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STUDY ON CAR LOAN TO PROFESSIONAL, SELF EMPLOYED & BUSINESSMAN 2013
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Study On Car Loans to Professional, Self employed
and Businessman
PREPARED BY
DEEPAK KUMAR SAHOO
ENROLLMENT NO-12DM075
UNDER THE GUIDANCE OF
Mr. SANTOSH KUMAR MOHAPATRA (Chief Manager)
Internship report submitted to SBI in completion of the
requirement of Summer Internship at State Bank of India
May 11, 2013 to July 6, 2013
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DECLARATION
I, Deepak Kumar Sahoo student of Post Graduate Diploma in Management of
Institute of Management & Information Science bearing enrollment number
12DM075 declare that the project entitled STUDY ON CAR LOAN TO
PROFESSIONAL, SELF EMPLOYED AND BUSINESSMAN submitted to
State Bank of India, BBSR is an original record of work done by me as a part of
partial fulfillment of PGDM programme of IMIS, Bhubaneswar.
Date: Deepak Kumar Sahoo
Place: PGDM (2012-2014)
Enrollment No:12DM075
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ACKNOWLEDGEMENT
I would like to take the privilege of acknowledging each and everyone for the
guidance, concern, inspiration, encouragement, valuable ideas & for showing the right
path to travel throughout the project.
At first I would like to thank Mr Ishwar Chandra Sahu (HR, LHO)
Bhubaneswar for assigning me this topic.I am also grateful to Mr.Santosh ku Mohapatra (Chief Manager, IDCO Tower
Branch, BBSR) and Mr.Sambit Bose (RM) my external guide for giving all the required
facilities and knowledge to carry out the project.
I would also like to show appreciation to Prof. S. P. Padhi (Internal Guide), Prof.
Chunku Pani, Prof A.K Mishra, Prof. R.N Patnaik and Prof. Tanmoy de for his
excellent guidance & his interest towards the project for the past two months. Without
his motivation and consistent support this project could not have materialized.
I am grateful to my parents and my sister for supporting & giving me the
confidence to complete the project successfully.
Apart from the above mentioned people, I would like to thank all the people who
have co-operated in different places like Bhubaneswar and Cuttack for the completion
of my summer internship program.
I dedicated my work to my Lord Jagannath who was constantly with me for this
endeavor without whom the project would not have seen the light of the day.
Date: Deepak Kumar Sahoo
Place: 12DM075
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CONTENTS
Sl.No. Topic Pg. No.
1. Certificate of completion 2
2. Declaration 3
3. Acknowledgement 4
4. List of Tables and Graphs 6
5. Executive summary 7
6. Introduction 8
7. Framework of study 9
Theoretical perspective and auto loan procedure of SBI8. Objectives and scope 17
9. Methodology 18
10. Data analysis 19
11. Conclusion 28
12. Recommendations 29
13. References 31
14. Annexure 32
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LIST OF TABLES AND GRAPHS
Figure 1: Black box model
Figure 2: Marketing strategy process
Figure 3: 7Ps of marketing
Figure 4: Customers
Figure 5: Non customers
Figure 6: Time taken for loan sanction in SBI
Figure 7: Time taken in other banks
Figure 8: Factors preferred for taking loan from SBI
Figure 9: Documentation procedure in SBI
Figure 10: Documentation procedure in other banks
Figure 11: Level of satisfaction in Bank services
Figure 12: Preference to SBI for future loan
Figure 13: Recommend SBI to friends and relatives
Figure 14: Reasons for not preferring SBI
Figure 15: Car bookings (financed/owned)
Figure 16: Banks preferred by customers
Figure 17: Banks which dealers recommend to their customer
Figure 18: Reasons for choosing the bank
Figure 19: Performance of SBI representatives
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EXECUTIVE SUMMARY
Need for the StudyBanks form the major backbone of our economy. Banking products form a part of our
vast financial system hence their development is possible only if the customers are happy and
satisfied. The market share of an organization can be improved by analyzing the general
perceptions of the people about the very organization and also of its competitors. This can be
done by peer analysis.
