loan documents required for processing:

Application & Forms

Mortgage Statement & Insurance

Preliminary Title Report

Escrow Instructions

Verification of Employment

Verification of Deposit

Full Factual Credit Report

Appraisal

Verification of Mortgage

Bank Statements & Account Info.

Good Faith Estimate

Step 6 Submit Completed Loan FileAfter the loan has been processed, it is submitted to the lender for loan approval.Normally, lender approval occurs within 48 to 72 hours.

Step 7: Lender Loan Approval

Upon loan approval Provident is notified immediately by the lender. At this time, aProvident representative contacts the borrower and notifies them of loan approval and if

there are any loan conditions.

Step 8: Loan ConditionsAlthough a loan may receive lender approval, it is common that various conditions beassigned prior to funding the loan. For example, common loan conditions may require theborrower to supply recent bank statements, pay off credit cards, or supply updated pay

stubs.


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Step 9: Ordering & Signing Documents

Once loan conditions are met, loan documents are ordered, reviewed by Provident, andforwarded to escrow. The escrow officer then normally contacts borrowers and anappointment is set to sign loan documents.

Step 10: Funding The LoanSigned loan documents are returned to Provident for final review and then forwarded tothe lender. The lender confirms all signatures and documents and normally funds the loanwithin 48 hours.

Step 11: Recording The LoanOnce the loan is funded via a wire transfer, it is escrow's responsibility to record the loan

with the county assessor's office. This may occur the same day the loan is funded, buttypically loans are recorded the day after funding.

MAJOR


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PLAYERS IN

THE MARKET


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HDFC BANK

OVERVIEW

HDFC Bank has its deposit programmes rated by two rating agencies - Credit Analysis &Research Limited. (CARE) and Fitch Ratings India Private Limited. The Bank's FixedDeposit programme has been rated 'CARE AAA (FD)' [Triple A] by CARE, whichrepresents instruments considered to be "of the best quality, carrying negligibleinvestment risk". CARE has also rated the Bank's Certificate of Deposit (CD) programme"PR 1+" which represents "superior capacity for repayment of short term promissoryobligations". Fitch Ratings India Pvt. Ltd. (100% subsidiary of Fitch Inc.) has assignedthe "tAAA (ind)" rating to the Bank's deposit programme, with the outlook on the ratingas "stable". This rating indicates "highest credit quality" where protection factors arevery high". HDFC Bank also has its long term unsecured, subordinated (Tier II) Bonds of

Rs.4 billion rated by CARE and Fitch Ratings India Private Limited. CARE has assignedthe rating of "CARE AAA" for the Tier II Bonds while Fitch Ratings India Pvt. Ltd. hasassigned the rating "AAA (ind)" with the outlook on the rating as "stable". In each of thecases referred to above, the ratings awarded were the highest assigned by the ratingagency for those instruments?

Business

HDFC Bank offers a wide range of commercial and transactional banking servicesand 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, blue-chip manufacturingcompanies in the Indian corporate to small & mid-sized corporate and agri-based businesses. For these customers, the Bank provides a wide range ofcommercial and transactional banking services, including working capitalfinance, trade services, transactional services, cash management, etc

Retail Banking Services

The objective of the Retail Bank is to provide its target market customers afull range of financial products and banking services, giving the customer aone-stop window for all his/her banking requirements. The products arebacked by world-class service and delivered to the customers through thegrowing branch network, as well as through alternative delivery channels likeATMs, Phone Banking, Net Banking and Mobile Banking.


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Treasury

Within this business, the bank has three main product areas - ForeignExchange and Derivatives, Local Currency Money Market & Debt Securities,and Equities. With the liberalization of the financial markets in India,corporate need more sophisticated risk management information, advice and

product structures.

Products of Home Loans

Home Loans

Home ImprovementLoans

Home Extension Loans

Short Term BridgingLoans

Land Purchase Loans Professional Loan

Non-residential premises

Home Equity Loan

HOME LOANS

Resident Indians

With an HDFC Home Loan, you can bring to life the house of your dreams. You couldbuy a self-contained flat in an existing or proposed co-operative society, in an apartmentowner's association or even an independent single-family or multi-family bungalow orrow house as well as a house that you like anywhere in India.

HDFC Home Loans are easy to arrange and can be customised according to your needsand repayment capability. Moreover, in Delhi you can get finance for first power ofattorney purchases of DDA flats allotted before 1992.


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FEATURES

Home Loan CounsellingSharing of over 29 years of home loan experience.We have been a part of a 29 year journey with our 26 Lakh customers. Our home loan

counsellors offer you the time tested advice. Be it legal documentation, project or builderapprovals, and technical advice, we look forward to sharing with you and this service isabsolutely free.Our project approval facility provides our customers the comfort ofpurchasing properties from builders who have complied with all basic documentation.

Door Step ServiceWe offer door step service. Please call HDFC Home Line call for our Sales Executive toassist you..

We help you find your dream homePlease seek the help of HDFC Realty for purchasing your dream home.

