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INTRODUCTION OF BANK
Banking is a abase of today’s world. The bank word is too old. The origin of the word bank
is shrouded in the mystery. It is made from the word “Banchi” or from Greek word “Banque”
or from the German word “Banch”. The first bank was established in 1148 and its name is
“CASA DE SAN GEIORGIO”.
Soon after the people realized the importance of money as a medium of exchange
they recognized the need of storing it. This safe place ultimately evolved into financial
institution that accept deposit and make loans i.e. the modern banking system. As per as
India concerned the original banking operations were in the hands of the indigenous
bankers who dominated the finance to the extend that they credit to the govt. as well.
A bank is an institution which accepts deposits with drawable by cheque and makes
loan and advances for the purpose of earning profits.
The Banking Companies Regulation Act-“The accepting, for the purpose of
lending and investment, of deposits of money from the public, repayable on demand or
otherwise, and withdraw able by cheque, draft and otherwise.”
Kinley-“Bank is an establishment which makes to individuals such advances of
money as may be required and safely made, and to which individuals entrust money when
not required by them for use.”
Thus the following are the functions of a bank:-
Accepting deposits
Advancing money
Collection and payment of credit and other instruments.
Sale and purchase of stock exchange securites.
Acting as information bank
Remittance of fund
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Over View & Profile of HDFC Bank
PROMOTOR
HDFC is india’s premier housing finance company and enjoys an impeccable trak record in
India as well as in international markets. Since its inception in 1977, the Corporation has
maintained a consistent and healthy growth in its operation sto remain the market leader in
mortgages. Its outstanding loan portfolio covers well over a million dwelling units. HDFC has
developed significant expertise in retail mortgage loans to different market segments and
also has a large corporate client base for its housing related credit facilities. With its
experience in the financial markets, a strong market reputation, large shareholder base and
unique consumer franchise, HDFC was ideally positioned to promote a abank in the Indian
environment.
BUSINESS FOCUS
HDFC Bank’s mission is to be a World-Class Indian Bank. The objective is to build sound
customer franchises across distinct businesses so as to be the preferred provider of
banking services for target retail and wholesale customer segments, and to achieve healthy
growth in profitability, consistent with the bank’s risk appetite. The banks is committed to
maintain the highest level of ethical standards, professional integrity, corporate governance
and regulatory compliance. HDFC Bank’s business philosophy is based on four core values
– Operational Excellence, Customer Focus, Product Leadership and People.
CAPITAL STRUCTURE
The authorised capital of HDFC Bank is Rs 550 crire (Rs. 5.5 billion). The paid up capital is
Rs 424.6 crore (Rs. 4.2 billion). The HDFC Group holds 19.4% of the bank’s equity and
about 17.6% of the equity is held by the ADS Depository (in respect ) of the bank’s 2
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American Depository Shares (ADS) Issue. Roughly 28% of the equity is held by the Foreign
Institutional Investors (FIIs) and the bank has about 570,000 shareholders. The shares are
listed on the Stock Exchange, Mumbai and the National Stock Exchange. The bank’s
American Depository Shares are listed on the New York Stock Exchange (NYSE) under the
symbol ‘HDB’.
DISTRIBUTION NETWORK
HDFC Bank is headquartered in Mumbai. The bank at present has an enviable network of
over 1229 branches spread over 444 cities across India. All branches are linked on an
online real-time basis. Customers in over 120 locations are also serviced through
Telephone Banking. The Bank’s expansion plans take into account the need to have a
presence in all major industrial and commercial centres where its corporate customers are
located as well as the need to build a strong retail customer base for both deposits and loan
products. Being a clearing/settlement bank to various leading stock exchanges, the Bank
has branches in the centres where the NSE/BSE have a strong and active member base.
The Bank also has a network of about over 2526 networked ATMs across these
cities. Moreover, HDFC Bank’s ATM network can be accessed by all domestic and
international Vise/MasterCard, Visa Electron/Maestro, Plus/Cirrus and American Express
Credit/Charge cardholders.
MANAGEMENT
Mr. Jagdish Kapur took over as the bank’s Chairman in July 2001. Prior to this Mr. Kapur
was a Deputy Governor of the Reserve Bank of India.
The managing Director, Mr. Aditya Puri, has been a professional banker for over 25
years, and before joining HDFC Bank in 1994 was heading Citibank’s operations in
Malaysia.
The Bank’s Board of Directors is composed of eminent individuals with a wealth of
experience in public policy, administration, industry and commercial banking. Senior
executives representing HDFC are also on the Board.
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Senior banking professionals with substantial experience in India and abroad head
various businesses and functions and report to the Managing Director. Given the
professional expertise of the management team and the overall focus on recruiting and
retaining the best talent in the industry, the bank believes that its people are a significant
competitive strength.
TECHNOLOGY
HDFC Bank operates in a highly automated environment in terms of information technology
and communication systems. All the bank’s branches have online connectivity, which
enables the bank to offer speedy funds transfer facilities to its customers. Multy-branches
access is also provided to retail customers through the branch network and Automated
Teller Machines (ATMs).
The bank has made substantial efforts and investments in acquiring the best
technology available internationally, to build the infrastructure for a world class bank. The
Bank’s business is supported by scalable and robust systems which ensure that our clients
always get the finest services we offer.
The Bank has prioritised its engagement in technology and the internet as one of its
key goals and has already made significant progress in web-enabling its core businesses. In
each of its businesses, the Bank has succeeded in leveraging its market position, expertise
and technology to create a competitive advantage and buld market share.
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SERVICES PROVIDED
HDFC Bank offers a wide range of commercial and transactional banking services and
treasury products to wholesale and retail customers. The bank has three key business
segments:
Wholesale Banking Services
The bank’s target market ranges from large, blue-chip manufacturing companies in the
Indian corporate to small & mid-sized corporates and agri-based businesses. For these
customers, the Bank provides a wide range of commercial and transactional banking
services, including working capital finance, trade services, transactional services, cash
management, etc. The bank is also a leading provider of structured solutions, which
combine cash management services with vendor and distributor finance for facilitating
superior supply chain management for its corporate customers. Based on its superior
product delivery / service levels and strong customer orientation, the Bank has made
significant inroads into the banking consortia of a number of leading Indian corporates
including multinationals, companies from the domestic business houses and prime public
sector companies. It is recognised as a leading provider of cash management and
transactional banking solutions to corporate customers, mutual funds, stock exchange
members and banks.
