Dissertation Report ON

Comparative study of Home Loans provided by HDFC and ICICI Bank on the basis of customer satisfaction, different schemes, sales-A case study in Yamunanagar

Kurukshetra University, Kurukshetra in partial fulfilment for the degree of Master of Business Administration (Session
2005-2007)
Under the supervision of:Submitted By:-

Submitted to

Ms. Kiranpreet Kaur Priyanka Kundu Faculty MBA no. 1152/05

Roll

TIMT reg.no. 02-RK-1062 No.. MBA-final.

University Roll

Tilak Raj Chadha Institute of Management & Technology, Yamuna Nagar (TIMT). Approved by AICTE and Affiliated to Kurukshetra University,

ACKNOWLEDGEMENT

In this world of cut throat competition my project report is a combination of both theoretical as well as practical efforts. Comparative study of Home Loans provided by HDFC and ICICI Bank on the basis of customer satisfaction, different schemes, sales-A case study in Yamunanagar I thank almighty god to give me strength to work sincerely during the course of the project. I express my sincere gratitude to Dr. R.K.Garg(Director) without whose guidance, keen interest and regular encouragement my project would not have been compiled. Im also thankful to Dr. Vikas Daryal (Assistant Professor,HOD-MBA,TIMT ) for his

inspiration and helpful attitude. I would also like to grab the opportunity to thank Ms. Kiranpreet Kaur for his helping hand in the compilation of the report. Last but not the least I would like to thank my parents for their support.

(Priyanka Kundu)

EXECUTIVE SUMMARY
The concept of this project is to check whether HDFC Bank and ICICI Bank are performing well year after year or are lacking in performance. The performance is majorly evaluated by having a look on the sales, customer satisfaction, and brand image among customers. The purpose of this project is to evaluate the performance of two banks that are HDFC Bank and ICICI Bank. It primarily aims at learning the various factors that can help in evaluation process. It also aims at providing innovative services and by attaining cost efficiency. I have tried to find out whether customers are satisfied with the bank from where they have taken loan or not. I have also tried to find out the areas of improvement in these two banks. The project encompasses HDFC and ICICI Bank of Yamunanagar region who visited their respective banks to get the resolution of their problems. Number of respondents are from a sample of hundred each of HDFC and ICICI bank respectively. The first part of the report is about the History of both the banks that are being undertaken for study. The second part includes a brief description about the Consumer, his Behaviour/Preferences, and the Consumer Decision Making Process. The third part

presents an overview of Objective of the Study and Literature Review. The fourth part consist of Research Methodology which includes Sampling, Data Collection, Statistical and Analytical tool and the Limitations of the study. And the last part covers the Interpretation of the findings and Recommendations along with Bibliography and annexure. The sample size taken by me is two hundred customers so that maximum information will be obtained. The sample design used is judgement sampling and the data used are both: the primary data and secondary data.

CONTENTS
Serial No. 1. Introduction Profile of the study Significance of the study 2. 3. 4. Objective of the study Literature Review Research Methodology Sampling & Sample Design Data Collection Analytical Tools Hypothesis Testing Limitations of the study 5. 6. 7. 8. Result & Discussions/Findings Recommendation Bibliography Annexure 26 29 30 39 42 43 60 63 65 1 21 22 23 Page No.

INTRODUCTION

Introduction of the Project

This project is about the preferences of consumer regarding the type of home loan they prefer and from which bank in the Yamuna Nagar (in special context of HDFC Bank and ICICI Bank). Personal unsecured loans can be very expensive because of the interest rates charged, and the reasons that banks and lenders charge such high rates on these loans is because the loan is based on trust alone, which is a high risk for the lender. Because of this, these loans can also be far more difficult to get, and unless you have an unblemished credit history you could run into trouble. Home loans are different in that they are secured loans, which is a lower risk for the lender. This means that you have more chance of getting the loan you want, and you will find far lower interest rates attached to these home loans simply because they are secured.

Loan Process Overview

Step 1: Loan Application & Forms
The loan application and accompanying forms allow the loan officer to gather essential information relating to your loan. Additionally, at the point of application, the borrower normally supplies the loan officer all the necessary documents and records required for loan submission.

Step 2: Loan Selection & Lock

After consulting with the client(s) and reviewing all loan documents, the loan officer will identify several loan options best suited to meet the clients short and long term goals. When the best loan is identified, the loan officer will lock the interest rate with the lender for 30 to 45 days depending on loan requirements.

Step 3: Order the Appraisal

An appraisal is a requirement for most loans and it represents a professional appraiser's evaluation and estimate of.

Step 4: Open Escrow

Order Title Preliminary Report

Lender Good Faith Estimate (GFE)- By law, the lender is required to send a Good Faith Estimate to you. This GFE may not reflect the same numbers as the GFE provided by Provident. Please note, the GFE provided to the client by Provident represents the truest estimate of the loan fees and will be used as the guideline for the loan.

Step 5: Process The Loan

Before a loan can be submitted for lender approval, the processor must assemble a completed loan file that includes required lender documentation. Items listed below reflect a sample list of loan documents required for processing:

Application & Forms Mortgage Statement & Insurance Preliminary Title Report Escrow Instructions Verification of Employment Verification of Deposit

Full Factual Credit Report Appraisal Verification of Mortgage Bank Statements & Account Info. Good Faith Estimate

Step 6 Submit Completed Loan File

After the loan has been processed, it is submitted to the lender for loan approval. Normally, lender approval occurs within 48 to 72 hours.

