project ameer draft for print

7/31/2019 Project Ameer Draft for Print

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CHAPTER 1

INTRODUCTION TO THE STUDY


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1.1 BACKROUND OF THE PROBLEM

The present study is aimed at determining the customer awareness and preferences in the

home loan market. Decision making is identifying and choosing alternatives based on the

values, awareness and preferences of the decision maker. In this knowledge based economy,

getting the right information at the right time is an important weapon for a decision-maker.

Making existing and potential customers knowledgeable about products and services create

more informed buying decisions. Customers cannot purchase products and services if they do

not know they exist. Lack of consumer awareness in any industry can harm sales. If specific

products and services are better known, those products and services will remain on the front

line in sales. Therefore, it is important to generate customer awareness that will introduce and

make the target audience aware of the products and services a company offers.

Unlike awareness, customer preferences also play a vital role in choosing the best alternative.

Preferences vary from person to person and may be based on ones goals, desires, life styles,

values etc. Banks in order to face the challenges of external environment successfully focuses

on mortgage products, in their efforts to satisfy their clients needs. The great fall of interest

rate along with the offering of new, more flexible and attractive products has lead to an

increase in demand relating to housing.

Todays bank clients are more informed on products in the market due to the load of

circulating information. Clients directly compare various competitive products and turn easily

towards services of other banks than in the past especially when they find little or insignificant

differences among various products and services. As competition grows constantly, it is very

important for an existing player to examine the factors that have a positive impact on

consumer purchasing decisions such as level of awareness and varying preferences so as to

create appropriate marketing strategies.


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1.1.1 STATEMENT OF THE PROBLEM

Housing loan is the finance taken for buying/modifying a real estate property. Home Loans,

Home extension loans, home improvement loans, NRI loans and home equity loans fall underthe category of housing loans. Any Resident or Non-resident individual who is planning to

buy a house can apply for a Home loan. If one has decided to buy a property in the near future

he can even apply for a loan before he select the property. Once you decide the maximum

amount that you can put into the property, all Housing Finance Institutions let you know how

much you are eligible for and this helps you plan out your budget.

HDFC Housing finance has been in the industry for more than 3 decades and provides various

housing loan options based on the various home loan needs at attractive interest rates. Just like

other banks HDFC is also offering door step service for finding a suitable loan which suits the

customers personal needs. Whats this?

Customer awareness, which refers to a buyer's knowledge of a particular product or company,

allows the buyer to get the most from what he buys. Customers know more about their choices

when they have product information and benefit from knowing their rights, hearing about

alerts and warnings and finding out about safety issues. Customer preferences vary according

to the life style they prefer and belong and also differs based on their occupation. It can be

broadly classified into self employed persons and salaried persons. These customers have their

own preferences on different types of home loans. Some of the customers prefer nationalized

banks while others prefer private banks based on their convenience. The present study is an

attempt to analyze the customer awareness and preferences in the home loan market in

Ernakulum.
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1.2 INDUSTRY PROFILE

1.2.1. INDIAN BANKING INDUSTRY

The Indian Banking Industry can be categorized into non-scheduled banks and scheduled

banks. Scheduled banks constitute of commercial banks and co-operative banks. There are

about 67,000 branches of Scheduled banks spread across India. As far as the present scenario

is concerned the Banking

Banking Industry has revolutionized the transaction and financial services system worldwide.

Through the development in technology banking services has been availed to the customers at

all times, even after the normal banking hours, on a 24x7 basis. Banking Industry services is

nothing but the access of most of the banking related services (such as verification of account

details, going with the transactions, etc.). In todays world, progress of online services is

available to all customers of the concerned bank and can be accessed at any point of time and

from anywhere provided the place is equipped with the Internet facility. Now-a-days, almost

all the banks all over the world, especially the multinational ones, provide their customers

with Online Banking facility.

The growth in the Indian Banking Industry has been more qualitative than quantitative and it

is expected to remain the same in the coming years. Based on the projections made in the

"India Vision 2020" prepared by the Planning Commission and the Draft 10th Plan, the report

forecasts that the pace of expansion in the balance-sheets of banks is likely to decelerate. The

total assets of all scheduled commercial banks by end-March 2010 are estimated at Rs 40,

90,000 crores. That will comprise about 65 per cent of GDP at current market prices as

compared to 67 per cent in 2002-03. Bank assets are expected to grow at an annual composite

rate of 13.4 per cent during the rest of the decade as against the growth rate of 16.7 per cent

that existed between 1994-95 and 2002-03. It is expected that there will be large additions tothe capital base and reserves on the liability side.

1.2.1a. INDUSTRY IN INDIA IS GOING THROUGH A TRANSITIONAL PHASE

The Public Sector Banks (PSBs), which are the base of the Banking sector in India account for

more than 78 per cent of the total banking industry assets. Unfortunately they are burdened


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with excessive Non Performing assets (NPAs), massive manpower and lack of modern

technology. On the other hand the Private Sector Banks are making tremendous progress.

They are leaders in Internet banking, mobile banking, phone banking, ATMs. As far as foreign

banks are concerned they are likely to succeed in the Indian Banking Industry.

In the Indian Banking Industry some of the Private Sector Banks operating are IDBI, ING

Vyasa Bank, SBI Commercial and International Bank Ltd, Bank of Rajasthan Ltd. and banks

from the Public Sector include Punjab National bank, Vijaya Bank, UCO Bank, Oriental

Bank, Allahabad Bank among others. ANZ Grindlays Bank, ABN-AMRO Bank, American

Express Bank Ltd, Citibank are some of the foreign banks operating in the Indian Banking

Industry.

Banks in India can be categorized into non-scheduled banks and scheduled banks. Scheduled

banks constitute of commercial banks and co-operative banks. There are about 67,000

branches of Scheduled banks spread across India. During the first phase of financial reforms,

there was a nationalization of 14 major banks in 1969. This crucial step led to a shift from

Class banking to Mass banking. Since then the growth of the banking industry in India has

been a continuous process.

As far as the present scenario is concerned the banking industry is in a transition sphase. The

Public Sector Banks (PSBs), which are the foundation of the Indian Banking system account

for more than 78 per cent of total banking industry assets. Unfortunately they are burdened

with excessive Non Performing assets

On the other hand the Private Sector Banks in India are witnessing immense progress. They

are leaders in Internet banking, mobile banking, phone banking, ATMs. On the other hand the

Public Sector Banks are still facing the problem of unhappy employees. There has been a

decrease of 20 percent in the employee strength of the private sector in the wake of the

Voluntary Retirement Schemes (VRS). As far as foreign banks are concerned they are likely

to succeed in India.

Indusland Bank was the first private bank to be set up in India. IDBI, ING Vyasa Bank, SBI

Commercial and International Bank Ltd, Dhanalakshmi Bank Ltd, Karur Vysya Bank Ltd,

Bank of Rajasthan Ltd etc are some Private Sector Banks. Banks from the Public Sector


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include Punjab National bank, Vijaya Bank, UCO Bank, Oriental Bank, Allahabad Bank,

Andhra Bank etc. ANZ Grindlays Bank, ABN-AMRO Bank, American Express Bank Ltd,

Citibank etc are some foreign banks operating in India.

1.2.1b. INDIAN BANKINGAN OVERVIEW

Indian Banking is the lifetime of the nation and its people. Banking has helped develop vital

sectors of economy and usher in a new dawn of progress on the Indian horizon. Roots of

banking system in India dates back over 2000 years.

The Indian Banking industry is today at the crossroads. It is trying to make the transition from

the era of socialist rhetoric to the era of the marketing mantra. A strong and efficient financial

system is critical to the attainment of the objective of creating a market driven, productive and

competitive economy and to support higher investment levels and accentuate growth. Banking

is the most dominant segment of the financial system and plays a critical role in the

development of sound economy. So, to improve the performance of banking industry,

financial sector reforms have introduced, which brought about significant improvement in the

strength, resilience and competitiveness of Indian banking industry.

1.2.1c.EVOLUTION OF BANKING INDUSTRY IN INDIA

Organized banking was active in India since the establishment of the General Bank of India in

1786. After independence, the Reserve Bank of India (RBI) was established as the central

Bank and in 1955, the Imperial Bank of India, the biggest bank at the time, was taken over by

the government to form state owned state Bank of India (SBI). RBI has undertaken an

exercise to merge weak banks to strong banks and the total number of banks thus reduced

from 566 in 1951 to 85 in 1969. With the objective of reaching out to masses and meeting the

credit needs of all sections of people, the government nationalized 14 large banks in 1969

followed by another 6 banks in 1980. This period saw enormous growth in the number ofbranches and the banks branch network became wide enough to reach the weakest sections of

the society in a vast country like India. SBI network of 9033 domestic branches and 48

overseas offices is considered to be one of the largest for any bank in the world.