Retail Banking Services
The objective of the Retail Bank is to provide its target market customers a full range of
financial products and banking services, giving the customer a one-stop window for all
his/her banking requirements. The products are backed by world-class service and
delivered to the customers through the growing branch network, as well as through
alternative delivery channels like ATMs, phone Banking, Net Banking and Mobile Banking.
The HDFC Bank preferred program for high net worth individuals, the HDFC Bank
plus and the investment Advisory services programs have been designed keeping in mind
needs of customers who seek distinct financial solutions, information and advice on various
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investment avenues. The Bank also has a wide array of retail loan products including Auto
Loans, Loans against marketable securities, Personal Loans and Loans for Two-wheelers. It
is also a leading provider of Depository Participant (DP) services for retail customers,
providing customers the facility to hold their investments in electronic form.
HDFC Bank was the first bank in India to launch an International Debit Card in
association with VISA (VISA Electron) and issues the MasterCard Maestro debit card as
well. The bank launched its credit card business in late 2001. The Bank is also one of the
leading players in the “merchant acquiring” business with over 50,000 point-of-sale (POS)
terminals for debit / credit cards acceptance at merchant establishments.
Treasury
Within this business, the bank has three main product areas – Foreign Exchange and
Derivatives, Local Currency Money Market & Debt Securities, and Equities. With the
liberalization of the financial markets in India, corporate need more sophisticated risk
management information, advice and product structures. These and fine pricing on various
treasury products are provided through the bank’s Treasury team. To comply with statutory
reserve requirements, the bank is required to hold 25% of its deposits in government
securities. The Treasury business is responsible managing the returns and market risk on
this investment portfolio.
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MEANING AND TYPES OF LOAN
MEANING OF LOAN
Loan means a credit facility where the money is disbursed in the beginning, mostly in one
stroke, and later on only recoveries in the forms of installments take place in the account.
Very often the two words ‘Loans’ and ‘Advance’ are interchangeably used without abserving
any difference in their meanings. But there exists a fine degree of distinction between the
two words. Loan means a credit facility where the money is disbursed in the beginning,
mostly in one stroke, and later on only recoveries in the forms of installments take place in
the account. In case of ‘Advance’, credit facility is availed of as and when needed and
continuous debit and credit operations are made in the account, within the prescribed limit.
Thus, credit facilities repayable in installments are ‘loans’ and credit facilities like cash credit
and overdrafts where cheque book facility is also given ‘advances’. In case of loan, except
initial disbursal, no further debits are allowed barring interest being debited by the bank. The
account will have credit entries only by the way of recovery and balance outstanding will
gradually decline. But in case of Advance, cheque book remains with the borrower and any
number of debits and credits are permitted with in the agreed limit. In banking parlance,
mostly the deposits are payable on demand including term deposits, which too can be
discounted at any time and as such ‘Advances’ are preferred as compared to ‘Loans’ for
simple reasons that advance can be recalled on demand whilst loan will be repaid only in
installments over a long period. Although the logic of such preference is practically not
visible since the cash credit accounts are never repaid and only limits are enhanced every
year while the loans are at least paid back gradually. However, traditionally banks prefer
facilities which are payable on demand. Moreover, for granting loans, others specialized
agencies like State Financial Corporations have been promoted and they don’t sanction
advances.
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TYPES OF LOANS
Banks grant loans for different periods- short, medium and long, and for different purposes.
Broadly, the loans granted by banks are classified as Error! Bookmark not defined.
Short term loan
Short term loans are granted to meet the working capital needs of the borrowers. These
loans are granted for granted less than a year. These loans are granted against the security
of tangible assets- mainly the movable assets like goods and commodities, share,
debentures etc. since April, 1995 reserve Bank of India has made in mandatory for the
banks to grant a portion of bank credit to big customers in the form of loans, which may be
the various maturities. The reserve bank of India has also permitted the banks to roll over
such loans, i.e., to extent loan for another period at the expiry of the tenor of the first loan.
Medium term loan & long term loan
Medium and long term loans are usually called ‘Term Loan’. Medium terms loans are
granted for more than a year and less than three years and long term loans are granted for
more than three years and are meant for purchase of capital assets for the establishment of
new units and for expansion or diversification of an existing unit. Bank usually grants such
loans together with specialized financial institutions like Industrial Finance Corporation of
India, Industrial Credit and Investment Corporation of India etc.
Bridge loans
Bridge loans are essentially short term loans which are granted to industrial undertakings to
meet their urgent and essential needs during the period when formalities for availing of the
term loan sanctioned by financial institutions are being fulfilled or necessary steps are being
taken to raise funds from the capital market. These loans are granted by banks or by
financial institutions themselves and are automatically repaid out of amount of the term loan
or the funds raised in the capital market.
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Composite loan
When a loan is granted both for buying capital assets and for working capital purposes it is
called a composite loans. Such loans are usually granted to small borrowers, such as
artisans, farmers, small industries etc.
Consumption loan
Though normally banks provide loans for productive purposes only, but as an exception
loans are also granted on a limited scale to meet the medical needs or the educational
expenses relating the marriages and other social ceremonies etc. of the needy persons.
Such loans are called consumption loans.
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OBJECTIVES OF STUDY
To study the various complexities involved in the loan the HDFC.
To know the various loan provided by the HDFC bank.
To know the various requirements fulfilled by customers to get from HDFC bank.
To study the various facilities provided by HDFC bank to customers for taking loans.
Recommend the valuable suggestion which may increase the faith of new customers.
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LOANS PROVIDED BY HDFC
Home Loans
Personal loan
Car loan
Two wheeler loan
Commercial Vehicle loan
Loan against securities
Farm Equity Loans
Construction Equipment loan
Office Equipment loan
Medical Equipment loan
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AUTOLOAN (Car loans) AN OVERVIEW
A basket of options available – New cars/Used cars/ Car N cash.