This report is meant to determine the general perceptions of Professional, self employed and
businessman regarding SBIs Car Loan process. It aims at studying the car loan product of State
Bank of India, conducting a market survey to find the acceptability/popularity of the loan product
among these categories of customers, to sort out the difficulties faced by the customer and
analyzing the findings in order to find out where the bank stands and using the results thus
obtained to formulate strategies to improve its market share.
For this project, various questionnaires were provided to customers, noncustomers of SBI and the
dealers and information was collected from them. Apart from these the car loan scheme of various
banks namely HDFC, AXIS, IDBI, Punjab National Bank, Utkal Hyundai, Sky Automobiles,
Narayani Automobiles, Jyoti Automobiles were studied and compared with that of SBI. The
popularity of the banks loan product was ascertained through a survey. The analysis was done
and interpretations were recorded. The results showed that there were many difficulties faced by
the customers which differed according to their categories. Though SBI was leading the market
but there were certain negative aspects of the bank which if worked on at the right time, could
prove to be beneficial to it. Strategies have been formulated taking into consideration the reasons
why people havent chosen SBI for availing car loan.
Hence this study was meant to know the level of expectation of people for the Car loan product
and their satisfaction. This survey also helped me to find out the popularity of car loan product
and difficulties faced by the professionals, self employed and businessman.
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INTRODUCTION
Brief Profile of student
NameDeepak kumar sahoo
Phone No: 9338361378
Email: [email protected]
Pursuing PGDM( Finance and Marketing) at IMIS, BBSR
Did schooling from Maharishi vidya mandir, cuttack, 12th from Ravenshaw university,
B.com (Finance Hons) from Utkal university.
Got an first class throughout the academic career
Apart from academics I also learnt O level,Tally,DCA
Organization:
State Bank of India (SBI) is a multinational banking and financial services company based in
India. The Corporate Centre is in Mumbai and 14 Local Head Offices and 57 Zonal Offices are
located at important cities spread throughout the country. The Corporate Centre has several
other establishments in and outside Mumbai, designated to cater to various functions. Its
Colleges/Institutes/Training Centres are the seats of learning and research and development to
spread the wings of knowledge not only to employees but also other banks/establishments in
India and abroad.
SBI entered into several alliances and tie-ups with automobile, insurance, mutual fund, project
finance and medical equipment companies to boost its business.
SBI is an active player in financing passenger vehicles. It extended the tenor of car loans from
five to seven years; thereby lowering the monthly debt repayment burden of the loan seeker.
SBI has also introduced various interest rates scheme for auto loan from time to time to attract
customers. SBI entered into a tie-up with Maruti, the largest automobile manufacturer in India
and also with Hyundai. After the scheme was introduced, SBI emerged as the largest financier
for Maruti cars in India and the number of Maruti vehicles financed grew.
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FRAMEWORK OF STUDY
THEORETICAL PERSPECTIVE
This report is meant to determine the acceptability/popularity and the general perceptions of
Professional, self employed and businessman regarding SBIs Car Loan process. Thus, for this
purpose, we need to study the consumer behavior aspect.
Consumer behavior is the study of individuals, groups, or organizations and the processes they
use to select, secure, and dispose of products, services, experiences, or ideas to satisfy needs and
the impacts that these processes have on the consumer. It may be defined as the decision-making
process and the physical activity involved in evaluating the various aspects of goods or services in
order to initiate a purchase. Customer behaviour study is based on consumer buying behaviour,
with the customer playing the three distinct roles of user, payer and buyer. Relationship
marketing is an influential asset for customer behaviour analysis. A greater importance is also
placed on consumer retention, customer relationship management, personalization, customization
and one-to-one marketing.
Customer relationship management (CRM) entails all aspects of interaction that the
organisation has with its customer, whether it is sales or service-related. CRM is often thought of
as a business strategy that enables businesses to:
Understand the customer
Retain customers through better customer experience
Attract new customer
Win new clients and contracts
Increase profitably
Decrease customer management costs
It helps an enterprise to enable its marketing departments to identify and target their best
customers, manage marketing campaigns and generate quality leads for the sales team.
