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2010

HDFC

CHANDIGARH

A REPORT ON COMPARATIVE ANALYSIS OF HOUSING
LOAN SCHEMES OF HDFC LTD. WITH OTHER FINANCIAL
INSTITUTIONS AND FINANCIAL ANALYSIS OF HDFC LTD
FOR THE YEAR 2008-09 & 2009-10

SUBMITTED TO: SUBMITTED BY:
MR. PRABHUJEEV BAJAJ GOURAV SHARMA
MARKETING HEAD, MBA 3rd (Finance)
HDFC LTD.,CHANDIGARH 94512236916

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ACKNOWLEDGEMENT

It gives me immense pleasure to express my deep sense of Gratitude to Miss Mandeep
Mahendru, coordinator, for her valuable guidance and consistent supervision throughout the
course.

I am highly indebted to Mr. Prabhujeev Bajaj, Marketing Head, HDFC LTD.
Chandigarh for his very personalized and invaluable help, advice, guidance and
encouragement which culminated in this project. His constructive comments and
contributions had been of immense help for giving a tangible shape to this project. It was a
real value added experience for having worked under his stewardship. At last, I am thankful
to all respondents who cooperated with me by providing information for the compilation of
this project.

I am extremely thankful to Prof. Anupam Gupta, Faculty Guide, GIAN JYOTI
INSTITUTE OF MANAGEMENT AND TECHNOLOGY, for her timely guidance and
support throughout the Final Report work. In the course of carrying out the Project work.

Finally I am indebted to our other faculty members, my friends who gave their full-
fledged co-operation for successful completion of my project.

It was an indeed a learning experience for me.

Name of the Student: Gourav Sharma
Enrollment No.: 94512236916

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ABSTRACT
During My summer internship in HDFC LTD., Chandigarh, I was assigned a project
regarding Home Loans. This project has been completed in parts. First part consists of
comparative study of “Comparative Study of Home Loans provided by HDFC LTD. With
other financial institutions” and the second part was “Financial Analysis of HDFC LTD.
For the financial years 2008-09 and 2009-10 “
This was a step wise process including collection of data, Company Profile, Product Features,
Analysis of data, and finally concluding the data while putting some suggestions. The whole
study was done with a view that it would help HDFC maintain its expansion path and
improvise their schemes to perform better than other financial institutions.
It was the best platform being provided as it has increased my horizons and has given me the
opportunity to apply my theoretical knowledge and managerial concepts practically in the real
business.

DECLARATION
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I, Gourav Sharma, student of “Gian Jyoti Institute of Management & Technology” hereby declare that
I have completed this project on title of “Comparative Analysis of Housing Loan Schemes of
HDFC LTD. with other Financial Institutes and Financial Analysis of HDFC LTD. for
the year 2008-09 & 2009-10” is an authentic work done by me and it is my own hard work and
effort under the guidance of Mr. Prabhujeev Bajaj, Marketing Head, HDFC LTD.
Chandigarh in the academic year 2009-2011.
I declare that the information submitted is true and original to best of my knowledge.

DATE____________ Gourav Sharma

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WEBLIOGRAPHY………………………………………….COMPARATIVE ANALYSIS…………………………….39-40 .53-76 8. SUGGESTIONS AND RECOMDENTATIONS……………79-80 10.6-9 2.. 1..FINANCIAL ANALYSIS…………………………………...18-29 5. MARKET PLAYERS……………………………………….30-36 6.81-82 5 .. OBJECTIVE OF STUDY……………………………………16-17 4. Table of Contents CHAPTERS PAGE NO. LIMITATIONS OF STUDY…………………………………77-78 9. DATA ANALYSIS AND INTERPRETATION……………..37-38 7.. COMPANY PROFILE……………………………………….41-52 . INTRODUCTION…………………………………………….10-15 3. RESEARCH METHODOLOGY……………………………. PROCEDURE OF HOME LOAN………………………….

CHAPTER 1 HDFC Ltd.  INTRODUCTION: 6 .

According to the National Building Organization (NBO). The importance of the housing sector in the economy can be illustrated by a few key statistics.4 million units. 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. the total demand for housing is estimated at 2 million units per year and the total housing shortfall is estimated to be 19.  Business Objectives: Helping Indians experience the joy of home ownership. Having identified housing as a priority area in the Ninth Five Year Plan (1997-2002). 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. the skill to understand your clientele and the desire to give them your best. All you need is the courage to innovate. the National Housing Policy has envisaged an investment target of Rs. In order to achieve this investment target. has been to enhance residential housing stock and promote home ownership. 1. Now. As they found out nearly three decades ago. HDFC was promoted with an initial share capital of Rs. Their objective. their offerings range from hassle-free home loans and deposit products. Housing Finance Sector: Against the milieu of rapid urbanization and a changing socio-economic scenario. in 1977. the Government needs to make low cost funds easily available and enforce legal and regulatory reforms.76 million units is from rural areas and 6. stand testimony to their success. 7 . nearly three million satisfied customers whose dream they helped realize.that of promoting home ownership by providing long-term finance to households for their housing needs. They also offer specialized financial services to their customer base through partnerships with some of the best financial institutions worldwide. of which 12. and to promote home ownership. The housing industry is the second largest employment generator in the country. to property related services and a training facility.64 million units from urban areas.HDFC was incorporated in 1977 with the primary objective of meeting a social need .500 billion for this sector. the demand for housing has grown explosively. 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 man-years of indirect employment. the solution for success is customer satisfaction. Today. from the beginning. 100 million.

He was a true development banker. In 1956 he began his lifelong financial affair with the economic world. he went on to become a towering figure on the Indian financial scene. He rose to become Chairman and continued so till his retirement in 1972. His vision for mortgage finance for housing gave birth to the Housing Development Finance Corporation . At the ripe age of 60. • Transform ideas into viable and creative solutions. His building up HDFC without any government assistance is itself a brilliant chapter in financial history. but. Parekh started his financial career at Harkisandass Lukhmidass . Mr.a leading stock broking firm. • Maintain its position as the premier housing finance institution in the country. and • To grow through diversification by leveraging off the existing client base. even more illustrious than his first.  Organizational Goals: HDFC's main goals are to: • Develop close relationships with individual households. who left this earthly abode on November 18. His wisdom and warmth drew people from all walks of life to him. guidance and inspiration soft spoken man of few words.  Organization & Management: 8 . long before that. as General Manager of the newly-formed Industrial Credit and Investment Corporation of India (ICICI). Gujarat. Parekh nevertheless held strong and definite views with a quiet conviction. Mr.it was a trend-setter for housing finance in the whole Asian continent. • Provide consistently high returns to shareholders. The firm closed down in the late seventies. for advice.  HDFC Founder: MAN WITH A MISSION: Hasmukhbhai Parekh If ever there was a man with a mission it was Hasmukhbhai Parekh. improving and encouraging communication between people. Hasmukhbhai started his second dynamic life. their Founder and Chairman-Emeritus. Born in a traditional banking family in Surat. 1994. He was always concerned with building bridges.

accountancy. Click here for details of Senior Management. professionals who represent various fields including finance. 2009). designed to deliver increasing value to stakeholders. engineering and marketing. taxation. 9 . policy and control. law.HDFC is a professionally managed organization with a board of directors consisting of eminent persons. construction and urban policy & development. The board primarily focuses on strategy formulation. which includes professionals from the fields of finance. HDFC has a staff strength of 1490 (as on 31st March.

CHAPTER 2 10 .

PURPOSE 11 . Proposed owner of the property will have to be co-applicants. HDFC HOME LOAN PRODUCTS 1) Home Loan 2) Home Improvement Loan 3) Home Extension Loan 4) Land purchase loan 5) Short Term Bridging Loan 6) Loan to Professionals for Non Residential Premises 7) Home Equity Loan • HOME LOAN HDFC offers loans to individuals to purchase (fresh/resale) or construct houses. Home loan be applied individually or jointly. However the co-applicants need not to be the co-owners.

tilling and flooring. water proofing.  Property in an existing or proposed cooperative society or apartment. plumbing and electric works. bungalow from developers. MAXIMUM LOAN 85% of the cost of property (including the cost of land) and based on the repayment capacity of the customers. grills and aluminium windows.  Purchase of flat. ELIGIBILITY • Salaried employees • Self employed professionals • Self employed businessman • Applicants can either be Resident or Non-Resident • Age of the applicant should not be more than 65 years • HOME IMPROVEMENT LOAN Home improvement loan facilitates internal and external repairs and other structural improvements like paintings. MAXIMUM TERM 20 years subject to the retirement age. row house.  Self construction. PURPOSE External repairs Tilling & flooring Internal & external flooring Waterproofing and roofing Plumbing & electric work Grills & aluminium windows Construction of underground/ upper water Paving of compound walls (with stone/tiles tank etc) Bore well Waterproofing on terrace 12 .  Existing freehold properties.

PURPOSE This loan is specifically for the extension purpopse. MAXIMUM TERM 20 years subject to retirement age. Be it an additional room. MAXIMUM LOANS  For Existing customers : 100% of the cost of improvement  For New customers : 85% of the cost of improvement  MAXIMUM TERM 15 years subject to retirement age. • HOME EXTENSION LOAN Home extention loan facilitates the extension of an existing dwelling unit. whether it be to build a house or an investment. MAXIMUM LOAN 85% of the cost of extention. MAXIMUM LOAN 13 . a larger bathroom or even enclosing an open balcony. • LAND PURCHASE LOAN PURPOSE HDFC Land purchase loan is a convenient loan facility to purchase land. This type of loan makes it convinient to extend or add space to home.

PURPOSE  Purchase  Constuction  Improvement of office MAXIMUM LOAN 85% of the cost of property MAXIMUM TERM 15 years subject to customer retirement age. Hence customers gets 2 years to sell the property repay the loan. 85% of cost of land and based upon the repayment capacity of the customer. MAXIMUM LOAN 90% of the cost of new property MAXIMUM TERM : 2 years • LOAN TO PROFESSIONALS FOR NON RESIDENTIAL PREMISES This loan facilitates professional to purchase and construct their own office premises or even renovate their existing office premises. • SHORT TERM BRIDGING LOAN PURPOSE Short Term Bridging loan makes customer realize their dreams of buying a bigger and better home and give them time to sell their existing property to pay off the loan. Customers repay the loan by paying monthlyinstallment or interest on the loan with the lump sum payments within 2 years. This is a short term loan to help customers with the interim period between the sale of their old homes and the purchase of a new home. MAXIMUM TERM 15 years subject to customer retirement age. • HOME EQUITY LOANS 14 .