Market leader in the auto loans business.
Evolved distribution and capacities.
HDFC Bank is operational in excess of 550 locations within the country.
Widely experienced in the auto loans business across the value chain.
Over 425 dedicated resources to handle the Auto loans business.
Loan facilities will be offered at all centers where your branch is operational (subject
to being auto approved locations).
Highly process oriented. Great emphasis on customer delight.
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FEATURES AND BENEFITS
Choose any car manufactured in India within a certain age.
Borrow up to 80% of the value of the car.
Flexible repayment option, ranging from 12 to 60 months.
Borrow up to 3 times your annual salary (for salaried professionals) and 6 times
your annual income (for self employed professionals).
Available for almost all car models at attractive interest rates.
Repay with easy EMIs.
Attractive car loan plans – To Fastrack your loan, just choose the plan that is right
for you.
Additional loan on existing loan – If you are a existing HDFC Bank Auto loan
customer with a clear track record of 12 months or more, then you can get an
additional loan to the extent of your existing loan amount at attractive rate of
interest.
Customer Privileges
Special benefits for HDFC Bank account holders.
If you have had preffered Account or a Corporate Salary Account with HDFC
Bank for more than six months, you can get fast approvals on your loans with
minimum documentation.
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PRODUCT OFFERINGS
New Car loans:
Funding of upto 100% of ex-showroom value
Tenors from 12-84 months
Competitive pricing
Unique credit shield offered along with loan-suraksha Kawatch
Insurance of car facilitated by the bank
Used car Loans:
Funding of up to 85% of valuation of car
Tenors from 12-60 months
Competitive pricing
Unique credit shield offered along with loan- suraksha Kawatch
Insurance of car facilitated by the bank
Car N Cash:
Refinance on your existing car
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APPLICATION PROCESS
The applicant may contact the nearest HDFC Bank branch for the best deal
available on the car of his choice.
The applicant need not visit HDFC Bank for documentation. The documents
may be handed over the HDFC Bank direct marketing associate/ dealer he is
dealing with.
If applicant wish to cancel his loan application and the loan has not yet been
disbursed, no letter is required. But if the loan has been disbursed, a letter is
requirement requesting for cancellation of the loan.
The applicant can apply for another loan and HDFC Bank shall sanction the
loan based To verify applicant status, contact the representative who is
processing his loan application.
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DOCUMENTATION REQUIRED
Salaried Individual Self-EmployedIndividual
Partnership Firm Private/Public Ltd. Co.
Application form Application Form Application Form Application Form
Photograph Photograph Photograph of signing partner
Guarantor’s Photograph (for private limited company only)
Proof of bank account continuity
One proof of income (ITR for the last two years)
Last two years’ income proof (audited account or ITRs+CA certified financials)
Last two years audited financials
One income proof for the last two years (ITR, Form 16, salary slip)
One proof of residence (driving license / voters’ identity card / ration card / passport / utility bills for the last 3 months)
Partnership deed Certified true copy of the MOA & AOA
One proof of identity (driving license / voters’ identity card / Passport / PAN card / photo credit card/ photo ration card)
One proof of residence (driving license / voters’ identity card / ration card / passport / utility bills for the last 3 months)
Partners authority letter
Board resolution (format available on request)
One proof of residence (laminated driving license / voters’ identity card / ration card / passport / utility bills for the last 3 months / company ID limited company or
One proof of office address (Utility bill / lease deed / excise or sales tax receipt / shops and Establishment Act Registration)
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Self Employed staying in Negative Area
Criteria Credit norms Deviation
Eligible borrower
segment
Salaried, Self employed individuals age > 30
yrs. Sole proprietorships age> 30 yrs
No Deviation
Age Salaried > 25 yrs Self Employed > 30 yrs No Deviation
Vehicle segment .A1, A2, A3, A4 and MUV To meet premium Car
Norms
Minimum income Salaried – 2 lacs annual
Others – 1.5 lacs annual income for
No Deviation
Repayment Mandatory for HRP2
Mandatory for A3, A4 and MUV segment
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Self Employed Staying in Negative Area
Criteria Banking and ownership proof Deviation
Vehicle
Segment
A1 and A2
Banking 6 months banking with AQB of 1.5 time of
the EMI
L1- for HDFC Bank a/c with
vintage > 3 months AQB of 1
time
LTV 65% for 36 month No deviation
Maximum loan
amt.
3 lacs for A1 and A2 No deviation
Profile HRP 2 not to be funded
Segmentation
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Others No Income
Criteria Banking and ownership
proof
Only Banking Deviation
Vehicle
Segment
A1,A2 and A3 A1,A2 and A3 No deviation
Banking 6 months banking with AQB
of 1.5 time of the EMI
6 months banking with
AQB of 2 times of the
EMI
L1- For HDFC
Bank a/c with
vintage > 3
months AQB of 1
time and 1.5 time
respectively
LTV 75% for 36 month
65% for 37 to 60 mts
70% for 36 month
60% for 37 to 60 mts
No deviation
Maximum loan
amt.
3 lacs for A1 and A2
4 lacs for A3
3 lacs for A1 and A2
4 lacs for A3
NO deviation
Segmentation
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Self Employed Individuals Age < 30 yrs
Criteria Credit norms Deviation
Eligible Borrower
segment
Self employed Individuals, sole
proprietorships with age less than 30
yrs but greater than 21 yrs.
Not to be an RCO – rented residence.
No Deviation
Vehicle Segment A1,A2,A3,A4 and MUV L4- for any other vehicle
Minimum Income 1.5 lacs annual income No deviation
Repayment Vehicle
Segment
A3 A4 &
MUV
No deviaton
Min
Repayment
3 Lacs 5 Lacs
Loan Eligibility Others 4 times of the annual income L1 – up to 10 & higher with
repayment track
LTV Without repayment
5% lower LTV as defined in LTV
matrix
10 % lower for tier 3 category of
vehicle with repayment
Normal LTV +5%
L2 – up to 5% higher
L3 – up to 10% higher
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CPV Guidelines
Contact point verification (CPV) includes:
Physical verification of residence and office
Tele verification at residence and office
Directory Check
Please Note : For co-opplicant also all the above has to be done
Status of the CPV will be based on all the factors mentioned below:
The address as given in the application form exits
The applicant / Co – applicants stay / work at the given address
The applicant is normally contact able at the given segment of the car
The standard of living is appropriate with the segment of the car
The third party confirmation are positive & there is no negative remark
Directory check confirming the address and the name of the customer including
relatives.