The marketing stimuli are planned and processed by the organization, whereas the
environmental stimuli are given by social factors, based on the economical, political and
cultural circumstances of a society.
https://en.wikipedia.org/wiki/Relationship_marketinghttps://en.wikipedia.org/wiki/Relationship_marketinghttps://en.wikipedia.org/wiki/Marketinghttps://en.wikipedia.org/wiki/Marketinghttps://en.wikipedia.org/wiki/Relationship_marketinghttps://en.wikipedia.org/wiki/Relationship_marketing7/27/2019 Deepak Sip Report 2013
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The black box model shows the interaction of stimuli, consumer characteristics, decision
process and consumer responses.
Figure 1: Black Box Model
Environmental factors Buyer's black box
Buyer's
responseMarketing
Stimuli
Environmental
Stimuli
Buyer
CharacteristicsDecision Process
Product
Price
Place
Promotion
Economic
Technological
Political
Cultural
Demographic
Natural
Attitudes
Motivation
Perceptions
Personality
Lifestyle
Knowledge
Problem recognition
Information search
Alternative evaluation
Purchase decision
Post-purchase
behaviour
Product choice
Brand choice
Dealer choice
Purchase timing
Purchase
amount
For providing better consumer value, the bank should have proper knowledge of the needs
of the consumer and should formulate plans and strategies for marketing their product.
Marketing strategy is defined by Prophet's David Aakeras a process that can allow an
organization to concentrate its resources on the optimal opportunities with the goals of increasing
sales and achieving a sustainable competitive advantage.
Figure 2: Marketing strategy process
https://en.wikipedia.org/wiki/David_Aakerhttps://en.wikipedia.org/wiki/Competitive_advantagehttps://en.wikipedia.org/wiki/Competitive_advantagehttps://en.wikipedia.org/wiki/Competitive_advantagehttps://en.wikipedia.org/wiki/David_Aaker7/27/2019 Deepak Sip Report 2013
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Marketing strategy includes the formulation of strategies in order to provide superior
customer value. These strategies are formulated keeping in mind the 7-Ps i.e. product, price,
promotion, place, process, people and physical evidence.
Figure 3. The 7-Ps of Marketing
To understand the likes and dislikes of consumers, extensive consumer research studies shouldbe conducted by the bank. The following should be considered:
What the customers thinks of the loan procedure in bank.
If the procedure happens to be better, then how can it be improved in their opinion?
What is the customers attitude towards thebank and its advertising?
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A popular definition of bank marketing is given by S. Kuppuswami in the
following words, "Creation and delivery of financial services suitable to meet the
customer's need at a profit to the bank". This definition recognises the imperative need
to satisfy customers, the significance of both the creation and delivery aspects of bank
services and underlying profit motive.
Deryk Weyer of Barclays Bank defines bank marketing as, Consisting of identifying the
most profitable markets now and in future, assessing the present and future needs of customers,
setting business development goals, making plans to meet them and managing the various
services and promoting them to achieve the plans - all in the context of changing environment
in the market.
The perceptions of customers about a bank product is
basically dependent on the services provided by the bank such as interest rates, processing
time, hassle-free operations, minimal documentation, location advantage, etc.
Auto Loan product offered by SBI
SBI Auto Loan maintains its market leadership by increasing the market share from 16.75% to
19.25% as on June 2012. The Bank continues to be number one in financing Maruti cars pan
India for two consecutive years in a row. SBI has increased its presence in the market with
higher penetration in major brands like Chevrolet, Hyundai, Tata Motors and Honda Siel cars
at 25.7%, 20.7%, 17.1% and 13.8% respectively.
The Bank has introduced SBI Advantage Car Loan Scheme which facilitates Businessmen,
Proprietary and partnership firms to avail of car loan of Rs.5 lacs and above quickly. Pre-
approved car loan, Retail Inventory financing for car dealers are a few notable
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schemes which are on the anvil. Special Execution Desks have been created in all Metros / Urban
centers for the convenience of the customers to execute their car loan documents at mutually
convenient timings and places. The Bank has MoU with all major car manufacturers to achieve
highest penetration in the market. Car Loan Origination Software has been introduced in theBank to facilitate more customer acquisition.