Step 7: Lender Loan Approval

Upon loan approval Provident is notified immediately by the lender. At this time, a Provident representative contacts the borrower and notifies them of loan approval and if there are any loan conditions.

Step 8: Loan Conditions

Although a loan may receive lender approval, it is common that various conditions be assigned prior to funding the loan. For example, common loan conditions may require the borrower to supply recent bank statements, pay off credit cards, or supply updated pay stubs.

Step 9: Ordering & Signing Documents

Once loan conditions are met, loan documents are ordered, reviewed by Provident, and forwarded to escrow. The escrow officer then normally contacts borrowers and an appointment is set to sign loan documents.

Step 10: Funding The Loan

Signed loan documents are returned to Provident for final review and then forwarded to the lender. The lender confirms all signatures and documents and normally funds the loan within 48 hours.

Step 11: Recording The Loan

Once the loan is funded via a wire transfer, it is escrow's responsibility to record the loan with the county assessor's office. This may occur the same day the loan is funded, but typically loans are recorded the day after funding.

MAJOR

PLAYERS IN THE MARKET

HDFC BANK OVERVIEW

HDFC Bank has its deposit programmes rated by two rating agencies - Credit Analysis & Research Limited. (CARE) and Fitch Ratings India Private Limited. The Bank's Fixed Deposit programme has been rated 'CARE AAA (FD)' [Triple A] by CARE, which represents instruments considered to be "of the best quality, carrying negligible investment risk". CARE has also rated the Bank's Certificate of Deposit (CD) programme "PR 1+" which represents "superior capacity for repayment of short term promissory obligations". Fitch Ratings India Pvt. Ltd. (100% subsidiary of Fitch Inc.) has assigned the "tAAA (ind)" rating to the Bank's deposit programme, with the outlook on the rating as "stable". This rating indicates "highest credit quality" where protection factors are very high". HDFC Bank also has its long term unsecured, subordinated (Tier II) Bonds of Rs.4 billion rated by CARE and Fitch Ratings India Private Limited. CARE has assigned the rating of "CARE AAA" for the Tier II Bonds while Fitch Ratings India Pvt. Ltd. has assigned the rating "AAA (ind)" with the outlook on the rating as "stable". In each of the cases referred to above, the ratings awarded were the highest assigned by the rating agency for those instruments? Business 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 corporate and agribased 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

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.

 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. Products of Home Loans Home Loans Home Improvement Loans Home Extension Loans Short Term Bridging Loans Land Purchase Loans Professional Loan Non-residential premises Home Equity Loan

HOME LOANS
Resident Indians
With an HDFC Home Loan, you can bring to life the house of your dreams. You could buy a self-contained flat in an existing or proposed co-operative society, in an apartment owner's association or even an independent single-family or multi-family bungalow or row house as well as a house that you like anywhere in India. HDFC Home Loans are easy to arrange and can be customised according to your needs and repayment capability. Moreover, in Delhi you can get finance for first power of attorney purchases of DDA flats allotted before 1992.

FEATURES
Home Loan Counselling Sharing of over 29 years of home loan experience. We have been a part of a 29 year journey with our 26 Lakh customers. Our home loan counsellors offer you the time tested advice. Be it legal documentation, project or builder approvals, and technical advice, we look forward to sharing with you and this service is absolutely free.Our project approval facility provides our customers the comfort of purchasing properties from builders who have complied with all basic documentation.

Door Step Service

We offer door step service. Please call HDFC Home Line call for our Sales Executive to assist you..

We help you find your dream home

Please seek the help of HDFC Realty for purchasing your dream home.

Wide Product Range

We provide loans to meet all your requirements for you to make that house a home. Home Loans, Home Improvement Loans, Home Extension Loans, Loans to professionals for office or clinic, Home Equity Loans (Loan Against Property), Loan Against Rent receivables, Short Term Bridging Loan.

Multiple Repayment Option

Step Up Repayment Facility Helps young executives take a much bigger loan today based on an increase in their future income, this helps executives buy a bigger home today!

Flexible Loan installments Plan

Often customers, parents and their children, wish to purchase properties together. The parent is nearing retirement and their children have just started working. This option helps such customers combine the incomes and take a long term home loan where in the installment reduces upon retirement of the earning parent.

Accelerated Repayment Scheme

Accelerated Repayment Scheme offers you a great oppourtunity to repay the loan faster by increasing the EMI. Whenever you get an increment, increase in your disposable income or have lumpsum funds for loan prepayment, you can benefit by

Wide network of financing

With over 200 offices, 90 outreach programs- HDFC is able to provide home loans is over 2400 locations in India. You can apply at your local HDFC office for properties in locations where we finance.

Post Disbursement Services

Income tax Certificate to enable you to claim the tax benefits are sent to you. This service is absolutely free.

