Sip akshay hdbfs

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Summer Internship Project Report
“A Study of Credit Appraisal Process of HDB Financial services"
Undertaken at
SUBMITTED BY
AKSHAY KUMAR
16DM111
PGDM 2016-2018
Under the guidance of:
Mr. Sudhanshu Parida – Branch Manager, HDBFS, Bhubaneswar.
Dr. Archana Choudhary – Birla Global University, Bhubanewar

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ACKNOWLEDGEMENT
I sincerely feel the credit of the project work could not be categorized to only one individual.
This work is a combined effort of all those concerned with it, it would have been quite
difficult without their direct and indirect co-operation. I express my appreciation and
gratitude to all the concerned people.
To begin with, I would like to offer my sincere thanks to “HDB Financial Services” for giving
me an opportunity to do my summer internship with the esteemed organization.
With due reverence, I acknowledge the valuable support of “Mr. Sudhanshu Parida, Branch
Manager”, for giving me the opportunity to do my summer internship under his guidance.
Without his guidance, support and valuable suggestions during the research, the project
would not have been accomplished.
My heartfelt gratitude also goes to “Mr. Debidutta Satapathy, Credit Manager” for his co-
operation and willingness to answer all my queries, and provide valuable assistance.
I also sincerely thank “Dr. Archana Choudhary”, my faculty mentor at BGU, who provided
valuable suggestions, shared his/her rich corporate experience, and helped me script the
exact requisites.
Last, but not least, I would like to thank Mr. Mithun Patnaik (Sales Manager, HDB Financial
Services) who has contributed significantly towards the completion of the project by sharing
his experience and giving his valuable time as well as his suggestions to me during the
course of my project.
Akshay Kumar
MBA Batch (2016-18)
16DM111
Birla Global University, Bhubaneswar

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EXECUTIVE SUMMARY
The prime objective for taking up this project is to acquire knowledge of NBFCs and to take
a practical exposure and expertise of credit appraisal process. Credit Appraisal is an
important activity carried out to determine whether to accept or reject the proposal for
finance. Credit appraisal is a process to ascertain the risk associated with the extension of the
credit facility.
The project explains the steps of credit appraisal process starting from the loan application to
the loan disbursal in this report. There are two types of cases one is Financial based and the
second is Non-financial based consists of documents like KYC, ITR etc. Then comes the life
blood of credit analysis which is Credit Approval Memo (CAM) which is crucial and most
important for making proposal.
Financial Analysis basically arranges the customers financial data in a well-defined manner
so that it becomes easy for the credit analyst or the credit manager to interpret the financial
data of the customer and make the final call whether to give the loan or not (under certain
parameters).
CAM is maintained to access the risk of the applicant. It contains the history or background
of the applicant and guarantor as well as the customer category. The amount of loan, for how
much period i.e. tenure & on what rate, banking facility, details of the collateral security are
also mentioned in this CAM report on all this basis credit manager takes the call.
For better understanding of Credit appraisal and its parameters, I have also studied the loan
policies provided by the HDB Financial Services.
This project also helps to know about customer’s perception on HDBFS funding because in
today’s world competition it helps in providing the better services to the customers and
increases the efficiency of the institution.

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Table of Contents
Summer Internship Project Report............................................................................................1
Faculty Mentor Certificate..................................................................................................i
Industry Mentor Certificate................................................................................................ii
Acknowledgement ............................................................................................................iii
Declaration........................................................................................................................iv
Letter of Transmittal ..........................................................................................................v
Letter of Authorization......................................................................................................vi
Table of Contents.............................................................................................................vii
Executive Summary.........................................................................................................viii
Chapter 1....................................................................................................................................6
INDUSTRY AND COMPANY OVERVIEW......................................................................................6
Industry Overview......................................................................................................................7
TYPES OF NBFCs IN INDIA...................................................................................................8
DIFFERENCE BETWEEN NBFCS AND BANKS .................................................................8
Growth ...............................................................................................................................9
Profitability ........................................................................................................................9
Infrastructure Lending.......................................................................................................9
Promoting inclusive growth...............................................................................................9
COMPANY OVERVIEW..............................................................................................................10
Subsidiaries ..........................................................................................................................10
Loans....................................................................................................................................12
 Unsecured Personal Loans ........................................................................................12
 Secured Loans ...........................................................................................................12
Chapter 2..................................................................................................................................14
Job Description.........................................................................................................................14
JOB DESCRIPTION.....................................................................................................................15
Chapter 3..................................................................................................................................16
Introduction to Topic ...............................................................................................................16
INTRODUCTION TO TOPIC........................................................................................................17

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CREDIT APPRAISAL ........................................................................................................17
Introduction to loans ...............................................................................................................19
Secured.................................................................................................................................19
Unsecured.........................................................................................................................20
HDB Financial Services.............................................................................................................21
FINANCIAL ANALYSIS ...................................................................................................29
OPERATING MODEL OF HDB FINANCIAL SERVICES .................................................................29
Chapter 4………………………………………………………………………………………………………......................30
CHAPTER 4................................................................................................................................32
Research Methodology............................................................................................................29
Process of Credit Appraisal....................................................................................................313
Data Analysis........................................................................................................................33
“A Study on customer perception towards HDB funding” ................................................334
FINDINGS................................................................................................................................388
CONCLUSION..........................................................................................................................398
SUGGESTIONS ........................................................................................................................399
Annexure..................................................................................................................................40
References..............................................................................................................................422

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Chapter 1
Industry and
Company Overview