Unique advantages of SBI Auto Loan Scheme:
Lowest interest rates
Complete transparency.
Low and No advance EMIs
(Equated Monthly Installments).
Finance for one-time road tax, registration fee, insurance premium and accessories.
LTV 85% of On Road Price of car (includes registration, insurance and cost of
accessories worth Rs 25000), 90% in case of Corporate Salary Package accounts
Interest Calculated on Daily Reducing Balance.
Flexibility of payment of EMI anytime during the month.
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Longer repayment period (7 years).
No pre-payment penalty.
No hidden costs or administrative charges.
Free Accidental insurance; Optional SBI Life cover.
Overdraft facility available.
Purpose for which Auto loan can be avail ed:
The loan will be sanctioned for the purpose of purchase of new Cars/used cars, Multi
Utility Vehicles (MUVs) and Semi Utility Vehicles (SUVs).
Eligibility:
Individual between the age of 21-65 years of age.
A Permanent employee of State / Central Government, Public Sector Undertaking,
Private Company or a reputed establishment.
Professionals, self-employed, businessmen who is an income tax assesses or
Person engaged in agriculture and allied activities.
Loans can be granted by sanctioning authority to individuals who have sufficient,
regular and continuous source of income for servicing the loan repayment beyond 65 years.
Loan must be fully repaid before the borrower attains the age of 70 years.
Minimum Income:
Net Annual Income Rs.2, 50,000/- and above for salaried, self-employed and body of
associations as per ITR after adding back depreciation and deducting repayment of all existing
loans. Income from other sources like bank interest/dividends of listed Companies, rent,
agriculture income can be added.
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Features:
1) Maximum loan amount:The maximum loan amount that can be granted would be
restricted to 48 times the net monthly income of salaried persons and Up to 4 times the Net
Profit or Gross Taxable Income per annum as per ITR after adding back depreciation and
deducting repayment of all existing loans.
2) Rate of Interest:11.25 % p.a.( term loans) / 11.75% p.a.( overdraft). All loans should be
given only on a floating rate basis, i.e., the effective interest will increase or decrease with
every increase or decrease in Base Rate or whenever the rate of interest on Car Loans are
revised without changing Base rate.
3) Loan Repayment tenure: Maximum 84 months (7 years) for all. However, the
repayment period shall, in no case, exceed 70 years of the age of the borrower.
4) Loan to Value Ratio (LTV): Maximum permissible LTV ratio is 85% of on road price
of the car. The On Road Price of Car includes the cost of the vehicle, registration,
insurance and cost of accessories worth Rs 25000.
5) Margin: 15% of the on the road price (which includes vehicle registration charges,
insurance, one-time road tax and accessories).
6) Processing fee:For Car Loans: -0.50% of the loan amount subject to Minimum of Rs.500/- and maximum of Rs. 10000/- and for Two-wheeler Loans: - 1.20% of the loan
amount subject to Minimum of Rs. 250/- and maximum of Rs. 500/-.
7) Documentation:One needs to submit the following documents along with the completed application form:
Statement of Bank account of the borrower for last 12 months.
2 passport size photographs of borrower(s).
Signature identification from bankers of borrower(s).
Proof of Identity: A copy of passport /voter ID card/PAN card.
Proof of residence: (any one of the following)Ration card/Driving licence/Voters
ID Card/Passport Copy/Telephone Bill/ Electricity Bill/Life Insurance policy/ PAN
Card
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Income proof: Latest salary-slip showing all deductions/ Latest ITR for 2 years.
I.T. Returns/Form 16: 2 years for salaried employees/professional/self-
employed/businessmen duly accepted by the ITO wherever applicable to be
submitted.
Audited Balance sheet, P&L statement for 2 years, Shop & establishment actcertificate/sales tax certificate/SSI registered certificate/copy of partnership.
