CAR FINANCE:

COMPARISON OF HDFC BANK AND ICICI BANK

Submitted To:
Dr. HARSH PUROHIT

Submitted By:
Milisha Srivastava (4519) Nandini Jain (4524) Shruti Sethi (4558) Trapti Jain (4565) Yesha Jain (4566)

acknowledgement
There are people who simply by being what they are, influence and inspire us to do things we never thought ourselves capable of doing. We express our gratitude and well-wishes to them. Among these are my parents, teachers, friends, and last, but not the least, the almighty god, and ourselves. Our parents, who have made us all competent enough to face challenging task. Our teacher, Dr. HARSH PUROHIT who has guided us all way. Our friends to give us courage and confidence to complete this project. Almighty god for his shower of blessing and love. In the end, we would like to thank each other for the co-operation, help and understanding each one of us has shown till the completion.
THANK YOU

Contents
Introduction of car finance. Type of schemes. Introduction of HDFC bank. Documentation and Eligibility of HDFC bank.

Introduction of ICICI bank.

Documentation and Eligibility of ICICI bank. Car finance comparison of HDFC bank and ICICI bank. Conclusion

Bibliography

INTRODUCTION OF CAR FINANCE

Every one wishes to own a car but it is the financial is condition of a person that become barriers. Car financial is the best option for those wish to buy a car wonderful car but their pocket restrains them to do so. Cars are very important to our society today. Not having these machineries, traveling from one place to another would be such an inconvenience. People have now started using the car finance facility to pay for their vehicle. Car finance means financial help for your vehicle and greater peace of mind. Car finance easy options and quick process can ensure the best deal. You can turn your dream into reality and own that new car have always desired, with a little help from banks. Banks offers up to 90% of on road cost on select models and up to 95% of ex showroom price on others. In India every bank or every institutional who is offering car loan has different interest rate. You need to pick which one is best f or you. You have wide varities of options and you can easily choose which one is best for you. Banks offers loans on fixed as well as floating interest rate. Everyone wants a luxurious life and a luxurious car is a possession that every individual dreams to have at some point of his life. Now days Cars are seen as a status symbol and with various car loans available in the market now its within the reach of all the people to get their dream come true. Whether its brand new car or motorcycle or used

cars, there is wide range of financing schemes available with different terms and conditions as per the model. One can avail of the advance EMI schemes, deposit payment schemes or margin money schemes. Finance agencies give loans on cars, two wheelers, three wheelers, auto loan. Competition improves efficiency, thats the reason that all the ace car making companies also provide loans to their customers. What you need to do is to check out which scheme is fruitful for you and then decide to go for it. There is major development in loan giving industry as these are trying their best to attract the people to take advantage of competitive rates and flexible loan terms.

TYPES OF SCHEMES

1. Margin Money Schemes 2. Security Deposit Schemes 3. Hire purchase schemes 4. Advance EMI Schemes 5. Leasing

1. MARGIN MONEY SCHEMEThis is the most straightforward scheme of them all. For instance, if a car costs Rs. 1 lakh, a typical scheme would require you to pay at least 10% up front, and you would get a loan of Rs. 90,000. The Loan to Value (LTV) ratio is 90% in this case. The interest rate quoted will be on this Rs. 90,000. Thus if the rate quoted is 16% for 12 installments, the EMI would be Rs. 8,166. The interest rate is charged on a monthly basis.

2. SECURITY DEPOSIT SCHEMEThis is a variation of the Margin Money Scheme. In this, the company claims to give a loan of 100%, but asks for, say, 10% of the amount in advance, which it will return at the end of the loan period. In effect, you are still getting a loan of 90%.But the reason that you are being "shown" a lower rate is that the designer is making interest on your deposit for the period of the loan, when your money is lying with him. He uses that money to offset the amount that he is charging less from you. Some security deposit schemes offer interest on the deposit that you pay. As long as this rate is lower than the rate that you are paying in a normal margin money scheme, the designer can reduce the price of the loan.

Suppose you had to put in a deposit of Rs. 10,000 in the above case, on which 14% is being offered. The scheme lets you borrow Rs. 1 lakh, instead of only Rs. 90,000. In effect, he is borrowing the additional Rs. 10,000 from you at 14%, and is lending you that same money at 16%.