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INDUSRTYAND COMPANY OVERVIEW
Non-bank financial companies (NBFCs) are financial institutions that
provide banking services without meeting the legal definition of a bank, i.e. one that does not
hold a banking license. These institutions typically are restricted from taking deposits from
the public depending on the jurisdiction. Nonetheless, operations of these institutions are
often still covered under a country's banking regulations.
The specific banking products that can be offered by NBFCs depends on the jurisdiction, and
may include services such as loans and credit facilities, savings products, investments
and money transfer services.
A Non Banking Financial Company (NBFC) is a company registered under the Companies
Act, 1956 of India, engaged in the business of loans and advances, acquisition of shares,
stock, bonds hire-purchase, insurance business or chit business but does not include any
institution whose principal business is that includes agriculture or industrial activity or the
sale, purchase or construction of immovable property.
The working and operations of NBFCs are regulated by the Reserve Bank of India (RBI)
within the framework of the Reserve Bank of India Act, 1934 (Chapter III B) and the
directions issued by it.
SERVICES PROVIDED
NBFCs offer most sorts of banking services, such as loans and credit facilities, private
education funding, retirement planning, trading in money markets, underwriting stocks and
shares. These institutions also provide wealth management such as managing portfolios of
stocks and shares, discounting services e.g. discounting of instruments and advice
on merger and acquisition activities. The number of non-banking financial companies has
expanded greatly in the last several years as venture capital companies, retail and industrial
companies have entered the lending business. Non-bank institutions also frequently support
investments in property and prepare feasibility, market or industry studies for companies.
However they are typically not allowed to take deposits from the general public and have to
find other means of funding their operations such as issuing debt instruments.
NBFCs registered with the Reserve Bank of India may take part in the insurance agency
business on a fee basis and without risk participation or the need to seek the bank's
approval.

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In a notification issued, the RBI said such NBFCs should obtain permission from the
Insurance Regulatory and Development Authority and comply with IRDA regulations for
acting as a "composite corporate agent" with insurance companies.
TYPES OF NBFCs IN INDIA
Different types of NBFCs are as follows:
 ASSETS FINANCE COMPANY (AFC)
 Investment Company (IC)
 Loan Company (LC)
 Infrastructure Finance Company (IFC)
 Infrastructure Debt Fund: Non Banking Financial Company (IDF-NBFC)
 Gold Loan NBFCs in India
DIFFERENCEBETWEEN NBFCSAND BANKS
NBFCs perform functions similar to that of banks but there are a few differences-
 NBFC cannot accept demand deposits;
 NBFC is not a part of the payment and settlement system and as such,
 NBFC cannot issue cheques drawn on itself, and
 Deposit insurance facility of the Deposit Insurance and Credit Guarantee Corporation
is not available for NBFC depositors, unlike banks.
Why are Non Banking Financial Companies Important?
India’s financial services sector is huge. It is not just comprised of commercial banks, but
also non-banking financial companies (NBFCs). These firms offer a wide array of financial
services like loans, chit-funds, and are different from banks. NBFCs are often small players
that largely go unnoticed. However, they are still important to the economy, especially in a
developing country like India where 70% of the population lives in rural areas.
Size of sector
The NBFC sector has grown considerably in the last few years despite the slowdown in the
economy. As of March 2013, it accounted for 12.5% of the country’s Gross Domestic
Product (GDP) – a measure of the size of the economy. This is up from 8.4% in March 2006.
However, this only counts NBFCs with assets more than Rs 100 crore. If the assets of all the
NBFCs below Rs 100 crore are reckoned, the share of NBFCs’ assets to GDP would go
further.

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Growth
In terms of year-over-year growth rate, the NBFC sector beat the banking sector in most
years between 2006 and 2013. On an average, it grew 22% every year. Even when the
country’s GDP growth slowed to 6.3% in 2011-12 from 10.5% in 2010-11, the NBFC sector
clocked a growth of 25.7%. This shows, it is contributing more to the economy every year.
Profitability
NBFCs are more profitable than the banking sector because of lower costs. This helps them
offer cheaper loans to customers. As a result, NBFCs’ credit growth – the increase in the
amount of money being lent to customers – is higher than that of the banking sector. Credit
grew an average 24.3% per year for NBFCs as against 21.4% for banks. This shows that
more customers are opting for NBFCs.
Infrastructure Lending
NBFCs contribute largely to the economy by lending to infrastructure projects, which are
very important to a developing country like India. But they require large amount of funds,
and earn profits only over a longer time-frame. As a result, these are riskier projects. This
deters a lot of banks from lending to infrastructure projects. In the last few years, NBFCs
have contributed more to infrastructure lending than banks. NBFCs lent over one third or
35.8% of their total assets to infrastructure sector as of March 2013. In contrast, banks lent
only 7.6%.
Promoting inclusive growth
NBFCs cater to a wide variety of customers – both in urban and rural areas. They finance
projects of small-scale companies, which is important for the growth in rural areas. They also
provide small-ticket loans for affordable housing projects. All these help promote inclusive
growth in the country.

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COMPANYOVERVIEW
HDFC Bank Limited (Housing Development Finance Corporation) is an Indian banking
and financial services company headquartered in Mumbai, Maharashtra. It has about 76,286
employees including 12,680 women and has a presence in Bahrain, Hong Kong and
Dubai. HDFC Bank is the second largest private bank in India as measured by assets. It is the
largest bank in India by market capitalization as of February 2016. It was ranked 58th among
India’s most trusted brands according to Brand Trust Report, 2015
The Housing Development Finance Corporation Limited (HDFC) was amongst the first to
receive an 'in principle' approval from the Reserve Bank of India (RBI) to set up a bank in the
private sector, as part of the RBI's liberalization of the Indian Banking Industry in 1994. The
bank was incorporated in August 1994 in the name of 'HDFC Bank Limited', with its
registered office in Mumbai, India. HDFC Bank commenced operations as a Scheduled
Commercial Bank in January 1995.
Subsidiaries
HDB Financial Services Limited (‘HDBFS’) is engaged in retail asset financing. It is a non-
deposit taking non-bank finance company (NBFC). Apart from lending to individuals, the
company grants loans to micro, small and medium business enterprises. It also runs call
centers for collection services to the HDFC Bank’s retail loan products. The Company is
promoted by HDFC Bank Ltd which has 96.49% shareholding in the Company as on 31