The vehicle should be for self/family/company use.
Please Note: Observations on Negative Area & HRP ½ would not result in the CPV
being termed as negative. In all such cases, the agency to highlight the observations –
but mark the CPV based on the above criteria only. For negative area cases, as
highlighted by CPV agency, the policy for negative area will be applicable. The CPV
agency should also provide information on the usage of the asset (Personal or
commercial) and if the asset is the for commercial use, the fleet size (no. of vehicles) of
the operator should also be provided.
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CPV Deviation Matrix
In cases where the CPV is marked as negative the below mentioned deviation grid will be
applicable
Condition Deviation Level
The address as given in the application from
does not exist
No deviation
The correct address to be obtained at CPV
conducted at the right address.
The applicant/Co-applicant do not stay/work
at the given address
No deviation
The correct address to be obtained at CPV
conducted at the right address.
The applicants normally not contactable at
the given contact address
No deviation
The correct address to be obtained at CPV
conducted at the right address.
No of times CPV fired on new addresses
excluding the application address
Exceeds 2
Exceeds 4
L2
L3
The standard of living is not appropriate with
the segment of the car
L2
The third party confirmation are not positive
or there may be some negative remarks
L2
Third party usage L3
As per application form vehicle for personal
use but as per CPV vehicle for commercial
use
L3
Any other deviations L3
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CPV Waivers
The CPV can be waived for cases meeting norms as mentioned below:
Criteria Residence CPV Business CPV TVR
Internal customer – F4 per
approved/pre qualified/
Preferred/ Imperia
Waived Waived Required
Internal liability customer –
salaried with at least one salary
credit with the company name
Required Waived Required
Internal liability customer –
others
Min six months vintage
Waived Required Required
Internal asset customer Waived Waived Required
CIBIL matches Waived Waived Required
For all liability customers
There should not be any instances of cheque book returned (or) statement
returned instance of address not confirmed.
The address in the bank statement / Finware should match with any one the
address – residence / office in the application form.
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For internal asset customer following conditions should be met for CPV waivers if the
loan is live
Account should be live at the time of new loan origination.
The address in Finnone should match with any one of the address – residence/office
in the application form
Closed loan – Loan should not have closed more than 6 months before the
application date.
For CIBIL Matches :
The match should be a good match of an installment loan with at least a 12 month
vintage and loan amount to be >=50% of the applied loan amount,
Any one of address – residence/office in the application form should match one of the
last two addresses in the CIBIL report.
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Contact ability
Segment Residence/ office stability
Job/Business stability
Contractibility
F4 Hotkey NA NA Landline / WLL at residence is required Or post paid mobile in the name of applicant.
Landline / WLL of office is required.
Repayment 2 yrs at current residence.
Not Applicable: If residence is owned
or for self employed office is owned or
Salaried working for super Cat A, Cat A & Cat B companies OR Repayment of at least 24 month
Salaried- 2 yrs in current job
Not applicable – If working for super Cat A, Cat A & Cat B companies
Self employed – 2 yrs in business
Not applicable – if office / business premises is owned
Landline / WLL at residence is required or post paid mobile in the name of applicantLandline / WLL at office is required
Corporates NA Self Employed – 2 yrs in business
Or co-applicant to meet the norms
Mandatory landline at office (Max. 8 digit telephone number)
Mandatory Residency Number / Mobile number of co applicant / partner / director
Salaried – Bigcorporates
Salaried – 1 year in current job and total work experience of 3 yrs. OR
Post graduate having 1 year of work experience
NA Landline at office AND
Mobile No OR Residence number of applicant
Premium Cars For self employed – 2 yrs at current residence AND to be owned (Parents name is acceptable)
For salaried – 5 years in current resi OR Company leased acco (super Cat-A/CatA) OR to be owned
Salaried – 1 year in current job and total work experience of 10 yrs.
Or Post graduate
working for super Cat A, Cat A and Cat B companies having 5 years of work experience
Self Employed – 5 yrs in business
Landline mandatory at office & residence
Mobile phone of applicant mandatory
Example of Higher LTV for Higher income without Deviation25
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LTV For salaried working for super cat A company
Vehicle Swift Dzire
Lone amount 6 lacs
Customer 1 Customer 2 Customer 3 Customer 4
Income 7 lacs 5 lacs 4 lacs 3 lacs
Loan amount/
income ratio
0.86 1.20 1.50 2.00
Eligible for LTV
(without
deviations)
Upto 100% Upto 10%
higher
Upto 5% higher Upto 5% higher
LTV For self employed going for premium car
Vehicle Honda accord
Lone amount 17 lacs
Customer 1 Customer 2 Customer 3 Customer 4
Income 12 lacs 10 lacs 8 lacs 5lacs
Loan amount/
income ratio
1.42 1.70 2.13 3.40
Eligible for LTV
(without
deviations)
Upto 15%
higher
Upto 10%
higher
Upto 10 %
higher
Upto 5% higher
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LTV For a Salaried customer in Other segment
Vehicle Honda City
Lone amount 7 lacs
Customer 1 Customer 2 Customer 3 Customer 4
Income 4 lacs 3 lacs 2.5 lacs 1.5 lacs
Loan amount/
income ratio
1.75 2.33 2.80 4.67
Eligible for LTV
(without
deviations)
Upto 5% higher Normal Normal Not eligible for
7 lacs
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Repayment – Definition
The repayment should be from the Banks, NBFC or Financial institution, who
share customer database with CIBIL.