8) Repayment Cycle: For the loan disbursed on or before 15th of the month, the repayment
is to be started on the 10th of the following month. For the loan disbursed on or after 16 th of
the month, the repayment is to be started on the 20th of the following month.
9) Penal Interest: If the irregularity in EMI exceeds a period of one month, then the penalinterest would be charged at 2% p.a. (over and above the applicable interest rate) on the
overdue amount for the period of default.
10)Security:
a) Borrower undertakes to get hypothecation to the Bank marked in Registration book of
the vehicle immediately after purchase of the vehicle.
b) Bank will verify the original RC book for noting down the charges in favor of the Bank.
The various car loan products offered by SBI are:
1. SBI Advantage car Loan
2. SBI NRI Car Loan
3. SBI Used car Loan
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OBJECTIVES AND SCOPE
Objectives:
This project was completed keeping in mind the following objectives:
To study the Car Loan procedure provided by SBI.
To study the general perceptions of Professionals, Self employed and Businessman
regarding the process of sanction and disbursement of SBI loans and the
acceptability/popularity of car loan provided by SBI.
From the results thus obtained, to make suggestions for improving SBIs market share and
the strategies to be adopted.
Scope:
To ensure that the project report is useful and could become a source of reference for the
bank.
To study the practical difficulties in extending car finance to Professionals, self employed
and Businessmen
To find out the strategies to be adopted by the Bank for better result.
Limitations:
The present data is confined to the Car Loan process offered by State bank of India.
The data collected here is specific to the selected branches of the various banks in
Bhubaneswar and Cuttack as per the instructions of the organization.
The data and information collected here has been taken from the internal circular of the
organization and from conversations with customers.
The customer feedback collected here is specific to selected customers of limited centers
only.
Ignorant, non-cooperative and reluctant attitude of respondents was also a major constraint.
Period of study: 8 weeks
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METHODOLOGY
Research methodology is a methodology for collecting all sorts of information & data
pertaining to the subject in question. The objective is to examine all the issues involved &
conduct situational analysis. The methodology includes the overall research design, sampling
procedure & fieldwork done & finally the analysis procedure.
For this project i.e. Study of SBIs Car Loan to Professional, Self employed and Businessman,
the methodology used is stated below:
The research carried out for this project is descriptive in nature. It required the banks
internal circular for the car loan and other banks car loan schemes.
Sampling Technique: To study the Project, a Simple Random Sampling technique is used.
Sample Size: Sample of 150 people was taken into study, and their data was collected.
Data Collection: Collection of data is done by Primary and Secondary Data.
The primary data has been collected with the help of questionnaire as well as
personal observation book, magazine; journals have been referred for secondary
data.
Data Interpretation:
Interpretation of data is done by using statistical tools like Pie diagrams, Bar graphs,
and also using quantitative techniques (by using these techniques) accurate
information is obtained.
An exhaustive study of the general perceptions of the customers and the dealers. For this
purpose, questionnaire method was employed. This gave me an opportunity to gain insight
about the acceptability/popularity of SBIs car loan.
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DATA ANALYSIS
For the study 150 samples were taken, out of which 100 were customers and 50 were non
customers including Professionals, self employed and businessman.
Figure 4: Customers Figure 5: Non customers
The data and information collected here is with the help of Primary methods of Data collection
i.e. Questionnaire Surveys.
Figure 6: Time taken for loan sanction in SBI Figure 7: Time taken in other banks
Interpretation: From the above chart it can be seen that, almost 73% customers of SBI got
fast service and their car loan was sanctioned within 2-7 days, while the data collected from
non customers shows that 60% of them got their loan sanctioned within 1 week in other banks
while about 40% of them got delayed service.
30
30
40 professional
self employed
Businessman
15
15
20 professional
self employed
Businessman
73%
27%
Fast service to
customer
yes
no
60%
40%
Fast Service process
in other Bank
yes
no
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Figure 8: Factors preferred for taking loan from SBI
Interpretation: Studies from the collected data revealed that most customers of SBI
preferred to take car loan from this bank due to its low interest rates. Almost 60% went with
the cause. 18% customers preferred SBI for its low EMI. 10% went with minimum processing
fee, 8% with fast service process and about 4 % with longer repayment period and other
factors. The facilities provided by the bank towards car loans has resulted in increased demand
of the car loan product of various banks.