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The economic reforms unleashed by the government in early nineties included banking sector too,

to a significant extent. Entry of new private sector banks was permitted under specific guidelines

issued by Reserve Bank of India. A number of liberalization and de-regulation measures aimed at

consolidation, efficiency, productivity, asset quality capital adequacy and profitability have been

introduced by the RBI to bring Indian banks in line with International best practices. With a view

to giving the state-owned banks operational flexibility and functional autonomy, partial

privatization has been authorized as a first step, enabling them to dilute the stake of the

government to 51 percent.

As of March 31, 2003, there were a total of 289 scheduled commercial banks in India. It gives the

banking measures of deposits, advances and net profit as at March 31, 2003 for the key

constituents namely, public sector banks, private sector banks (new- which came into existence

after liberalization of nineties and old- which were in existence from before), foreign banks and

regional rural banks. Even through regional rural banks number 196, they have a minuscule share

of 3.4 percent of customer deposits and 3 percent of net profit of the industry total. Similarly, the

older private sector banks are mostly regional players and enjoyed a small share. The public sector

banks including the State Bank group (SBI and its subsidiaries) dominate the industry with 77

percent share of the deposit and 70 percent share of net profit. Excluding SBI group, public sector

banks still command a very high share of close to 50 percent share of the total industry in terms of

deposits.

1.2.2 INTERNATIONAL SCENARIO MORTGAGES

Expatriate Mortgage Broker & International Mortgages.

Financial is an independent financial advisor and international mortgage broker. Our primary

activity is to secure mortgages for UK expatriates and foreign nationals financing property

purchase in the UK. We have access to the top UK mortgage lenders, offshore banks and financial

banking institutions. This ensures we can secure some of the very best international mortgage

loans at the most competitive international mortgage rates. Through our experience we understand

that the expatriate has special requirements when it comes to securing an international mortgage plan. It

is our aim is to simplify the entire mortgage process and we pride ourselves on the level of service we

provide.


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1.2.2a. INTERNATIONAL FINANCIAL SERVICES CENTRE

In the Structured Financial Messaging System (SFMS), the Indian Financial System Code (IFSC)

is being used as the addressing code in user-to-user message transmission. The Payment System

Applications such as RTGS, CFMS and NEFT developed by the Reserve Bank of India (RBI) usethese codes. The code consists of 11 characters - first 4 characters (4! A) Represent the entity; fifth

position has been defaulted with a '0' (Zero) for future use; and the last 6 characters (6! X) Denote

the branch identity. IFSC is being identified by the RBI as the code to be used for various payment

system projects within the country, and it would, in due course, cover all networked branches in

the country. In due course, when all bank branches participate in electronic payment systems, they

would need to have a single identifiable unique code and IFSC would serve the purpose

effectively.

1.2.2b.INTERNATIONAL HOME LOANS

International home loans are an ideal tool to facilitate real estate investments around the world.

Our trained teams of home loan experts keep abreast of the most competitive international property

loan deals available in the market today, and will offer informed recommendations to clients about

the same.

Services for International Home Loans include:

1. Pre-application our staff will i) find the most appropriate international home loan deal

according to our clients home loan requirements, personal circumstances and property

location ii) meet with the bank to confirm details of the loan, including amount of financing

available, lending rates, loan repayment schedules and loan tenure. Once these details are

confirmed, our staff prepare a table of recommendations to our client, enabling him to make

an informed decision

2. Application Healy Consultants completes the international home loan application form

provided by the bank. Furthermore, we collect client due diligence required by the bank,

typically including applicants passport copy, letter from employer confirming salary and/or

bank statements. A copy of the valuation report of the property is also supplied, if required.

Sometimes a lender also requires cash flow statements and rental income forecasts as part


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of the application. To maximize the likelihood that the international home loan is approved

quickly, Healy Consultants will prepare these additional documents on our clients behalf.

3. Post-application once the international home loan application is submitted, Healy

Consultants liaises with the bank officer handling the application. We i) confirm that theapplication is successfully received and ii) that the information contained in the application

pack is sufficient. If the bank requests additional information on the applicant or property

we will supply it (with the assistance of our client).

4. The bank will send out a Home Loan offer, which we will then forward to our client. Once

our client accepts the offer we often help the client open personal and/or corporate bank

accounts to receive rental income

1.2.2c.INTERNATIONAL MORTGAGE LOANS

Mortgage process in other countries is similar to the process in the United States, language,

cultural and legal issues can make it very complex. We at International Mortgage Loans work

hard to simplify the process for our clients. We take you from application to closing seamlessly.

Whether you want real estate financing internationally or in the United States, we work for you

and it is our job to provide the loan that best meets your needs. We provide mortgages for

properties globally for purchase or refinance for Commercial or Residential properties in selectforeign countries and all 50 United States.

Purchase

Whether you are purchasing a condo on the beach in Baja, or a home in the lush mountains of

Costa Rica, we provide the financing. Now you can make your dream home a reality!!! We can

even pre-approve your mortgage before you shop for that special property. We will let you know

what your financial limits are before you make a purchase offer.

Refinance

The tremendous appreciation seen in various countries and regions of the U.S. in the last few

years has created millions of dollars in equity for the many U.S. Citizens that own property there.


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Taking that equity out in cash and keeping your dream property as it continues to appreciate is

like having your cake and eating it too!!! Speak with one of our loan representatives to find out

how much cash you can tap from your U.S. or foreign real estate.

1.2.2d. NATIONAL SCENARIO OF FINANCIAL SERVICES

In last few years, India has emerged as the one of the most rapidly growing economies in the

world. India along with other Asian powerhouse China makes for the fastest growing nations in the

entire world. Even if we take the case of ongoing global recession, India has managed to perform

far better than other nations. Right from banking system to financial regularities, the country has

thrived on discipline and out-performance. The booming Indian economy resulted in widespreadgrowth and arrival of new industries. The most sparkling phenomenon is in form of financial

market of India.

Financial services in India has taken a giant leap from the days of standing in banks queue for

several hours for opening a saving account or trying to get some fixed deposits (FD) done. There

are several services like broking firms, investment services, financial consulting, evergreen

national banks, numerous private banks, mutual funds, car and home loans, equity market and

other banking services. Services are many and offered by blue chip names of the industry. Most of

the companies in financial segment offer taxation services, project consultancy services and all the

services of wide financial gamut. Whether its taking a car loan or booking your favorite house,

going for pension plan or getting your child insured, numerous attractive financial services are

available at affordable costs. Personal banking services have acquired an altogether new meaning.

Now customers have multiple choices to choose from. One can find all the financial services on

the internet that are just a call away.

1.2.2e.HOUSING FINANCE COMPANIES IN INDIA

Economic liberalization and ensuing policy changes, the housing finance industry has

undergone a paradigm shift over the last decade. Gone are the days, when taking a loan meant

entering a labyrinth of documentation and dealing with condescending bank officials. Today, in

the backdrop of intense competition, housing finance companies are falling over each other to
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woo potential customers. Housing finance being one of the safest lending avenues has also

contributed to the emergence of new players in the market.

The unique place that a house has in an individual's life plus the high proportion of the customer's

own money in the house provides considerable comfort for home loan companies. In the presenttimes, people are increasingly taking to credit, because of rising annual incomes and the series of

tax sops that have become an annual ritual in the Union Budget. With the constant rise in demand

for residential and commercial complexes, the growth of the real estate sector in India has

witnessed at an exponential rate over last five years.

Cut-throat competition among Indian housing finance companies has brought down the interest

rates by a few notches. The vast difference in interest rates across-the-board has all but

disappeared, and home loan companies are taking recourse to product innovation to stand out in

the burgeoning home loan market. Today, apart from the resident Indians, even NRI's can apply

for a home loan. An applicant applying for a loan can either opt for fixed or floating rates. The

loan rates of companies today are in between 7.50% to 12 %, depending on the repayment years.

The recent home loan interest rate cut by various banks has started showing results. Things are

now picking up in the residential real estate segment. Builders and financial institutions have

started receiving enquiries once again, after a long drought.

Sanjiv Srivastava MD Assotech said, "There is a clear change in trend in the last couple of weeks.