Wide Product RangeWe provide loans to meet all your requirements for you to make that house a home.Home Loans, Home Improvement Loans, Home Extension Loans, Loans to professionalsfor office or clinic, Home Equity Loans (Loan Against Property), Loan Against Rentreceivables, Short Term Bridging Loan.

Multiple Repayment OptionStep Up Repayment Facility

Helps young executives take a much bigger loan today based on an increase in theirfuture income, this helps executives buy a bigger home today!

Flexible Loan installments PlanOften customers, parents and their children, wish to purchase properties together. Theparent is nearing retirement and their children have just started working. This optionhelps such customers combine the incomes and take a long term home loan where in theinstallment reduces upon retirement of the earning parent.

Accelerated Repayment Scheme

Accelerated Repayment Scheme offers you a great oppourtunity to repay the loan fasterby increasing the EMI. Whenever you get an increment, increase in your disposableincome or have lumpsum funds for loan prepayment, you can benefit by

Wide network of financingWith over 200 offices, 90 outreach programs- HDFC is able to provide home loans isover 2400 locations in India. You can apply at your local HDFC office for properties in

locations where we finance.


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Post Disbursement ServicesIncome tax Certificate to enable you to claim the tax benefits are sent to you. This serviceis absolutely free.

Loan RepaymentECS facilityPost dated cheques- No charges for replacement of chequesLoan repayment at any HDFC officesBack to top

ICICI BANK

Overview

ICICI Bank is India's second-largest bank with total assets of about Rs. 2,513.89 bn (US$56.3 bn) at March 31, 2006 and profit after tax of Rs. 25.40 bn (US$ 569 mn) for the yearended March 31, 2006 (Rs. 20.05 bn (US$ 449 mn) for the year ended March 31, 2005).ICICI Bank has a network of about 614 branches and extension counters and over 2,200

ATMs. ICICI Bank offers a wide range of banking products and financial services tocorporate and retail customers through a variety of delivery channels and through itsspecialised subsidiaries and affiliates in the areas of investment banking, life and non-lifeinsurance, venture capital and asset management.

ICICI Bank set up its international banking group in fiscal 2002 to cater to thecross border needs of clients and leverage on its domestic banking strengths to offerproducts internationally. ICICI Bank currently has subsidiaries in the United Kingdom,Russia and Canada, branches in Singapore, Bahrain, Hong Kong, Sri Lanka and DubaiInternational Finance Centre and representative offices in the United States, United ArabEmirates, China, South Africa and Bangladesh. Our UK subsidiary has established abranch in Belgium. ICICI Bank is the most valuable bank in India in terms of market

capitalisation.

ICICI Bank's equity shares are listed in India on the Bombay Stock Exchange and theNational Stock Exchange of India Limited and its American Depositary Receipts (ADRs)are listed on the New York Stock Exchange (NYSE).

ICICI Bank has formulated a Code of Business Conduct and Ethics for its directors andemployees. (Click here to view a copy of the Code)


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At June 5, 2006, ICICI Bank, with free float market capitalization* of about Rs.

480.00 billion (US$ 10.8 billion) ranked third amongst all the companies listed on

the Indian stock exchanges.

ICICI Bank was originally promoted in 1994 by ICICI Limited, an Indian financialinstitution, and was its wholly-owned subsidiary. ICICI's shareholding in ICICI Bank wasreduced to 46% through a public offering of shares in India in fiscal 1998, an equityoffering in the form of ADRs listed on the NYSE in fiscal 2000, ICICI Bank's acquisitionof Bank of Madura Limited in an all-stock amalgamation in fiscal 2001, and secondarymarket sales by ICICI to institutional investors in fiscal 2001 and fiscal 2002. ICICI wasformed in 1955 at the initiative of the World Bank, the Government of India andrepresentatives of Indian industry.

The principal objective was to create a development financial institution forproviding medium-term and long-term project financing to Indian businesses. In the

1990s, ICICI transformed its business from a development financial institution offeringonly project finance to a diversified financial services group offering a wide variety ofproducts and services, both directly and through a number of subsidiaries and affiliateslike ICICI Bank. In 1999, ICICI become the first Indian company and the first bank orfinancial institution from non-Japan Asia to be listed on the NYSE.

After consideration of various corporate structuring alternatives in the context ofthe emerging competitive scenario in the Indian banking industry, and the move towardsuniversal banking, the managements of ICICI and ICICI Bank formed the view that themerger of ICICI with ICICI Bank would be the optimal strategic alternative for bothentities, and would create the optimal legal structure for the ICICI group's universalbanking strategy. The merger would enhance value for ICICI shareholders through themerged entity's access to low-cost deposits, greater opportunities for earning fee-basedincome and the ability to participate in the payments system and provide transaction-banking services. The merger would enhance value for ICICI Bank shareholders througha large capital base and scale of operations, seamless access to ICICI's strong corporaterelationships built up over five decades, entry into new business segments, higher marketshare in various business segments, particularly fee-based services, and access to the vasttalent pool of ICICI and its subsidiaries. In October 2001, the Boards of Directors ofICICI and ICICI Bank approved the merger of ICICI and two of its wholly-owned retailfinance subsidiaries, ICICI Personal Financial Services Limited and ICICI CapitalServices Limited, with ICICI Bank. The merger was approved by shareholders of ICICIand ICICI Bank in January 2002, by the High Court of Gujarat at Ahmedabad in March2002, and by the High Court of Judicature at Mumbai and the Reserve Bank of India inApril 2002. Consequent to the merger, the ICICI group's financing and bankingoperations, both wholesale and retail, have been integrated in a single entity.