3. Hire PurchaseHire Purchase, the size of the installment was known to the hirer and interest was calculated in loan balances. Under hire- purchase, it is automatically transferred to the buyer as soon as the last installment is paid.

4. Advance EMI SchemesUnder the modern EMI, a much smaller amount is adjusted against the installment in repayment of the principal and much higher against interest liability. But the hirer does not know the adjustment and the lifetime cost and is happier to pay a fixed sum, an affordable EMI for the period committed.

5. LeasingLeasing is another form of financing vehicles. The buyer pays a fully tax deductible fixed monthly rental - there is no need to segregate monthly installment and interest and there is no security deposit.

Decide on your vehicle, and go for it. There is nothing to think of, except, of course, paying those installments on time!

INTRODUCTION OF HDFC BANK

HDFC-Housing Development Finance Corporation Limited

Indias second largest private sector bank HDFC Bank has increased the fixed deposit rates by 150 points. Earlier I have posted about the CRR Ratio hike by the Reserve Bank of India (RBI). As I have explained in the post. CRR hike will reduce the liquidity of the banks. With a view to attract long term deposits and prevent premature withdrawal when the interest rates peak, HDFC, the housing finance major, has decided to pay variable interest rate on recurring deposits. HDFC Bank on Feb 19 increased the fixed deposit rates by up to 150 basis points across maturities, a move that follows the Cash Reserve Ratio hike of 75 basis points by the Reserve Bank of India last month from HDFC Mumbai. HDFC Bank 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 from Housing Development Finance Corporation Limited (HDFC), in 1994 during the period of liberalization of the banking sector in India. HDFC India was incorporated in August 1994 in the name of 'HDFC Bank Limited'. HDFC India commenced operations as a Scheduled Commercial Bank in January 1995. HDFC India deals in varieties of products like home loan, standard life insurance, mutual fund, securities, credit cards, etc. HDFC has branch offices in all major cities in India like Calcutta, Chennai, Delhi, Bangalore, Hyderabad, and Ahmedabad. PUNCH LINE We understand your world

Eligibility and DOCUMENTATION OF HDFC BANK

Eligibility and documentation based on this1. Salaries Individuals 2. Self Employed 3. Partnership Firms 4. Private Limited Company 5. Public Limited Company

Salaried Individuals Eligibility Criteria:

Minimum age of Applicant: 21 years Maximum age of Applicant at loan maturity: 58 years Minimum employment: 1 year in current employment and minimum 2 years of employment Minimum Annual Income: Rs 100000 net annual income Telephone: Must at residence

Documents required:

Proof of Identity:- Passport copy, PAN Card, Voters Id car, driving license( Laminated, Recent, Legible) Income Proof: - Latest salary slip with form 16. Address Proof: - Ration card/Driving license/Voters card/passport copy/telephone bill/ electricity bill/Life insurance policy PAN Card. Bank Statement:- Not mandatory Minimum 2 years of employment Minimum Annual Income: Rs 100000 net annual income Telephone: Must at residence

Self Employed Eligibility Criteria:

Minimum age of Applicant: 21 years Maximum age of Applicant at loan maturity: 65 years

Minimum employment: At least 3 years in business Minimum Annual Income: Net profit Rs. 60000 p.a for standard cars and Rs.100000 p.a. for mid-sized and premium cars Telephone: Must at residence

Documents required:

Proof of Identity:- Passport copy, PAN Card, Voters Id car, driving license( Laminated, Recent, Legible) Income Proof:- Latest ITR Address Proof:- Ration card/Driving license/Voters card/passport copy/telephone bill/ electricity bill/Life insurance policy PAN Card Bank Statement:- Waived for small cars, for mid - sized and premium cars if income Is greater than Rs. 1.5 lacs then bank statement requirement can be waived.