Loan Repayment
ECS facility Post dated cheques- No charges for replacement of cheques Loan repayment at any HDFC offices Back to top

ICICI BANK
Overview
ICICI Bank is India's second-largest bank with total assets of about Rs. 2,513.89 bn (US$ 56.3 bn) at March 31, 2006 and profit after tax of Rs. 25.40 bn (US$ 569 mn) for the year ended March 31, 2006 (Rs. 20.05 bn (US$ 449 mn) for the year ended March 31, 2005). ICICI Bank has a network of about 614 branches and extension counters and over 2,200 ATMs. ICICI Bank offers a wide range of banking products and financial services to corporate and retail customers through a variety of delivery channels and through its specialised subsidiaries and affiliates in the areas of investment banking, life and non-life insurance, venture capital and asset management. ICICI Bank set up its international banking group in fiscal 2002 to cater to the cross border needs of clients and leverage on its domestic banking strengths to offer products internationally. ICICI Bank currently has subsidiaries in the United Kingdom, Russia and Canada, branches in Singapore, Bahrain, Hong Kong, Sri Lanka and Dubai International Finance Centre and representative offices in the United States, United Arab Emirates, China, South Africa and Bangladesh. Our UK subsidiary has established a branch in Belgium. ICICI Bank is the most valuable bank in India in terms of market capitalisation. ICICI Bank's equity shares are listed in India on the Bombay Stock Exchange and the National Stock Exchange of India Limited and its American Depositary Receipts (ADRs) are listed on the New York Stock Exchange (NYSE). ICICI Bank has formulated a Code of Business Conduct and Ethics for its directors and employees. (Click here to view a copy of the Code)

At June 5, 2006, ICICI Bank, with free float market capitalization* of about Rs. 480.00 billion (US$ 10.8 billion) ranked third amongst all the companies listed on the Indian stock exchanges. ICICI Bank was originally promoted in 1994 by ICICI Limited, an Indian financial institution, and was its wholly-owned subsidiary. ICICI's shareholding in ICICI Bank was reduced to 46% through a public offering of shares in India in fiscal 1998, an equity offering in the form of ADRs listed on the NYSE in fiscal 2000, ICICI Bank's acquisition of Bank of Madura Limited in an all-stock amalgamation in fiscal 2001, and secondary market sales by ICICI to institutional investors in fiscal 2001 and fiscal 2002. ICICI was formed in 1955 at the initiative of the World Bank, the Government of India and representatives of Indian industry. The principal objective was to create a development financial institution for providing medium-term and long-term project financing to Indian businesses. In the 1990s, ICICI transformed its business from a development financial institution offering only project finance to a diversified financial services group offering a wide variety of products and services, both directly and through a number of subsidiaries and affiliates like ICICI Bank. In 1999, ICICI become the first Indian company and the first bank or financial institution from non-Japan Asia to be listed on the NYSE. After consideration of various corporate structuring alternatives in the context of the emerging competitive scenario in the Indian banking industry, and the move towards universal banking, the managements of ICICI and ICICI Bank formed the view that the merger of ICICI with ICICI Bank would be the optimal strategic alternative for both entities, and would create the optimal legal structure for the ICICI group's universal banking strategy. The merger would enhance value for ICICI shareholders through the merged entity's access to low-cost deposits, greater opportunities for earning fee-based income and the ability to participate in the payments system and provide transactionbanking services. The merger would enhance value for ICICI Bank shareholders through a large capital base and scale of operations, seamless access to ICICI's strong corporate relationships built up over five decades, entry into new business segments, higher market share in various business segments, particularly fee-based services, and access to the vast talent pool of ICICI and its subsidiaries. In October 2001, the Boards of Directors of ICICI and ICICI Bank approved the merger of ICICI and two of its wholly-owned retail finance subsidiaries, ICICI Personal Financial Services Limited and ICICI Capital Services Limited, with ICICI Bank. The merger was approved by shareholders of ICICI and ICICI Bank in January 2002, by the High Court of Gujarat at Ahmedabad in March 2002, and by the High Court of Judicature at Mumbai and the Reserve Bank of India in April 2002. Consequent to the merger, the ICICI group's financing and banking operations, both wholesale and retail, have been integrated in a single entity. *Free float holding excludes all promoter holdings, strategic investments and cross holdings among public sector entities.

Board Members Mr. N. Vaghul, Chairman Mr. Sridar Iyengar Mr. R.K.Joshi Mr. Lakshmi N. Mittal Mr. Narendra Murkumbi Mr. Anupam Puri Mr. Vinod Rai Mr. M.K. Sharma Mr. P.M. Sinha Prof. Marti G. Subrahmanyam Mr. T.S. Vijayan Mr. V. Prem Watsa Mr. K.V. Kamath, Managing Director & CEO Ms. Kalpana Morparia, Joint Managing Director Ms. Chanda Kochhar, Deputy Managing Director Dr. Nachiket Mor, Deputy Managing Director ICICI HOME LOANS Why ICICI Bank Home Loans are easy :
Counsellors visit you at your convenience. Step by step guidance through the process. Doorstep delivery and pick up of documents. Home Search service.

FEATURES Purpose: For purchase of house from builder / resale and construction / extension of
existing house.

Loan amount: Rs. 2 lac onwards.

Maximum tenure: 20 years for salaried individuals and self employed professionals 15 years for self employed non professionals. Maximum loan amount: 85% of the of the property cost (Including the stamp duty
and registration).