• For new customers: 50% of the market value of the property. MAXIMUM TERMS PROPERTY TYPE REPAYMENT OPTION NO. HDFC Home equity loans helps to encash the present market value of the property by taking a loan by mortgaging the property. PURPOSE  Higher eduation of the children  Marriage expenses  Medical expenses  Business purpose MAXIMUM LOAN • For Existing customers: 60% of the market value and present loan outstanding. OF YEARS Residential EMI Based 15 Non Residential EMI Based 10 Residential & Non Residential Simple Interest 2 15 .

CHAPTER 3 MAJOR OBJECTIVES 16 .

• To know about the HDFC home loan and its products. 17 . • To have the first hand information on loan procedure. • To compare the performance of HDFC with other market players. • To study about the financial position for the financial year 2009-10 in comparison with position in financial year 2008-09. sanctioning and disbursement in HDFC ltd.

CHAPTER 4 18 .

This is because these stages are taking place simultaneously and one application is being taken care for by the experienced employees of both HDFC Ltd service centre. STAGES OF HOME LOAN Applicati on Data Logi Scanni Entry ng Recommendati on Over (ROVR) Double Sanctioni Checking Disburseme ng nt of the Over loan After Sales Services The representation shown above is not a perfect copy of the actual process. Here all the documents in the application are reviewed by the experienced staff 19 . Also the applicant may be asked to send information or may be asked questions regarding his requirement and/or his documents for his own convenience Hence the loan application may or may not shuttle through different stages  APPLICATION STAGE This is the stage where the Application Form first reaches the concerned Service Centre/ workstation.

FOIR. The credit appraisal of the loan application starts at this stage.The interview sheet helps to cut corners and helps save time by not having other employees to go through the documents again and again . if the documents are duly filled. In case any document is missing the applicant is contacted electronically or by mail or by telephone and requested for the document to be submitted. is created under which all the loan processes will be carried out. Family background and permanent address etc 5. The credit worthiness of the applicant is calculated here. Obligations 9. IIR. The HDFC Ltd employee who reviews the file checks to see whether all documents are present and in their proper place.Name of borrower 2. It is also at this stage that the QUICK DATA ENTRY of the loan application is done to create a serial no. Remarks: This column contains the various findings that the employee has found out after thorough review of the applicants documents such as bank statement.It hence acts as a source of quick reference. The number that has been generated is communicated to the applicant by means of a letter and/or electronic communication. Gross Salary 6. It contains various simple entries like 1. Hence the interview sheet contains the important findings which the employee has Collected after careful review of the various documents . not fake. Income details 4. Other incomes 8.present at the workstation. The system of electronically recording the data helps to create ready reference.  The next and important processing performed at the workstation is that of filling up a document known as the INTERVIEW SHEET for processing individual loans.helps in quick and easy processing of the data. Name of co-borrower 3. Rental 7. After that another page appears and more data is entered . It also helps to very easily and quickly share data with other employees of HDFC. Loan Eligibility ratio etc. of the application. attested by authority and present in order. This exercise is called FOLLOW UP. The workstation employees compute the gross salary. salary slip etc.It is now that a special and unique LOAN A/C NO. a proof . After all this has been performed well enough the loan application will be arranged 20 .

. After it has 21 . At this stage certain specially appointed persons have been given the responsibility of recommending a loan These people have to take special care of reviewing every document. etc. These officials review the various parts of the file again and perform many specialized tasks.They should have completed a select number of years with the company and should have shown exemplary performance and must possess experience.  DOUBLE CHECKING OVER As the name suggests at this stage a specially appointed person will double check all the past proceedings. and can also be shared and utilized by other employees of HDFC Ltd. This helps to create their electronic copy which acts as a ready reference. An exhaustive amount and type of information has to be entered into the ILPS system ranging from Personal Details. a proof. HDFC takes great care while appointing double checkers . They will examine the Loan file for any discrepancies.  RECOMMENDATION OVER (ROVR) The Recommendation over is also referred to as the First Appraisal. Data entry is also one of these tasks . The Double checker is responsible for the ultimate sanctioning of the loan . Next step is scanning of the documents.in a file and all it will be given its loan a/c no which also acts as its file no. This is because a mistake at this stage can cause a great loss to the company. If it considers the loan suitable to be sanctioned it gives it approval . any missing and /or misplaced documents. The file is now ready to be sent to the HUB (Senior Officers) where further processing will take place. the Credit Appraisal results. and all the small details that need to be considered before considering the loan application to be valid. At this stage if any correction or mistake is present it can be sent back to the workstation. This is a very important stage and must be handled with exceptional care.  DATA ENTRY The file has been sent to the bank head office or the HUB .At HUB there are many experts with their own specializations. After this the file is sent to another specially appointed person as explained below.If any mistake is done at this stage there is no going back and hence no protection.This entry is much more different and complex as compared to the earlier performed Quick Data Entry. Employment Details to Property Rate History and Customer Interactions.  SANCTIONING An authorized sanctioning authority within HDFC itself will review the remarks of Double Checker.  SCANNING In this stage the various important documents of the applicant are scanned.

The organization may be public or private.HDFC try to compute the credit worthiness of a salaried person . 2. CREDIT APPRAISAL Credit appraisal is one of the most important and significant step in the Home Loan process.given its approval stamp the ILPS system will automatically send a letter to the Applicant that his loan has been sanctioned. The person must have proof to prove his employment like credit documents etc. However the Applicant is expected to finalize the property in a short time A Property Address is necessary to: 1. The borrower hereby acknowledges the receipt of the loan disbursed as indicated in the receipt. As conducting Business in modern times is a capital intensive 22 . In case of home loans we either create new accounts or maintain pre existing ones. CATEGORIES In case of Credit appraisal there are three main categories: 1. which is then sent to back office for processing which is called HUB. Credit Appraisal starts from the moment.  SPECIAL CASE A special case can arise if the applicant has not mentioned the property for which he wants to take a loan. After the sanctioning has taken place the applicant becomes a registered customer of HDFC Ltd . SELF EMPLOYED PERSON The nature of Credit Appraisal done for a self employed applicant is slightly more complex.The loan shall be disbursed in one Lump sum or in suitable installments to be decided by HDFC with reference to the need and/or progress of construction. This is due to the presence of enormous bank statements as well as transactions involved in business. the documents for Loan from the customers has taken.It means that the person should be employed as an employee in a recognized organization.He/She can now take the disbursement of the loan from any of the various service centre of HDFC . In that case the applicant can let the case be remain pending . After this approval the Applicant can go to whichever Service Centre to get his loan disbursed. Get the loan disbursed 2. SALARIED PERSON Here the Credit Appraisal is done for a salaried person . Credit appraisal is however a part of sanctioning new loans or enhancing the existing one. This means that the Applicants loan request will be considered to be complete even though he has not decided the property. Process the Legal and Technical Appraisal of the property and its Papers.  DISBURSEMENT The last and final stage in the Home Loan process is that of disbursement.

Chartered accountants . Also care should be taken in places like the decimals and rounding off.For this very purpose HDFC Ltd has appointed Specialized Credit Appraisers and a specialized Self employed Committee. Credit card etc. Apart from that their income statements are also quite complex due to presence of many components.Hence it necessary to take all precautions. Hence in the case of a self employed person demanding a loan the credit appraisal has to be done very carefully . The data entry in the system must match the actual data. Only HDFC recognizes these professionals as a separate category and has hence developed a comparatively smoother procedure for their Credit Appraisal and sanctioning of loan. The precaution taken by HDFC in this case is that it contacts CIBIL (Credit Bureau of India Ltd) which is the mega Repository of financial data in India . All calculations must be done with correct figures. In these conditions it is difficult to correctly compute the credit worthiness of the person. The common situation in this case are A. He has not revealed of any loan that he may be paying off from an undisclosed bank account in any other bank B. process the bank statements of self employed persons are large and much more complex. Engineers etc. 3. He is not disclosing information related to any defaults. SELF EMPLOYED PROFESSIONAL The self employed professionals include people like Doctors. CIBIL passes on the information by means of a fax containing all revolving accounts. They handle the important job of appraising the credit worthiness of the self employed applicants.This will lead to loss to both HDFC and its honest customers.HDFC electronically requests CIBIL to reveal information it possesses pertaining to the persons financial obligations. Revolving accounts such as Debit card. TERMS AND CONDITIONS OF HDFC HOME LOANS 23 . The source of the data should be mentioned so that another person may easily verify the facts and figures Sometimes it may happen that the Applicant has intentionally or by mistake not mentioned the full status of his obligations. PRECAUTIONS The credit appraisal is an important step for both the borrower and HDFC . The statement runs into a large number of pages due to the multiple numbers of transactions. The data entries should not be going outside the space provided to them. These consist mainly of Chartered Accountants. loans and liabilities. As a result an unscrupulous element might get a loan .

spouse income. RESIDENCE PROOF IDENTITY PROOF Ration Card Driving License Passport Passport Bank Account Statement Pan Card Voters Identity Card Voters Identity Card Letter from recognized public authority Identity Card issued by Employer(if employed in state/central Govt. assets. 6. stability and continuity of occupation and saving history. mention on a separate sheet details of occupation for previous five years . liabilities. If an applicant have been present employment /business or profession for less than a year. Copy of the approved drawings of proposed construction /purchase /extention. giving position held. Any other information regarding your repayment capacity that is necessary and will assist HDFC in appraising the loan proposal. 2. Agreement of sale /sales deed /detailed cost estimate cost from architect.HDFC has always been market oriented and dynamic with respect resource mobilisation as well as lending programme.) 7. qualifications. Residence proof and Identity Proof.  Maximum loan amount to an individual connot exceed Rs 1crore. It provides loans to meet all requirements of the customers to make their house a home. 3. Necessary documents required are as follows. 4. Allotment letter of the co-operative society /association of apartment owners. LOAN AMOUNT CONDITIONS  HDFC finances upto 85% maximum of cost of property (agreement value + stamp duty + registration charges)  Repayment capacity takrs into consideration factors such as income. However following are the conditions which are to be met by the customer before applying for a loan. reasons for change and period of the same. 24 .  The loan amount of the individual is also subject to Instalment to Income Ratio (IIR) which is 40% and Fixed Obligation Income Ratio (FOIR) which is 45%. Applicable proceesing fees. SUPPORTING DOCUMENTS First of all when a customer came all documents are checked by the workstation which are directly in contact with the customers. Certificate of loan outstanding issued by the lender ( for refinance cases only) 8. number of dependents. FOR ALL APLICANTS 1. 5.

