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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.
http://www.indianground.com/nri/nri_housing_and_finance.aspxhttp://www.indianground.com/residential_buy_lease.aspxhttp://www.indianground.com/finance.aspxhttp://www.indianground.com/finance.aspxhttp://www.indianground.com/residential_buy_lease.aspxhttp://www.indianground.com/nri/nri_housing_and_finance.aspx -
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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
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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.
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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.
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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).
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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
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 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
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.
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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
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 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 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
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
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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 land
purchase loan
RPLR: 16.00
Land loans Fixed rates% Variable rates% Basis%
Up to and including Rs 30 lacks 12.25 10.50 RPLR - 5.50
Rs.30.01 lacks to Rs.75 lacks 12.25 10.75 RPLR - 5.25
*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.
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.
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.
Land tax receipt for the current financial year 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.
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.
Land tax receipt for the current financial year 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 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