*Free float holding excludes all promoter holdings, strategic investments and crossholdings among public sector entities.


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Board Members

Mr. N. Vaghul, Chairman

Mr. Sridar IyengarMr. R.K.Joshi

Mr. Lakshmi N. Mittal

Mr. Narendra Murkumbi

Mr. Anupam Puri

Mr. Vinod Rai

Mr. M.K. Sharma

Mr. P.M. Sinha

Prof. Marti G. Subrahmanyam

Mr. T.S. Vijayan

Mr. V. Prem Watsa

Mr. K.V. Kamath, Managing Director & CEO

Ms. Kalpana Morparia, Joint Managing Director

Ms. Chanda Kochhar, Deputy Managing Director

Dr. Nachiket Mor, Deputy Managing Director

ICICI HOME LOANS

Why ICICI Bank Home Loans are easy :

Counsellors visit you at your convenience.

Step by step guidance through the process.

Doorstep delivery and pick up of documents.

Home Search service.

FEATURES

Purpose:For purchase of house from builder / resale and construction / extension ofexisting house.

Loan amount:Rs. 2 lac onwards.


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Maximum tenure:20 years for salaried individuals and self employed professionals15 years for self employed non professionals.

Maximum loan amount:85% of the of the property cost (Including the stamp dutyand registration).

LOAN AGAINST PROPERTY

Want to send your child abroad forhigher education? Want to finance yourbusiness?Want to meet your medical expenses? Want to finance your daughter'swedding?

Wondering where the money would come from?

Finance your dreams with Loan Against Property:

Get a loan upto Rs.3 crore

Payable in easy monthly installments over a period of 15 years or less

Available against Residential as well as Commercial properties

Also available is overdraft against your property

OFFICE PREMISES LOANS

Following are some features of Office Premises Loans:

You can avail of a loan of a minimum of Rs.2 lac* to a maximum of Rs.1 crore

You can opt for a payback term of upto 15 years

You could also include your spouse as a co-applicant for the loan and

we shall include his / her income to enhance your loan amount


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OBJECTIVE

OF THE


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STUDY


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Every research is carried out with some or the other objective. The main

mottos behind my research were:-

To compare Home loan market of two different banks with respect to customer

satisfaction, different schemes provided and profit earned.

To study uncovered areas geographically.

To state about the benefits which the consumers can avail from banks while

applying for loan.

To create awareness and provide an opportunity to the customers for availing loan

at low rate of interest.

To suggest way of improving the provision of facilities to the banks from

customer point of view.

To analyze home loan segments provided by the banks in YamunaNagar

To study the consumer preferences for different banks providing home loans.


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Comparison between HDFC & ICICI Bank on the basis of

sales made in past five years

YearHDFC(salesin crores)

ICICI(salesin crores)

2002 11 12

2003 15 15

2004 16 18

2005 21 22

2006 23 25

comparison

0

5

10

15

20

25

30

2002 2003 2004 2005 2006

year

s

ale

Series1

Series2

Pink line represent sales of ICICI Bank and blue line represent sales of

HDFC Bank.

The comparison between the sales of the two banks shows that sales

of ICICI Bank is increasing as compared to the HDFC Bank.


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LITERATUR

E

REVIEW


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LITRATURE REVIEW

Once the problem is formulated the researcher undertakes an extensive

literature survey related to the problem.

The literature survey undertaken here includes the books, magazines,and different websites from the internet. In this project report

following literature is reviewed.

Journals:

Southern EconomistaThe National housing Bank has come out with a newmortgage loan product called Reverse Mortgage Loan executively for benefit ofsenior citizens. The scheme seeks to address the financial needs of senior citizenfor up gradation.

Indian Journal of Comm.b The Govt, India has been giving substantialencouragement to the housing sector . The social structure of families is goingthrough a sea change as the Joint joining is fast going way to the nuclear familyconcept. The pressure to have once own home is high among these families.

Indian Journal Of MKtgcBlessed are those who live in their own house andfordone are those who have money to buy one. But all are not privileged to buy ahouse of his own. For many such less privileged, buying a house has becomepossible in modern times.

DigitdWhile a majority of companies try to appear the all important globalwhile, ICICI bank modified its loan offering to cater to one specific user group.

BOOKS

Kothari,C.R.,RESEARCH METHODOLOGY4,

Cooper Donald R.,Schindler Pamela S5

Gupta S.P6--- Time series analysis is used here. When estimates of futureconditions are made on a systematic basis, the process is referred as forecastingand the figure or statement obtained is known as forecast.

Schiffman Leon G, Kanuk Leslie Lazar9---- Study of the customer behavior is the

study of how individuals make decisions to spend their available resources.