25% Fixed rate -14% 25 . If a job is transferable. RATE OF INTEREST TILL 30 JUNE.2010 (DUAL RATE) Till 30 June. SELF EMPLOYED 1. After credit appraisal loan is approved an disbursed to the conditions or requirement. Copies of individual Tax Challans for the last three years. Updated original Bank Passbook/ or Bank Statement for the last twelve months. 5. 2. 5. 2010 all applications received will be locked by Dual rate. Latest original salary slip/salary certificate showing all deductions. Profit & loss and ITR for the last three years. 2. Copy of advance Tax Challan (if any). Photocopy of Form 16 (issued by the employer) for the last assesment year. SLAB RATE OF INTEREST Till March 2011 8. permanent address where correspondence relating to the applicant can be mailed. A letter from employer agreeing to deduct the EMI towards repayment of the loan from applicant salary. This will expedite the processing of loan application.Balance Sheet . 3. 3. Business Profile. 6. 4. Verification of Employment Form with only Part I filled in.75% 9. CREDIT APPRAISAL After the documents are checked by the workstation. EMPLOYED CASE 1.25% Loan against property -11. 4. Updated original Bank Passbook/ or Bank Statement for the last six months. documents are rechecked by the Senior Officer as well as File Credit Investigation Department (FCI) prepares income sheet and check all documents of the file.75% RATE OF INTEREST SLAB HOUSING PLOT EQUITY LOAN FIXED LOAN LOAN RATE OF INTEREST Upto 30 lakhs 8.25% Till March 2012 9% Next Floating rate PLR – 4.

They can also issue post dated cheques and can also issue standing instruction to their bankers or can pay the installment at any of the HDFC collection centers.30-50 lakhs 9% 9. DISBURSEMENT OF THE LOAN 26 . Due date of payment of first EMI is the 5th day of the month following such month. early redetmption charges of 2% of the amount being prepaid is payable.  Tranching: To help the customers save their interest. parents and their children wish to purchase property together.75% PROCESSING FEES AND OTHER CHARGES A processing fees of 1% of the loan amount is charged from the applicant which includes all the fees and the charges at the time of sanctioning of the loan application. but if prepayment is made after three years then no charges is charged by HDFC. FLEXIBILITY IN REPAYMENT Following are the repayment option features being offered by HDFC to their customers:  Step up Repayment Facility (SURF): This scheme help young executive to take a bigger loan today based on an increase in their future income. The parents are near to retirement and their children just started their work. In this EMI’s of the customer increases in future. In this customer has the option to start their EMI’s even before the full disbursement of the loan. This option help customers to combine their income and take a long term home loan wherein the installment reduces after the retirement.5% Above 50 lakhs 9. Pre-EMI interest is payable every month from the date of each disbursement upto the date of the commencement of EMI.25% 9. HDFC introduced a special facility known as Tranching. If the prepayment is made within three years of the first disbursement. Service tax is also applicable and will be charged on the fees collected. PREPAYMENT FACILITY Customer can repay the loan ahead of schedule by making part or full prepayment. EMI commences from the first of the month following the month in which the disbursement of the loan has been completed.  Flexible Loan Installment Plan (FLIP): Often customers. this will help executives to buy a bigger home today. Customer may opt to pay the EMI’s by direct deduction from their monthly salary. Interest is paid on the portion of the loan disbursed which is called Pre-EMI. By this facility customer can repays their loan faster. REPAYMENT Loan is repaid in EMI comprising principal and interest.

an individual's loan eligibility is calculated.with the borrower by the loan installment per lakh for the given tenure The simplest way to increase your loan eligibility is by increasing the loan tenure. A two-bedroom house on the outskirts costs about Rs 16 lakhs. with your parent or spouse. banks will sanction him not more that Rs 12 lakhs. repayment/credit history. banks will lend to applicants who can set aside 40 percent of their monthly income towards their home loan repayments. some jobs are considered more stable with lesser probability of default. is arrived at by dividing the amount available for the loan repayment . Practical example to explain how banks arrive at eligibility of home loan applicants Vijay is a maintenance engineer with a private firm. The home loan eligibility. location of property. in lakhs. Will any banker lend him this money? Is he eligible for a home loan of Rs 16 ?lakhs There are numerous factors that banks take into consideration when computing your loan eligibility.your loan eligibility with a joint loan 27 . for a greater tenure of 20 years his loan amount shoots . His monthly takehome salary is around Rs 35. health condition and other debts have a direct bearing on the loan amount sanctioned. With many public sector banks offering singledigit interest rates. all legal documentation has been completed. savings. greater is the cost of borrowing Applying jointly. However. Consider Vijay's case. Age of the applicant. Some professions are categorised as negative or risky by the lenders. The incomes of both applicants are combined when computing the loan eligibility.HDFC disbursed the loan after the property has been technically appraised. At 9 percent rate of interest and for a tenure of 10 years. On the contrary. his salary.000. It is assumed that a person who earns more . However. increases your loan eligibility. People in such professions may find it difficult to get a loan sanctioned. As a thumb rule. the longer the tenure of the loan.up to Rs 18 lakhs. profession. They are on the .preferred list of most lenders It is imperative that the property an applicant wishes to purchase falls within the geographical limits as defined by the bank. You can almost double .can set aside more money towards his EMI repayments ?How does a bank compute your loan eligibility Most loan eligibility calculators available on the Internet are based on a formula. Based on this. The loan will be disbursed in full or in suitable instalments (normally not exceeding three in number) taking into account the requirements of the funds and progress of construction. Vijay feels this is the best time to invest in his dream house.

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CHAPTER 5

OTHER MARKET PLAYERS

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1. State Bank of India
2. ICICI Bank
3. Axis Bank

SBI -STATE BANK OF INDIA

State Bank of India(SBI), the country largest and oldest commercial bank with a branch
network of over 11000 branches and six associate banks located even in the remotest parts of
India. SBI offers a wide range of banking products and services to corporate and retail
customers.
SBI HOME LOAN
PURPOSE

 Purchase/Constuction of a house/flat
 Purchase of a plot of land for constrution of house.
 Extention/ Repair/ Renovation or Alteration of an existing house/flat
 Purchase of Furnishings and Consumer Durables as a part of project cost.
 Takeover of an existing loan from other Banks/Housing Finance Companies.
ELIGIBILITY

 Minimum Age – 18 years as on the date of sanction.
 Maximum Age – For a home loan borrower is fixed at 70 years i.e the age by
which the loan should be fully repaid.
 There should be availability of sufficient, regular and continuous source of income
for serving the loan repayment.
DOCUMENTS

 Two photographs of each applicant/gurrantor.
 Proof of residence of each applicant/gurrantor.
 Copy of PAN Card for identity proof.
 Latest & original salary slip of employees/ Business proof for businessman.
 Two years IT Returns /Form 16 for employees and three years IT Return with
computation sheets for busineesman/Self Employed.
 Balance sheet for last three years for business man.
 Six months salary account statements for employees and savings account
statement for Businessman/self employed.
 Copy of Agreement to Sale.
 Copy of Registry of house/ plot/flat plus old registries.
 Copy of Allotment letter/Re-allotment letter of House/plot/Flat.
 Latest Jamabandi of Plot/Flat/House, Builders approval letter to develop the
project and copy of license.
 Latest Non Encumbrance Certificate of Plot/Flat/House.
 Copy of approved Map/ approved site plan of builder.

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 In case of constuction of house/flat etc. • ICICI-INDUSTRIAL CREDIT AND INVESTMENT CORPORATION OF INDIA 32 . Prepayment Charges – If paid from own source – nil In other case – 2% on principal amount prepaid. depending upon the actual progress of work.  List of documents held with other Bank from whom Housing loan is to be taken over. Service tax is also applicable and will be charged on the fees collected.  Other tangible security of adequate value like NSCs. RATE OF INTEREST YEAR RATE OF INTEREST 1st Year 8% 2nd Year 9% 3rd Year 9% PROCESSING FEES A processing fees of . SECURITY  Equitable Mortgage of the property.  Estimate cost of constuction from Govt. MAXIMUM REPAYMENT PERIOD For Applicants upto 45 years of age: 25 years For Applicants above 45 years of age: 15 years PREPAYMENT Customer can repay the loan ahead of schedule by making part or full prepayment. Approved Architect for construction/ Renovation cases. Life Insurance Policies etc. DISBURSEMENT • In lump sum direct in favour of the builder/ seller in respect of outright purchase.50% of the loan amount is charged from the applicant which includes all the fees and the charges at the time of sanctioning of the loan application. if the property cannot be mortgaged.