Valid repayment proof – CIBIL, Statement of account, 12 months Bank EMI debit
Minimum 12 months clean repayment track or track of at least 50% competed
tenor whichever is less required
Loan should not have been completed before 18 months prior to the date of
application
There should not be more than 2 bounces in every completed 12 months
payment
There should not be more than 1 bounces in the last 12 months of the loan tenor
It should not have been more than once 30 days past due and should be current if
live.
Segmentation
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Repayment – Policy
Criteria Credit norms Deviation
Vehicle segment A1, A2, A3 and MUV segment vehicle as defined in
LTV matrix
No Deviation
Loan Eligibility Please Note: Eligible loan amount will be the lower of
EMI multiplier and loan amt. multiplier for applied
tenor <= 36 months and higher if applied tenor is > 36
month
L1 – for Funding
> Loan eligibility
up to 5%
L2 – for funding
> Loan eligibility
up to 10%
Product EMI multiplier Loan amt.
Multiplier
AL 50 times 1.5 times
PL 50 times 1.5 times
CV 25 times 0.5 times
LTV Repayment
(Vintage)
Int. Repayment Ext.
Repayment
12-24 months Normal Normal
No Deviation25-36 months +10% +5%>36months +15% +10%
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Companies, Firms, HUF’s and Trust
Definition:
> The eligible borrower segment should have cash profit in the current year and earlier
losses should not be more the capital (Subscribed share capital + reserves and surplus)
Criteria Credit norms Deviation
Minimum
income
1.5 lacs income required L1 – up to
10% lower
L2 – up to
20% lower
Loan
Eligibility &
LTV
criteria Income Multiplier
One car 4 3-3.99 2-2.99 <2
Multiple
Car
6-5 4-4.99 2-3.99 <
LTV Normal +5% +10% 100%
Vehicle
category
ALL ALL Only for
tier 1 & 2
Only for
tier 1 & 2
LTV As given above OR
10 % higher than the normal LTV with Repayment satisfying the
repayment conditions (earlier Loan Amt to be at least 50% of
proposed loan amt)
L3 – up to
5 % higher
Please Note : For Multiple cars – POS of all EMI obligation – only installment loans to be
considered (Banks, NBFC or any other – as evidenced by CIBIL / Bank statement) including
the current borrowing to be less than 6 times of the annual income.
Segmentation
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Others- With income (for 800 & Omni)
Criteria Credit norms Deviation
Eligible borrower segment Salaried, self employed individuals
age > 30 yrs,
Sole proprietorships age > 30 yrs
No Deviation
Category For Maruti 800 and omni
Min Income Salaried – 1.5
Others – 1.0
Banking 3 months banking with min. AQB of 1
times of EMI
LTV +5% on repayment of 50% of loan
amt. OR
Banking with AQB > 1.5 time EMI
Segmentation
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Others- With income below norms
Criteria Credit norms Deviation
Eligible borrower segment All Eligible borrowers as defined
under common criteria
No Deviation
Income proof Income proof required as defined –
with the minimum income being
For salaried – 1 lac
For other segment – Rs. 0.60 lac
No multipliers applicable
No Deviation
Vehicle segment Salaried – 1.5
Others – 1.0
No Deviation
Banking 3 months banking with min. AQB of 1
times of EMI
No Deviation
LTV +80 % for 36 months
75% up to 60 months
Max loan amount 4
No Deviation
Others Contractibility and stability norms as
defined above
No Deviation
Segmentation
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Auto Loans
CPV Policy
CPV Grid
For all cases, the verifications to be done are:
Residence verification
Office/Business Verification
Tele verification – Residence
Tele verification – Office
Directory check
For cases with co-applicants, the verification are to be done as detailed above for the co-
applicant also.
CPV Walvers
For the cases meeting the following norms, the verifications can be waived:
Residence CPV Business CPV TVR
Internal customer – F4
preapproved / prequalified /
preferred/ imperia
Waived Waived Required
Internal liability customer –
salaried with at least one salary
credit with the company name
Required Waived Required
Internal liability customer –
others Min Six months vintage
Waived Required Required
Internal asset customer Waived Waived Required
CIBIL Matches Waived Waived Required
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Auto Loans
For liability customer:
There should not be any instances of cheque book returned (or_ statement returned
instance of address not confirmed.)
The address in the bank statement / Finware should match with any one the address
residence/office in the application form
For internal asset customer following conditions should be met for CPV waivers if
the loan is live:
Account should be live at the time of new loan origination.
The address in finnone should match with any one of the address –
residence/office in the application form.
Closed loan – Loan should not have closed more than 6 months before the
application date.
For CIBIL Matches:
The match should be a good match of an installment loan with at least a 12
month vintage and loan amount to be >= 50% of the applied loan amount.
Any loan of address – residence/office in the application form should match
one of the last two addresses in the CIBIL report.
For all cases where CPV has been waived, and TVR is negative, both CPV’s to be done &
the same would be treated as per the normal CPV policy.
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Auto Loans
CPV Criteria
The CPV would be considered positive only if (all conditions to be met)
The address as givenin the application form exists
The applicant/co-applicant stay/work at the given address
The applicant is normally contactable at the given contact address
The standard of living is appropriate with the segment of the car
The third party confirmations are positive & there is no negative remark
Directory check confirming the address and the name of the customer including
relatives.
The vehicle should be for self/family/company use.
Observation on Negative Area & HRP ½ would not result in the CPV being termed as
negative in all such cases, the agency to highlight the observations – but mark the CPV
based on the above criteria only. For negative area cases, as highlighted by CPV agency,
the policy for negative area will be applicable. The CPV agency should also provide
information on the usage of the asset (personal or commercial) and if the assets for
commercial use, the fleet size (no. of vehicles) of the operator should also be provided.
In cases where the CPV is marked as negative basis failure on one of the above criteria, the
deviation grid for the same would be as detailed below:
In cases where the CPV is marked as negative the below mentioned deviation grid will be
applicable
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Auto Loans
Condition Deviation Level
The address as given in the application from
does not exist
No deviation
The correct address to be obtained at CPV
conducted at the right address.
The applicant/Co-applicant do not stay/work
at the given address
No deviation
The correct address to be obtained at CPV
conducted at the right address.