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March 2012. As of March 31, 2015, HDBFS had more than 1000 branches in 23 states and 3
union territories. During the FY 2016-17, HDBFS had turnover of Rs 5714.54 crores and
profit after tax of Rs. 698.77 crores.
HDB Financial Services Ltd., a Company, incorporated in Ahmedabad, is a Registered Non
Banking Finance Company engaged in providing loans and other financial services and
governed by the Indian Companies Act, 1956 The financial statements have been prepared in
accordance with statutory requirements and in accordance with the Companies Act, 1956. .
The accounting and reporting policies of HDB Financial Services Ltd used in the preparation
of these financial statements conform to Generally Accepted Accounting Principles in India
(“Indian GAAP”), the guidelines issued by Reserve Bank of India (“RBI”) from time to time
and practices generally prevalent in the industry in India.
HDB Financial Services Limited is a subsidiary company.
NBFC REGISTRATION
The Company has been registered as Non-Banking Financial Company (Non Deposit) i.e.
NBFC-ND by the Reserve Bank of India vide their letter dated December 31, 2007.
INCREASE IN SHARE CAPITAL
The Company was incorporated on 4th June 2007 with an initial paid-up share capital of Rs.
700,000/- divided into 70,000 equity shares of Rs. 10/- each. During the period under review,
the Company has issued and allotted 1048.72 lacs equity shares of the face value of Rs. 10/-
each whereby its paid-up share capital has increased to Rs. 10494.20 lacs divided into
1049.42 lacs equity shares of Rs. 10/- each. The aforesaid increase falls within the existing
authorized Share Capital of the Company. During the period under review, the Company has
allotted 1000.00 lacs equity shares to HDFC Bank Limited which constitute 95.29% of the
total current paid-up share capital of the Company. Thus the Company has become subsidiary
of HDFC Bank Limited.
BUSINESS
HDB Financial Services was incorporated on June 4, 2007 and it received its
Commencement of Business Certificate on July, 31, 2007. The company applied for
registration certificate with Reserve Bank of India and received the registration on December
31, 2007. The Company has put in place its Management team. The company placed an order
with Nucleus for its Lending system "Finn one". The application has since been installed
and UAT completed. The company has also successfully implemented a GL System for its

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Finance Department and a mail system for the employees. The company also prepared the
business plans and also finalized premises for its some of the branches, its CPU operations at
Hyderabad and Data Centre at Bangalore. First branch was started at Kodambakkam,
Chennai and the CPU operations set up at Kukkatpally, Hyderabad. The Company
commenced business by placing deposit with a corporate.
HDB’s primary focus is on small borrowers whose credit requirements are under Rs 3 Crores.
It has the following products and services:
Loans – HDB offers a range of Loans in the Unsecured and Secured Loans space that fulfils
all the financial needs of its target Segment.
 Unsecured Personal Loans
The Loans are in the range of Rs 100,000 to Rs 20, 00,000/- . These loans are offered as term
loans will the maximum tenure at 48 months. Interest rates on these loans will be higher than
the rates on Secured Loans.
 Secured Loans
Secured loans are offered to customers to address larger loan requirements or longer
repayment requirements. Secured Loans are in the range of Rs 100,000 to 300,00,000. These
loans are offered as term loans with the maximum tenure at 120 months. These loans are
normally offered on a floating rate basis.
HDB provides loan against the following Collaterals as Security
 Commercial / Residential Property (LAP)
 Cars/Automobiles
 Shares
 Marketable Securities such as Bonds
 Gold Jewellery
 Commercial Vehicle Loans (New and Used Commercial Vehicles)
Insurance Services
HDB is a corporate agent for HDFC Standard Life Insurance Company Limited and
HDFC Ergo General Insurance Company Limited. HDB sells Insurance bundled with its
Loan as a value-add as well as a standalone product. Insurance in India has been traditionally
bought by Mass Affluent segment for “Tax Deferment” and long term savings. The company
believes that its target segment has a huge appetite for traditional risk cover policies.

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Key Strengths of the Company
 Access to Cost Effective Funding:
The Company has access to cost effective funding because of its strong parentage and
conservative risk management policies. The Company maintains relationship with several
banks and financial institutions
 Experienced Management Team:
The Company has an experienced management team which is supported by efficient and
capable employee pool. The board comprises of senior professionals of HDFC Bank who
have in depth experience in the financial services Industry and in Banking. The senior
management is composed of professionals who have deep understanding of the industry and
have extensive experience in financial services sector.
 Effective Risk Management policies:
The Company recognizes the importance of Risk management and has accordingly invested
in processes, people and a management structure. The risk committee of the Company also
reviews the asset quality at frequent intervals. Product policy programs are duly approved
before any new product launches and are fine tuned regularly. The asset quality of the
company continues to remain healthy and the Gross NPA of the company is at 0.10% and Net
NPAs are at 0.0.05% as of 31st March 2012.