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(Time, Money and Efforts) on consumption related items. It includes the study

what they buy, whey they buy it, when they buy it, where they buy it, how often

they buy it and how often they use it. The primary purpose for the study consumer

behavior as apart of marketing curriculum is to understand how customers make

their purchase decisions. There insights enable marketers to design more effective

marketing strategies.

Gupta S C,Kapoor V K7---

WEBSITES

www.hdfc.com/homeloans.asp (02/02/07), from this site I came to know aboutthe types of home loans provided by HDFC bank.

www.hdfcbank.com/personal/loans/homeloans.html, from this site I came to

know about the profile of HDFC Bank.

www.icicibank.com/pfsusee/loan/homeloan/hshomepage.html(08/03/07), from

this site I came to know about the profile of ICICI Bank.

www.easyhomeloanindia.com(12/03/07)
http://www.hdfc.com/homeloans.asphttp://www.amazon.com/swiss-sugar-free-chocolate-assortment/dp/B000M39TN4http://www.icicibank.com/pfsusee/loan/homeloan/hshomepage.html(08/03/07http://www.easyhomeloanindia.com/http://www.hdfc.com/homeloans.asphttp://www.amazon.com/swiss-sugar-free-chocolate-assortment/dp/B000M39TN4http://www.icicibank.com/pfsusee/loan/homeloan/hshomepage.html(08/03/07http://www.easyhomeloanindia.com/


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RESEARCH

METHODOLGY


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Research in common parlance refers to search for knowledge. It can also be defined as a

scientific and systematic search for information on a specific topic. According to

OXFORD Dictionary:

Research is a careful investigation or inquiry specially through search of new

facts.

Research Methodology in a way is a written game plan for conducting research. Research

methodology may have dimensions. It includes research methods and also considers the

logic behind the methods used in the context of the study. It may also be understood as

the science of the study and minimizes the degree of uncertainty of making wrongchoices. It helps to understand assumptions underlying various techniques and the criteria

by which they can decide that certain techniques will be applicable to certain problems

and others will not.

Therefore in order to solve a research problem it is necessary to design a research

methodology for the easy and accurate solution of the problem.


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SAMPLING: Sampling can be defined as the selection of some part of an

aggregate or totality on the basis of which a judgement or inference about the aggregate

or totality is made. In other words it is the process of obtaining information about an

entire population by examining only a part of it. The process of sampling is used for

various reasons-

Sampling saves time and money. It is usually less expensive and produces results

at faster speed.

It provides more accurate information.

It enables to estimate the sampling errors and thus assists in obtaining information

concerning characteristics of population.

It also enables greater speed of collection of data.

The ultimate test of sample design is how well it represents the characteristics of the

population it purports to represent. In measurement terms the sample must be valid

which depends upon

Accuracy It is the degree to which biasness is absent from the sample.

Precision It represents how well the sample represents the population

in all respect.

SAMPLING DESIGN:A sample design is a definite plan for obtaining a sample

from the sampling frame. It refers to the technique or the procedure that is adopted in

selecting the sampling units from which inferences about the population is drawn.

Sampling design is determined before the collection of the data.


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Several decisions have to be taken in context to the decision about the appropriate sample

selection so that accurate data is obtained and efficient results are drawn.

Following questions have to be considered while sampling design-

What is the relevant population?

What is the parameter of interest?

What is the sampling frame?

What is the type of sample?

What sample size is needed?

How much will it cost?

Sample Size: It indicates the number of individual who would be surveyed. Here the

sample size is two hundred respondents.

Sampling: In this case Judgement Sampling would be used. In judgement sampling

the researchers judgement is used for selecting items which he considers as

representative of the population. It is used quite frequently in qualitative research.


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ANALYTICAL TOOL

The tool that I have applied on my research report is Multidimensional

scaling & Correlation analysis.

CORRELATION

According to Simpson and Kafka correlation analysis deals with the association between

two or more variables.

It helps in determining the degree of relationship between two or more variables but itdoes not tell us anything about cause and effect relationship.

Types

Correlation is classified in several different ways. Three of the most important ways are

Positive or negative

Simple partial or multiple

Linear or non-linear


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Group Correlation

Correlation

r = f fdydx - (fdx) ( fdy)

f fdx2 - (fdx)2 f fdy2 - (fdy)2

= 200 30 - (60) (80)

dxdy

HDFC ICICI Others f fdy fdy2 fdydx

-1 0 1

repayment -2 29 20 11 80 -

120

240 36

Interest

rate

-1 19 15 5 39 -39 39 14

Down

payment

0 23 23 7 53 0 0 0

Brand

image

1 7 7 3 17 17 17 -4

Quick

availability

2 14 11 6 31 62 124 -16

f 92 76 32 200 -80 420 30

fdx -92 0 32 60fdx2 92 0 32 124

fdxdy 42 0 -12 30


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200 124 (60)2 200 420 - (80)2

= 6000-4800

24800-3600 84000-6400

= 1200

21200 77600

= 1200

149.60 278.56

= 1200

40998.36

r = 0.029

This shows that it has a low degree of correlation.