LOAN AGAINST PROPERTY Want to send your child abroad for higher education? Want to finance your business? Want to meet your medical expenses? Want to finance your daughter's wedding? Wondering where the money would come from? Finance your dreams with Loan Against Property:
Get a loan upto Rs.3 crore Payable in easy monthly installments over a period of 15 years or less Available against Residential as well as Commercial properties Also available is overdraft against your property

OFFICE PREMISES LOANS Following are some features of Office Premises Loans:
You can avail of a loan of a minimum of Rs.2 lac* to a maximum of Rs.1 crore You can opt for a payback term of upto 15 years You could also include your spouse as a co-applicant for the loan and we shall include his / her income to enhance your loan amount

OBJECTIVE OF THE

STUDY

Every research is carried out with some or the other objective. The main mottos behind my research were: To compare Home loan market of two different banks with respect to customer satisfaction, different schemes provided and profit earned. To study uncovered areas geographically. To state about the benefits which the consumers can avail from banks while applying for loan. To create awareness and provide an opportunity to the customers for availing loan at low rate of interest. To suggest way of improving the provision of facilities to the banks from customer point of view. To analyze home loan segments provided by the banks in YamunaNagar To study the consumer preferences for different banks providing home loans.

Comparison between HDFC & ICICI Bank on the basis of sales made in past five years

Year 2002 2003 2004 2005 2006

HDFC(sales ICICI(sales in crores) in crores) 11 12 15 15 16 18 21 22 23 25

comparison

30 25 sales 20 15 10 5 0 2002 2003 2004 year 2005 2006 Series1 Series2

Pink line represent sales of ICICI Bank and blue line represent sales of HDFC Bank. The comparison between the sales of the two banks shows that sales of ICICI Bank is increasing as compared to the HDFC Bank.

LITERATUR E REVIEW

LITRATURE REVIEW
Once the problem is formulated the researcher undertakes an extensive literature survey related to the problem. The literature survey undertaken here includes the books, magazines, and different websites from the internet. In this project report following literature is reviewed. Journals:
Southern Economista The National housing Bank has come out with a new mortgage loan product called Reverse Mortgage Loan executively for benefit of senior citizens. The scheme seeks to address the financial needs of senior citizen for up gradation. Indian Journal of Comm.b The Govt, India has been giving substantial encouragement to the housing sector . The social structure of families is going through a sea change as the Joint joining is fast going way to the nuclear family concept. The pressure to have once own home is high among these families. Indian Journal Of MKtgc Blessed are those who live in their own house and fordone are those who have money to buy one. But all are not privileged to buy a house of his own. For many such less privileged, buying a house has become possible in modern times. Digitd While a majority of companies try to appear the all important global while, ICICI bank modified its loan offering to cater to one specific user group.

BOOKS
Kothari,C.R.,RESEARCH METHODOLOGY4, Cooper Donald R.,Schindler Pamela S5 Gupta S.P6--- Time series analysis is used here. When estimates of future conditions are made on a systematic basis, the process is referred as forecasting and the figure or statement obtained is known as forecast. Schiffman Leon G, Kanuk Leslie Lazar9---- Study of the customer behavior is the study of how individuals make decisions to spend their available resources.

(Time, Money and Efforts) on consumption related items. It includes the study what they buy, whey they buy it, when they buy it, where they buy it, how often they buy it and how often they use it. The primary purpose for the study consumer behavior as apart of marketing curriculum is to understand how customers make their purchase decisions. There insights enable marketers to design more effective marketing strategies. Gupta S C,Kapoor V K7---

WEBSITES
www.hdfc.com/homeloans.asp (02/02/07), from this site I came to know about the types of home loans provided by HDFC bank. www.hdfcbank.com/personal/loans/homeloans.html, from this site I came to know about the profile of HDFC Bank. www.icicibank.com/pfsusee/loan/homeloan/hshomepage.html(08/03/07), this site I came to know about the profile of ICICI Bank. www.easyhomeloanindia.com(12/03/07) from

RESEARCH METHODOLGY

Research in common parlance refers to search for knowledge. It can also be defined as a scientific and systematic search for information on a specific topic. According to OXFORD Dictionary: Research is a careful investigation or inquiry specially through search of new facts. Research Methodology in a way is a written game plan for conducting research. Research methodology may have dimensions. It includes research methods and also considers the logic behind the methods used in the context of the study. It may also be understood as the science of the study and minimizes the degree of uncertainty of making wrong choices. It helps to understand assumptions underlying various techniques and the criteria by which they can decide that certain techniques will be applicable to certain problems and others will not. Therefore in order to solve a research problem it is necessary to design a research methodology for the easy and accurate solution of the problem.

SAMPLING:

Sampling can be defined as the selection of some part of an

aggregate or totality on the basis of which a judgement or inference about the aggregate or totality is made. In other words it is the process of obtaining information about an entire population by examining only a part of it. The process of sampling is used for various reasons-

Sampling saves time and money. It is usually less expensive and produces results at faster speed. It provides more accurate information. It enables to estimate the sampling errors and thus assists in obtaining information concerning characteristics of population. It also enables greater speed of collection of data.

The ultimate test of sample design is how well it represents the characteristics of the population it purports to represent. In measurement terms the sample must be valid which depends upon

Accuracy It is the degree to which biasness is absent from the sample. Precision It represents how well the sample represents the population
in all respect.