The applicants normally not contactable at
the given contact address
No deviation
The correct address to be obtained at CPV
conducted at the right address.
No of times CPV fired on new addresses
excluding the application address
Exceeds 2
Exceeds 4
L2
L3
The standard of living is not appropriate with
the segment of the car
L2
The third party confirmation are not positive
or there may be some negative remarks
L2
Third party usage L3
As per application form vehicle for personal
use but as per CPV vehicle for commercial
use
L3
Any other deviations L3
Within these broad guidelines, the CPV policy would be rolled out for each region – and any
changes to that would be authorized by the regional credit head. Any change to above
parameters would require PRH approval.
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Auto Loans
CONTANCT POINT VERIFICATION
CPV requirement:
Residence
CPV
Business
CPV
Telephone
CPV
Individual Self
Employed
Yes Yes Yes
Individual salaried Yes Yes Yes
Partnership Yes Yes Yes
Private limited Yes Yes Yes
Public limited-
Deemed
No Yes Yes
Public Ltd co-listed No No Yes
Cat A list of PL product
1. Telephone verification:
PP numbers are not accepted.
Post paid mobile are acceptable subject of landline/WLL at residence/office
Applicant must have Landline/WLL at either residence (or) office to quality for
a loan.
2. Residence CPVs:
For private limited companies, residence CPV of the director being taken as
guarantor would be required. In a public Limited co., residence CPV of a director
is not required but when the director is taken as a guarantor the same will be
required.
For partnership, residence CPV of the authorized partner would be required
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Auto Loans
3. If the CPV has been done by a Credit Manager/CPA manager, then a CPV sheet
needs to be duly filled by the concerned officer. Such a sheet can be taken in
addition to the regular CPV but not in lieu of the same. The same would need to
be reviewed.
4. Reference checks through TVR
5. In the case of salaried customers telephonic CPV at the office address has been
made mandatory or HR confirmation mail marked to Credit / Ops in the originating
mail. Since in the case of salaried business CPV cannot be conducted, such a
telephonic CPV will ad act a good surrogate to determine the existence/continuity
of the employment of the customer PL cat A list to be attached.
OBJECTIVE
The objective of CPV policy is to serve as a guide and reference point for Auto CPV
agencies, CP’V stands for CONTACT POINT VERIFICATION.
Purpose
CPV is a very critical tool and only physical touch point in the transaction to determine
whether to lend to the applicant, based on certain sub criteria as mentioned below:
From credit perspective
Evaluate car capability
Assess the standard of living of the applicant
Job / business profile
Residence stability
Level of business activity
- Third party validation through Neighbor check
- Collect negative market information, if any, available
- Re-confirm certain details of loan application
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Auto Loans
Collections Perspective:
Contact ability of the customer
Access and verification of the Asset/Car
CPV agency is expected to deliver quality service while collecting information on the above.
Service delivery parameters essentially cover the following aspects:
Adherence to product and process guidelines:
The following pages will detail various processes that are to be followed. The agency
proprietor/ supervisor will be responsible for management of day to day activities including
telecalling, field activities, data collation, data entry, report accuracy and general
administration.
Scope of policy:
Physical verification at residence
Physical verification at office
CD ROM/BSNL Check at the given telephone nos
Tele verification at the given nos
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Auto Loans
CPV Guidelines
Residence Verification
Objective Positive criteria Negative criteria (Any one)
Address confirmation Identify Address
Reach physically
OGL
Does not Exist
Not reachable / Difficult
Slum area
Suspicious case / stage managed
Does not reside / resident on a
temporary basis
Contact ability
(Current & Future)
Met applicant OR
Met family Member OR
Neighbor confirmed with
details
Under construction – stays
there
Met servant
Met watchman
Entry not allowed in
quarters details confirmed
over intercom
Permanent / parents/ in
laws residence
Family stays- applicant
comes only on weekends
No such person
Not a residence
Door locked- unable to confirm even
from third party
Guest house
Shifted
Relative address
Contact address
Under construction – does not stay
there
PG Acco. / lodge
Bachelor Accommodation
Met a person who refuses to reveal
identity
Residence stability
norms
Stability norms met else,
Salaried with CAT A
company
Owned residence
Confirmation of
Application
Positive Response to CPV Family member / Applicant says
not applied
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Auto Loans
Applicant not interested for other
reasons
Profile SOL Average & Above Profile mismatch
Politically active area
Slum area
Community Dominated Area
Reputation Positive Third party Check Active Politician
Negative remarks from family
members
Met recovery Agency Executive of
other Financial Institutions
In neg. base of Agency
Business Verification
Objective Positive criteria Negative criteria (Any one)
Address confirmation Identify Address
Reach physically
Different Name Board/ No
Name Board, but applicant
met and TPC confirmation
OGL
Does not Exist
Not reachable / Difficult
Unable to Trace
Contact ability
(Current & Future)
Met applicant OR
Colleague confirmed with
details
Receptionist in Big / Busy
office Confirms
Resident Office
Met Security (cm’s name
reflects on ownership
Name plate)
Entry Not allowed even
into reception Details
confirmed
In Night Shift only
C&F agency premises
Posted on Site / Location
No such person
Not a office
Door locked
Does not work here
Transferred / Resigned
Office dues not function regularly
Dealer premises
Always on Field/tour
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Auto Loans
(except construction cos)
Receptionist in small firms
confirms HO/Branch
Address
Confirmation of
Application
Positive Response to CPV
Not interested due to
repeated verification
Colleague Refused to Provide
Details
Profile Profile mismatch to be flagged for
poor SOL . segment A2 (segment B)
No / Low Biz activity
No office infrastructure
Designation differs substantially
No employees found
Trader / Manufacturer – No stocks
Found
Office Cum Residence – with No
clearly defined Biz space (exclusive
CA, Doctors, Advocates)
Office appearance poor
Office Area < 150 sq. ft
Shared Biz premises
NTP Biz – Wine shops etc.
Reputation Colleague confirms app already owes
money to lot of people
Political flags/photos sighted
Political contacts
Note:
HRP/ NTS Profiles
Negative Area
For above cases the CPV would not be flagged as negative but the report should carry it as
BOLD qualitative comment.