Partnership Firms Eligibility Criteria:

Minimum Income: Net profit Rs. 60000 p.a for standard cars and Rs.100000 p.a. for mid-sized and premium cars Minimum turnover: Turnover Rs. 4.5 lacs Telephone: One phone at least at business and at residence of the loan executing partner

Documents required:

Proof of Identity: - non applicable. Income Proof:- Audited balance sheet, Profit & Loss Account for latest two years and the latest 2 years IT returns of the company Address Proof:- Telephone Bill/Electricity Bill/Shop & Establishment Act certificate/SSI registered certificate/Sales Tax certificate

Bank Statement:- Waived for small cars, for mid - sized and premium cars if income Is greater than Rs 1.5 lacs then bank statement requirement can be waived

Private Limited Company Eligibility Criteria:

Minimum Income: Net profit Rs. 60000 p.a for standard cars and Rs.100000 p a for mid-sized and premium cars Minimum turnover: Turnover Rs 4.5 lacs Telephone: One phone at least at business premises

Documents required:

Proof of Identity:- NA Income Proof:- Audited balance sheet, Profit & Loss Account for latest two years and the latest 2 years IT returns of the company Address Proof:- Telephone Bill/Electricity Bill/Shop & Establishment Act certificate/SSI registered certificate/Sales Tax certificate Bank Statement:- non applicable

Public Limited Company Eligibility Criteria:

Minimum Income: Net profit Rs. 60000 p.a for standard cars and Rs.100000 p a for mid-sized and premium cars Minimum turnover: Turnover Rs 4.5 lacs Telephone: One phone at least at business premises

Documents required:

Proof of Identity:- NA Income Proof:- Audited balance sheet, Profit & Loss Account for latest two years

Address Proof:- Telephone Bill/Electricity Bill/Shop & Establishment Act certificate/SSI registered certificate/Sales Tax certificate Bank Statement:- NA

INTRODUCTION OF ICICI BANK

ICICI -Industrial Credit Investment Corporation of India

ICICI Limited was established in 1955 by the World Bank, the Government of India and the Indian Industry, for the promotion of industrial development in India by giving project and corporate finance to the industries in India. To understand about this big bank, we need to understand how it became so big a force to reckon with. ICICI (Industrial Credit Investment Corporation of India) promoted the ICICI bank in 1994 with its stake reducing to 46% after the IPO in 1998. ICICI is a well-known name in India along with IDBI and was formed in 1955 at the initiative of the World Bank, Indian Government and Indian Industries. Both of these institutions have an exceptional brand-image and one of the highest possible ratings from CRISIL and other rating organizations. ICICI can be considered an oligopolistic corporation along with IDBI (please M2M me, if you want to discuss this!). ICIC listed in NYSE in 2000. In 2001 it underwent a tight marriage with Bank of Madura in a stock-only amalgamation. This was a tough marriage and I guess they are still suffering from this hiccup, which kind of substantiates their mediocre performance today, in my perspective. This and the merger with the ICICI Corporation have caused some management strain and some tough merger time. I could only wish they come over this and serve the customers in a better manner. ICICI Bank has grown from a development bank to a financial conglomerate and has become one of the largest public financial institutions in India. ICICI Bank has financed all the major sectors of the economy, covering 6,848 companies and 16,851 projects. As of March 31, 2000, ICICI had disbursed a total of Rs. 1, 13,070 cores, since inception. Total assets: Rs.146, 214 cores (December 31, 2004) Network : 530 branches ATMs : Over 1,880 Abaroad Subsidiaries : United Kingdom and Canada Abroad branches : Singapore and Bahrain

Representative offices : United States, China, United Arab Emirates, Bangladesh and South Africa. ICICI Bank is the largest private sector bank in India. No doubt about it. It was the confluence of one of the biggest financial corporation and a once great bank known for its service and promptness.

Punch line- Hum Hain Na!!!