It is the 4th largest bank in India and the largest private sector bank in India by market capitalization.  Purchase in Resale case.25 billion (US$ 896 million) for the year ended March 31. 3. 40. 2010.634. 2010 and profit after tax Rs. ICICI Bank offers easy home loan for  First purchase in ready constuction. ICICI Bank is India's second-largest bank with total assets of Rs. ICICI Bank offers a wide range of banking products and financial services to corporate and retail customers through a variety of delivery channels and specialization subsidiaries and affiliates in the areas of investment banking. (These data are dynamic. Residence and Age proof Identity. The bank also has a network of 2014+ branches (as on 31 March 2010) and about 5219 ATMs in India and presence in 19 countries.ICICI Bank ( Industrial Credit and Investment Corporation of India) is a major banking and financial services organization in India. Residence and Age proof Fee Cheque Income tax return/ Computation of total income/ Auditors report/ Balance Sheet/ Profit Account certified by Chartered Accountant for last two years( 3 years for home equity) Signature Verification Proof Signature Verification Proof Last three months salary slip Business Profile Form 16 Board Resolution in case of a company Bank Statement for last six months from Bank Statement for last six months from salary Account operating Account Repayment track record of existing loan/ loan Repayment track record of existing loan/ loan closure letter closure letter 33 .  Self construction – extention of existing living space.  Under constuction property. venture capital and asset management.) ICICI Bank is also the largest issuer of credit cards in India. DOCUMENTS EMPLOYED SELF EMPLOYED Duly complete application Form with one Duly complete application Form with one passport size photograph passport size photograph Identity.00 billion (US$ 81 billion) at March 31.  HOME LOAN Home loans are provided to individualsto own a residential property. life and non-life insurance.

25% PROCESSING FEES A processing fee of . Service tax is also applicable and will be charged on the fees collected.ELIGIBILITY  Loan must terminate before or when the borrower turns 65 years of age or before retirement whichever is earlier.5% of the loan amount is charged from the applicant which includes all the fees and the charges at the time of sanctioning of the loan application. RATE OF INTEREST YEARS UPTO 30 LAKHS ABOVE 30 LAKHS FIXED RATE 1ST Year 8. after the Government of India allowed new private banks to be established.  Minimum Age – 25 years of age. PREPAYMENT CHARGES There is no charge on part of prepayment but in case of full prepayment – 2% of the principal outstanding at the time of foreclosure is charged by ICICI Bank.75% Fixed rate – 16% 2nd Year 9% 9. Life Insurance Corporation (LIC) And General Insurance Corporation Ltd and its subsidiaries namely National Insurance Company Ltd. Axis bank was formed as UTI when it was incorporated in 1994 when government of India allowed private players in the banking sector.75% 8. The bank was sponsored together by the administrator of the specified undertaking of the Unit Trust of India. .  The loan amount can be upto 80% of the cost of property.25% 3rd Year 9% 9.25% fee is negotiable if applicant is an existing customer. At present the bank is the third largest private sector bank comprising of 1000 branch offices and extension counters and 4055 ATMs. New India Insurance Company.  Applicant must be Self employed or Employed with a regular source of income. The Oriental Insurance 34 . AXIS BANK Axis Bank Ltd was incorporated in the year 1994 as ‘UTI Bank Ltd’ which provided corporate and retail banking products and was the first private banks to have begun operations in 1994.  In case of Indian Resident both Self Employed or Employed can apply for loan but in case of Non Resident only Employed can avail a loan.

35 .75% Above 30 lakhs 9.25% REPAYMENT TERM Monthly EMI’s FOR 25 YEARS – 822 per lakh FOR 20 YEARS – 884 per lakh FOR 15 YEARS – 999 per lakh FOR 10 YEARS – 1253 per lakh ELIGIBILITY • Loan amount offered for both employed and self employed is Rs 1lakh to 50 lakhs. So from July 30.2007 onwards the UTI Bank was named as Axis Bank. However the name of the UTI was changed because of the disagreement on terms and conditions of th bank authority over certain stipulations including royalty charged over the name from UTI AMC. The bank was also wanted to have a new name from its Pan-Indian as well as international business perspective. DOCUMENTS EMPLOYED SELF EMPLOYED Application Form with photograph Application Form with photograph Identity and Residence proof Identity and Residence proof Latest salary slip Education qualification certificate and proof of business existence Form 16 Business profile and last three years profit & loss and balance sheet Last six months bank statement Last six months bank statement Processing fees Processing fees RATE OF INTEREST INCOME SLAB RATE OF INTEREST Upto 30 lakhs 8. • Minimum Age – 24 years of age.Corporation and the United Insurance Company Ltd.

PROCESSING FEES A processing fee of . • The loan amount can be upto 85% of the cost of property. • Loan must terminate before or when the borrower turns 60 years of age or before retirement whichever is earlier. • Applicant must be Self employed or Employed with a regular source of income. 36 . PREPAYMENT CHARGES Axis Bank do not charge any prepayment charges from its customers.5% of the loan amount is charged from the applicant plus service tax as applicable.

CHAPTER 6 37 .

were surveyed. various schemes. The Comparative Study of Home Loans provided by HDFC LTD.The secondary data was collected from the office account records and annual report of the company. With other financial institutions various banks like SBI. tenure of home loan. RESEARCH METHODOLOGY SCOPE OF THE STUDY: The study focuses on prevailing rate of interest. fee etc being charged by other banks in comparison to HDFC. The present study focuses on analyzing the balance sheet and profit and loss statement of HDFC for the last two years. SECONDARY DATA Secondary data refers to the one which has already been collected by someone else . METHODS OF COLLECTION OF DATA For the project number one i. PRIMARY DATA 38 . The whole procedure of the disbursement of loan. percentage of funding. The whole data was the organized in excel files and later on considering all the factors the whole data was analyzed. AXIS Bank etc. Factors were obtained from various banks. HDFC can identify the difference between the schemes and charges charged in comparison to with its competitors. interests rates etc.e. From this study. Secondary data sources for this study are: • Websites of HDFC and other financial institutions • Pamphlets/Brochures/Magazines • Annual report • Newspaper/ Articles • Mangers of different banks deal in housing loans. ICICI. Hence HDFC can change their schemes to perform better than other banks and can attract more customers.

.Primary data is collected from different banks of Chandigarh (shown above as Major Players) regarding the comparative analysis of housing loan schemes offered by different financial institutions. CHAPTER 7 39 .

SBI. 2008-09 and 2009-10. is bright. From this study. HDFC can identify the difference between their schemes and charges charged by other banks. Therefore this can help HDFC to change their schemes accordingly so as to perform better than other financial institutions.DATA ANALYSIS AND FINDINGS A) Comparison of home loans The comparative study of HDFC home loan products and process was conducted with similar services offered by other financial institutions. tenure of home loan and fees .The financial statements for these two years help me out in preparation of Ratio Analysis and Cash Flow Statement of HDFC Ltd. The study was done on the leading market players like ICICI. for two years i. documentation and repayment options features etc being launched in other banks . B) Financial Analysis The study of Balance Sheet and Profit and loss A/c of HDFC Ltd. 40 .e. The study illustrates prevailing rate of interests. AXIS Bank etc. From this study of Ratio Analysis and Cash Flow Statements to interpret the results that the future of HDFC Ltd. percentage of funding.

CHAPTER 7(A) 41 .

6 MONTHS) 9. PHOTOS 13.25 YEARS – 3rd YEAR – 9.75% 8.BALANCE SHEET & P/L (LAST 3 YEARS) 8. ITR (LAST 3 YEARS) 7.75% 9% LACS 30. PROPERTY PAPERS RATE OF UPTO 30 LAC – UPTO 30 LAC – UPTO 5 YEARS – UPTO 30 INTEREST 8. MUTATION BALANCE 3. DESIGN & OTHERS SAME ESTIMATE (ARCHITECT) 5.25% 9. BUSINESS PROFILE 10.50 LACS 5 – 10 YEARS – 1st YEAR – 9% – 9% 9.25% 42 .25% 2nd YEAR– 9.25% > 50 LACS – > 50 LACS – 10-15 YEARS – 2nd YEAR – 9.5% 9% 15. SALES DEED ITR & ALL SAME ALL SAME 2.50 LACS – 30.25% 9. BANK STATEMENT (CURRENT & SAVINGS.25% 8.BUSINESS PROFILE(for self employed people) BANKS STATE BANK IDBI BANK UBI ICICI BANK OF INDIA DOCUMENTS 1. VALUATION REPORT 6. LEGAL SHEET &P/L SEARCH (LAST 2 REPORT(BANK YEARS) ADVOCATE) & 4. ID PROOF 11.5% 9% MORE THAN 30 LACS 1st YEAR – 8. RESIDENCE PROOF 12.

20 YEARS OR 60 B.10 REPAYMENT YEARS OF AGE YEARS PERIOD OR 65 YEARS ELIGIBILITY 85% of the cost of 85% of the cost GROSS INCOME 85% of the cost OF LOAN property OR 4 of property .5% OF LOAN 0.5 100% of the of income (Avg of OR 80% of the TIMES & amount of 3 years' income) cost of property MAX AMOUNT .BELOW 55 20 YEARS YEARS YEARS OF YEARS -MAX 20 REPAYMENT CONSTRUCTION AGE YEARS PERIOD OR 65 MAX YEARS . registry. INSURANCE OF YES YES NO YES THE PROPERTY (OPTIONAL) (OPTIONAL) (OPTIONAL) 43 .25 PROCESSING 0.100 LACS OWN SOURCE NIL NIL ( AFTER 6 90% MONTHS) PREPAYMEN T ANYTIME STARTING FROM THE NEXT MONTH OF THE REFINANCE 2% 2% LOAN.4 TIMES MAX of property OR AMOUNT times the amount ( below 30 lakhs) NET INCOME .5% TAKEN + 1500 LOAN TAKEN NEGOTIABLE LAWYERS FEES ( IF LOAN FOR GOVT (NOT ALREADY EMPLOYEES) NEGOTIABLE) EXIST THEN NEGOTIABLE . 12 EMI TO RUN AFTER THAT. 3rd YEAR – 9.5% OF FEES TAKEN TAKEN (. (above 30 lakhs) 50 LACS & FOR ( 7 METROS).25%) REPAYMENT A.5% OF LOAN 1% OF LOAN 0. MAX 60% OF BELOW 55 FOR FLAT/PLOT MAX 20 TERMS NET INCOME YEARS -MAX MAX YEARS .