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Chapter 2
Job Description

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JOB DESCRIPTION
Title of the Job: Intern
Department: Credit Department
Key Result Areas (KRAs):
To understand, analyze and review of the “Credit Appraisal System” in different
cases.
 To assist the credit team
 Checking all the documents which are required before login
 Login the loan file and generate the LOS ID (unique ID)
 Generating all the other documents which is required to the credit team i.e. the CIBIL
Report (which shows the background of the customer ), e-tax payment slip (related to
ITR), FU( shows the track record in HDFC Or HDB in any branch ,if any
 Meeting the customer personally as PD (Personal Discussion)
 Preparing the CAM (Credit Approval Memo)
 Making the Cases in the given format by the company which is to be send above level
for the approval.
WORKING CONDITIONS:
There had been no sharing of data of any customer/company and any other due to
compliance issue.
Policy reading can be accessible within the branch.
Internet facilities for any extra use other then the office work are a not available.
Working Hours:
The timing of the working hours were 10’o clock morning till 7’o clock in the
evening.
Reporting:
The reporting person was Mr. Sudhanshu Parida (Branch Manager) & Mr. Devi
(Branch Credit Manager)

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Chapter 3
Introduction to Topic

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INTRODUCTIONTO TOPIC
CREDIT APPRAISAL
Credit Appraisal With Regards to HDB Financial Services
This project is done to understand, analyze and review the “Credit Appraisal System” at HDB
financial services. The Project is basically done to understand the process carried out in the
institution and the criteria set by the institution for obtaining the loan.
Overview of Credit
The word ‘CREDIT’ comes from the Latin word ‘CREDERE’, which means ‘TRUST’.
When seller transfers his wealth to a buyer who has agreed to pay later, there is a clear
implication of trust that the payment will be made at the agreed terms. The credit period and
the amount of credit depend upon the degree of trust.
Credit is an essential tool. It bears a cost, the cost of the seller having to borrow until the
customer payment comes. Ideally, the cost is the price but, as most customer pay later than
agreed; the extra unplanned cost erodes the planned net profit of the company.
Credit appraisal is an important activity carried out by the credit department of the bank to
determine whether to accept or reject the proposal for finance. In the beginning the report
talks about Bank of India's history, its overall financial status and its decision making
process.
Credit analysis is the method by which one calculates the creditworthiness of a business or
organization. In other words, It is the evaluation of the ability of a company to honor its
financial obligations. The audited financial statements of a large company might be analyzed
when it issues or, a bank may analyze the financial statements of a small business before
making or renewing a commercial loan. The term refers to either case, whether the business
is large or small.
The objective of credit analysis is to look at both the borrower and the lending facility being
proposed and to assign a risk rating. The risk rating is derived by estimating the probability of
default by the borrower at a given confidence level over the life of the facility, and by
estimating the amount of loss that the lender would suffer in the event of default.
Credit analysis involves a wide variety of financial analysis techniques, including ratio and
trend analysis as well as the creation of projections and a detailed analysis of cash flows.
Credit analysis also includes an examination of collateral and other sources of repayment as
well as credit history and management ability. Analysts attempt to predict the probability that

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a borrower will default on its debts, and also the severity of losses in the event of default.
Credit spreads—the difference in interest rates between theoretically "risk-free" investments.
Before approving a commercial loan, a bank will look at all of these factors with the primary
emphasis being the cash flow of the borrower. A typical measurement of repayment ability is
the debt service coverage ratio. A credit analyst at a bank will measure the cash generated
by a business (before interest expense and excluding depreciation and any other non-cash or
extraordinary expenses). The debt service coverage ratio divides this cash flow amount by the
debt service (both principal and interest payments on all loans) that will be required to be
met. Commercial bankers like to see debt service coverage of at least 120 percent. In other
words, the debt service coverage ratio should be 1.2 or higher to show that an extra cushion
exists and that the business can afford its debt requirements.
Institutions use the credit appraisal services for themselves also before providing the loan to a
borrower. The credit appraisal process is based on careful analysis of various facts ands data
provided by the borrower to the bank. After the proper credit appraisal process, banks takes
the decision to either fund the project or reject the project.
Credit appraisal take cares of:
 Borrower’s ability to complete the project and its intention to re-pay the loan
after the completion of the project.
 All the technical details related to the project like project requirement, end
product, maintenance, project specification, quality etc.
 All the project detail like Cash flow, bank balance, ITR etc needed to be
checked at that time.
 Credit Appraisal also to determine whether the project is visible or not, are
there chances to re-pay the loan.
Advantages:
 Reduce the risk involved in the loans provided for a project
 Increases the confidence among the team and improves the sales decision
 Reduces NPA ( Non performing assets) and financial losses
 Proper assessment is done with different options

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Introduction to loans
Loans are advances for fixed amounts repayable on demand or in installments. They are
normally made in lump sums and interest is paid on the entire amount. The borrower cannot
withdraw funds beyond the amount sanctioned.
A key function of the NBFC is deploying funds for income-yields assets. A major part of the
NBFC is loans and advances. Loans and advances are long term and short term credit
facilities to the various types.
LOANS
In finance, a loan is the lending of money from one individual, organization or entity to
another individual, organization or entity. A loan is a debt provided by an entity
(organization or individual) to another entity at an interest rate, and evidenced by
a promissory note which specifies, among other things, the principal amount of money
borrowed, the interest rate the lender is charging, and date of repayment. A loan entails the
reallocation of the subject asset(s) for a period of time, between the lender and the borrower.
In a loan, the borrower initially receives or borrows an amount of money, called
the principal, from the lender, and is obligated to pay back or repay an equal amount of
money to the lender at a later time.
The loan is generally provided at a cost, referred to as interest on the debt, which provides an
incentive for the lender to engage in the loan. In a legal loan, each of these obligations and
restrictions is enforced by contract, which can also place the borrower under additional
restrictions known as loan covenants. Although this article focuses on monetary loans, in
practice any material object might be lent.
Acting as a provider of loans is one of the principal tasks for financial institutions such as
banks and credit card companies.
TYPES OF LOANS
Secured
A secured loan is a loan in which the borrower pledges some asset (e.g. a car or property)
as collateral.