SAMPLING DESIGN: A sample design is a definite plan for obtaining a sample

from the sampling frame. It refers to the technique or the procedure that is adopted in selecting the sampling units from which inferences about the population is drawn. Sampling design is determined before the collection of the data.

Several decisions have to be taken in context to the decision about the appropriate sample selection so that accurate data is obtained and efficient results are drawn.

Following questions have to be considered while sampling design What is the relevant population? What is the parameter of interest? What is the sampling frame? What is the type of sample? What sample size is needed? How much will it cost?

Sample Size: It indicates the number of individual who would be surveyed. Here the
sample size is two hundred respondents.

Sampling: In this case Judgement Sampling would be used. In judgement sampling

the researchers judgement is used for selecting items which he considers as representative of the population. It is used quite frequently in qualitative research.

ANALYTICAL TOOL
The tool that I have applied on my research report is Multidimensional scaling & Correlation analysis. CORRELATION
According to Simpson and Kafka correlation analysis deals with the association between two or more variables. It helps in determining the degree of relationship between two or more variables but it does not tell us anything about cause and effect relationship.

Types
Correlation is classified in several different ways. Three of the most important ways are Positive or negative Simple partial or multiple Linear or non-linear

dx repayment dy -2

HDFC -1 29 19 23 7 14 92 -92 92 42

ICICI 0 20 15 23 7 11 76 0 0 0

Others 1 11 5 7 3 6 32 32 32 -12

f 80 39 53 17 31 200 60 124 30

fdy 12 0 -39 0 17 62 -80

fdy2 fdydx 240 39 0 17 124 420 36 14 0 -4 -16 30

Interest -1 rate Down 0 payment Brand 1 image Quick 2 availability f fdx fdx2 fdxdy

Group Correlation

Correlation
r= f fdydx - (fdx) ( fdy) f fdx2 - (fdx)2 = f fdy2 - (fdy)2

200 30 - (60) (80)

200 124 (60)2 = 24800-3600 = 21200 = 149.60 = 1200 1200 40998.36 r= 0.029 1200 6000-4800

200 420 - (80)2

84000-6400

77600

278.56

This shows that it has a low degree of correlation.

Multi Dimensional Scaling: The various factors that a consumer prefer in order to
select a particular brand are: Repayment Rate of interest Quick availability Brand Image Down payment (The calculations are shown in Annexure-2)

TREND ANALYSIS
To apply the statistical tool in this project TREND ANALYSIS is the most effective tool which is applied here.

When estimates of future conditions are made on a systematic basis, the process is referred as forecasting and the figure or statement obtained is known as forecast. In this world of uncertaininty, economic decision rest upon a forecast of future condition. Forecasting is concerned with mainly two tasks:- the determination of best basis available for formation of intelligent managerial expectations, and second handling of uncertainity about future.

ROLE OF TIME SERIES ANALYSIS

It helps in understanding of past behavioiur. It helps in planning future operations.

It helps in evaluating current accomplishments

It facilitates comparisons

COMPONENTS OF TIME SERIES

Secular trend Seasonal variations

Cyclical variations

Irregular variations The method here used is least square method. It is a mathematical method with its help a trend line is fitted to the data in such a manner that following two conditions are satisfied.

Equation of straight line trend is Y=a+bx

Tool Applied ICICI BANK Year sales(Y) 2002 12 2003 15 2004 18 2005 22 2006 25 92 X 1 2 3 4 5 15 XY 12 30 54 88 125 309 X2 1 4 9 16 25 55

Equation of a straight line is Y = a+bX And other two equations are Y= Na+bX XY=aX+bX2 Putting all the values, we get 92=5a+15b, 309=15a+55b After solving both the equations, we get a=8.5 and b=3.3 Trend Eq. will become Y=8.5+3.3X Trend values are Year 2002; X=1, Y=11.8 2003; X=2, Y=15.1 2004; X=3, Y=18.4 2005; X=4, Y=21.7

2006; X=5, Y=25 Expected profit for year is 2007 X=6, Y=28.3

trend of sales
30 25 20 sales 15 10 5 0 2002 2003 2004 2005 2006 2007 year Series1 Series2

HDFC BANK Year sales(Y) X XY X2 2002 11 1 11 1 2003 15 2 30 4 2004 16 3 48 9 2005 21 4 84 16 2006 23 5 115 25 86 15 288 55
Equation of a straight line is Y = a+bX

And other two equations are Y= Na+bX XY=aX+bX2 Putting all the values, we get 86=5a+15b, 288=15a+55b After solving both the equations, we get a=8.2 and b=3 Trend Eq. will become Y=8.2+3X Trend values are Year 2002; X=1, Y=11.2 2003; X=2, Y=14.2 2004; X=3, Y=17.2 2005; X=4, Y=20.2 2006; X=5, Y=23.2 Expected profit for year is 2007 X=6, Y=26.2

trend of Sales
30 25 20 Rs 15 10 5 0 2002 2003 2004 2005 2006 2007 Years Series1 Series2

DATA COLLECTION
After defining the problem and deciding about the sample and its size we need to collect data to further carry out our report work. The gathering of data may range from a simple observation at one location to a grandiose survey of multinational corporations at sites in different parts of the world. The main methods of data collection adopted here are

Primary Data Collection: This methodology is used for the proximity to the truth and control over errors. These cautions remind us to use care in designing data collection procedures and generalizing form results. There are several methods of primary data collection like Observation Method, Interview Method, Schedules, and Questionnaires and so on. The method used by me is Questionnaire. It is considered as the heart of survey operations and therefore should be very carefully constructed. It consists of a number of questions printed or typed in a definite order which is filled by the respondents on their own. A good questionnaire should be comparatively short and simple and the sequence shall be from easy the difficult ones. Questionnaires have many positive features like They are economical. They are free form the biasness of the interviewers. Respondents have adequate time to give well thought to their answers. Respondents can be reached conveniently. Large samples can be used and therefore the results are more dependable.