Many, who had dropped the idea of buying an apartment after the interest rate hike in January

2007, want to complete the deal now."

Many banks like HDFC, IDBI, SBI, ICICI, Axis Bank, Canara Bank, Bank of Baroda, and Bank of

India had slashed their interest rates on floating rate home loans to tap the festive season. In

addition to the cut in interest rates, banks had also organized special fairs, offered discounts on

processing fees to lure in more customers. The hike in floating rate home loan during the past few

months had dried up their business and forced the banks to offer discounts despite no such

indications by RBI.
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The recent demand for new home loans is mostly for the non-premium segment - that is for

apartments costing around 50 lakhs. The premium segment is currently facing a peculiar

oversupply situation and is not witnessing too many enquiries.

Every Home Loan customer is eligible for tax benefits under sections 88 and 24 of the Income Tax

Act. Allowable deduction of interest paid during the year: As per the budget of financial year 2001

- 02, every customer can claim a deduction on interest amount of a maximum of Rs. 150000/- or

the actual interest paid (whichever is lower) to the HFI from his Gross Taxable Income. Tax

exemption on Principal repaid during the year: The budget for financial year 2001 - 02 provides

for tax exemption on a maximum of 20% of a principal amount of Rs. 20000/- or the actual

interest paid during the year (whichever is lower) to the HFI from the total tax payable by the

customer.

Tax Benefits on Home Loans

The Mortgage Financing industry was estimated approximately at US $ 18 billion in India.

The mortgage industry is undergoing a change as the market is dominated by banks in the direct

housing finance sector. Though the housing finance industry in India is growing for the past few

years still financing through the organized sector continues to account only for 25% of the total

housing investment in India

1.2.3 STATE SCENARIO

Kerala Financial Corporation (KFC) incorporated under the State Financial Corporations Act

of 1951, is a trend setter and path breaker in the field of long term finance, playing a major role

in the development and industrialization of Kerala. It was established as the Travancore Cochin

Financial Corporation on 01.12.1953. Consequent to the reorganization of states on linguistic basis

in November 1956, Kerala State was formed and the Travancore Cochin Financial Corporation

was renamed as Kerala Financial Corporation.

Now KFC has 16 Branch Offices with its Head Quarters at Thiruvananthapuram and Zonal Offices

at Kozhikode, Ernakulum and Thiruvananthapuram. The provisions of SFCs Act 1951 as amended


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in 2000 control and guide the functions of Corporation. The main objective of KFC is the rapid

industrialization of the state by extending financial assistance to Micro, Small and Medium

Enterprises in manufacturing and service sector.SFCs Act empowers KFC to formulate suitable

loan schemes for achieving the above said objectives. Corporation can give financial assistance for

setting up of new units and for the expansion / modernization / diversification of existing units in

both manufacturing and service sectors. Since inception KFC has disbursed over Rs. 3000 Crores

to more than 40,000 projects, spread over the length and breadth of the State.

There are over 45 Home loan companies and mortgage lender in Kochi. The leading loan

companies in Kochi are HDFC, ICICI, HSBC, Citibank, LIC Housing, SBI, GE money, Reliance

money, IDBI bank among other.

The growing demands for various kinds of properties in the city on the one hand and the acute

shortages of lands and houses on the other hand have made the real estate prices in Kochi have

been scaling new heights over a period of time. Within the past few years the property prices have

moved up but salaries have not kept pace, making it almost impossible for anyone to buy a

property without any aid from the home finance companies in Kochi.

The banks and housing finance institutions in Kochi provide cheap and affordable home finance

solutions to help you buy the property you desire or home equity loans in Kochi for renovation orconstruction purposes or even real estate mortgage loans in Kochi for getting loan against your

house asset in bad times. Thus, you can apply for home loans in Kochi when you want to:

Construct a residential house.

Buy a residential property.

Purchase a residential plot in an upcoming area.

Buy a flat or apartment.

Need a loan for renovation of your house.

Most of the banks and finance companies have their own websites that tell you step by step

process to apply for home loans. You can also visit their local branches to get information

regarding the procedure. The amount of home loans normally depends upon your personal annual

income but can be increased if you are allowed to show your gross household income. Various


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EMI calculators on AbodesIndia.com help you easily calculate the EMI and your eligibility to get

a loan.

Loans that are taken against a property that you already own are called Mortgage Loans. In Kochi

there are above 30 banks and lenders who give mortgage loans. Such loans are also called Loan

against property in Kochi. Normally you can borrow up to about 60% of the market value of the

property but some banks like HDFC, SBI, and ICICI allow you to borrow up to 50% of the

Agreement Value or Market value of the property in Kochi. In Kochi, Commercial loans for

acquiring a commercial property are also available with a select few banks and home loan lenders

like HDFC, SBI and IDBI bank.

1.3 COMPANY PROFILE

Against the milieu of rapid urbanization and a changing socio-economic scenario, the

demand for housing has grown explosively. The importance of the housing sector in the economy

can be illustrated by a few key statistics. According to the National Building Organization (NBO)

the total demand for housing is estimated at 2 million units per year and the total housing shortfall

is estimated to be 19.4 million units from the urban areas. The housing industry is the second

largest employment generator in the country. It is estimated that the budgeted 2 million units

would lead to the creation of an additional 10 million man-years of direct employment and another

15 million an-years of indirect employment. Having identified housing as a priority area in the

Ninth Five Year Plan (1997-2002), the National Housing Policy has envisaged an investment

target of Rs.1500 billion for this sector. In order to achieve this investment target, the Government

needs to make low cost funds easily available and enforce legal and regulatory reforms.

1.3.1 ABOUT THE HDFC

Housing Development Finance Corporation Limited (HDFC Ltd.) was established in 1977

with the primary objective of meeting a social need of encouraging home ownership by providing

long-term finance to households. Over the last three decades, HDFC has turned the concept of

housing finance for the growing middle class in India into a world-class enterprise with excellent

reputation for professionalism, integrity and impeccable service.
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A pioneer and leader in housing finance in India, since inception, HDFC has assisted more than

3.8 million families to own a home of their own, through cumulative housing loan approvals of

over Rs. 2.98 trillion and disbursements of over Rs. 2.42 trillion as at March 31, 2010.

HDFC has a wide network of 289 offices (which includes 71 offices of HDFC's wholly owneddistribution company HDFC Sales Private Limited) catering to over 2,400 towns & cities spread

across the country. It also has offices inDubai, London and Singapore and service associates in the

Middle East region, to provide housing loans and property advisory services to Non-Resident

Indians (NRIs) and Persons of Indian Origin (PIOs).

HDFC's unrelenting focus on Corporate Governance, high standards of ethics and clarity of vision,

percolate through the organization. Trust, Integrity, Transparency and Professional Service are the

important pillars of the brand HDFC and most importantly, people - both employees and

customers - are its brand ambassadors.

Customer satisfaction is the hallmark of all HDFC offerings. The first touch of HDFC's

personalized service begins as soon as a customer approaches HDFC, and over time it progresses

into a long and meaningful relationship. State-of-the-art information systems supported by strong

in-house training programmes conducted at its specialized training centre in Lonavla, have

equipped HDFC to respond swiftly to the ever-changing customer needs and thereby empower

customers in making the right home buying decision. This is what sets apart HDFC's customer

service philosophy - 'With You, Right Through'.

HDFC's specialist team of over 1,500 trained and experienced professionals follows a 'single-

window concept' for providing smooth and value added services at all stages. The team guides the

customers right through the entire process of property purchase - be it property search assistance,

technical support prior to finalizing the property, legal advice on property related documentation,

personalized home loan counseling or providing tailor-made repayment options to suit the

customer's specific requirements.

HDFC's wide product range includes loans for purchase and construction of a residential unit,

purchase of land, home improvement loans, home extension loans, non-residential premises loans

for professionals and loan against property, while its flexible repayment options include Step Up

Repayment Facility (SURF) and Flexible Loan Installment Plan (FLIP).
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HDFC also has a robust deposits mobilization programme. HDFC has been able to mobilize

deposits from over 10 lack depositors. Outstanding deposits grew from Rs. 1,458 crores in March

1994 to Rs 23,081 crores in March 2010. In addition, HDFC has received 'AAA' rating for its

Deposit products for highest safety from both CRISIL and ICRA for sixteen consecutive years.

Over the years, HDFC has emerged as a financial conglomerate with its presence in the entire

gamut of financial services including banking, insurance (life and non-life), asset management,

real estate venture capital and more recently education loans.