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A mortgage loan is a very common type of loan, used by many individuals to purchase
things. In this arrangement, the money is used to purchase the property. The financial
institution, however, is given security – a lien on the title to the house – until the mortgage is
paid off in full. If the borrower defaults on the loan, the bank would have the legal right to
repossess the house and sell it, to recover sums owing to it.
In some instances, a loan taken out to purchase a new or used car may be secured by the car,
in much the same way as a mortgage is secured by housing. The duration of the loan period is
considerably shorter – often corresponding to the useful life of the car. There are two types of
auto loans, direct and indirect. A direct auto loan is where a bank gives the loan directly to a
consumer. An indirect auto loan is where a car dealership acts as an intermediary between the
bank or financial institution and the consumer.
Unsecured
Unsecured loans are monetary loans that are not secured against the borrower's assets. These
may be available from financial institutions under many different guises or marketing
packages:
 credit card debt
 personal loans
 bank overdrafts
 credit facilities or lines of credit
 corporate bonds (may be secured or unsecured)
 peer-to-peer lending
The interest rates applicable to these different forms may vary depending on the lender and
the borrower. These may or may not be regulated by law. In the United Kingdom, when
applied to individuals, these may come under the Consumer Credit Act 1974.
Interest rates on unsecured loans are nearly always higher than for secured loans, because an
unsecured lender's options for recourse against the borrower in the event of default are
severely limited. An unsecured lender must sue the borrower, obtain a money judgment for
breach of contract, and then pursue execution of the judgment against the borrower's
unencumbered assets (that is, the ones not already pledged to secured lenders). In insolvency
proceedings, secured lenders traditionally have priority over unsecured lenders when a court
divides up the borrower's assets. Thus, a higher interest rate reflects the additional risk that in
the event of insolvency, the debt may be uncollectible.

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HDB FinancialServices
HDB Financial Services Limited, a non-banking financial company, provides financing,
collection, and insurance services in India. The company operates through Lending Business
and BPO Services segments. It offers unsecured loans, including business and personal loans;
loans against properties, gold jewelry, securities, and shares; loans for ESOPs; and enterprise
business, consumer durables, car, construction equipment, and commercial vehicle loans. The
company also provides various life insurance products; and general insurance products, such
as motor, health, critical illness, travel, home, and personal accident insurance, as well as end
to end collection services through collection call centers. It operates 929 branches in 623
cities. The company was incorporated in 2007 and is based in Mumbai, India. HDB Financial
Services Limited is a subsidiary of HDFC Bank Limited.
HDB
LOANS
Secured loans
Loan against
securities
Loan against
Shares
Loan against
Property
Loan against
Gold
Car Loans
Enterprise
Business Loan
Equipment
Loans
Unsecured
loans
Personal loans
Business Loans
INSURANCE
Life Insurance
General
Insurance

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LOANS (Apply now and live your dreams!)
Whether it is business expansion or a working capital requirement, money for your children's
school admissions, daughter's wedding or a dream vacation – our range of loans can help you
fulfill your needs and dreams alike.
We, at HDBFS, have dedicated professionals who work for you and appraise your exact
requirements. Our efforts are directed towards understanding your requirements, and
structuring loan solutions accordingly.
FEATURES AND BENEFITS
 Loans up to Rs. 5 Cr for any purpose.
 Repay in easy EMIs
 Flexible repayment options, ranging from 12 - 120 months
 Hassle-free documentation and speedy loan processing
 Service at your doorstep
 Competitive insurance scheme to protect your loan
 Complete transparency in processing-no hidden costs
 Friendly and high-on-integrity customer service
HDBFs offer:
 Unsecured Loans (Personal Loans, Business Loans)
 Secured Loans (Loan against Property / Auto Refinance)
 Commercial Vehicle Loans
 Loans against ESOP and Shares
 Loans against Securities (NSC / KVP / LIC)
 Loans against Mutual Funds
 Loans against Gold
Advantages of HDB Financial Services:
 One-stop shop for all your loan requirements
 Personalized solutions – we work with you to structure a loan solution based on your
requirements
 Doorstep service – our employees assist you on all documentation, at your doorstep
 Quick turnaround – loan approvals within 72 hours of receiving the documents
 Single window service – dedicated service for all your loan requirements and queries

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Secured Loans
Investments not only help grow your wealth, they also come in handy when you need
immediate financing solutions. At HDB Financial Services, we value your investments and
financial goals. That is why when you need a quick loan for personal and business needs, you
can turn to us.
While most secured loans in the market need demanding collaterals, our extensive range
gives you the choice to declare a variety of assets. Long and short term investments, equities,
bonds, ESOPs, commercial vehicles, property, gold, and jewellery - we accept almost all your
prized possessions as guarantee. At HDB Financial Services, we make dreams possible.
 Loan against Securities
At HDB, we understand how much you value your investments and want them to remain as
your long term investments. With our Loan against Securities offer, you can meet immediate
cash requirements without having to liquidate the securities.
FEATURES & BENEFITS
If you have any of the following securities, you can avail the loan:
 Mutual Fund units
 Fixed maturity plans
 Exchange traded funds
 Insurance policies
 Bonds
 NSC
 KVP
 Simple and hassle-free loan process
 Loans up to Rs. 50 Lakhs
 No hidden charges
 Loan against ESOPs and Shares
While being part of the Employee Stock Ownership Plan (ESOP) is a definite asset, you can
now utilize it to meet your liquid cash requirements. Avail of our Loan against ESOPs and
Shares without parting with any of the benefits.