Figure 9: Documentation procedure in SBI
Interpretation: From the survey done among the 100 respondents of SBI, when they were
asked about the convenience in the documentation procedure of availing car loan, varying
responds were noticed from the different classes of customers. While 85% of
60%
8%
10%
18%
4%
Factors preferred for loan from SBI
Low interest rates
Fast service process
Minimum processing fee
Low Emi
Longer repayement
period
0
10
20
30
40
50
60
70
80
90
Professional Self employed Businessman
8580
60
15
20
40in %
Satisfaction of customers in documentation procedure in SBI
satisfied
not satisfied
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professionals and about 80% of self employed were satisfied with the procedure, only 60% of
the Businessmen found the documentation procedure convenient. Rest of the customers were
not satisfied with the procedure of which maximum were businessmen, about 40%. These
included mostly the non-resident businessmen who faced problem while providing theresidence proof. Some of them were also unwilling to provide their proper documentation
regarding income proof and IT returns. Remaining 15% professionals and 20% of self
employed faced some minor difficulties in documentation procedure.
Figure10: Documentation procedure in other banks
Interpretation: The data collected from the non customers shows that almost 78% of
professionals, 82% of self employed and 75% of businessmen were satisfied with the
documentation procedure of their respective banks, while remaining faced similar difficulties
while providing proper documents required for availing the loan facilities.
But still above data reveal that businessmen find the documentation procedure more suitablefor them in other banks than in SBI.
0
10
20
30
40
50
60
70
80
90
Professional Self employed Businessman
78
82
75
2218
25
in %
Satisfaction of non customers in respestive Banks
satisfied
not satisfied
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Figure11: Level of satisfaction in Bank services
Interpretation: Questionnaire were provided to both SBI customers and non customers and
they were asked to rank the bank services provided to them according to their level of
satisfaction and from the above collected data various information were obtained. Regarding
explanation of terms and conditions SBI customers were highly satisfied providing maximum
score to this i.e. 90%, while non customers were satisfied upto 70% with their service provider.
SBI scored 73% in High speed access but the non customers gave almost 80% score to their
banks. Staff consideration in SBI scored about 70%, while it is 75% in other banks.
When asked about convenience in location SBI scored 84% while non customers gave 78% totheir banks. This shows that SBI has reached most places for convenience of the customers.
Regarding protection to personal information customers found SBI to be more secure and gave
90% to SBI, while non customers gave 85% score to their service provider. SBI scored 85% in
providing accurate information and 78% in ease to find correct information, while other service
providers lagged behind SBI by scoring 72%
0% 20% 40% 60% 80% 100%
Easy to find correct information
Provide accurate information
Protect personal information
Convinient location
Staff consideration
High speed access
Terms explanation
78%
85%
90%
84%
70%
73%
90%
70%
72%
85%
78%
75%
80%
70%
Level of satisfaction in Bank services
Non customer
SBI customer
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and 70% respectively. This shows that SBI has outrun other banks in many aspects but still it
needs to improve a lot in many.
Figure 12: Preference to SBI for future car loan
Interpretation: From the survey done above we can see that More than 65% of the
respondents expressed that they would prefer taking loan from SBI if required in future, citing
multiple reasons. While non customers about only 10% expressed interest in trying SBI next
time and almost 70% were not interested as they were satisfied with their service provider and
also may be due to lack of proper information regarding loan procedure in SBI. 20% of the SBI
customers also refused to take car loan next time, may be due to the difficulties faced this time.
Remaining were not sure for their decision.
But still about 65% of the respondents were ready to recommend SBI to their friends, relatives
and associates for taking car loan.
Figure 13: Recommend SBI to friends and relatives?
0%
10%
20%
30%
40%
50%
60%
70%
80%
yes no may be
65%
20%15%
10%
70%
20%
Preference to SBI for future car loan
customer
non customer
65%
35%
Recommend SBI to friends and relatives?