Today, HDFC is recognized as one of the Best Managed Companies in India and is a model

housing finance company for developing countries with nascent housing finance markets. HDFC

has undertaken several consultancy assignments in various countries across Asia, Africa andEast

Europe to support and establish their housing finance institutions.

At HDFC, 'Corporate Social Responsibility' has always been an evolving concept, akin to its

'learning by doing' philosophy. As part of its social objectives, HDFC has always endeavored to

contribute to economic development and social upliftment of the weaker sections of society and

has professionally nurtured each of its social initiative as an investment. HDFC has undertaken

development oriented work and supported several social initiatives in the areas of education, child

welfare, medical research, welfare for the elderly and the handicapped among several others.

HDFC is how millions of Indian families spell the word 'Home' as the brand not only offers

Housing Finance, but also Total Housing Solutions.

The HDFC Advantage

Pioneers of Housing Finance in India with over 33 years of lending experience.

Widest range of home loan & deposit products.

Vast network of over 283 interconnected offices which includes 3 international offices.

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

Online loan application facility at www.hdfc.com and across-the-counter services for new

deposits, renewals & repayments.

Counseling and advisory services for acquiring a property.

Flexible loan repayment options
http://www.hdfc.com/http://www.hdfc.com/


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Free & safe document storage

HDFC Home Loan Features

The HDFC housing offers loans for purchase of old as well as new property, repair and

renewal as well as for buying plots. The HDFC offers loans to NRI and Indian customers at fixed

and floating rates.

Co-applicants allowed:

Father, Mother, Brother, Sister, Son, Daughter, Spouse

Processing Fees:

0.50% to 1% of loan amount, maximum Rs 10000.

Prepayment Charges:

If paid from own source- Nil, in other cases- 2% on amount prepaid.

Min-Max Age:

21-60

Max Tenure:

15

1.3.2 BUSINESS OBJECTIVES

The primary objective of HDFC is to enhance residential housing stock in the country

through the provision of housing finance in a systematic and professional manner, and to promote

home ownership. Another Objective is to increase the flow of resources to the housing sector by

integrating the housing finance sector with the overall domestic financial markets.

1.3.3 ORGANIZATIONAL GOALS

The main goals are-

a) To develop close relationships with individual households.


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b) To maintain its position as the premier housing finance institution in the country.

c) To transform ideas into viable and creative solutions.

d) To provide consistently high returns to shareholders

e) To grow through diversification by leveraging off the existing client base

Against the milieu of rapid urbanization and a changing socio-economic scenario, the demand for

housing has grown explosively. The importance of the housing sector in the economy can be

illustrated by a few key statistics. According to the National Building Organization (NBO), the

total demand for housing is estimated at 2 million units, of which 12.76 million units is from rural

areas and 6.4 million units from urban areas. The housing industry is the second largest

employment generator in the country. It is estimated that the budgeted 2 million units would lead

to the creation of an additional 10 million man-years of indirect employment. Having identified

housing as priority area in the Ninth Five Year Plan (1997-2002), the National Housing policy has

envisaged an investment target of Rs.1500 billion for this sector. In order to achieve this

investment target, the Government needs to make low cost funds easily available and enforce legal

and regulatory reforms.

1.3.4 AWARDS AND ACCOLADES

Awards & Accolades 2010

Best CFO in the financial sector for 2010 by ICAI. (Feb '11)

Mr. VS Rangan, Executive Director, HDFC has been awarded the "Best CFO in the

financial sector" for 2010 by ICAI.

Verve Power List 2010 (June '10)Ms. Renu Sud Karnad featured in Verve magazines

list of 50 power women.

Finance Asias List of Asia's Best Managed Companies (April '10) HDFC featured in

Finance Asia magazines list of Asias Best Managed Companies.

ET - Corporate Dossier List of India Inc's Most Powerful Women leaders (Apr '10) Ms.

Renu Sud Karnad featured among the list of top 15 powerful women CEOs.

Reader's Digest India's Most Trusted 2009 (Mar '10) Mr. Deepak Parekh voted

among India's Most Trusted by people across India in a poll conducted by Reader's

Digest on a list of 100 public figures.
http://www.hdfc.com/others/hdfc_awards.asphttp://www.hdfc.com/others/hdfc_awards.asphttp://www.hdfc.com/others/hdfc_awards.asphttp://www.hdfc.com/others/hdfc_awards.asphttp://www.hdfc.com/others/hdfc_awards.asphttp://www.hdfc.com/others/hdfc_awards.asphttp://www.hdfc.com/others/hdfc_awards.asphttp://www.hdfc.com/others/hdfc_awards.asphttp://www.hdfc.com/others/hdfc_awards.asphttp://www.hdfc.com/others/hdfc_awards.asphttp://www.hdfc.com/others/hdfc_awards.asphttp://www.hdfc.com/others/hdfc_awards.asphttp://www.hdfc.com/others/hdfc_awards.asphttp://www.hdfc.com/others/hdfc_awards.asphttp://www.hdfc.com/others/hdfc_awards.asp


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India Today Power List 2010 (Mar '10) Mr. Deepak Parekh featured in India Todays

list of 50 Power People.

Times of India Crest List of 100 Powerful Women (Mar '10) Ms. Renu Sud Karnad

featured in the business category among the List of 100 Powerful Women by TOI

Crest.

Dun & Bradstreet Rolta Corporate Awards 2009 (Mar '10) HDFC selected for the

fourth consecutive year as the 'Top Indian Company' for the 'Financial

Institutions/Non-Banking Financial Companies/Financial Services' sector at the Dun &

BradstreetRolta Corporate Awards 2009.

Institute of Chartered Accountants in England and Wales (ICAEW) Award (Feb '10)

Mr. Deepak Parekh pronounced as the first international recipient of the 'Outstanding

Achievement Award by ICAEW.

Confederation of Real Estate Developers Associations of India (CREDAI) Award (Feb

'10)

Mr. Deepak Parekh awarded the 'Lifetime Achievement Award' by CREDAI for his

contribution to the Real Estate Industry at Natcon 2010 in Dubai.

Awards & Accolades 2009

CNN-IBN Indian of the Year 2009 (Dec '09)Mr. Deepak Parekh along with the team

that revived Satyam, received CNN-IBN's 'Indian of the Year' Award in the business

category.

14th Motilal Oswal Wealth Creation Study (Dec '09) Motilal Oswal Financial Services

for the second time ranked HDFC as the Most Consistent Wealth Creator in its 14th

Annual Wealth Creation Study, which analyses the top 100 wealth creating companies

of India.

HDFC is ranked as the most consistent by virtue of its 10-year price CAGR being the

highest.

NDTV Profit Business Leadership Awards 2009 (Dec '09) Mr. Deepak Parekh received

the 'NDTV Profit Business Leadership Award' for being part of the team that revived

Satyam.
http://www.hdfc.com/others/hdfc_awards.asphttp://www.hdfc.com/others/hdfc_awards.asphttp://www.hdfc.com/others/hdfc_awards.asphttp://www.hdfc.com/others/hdfc_awards.asphttp://www.hdfc.com/others/hdfc_awards.asphttp://www.hdfc.com/others/hdfc_awards.asphttp://www.hdfc.com/others/hdfc_awards.asphttp://www.hdfc.com/others/hdfc_awards.asphttp://www.hdfc.com/others/hdfc_awards.asphttp://www.hdfc.com/others/hdfc_awards.asphttp://www.hdfc.com/others/hdfc_awards.asphttp://www.hdfc.com/others/hdfc_awards.asphttp://www.hdfc.com/others/awards_2009.asphttp://www.hdfc.com/others/awards_2009.asphttp://www.hdfc.com/others/awards_2009.asphttp://www.hdfc.com/others/awards_2009.asphttp://www.hdfc.com/others/awards_2009.asphttp://www.hdfc.com/others/awards_2009.asphttp://www.hdfc.com/others/hdfc_awards.asphttp://www.hdfc.com/others/hdfc_awards.asphttp://www.hdfc.com/others/hdfc_awards.asphttp://www.hdfc.com/others/hdfc_awards.asphttp://www.hdfc.com/others/hdfc_awards.asphttp://www.hdfc.com/others/hdfc_awards.asp


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Business Today's List of 30 Most Powerful Women in Indian Business (Nov '09) Ms.

Renu Sud Karnad for the fifth time featured amongst Business Today's '30 Most

Powerful Women in Indian Business'.