Multi Dimensional Scaling:The various factors that a consumer prefer in order toselect a particular brand are: Repayment

Rate of interest

Quick availability

Brand Image

Down payment

(The calculations are shown in Annexure-2)

TREND ANALYSIS

To apply the statistical tool in this project TREND ANALYSIS is the most effective tool

which is applied here.


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When estimates of future conditions are made on a systematic basis, the process is

referred as forecasting and the figure or statement obtained is known as forecast. In

this world of uncertaininty, economic decision rest upon a forecast of future condition.

Forecasting is concerned with mainly two tasks:- the determination of best basis available

for formation of intelligent managerial expectations, and second handling of uncertainity

about future.

ROLE OF TIME SERIES ANALYSIS

It helps in understanding of past behavioiur.

It helps in planning future operations.

It helps in evaluating current accomplishments

It facilitates comparisons

COMPONENTS OF TIME SERIES

Secular trend

Seasonal variations

Cyclical variations

Irregular variations

The method here used is least square method. It is a mathematical method with its help a

trend line is fitted to the data in such a manner that following two conditions are satisfied.


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Equation of straight line trend is Y=a+bx

Tool Applied

ICICI BANK

Year sales(Y) X XYX2

2002 12 1 12 12003 15 2 30 4

2004 18 3 54 92005 22 4 88 162006 25 5 125 25

92 15 309 55

Equation of a straight line is Y = a+bX

And other two equations are

Y= Na+bX

XY=aX+bX2

Putting all the values, we get

92=5a+15b,

309=15a+55b

After solving both the equations, we get

a=8.5 and b=3.3

Trend Eq. will become Y=8.5+3.3X

Trend values are

Year 2002; X=1, Y=11.8

2003; X=2, Y=15.1

2004; X=3, Y=18.4

2005; X=4, Y=21.7


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2006; X=5, Y=25

Expected profit for year is

2007 X=6, Y=28.3

trend of sales

0

5

10

15

20

25

30

2002 2003 2004 2005 2006 2007

year

sales Series1

Series2

HDFC BANK

Year sales(Y) X XY X22002 11 1 11 12003 15 2 30 4

2004 16 3 48 92005 21 4 84 162006 23 5 115 25

86 15 288 55

Equation of a straight line is Y = a+bX


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And other two equations are

Y= Na+bX

XY=aX+bX2

Putting all the values, we get

86=5a+15b,

288=15a+55b

After solving both the equations, we get

a=8.2 and b=3

Trend Eq. will become Y=8.2+3X

Trend values are

Year 2002; X=1, Y=11.2

2003; X=2, Y=14.2

2004; X=3, Y=17.2

2005; X=4, Y=20.2

2006; X=5, Y=23.2

Expected profit for year is

2007 X=6, Y=26.2

trend of Sales

0

5

10

15

20

25

30

2002 2003 2004 2005 2006 2007

Years

Rs

Series1

Series2


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DATA COLLECTION

After defining the problem and deciding about the sample and its size we need to collect

data to further carry out our report work. The gathering of data may range from a simple

observation at one location to a grandiose survey of multinational corporations at sites in

different parts of the world. The main methods of data collection adopted here are

Primary Data Collection: This methodology is used for the proximity to

the truth and control over errors. These cautions remind us to use care in

designing data collection procedures and generalizing form results. There are

several methods of primary data collection like Observation Method, Interview

Method, Schedules, and Questionnaires and so on. The method used by me is

Questionnaire.

It is considered as the heart of survey operations and therefore should be very

carefully constructed. It consists of a number of questions printed or typed in a

definite order which is filled by the respondents on their own. A good

questionnaire should be comparatively short and simple and the sequence shall be

from easy the difficult ones. Questionnaires have many positive features like-

They are economical.

They are free form the biasness of the interviewers.

Respondents have adequate time to give well thought to their answers.

Respondents can be reached conveniently.

Large samples can be used and therefore the results are more dependable.


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Before using this method PILOT SURVEY was conducted by me.

SECONDARY DATA COLLECTION

Secondary data means that data that are already available i.e. refers to data which

has already been collected and analyzed by someone else. The sources used in this

case are-

Magazines.

Journals.

Websites.


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HYPOTHESIS TESTING

The chi-square test is one of the most simplest and widely used non-parametric test in

statistical work. The symbol is greek letter chi. It was first used by Karl Pearsons in the

year 1990. the quantity chi-square describes the magnitute of the discrepancy between

theory and observation

Chi-square= (O-E)2

E

Where O=observed frequency

And E=expected frequency

Degree of freedom:While comparing the calculated value of chi square with the table value, we have to

determine the degree of freedom. By degree of freedom we mean the number of classes

to which the values can be assigned arbitrary or will without violating the restriction or

limitations placed.

(The calculations are shown in Annexure-3)

H0 = let us take the hypothesis that Repayment, down payment, interest rate, quick

availability, brand image influence the customer in their buying decision.

H1= let us take the hypothesis that Repayment, down payment, interest rate, quickavailability, brand image do not influence the customer in their buying decision.


