A
SYNOPSIS REPORT
HOME LOANS
WITH REFERENCE TO
HDFC BANK LTD.
A synopsis report submitted to Osmania University
In partial fulfillment for the Award of the Degree of
MASTER OF BUSIUNESS ADMINISTRATION
Submitted by
GUDIDEVUNI SHRAVYA
HT NO: 2121-20-672-131
UNDER THE GUIDANCE OF
---------------------------------------
ARISTOTLE PG COLLEGE
(Affliated To Osmania University,Hyderabad)
Recognized By UGC under section 2(f) of UGC Act 1956
Beside Moinabad Police Station,
Chilkur, Moinabad ,Ranga Reddy District, Telangana.
(2020-2022)
INTRODUCTION
Introduction to Home Loans.
Home is an integral part of a human being, who since his childhood, dreams to have living
space of his own. Once in a lifetime investment requires loan to do it and that is how the
home loan comes into scheme of things. Buying a home is dream for everyone. Due to the
rising price of properties, it has almost become impossible for an average earning person to
buy a home through lump sum payment. Therefore, the concept of home loan has come into
existence. There are plethora of housing finance institutions and banks both in public and
private sector which offer home loans. Choosing one institution and one offer for home loan
amidst the thousands available options have become a very complex task in our country.
Apart from this, there are intricate business jargons and technicalities that make this job more
tough and difficult. Through this study, I propose to identify the critical factors impacting the
growth and distinguishing the growth pattern in home loan portfolio particularly in public
sector banks in India.
Home is a necessity to all human beings and owning a home is a dream for
everyone. Earlier only a few people had the privilege to have an own home but
now with the availability of home loans provided by banks many people’s
dream has come true. These are loans which are provided either to buy an
already built ready to occupy a home or a flat or to construct a home.
Are you looking for a home loan? If yes, read our article Introduction to Home Loans on
BankandFinance.com and educate yourself before you start applying for house loans. Almost
every citizen wishes to purchase their own house in their name and in this day and age, land
and property prices have increased significantly, offering an attractive investment for
individuals in India.
A Home Loan is taken out from a bank or financial company in order to purchase/construct a
new house or reconstruct an existing mortgage. There are several different ways in which an
individual can get a home loan mortgage. Over the past few years, many new banks and
housing finance companies have opened up and are providing attractive and low lending
rates. There are many housing finance lenders which we work with who are ready to give you
the latest information about the bank of mortgage rates.
An individual who is looking for housing loans should be aware of all his requirements and
then he/she can search for housing finance services in India. Without knowing the
requirements it is difficult to understand the process of a home loan. A borrower who is ready
to go for house loans should check their monthly incomes and the location of the borrower.
You will also want to look into getting home insurance quotes for your new home. Given the
present economic conditions, the prices of properties are rapidly on the rise especially in the
major cities across India. This is making it difficult for middle class families to afford these
huge investments. Keeping this fact in mind, bank of mortgage services in India considered
these facts and came up with attractive mortgage interest rates so that the middle class
families can take a home lending bank loans. Borrowers should consider each and every
aspect of home lending from selecting the property to closing the finance loan amount. The
borrowers will be maintaining a long-term relationship with the finance company so it is wise
to take a loan from a bank which you feel comfortable with.
The core function of commercial banks is granting of credit. Although banks offer a wide
spectrum of financial services, lending has traditionally been their main function. Banks
profess experience, expertise and flexibility in lending which gives them a clear competitive
advantage over other financial institutions. Lending of funds to businessmen, traders and
industrial enterprises is one of the most important activity of a commercial bank.
The term “LOAN” refers to the amount borrowed by one person from another. The amount
is in the nature of loan and refers to the sum paid to the borrower. Thus, from the point of
view of the borrower it is ‘borrowing’ and for the bank it is ‘lending’. Loan may be regarded
as ‘credit’ granted where the money is disbursed and its recovery is made on a later date. It is
a debt for the borrower. While granting loans, credit is given for a definite purpose and for a
predetermined period. Interest is charged on the loan at an agreed rate and intervals of
payments.
REVIEW OF LITERATURE
An attempt has been made to peruse the literature of earlier studies. A few studies have been
conducted in the field of home problems, home policies and programmes. Home is the day-
to-day problem of millions of people. A study on home finance helps to minimize the
problems of millions of people. For the purpose of review, some studies conducted on home
finance are studied. The methodology and findings of these research works had been
carefully studied and analyzed by the present researcher. Useful hints were drawn from these
studies which helped in putting the present research work in a proper perspective. The gist of
some of the relevant research studies and research papers on home finance are presented in
this chapter.