Eligibility and DOCUMENTATION OF ICICI BANK

Eligibility and documentation based on this1. Salaries Individuals 2. Self Employed 3. Partnership Firms 4. Private Limited Company 5. Public Limited Company

Salaried Individuals Eligibility Criteria:

Minimum age of Applicant: 25 years Maximum age of Applicant at loan maturity: 58 years Minimum employment: 1 year in current employment and minimum 2 years of employment Minimum Annual Income: Rs 250000 net annual income Telephone: Must at residence

Documents required:

Proof of Identity:- Passport copy, PAN Card, Voters Id car, driving license( Laminated, Recent, Legible) Income Proof: - Latest salary slip with form 16. Address Proof: - Ration card/Driving license/Voters card/passport copy/telephone bill/ electricity bill/Life insurance policy PAN Card. Bank Statement:- Not mandatory Minimum 2 years of employment Minimum Annual Income: Rs 100000 net annual income Telephone: Must at residence

Self Employed Eligibility Criteria:

Minimum age of Applicant: 28 years Maximum age of Applicant at loan maturity: 65 years Minimum employment: At least 3 years in business Minimum Annual Income: Net profit Rs. 60000 p.a for standard cars and Rs.200000 p.a. for mid-sized and premium cars Telephone: Must at residence

Documents required:

Proof of Identity:- Passport copy, PAN Card, Voters Id car, driving license( Laminated, Recent, Legible) Income Proof:- Latest ITR Address Proof:- Ration card/Driving license/Voters card/passport copy/telephone bill/ electricity bill/Life insurance policy PAN Card Bank Statement:- Waived for small cars, for mid - sized and premium cars if income Is greater than Rs. 1.5 lacs then bank statement requirement can be waived.

Partnership Firms Eligibility Criteria:

Minimum Income: Net profit Rs. 60000 p.a for standard cars and Rs.100000 p.a. for mid-sized and premium cars Minimum PAT(profit after tax) Rs 200000 Telephone: One phone at least at business and at residence of the loan executing partner

Documents required:

Proof of Identity: - non applicable. Income Proof:- Audited balance sheet, Profit & Loss Account for latest two years and the latest 2 years IT returns of the company Address Proof:- Telephone Bill/Electricity Bill/Shop & Establishment Act certificate/SSI registered certificate/Sales Tax certificate

Bank Statement: - Waived for small cars, for mid - sized and premium cars if income is greater than Rs 1.5 lacs then bank statement requirement can be waived.

Private Limited Company Eligibility Criteria:

Minimum Income: Net profit Rs. 60000 p.a for standard cars and Rs.100000 p a for mid-sized and premium cars Minimum PAT(profit after tax) Rs 200000 Business stability should be more than 3 years Telephone: One phone at least at business premises

Documents required:

Proof of Identity:- NA Income Proof:- Audited balance sheet, Profit & Loss Account for latest two years and the latest 2 years IT returns of the company Address Proof:- Telephone Bill/Electricity Bill/Shop & Establishment Act certificate/SSI registered certificate/Sales Tax certificate Bank Statement:- non applicable

Public Limited Company Eligibility Criteria:

Minimum Income: Net profit Rs. 60000 p.a for standard cars and Rs.100000 p a for mid-sized and premium cars Minimum PAT(profit after tax) Rs 200000 Telephone: One phone at least at business premises

Documents required:

Proof of Identity:- NA

Income Proof:- Audited balance sheet, Profit & Loss Account for latest two years Address Proof:- Telephone Bill/Electricity Bill/Shop & Establishment Act certificate/SSI registered certificate/Sales Tax certificate Bank Statement:- NA

CAR FINANCE COMPARISON OF HDFC BANK AND ICICI BANK

HDFC bank:
1.It

covers the widest range of cars and multi-utility vehicles in India. 2.HDFC bank Avail 100% finance on your favorite car. 3. Flexible repayment options, ranging from 12 to 84 months. 4. Borrow up to 3 times your annual salary (for salaried professionals) and 6 times your annual income (for self employed professionals). 5. Speedy processing - within 48 hours. 6. Repay with easy EMIs 7. HDFC bank provides attractive Interest rates. 8. Hassle-free documentation. 9. If you are an existing HDFC Bank Car Loan customer with a clear repayment of 12 months or more we can Top-Up your car loan to the extent of the original loan value. Customer Privileges 1. If you are an HDFC Bank account holder, we have special rates for you. 2. If you have had a Preferred Account or a Corporate Salary Account with HDFC Bank for more than six months, you can get fast approvals on your loans with minimal documentation. ICICI bank: 1. Choose any car manufactured in India within a certain age. 2. Borrow up to 80% of the value of the car. 3. Flexible repayment options, ranging from 12 to 60 months. 4. Borrow up to 3 times your annual salary (for salaried professionals) and 6 times your annual income (for self employed professionals. 5. Available for almost all car models at attractive interest rates.