AREAS OF Any area inside or Any area inside NOT OUTSIDE Any area inside FUNDING outside tricity the or outside tricity THE TRICITY or outside tricity condition being it the condition the condition should not have being it should being it should been given on not have been not have been GPA or through given on GPA or given on GPA Share transfer through Share or through transfer Share transfer GURRANTOR Guarantor is NOT DEPENDS UPON NOT required(one who REQUIRED CASE REQUIRED is an Income Tax Assessee and he/she has to have an account in State bank of india) ADDITIONAL N/A DEPENDS DEPENDS UPON N/A SECURITY UPON CASE CASE 44 .

DOCUMENTS ALL SAME 1.884 FOR 15 YEARS 45 .COPY OF APPROVED MAP. 6.1267 PER LACS FOR 20 YEARS . ← BUSINESS PROFILE(for self employed people) BANKS AXIS BANK BANK OF INDIA HDFC Ltd.PHOTOGRAPHS 1.PROOF OF WORTH 5.BANK 2. BUSINESS PROFILE STATEMENT (LAST 3.5% OF LOAN .75% ABOVE 30 LACS – 9.BANK STATEMENT 8. 11. COPIES OF 6 MONTHS) INDIVIDUAL TAX 5.SALE ( LAST 12 MONTHS) AGRREMENT 9.BALANCE SHEET 4.IDENYITY PROOF & L AND ITR (LAST 3.ITR (LAST 3 CHALLANS FOR THE YEARS) LAST THREE YEARS.25% PROCESSING 0.BALANCE SHEET . P 2. COPY OF ADVANCE & P/L (LAST 3 TAX CHALLAN (IF YEARS) ANY) 7. 10ESTIMATION OF CONSTRUCTION.LOCAL ADDRESS THREE YEARS) PROOF 4.822 . COPY OF TITLE DEED & PREVIOUS TITLE DEED RATE OF UPTO 30 LACS - INTEREST 8.55% OF THE LOAN 1% OF LOAN AMOUNT FEES TAKEN AMOUNT REPAYMENT MONTHLY EMI 15 YEARS .1029 MAX TO 20 YEARS TERMS FOR 25 YEARS PER LACS 10 YEARS .

← .5 TIMES THE GPA PROPERTY GURRANTOR Any area inside Any area inside or DEPENDS UPON CASE or outside tricity outside tricity the the condition condition being it being it should should not have been not have been given on GPA given on GPA or through Share transfer ADDITIONAL NOT LOCAL DEPENDS UPON CASE SECURITY REQUIRED GURRANTOR IN CAES OF OUTSIDE TRICITY. MAX TO 35% OWN SOURCE REFINANCE NIL NIL INSURANCE OF NIL 0. MIGHT REQUIRE KEEPING THE PROPERTY INTO CONSIDERATION 46 . FOIR = ALL OBLIGATION/GROSS INCOME .e 1.65% YES (OPTIONAL) THE PROPERTY AREAS OF YES REQUIRED FOR APPROVED PROJECTS FUNDING (OPTIONAL) BUILDING NOT FOR ONLY & FLATS LAND TRANSFERABLE ON GPA & ALSO FUNDED WITH ADDITIONAL SECURITY i. IN CASE NET INCOME ANNUAL INCOME MORE EMI REDUCE B.999 FOR 10 YEARS – 1253 ELIGIBILITY 85% OF THE 75% OF THE COST A. IIR (INCOME OF LOAN COST OF OF PROPERTY OR 4 INSTALMENT RATIO) AMOUNT PROPERTY OR TIMES LAST THREE = EMI/GROSS INCOME 55% OF THE YEARS AVERAGE MAX 40%.

50 lakhs -9%. 30 - 50 lakhs - 9. 30 .8. above 50 lakhs - 9.9% 3rd year onwards Floating rate( PLR- 30 lakhs .8.25% Plot loan: Upto 30 lakhs .75%) years) housing loan: more than 50 lakhs upto 30 lakhs. LIMITED Maximum loan amount 75% of the cost of 75% of the cost of 85% of the the property Property or four times cost of the avg income of last property three years Rate of interest: ( FLOATING ) below 30 lakhs 8.25%. above 50 lakhs - 9. Till March 2012 .75%.75% following loans are given when the person has home loan Equit loan ( loan against 47 . HDFC CHART.5%.5% floating 9.25%. ← COMPARATIVE ANALYSIS OF VARIOUS BANKS FOR HOME LOANS (for employed people) STANDARD BANK OF INDIA.25%(for 10 years n till 30th june above) all applications received can be locked in under dual rate.9. March 2011 .50 lakhs 9% ( for below 10 4.

25% education loan .20 fixed: 2% if the amount being repaid own source Nil is more than Refinance 0.65% 25% of the opening Broken Interest Charges balance adjustable: 2% if the amount being repaid is more than 25% 0f the opening balance and is paid within 3 years of the date of first disbursement. ← property) 11. GPA property is also financed but with an additional security of 1.5 times the cost of the 48 .75%.55% 1% of the loan amount Pre-payment charges: 51. above 50 lakhs - 10.25% top up loan - 10.upto 30 lakhs - 9.25% Processing charges 0. 30 - 50 lakhs -10%. Additional security in case of GPA not required in case of GPA Insurance of the property required for required for building optional building not for land Area of funding anywhere except GPA any area but the project has to be approved by the MC.229.

Guarantor depends on case to local guarantor in case depends on case of outside tricity. case to case Might require a guarantor in tricity keeping property into consideration. ← GPA property. estimation of the construction/ renovation cost. copy area to be of the title deed and approved by previous title deeds. DOCUMENTS REQUIRED: (1)Income tax return with 3 3 3 computation (years) (2)Balance sheet and Income 3 3 3 statement (years) (3) Six months bank √ √ √ statement (4) Residence proof √ √ √ (5) Pan card √ √ √ (6)Landline bill original √ √ √ (7) Business Profile not required not required √ (8) Property paper √ √ √ (9) Passport size photograph √ √(applicant + √ guarantor) (10) R C Photocopies not required not required not required 49 . any other statutory permission as required by the local authority. Resale of the property Additional documents sale agreement. MC copy of the approved map duly signed.

25% for first year. 9. income) Rate of interest: ( FLOATING ) below 30 lakhs 8.50 lakhs 9% 9% 9% 8. 9% for second year.25% onwards 30 lakhs .25% 9. 9% for second year. ← COMPARATIVE ANALYSIS OF VARIOUS BANKS FOR HOME LOANS (for employed people) STATE AXIS IDBI BANK ICICI BANK OF BANK BANK INDIA Maximum loan 85% of the 85% of the 85% of the cost 85% of the amount cost of cost of of property cost of property OR 4 property ( below 30 lakhs) property times the OR 80% of the OR 100% amount of cost of property of the income (Avg (above 30 lakhs) amount of of 3 years' registry. 9% for second year.25% 9.75% 8.25% 8.75% 8. 50 . 9.25% for first year.75% 8.25% onwards more than 50 lakhs 9.25% for first year.

(.25% onwards Processing charges 0.50% for govt 0.5% .50% 1% (negotiable) 0. ← 9. own source Nil nil nil (after 6 months) Refinance 2% nil 2% Broken Interest √ Charges Additional security not required not depends upon the not required case required Insurance of the Yes yes optional not property required Area of funding Any area inside or outside tricity the condition being it should not have been given on GPA or through Share transfer 51 .25%( if loan already existing) Pre-payment charges: 90% prepayment anytime starting from the next month of the loan. 12 EMIs to run after that.50% 0.

map and by the MC estimate approved by the authority DOCUMENTS REQUIRED: (1)Income tax return 3 3 2 3 with computation (years) (2)Balance sheet and 3 3 2 3 Income statement (years) (3) Six months bank √ √ √ √ statement (4) Residence proof √ √ √ √ (5) Pan card √ √ √ √ (6)Local Address not required not not required √ Proof required (7) Business Profile √ not √ √ required (8) Property paper √ √ √ √ (9) Passport size √ √ √ √ photograph 52 . ← Guarantor Guarantor is Not yes in case of not required(one required business.no in required who is an case of salaried Income Tax Assessee and he/she has to have an account in State bank of india) Resale of the property Allowed allowed allowed with allowed security Additional documents Registered Not depends upon the Map and Sale deed. required case Area to be Mutation approved copy.

← CHAPTER 7(B) 53 .

018:1 Rs.CURRENT RATIO: CURRENT ASSETS/CURRENT LIABILITIES For the Year 2009-10 Rs.40.56.65.17.59.26.76.268 = 0.46.18. 2010 1.53. ← HOUSING DEVELOPMENT FINANCE CORPORATION RATIO ANALYSIS for year ending March 31.651:1 54 .847 For the year 2008-09 Rs.16.262 = 2.16.

Absolute Liquid Assets =Cash And Bank Balance Except Cash With RBI 2.77.5.60.32.590 For the Year 2008-09 55 .48.847 = Rs.08.606 Rs.40.18.28.36.83.1.47.28.40.ABSOLUTE LIQUID RATIO: ABSOLUTE LIQUID ASSESTS/CURRENT LIABILITIES For the Year 2009-10 Rs.905 = 0.83.90.487 Note: 1. Current Liabilities Are Taken Except Provisions 3. Current Liabilities Are Taken Except Provisions 2.08.26.24.56.97:1 Rs.78:1 Rs.85.36.87.487 Note: 1.5.41. ← Rs.87.56.16.65.459 = 1.16.17.065.97.51.338:1 Rs.Rs.847 For the Year 2008-09 Rs.97.71.26.52.RATIOS OF LONG TERM DEBT TO SHAREHOLDERS’ FUND: LONGTERM DEBT/SHAREHOLDERS’ FUND For the Year 2009-10 Rs.058 = 5.86.8.22.Current Assets Are Taken Except Loans And Advances 2.