Before using this method PILOT SURVEY was conducted by me.

SECONDARY DATA COLLECTION

Secondary data means that data that are already available i.e. refers to data which has already been collected and analyzed by someone else. The sources used in this case are Magazines. Journals. Websites.

HYPOTHESIS TESTING
The chi-square test is one of the most simplest and widely used non-parametric test in statistical work. The symbol is greek letter chi. It was first used by Karl Pearsons in the year 1990. the quantity chi-square describes the magnitute of the discrepancy between theory and observation Chi-square= (O-E)2 E Where O=observed frequency And E=expected frequency

Degree of freedom:
While comparing the calculated value of chi square with the table value, we have to determine the degree of freedom. By degree of freedom we mean the number of classes to which the values can be assigned arbitrary or will without violating the restriction or limitations placed. (The calculations are shown in Annexure-3) H0 = let us take the hypothesis that Repayment, down payment, interest rate, quick availability, brand image influence the customer in their buying decision. H1= let us take the hypothesis that Repayment, down payment, interest rate, quick availability, brand image do not influence the customer in their buying decision.

LIMITATIONS OF THE STUDY

Various hindrances occurred while carrying out the research. They have acted as limitation of the study and a few of them are: The area for study was Yamuna Nagar which is quite a small area to judge out the consumer preferences for different banks providing home loans. The market is not well flourished and because of which many banks are not available. Consumers were not aware about various schemes available. Only two hundred respondents have been chosen which is a small number to represent the whole of the population of Yamuna Nagar. While collection of the data many consumers were unwilling to fill the questionnaire. Some of the customers are not aware of the proper knowledge of the banks and the schemes provided by them. The time period for carrying out the research was short as a result of which many facts have been left unexplored.

RESULTS AND FINDINGS

 Have you taken any home loans?

home loans taken yes no

percentage 65% 35%

percentage

yes no

Interpretation: My survey reveal that maximum number of the citizens had taken home loans.

 If yes, which bank do you prefer? Bank preferred HDFC ICICI OTHERS percentage 31% 49% 20%

percentage

HDFC ICICI OTHERS

Interpretation: My survey regarding Home loans reveal that most of the customers prefer ICICI Bank rather than other banks.

 Are you satisfied with the present schemes provided by your bank?

satisfaction level highly satisfied satisfied neutral dissatisfied highly dissatisfied

Percentage 22% 31% 16% 17% 14%

percentage 35% 30% 25% 20% 15% 10% 5% 0%

sa t is f ie d sa tis fie d ne ut ra di s l hi sa gh t is ly f ie di d ss at is f ie d

per%

percentage

hi gh

ly

category

Interpretation: It is revealed that maximum number number of customers are satisfied with the schemes provided by their banks.

If yes which of the scheme you prefer the most?

scheme preferred home acquisition plan pre-allotment extension plan balance transfer booking finance

Percentage 51% 9% 20% 11% 9%

percentage 60% 50% 40% 30% 20% 10% 0% home acquisition plan balance transfer schemes percentage

Interpretation: From the survey conducted it is revealed that maximum number of customers prefer Home acquisition plan, after that extension plan then balance transfer and others.

Specify the reason for taking loan from a specified bank?

reason repayment down payment rate of interest image of bank quick availability

percentage 31% 20% 26% 11% 12%

percentage 35% 30% 25% 20% 15% 10% 5% 0%

re pa ym do en w t n pa ym ra en te t of in te im re st ag e of qu ba ic nk k av ai la bi lit y

% of respondents

percentage

Interpretation: Through my survey it is concluded that most of the customers prefer repayment factor more in order to take loan from a particular bank, after that rate of interest.

Are you satisfied with the services provided by your bank?

satisfaction level highly satisfied satisfied neutral dissatisfied highly dissatisfied

Percentage 23% 28% 17% 28% 4%

percentage percentage of respondents 30% 25% 20% 15% 10% 5% 0%

d ne ut ra l sa tis f ie d sa t is f ie d sa tis at isf ie d fie

percentage

hi gh l

hi gh l

di ss

di s

Interpretation: My survey reveal that equal number of customers are satisfied and dissatisfied with the services provided by their banks.

If not what are the reasons for that? reasons lack of knowledge tenure lack of guidance legal formalities inadequate information Percentage 13% 10% 12% 25% 40%

percentage of respondents

percentage 45% 40% 35% 30% 25% 20% 15% 10% 5% 0%

te nu re ui da nc e le dg e al it at io n ie s

percentage

of k

of g

le ga l

la ck

in ad eq ua

la ck

te

in fo rm

no w

fo rm

Interpretation: My survey revealed that most of the customers are not satisfied with their banks because of inadequate information and legal formalities.