'AAA' rating for HDFC Deposits by CRISIL & ICRA (Aug '09) HDFC's Fixed Deposit

Program has been reaffirmed the 'AAA' credit rating for the 15th consecutive year by

CRISIL and ICRA .

Study by the Great Place to Work Institute (June '09) HDFC featured amongst the 'Top

50 Best Companies to Work For 2009', a study conducted by The Great Place to

Work Institute in association with The Ec6nomic Times. In addition, HDFC was

adjudged as the 'Best Company for Management Credibility' overall, and bagged the

third rank in the Banking and Credit Services Industry.

Karmayog Corporate Social Responsibility Ratings 2008 (May '09) In a study of 1000

largest Indian companies undertaken by Karmayog in 2008, HDFC scored the highest

rating of 4 out of 5 for its CSR projects and activities for the second year in a row.

Mr. Deepak Parekh amongst India's 50 Most Powerful People 2009 - Business Week

(Apr '09).

Mr. Deepak Parekh features among the top of India Inc's Most Powerful CEOs - Survey

by Economic Times with IMRB (Mar '09).

Mr. Deepak Parekh selected for the IMC Juran Quality Medal 2008 for his excellent

customer-centric work in various initiatives related to the fields of Banking & Finance

(Mar '09).

HDFC selected as the 'Top Indian Company in FIs / NBFCs / Financial Services sector'

for the Dun & Bradstreet - Rolta Corporate Awards 2008 (Mar '09).

Mr. Keki Mistry awarded the "Best CFO in the Financial Services Sector" and the

"CFO of the Year" for 2008 by CNBC TV18 (Mar '09).

Mr. Keki Mistry declared the Best CFO in the Financial Services category by the

Institute of Chartered Accountants of India (ICAI) (Jan '09).

Mr. Deepak Parekh is CNBC's Outstanding Business Leader (Jan '09).

Mr. Deepak Parekh awarded the 'Business Leader of the Year' by NDTV (Jan '09).
http://www.hdfc.com/others/awards_2009.asphttp://www.hdfc.com/others/awards_2009.asphttp://www.hdfc.com/others/awards_2009.asphttp://www.hdfc.com/others/awards_2009.asphttp://www.hdfc.com/others/awards_2009.asphttp://www.hdfc.com/others/awards_2009.asphttp://www.hdfc.com/others/awards_2009.asphttp://www.hdfc.com/others/awards_2009.asphttp://www.hdfc.com/others/awards_2009.asphttp://www.hdfc.com/others/awards_2009.asphttp://www.hdfc.com/others/awards_2009.asphttp://www.hdfc.com/others/awards_2009.asphttp://www.hdfc.com/others/awards_2009.asphttp://www.hdfc.com/others/awards_2009.asphttp://www.hdfc.com/others/awards_2009.asphttp://www.hdfc.com/others/awards_2009.asphttp://www.hdfc.com/others/awards_2009.asphttp://www.hdfc.com/others/awards_2009.asphttp://www.hdfc.com/others/awards_2009.asphttp://www.hdfc.com/others/awards_2009.asphttp://www.hdfc.com/others/awards_2009.asphttp://www.hdfc.com/others/awards_2009.asphttp://www.hdfc.com/others/awards_2009.asphttp://www.hdfc.com/others/awards_2009.asphttp://www.hdfc.com/others/awards_2009.asphttp://www.hdfc.com/others/awards_2009.asphttp://www.hdfc.com/others/awards_2009.asphttp://www.hdfc.com/others/awards_2009.asphttp://www.hdfc.com/others/awards_2009.asphttp://www.hdfc.com/others/awards_2009.asphttp://www.hdfc.com/others/awards_2009.asphttp://www.hdfc.com/others/awards_2009.asphttp://www.hdfc.com/others/awards_2009.asphttp://www.hdfc.com/others/awards_2009.asphttp://www.hdfc.com/others/awards_2009.asphttp://www.hdfc.com/others/awards_2009.asphttp://www.hdfc.com/others/awards_2009.asphttp://www.hdfc.com/others/awards_2009.asphttp://www.hdfc.com/others/awards_2009.asphttp://www.hdfc.com/others/awards_2009.asphttp://www.hdfc.com/others/awards_2009.asphttp://www.hdfc.com/others/awards_2009.asphttp://www.hdfc.com/others/awards_2009.asphttp://www.hdfc.com/others/awards_2009.asphttp://www.hdfc.com/others/awards_2009.asphttp://www.hdfc.com/others/awards_2009.asphttp://www.hdfc.com/others/awards_2009.asphttp://www.hdfc.com/others/awards_2009.asphttp://www.hdfc.com/others/awards_2009.asphttp://www.hdfc.com/others/awards_2009.asp


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Awards: 2008

Ms Renu Sud Karnad selected as the best woman Corporate Leader of the year by

Business &Economy Magazine.

HDFC selected as the top Indian company in FIs / NSFCs / financial services sector for

the DUN & BRADSTREET- American Express Corporate Awards 2007.

Mr. Deepak Parekh recognized by Finance Asia for his life time achievements, at their

achievement Awards ceremony held in Hong Kong on 24th Jan, 2008.

Awards: 2007

Mr. Keki Mistry awarded the Best Performing CFO in the financial services sector for

2007 by CNBC-TV18. Business today selects Renu Sud Karnad as a powerful woman in Indian Business.

HDFC emerged as the best Investment Management company in India at the Liquid

Real Estate Awards- 2007 organized by EUROMONEY.

HDFC ranked 3rd amongst the Asian Banking and Finance Sector for Highest Return on

Equity by Asia money.

Ms Renu Sud Karnad, Executive Director, was one of the eminent women felicitated by

the FICCI Ladies organization at their Women Achievers Award-2007.

Award: 2006

Mr. Deepak Parekh, Chairman HDFC Ltd. Awarded the Best Non Executive Director

2006 by the Asian Centre for Corporate Governance.

Mr. Keki Mistry, Managing Director HDFC Ltd, awarded the best performing CFO in

the Financial Services Sector at the CNBC-TV 18 CFO Awards 2006.

HDFC won the award for Investment Management in India at the EUROMONEY 2006

Real Estate awards.

Best Home Loan Provider title at the Zee Business Pinnacle Awards, 2006.

Limca Book of records, 2006: HDFC for the landmark achievement of Rs. one lakh

crore.


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Best Strategy at the 4Ps business, marketing and advertising power awards 2006, Dun

& Bradstreet- American Express Corporate Awards 2006.

Mr. Deepak Parekh, Chairman, HDFC Ltd. Conferred with prestigious Padma Bhushan

award.

Awards: 2005

HDFC receives award for The Best Presented Accounts of The Institute of Chartered

Accountants of India for 2004-05.

HDFC ranked as Indias third best managed company by finance Asia -2005. Mr.

Deepak Parekh awarded the Hall of fame award by outlook Money magazine.

HDFC receives the Dream Home award for the best Housing Finance Company for

2004 from outlook money magazine.

1.3.5 FUTUREOF THE COMPANY

HDFC has always been market-oriented and dynamic with respect to resource mobilization

as well as its lending program. This renders it more than capable to meet the new challenges

that have emerged. Over the years, HDFC has developed a vast client case of borrowers,

depositors, shareholders and agents, and it hopes to capitalize on this loyal and satisfied client

base for future growth. Internal systems have been developed to be robust and agile, to take in

to account changes in the volatile external environment.

HDFC has developed a network of institutions through partnerships with some of the best

institutions in the world, for providing specialized financial services. Each institution is being

fine-tuned for a specific market, while offering the entire HDFC customer base the highest

standards of quality in product design, facilities and service.

Centre for housing finance (CHF)

A synonym for convenient and hassle-free service, HDFCs Training Centre, CHF presents a

unique focal point to hold training programmes.

Nature at its best.


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CHF is located in the serene ambience of Lonavla, 2000 feet above sea level, 120 kms from

Mumbai. The hills and valleys and scenic landscape make your training unique pleasurable

experience, so much so you may even prefer having your sessions out in the open lush green

lawns.

Training and Human Resource Management

HDFC having pioneered and helped develop market-oriented housing finance in India, has

continued to expand its services to a broader spectrum of clients by offering specialized training

courses. HDFCs centre for Housing Finance (CHF) provides technical assistance to national

governments and housing finance institutions in developing countries in the South Asian and

African regions, especially in the field of institutional development for effective shelter finance

delivery.

The second major area of activity of the CHF is managerial training for housing finance

institutions. Besides effective housing finance operations, some established housing finance

institutions also seek training for systems development and improvement.