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LIMITATIONS OF THE STUDY

Various hindrances occurred while carrying out the research. They have acted as

limitation of the study and a few of them are:-

The area for study was Yamuna Nagar which is quite a small area to judge out

the consumer preferences for different banks providing home loans.

The market is not well flourished and because of which many banks are not

available.

Consumers were not aware about various schemes available.

Only two hundred respondents have been chosen which is a small number to

represent the whole of the population of Yamuna Nagar.

While collection of the data many consumers were unwilling to fill the

questionnaire.

Some of the customers are not aware of the proper knowledge of the banks

and the schemes provided by them.

The time period for carrying out the research was short as a result of which

many facts have been left unexplored.


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RESULTS

AND

FINDINGS


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Have you taken any home loans?

home loans taken percentage

yes 65%no 35%

percentage

yes

no

Interpretation: My survey reveal that maximum number of the citizens hadtaken home loans.


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If yes, which bank do you prefer?

Bank preferred percentage

HDFC 31%

ICICI 49%OTHERS 20%

percentage

HDFC

ICICI

OTHERS

Interpretation: My survey regarding Home loans reveal that most of thecustomers prefer ICICI Bank rather than other banks.


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Are you satisfied with the present schemes provided by your bank?

satisfaction level Percentage

highly satisfied 22%satisfied 31%

neutral 16%

dissatisfied 17%

highly dissatisfied 14%

percentage

0%

5%

10%

15%

20%

25%

30%

35%

highl

ysa

tisfie

satis

fied

neutra

l

diss

atisfie

high

lyd

issa

tisfie

category

per percentage


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Interpretation: It is revealed that maximum number number of customers aresatisfied with the schemes provided by their banks.

If yes which of the scheme you prefer the most?

scheme preferred Percentagehome acquisition plan 51%

pre-allotment 9%

extension plan 20%

balance transfer 11%

booking finance 9%

0%

10%

20%

30%

40%

50%

60%

home

acquisition

plan

balance

transfer

schemes

percentage

percentage


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Interpretation: From the survey conducted it is revealed that maximumnumber of customers prefer Home acquisition plan, after that extension planthen balance transfer and others.

Specify the reason for taking loan from a specified bank?

reason percentagerepayment 31%

down payment 20%

rate of interest 26%

image of bank 11%

quick availability 12%

percentage

0%

5%

10%

15%

20%

25%

30%

35%

repa

ymen

t

downpa

ymen

rate

ofinteres

imag

eof

ban

quick

availabilit

%o

fresponde

percentage


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Interpretation: Through my survey it is concluded that most of the customersprefer repayment factor more in order to take loan from a particular bank,after that rate of interest.

Are you satisfied with the services provided by your bank?

satisfaction level Percentage

highly satisfied 23%

satisfied 28%

neutral 17%

dissatisfied 28%

highly dissatisfied 4%

percentage

0%

5%

10%

15%

20%

25%

30%

highly

satisfie

d

satis

fied

neutral

diss

atisfie

d

highly

dissatis

fiedp

ercentageofrespondents

percentage


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Interpretation: My survey reveal that equal number of customers aresatisfied and dissatisfied with the services provided by their banks.

If not what are the reasons for that?

reasons Percentagelack of knowledge 13%

tenure 10%

lack of guidance 12%

legal formalities 25%

inadequate information 40%

percentage

0%5%

10%15%20%25%30%35%40%45%

lack

ofkn

owle

dge

tenu

re

lack

ofguida

nce

legalfor

maliti

es

inad

equate

informatio

npercentageofrespondents

percentage


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Interpretation: My survey revealed that most of the customers are notsatisfied with their banks because of inadequate information and legalformalities.

What do you think who can better guide you for your decision?

promotion Percentage

advertisements 17%

employees 14%

friends 5%

reference group 31%

relatives 33%

percentage

0%

5%

10%

15%

20%

25%

30%

35%

adve

rtise

ments

employ

ees

frien

ds

refe

rcegrou

p

relativ

espercenta

geofrespondents

percentage


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Interpretation: Maximum number of customers are influenced by thesuggestions given by their relatives and the reference group.

On the basis of the services, in which category you place yourbank?

category Percentage

excellent 29%

best 41%

good 12%

better 8%

ok 10%

percentage

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

excellent best good better ok

percentageo

frespondents

percentage


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Interpretation: My survey reveal that most of the customers consider theirbank as best. 21% of he customers consider their bank as excellent.

FINDINGS

In my survey, I found that:

Both the banks are easily recalled by the customers.

Marketing strategies of HDFC Bank are not so good.

The procedure adopted by banks for disbursement of loans is very

lengthy.

Documentation needed to apply for loan are very large that create

problem

Some of the customers avail home loans due to tax planning

Door step services provided by banks are attractive.

Customer relationship management technique is effectively used by

both the banks.

Rural areas are not given more emphasis.


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SUGGESTIONS


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On the basis of the survey conducted by me, following suggestions are to be

considered:

They should Update market strategy according to changing

circumstances.

They should contact personally to the customers to avoid any

communication problems.

They should give more focus to the rural areas.

Proper advertisement should be given in order to remind the

customers about their schemes and other benefits.