RESEARCH STUDIES
Sundram K.V. (1991),1 A study titled "A study on home finance with particular reference to
co-operative home in Tiruchiraplli District" by Sundram K.V. with the objective of testing
co-operative home finance for home constructions. The study was completed in the year 1991
and was submitted to the Bharathidasan University, Tiruchi. The data for the study were
collected from the borrowers of co-operative home loans and also secondary data from
cooperative home finance societies. The sample consisted of 300 borrowers of co-operative
home loans. He concluded that loan recovery from borrowers is not satisfactory and also
suggested that co-operative home finance institutions must provide additional services in
addition to loan lending.
Varghese R (1992)2The thesis entitled "Home Development and Finance in India; An
Evaluation of Selected Home Finance Organizations", carried out by Varghese, Department
of Commerce, University of Jodhpur in 1994, was aimed at analyzing the home
developments in India and performance of banks towards home loans. Mr. Varghese selected
6 Banks for the study and analyzed the lending and repayments. The study helped to arrive at
useful solutions to the major problems of home and home finances institutions. He collected
data for the study from the published accounting reports of banking companies. The
information collected by him was analyzed through ratio, trend technique of financial
analysis. The process of analyzing the financial statements involved the compilation,
comparison and study of financial data. He reported that home development in India should
be improved and also the banks.must make additional lending for home developments.
Mishra. G. P (1994)3In his study entitled, "Home Development and Finance in Maharashtra;
An Evaluation Study of Selected Finance Organizations" at Department of Commerce,
Saurastra University, in 1998 Mishra. G.P, had the objectives of a. Examining the home
development in Maharastra b. Evaluating the performance of home finance in Maharastra, c.
Making comparative study on home development and home finance. The whole study was
based on data collected from home finance companies and home development organizations.
Analytical tools like ratio analysis, trend analysis, common size analysis and central tendency
etc., were used by the researcher to analyze the collected data. The researcher has concluded
that the performance of Government towards home development is not satisfactory and
Maharashtra needs more home finance companies for better home development.
Tamilarasu. S (1995)4 In his doctoral research work on "Home Finance in India; A Case
Study of the North Eastern India" submitted to the Department of Commerce, University of
Delhi in 1995 had the objectives to a. Analyse the adequacy of home finance in India b.
Suggest ways to increase the home Loans to borrowers c. Suggest measures to improve
profitability of home finance companies d. Analyze the performance in North eastern India.
He collected data both from primary and secondary sources. He applied the techniques of
ratio analysis, fund flow analysis, trend analysis, and common size statement analysis for
analyzing the financial statements. Statistical techniques like index numbers, percentages,
averages, graphs, diagrams, F test and chi square test had been used. He concluded that banks
in Northeastern India lend home finance with better performance and he suggested that loans
must be extended only to borrowers having regular income. He also suggested that the
profitability of the banks has improved by way of lending long-term home loans.
NEED OF THE STUDY
In the era of growing importance of financial status, there is an increased importance for
various financial institutions which provide such loans.
The main objective of the study of the loans and advances is to understand the lending
policies and the various schemes of financial assistance provided by the bank. The bank
works comparatively different from other financial institutions and banks as it works
according to the rules and regulations and the guidelines by the RBI.
In the post reforms period, banks are facing tough competition due to interest rate regime. In
today’s buyers market, banks are facing cutthroat competition. Hence they are introducing
new loan products to meet the requirements of the various segments of the society to know
the importance of the retail lending in banks.
In this background the topic of personal lending schemes of HDFC BANK LTD is chosen as
the subject matter of this project. The findings of the project may be considered by HDFC
BANK LTD while formulating the policies for increasing the volume of personal lending
schemes.
As the country is witnessing globalization, privatization and liberalization wave with a strong
influence in culture and its implication, the need for loan have become inevitable at present
scenario, hence there is a need to study the progress and trends. Since more and more
competitors have entered the market with many features in their services.
The study is also required to analyze the views of the borrowers and to analyze the
satisfaction level of customers. It helps to know in detail the Loans and Advances provided
by the bank, right from its inception stage, growth and future prospects.
OBJECTIVES OF STUDY
There is no strongest foundation for your dream home, than a cheap loan. Home loans
have become those stronger foundations for people who want to own a home. The main
objectives of the study are as follows:-
The main objective of this study is to know the Customers perceptions about home
loans of HDFC BANK LTD housing development finance corporation LTD.
To find out the sources of borrowings and mobilization of loans.
To know the terms and conditions laid down by the banks for sanction of loans.
To know the ideas of customers about home loan products and services.
To study about the loan policy, credit evaluation and supervision of loans and
advances at HDFC BANK LTD.
To study in detail about the different types of personal loans offered by HDFC BANK
LTD in the context of purpose, eligibility, interest, etc.
To study the satisfaction level of customers about home loans.
To study the problems faced by customers in obtaining the home loans.
SCOPE OF STUDY
Company has undergone rapid changes in the past 5 years due to many policy
decisions relating to capital markets, banking sector & licensing policy.
The study is limited to only Indian overseas this study is mainly related to the
individuals who are interested in taking home loans from banks to fulfill their dreams.