Technology adds value

State of the art technology at this training centre makes your training programme come alive.

Overhead projectors with remote control screen, multimedia projector, electronic copy board

and programmable lighting arrangements all make for a great learning experience. Besides you

can bid farewell to the hiss, crackle static of artificial audio sounds. And welcome sound in its

natural state thanks to the acoustic cushioning of the training centre. CHF is also well-equipped

with computers, fax and photocopying facilities. A backup generator set provides uninterrupted

power supply. Air conditioning ensures a balanced climate here. Also our syndicate rooms

provide facilities for group work.

Service that makes you smile..

CHFoffering you service when you need it the most. Ergonomically designed chairs with

seating arrangements which are flexible to suit your requirements and refreshment services at

preferred things make the experience complete and fulfilling in every respect. A well equipped


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library and above all a caring and experienced staff who understand your needs are what make

CHF truly one of a kind. When you come to CHF, rest assured that the only thing you would

need to think about is your training. We will take care of the rest.

The residential annex..

The residential annex has seventeen well appointed rooms for single or double occupancy.

Equipped with comforts like cable T.V, Air-conditioning, attached bathrooms and work space,

these rooms make unwinding a rewarding experience. Attached to the Residential Annex, is

the air-conditioned dining room offering Chinese, continental, Magalia and South Indian

cuisines.

1.3.6 HDFC SALES (P) LTD

HDFC Sales (P) Ltd is a wholly owned subsidiary of HDFC Ltd and which was incorporated

on 23rd January 2004. HDFC sales offer financial management solutions uncompressing home

loans, life insurance mutual fund property solution and education loan. HDFC Sales is present

in more than 200 locations across the country with more than 60 offices and over 3000

employees. MS.Renu Sud Karnad is the chairperson and Mr. Gautam Bhagat is the CEO of

HDFC Sales (P) Ltd.

HDFC not only offers Home Loans but also loans for renovation and other related purposes

like Home Improvement Loan, Home Extension Loan, Short Term Bridging Loan, Land

purchase Loan, Home Equity Loans. Besides these, loans to professionals for Non Residential

Premises are also provided. HDFC Housing Loan can be taken up to 85% of the total cost of

your home and you can avail their Home Loan facility from the age of 20 years till the age of

your retirement. Moreover HDFC Housing finance offers the special benefit of Multiple

Repayment Option to their clients.

The primary subdivision of HDFC Home Loans is loans for Resident Indians and for Non

Resident Indians. HDFC Home Loans can be customized according to the individuals needs

and repayment capabilities. An individual can undergo a Home Loan guidance, which will


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help you to plan your purchase and selecting the appropriate housing loan. Variety of loan

option which gives multiple choices to an individual to choose the best loan option. Long with

these features HDFC housing loan offers multiple repayment options which offer a customer a

larger scope of repayment according based on the financial situations.

Fig .1 Organization Structure


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Managing Director

General Manager

CEO

State head

Area sales manager

Regional ManagerRegional Manager Regional Manager

State headState head

Team manager

Area sales managerArea sales manager

Team manager Team manager

ExecutivesExecutives Executives

1.3.7PRODUCTS PROFILE

1.3.7a. HOME LOAN


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Maximum home loan

80% of the cost of the property (including the cost of the land)and based on the

repayment capacity of the customer.

Maximum term

15 years subject to your retirement age.

Applicant and co-applicant to the loan

Home loans can be applied for either individually or jointly. Proposed owners of the

property will have to be co-applicants. However the co-applicants need not be co

owners.

Adjustable rate home loan

Loan under adjustable rate is linked to HDFCs Retail Prime Lending Rate (RPLR).

The rate on your loan will be revised every three months from the date of first

disbursement, if there is a change in RPLR, the interest rate on your loan may

change. However, the EMI on the home loan disbursed will not change. If the

interest rate increases, the interest component in an EMI will increase and the

principal component will reduce resulting in an extension of term of the home loan,

and vice versa when the interest rate decreases

1.3.7b.HOME IMPROVEMENT LOAN

Purpose

o External repairs

o Tiling and flooring

o Internal and external painting

o Plumbing and electrical work

o Waterproofing and roofing

o Grills and aluminum windows


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o Waterproofing on terrace

o Construction of underground/ overhead water tank

o Paving of compound wall (with stone, tile etc) and bore

Maximum loan

100% of the cost of improvement, subject to loan not exceeding 80% of the market

value of the property as assessed by HDFC.

(Subject to market value of the property)

Maximum term


Applicant and co-applicant to the loan

Home loans can be applied for either individually or jointly. Proposed owners of the

property will have to be co-applicants. However the co-applicants need not be co-

owners.

Adjustable Rate Home Loan.

Loan under adjustable is linked to HDFCs Retail Prime Lending Rate (RPLR). The

rate on your loan will be revised every three months from the date of first

disbursement, if there is a change in RPLR the interest rate on your loan may change.

However the EMI on the home loan disbursed will not change. If the interest rate

increases, the interest component in an EMI will increase and the principal component

will reduce resulting in extension of term of the loan and vice versa when the interest

rate decreases.

Current RPLR of home

improvement loan


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RPLR: 16.00

Applicable Rates

(Monthly Rest Basis)Fixed rates% Variable rates%

Basis%

RPLR

Up to and including Rs 30 lacks 12.00 10.25 RPLR - 5.75

Rs.30.01 lacks to Rs.75 lacks 12.00 10.50 RPLR - 5.50

Over Rs.75 lacks 12.00 11.00 RPLR - 5.00

*The above rates are subject to change without notice.

1.3.7c.HOME EXTENSION LOAN

Want to build an additional room or enclose the open balcony space

HDFC Home Extension Loan is a convenient loan facility to extend or add space to your house. Be

it an additional room on the same floor or the terrace, a larger bathroom, or even enclosing an open

balcony, the Home Extension loan will facilitate your home extension plans with appropriate loans

and comfortable re-payment options. Home Extension loans are quick to arrange and repayable in

easy monthly installments. You can avail of this loan even if you are an existing customer of

HDFC

Features

Purpose

HDFC Home Extension Loan makes it convenient for you to extend or add space to your home. Be

it an additional room, a larger bathroom, or even enclosing an open balcony.

Maximum loan

100% of the cost of extension, subject to loan not exceeding 80% of the market

value of the property as assessed by HDFC.


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Maximum Term

20 years subject to your retirement age

Applicant and Co- Applicant to the loan

Home Loans can be applied for either individually or jointly. Proposed owners of the

property will have to be co-applicants. However, the co-applicants need not be co- owners.

Adjustable Rate Home Loan

Loan under Adjustable Rate is linked to HDFC's Retail Prime Lending Rate (RPLR). The

rate on your loan will be revised every three months from the date of first disbursement, if

there is a change in RPLR, the interest rate on your loan may change. However, the EMI on

the home loan disbursed will not change*. If the interest rate increases, the interest

component in an EMI will increase and the principal component will reduce resulting in an

extension of term of the loan, and vice versa when the interest rate decreases

Current RPLR Of Home Extension Loan

RPLR: 16.00

Applicable Rates

(Monthly Rest Basis) Fixed rates% Variable rates%

Basis%

RPLR



Over Rs.75 lacks 12.00 11.00 RPLR - 5.00

* The above rates are subject to change without notice.


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1.3.7d.SHORT TERM BRIDGING LOAN

Short term bridging loan makes you realize your dream of buying a bigger and better home

and gives you time to sell your existing property to pay off the loan. This is a short term loan to help

customers with the interim period between the sale of your old home and the purchase of a newhome. You can take the loan even if you are an existing customer of HDFC.

1.3.7e.LAND PURCHASE LOAN

Features

Maximum loan

Direct Allotment from Development authority - 85% of cost of the land

First Purchase from developers, Resale plots - 70% of cost of the land. The above is subject

to repayment capacity of the customer.

You may apply for land purchase and construction of loans simultaneously. In such cases

we offer up to 85% of the cost of land and construction.

Maximum Term


Applicant and Co- Applicant to the loan

Home Loans can be applied for either individually or jointly. Proposed owners of the

property will have to be co-applicants. However, the co-applicants need not be co-owners.

Adjustable Rate Home Loan




the home Loan under Adjustable Rate is linked to HDFC's Retail Prime Lending Rate(RPLR). The rate on your loan will be revised every three months from the date of first

disbursement, if there is a change in RPLR, the interest rate on your loan may change.