To capture more market by shooting promotional schemes


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To design effective strategies to capture untouched areas.

BIBLIOGRAPHY


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BOOKS

1. Consumer Behaviour (Third Edition) by Schiffman $ Kanauk.

2. Consumer Behaviour in Indian Perspectives (First Edition: 2001) by Suja R.

Nair, Himalaya Publishing House, Mumbai-400004. Chapter 1, Page 3-6.

3. Consumer Behaviour (Second Edition) by Gupta S.L

4. Research Methodology Methods and Techniques (Second Edition) by Kothari

C.R., New Age International Publishers, Ansari Road, Daryaganj, New Delhi-

110002. Chapter 4, Page 55-58. Chapter 6, Page 95,100,111.

5. Business Research Methodology (Eighth Edition) by Donald R. Cooper and

Pamela S. Schindler, Tata McGraw Hill Publishing Company Limited, New

Delhi. Chapter 3, Page 82,86,87. Chapter 4, Page 101,102

6. Statistical Methods by S.P.,sultan Chand & sons, educational publishers, New

Delhi, page No.(589-672)


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7. Gupta S C, Kapoor V K, Fundamental of mathematical statistics, Sultan Chand &

Sons, Page No.-10.1-10.40

WEBSITES

1. www.homeloans.va.govl (02/03/07)

2. www.caussic.com.au/ (05/03/07)

3. www.hdfc.com/homeloans.asp (02/02/07)

4. www.hdfcbank.com/personal/loans/homeloans.html (26/02/07)

5. www.indiahousing.com/hdfc-home-loans-html (10/03/07)

6. www.hdfcbank.com (07/03/07)

7. www.icicibank.com(10/03/07)

8. www.icicibank.com/pfsusee/loan/homeloan/hshomepage.html(08/03/07)

9. www.easyhomeloanindia.com(12/03/07)

10. www.ilovesindis.com/real-estate/housing-finance- company/icici.html

Journals:

a) Southern Economist: The National housing Bank has come out with a newmortgage loan product called Reverse Mortgage Loan executively for benefit ofsenior citizens. The scheme seeks to address the financial needs of senior citizenfor up gradation.

b) Indian Journal of Comm: The Govt, India has been giving substantialencouragement to the housing sector . The social structure of families is goingthrough a sea change as the Joint joining is fast going way to the nuclear familyconcept. The pressure to have once own home is high among these families.

c) Indian Journal Of MKtg: Blessed are those who live in their own house andfordone are those who have money to buy one. But all are not privileged to buy ahouse of his own. For many such less privileged, buying a house has becomepossible in modern times.

d) Digit While a majority of companies try to appear the all important globalwhile, ICICI bank modified its loan offering to cater to one specific user group.
http://www.homeloans.va.govl/http://www.caussic.com.au/http://www.hdfc.com/homeloans.asphttp://www.amazon.com/swiss-sugar-free-chocolate-assortment/dp/B000M39TN4http://www.indiahousing.com/hdfc-home-loans-htmlhttp://www.hdfcbank.com/http://www.icicibank.com/http://www.icicibank.com/pfsusee/loan/homeloan/hshomepage.htmlhttp://www.easyhomeloanindia.com/http://www.ilovesindis.com/real-estate/housing-finance-company/icici.htmlhttp://www.homeloans.va.govl/http://www.caussic.com.au/http://www.hdfc.com/homeloans.asphttp://www.amazon.com/swiss-sugar-free-chocolate-assortment/dp/B000M39TN4http://www.indiahousing.com/hdfc-home-loans-htmlhttp://www.hdfcbank.com/http://www.icicibank.com/http://www.icicibank.com/pfsusee/loan/homeloan/hshomepage.htmlhttp://www.easyhomeloanindia.com/http://www.ilovesindis.com/real-estate/housing-finance-company/icici.html


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ANNEXURE

Annexure-1

Questionnaire on

Comparative study of Home Loans

provided by HDFC and ICICI Bank on

the basis of customer satisfaction,

different schemes, sales made-A case

study in Yamunanagar


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Have you taken a home loan?

Yes No

If yes, which bank you prefer?

HDFC Bank

ICICI Bank

Others

Specify the reason for preferring the particular Bank..

Are you satisfied with the present schemes provided by your bank?

Highly satisfied SatisfiedHighly dissatisfied Dissatisfied

Others

If yes which of the scheme would you prefer the most?

Home acquisition plan Balance Transfer Extension plan Pre allotment booking finance

Specify the reason for taking loan from a specific bank.Repayment Down payment

Rate of interest Image of bank

Quick availability

Are you satisfied with the services provided by your bank?

Highly satisfied Satisfied

Highly dissatisfied Dissatisfied

Neutral

If not, what are the reasons for that?

Lack of knowledge Legal formalities

Lack of guidance Inadequate information


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Tenure

What do you think who can better guide you for your decision?

Advertisements Relatives Friends

Employees Reference group

On the basis of services in which category do you place your bank?

Good Excellent

Better OK

Best

Do you face any problem while applying for loan?