Yes
No
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Figure 14: Reasons for not preferring SBI
Interpretation:Out of the non customers who did not choose SBI as their preferred bank for
car loan cited the reason as to the delay in processing of their loan request. Nearly 25% of them
were of the view that SBI takes a lot of time in processing their documents and disbursing the
loan. About 18% found the interest rates higher than their service provider and about 12% were
not interested due to floating interest rates. About 15% of them found the documentation
procedure unsuitable to their profile. There were many others who could not opt for SBI as
their income did not match the eligibility criteria of the bank. Some of them stepped back due
to callous attitude of the bank employees. About 10% found the processing fee to be higher.
Other reasons for not choosing the bank include various perceptions of the respondent about
the bank.
18%
12%
25%10%
15%
15%
5%
Reasons for not preferring SBI
High interest rate
Floating interest rates
Delayed service process
High processing fee
Callous attitude of
employees
Unsuitable documentation
procedure
others
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The data collected from various dealers have been analyzed and the findings are as follows:
Figure 15: Car bookings
Interpretation: The data collected from various car dealers reveals that the number of
vehicles financed is more than the number of vehicles ownedby 28%. In other words, people
these days are more dependent on banking institutions to avail car loan facilities.
Figure 16: Banks preferred by customers
Interpretation: According to dealers, SBI happens to be the most preferred bank with more
than 56% of the bookings opting for SBI to avail car loan. Other banks like HDFC and AXIS
share around 24% followed by Non banking finance companies having a demand of around
20%. Thus we can see that banks tend to be the leading market players in the car loan segment
over non banking finance companies.
64%
36%Financed
Owned
0%
10%
20%
30%
40%
50%
60%
SBI Other banks Non banking
finance
companies
56%
24%20%
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Figure 17: Banks which dealers refer to their customers
Interpretation: From the above diagram, it can be inferred that SBI and HDFC are the two
most referred banks. SBI tops the dealer referral and counts about 90% followed by HDFC
counting about 80% of the referral. AXIS follows suit with a share of around 50% while other
banks are rarely referred to with a count of 20%.
Figure 18: Reasons for choosing the bank
Interpretation: According to dealers, customers prefer SBI and HDFC the most. More than
80% prefer SBI due to lower interest rates. HDFC lags a little behind in this aspect but outruns
SBI by 75% when it comes to easy and quick disposal of loans. As inferred earlier, SBIs
biggest drawback is the delay involved in the processing of loans. But
0%
10%
20%
30%
40%
50%
60%
70%80%
90%
SBI HDFC AXIS Others
90%
80%
50%
20%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
Low interest rate Quick disposal Location
convinience
Transperancy
80%
60%
75%
85%
70%75%
65%
72%
40%35%
50%
60%
45%
70%
60%
68%
SBI
HDFC
AXIS
Finance companies
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again SBI tops the list from location point of view grabbing a share of more than 75%. In
terms of transparent dealing, yet again SBI leads the market with more than 85% of the
respondents choosing the bank. AXIS bank, although referred to by various dealers, hasnt
been able to capture a good market share as we can see that in terms of lower interest rates it isthe least preferred bank with merely 40% share, as low as nearly 35% when it comes to quick
disposal and less than 50% from the location point of view. Regarding non banking financial
companies some of the dealers refer them still they lag behind due to their high interest rates
but due to quick disposal accounting around 70% these are preferred by mostly businessmen
and customers who prefer to have their car quickly.
Figure 19: Performance of SBI representatives
Interpretation: When asked about the performance of SBI representatives in car loan
marketing 62% dealers considered it to be excellent. 24% said good and 10% said average.
This shows that SBI has to work more on its marketing skills and need to perform more nicely.
62%
24%
10%
4%
Acc. to Dealers
Excellent
Good
Average
poor
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CONCLUSION
After Studying the popularity and general perceptions of the car loan product of SBI and
keeping in mind our categories of customers gave me an insight as to what strategies should be
adopted by the bank which will help it improve its market share. From the findings it can be
clearly seen that SBIs market share is already high but there are certain crucial points where
the bank needs to work on in order to attract more customers. SBI tops the list of banks most
preferred for car loan. Most of the respondents who already have taken loan from SBI are
satisfied with its services and hence, would opt for the same in respect to car loan. Since more
people would like to finance their vehicles, they would prove to be more prospective for SBI if
the bank works on its negative aspects of the loan product.