24 | P a g e
FEATURES & BENEFITS
 Loan of up to 70% of the value of shares
 Option of EMI-based repayment or interest only payment
 Instant credit
 Attractive interest rates
 Shares can be pledged from any Depository participant across the country
 Simple and hassle-free
 Loan against Property
Loan against Property is an ideal way to utilize and leverage your property to its full
potential. It will help you fulfill your dream of taking your business to the next level. You can
mortgage your Residential or Commercial property to meet your financial requirements.
FEATURES & BENEFITS
 Loans up to Rs. 8 Crore
 Loan up to 60% of the market value of the property
 Tenor up to 180 months
 Simple and speedy processing
 Balance transfer facility - Lets you retire your high cost debt
 Loan against Rent Receivables - Lease rental discounting
 Loans to purchase a new shop or office for your business
 Loan against Gold
Gold is a prized possession and this prized possession can yield you great returns without
having to liquidate it. Avail Loan against Gold from HDB Financial Services and reap huge
benefits.
FEATURES & BENEFITS
 Loan up to Rs. 20 Lakhs
 Loan up to 75% the value of gold.
 Safety and security of your gold jewellery

25 | P a g e
 Flexible repayment options
 No hidden charges
 Commercial Vehicle Loans
At HDB Financial Services, we understand our customers’ requirements and provide
Commercial Vehicle loans which help him grow his business. Our loan process is simple and
hassle free. Our plans are easy to understand minus any hidden costs.
Company provides finance to a broad spectrum of customers, which include:
 Large, medium and small-size fleet owners
 Individuals
 First time users
 Partnership firms and proprietorship firms.
 Private and public limited companies
FEATURES & BENEFITS
 Tenure up to 60 months
 Financing for bus, trucks, light commercial vehicles and small commercial vehicles
 Finance for used vehicles
 Top-up on existing vehicle loans
 Customized financing solutions to meet individual requirements
 Simple documentation and easy processing
 Assistance for purchasing the vehicle
 Construction Equipment Loans
At HDB Financial Services, we understand our customers’ requirements and provide
Commercial Equipment loans which help him to pursue his own path to success. With greater
thrust on Infrastructure development in India, we cater to the growing needs of our customers
with an array of attractive finance schemes to suit their varying requirements.
Company provides finance to a broad spectrum of customers, which include:
 First time users
 Hirers of construction, earthmoving and material handling equipments & plant hirers
 Small and medium contractors of government and private agencies, i.e., irrigation,
public works department, national and state highways etc
 Small and medium quarry/mine owners/operators

26 | P a g e
 Contractors of various civic and municipal bodies
 Waste management contractors
 Small and medium industries requiring construction and material handling
equipments for captive usages
FEATURES & BENEFITS
 Financing for a whole range of construction equipment, such as loader backhoe,
excavators, wheeled loaders, cranes, fork lift trucks, concrete machineries and road
equipments
 Up to 100% finance on asset cost
 Finance for used vehicles (Re-finance & Re-purchase)
 Top-up on existing vehicle loans
 Customized financing solutions to meet individual requirements
 Simple documentation and easy processing
Unsecured Loans
HDB Financial Services offers unsecured loans for personal and business needs. With just a
few documents that you need to submit, basic eligibility criteria that you need to meet, you
could get a loan without collateral or a guarantor.
With competitive interest rates, doorstep service, and loan limits of up to Rs. 10 lakh, there is
nothing that can come in the way of your dreams.
 Personal Loans
With HDB Financial Services Personal Loan, get a step closer to planning your dream
wedding, a dream vacation, renovating your home or funding your child's education. We
have an ideal solution that lets you dream big.
FEATURES & BENEFITS
 Tenor ranging from 12 to 60 months
 No guarantor/security required
 Convenience of doorstep service
 Quick and Speedy processing

27 | P a g e
 Attractive Rate of Interest
 Minimum/Hassle free Documentation
 Special offer for employees of select companies
 Business Loans
Do you own a business that is in need of funds for expansion? Or do you have a big business
order in hand and require funds for some working capital?
If you can relate to any of the above situations, then a Business Loan is the right solution for
you. Our team of dedicated professionals helps you determine your requirements, especially
for small businesses; and you can get started within the shortest possible time.
FEATURES & BENEFITS
 Tenor ranging from 12 to 60 months
 No guarantor/security required
 Convenience of doorstep service
 Attractive Rate of Interest
 Minimum/Hassle free Documentation
 Special offer for self employed Doctors
Insurance
Life is but a sum total of hopes, promises, dreams and achievements. While we work towards
fulfilling these aspirations, we must also prepare for situations that are unplanned, which may
leave those we love with an uncertain future. To tide over such predicaments, HDBFS offers
you a wide range of insurance solutions.
Serving 3 major purposes of protection, investment and tax-saving, we have a plan to suit
each of your needs. Life insurance plans help you progress through each step of your life with
complete security, and general insurance plans help you take care of the things you hold dear.
With the HDBFS advantage on your side, be assured that you will always be ready for life's
challenges.

28 | P a g e
Life Insurance
Life insurance has changed enormously over the years. In addition to conventional life
insurance, today's uncertain world requires a wider range of solutions that don't just cover
your life, but also give excellent investment options with higher returns in the short and long
terms.
At HDB Financial Services, we have child plans to secure the future of your child, pension
plans that help you retire in style and live the life you always lived, growth plans, and stable
plans. Our comprehensive list of life insurance solutions is everything you ever wanted.
General Insurance
At HDB Financial Services, we have solutions for almost every emergency life may throw at
you. Whether it is insuring your vehicle against accidental damage, providing strong financial
support during a medical crisis, or being with you wherever you travel – we do it all.
With no-claim bonuses, multiple premium payment options, affordable solutions, and 24x7
assistance, general insurance doesn't get better than this.
Financial Highlights:
Particulars 2013-14 2014-15 2015-16 2016-17
Total revenue 1,688.27 2,527.26 3,302.02 5,714.54
Profit before tax 318.07 530.28 817.81 1058.59
Profit after tax 209.24 349.45 534.41 698.77
Assets under
Management
13,560 19,290 25,906 34,277
Shareholders’ funds 1,628.50 3,125.13 3,561.80 5,362.90
Borrowings 11,075.00 15,277.97 19,612.15 25,287.05
Earnings per share
(`)
4.32 6.63 7.64 9.64
Book value per share
(`)
31.70 44.68 50.87 68.73