What do you think who can better guide you for your decision?

promotion advertisements employees friends reference group relatives

Percentage 17% 14% 5% 31% 33%

percentage percentage of respondents 35% 30% 25% 20% 15% 10% 5% 0%

en ds pl oy ee s gr ou p en ts se m re la tiv es

percentage

fri

ad ve r ti

re fe rc e

em

Interpretation: Maximum number of customers are influenced by the suggestions given by their relatives and the reference group.

On the basis of the services, in which category you place your bank? category excellent best good better ok Percentage 29% 41% 12% 8% 10%

percentage 45% percentage of respondents 40% 35% 30% 25% 20% 15% 10% 5% 0% excellent best good better ok percentage

Interpretation: My survey reveal that most of the customers consider their bank as best. 21% of he customers consider their bank as excellent.

FINDINGS
In my survey, I found that: Both the banks are easily recalled by the customers. Marketing strategies of HDFC Bank are not so good. The procedure adopted by banks for disbursement of loans is very lengthy. Documentation needed to apply for loan are very large that create problem Some of the customers avail home loans due to tax planning Door step services provided by banks are attractive. Customer relationship management technique is effectively used by both the banks. Rural areas are not given more emphasis.

SUGGESTIONS

On the basis of the survey conducted by me, following suggestions are to be considered: They should Update market strategy according to changing circumstances. They should contact personally to the customers to avoid any communication problems. They should give more focus to the rural areas. Proper advertisement should be given in order to remind the customers about their schemes and other benefits. To capture more market by shooting promotional schemes

 To design effective strategies to capture untouched areas.

BIBLIOGRAPHY

BOOKS
1. Consumer Behaviour (Third Edition) by Schiffman $ Kanauk.

2. Consumer Behaviour in Indian Perspectives (First Edition: 2001) by Suja R. Nair, Himalaya Publishing House, Mumbai-400004. Chapter 1, Page 3-6. 3. Consumer Behaviour (Second Edition) by Gupta S.L 4. Research Methodology Methods and Techniques (Second Edition) by Kothari C.R., New Age International Publishers, Ansari Road, Daryaganj, New Delhi110002. Chapter 4, Page 55-58. Chapter 6, Page 95,100,111. 5. Business Research Methodology (Eighth Edition) by Donald R. Cooper and Pamela S. Schindler, Tata McGraw Hill Publishing Company Limited, New Delhi. Chapter 3, Page 82,86,87. Chapter 4, Page 101,102 6. Statistical Methods by S.P.,sultan Chand & sons, educational publishers, New Delhi, page No.(589-672)

7. Gupta S C, Kapoor V K, Fundamental of mathematical statistics, Sultan Chand & Sons, Page No.-10.1-10.40

WEBSITES
1. www.homeloans.va.govl (02/03/07) 2. www.caussic.com.au/ (05/03/07) 3. www.hdfc.com/homeloans.asp (02/02/07) 4. www.hdfcbank.com/personal/loans/homeloans.html 6. www.hdfcbank.com (07/03/07) 7. www.icicibank.com(10/03/07) 8. www.icicibank.com/pfsusee/loan/homeloan/hshomepage.html(08/03/07) 9. www.easyhomeloanindia.com(12/03/07) 10. www.ilovesindis.com/real-estate/housing-financecompany/icici.html (26/02/07) 5. www.indiahousing.com/hdfc-home-loans-html (10/03/07)

Journals:
a) Southern Economist: The National housing Bank has come out with a new mortgage loan product called Reverse Mortgage Loan executively for benefit of senior citizens. The scheme seeks to address the financial needs of senior citizen for up gradation. b) Indian Journal of Comm: The Govt, India has been giving substantial encouragement to the housing sector . The social structure of families is going through a sea change as the Joint joining is fast going way to the nuclear family concept. The pressure to have once own home is high among these families. c) Indian Journal Of MKtg: Blessed are those who live in their own house and fordone are those who have money to buy one. But all are not privileged to buy a house of his own. For many such less privileged, buying a house has become possible in modern times. d) Digit While a majority of companies try to appear the all important global while, ICICI bank modified its loan offering to cater to one specific user group.

ANNEXURE

Annexure-1 Questionnaire on

Comparative study of Home Loans provided by HDFC and ICICI Bank on the basis of customer satisfaction, different schemes, sales made-A case study in Yamunanagar

 Have you taken a home loan? Yes If yes, which bank you prefer? HDFC Bank ICICI Bank Others Specify the reason for preferring the particular Bank.. Are you satisfied with the present schemes provided by your bank? Highly satisfied Highly dissatisfied Others If yes which of the scheme would you prefer the most? Home acquisition plan Extension plan Balance Transfer Pre allotment booking finance Satisfied Dissatisfied No

Specify the reason for taking loan from a specific bank. Repayment Rate of interest Quick availability Are you satisfied with the services provided by your bank? Highly satisfied Highly dissatisfied Neutral If not, what are the reasons for that? Lack of knowledge Lack of guidance Legal formalities Inadequate information Satisfied Dissatisfied Down payment Image of bank