6. Repay with easy EMIs. 7. Additional loan on existing loan - If you are a existing ICICI Bank Auto loan customer with a clear track record of 12 months or more, then you can get an additional loan to the extent of your existing loan amount at attractive rate of interest. Customer Privileges Special benefits for ICICI Bank account holders. If you have had a Preferred Account or a Corporate Salary Account with ICICI Bank for more than six months, you can get fast approvals on your loans with minimal documentation. Comparative analysis Icici is the no1 financier for car loans in the country.Network of more than 2500 channel partners in over 1000 locations. Tie- ups with all leading automobile manufacturers to ensure the best deals.Flexible schemes & quick processing. Hassle - free application process on the click of a mouse. 1. Loan on Phone for Customers:if you are an ICICI Bank customer,you can Go for a pre-approved car loan.Call Customer Care numbers or by send an sms car loan to 5676766. (e.g.If you are in Mumbai, car loan Mumbai). 2. Loan on the Strength of Your Income: Submit income proofs as required and avail of finance up to 100% of the on-road cost of the car! *. 3. Contribute 20%. No Need for Income Proof: you can contribute 20% or more of the ex-showroom price of the car.No need for any income proof then! Walk away with the car keys. 4. Instant Funding for Credit Card Holders: if you hold a credit card for more than a year with a good repayment record.Get a loan up to 90% of the ex-showroom price of the car. No need for any income documents!

And no field investigation too. 5. 100% Loan for Fixed Deposit Holders: If you have a fixed deposit with ICICI Bank, you can get a loan up to 100% of the ex-showroom price of the car. No need for income proofs. ICICI bank also have several other car loan options based on your life insurance premium receipts, bank statements, RC Book, etc. Used Cars ICICI Bank Used Car Loans. ICICI offer up to 90% of the car value, and up to a7-year repayment duration. They finance cars which are up to 10 years old at the end of the loan tenure. You can also take a loan on a car you already bought or transfer your loan to ICICI Bank from another financier. Car Overdraft A current account on wheels! Convert your car into cash by taking an overdraft up to 90% of the assessed value of the car.

Conclusion
Private sector lender HDFC Bank today toppled ICICI Bank as the

country's most valued private sector bank, after its shares surged over six per cent on the Bombay Stock Exchange. The market capitalization of ICICI Bank, the top private sector lender in terms of asset size, today fell to Rs 39,516.58 crore against Rs40,001 crore of rival HDFC Bank. At the end of the trade today, the shares of HDFC Bank settled up 6.31 per cent at Rs 940.50 on BSE. During the day the scrip had surged 10.09 per cent to Rs 973.90. In comparison, ICICI Bank gained 2.44 per cent at Rs 355.10. In the intra-day trade, the scrip had surged 7.69 per cent to a high of Rs 373.30 on BSE. Overall, ICICI Bank moved down to 18th position in terms of market cap, against a place among the top-10 companies till last year. At the end of Friday's trading, the country's biggest state-run lender State Bank of India's market cap stood at Rs 65,697.02 crore after its shares rose by 1.09 per cent to close at Rs 1,034.65. The banking sector stocks today witnessed a surge following positive global cues with HDFC Bank emerging as the biggest gainer among all the blue-chip stocks. Here is a latest interest rate of some of the most popular banks providing car loans.

Bank of Baroda 10.5 HDFC Bank 14.0 ICICI Bank 14.25 Punjab National Bank 12.5-12.0 SBI Bank 11.75

ICICI bank and HDFC bank have carried forward their style statement in their approach to business. ICICI bank think big in all for growth and hungry for market share. HDFC bank is more conservative and caution, grows at a measured pace, without taking any undue risk. ICICI bank assets in the retail space stand at 56000 Rs crores and 18000 crores for HDFC bank.

Both banks targeted the same customer, the upper middle class, the marketing channels used by both, including direct sales agent, were the same.

BIBLIOGRAPHY

www.hdfc bank.com www.icici bank.com Google.com Yahoo.com