However, the EMI on t Adjustable Rate Home Loan




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the home loan disbursed will not change. If the interest rate increases, the interest

component in an EMI will increase and the principal component will reduce resulting in an

extension of term of the loan, and vice versa when the interest rate decreases.

Current RPLR of land

purchase loan

RPLR: 16.00

Land loans Fixed rates% Variable rates% Basis%



*The home loan disbursed will not change. If the interest rate increases, the interestcomponent in an EMI will increase and the principal component will reduce resulting in an

extension of term of the loan, and vice versa when the interest rate decreases.

1.3.7f. LOANS TO PROFESSIONALS FOR NON RESIDENTIAL PREMISES (NRP)

Purpose

Purchase, construction, improvement of office.

Clinic Eligible Doctors

Chartered Accountants

Lawyers

Other self-employed professional


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Maximum loan-

85% of cost of the property

Maximum term-

10 years improvements five years

Documents Needed For NRP

Application form with photograph

Identity and Residence Proof

Education Qualifications Certificate and Proof of business existence

Last 3 years Income Tax returns (self and business)

Last 3 years Profit /Loss and Balance Sheet

Last 6 months bank statements

Processing fee cheque

1.3.7g. HOME EQUITY LOANS

HDFC Home equity Loans helps you encash the present market value of the property by

taking a loan by mortgaging the property. The end usage of the funds will not be monitored by

HDFC.however; the funds should not be used for speculation or any illegal purposes.

Loans can be advanced against any freehold or leasehold properties that have a clear, marketable

title. Loans can be repaid on an EMI basis or on a simple interest basis. Moreover, the loan shall be

approved only in respect of units that are self occupied; units which are rented out are not covered

under this scheme. Initially loans will be granted only to individuals against residential properties

in Mumbai, New Delhi, Chennai, Calcutta, Bangalore and pune.


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1.3.7. h. TOP - UP LOANS

This product offers an existing resident Indian customer a loan against the mortgage of the

existing property. It helps in encashing the investment in a house without having to dispose it off

to fund various needs related to Higher Education, Purchase of Furniture, Business Requirements,

etc. The maximum loan amount under this product is 60 % of the market value of the property less

the outstanding loan and is subject to the current loan eligibility.

The maximum term of the loan is 10 years. Top up loans can given after 1 to 2 years [based on our

discretion], of the final disbursement of the existing loan or upon possession/completion of the

existing financed property.

E.g.:

Existing outstanding Loan Rs 3 lack.

Current market value of property Rs 10 lacks

Maximum loan eligibility60% of market value i.e.

Rs 6 lacks

Actual Loan EligibilityRs 6 lacks less Rs 3 lacks

= Rs 3 lacks

Current RPLR Of Top

up Loan

RPLR: 16.00

Applicable Rate

(Monthly Rest Basis)

Variable rate%Basis%

RPLR

Top Up 11.75 RPLR4.25%

*The above rates are subject to change without notice


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Documents needed for approval

Customer can download theApplication Formand submit along with the followingdocuments for an approval of loan.

Salaried Customers Self Employed Professionals Self Employed Businessman

Application form

with photographApplication form with photograph Application form with photograph

Identity and

Residence Proof

Identity and Residence Proof Identity and Residence Proof

Latest Salary-slipEducation Qualifications Certificate

and Proof of business existence

Education Qualifications Certificate

and Proof of business existence

Form 16Last 3 years Income Tax returns

(self and business)Business profile

Last 6 months bank

statements

Last 3 years Profit /Loss and

Balance Sheet

Last 3 years Income Tax returns

(self and business)

Last 3 years Profit /Loss and

Balance Sheet

Processing fee

cheque

Last 6 months bank statementsLast 6 months bank statements

(self and business)

Processing fee cheque Processing fee cheque

Detailed cost estimate from architect/engineer for the property to be extended
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1.3.8 DOCUMENT TO BE SUBMITTED BY ALL APPLICANTS

I.3.8a DOCUMENT TO BE SUBMITTED FOR LOANS FOR CONSTRUCTION OF

HOUSES

A copy of the plan inclusive site plan approved by the Municipal

corporation/Municipality/Development Authority/Panchayat, as required.

A copy of the building permit issued by the (Municipal Corporation/ Municipality/

Panchayat) as required. In Panchayat areas where approval of plan and building permit is

not required a no objection certificate is to be submitted.

A copy of the abstract estimate of the cost of construction prepared and certified by a

qualified engineer/ architect at the current market rates.

Original and a photocopy of Title Deed.

No encumbrance Certificate in original from the Sub Registrar from 1 st January 1993 till

the date of submission of original title deed.

Land tax receipt for the current financial year in original.

Original of the parent document including release deed and power of attorney linking the

chain of transaction for a minimum period of 13 years.

1.3.8b. DOCUMENT TO BE SUBMITTED, FOR LOANS FOR PURCHASE OF HOUSES

A copy of the plan inclusive of site plan prepared by a qualified Engineer/ Architect.

A copy of the building tax receipt.

The Agreement for sale.

A copy of the Title Deed of the present owner.

No encumbrance Certificate in original from the Sub Registrar from 1st January 1993

till the Submission of original Title Deed. Land tax receipt for the current financial year in the name of the present owner in

original.

Original certified or Photostat copies of the parent documents including release deed

and power of attorneys linking the chain of transaction for a minimum period of 13

years.


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IMPORTANT:

Loans will be disbursed after the sale deed is executed and the original deed along the

encumbrance for the balance period till the date of submission of title deed is deposited with

HDFC

OR

Alternate security mutually agreed upon to be provided till the sale deed is deposited with the

HDFC.

1.3.8c. DOCUMENT TO BE SUBMITTED FOR LOANS FOR PURCHASE OF LAND.

A copy of the agreement for sale.

A copy of the title deed of the present owner.

No encumbrance Certificate in original from the Sub Registrar from 1 st January 1993

till the Submission of original Title Deed.



years.

IMPORTANT:

Loans will be disbursed after the sale deed is executed and the original deed along the

encumbrance for the balance period till the date of submission of title deed is deposited with

HDFC.

OR

Alternate security mutually agreed upon to be provided till the sale deed is deposited with the

HDFC.

1.3.8d. DOCUMENT TO BE SUBMITTED FOR LOANS FOR IMPROVEMENT OF

HOUSES.

A copy of the plan prepared and certified by an Engineer/ Architect inclusive of site

plan of the existing building.

A copy of the latest Building Tax receipt for the existing building.


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A copy of the abstract estimate of the cost of construction prepared and certified by

a qualified engineer/ architect at the current market rates.

Original and photocopy of Title Deed.

No encumbrance Certificate in original from the Sub Registrar from 1st January

1993 till the Submission of original Title Deed.




years.

1.3.8e. DOCUMENT TO BE SUBMITTED FOR LOANS FOR EXTENSION OF HOUSES

A copy of the plan of extension inclusive of site plan approved by

Municipalcorporation/Municipality/DevelopmentAuthority/Panchayat, as

required.

A copy of the building permit issued by the (Municipal Corporation/

Municipality/ Panchayat) as required. In Panchayat areas where approval of plan

and building permit is not required a no objection certificate is to be submitted.

Copy of the latest building tax paid receipt for the existing building.

A copy of the abstract estimate of the cost of extension prepared and certified by

a qualified engineer/ architect at the current market rates.

Original and Photocopy of Title Deed.

No encumbrance Certificate in original from the Sub Registrar from 1 st January

1993 till the Submission of original Title Deed.


Original certified or Photostat copies of the parent documents including release

deed and power of attorneys linking the chain of transaction for a minimumperiod of 13 years.


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1.3.8f. LIST OF DOCUMENTS FOR FLATS.

Project approved by HDFC.

Original Agreement with land owner for sale of undivided share in land.

Original Agreement with Builder for construction of flats. Original receipts for payments made to Builder.

No objection Certificate from Builder as per HDFCs Draft/

Alternate security mutually agreed upon till such time the original sale deed

with respect to the undivided interest in land is registered and deposited with

HDFC.

Documents of Projects not verified by HDFC

Copy of original Title Deed of land.

Encumbrance Certificate for 13 years.

Land Tax receipt.

Copies of parent documents executed during the last13.

Advocates Title Report.

Building plan approved by the Corporation/ Municipality etc.

Building permit/ NOC from Panchayat.

1. All documents referred to in (A) above. Alternate security mutually agreed upon

till such time the original sale deed with respect to the undivided interest in land

is registered and deposited with HDFC.

1.3.8g. DOCUMENTS TO BE SUBMITTED FOR SECOND MORTGAGE LOANS.