YES NO

Do you feel any hidden charges which were not revealed but has been

charged from you?

YES NO

If yes, are you satisfied with the services provided by your bank?

Highly satisfied Satisfied Moderate

Unsatisfied Highly unsatisfied

Arrange the following in descending order according to your preference

while taking a decision:

Repayment procedure

Less documentation

Down payment

Quick availability

Are you satisfied with the procedure of disbursement of loan?

Highly satisfied Satisfied Moderate

Unsatisfied Highly unsatisfied


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Suggestions, If any

Name of Investor: Sex: male/female Age (in yrs):

Resident of:

Marital status:

Occupation: Service/ Business/ Others

Annual Income (in Rs.):

Service

Business.

Others

Place: Investigator Signature

Date: (Priyanka Kundu)

Annexure-2

MULTI DIMENSION SCALING

XLSTAT 7.1 - Multidimensional Scaling (MDS) - 3/14/2007 at 6:22:19 PM

Similarity matrix (converted to a dissimilarity matrix): workbook = pika.xls / sheet = Sheet1 / range = $B$5:$F

Uniform weighting (default)

No missing values

Metric Multidimensional Scaling

Multidimensional Scaling model: absoluteStress used for the results: Kruskal's stress-1

Dimension of the representation space: 2

Repetitions: 10

Seed of the pseudo-random numbers generator: 1251198112

Iterations: 50

Convergence: 0.0001


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Space with 2 Dimensions:

Model: Dij= Pij

Observation coordinates:

Observation Dim1 Dim2

group 1 5.422 0.008

group 2 5.738 -9.532

group 3 10.333 2.946

group 4 -6.017 13.363

group 5 -15.475 -6.785

Distances measured in the representation space:

group 1 group 2 group 3 group 4 group 5

group 1 0 9.546 5.722 17.585 21.974

group 2 9.546 0 13.297 25.737 21.391

group 3 5.722 13.297 0 19.387 27.582

group 4 17.585 25.737 19.387 0 22.258

group 5 21.974 21.391 27.582 22.258 0

Ideal distances calculated using the model (disparities):


group 1 0 10.000 6.000 18.000 22.000

group 2 10.000 0 16.000 22.000 24.000

group 3 6.000 16.000 0 22.000 24.000


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group 4 18.000 22.000 22.000 0 24.000

group 5 22.000 24.000 24.000 24.000 0

In the case of the absolute model, the disparities are equal than the dissimilarities

Residual distances:


group 1 0 -0.454 -0.278 -0.415 -0.026

group 2 -0.454 0 -2.703 3.737 -2.609

group 3 -0.278 -2.703 0 -2.613 3.582

group 4 -0.415 3.737 -2.613 0 -1.742

group 5 -0.026 -2.609 3.582 -1.742 0

Comparative table:

PairDissimilarit

y Disparity DistanceDissimilarity

rankDisparity

rankDistance

rankgroup 1 -group 3 6.000 6.000 5.722 1 1 1group 1 -group 2 10.000 10.000 9.546 2 2 2group 2 -group 3 16.000 16.000 13.297 3 3 3group 1 -group 4 18.000 18.000 17.585 4 4 4group 3 -group 4 22.000 22.000 19.387 5 5 5group 2 -group 4 22.000 22.000 25.737 5 5 9

group 1 -group 5 22.000 22.000 21.974 5 5 7group 4 -group 5 24.000 24.000 22.258 6 6 8group 3 -group 5 24.000 24.000 27.582 6 6 10group 2 -group 5 24.000 24.000 21.391 6 6 6

In the case of the absolute model, the disparities are equal than the dissimilarities


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Summary of repetitions:

Repetition IterationsInitialstress

Fin.stress

1 50 0.609 0.120

2 50 0.526 0.188

3 17 1.204 0.1154 50 1.491 0.180

5 50 0.428 0.209

6 20 0.655 0.115

7 22 0.863 0.115

8 12 0.497 0.115

9 19 0.520 0.115

10 30 0.550 0.120

In bold, repetition corresponding to the best solution that XLSTAT found


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ANNEXURE-3

CHI SQUARE TEST

XLSTAT 7.1 - Tests on Contingency Tables (Chi-square...) - 3/14/2007 at 10:55:35 AM

Data: workbook = Book1 / sheet = Sheet1 / range = $B$2:$D$6 / 5 rows and 3 columns

Independence tests between the rows and columns in the contingency table:

Chi-square test:

Chi-square (observed value) 2.107

Chi-square (critical value) 15.507


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DF 8

One-tailed p-value 0.978

Alpha 0.05

Decision:At the level of significance Alpha=0.050 the decision is to not reject the null hypothesis of independence

between the rows and the columns.In other words, the dependence between the rows and the columns is not significant.

Chi-square likelihood ratio test (Wilks' G):

Wilks' G (observed value) 2.117

Wilks' G (critical value) 15.507

DF 8

One-tailed p-value 0.977

Alpha 0.05

Decision:At the level of significance Alpha=0.050 the decision is to not reject the null hypothesis of independencebetween the rows and the columns.

In other words, the dependence between the rows and the columns is not significant.