29 | P a g e
FINANCIAL ANALYSIS:
Company posted total income and net profit of 3,302.02 crores and 534.41 crores,
respectively, for the financial year ended March 31, 2016, as against 2,527.26 crores and
349.45 crores, respectively, in the preceeding year.
Company has achieved robust growth during the preceding years and particularly in the
financial year 2015 -16. Keeping this in mind, your Directors had declared an ‘interim
dividend’ of Re. 0.60 (Paise Sixty only) per equity share i.e. 6% (Six percent) on each Equity
Share of ` 10/- (Rupees Ten only), entailing a payout of 50.56 crores, including dividend
distribution tax. The ‘interim dividend’ was paid to all the shareholders of the Company.
Further your directors are pleased to recommend a final dividend of Re. 0.60 (Paise Sixty
only) per equity share i.e. 6 % (Six percent) on each Equity Share of ` 10/- (Rupees Ten
only), entailing a payout of ` 50.56 crores, including dividend distribution tax. The dividend
would be paid to all the shareholders, whose names appear on the Register of Members /
Beneficial Holders as on the Book Closure date.
OPERATING MODELOF HDB FINANCIAL SERVICES

30 | P a g e
This is the operating model or business model of HDB financial services limited as:
 First is the product management under which the superior’s role will come in to
picture as they prepare the policy and the products of the company for the customer to
offer as per the guidelines of RBI. They all set the parameters, rate of interest, norms
and conditions related to that product, after that no changes will be made by any other
department.
 After the policy management, credit comes which follows and implements all that
norms and procedures prepare the credit portfolio and also checks the minimizes the
losses by implementing all these policies.
 After credit, operations plays their role which manages all the data entry system and
check that the process is going in a direction or not, all the money related work that is
disbursement of loan, ECS all to be done by operations.
 Finally the collections part comes under which there is manger which manages all the
block payments to recover and all the other dues to be come on time otherwise it will
cause losses to the company.
All the departments have their own standard hierarchy of mangers at different levels which
all monitors. Combining all the departments sales part comes in which is the most important
part for any organization which has to follows of all the four departments parallel.

31 | P a g e
ProcessofCredit Appraisal
Source: Self
Post sanction activities such as bank account review
Disbursement of loan
Final assessment of documentations,mortgages,agreemebts
Sanction/Approval of proposal by concerned authority
Assessment of thr proposal (ABB bank balance, gross income)
Preparing the financial data
Preparation of CAM (credit approval memo)
Check for the RBI defaulter list, CIBIL check, POSIDEX, ITR check
Pre sanction visit by the credit officer (Personel Discussion)
Receipt of documents (Balance sheet, KYC, Gas receipt,Bank balances, Stability proof)
Reciept of application from the applicant

32 | P a g e
Chapter 4
DATA ANALYSIS & FINDINGS

33 | P a g e
ResearchMethodology
 Data collected:- Primary data
 Analysis :- Trend Analysis, Ratio Analysis
 Sample Size :- 50 Random Samples
 Time Duration:- 6 years (2014-2020)
Data Analysis
“A Study on customer perception towards HDB funding”
 To study the demographics of HDB financial services
 AGE
So, as I have taken the survey by the structured questionnaire i.e. primary data, personally
interviewed the customers and come to know that the customers who is taken loan or who is
applying for the loan is of the age of mainly 35-45 years the reason behind this as they want
to expand their business, they want to add some new products or they require it for the
smooth working capital of the business.
 GENDER
Below 25
25-35
35-45
45-55
5
18
20
7
Age
Below 25 25-35 35-45 45-55

34 | P a g e
It is clearly visible from the pie chart that the mostly or the maximum who applied for the
loan or who want the loan is male as they are those who are running their business. There are
only 4 percent of females who want credit or they are the main applicant of their husband’s
loans.
 Business Model of the Customer
As I have done my summer training in HDB financial where the applicant have their own
business or self-employed, it is non- salaried area branch and mainly of there was Retail
business so here the mainly the business who is applying for the business is of trading and
manufacturing. They are applying for the loan as they have different needs for money
sometimes it has to pay its creditors and debtors to settle down the dues, sometimes for the
expansion, working capital etc. but mainly those who are traders and manufactures.
96%
4%
Gender
Male Female
13
4
2
2
29
Manufacturing
Retailing
Contractor
Service
Trading
Business Model of Customers
Manufacturing Retailing Contractor Service Trading

35 | P a g e
 To know the vintage of the customer business
 Vintage of the firm means the stability of the business as of how many years
they are doing the same business at that place.
 Business Vintage (in yrs)
Vintage of the business means it is a kind of proof under which the financial institution will
come to know the no. of years the business is running from that address so that they will be in
confidence by giving credit to that businessman, that in case of any default he or she will not
run. In these customers majorly the business is of 5yrs to more than 15 yrs so it is a stability
proof as they are old businessmen of that area so the credit can be given to them but other
parameters to be checked.
 Sole banking with the parent bank HDFC
1-5 years
5-10 years
10-15 years
Above 15 years
10
14
13
13
Business Vintage
1-5 years 5-10 years 10-15 years Above 15 years
36%
64%
Sole Banking with HDFC
Yes No

36 | P a g e
Sole banking means the customer who is applying for the credit he or she is doing the
banking with HDFC bank or not I mean what is percentage of customers who is applying for
the credit out of which is having or doing banking with HDFC. So 36% of customers out of
100 are doing banking with the parent bank as it is necessary for HDB to create the business
for HDFC and similarly for the HDFC to HDB.
 Already financed by HDB Financial services
Sole banking means the customer who is applying for the credit he or she is doing the
banking with HDFC bank or not I mean what is percentage of customers who is applying for
the credit out of which is having or doing banking with HDFC. So 36% of customers out of
100 are doing banking with the parent bank as it is necessary for HDB to create the business
for HDFC and similarly for the HDFC to HDB.
 Services provided by HDB financial services
28%
72%
Finance from HDB
Yes No
Excellent
Good
Satisfactory
Bad
Very Bad
1
19
22
7
1
Services providedby HDB
Excellent Good Satisfactory Bad Very Bad

