car finance-comparison of hdfc bank and icici bank

8/2/2019 Car Finance-comparison of HDFC Bank and ICICI Bank

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CAR FINANCE:COMPARISON

OFHDFC BANK

ANDICICI BANK

Submitted To:Dr. HARSH PUROHIT

Submitted By:Milisha Srivastava (4519)Nandini Jain (4524)

Shruti Sethi (4558)

Trapti Jain (4565)Yesha Jain (4566)


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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 confidenceto 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


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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


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INTRODUCTIONOF 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


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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


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1. Margin Money Schemes

2. Security Deposit Schemes

3. Hire purchase schemes

4. Advance EMI Schemes

5. Leasing

1. MARGIN MONEY SCHEME-

This is the most straightforward

scheme of them all. For instance, if a car costs Rs. 1 lakh, a typicalscheme 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 SCHEME-

This 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.
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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 Purchase-Hire 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 Schemes-Under 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. Leasing-Leasing 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 OFHDFC BANK
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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 CRRRatio 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 150basis 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 DOCUMENTATIONOF HDFC BANK


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Eligibility and documentation based on this-

1. Salaries Individuals

2. Self Employed

3. Partnership Firms

4. Private Limited Company5. 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



Self Employed



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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


Documents required:



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 bankstatement requirement can be waived.

Partnership Firms


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


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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



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


latest two years and the latest 2 years IT returns of the company

Address Proof:- Telephone Bill/Electricity Bill/Shop &


certificate

Bank Statement:- non applicable

Public Limited Company




Minimum turnover: Turnover Rs 4.5 lacs


Documents required:



latest two years


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certificate

Bank Statement:- NA

INTRODUCTIONOF ICICI BANK

ICICI -Industrial Credit Investment Corporation of India


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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 InvestmentCorporation 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 withIDBIand 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 theycome 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


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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!!!


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Eligibility and DOCUMENTATIONOF ICICI BANK

Eligibility and documentation based on this-

1. Salaries Individuals2. Self Employed

3. Partnership Firms

4. Private Limited Company

5. Public Limited Company

Salaried Individuals

Eligibility Criteria: Minimum age of Applicant: 25 years


Minimum employment: 1 year in current employment and

minimum 2 years of employment



Documents required:



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


Self Employed

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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


Documents required:



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


Minimum Income: Net profit Rs. 60000 p.a for standard cars andRs.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




certificate


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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





Business stability should be more than 3 years


Documents required: Proof of Identity:- NA





certificate

Bank Statement:- non applicable

Public Limited Company






Documents required:



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latest two years



certificate

Bank Statement:- NA

CAR FINANCE COMPARISONOF HDFC BANK AND ICICI BANK


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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 Loancustomerwith aclear 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 SalaryAccountwith 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.


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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 incomeproof 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!


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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 lifeinsurance 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


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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 intheir 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.


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Both banks targeted the same customer, the upper

middle class, the marketing channels used by both, including direct sales

agent, were the same.

BIBLIOGRAPHY


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www.hdfcbank.com

www.icicibank.com

Google.com

Yahoo.com
http://www.hdfc/http://www.icici/http://www.hdfc/http://www.icici/