Tenure What do you think who can better guide you for your decision? Advertisements Employees Relatives Reference group Friends

On the basis of services in which category do you place your bank? Good Better Best Do you face any problem while applying for loan? YES NO Excellent OK

Do you feel any hidden charges which were not revealed but has been charged from you? YES NO

If yes, are you satisfied with the services provided by your bank? Highly satisfied Unsatisfied Satisfied Highly unsatisfied Moderate

Arrange the following in descending order according to your preference while taking a decision: Repayment procedure Less documentation Down payment Quick availability Are you satisfied with the procedure of disbursement of loan? Highly satisfied Unsatisfied Satisfied Highly unsatisfied Moderate

 Suggestions, If any

Name of Investor: Resident of: Marital status: Occupation: Annual Income (in Rs.): Service Business. Others

Sex: male/female

Age (in yrs):

Service/ Business/ Others

Place: Date:

Investigator Signature
(Priyanka Kundu)

Annexure-2 MULTI DIMENSION SCALING

XLSTAT 7.1 - Multidimensional Scaling (MDS) - 3/14/2007 at 6:22:19 PM Similarity matrix (converted to a dissimilarity matrix): workbook = pika.xls / sheet = Sheet1 / range = $B$5:$F$9 / 5 row Uniform weighting (default) No missing values Metric Multidimensional Scaling Multidimensional Scaling model: absolute Stress used for the results: Kruskal's stress-1 Dimension of the representation space: 2 Repetitions: 10 Seed of the pseudo-random numbers generator: 1251198112 Iterations: 50 Convergence: 0.0001

Space with 2 Dimensions: Model: Dij= Pij

Observation coordinates: Observation group 1 group 2 group 3 group 4 group 5 Dim1 5.422 5.738 10.333 -6.017 -15.475 Dim2 0.008 -9.532 2.946 13.363 -6.785

Distances measured in the representation space: group 1 group 1 group 2 group 3 group 4 group 5 0 9.546 5.722 17.585 21.974 group 2 9.546 0 13.297 25.737 21.391 group 3 5.722 13.297 0 19.387 27.582 group 4 17.585 25.737 19.387 0 22.258 group 5 21.974 21.391 27.582 22.258 0

Ideal distances calculated using the model (disparities): group 1 group 1 group 2 group 3 0 10.000 6.000 group 2 10.000 0 16.000 group 3 6.000 16.000 0 group 4 18.000 22.000 22.000 group 5 22.000 24.000 24.000

group 4 18.000 22.000 22.000 0 24.000 group 5 22.000 24.000 24.000 24.000 0 In the case of the absolute model, the disparities are equal than the dissimilarities

Residual distances: group 1 group 1 group 2 group 3 group 4 group 5 0 -0.454 -0.278 -0.415 -0.026 group 2 -0.454 0 -2.703 3.737 -2.609 group 3 -0.278 -2.703 0 -2.613 3.582 group 4 -0.415 3.737 -2.613 0 -1.742 group 5 -0.026 -2.609 3.582 -1.742 0

Comparative table: Dissimilarit Dissimilarity Disparity Pair y Disparity Distance rank rank group 1 group 3 6.000 6.000 5.722 1 1 group 1 group 2 10.000 10.000 9.546 2 2 group 2 group 3 16.000 16.000 13.297 3 3 group 1 group 4 18.000 18.000 17.585 4 4 group 3 group 4 22.000 22.000 19.387 5 5 group 2 group 4 22.000 22.000 25.737 5 5 group 1 group 5 22.000 22.000 21.974 5 5 group 4 group 5 24.000 24.000 22.258 6 6 group 3 group 5 24.000 24.000 27.582 6 6 group 2 group 5 24.000 24.000 21.391 6 6 In the case of the absolute model, the disparities are equal than the dissimilarities Distance rank 1 2 3 4 5 9 7 8 10 6

Summary of repetitions: Initial Fin. Iterations stress stress 1 50 0.609 0.120 2 50 0.526 0.188 3 17 1.204 0.115 4 50 1.491 0.180 5 50 0.428 0.209 6 20 0.655 0.115 7 22 0.863 0.115 8 12 0.497 0.115 9 19 0.520 0.115 10 30 0.550 0.120 In bold, repetition corresponding to the best solution that XLSTAT found Repetition

ANNEXURE-3 CHI SQUARE TEST

XLSTAT 7.1 - Tests on Contingency Tables (Chi-square...) - 3/14/2007 at 10:55:35 AM Data: workbook = Book1 / sheet = Sheet1 / range = $B$2:$D$6 / 5 rows and 3 columns

Independence tests between the rows and columns in the contingency table: Chi-square test: Chi-square (observed value) Chi-square (critical value) 2.107 15.507

DF One-tailed p-value Alpha

8 0.978 0.05

Decision: At the level of significance Alpha=0.050 the decision is to not reject the null hypothesis of independence between the rows and the columns. In other words, the dependence between the rows and the columns is not significant.

Chi-square likelihood ratio test (Wilks' G): Wilks' G (observed value) Wilks' G (critical value) DF One-tailed p-value Alpha 2.117 15.507 8 0.977 0.05

Decision: At the level of significance Alpha=0.050 the decision is to not reject the null hypothesis of independence between the rows and the columns. In other words, the dependence between the rows and the columns is not significant.