37 | P a g e
Services provided by HDB shows here how the customers feels about the services or the
facilities provided by HDB so 22customers out of 50 feels that the services provided by the
financial institution is satisfactory and 19 shows trends towards good so maximum of
customers are on this side so it is good for the HDB that the customers are happy which their
services like the documentation facilities, the rate of interest provided, reimbursement of loan
etc so these are the services or the facilities provided by the financial institution.
 Aware of loan charges
Some of the customers just apply for the credit they are not aware of the charges or the fee of
the financial institution are to be included in the loan. Mostly the customers thinks that the
loan amount they are applying will get the same amount but in actual it is less than that the
amount applied there are certain charges which is to be applied on that such as GI (general
insurance charges), loan set off charges, tax amount so these are some of the charges that is
charged during the loan. So 56% of customers already know about the charges and mostly the
banks will not tell them and this leads to customers dissatisfaction.
 ROI provide by HDB
56%
44%
Aware of loan charges
Yes No

38 | P a g e
ROI (Rate of interest) is the rate of interest which is charged by the financial institution for
the amount or loan given by them. So the interest charged by the HDB is neutral as 26 out of
50 customers say that and 11 of say that the ROI is not high. So the interest rate charged by
the HDB for the loan is neutral and this is also one factor which is considered for the services
or facilities provide by HDB. This also leads to the generation of the business.
FINDINGS
 Credit appraisal is a very important side of the coin for both the borrower and the
institution as borrower needs money for their working capital or for their business
expansion and for the institution it is a medium to earn in terms of interest.
 Credit in NBFC in comparison with the banks works or deals on high risk high return
concept.
 Credit appraisal is the main part of the whole NBFC on which they works so it is an
important task for credit team as well as all otherwise it make a issue in the work of
collection.
 Credit and risk go hand in hand.
 For each type of loan, there are different types of parameters.
 After studying few cases, I found that in some cases, loan is sanctioned due to strong
financial statements.
 Credit appraisal mainly depends on the one most important factor which is the rate of
interest as due to the competition.
Strongly Agree
Agree
Neutral
Disagree
Strongly Disagree
1
11
26
11
1
ROI by HDB is High
Strongly Agree Agree Neutral Disagree Strongly Disagree

39 | P a g e
CONCLUSION
After two months of working in this I can conclude that credit appraisal is most important
aspect of NBFCs as it is the blood of the organization. Different type of customers comes
with their different types of needs of money or loan but it is not possible to give loan to
everyone so for that credit team checks each and every legal aspect or norms and guidance
provided by the company. But anyways company is more focusing in doing the business
which includes the concept of high risk and high returns so; sometimes it is good for the
company, sometimes not as it also depends on the market situation. Working with the credit
department in this NBFC is a great learning for me many things learnt from this experience
like preparing the portfolio of the applicant before giving the loan make sure from the
company side that the customer is loyal and will not default in future, preparing the financial
data and assessment of that financials as the case is on normal income or banking surrogate.
So it’s a great experience for me to work here.
SUGGESTIONS
 Credit and other departments should work independently; no other departments
should interfere in each other work.
 Credit department should be created as a separate entity as it should sit other than the
branch for smooth working.
 Login of cases to be done with complete documents, incomplete documents will
stretch the work and time of credit team.
 Login time should be properly followed by all.
 Policies and norms should be strictly followed for any cases by everyone.
 One person to be assigned to the credit team just for the personnel visit to the
customers as it consumes lots of time of the credit manager.
 Branch credit limit should be exceeded as it helps to reduce the work load of all the
related people.
 Branch should give focus to all products equally not as one product is giving more
preferences and not on other products.

40 | P a g e
Annexure
Questionnaire
Myself Akshay Kumar, student of Birla Global University, Bhubaneswar, I am doing summer
project on “perception of customers towards HDB funding”. Please give me five minute to
answer the following questions. This study is only for academic purpose only. No
information shall be disclosed anywhere.
1. Name/firm/Company name:
2. Age:
o Below 25
o 25-35
o 35-45
o 45-55
3. Gender :
o Male
o Female
4. Nature of the business :
5. What is the Business Model :
o Trading/Whole selling
o Retailing
o Manufacturing
o Contractor
o Service
6. What is the business vintage of your firm :
o 1-5 years
o 5-10 years
o 10-15 years
o Above 15 years
7. Number of major suppliers of your firm/company :
o 1-3
o 3-5
o 5-8
o 8 & above

41 | P a g e
8. Please share your Gross Profit and Net Profit trend :
o Increasing
o Decreasing
o Average
9. Are you doing sole banking with HDFC/any other bank :
o Yes
o No
If yes then please provide the name of the bank:
10. Please tell us about your income Annual salary/Business income?
o 1-5 lakhs
o 5-10 lakhs
o 10-15 lakhs
o 15-20 lakhs
o 20 & above
11. Do you have any finance prevailing with HDB/any other :
o Yes
o No
If yes then please provide the name of the bank:
12. The ROI provided by HDB financial services is very high :
o Strongly Agree
o Agree
o Neutral
o Disagree
o Strongly Disagree
13. Loan service provided by HDB Financial services is good/not :
o Excellent
o Very Good
o Satisfactory
o Bad
o Very Bad

42 | P a g e
14. Are you aware of the charges schedule during loan :
o Yes
o No
15. What is your turnover trend in 5 years?
o Increasing
o Decreasing
o Average
Thank you so much
.
References
http://www.investopedia.com/walkthrough/corporate-finance/3/loans/introduction.aspx
https://www.scribd.com
https://en.wikipedia.org/wiki/NBFC
http://www.bseindia.com/
http://www.hdbfs.com/
http://www.slideshare.net/
https://www.hdbfs.com/sites/default/files/reports/Annual-Report-2016.pdf

43 | P a g e
THANK YOU!
---------------END OF REPORT------------

Sip akshay hdbfs

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