Residence Telephone Verification
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Auto Loans
Objective Positive criteria Negative criteria (Any one)
Address confirmation Phone call connected to
the Number
SDCA No (95,91 calls)
Mobile / Will no
RNR
Does not Exist
Perpetually Engaged
STD Call
PP No
Service Temporarily Withdrawn
Disconnected
Number Changed
Contact ability
(Current & Future)
Spoke to Applicant
Family Member
Spoke to servant
Permanent / Parent / In
Laws Residence
Wrong No
Not a Residence
Unable to Confirm
No such person
Shifted
Relative Address
Guest House
Bachelor Accommodation
PG Accommodation
Person who refuses to reveal
identity
Confirmation of
Application
Positive Response to CPV
Not interested due to
repeated verification
Family member / Applicant says not
applied
Applicant says not interested
Family Member Refused to provide
Details
Details do no tally
Reputation Family member saying don’t Give
Indicates applicant is being followed
up by collection agencies of other
banks
Residence Telephone Verification
Objective Positive criteria Negative criteria (Any one)
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Auto Loans
Address confirmation Phone call connected to
the Number
SDCA No (95,91 calls)
Mobile / Will no
RNR
Does not Exist
Perpetually Engaged
STD Call
PP No Shared No
Service Temporarily Withdrawn
Disconnected
Number Changed
Contact ability
(Current & Future)
Spoke to Applicant OR
Colleague
Spoke to Receptionist
OR Security
OR a person who refuses
to reveal identity
Permanent / parents / In
Laws Residence
Wrong No
Not an office
Unable to Confirm
Required Extension / Dept to
connect
No such person
Shifted Friends / Relatives No
Dealer No
Confirmation of
Application
Positive Response to CPV
Not interested due to
repeated verification
Applicant says not interested /
Applied
Details do not tally
Colleague Refused to Provide
Details
Profile NTP Biz / Salaried
Reputation Colleague says don’t Give
CD Rom Check mandatory and status to be updated in TVR Positive / Negative
CD ROM / BSNL check
Name & Address Name matches Only address Name & Not found /
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Auto Loans
matches matches address does
not match
other TELCOS
Positive Negative (Positive
if ownership proof
provided of the
same address)
Positive Negative Neutral
Only address matches required proof of relationship
The status as per matrix be updated in TVR in LOS
For negative flagged cases proper reasoning to be documented in CAM if overridden
CPV Waiver
Residence
CPV
Business
CPV
TVR
Internal liability customer - salaried Waived Waived Required
Internal liability customer - self employed Waived Required Required
Internal asset customer – salaried Waived Waived Required
Internal asset customer – self employed Waived Waived Required
Internal customer asset and liability- firms
& companies
Waived Required Required
CIBIL matches – salaried Waived Required Required
CIBIL matches – self employed Waived Required Required
CIBIL matches – firms & companies Waived Required Required
Conditions
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Auto Loans
1. For internal liability customer minimum account vintage should be 3 months and
there should be minimum six transaction in last 3 months excluding interest and any
other charges debited or credit in the account.
There should not be any instances of cheque book returned (or) statement returned
instance of address not confirmed.
The address in the bank statement / Finware should match with the address in the
application form
2. Internal asset customer following conditions should be met for CPV waivers.
Account should be live at the time of new loan origination.
The address in finnone should match with the address in the application form
3. For CIBIL Matches:
The address in the CIBIL report should match with the application form
The proof of the same should be in the file.
Should not be a bad match
Interpretation of CPV:
Base don above criteria on each of the parameters over all status of the CPV
report has to be marked positive/Neutral/Negative
Positive : (all the below criteria to met)
Address confirmed and reachable
Customer to be Residing/Employed/Business exists at the given address and
should not be figuring in the negative criteria as per the grid
Third party confirmation of the customer details Residence/Business/Employment
Negative:
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Auto Loans
Customer and Address doesn’t exists (or) does not live there
Negative feedback on profile & reputation parameters in the grid
Below are the minimum credit parameters which are required at the time of Login.
A) Common Credit parameters
Residence ownership proof required in the name of applicant or blood relative in resi
cum office cases.
In NRI and foreign nationals cases, resident Indian having owned residence in India
must stand as co applicant.
Net worth of Pvt Ltd company/Ltd company must be positive. (Subscribed share
capital + reserves – Amount not written standing in asset side of balance sheet.)
B) Program wise Credit parameters
1. F4 Hockey program – Pre approved and pre qualified
Landline/WLL at office is compulsory required in addition to Landline/WLL/post paid
mobile the name of applicant at residence.
Firm/company should stand as co applicant if partner/director wants loan based on
income of business entities and vice versa.
Not to be funded to Trust and HUF, hence file not to be login.
2. Repayment Track program
Minimum 12 months repayment track or track of atleast 50% completed tenor
whichever is less required.
Loan should not have been completed before 18 months prior to the date of
application.
A4 segment vehicles not eligible under repayment track program, hence no file to be
logged in.
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Auto Loans
Self employed individuals having residence in negative area, HRP 1 and HRP 2 not
to be funded under the program, hence no file to be logged in.
Only one vehicle can he funed under this program but can fund maximum 2 vehicles
to CV customer.
Minimum repayment of Rs. 1 Lacs for A1 and A2 segment car, Rs. 3 lacs for A3
segment car and Rs. 5 Lacs for MUV required at the time of login.
Not to be funded to Trust and HUF, hence files not to be logged in.
3. Companies, Firms, HUF’s and Trust
Customer should have cash profit in the current year and earlier losses should not be
more than the capital (subscribed share capital + Reserves and surplus).
One of director/partner/karta/trustee should be co applicant.
Co applicant not required for companies having turnover > 100 crores OR Profit > 1
Crore.
Landline at office (8 digit) compulsory required along with Landline/Mobile/WLL at
residence of partner/director/karta/trustee.
HUF cannot be a partner in partnership firm and hence files not to be logged in.
4. Salaried-Big corporates
Applicant should be employed with super CAT A/ CAT A/ CAT B/ CSA holder with
hdfc bank with 6 consecutive salary credits are eligibles.