89.16. Total Assets= Loans And Advances As Per Schedule4 + Investment As Per Schedule 5 + Current Assets.10.11.91.701 = Rs.605 For the Year 2008-09 Rs.96.1.10.590 .695 Note: 1.38.9.63.78:1 Rs.37.78.62.43.38.46.31.86.46.44.97.31.31.97.129:1 Rs.48.66.86.78.78.Shareholders’ Fund=Share Capital As Per Schedule 1 + Reserves And Surplus As Per Schedule 2 2.37.Long Term Debt Are Taken Except Following: A) Short Term Foreign Currency Borrowings From Banks B) Unsecured Foreign Currency Convertible Bonds C) Loans From Scheduled Banks (Unsecured)-Short Term D) Commercial Paper(Unsecured) E) Interest Accrued And Due 2.51. Rs.54.PROPRIETORY RATIO: SHAREHOLDERS’ FUND/TOTAL ASSETS For the Year 2009-10 Rs.65.513 Note: 1.51.387+ Rs.130:1 Rs.59.90.37.65.1.74.11.904+ Rs.86. Loans And Advances Schedule 6 + Fixed Assets As Per Schedule 8 56 .69.38.17.7.513 .1.78. Rs.93.58.41.590 = 0.308 = Rs.1.64.72.46. Shareholders’ Fund=Share Capital + Reserves And Surplus 4.513 = 0.56.918 = 5. ← Rs.1.

88.8. Shareholders’ Fund=Share Capital As Per Schedule 1 + Reserves And Surplus As Per Schedule 2 57 .62. Outsiders’ Fund= Loans As Per Schedule 3 2.97.314 = 0.65.9.65.88. ← 5.38.31.9.11.904 For the Year 2008-09 Rs.FUNDED DEBT TO TOTAL CAPITALIZATION: FUNDED DEBT / TOTAL CAPITALIZATION * 100 For the Year 2009-10 Rs.513 Note: 1.864:1 Rs.35:1 Rs.69.387 Note: 1.07.56.08.590 For the Year 2008-09 Rs.65.30.96.86.38.46.38.30.8.874 = 6.9.86.56.78.17.1.51.07.DEBT/EQUITY RATIO: OUTSIDERS’ FUND/SHAREHOLDERS’ FUND OR EXTERNAL EQUITIES/INTERNAL EQUITIES For the Year 2009-10 Rs.93. Total Capitalization =Share Capital As Per Schedule 1+ Reserve And Surplus As Per Schedule 2+ Loans As Per Schedule 3 6.37.1.08.65.74.Funded Debt= Loans As Per Schedule 3 2.874 = 0.865:1 Rs.65.39:1 Rs.314 = 6.

SOLVENCY RATIO: TOTAL LIABILITIES TO OUTSIDERS/TOTAL ASSETS For the Year 2009-10 Rs.39.851:1 Rs.16.78.41.92.605 For the Year 2008-09 Rs.0155:1 Rs 1.613 = 0.1.03.361 = 0.31.161 = 0.)/SHAREHOLDERS’ FUND For the Year 2009-10 Rs.Fixed Assets= Net Block As Per Schedule 8 58 . Total Assets= Loans And Advances As Per Schedule 4 + Investment As Per Schedule 5 + Current Assets. Loans And Advances Schedule 6 + Fixed Assets As Per Schedule 8 8.95.40.0146:1 Rs.342 = 0.513 Note:1.21.56.8.51.97.11.22.86.65.2.43.590 For the Year 2008-09 Rs 2.38.67.66.41.Total Liabilities To Outsiders= Loan Funds As Per Schedule 3 +Current Liabilities And Provisions As Per Schedule 7 (Except Provisions Under Schedule 7) 2.37.695 Note: 1.58.64.51.47. ← 7.9.10.853:1 Rs.91.11.FIXED ASSETS TO NET WORTH RATIO: FIXED ASSTS (AFTER DEP.44.29.

40.89.29.94.51.28.69.2. ← 2.8.0023:1 Rs.62.0022:1 Rs.Fixed Assets= Net Block As Per Schedule 8 2.Total Long Term Funds= Share Capital As Per Schedule 1+ Reserves And Surplus As Per Schedule 2+ Loan Funds As Per Schedule 3 But Loan Funds Are Taken Except Following: A)Short Term Foreign Currency Borrowings From Banks B)Unsecured Foreign Currency Convertible Bonds C)Loans From Scheduled Banks (Unsecured)-Short Term D)Commercial Paper(Unsecured) E)Interest Accrued And Due 10.)/TOTAL LONG TERM FUNDS For the Year 2009-10 Rs.FIXED ASSET RATIO: OR FIXED ASSET TO LONG TERM FUNDS: FIXED ASSTS (AFTER DEP.90.431 Note: 1.342 = 0.03.14.92.613 = 0.2.22.10.648 For the Year 2008-09 Rs.11.RATIO OF CUURENT ASSETS TO PROPRIETORS’ FUND: CURRENT ASSETS/SHAREHOLDERS’ FUNDS For the Year 2009-10 59 . Shareholders’ Fund=Share Capital As Per Schedule 1 + Reserves And Surplus As Per Schedule 2 9.

27.60% Rs.590 For the Year 2008-09 Rs.97.RETURN ON SHAREHOLDERS’ INVESTMENT OR NET WORTH: NET PROFIT AFTER INTEREST AND TAX/SHAREHOLDERS’ FUND*100 For the Year 2009-10 Rs.28.82.38.1.98.86.51.76.Current Assets Are Taken Except Loans And Advances 2.65.18.37.590 For the Year 2008-09 Rs.48.53.268 = 0.31.17.54.38.78.51 Note:1.31.78.59.37.16.51.1.37% Rs.513 Note: .EARNING PER SHARE (EPS): EARNING AVAILABLE TO EQUITY SHAREHOLDER/NUMBER OF EQUITY SHARES 60 .65.86. Shareholders’ Fund=Share Capital As Per Schedule 1 + Reserves And Surplus As Per Schedule 2 12.22. ← Rs.354:1 Rs.262 = 3.97.143:1 Rs.1.Net Profit = Net Profit After Interest And Tax Taken As Per Profit And Loss Account. 2.46.200*100 =18.543*100 =17.1.26.65. Shareholders’ Fund=Share Capital As Per Schedule 1 + Reserves And Surplus As Per Schedule 2 11.1.

2.54.98. Equity Shares Are Given In Share Capital As Per Schedule 1 13.53.DIVIDEND PER SHARE: PROPOSED DIVIDEND/NUMBER OF EQUITY SHARES For the Year 2009-10 Rs.Number Of Equity Shares= No.98.45 Per Share 28.67.27.DIVIDEND YIELD RATIO: DIVIDEND PER SHARE/MARKET PER SHARE 61 .Number Of Equity Shares= No.992 = Rs.36.53.26.Proposed Dividend Is Taken As Per Profit And Loss Account.8.Earning Available To Equity Shareholders’= Net Profit After Interest And Tax Taken As Per Profit And Loss Account. Of.33.44.10.910 Shares Note:1.44.10.543 =Rs.28.48.910 Shares Note:1.17. Equity Shares Are Given In Share Capital As Per Schedule 1 14.36 per Share 28. ← For the Year 2009-10 Rs.80.24 Per Share 28.22. Of.200 =Rs.222 Shares For the Year 2008-09 Rs.300 = Rs.53.59.30 per Share 28.10.82.222 Shares For the Year 2008-09 Rs.71.71. 2.

Market Price Per Share Is Taken As Per Balance Sheet. 2876 For the Year 2008-09 Rs. 2.PRICE EARNING RATIO: MARKET PRICE PER SHARE/EARNING PER SHARE For the Year 2009-10 Rs. 15.12% Rs. ← For the Year 2009-10 Rs. 2.98.2876 = 29.57% Rs. 16.21:1 62 .36*100 = 1.25% Rs.80.DIVIDEND PAYOUT RATIO: DIVIDEND PER SHARE/EARNING PER SHARE For the Year 2009-10 Rs.24 Note: 1.Earning Per Share Is Taken As Per Above Calculations. Dividend Per Share Is Taken As Per Above Calculations.30*100 = 37. Dividend Per Share Is Taken As Per Above Calculations.36*100 = 36.30*100 = 1. 2686 Note: 1.45 For the Year 2008-09 Rs.39% Rs.

24.71.2686 = 33.90.59.Funded Debt= Loans As Per Schedule 3 18.45 For the Year 2008-09 Rs.11.Earning Per Share Is Taken As Per Above Calculations.10.08.RATIO OF FIXED ASSET TO FUNDED DEBT: FIXED ASSETS (BEFORE DEP.80.)/FUNDED DEBT For the Year 2009-10 Rs.RATIO OF FIXED ASSET TO FUNDED DEBT: FIXED ASSETS (AFTER DEP.058 63 .2.0027:1 Rs.98. ← Rs.77.97.40.)/FUNDED DEBT For the Year 2009-10 Rs.342 = 0. 17.Market Price Per Share Is Taken As Per Balance Sheet.613 = 0.97.8.41.71.0060:1 Rs.058 For the Year 2008-09 Rs.51.77.22.Fixed Assets= Net Block As Per Schedule 8 2.45.54.7.5.8.2.08.57. 2.47:1 Rs.0025:1 Rs.918 Note: 1.03.998 = 0.24 Note: 1.

1.10.520*100 = 98.1.RATIO OF CURRENT LIABILITIES TO PROPRIETORS’ FUND: CURRENT LIABILITIES/ PROPRIETORS’ FUND For the Year 2009-10 Rs.1.90.56.51.11% Rs.97.59.52.Reserve And Surplus Are Taken Per Schedule 2 Of The Balance Sheet. ← For the Year 2008-09 Rs.65.10.65. 2.86.38.0065:1 Rs.23.28.175:1 Rs.93.85.513 Note:1.55.23.590 For the Year 2008-09 Rs.563*100 = 97.49.26.Funded Debt= Loans As Per Schedule 3 19.1.31.78. Equity Capital=Share Capital As Per Schedule 1 + Reserves And Surplus As Per Schedule 2 20.590 64 .86.820 = 0.918 Note: 1.16.7.4.Fixed Assets= Gross Block As Per Schedule 8 2.93.40.80% Rs.1.97.54.847 = 0.78.RATIO OF RESERVE TO EQUITY CAPITAL: RESERVES AND SURPLUS/EQUITY CAPITAL For the Year 2009-10 Rs.37.51.