The study is mainly related to all the loans provided by Indian overseas only.
RESEARCH METHODOLOGY
Research methodology is a way to systematically solve the research problem. It is a
way of written game plan for conducting research. In this we describe the various
steps that are taken by a researcher. So it is therefore desirable to design a research
methodology. For this research the research methodology is designed as under:
Primary Data:
A survey will be conducted to get the primary information. It is the data which is
collected directly that is for the first time in my project I will be used:
• Home Interview
• Questionnaire
Secondary Data:
For the secondary data, the pamphlets of various schemes from different banks have
been obtained.
LIMITATIONS OF THE STUDY
The study was conducted with the available data and the analysis made on it.
The study is limited to the Home loans schemes under HDFC BANK LTD.
Due to the limited period of study it may not be detailed.
Lack of expertise being a trainee in analyzing the data.
Getting valid data was a problem due to the sensitivity of the data provided.
The project on loans and advances is more like a theoretical project.
Time was one of the constraints during the study. The period of study is of 5 yrs.
Some of the data vital to the study could not be accessed due to the confidentiality
policies of the bank.
The study is limited to one branch of HDFC BANK LTD.
PROFILE OF THE COMPANY
COMPANY PROFILE
HDFC (Housing Development Financial Corporation) Bank Limited is an Indian banking
and financial services company headquartered in Mumbai, Maharashtra. It has 84,325
employees and has a presence in Bahrain, Hong Kong and Dubai. HDFC Bank is India’s
largest private sector lender by assets. It is the largest bank in India by market capitalization
as of February 2017. It was ranked 69th in 2017 Brand Top 100 Most Valuable Global
Brands.
In 1994 HDFC Bank was incorporated, with its registered office in Mumbai, India. Its first
corporate office and a full service branch at Sandoz House, Worli were inaugurated by the
then Union Finance Minister, Manmohan Singh.
As of June 30, 2017, the bank's distribution network was at 4,715 branches and 12,260 ATMs
across 2,657 cities and towns. The bank also installed 4.30 Lacs POS terminals and issued
235.7 Lacs debit cards and 85.4 Lacs credit card in FY 2017.
Products and services
HDFC Bank provides a number of products and services including wholesale banking, retail
banking, treasury, auto loans, two wheeler loans, personal loans, loans against property
and credit cards.
The latest entry in the league is 'Project AI', under which HDFC Bank, over the next few
weeks, would deploy robots at select bank branches. These robots will offer options such as
cash withdrawal or deposit, forex, fixed deposits and demat services displaying on a screen to
customers.
Acquisitions
HDFC Bank merged with Times Bank in February 2000. This was the first merger of two
private banks in the New Generation private sector banks category.[15] In 2008, Centurion
Bank was acquired by HDFC Bank. HDFC Bank Board approved the acquisition of CBoP for
95.1 billion INR in one of the largest mergers in the financial sector in India.
Listings and shareholding
The equity shares of HDFC Bank are listed on the Bombay Stock Exchange and the National
Stock Exchange of India. Its American Depository Shares are listed on NYSE and the global
depository receipt are listed on the Luxembourg Stock Exchange where two GDRs represent
one equity share of HDFC Bank.
Shareholders (as of 31 December 2015) Shareholding[17]
Promoter group (HDFC) 21.57%
Foreign institutional investors (FII) 32.4%
Individual shareholders 8.5%
Bodies corporate 7.5%
Insurance companies 5.38%
Mutual funds/UTI 8.65%
NRI/OCB/others 0.29%
Financial institutions/banks 2.75%
ADS/GDRs 18.78%
3.2.2 VISION AND MISSION OF THE COMPANY
Vision Statement
"To become the market leader in Housing Development Finance in Sri Lanka"
Mission
We define our mission in the broader context of our shareholders, customers, staff, the
national economy, regulators and the natural environment.
To our shareholders, our mission is to optimize returns.
To our customers, our mission is to provide a caring service by anticipating their
requirements and innovatively satisfying them beyond their expectations.
To our staff, our mission is to identify their multi-faceted talents, develop, motivate,
recognize and reward them towards fulfilment of the institutional and national housing
vision.
To the national economy and the industry regulator, we are the key driver and thought
leader, shaping and financing the national housing policy.
To our natural environment, we enforce sustainable practices across all our activities.
CHAPTERIZATION
CHAPTER-1
INTRODUCTION
CHAPTER-2
REVIEW OF LITERATURE
CHAPTER-3
RESEARCH METHODOLOGY
NEED OF THE STUDY
OBJECTIVES OF THE STUDY
SCOPE OF THE STUDY
DATA COLLECTION
LIMITATIONS
CHAPTER-4
INDUSTRY/COMPANY PROFILE
CHAPTER-5
DATA ANALYSIS
CHAPTER-6
FINDINGS
CHAPTER-7
SUGGESTION & CONCLUSION
BIBLIOGRAPHY
ANNEXURES