If applicant is not working at above companies but if blood relatives (parents, spouse
or children) are employed with above companies and stands as co applicant then can
be logged in with income dox of co applicant.
5. Preminim cars
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Auto Loans
Minimum annual income should be 7.5 lac for salaried and Rs 5 Lac for others
Repayment of ½ of proposed loan or salaried having credit card limit of 3 lac
documentary proof should be there.
Bank statement should be provided at the time of login.
6. Deep geography
Vehicle segment under this category should be A1, A2, A3, A4 and MUV no other
vehicle should be logged in.
Land line and resi and office mandatory
Resi ownership proof mandatory
Banking with 3 Months statement at the time of login
7. Taxi Segment
Salaried employees file under this prog. Should not be logged in.
No of RC should be there as per the policy norms
To calculate the DSCR and D/E ration financials are must for logged in the files.
Rapyment should be there.
8. NID (other than HRP/NTS)
Only eligible models A1, A2 and A3 should come for logged in with cap on Max Loan
amount and LTV should be adhere.
6 month bank statement should be provided at the time of logged in.
9. HRP1 And HRP
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Auto Loans
Appl. Should come for eligible vehicle segment A1,A2,A3,A4 and MUV
Repayment mandatory for HRP 2
Min age norms of 25 yrs for salaried and>30 yrs for self employed should adhere.
10.Self employed>30 yrs
Repayment for A3 and MUV is mandatory
No rented resi cum office should be logged in.
OFF MARKETING CHANNELS
50
Auto Loans
OFF MARKETING CHANNELS are basically involve into their primary business or
profession like Chartered accountants, stock Brokers and as an extra source of income they
work as the channel partners for different companies or financial institutes by selling their
different products. E.g. Loan investment etc. to their own existing customer base.
This leads to a two way benefit both to the channels as well as the companies they
are associated to. For these channels it is an extra source of income for which they need to
search customers as they are existing customers for the financial institutes. Resulting it
leads to a low cost business as they need not to pay high commission to these channels
and most importantly it gives a non delinquent customer base to these institutes.
Identified Off-Marketing channels till date:-
1. KARVY
2. ANAND RATHI SECURITIES
3. HDFC LTD.
4. BAJAJ CAPITAL
5. CHARTERED ACCOUNTANTS
Main channel trapped
CHARTERED ACCOUNTANTS
Benefits
- cost efficient
- Business gained is at low cost as compared to marketing channels.
- Commission given to marketing channels is near about 4-5% whereas in the case of
off-marketing channels it is about 2%.
- More clientage
- High profile clientage
- Good business
ANALYSIS OF SURVEY
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Auto Loans
- UNIVERSE (RAJASTHAN) – 5089
- SAMPLE TAKEN (RAJASTHAN) -294
- BIZ SOURCE (RAJASTHAN) 88
MAY
TGT V/S ACHIVEMENT
OPEN
Location Business volume Total DSA DDSA HBL CA
Jaipur 800 596 238.06 357.94
600 543.71 344.15 199.56
200 25.9 25.9 0
400 357.15 0 0 357.15 0
Alwar 100 86.18 34.94 19.1 32.14 0
Kota 300 290.82 176.05 43.82 70.95 7.75
Ajmer 300 293.12 199.78 67.44 25.9 4.8
Bhilwara 225 185.67 131.54 0 54.13 13.77
Udaipur 500 459.38 3852.21 19.87 57.3 16.31
Jodhpur 525 531.54 305 119.25 107.29 8.1
Bikaner 150 123.21 49.62 0 73.59 0
Rajasthan 4100 3492.68 1887.25 826.98 778.45 50.73
JUNE
52
Auto Loans
TGT V/S ACHIVEMENT
OPEN
Location Business volume Total DSA DDSA HBL CA
Jaipur 600 513.05 258.89 254.16
600 538.1 348.19 189.91
65 0 0 27.96
285 339.2 339.2
Alwar 80 103.51 23.91 2 77.6 0
Kota 225 238.54 91.92 96.04 50.58 7.05
Ajmer 250 317.71 152.48 117.64 47.59 1.8
Bhilwara 225 156.28 98.92 3.04 54.32 18.99
Udaipur 400 360.31 251.77 33.81 74.73 8.25
Jodhpur 450 441.56 204.97 155.43 81.16 15
Bikaner 120 103.34 41.45 0 61.89 7.23
Rajasthan 3300 3111.6 1472.5 852.03 787.07 86.28
FEEDBACK53
Auto Loans
As the result of the survey, a positive feedback as observed. The CA’s are excited by the
new avenues of the income. According to them it gave them an effortless extra source of
income on one side and also helps them to strengthen their relationship with existing
customers.
The customers are also benefited with this venture as previously they had to deal
with the dealers but now they can avail the products and services with the help of the
type between the bank and the channel. Moreover this also gives an additional customer
base to these channels as they get references from their existing customers who avail
these services.
CA’s are happy to be a channel of the bank. They showed excitement and
satisfaction towards the work process and the services of HDFC. In total to sum up it can
be said that this new channel policy seems to be beneficial and fruitful for all the three
parties i.e. company, channel and customers.
SWOT ANALYSIS54
Auto Loans
STRENGTHS
Low in cost
Quality business
High profile clients
WEAKNESS
CA’s generally tend to be busy, so approaching them is difficult.
Gaining attention towards the proposal becomes difficult
OPPURTUNITY
Anand Rathi securities
Karvy
HDFC ltd.
Bajaj capital
THREAT
Delinquency control
Collateral on records.
SUGGESTIONS55
Auto Loans
Loans should be provided very easily.
There should be less formality for taking loan.
Terms and conditions should be easily understandable.
Loan should be provided as soon as possible.
Interest rate should be less as compare to other banks.
The customers should be comfortable while taking loans as compared other banks.
BIBLIOGRAPHY
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Auto Loans
By the help of Manuals
HDFC Bank report 2008 and internet
By the help of Other Sources
By the Heads & the consultant of HDFC bank
By Personal Surveys
By the helps of Websites
www.HDFCBank.com
www.google.com
57