77.97.8.058 = 1.28.54.10. Proprietors’ Fund=Share Capital As Per Schedule 1 + Reserves And Surplus As Per Schedule 2 21.54.513+ Rs.1729:1 Note: 1.71.1.918 Rs.1.7.513 Note: 1.87.78.65.90.37.36.08.77.7.38.Long Term Liabilities Are Taken Except Following: A)Short Term Foreign Currency Borrowings From Banks B)Unsecured Foreign Currency Convertible Bonds C)Loans From Scheduled Banks (Unsecured)-Short Term D)Commercial Paper(Unsecured) E)Interest Accrued And Due 65 .10.08.219:1 Rs.TOTAL INVESTMENT TO LONG TERM LIABILITIES: SHAREHOLDERS’ FUND + LONG TERM LIABILITIES/LONG TERM LIABILITIES’ For the Year 2009-10 Rs.058 Rs.83.487 = 0.590+ Rs. Current Liabilities Are Taken Except Provisions 2.97.31.8.1.918 = 1. Shareholders’ Fund=Share Capital As Per Schedule 1 + Reserves And Surplus As Per Schedule 2 2.31.173:1 For the Year 2008-09 Rs.59.59.38.78.86. ← For the Year 2008-09 Rs.90.97.71.51.37.

723+ Rs.78.54.Number Of Equity Shares= No.42. OF EQUITY SHARES For the Year 2009-10 Rs.20.FREE RESERVES PER SHARE: ALL FREE RESERVES/ NO.000 28.34.44.51.65.590 66 .86.84.53.98.000 28.149.10 per share 28.60% Rs.5. 28.10.RETURN ON GROSS CAPITAL EMPLOYED:NET PROFIT AFTER TAX and PREFERENCE DIVIDEND/GROSS CAPITAL EMPLOYED*100 For the Year 2009-10 Rs. 1.222 = Rs.44.15.06.746+ Rs.87.186.723 = Rs.20.10.9. Of.45.53.746 = Rs. ← 22.200*100 = 18.97.53.37.71.78.910 = Rs.222 For the Year 2008-09 Rs.44.68.Free Reserves= General Reserve As Per Schedule 2+ Balance Of Profit And Loss Account As Per Schedule 2 2.52.41.71.89.45. Equity Shares Are Given In Share Capital As Per Schedule 1 23.32.910 Note:1.26.97 per share 28.33.48.

Preference Dividend Is Nil Because There Are No Preference Shares 3.78. 2.38.26.651:1 2.Net Profit = Net Profit After Interest And Tax Taken As Per Profit And Loss Account.82.01.41.54% Rs.52. 22.338:1 0. Gross Capital Employed= Share Capital As Per Schedule 1 + Reserves And Surplus As Per Schedule 2 24.338:1 67 . 1.54. Preference Dividend Is Nil Because There Are No Preference Shares 3.91.Current Ratio 2.743 For the Year 2008-09 Rs. Year Year Ratios Of HDFC LTD.200*100 = 22.37% Rs.37. Absolute Liquid Ratio 0. For The Financial Year 2009-10 2008-09 1.52. 22.49.543*100 = 17.82.25. 2.27. 28.543*100 = 22.513 Note: 1.02.27.31. ← For the Year 2008-09 Rs. Net Capital Employed= Share Capital As Per Schedule 1 + Reserves And Surplus As Per Schedule 2 – Current Liabilities As Per Schedule 7 Except Provisions.018:1 0.Net Profit = Net Profit After Tax And Preference Dividend Taken As Per Profit And Loss Account.26% Rs. 1.026 Note: 1.45.98.RETURN ON NET CAPITAL EMPLOYED:NET PROFIT AFTER TAX and PREFERENCE DIVIDEND/NET CAPITAL EMPLOYED*100 For the Year 2009-10 Rs.48. 1.

Earning Per Share (EPS) (In Rs. Dividend Payout Ratio 36.851:1 0.219:1 21.97 Rs.57 37.24 13. Debt/Equity Ratio 6.0065:1 19. Ratio Of Fixed Asset To Funded Debt 0. Return On Net Capital Employed 22.0022:1 0.54% 22. Free Reserves Per Share Rs.39 16. Ratio Of Fixed Asset To Funded Debt 0.45 80. Ratio Of Current Liabilities To Proprietors’ Fund 0.0027:1 18. Fixed Assets To Net Worth Ratio 0.12 15. Dividend Per Share (In Rs. 149. Dividend Yield Ratio (In %Age) 1. Solvency Ratio 0. 2010 Investment Valuation Ratios: 68 .0025:1 0.130:1 0.39:1 7.0146:1 0.Return On Gross Capital Employed 18. 186. Return On Shareholders’ Investment Or Net Worth (In %Age) 18.37 12.) 36 30 14.173:1 1.143:1 11.37% 24.1729:1 22.47 17.8 20. Proprietary Ratio 0.11 97.0023:1 10.) 98.0060:1 0.21 33.25 1.129:1 5. Funded Debt To Total Capitalization 0. ← 3. Ratio Of Reserve To Equity Capital (In %Age) 98.864:1 0. Ratio Of Current Assets To Proprietors’ Fund 3.6 17.10 23.853:1 8.175:1 0.354:1 0. Total Investment To Long Term Liabilities 1.60% 17.0155:1 9.26% HOUSING DEVELOPMENT FINANCE CORPORATION RATIO ANALYSIS for year ending March 31. Fixed Asset Ratio 0.35:1 6. Price Earning Ratio 29.78:1 4.865:1 6.78:1 5.Ratios Of Long Term Debt To Shareholders’ Fund 5.

In the case of HDFC. 5. It is the primary ratio to measure the overall profitability of the company. Higher the ratio means higher the efficiency of the company. Lower the ratio is beneficial for the company. Fixed Assets Ratio & Fixed Assets to Net Worth Ratio These ratios show the relationship of fixed assets with Long Term Funds & Share Holders Funds. 149. In the given case.143:1resp. in year 2010 & 2009. 4.0023:1 resp while fixed assets to net worth ratio was 0. Higher the ratio means higher the capacity of company to pay back the Long Term Liabilities. In the case of HDFC. Ratio of Current Liabilities to Proprietors’ Fund This ratio shows the number of times current liabilities are to the proprietors’ funds. In Year 2010 & 2009 the fixed assets ratio was 0. Profitability Ratios: 1. 3. the percentage was 98. in Year 2010 & 2009. In both years the ratio is almost same.0022:1 & 0. 30 per share against face value of Rs. In Year 2010 & 2009. it was 0. As we can see that ratio has increased from Year 2009 to 2010 which shows company’s future is bright. 3.173:1 & 1. 10 per share. Higher the ratio higher the solvency. the free reserves per share are Rs.10 resp. higher the satisfaction & thus higher the confidence. In the given case.0155:1. in year 2010 & 2009. 36 & Rs.219:1. Higher the dividend. we can say that the company is in good condition because it is able to cover its long term liabilities with its investments.1729:1. The Company has provided dividend of Rs.80%. This shows that the company’s ratio has increased & the stability has also been increased because of higher reserves available with the company. This is a bad situation for the company. 2. This shows in 2010 both ratios have been decreased as compared to Year 2009. in year 2010 & 2009.97 & Rs. Ratio of Reserves to Equity Capital This ratio shows how much reserves are available against equity capital. 186. Total Investment to Long Term Liability Ratio This ratio shows that how much Long Term Liabilities are covered with our Investments. Ratio of Current Assets to Proprietors Funds This ratio shows that how much current assets are there to cover the proprietors’ funds. This shows that ratio has decreased from 2009 to 2010 which is good for the company. This proves that the company has paid dividend at rate of 360% & 300% in year 2010 & 2009 resp. Return on Gross Capital 69 . 2. the ratio in Year 2010 & 2009 was 1.175:1 & 0. Return on Gross Capital Employed & Return On Net Capital Employed These ratios establish the relationship between Profits & Capital Employed.11% & 97. ← 1. Free Reserves per Share It shows the amount of free reserves available per share. which shows company has surplus money to use in case of any contingent & other liabilities. this shows company is making huge profits & investors are also satisfied. higher the satisfaction of shareholders & thus higher the stability. this ratio in Year 2010 & 2009 was 3.354:1 & 0. Higher the percentage. Dividend per Share Dividend is the return to shareholders for their investment in the company. In the given case of HDFC.0146:1& 0. In the given case of HDFC.

the best quick ratio is 1:1. 2. 70 .338:1 resp.35 & 6. Ratio of Fixed Asset (after dep. which shows high working capital.) To Funded Debt is 0. Current Ratio As per rule of thumb. the current ratios in year 2010 & 2009 are 2.129:1 resp. Long Term Solvency Ratios 1.) To Funded Debt & Ratio Of Fixed Asset (before dep. Ratios of Long Term Debt to Shareholders’ Fund This ratio shows the claims of outsiders to the funds.26% resp which show higher efficiency of the company. the debt equity ratio in 2010 & 2009 are 6.0060:1 & 0. Liquidity & Solvency Ratios: 1.54% & 22. Higher the ratio higher the chances of stability because in case of failure fixed assets will cover the funded debt. ← Employed was 18. the company is highly efficient. Debt Coverage Ratios: 1. which shows no more difference between both two years. this is a bad situation for the company.0027:1 resp. this means absolute liquid assets should be equal to current liabilities but in case of HDFC.60% & 17. shareholders.37% resp while Return on Net Capital Employed was 22. in year 2010 & 2009 the Ratio Of Fixed Asset (after dep. In case of HDFC. 6.0025:1 & 0. Higher the ratio means higher the efficiency of the company.39 resp. In the given case. the liquid ratios in year 2010 & 2009 are 0. in year 2010 & 2009 it was 0.338:1 & 0.60% & 17. 3 Debt Equity Ratios This ratio shows the claims of outsiders to the claims of owners i.) To Funded Debt These ratios show the relationship of Fixed Assets with the Funded Debt.130:1 & 0. this shows that company has less liquid assets over current liabilities. Return on Net Worth This ratio establishes the relationship between Profits after interest & taxes & Net Worth. the ratio is 18.78:1 resp.e. In case of HDFC. while Ratio of Fixed Asset (before dep. this shows that company has excess current assets over current liabilities. which shows that the claims are more than the equity. 2. In the given case. It is the primary ratio to measure the overall profitability of the company.0065:1 resp.018:1 & 0. Absolute Liquid Ratio As per rule of thumb. which shows that company assets are much less than the funded debt. this is a bad situation for the company. the best current ratio is 2:1.37% which shows high efficiency of the company.) To Funded Debt is 0. in year 2010 & 2009. Ratios of Long Term Debt to Shareholders’ Fund in year 2010 & 2009 are 5. This proves that company has enough assets which can be easily converted into cash. which shows that the claims are more than the funds. this means current assets should be twice of current liabilities but in case of HDFC. Proprietary Ratio: This ratio shows the relationship of shareholder funds with hat of total assets. In the case of HDFC.78:1 & 5.651:1 resp.