(Government Employees/ Insurance company Employees who want to take loan from

HDFC for completing the home for which the Government has sanctioned HBA)

Copy of the plan inclusive of site plan approved by the Municipal Corporation/

Municipality Corporation/ Municipality/ Development Authority/ Panchayat and certified

by Government/ Department.

A copy of the detailed estimate submitted to the Government department, certified by the

Government/ Department.


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A copy of the building permit issued by the Municipal Corporation/ Municipality/

Panchayat. In Panchayat areas where approval of plan and building permit is not required,

no objection certificate is to be submitted.

1. Copy of the HBA sanction order.

2. Copy of the order releasing the last installment of HBA.

3. Photocopy of the title deed and mortgage deed.

1.3.8h. DOCUMENTS TO BE SUBMITTED FOR SECOND MORTGAGE LOANS-

EXTENSION.

A copy of the plan of extension.

A copy of the abstract estimate of the cost of extension.

A copy of Building permit issued by Corporation/ Municipality/ Panchayat

or NOC from Panchayat.

A copy of Building Tax Receipt and documents 1 to 6 of VII.

1.3.8i. DOCUMENTS TO BE SUBMITTED FOR SECOND MORTGAGE LOANS-HOME

IMPROVEMENT

Copy of the abstract extension of cost of improvement.

Copy of Building Tax Receipt and document 1 to 6 of VII.

1.3.8j. DOCUMENTS TO BE SUBMITTED FOR LOANS UNDER PARIPASSU

ARRANGEMENT.

(Bank Employee who want to take loan from HDFC for completing the home for which

the bank has sanctioned HBA.)

Copy of the plan inclusive of site plan approved by the Municipal Corporation/

Municipality/ Development Authority/ Panchayat and certified by the bank.

A copy of the detailed estimate submitted to the bank and certified by the bank.


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A copy of the building permit issued by the Municipal Corporation/ Municipal

Corporation/ Municipality/ Panchayat. In Panchayat areas where approval of

plan and building permit is not required no objection certificate is to be

submitted.

Copy of the HBA sanction order.

Copy of the order releasing the last installment of HBA.

Photocopy of the title deed.

1.3.9 SERVICE PROFILE

Home Loan Counseling- sharing of over 30 years of home loan experience HDFC has

been a part of a 30 years journey with our 26 lakh customers. Our home loan counselors offer youthe time tested advice. Be it legal documentation, project or builder approvals, and technical

advice, we look forward to sharing with you and this service is absolutely free. HDFCs project

approval facility provides our customers the comfort of purchasing properties from builders who

have complied with all basic documentation.

Door Step Services

HDFC offer door step services. Please call HDFC home line call for our sales executive

to assist you. It helps you to find your dream home.

Wide product range

It provides loans to meet all your requirements for you to make that house or a home.

Home loans, improvement loans, loans to professionals for office or clinic, Home Equity Loans,

Loan against rent receivables, short term bridging loan. Loan on adjustable rate and fixed rate.

2-in-1 Home Loans

Multiple Repayment Option

Step up Repayment Facility

Helps young executives take a much bigger loan today based on an increase in their future income,

this helps executives buy a bigger home today.


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Flexible Loan Installments Plan

Often customers, parents and their children wish to purchase properties together. The

parent is nearing retirement and their children have just started working. This option helps such

customers combine the incomes and take a long term home loan where in the installment reducesupon retirement of the earning parent.

Tranche Based EMI

Customers purchasing an under construction property need to pay interest(on the loan

amount drawn based on level of construction) till the property is ready. To help customer save this

interest, we have introduced a special facility of tranche based EMI. Customers can fix the

installments they wish to pay till the property is ready. The minimum amount payable is the

interest on the loan amount drawn. Anything over above the interest paid by the customer goes

towards principal repayment. The customer benefits by starting EMI and hence repays the loan

faster.

Accelerated Repayment Scheme

Accelerated Repayment Scheme offers you a great opportunity to repay the loan

faster by increasing the EMI. Whenever you get an increment, increase in your disposable income

or have lump sum funds for loan repayment.

Increase in EMI means faster loan repayment.

Saving of interest because of faster loan repayment. You can invest lump sum funds

rather than use it for loan prepayment. The return from the investments also gives you the comfort

of paying the increased EMI.

Wide network of financing

With over 200 offices, 90 reach programs- HDFC is able to provide home loans is

over 240 locations in India. You can apply at your local HDFC office for properties in locations

where we finance.


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Post Disbursement services

Income tax certificate to enable you to claim the tax benefits are sent to you. This

service is absolutely free.

Loan Repayment.

ECS facility.

Post dated cheques- No charges for replacement of cheques.

Loan repayment at any HDFC offices.

1.3.10 COMPETITORS OF HDFC HOME LOANS

SBI Housing loan

SBI housing loan schemes are designed to make it simple for you to make a choice at least as far

as financing goes! SBI home loans No cap on maximum loan amount for purchase/ construction

of house/ flat option to club income of your spouse and children to compute eligible loan amount.

Provision to club expected rent accruals from property proposed to compute eligible loan amount.

Provision to finance cost of furnishing and consumer durables as part of project cost repayment

permitted up to 70 years ago.

Free personal accident insurance cover

Optional group insurance from SBI Life at concessional premium (upfront premium finance as

part of project cost.)

Interest applied on diminishing basis

Plus schemes which offer attractive packages with concessional interest rates to govt. employees,

teachers, employees in public sector Oil companies. Special scheme to grant loans to finance

earnest money deposits to be paid to Urban Development authority/ housing board etc. in respect

of allotment of sites/ house/ flat.


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No Administrative charges or application fee

Prepayment penalty is recovered only if the loan is pre-closed before half of the original tenure

(not recovered for bulk payments provided the loan is not closed). Provision for downward re-

fixation of EMI in respect of floating rate borrowers who avail housing loans of Rs. 5 lacks and

above, to avail the benefit of downward revision of interest rate by 1% or more. In-principal

approval issued to give you flexibility while negotiating purchase of a property.

ICICI Housing Loan

The largest home loan provider, ICICI bank understands how special creating a

new home is for you and our home loans helps you to lay the foundation for your dream home.

Home loans are best option; you can go for to finance a new home. ICICI offers you the most

convenient and practical home loan plans to suit your needs. With so many attractive features in

every type of home loan we offer, creating the home you always wanted is no longer distant

dream.

LIC Housing Finance Ltd

LIC Housing finance Ltd is Indias one of the largest hosing finance companies. The

company possesses one of the industrys most expensive marketing networks in India. 6 Regional

offices and 115area offices backed by a chain of camp offices nationwide, an offshore office in

Dubai and Kuwait and registered and corporate office at Mumbai.

The main objective of the company is to provide long term finance to individuals for purchase/

construction/ Repair and renovation of new/existing flats/ houses

HSBC Home Loans

HSBC home loans make it easier for you to move in as soon as possible without

putting a strain on your wallet. It offers you loans ranging from Rs.5 lacks to Rs 3 crore.


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1.4 RESEARCH METHODOLOGY

1.4.1 RESEARCH METHODOLOGY

Research methodology is the way of doing a research. It is the plan which a researcher

prepares well in advance before the data collection. With the help of it a researcher tends to

overcome the difficulties which could possibly occur at the time of conducting the research. A

good research methodology takes into account all the parameters like the time and budget available

for conducting the research.

1.4.2 OBJECTIVES OF THE STUDY

The objective of this study is to find out the customer awareness and customer preferences

of home loans in Ernakulum.

Primary Objectives

To find out the level of awareness of different types of home loan.

To find out the preferences of customers in availing home loans.

To find out ways to increase the awareness level of customers about different banks who

provides home loans.

Secondary Objectives

To determine the related services provided by the banks.

To determine the frequency of consuming home loan.

To find out the procedures and formalities followed by each bank.

To give suggestions for improving the home loan services of the company.

1.4.3 RESEARCH DESIGN

Research design is the blue print of a research. A simple design is a definite plan in

obtaining a sample from a given population. It refers to the technique or procedure the researcher

would adopt in selecting items for the sample. The study was exploratory. Since the study is aimed

at determining the customer awareness and customer preferences of home loans and the customer


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under study is the person who is looking forward to avail the home loan, the population is

unknown. It is a descriptive research as the study describes the awareness level and preferences

with regard to home loans.

1.4.4 SOURCES OF DATA

The study required data from both primary and secondary sources:

Primary source

The primary data required for the study were collected by administering structured

q