CONCLUSION I have studied the attached Balance Sheet of HOUSING DEVELOPMENT FINANCE CORPORATION LIMITED (“the Corporation”) as at March 31. I have no doubt that if in coming future any contingent liability raises before company. After analyzing.24 resp. In the given case. It is capable of generating more & more returns in coming future. the ratios are 36.57 & 37. in year 2010 & 2009. this ratio in 2010 & 2009 was 0. It is growing day by day.851:1 & 0. the ratio was 1. Hence. Funded Debt to Total Capitalization: This ratio shows the claims of outsiders to the claims of total capital. in year 2010 & 2009. & company’s future is bright. the funded debt to total capitalization ratio in 2010 & 2009 are 0.864:1 & 0.12%. Higher the ratio higher the investors satisfaction & interest. which shows high returns to shareholders. 4.39 resp.47 resp. this shows company’s status is nice. Higher the ratio higher the investors satisfaction. In HDFC case in Year 2010 & 2009 the ratio was 29. Earnings per Share It represents the earnings of shareholders from the company in the year. it is able to face the challenge.865:1 resp. 5. Price Earning Ratio This ratio shows how many times the Market Price of Share is of the Earnings per Share. Moreover the investors & creditors 71 . In HDFC case. the earnings per share are 98. ← 4. As we have seen the ratio has increased from year 2009 t6o 2010. In case of HDFC. Higher the earnings per share. Its long term as well as short term stability is solid. which shows that the claims are less than the total capital. The Profit and Loss Account and the Cash Flow Statement of the Corporation for the year ended on that date. which shows that this this year there are more earnings as compared to last year.45 & 80. this is a good situation for the company. 2.25% & 1. company is highly stable.. higher the confidence of shareholders & higher the company’s reputation. 3. Solvency Ratio This ratio shows the solvency of the company by comparing total liability to outsiders with total assets.. in year 2010 & 2009. which are very high. both annexed thereto & have made an interpretation of the company via ratio analysis. This is very beneficial for the company because company can’t loose confidence of investors. I have come to the conclusion that the company is on the high level of success. In the case of HDFC. 2010. This shows company is capable to give higher returns to its investors.21 & 33. Dividend Yield Ratio This ratio shows the ratio of Dividend Paid Per Share & Market Price Per Share. As the ratio this year has increased this shows company’s higher profitability. Dividend Payout Ratio Net Profit This ratio shows the ratio of dividend paid out of profits. Cash Flow Indicator Ratios: 1. In the given case.853:1.

← (short & Long Term) both are satisfied by the company because it is declaring high profits & returns & repaying creditors in time. the company’s future is Bright. So. 72 .

2010 ← Current Year Previous year (2009-10) (2008-09) Rupees Rupees A] CASH FLOW FROM OPERTAING ACTIVITIES Profit Before Tax 39159898200 32190427543 Adjustment For: Depreciation And Amortization 182023071 174563928 Provision For Contingencies 580000000 500000000 (Gains)/Loss On Translation Of Foreign Currency Monetary Assets And Liabilities And Mark To Market Derivatives -295703919 2611652309 Employee Stock Option Expense(Net Of Options Exercised) -43790 -48969 Provisions For Employees Benefits 80382284 110954902 Profit On Sale Of Investments -2248303068 -252300208 Surplus From Deployment In Cash Management Schemes Of Mutual Funds -1898442216 -1579731748 Profit In Sale Of Fixed Assets (Net) -4587887 -5874605 Operating Profit Before Working Capital Changes 35555222675 33749643152 Adjustments For: Current Assets -840719487 -2821781029 Current Liabilities 552821112 6652700403 Cash Generated From Operations 35267324300 37580562526 Advance Tax Paid -11010619403 -9781572839 Net Cash From Operations 24256704897 27798989687 Loans Disbursed(Net) -128772620312 -117632036043 Corporate Deposits 7189413000 2336673400 Net Cash Used In Operating Activities -97326502415 -87496372956 B] CASH FLOW FROM INVESTING ACTIVITIES Purchase Of Fixed Assets -348309049 -123665189 Sale Of Fixed Assets 10708086 32160579 -337600963 -91504610 Investment In Subsidiaries -2863800000 -4155000000 Investment In Cash Management Schemes Of Mutual Funds -1349455987700 870590000000 73 Other Investments -89046447459 -10706949930 Sale Proceeds Of Investments: . for the year ended March 31.Cash Flow Statement of HDFC LTD.

← CHAPTER 8 74 .

the institution not being able to verify the customer’s details properly etc. some cases.  COMMON PROBLEMS FACED BY HDFC HOME LOAN CUSTOMERS: • Rejection at the first stage due to incompatibility between the borrower’s qualifications and lenders requirements. this is because the sample was a convenience sample. • Certain questions which are not properly responded by the Respondents. • An error may have been due to the samples taken not conforming to the actual population. • With every application form for home loans. improper documents. The processing fees are generally 75 . • There are several customers who don’t show proper interest in filling the questioner as they feel that they won’t get any benefit after filling the questioners and it’s just a waste of time for them. income criteria. ← LIMITATIONS: Every study conducted may have certain shortcomings and unfortunately mine is also a similar case. while interpreting the respondents. • Personal bias or personal error of the interviewer might also have crept in.25% to 1% of the loan amount to be submitted as the processing fees. A few errors have crept in despite mine best efforts to avoid them but it is expected that still mine study and findings are very much relevant. HDFC require about 0. It could be the age criteria.

• Another limitation is that desired loan is usually not sanctioned. In simple words this means that for whatever reasons. The Title deeds and NOC Documents have to be furnished in the bank’s format. will ruin the entire exercise and won’t get any loan. . • The interest rate dilemma • Another major limitation is Difference in property valuation. credit card usage history. This can cause a significant gap between what is needed and what the company is willing to lend. It evaluates the property on its established parameters and assigns a value to it . The company has its own experts for legal. The monthly income. financial history or other unpaid loans with the borrower. total years in employment etc. ← non-refundable. technical and financial appraisal of the property in question. average balance with the banks. The loan amount sanctioned is mostly based on repayment capacity of the borrower. • Another is the Title deeds and NOC Documentation Problem. These factors all clubbed together help in the institution to decide whether it will be able to recover its money satisfactorily or not. 76 . if the institution finds that customer doesn’t deserve the home loan this fee won’t be returned. Borrower’s who don’t provide them in proper format. if any bounced cheque.This value can be significantly lower than the price the customer quoted for the property. past payment record.

← CHAPTER 9 77 .

the skill to understand clientele and the desire to give them the best . HDFC must inform its customers about the change in ROI.Likewise following are some of the suggestions which would help HDFC in improvising their working styles and performance.Too much documentation is done . • Company should enter into tie ups with reputed builders and development authorities. Customers facing problems are not attended on time.They should also capitalize on present customer base by generating referrals • Aggressive marketing and great publicity through newspapers. It automatically changes but there is decrease in rate of interest . hoarding. Therefore paperwork should be more friendly and clear . • Website of HDFC should give more options and features to customers so that they get maximum information sitting at home • Employees of HDFC should be more prompt towards customer’s grievances and problems • HDFC should provide personalized services to customers.HDFC should provide proper information to its customers. • After sale service is an issue of concern. Customer is no aware of all the formalities. • There is lot of formalities in the loan disbursement process . ← SUGGESTIONS AND RECOMMENDATIONS All one need is the courage to innovate. 78 . • HDFC should increase their reach by penetrating into rural and semi urban areas . • Most of the customers face problems regarding the rate of interest. it doesn’t change automatically. • Comparative pricing in terms of lower interest rates and front end changes should be adopted. websites and other medias should be done. Employees are generally cooperative only when the loan is sanctioned and disbursed. • Any change in the policies must be intimated to all the customers . They are generally not told how their EMI are calculated they should know EMI is calculated and of what amount. Therefore after sale service should be improved up to the satisfaction level of the customer. • Customers should be given proper information about EMI.

← CHAPTER 10 79 .

com • www. ← Webliography • www.ansalapi.com • www.hdfcbank.com • www.credila.wikipedia.hdfc.com • www.hdfcinsurance.com 80 .org • www.moneycontrol.com • www.hdfcfund.com • www.com • www.hdfcergo.google.com • www.hdfcrealty.com • www.

← 81 .

← 82 .

Balance Sheet as at March 31.2010 Sch ← edule March 31.2009 Rupe Ru es pees Rupees SOURCES OF FUNDS SHAREHOLDERS' FUNDS 28710630 Share Capital 1 70 2844499950 14910552 Reserves and Surplus 2 3520 128529378563 1519765 86590 131373878513 9656530 LOAN FUNDS 3 88314 838560807874 1117629 674904 969334686387 APPLICATION OF FUNDS 9796699 LOANS 4 05923 851981057761 1072745 INVESTMENTS 5 45227 104687498861 DEFERRED TAX 2857280 ASSEST[Note 26] 715 2158210179 CURRENT ASSETS. 74391491 LOANS AND ADVANCES 6 127 55708340552 Less: CURRENT LIABILITIES AND 48784689 PROVISIONS 7 701 46634472308 2560680 NET CURRENT ASSESTS 1426 9073868244 FIXED ASSESTS 8 52445579 Gross Block 98 4938523820 30234163 Less: Depreciation 85 2904472478 2221141 Net Block 613 2034051342 83 1117629 674904 969934686387 Notes Forming Part of .