It can be seen that most of the people who havent chosen SBI for availing car loan have cited
the reason that they find the attitude of the bank officials to be negative and repulsive. This is a
very significant aspect of any organization because this is one of the most important criterions
which determine the satisfaction/dissatisfaction of customers. Therefore, the bank needs to
improve on this aspect. Moreover, the processing of loan and the documentation procedure
followed by the bank is quite lengthy and therefore, poses a major drawback for the bank. If
the processing time is shortened and the bank gives way for minimal documentation then this
can prove to be of much use to the bank thus, increasing the number of the people seeking its
Auto Loan.
Moreover the bank needs to improve its marketing skills, and all the bank representatives must
give their best performance to attract more customers.
Many drawbacks of SBI can be cited from this study and needs to be worked over to increase
its market share in auto loan.
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RECOMMENDATIONS
On the basis of the data collected through questionnaire, SBI should focus on the following
strategies in order to improve its market share:
Since the bank possess different categories of customers including professionals, self
employed and businessman accordingly their problems are also different. These must
be sorted individually as most of the businessmen are dissatisfied with the bank.
The nonresident businessmen are facing more difficulties in the documentation
procedure i.e. in providing residence proof or income proof, so some new criteria can
be introduced for them so that they may also find ease in availing car loan.
Since the main reason for people not choosing SBI for availing car loan is the problem
of delayed processing. SBI should work on this negative aspect and take necessary
corrective measures in order to attract more customers.
Another reason put forth by many respondents for not choosing SBI is the negative
attitude of the bank officials. This is a very crucial aspect to any organization because
this aspect decides the satisfaction/dissatisfaction of customers.
Though interest rates of the bank regarding car loan product is comparatively less than
other organization but still some problems are faced by the customers due to the
floating rates, so the bank needs to work on it and as much as possible try to provide a
fixed rate of interest to the customers.
There should be a proper procedure to collect customer feedback with respect to
processing time, documentation, choice/preference of the customer towards the loan
product. This feedback should be properly processed and the processed data should be
reviewed by higher authorities to bring the improvements.
Those customers who find that the documentation procedure dont match their profile
must also be considered to be important and SBI should search some way out for them
so that the bank could prevent losing its customer to other organization.
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Since the Rural approach of SBI is least, the bank should try to provide proper public
awareness of their car loan scheme and their benefits in rural areas.
A system should be developed wherein in addition to the dealing officials, other staff in
a branch should also possess adequate knowledge of various loan schemes to share theinformation with other customers, as a whole should be educated to the extent possible
which can result in a group marketing of products.
Bank representatives must also give their best performance.
The bank should employ hassle-free procedures for the sanctioning of loan to the
customers.
SBI should extend its concern on fast settlement of customer grievances.
SBI should provide spot financing forpurchasing car in the dealers premises duringfestival seasons.
Conducting more number of car loan melas in order to attract more customers.
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REFERENCES
Primary data collected: Questionnaires filled in by customers.
Primary data collected: Questionnaires filled in by non customers.
Primary data collected: Questionnaires filled in by dealers.
Documents available from the Bank website: www.sbi.co.in.
Information gathered from SBI officials.
Information gathered from the bank officials through face-to-face conversation.
Information gathered from Utkal Hyundai officials.
Information gathered from Sky Automobiles.
Information gathered from Narayani motors. http://www.axisbank.com/personal/loans/car-loan/car-loan-features.aspx
http://www.hdfc.com
Information gathered from Jyoti Automobiles.
Information gathered from Aditya motors.
http://www.axisbank.com/personal/loans/car-loan/car-loan-features.aspxhttp://www.hdfc.com/http://www.hdfc.com/http://www.hdfc.com/http://www.axisbank.com/personal/loans/car-loan/car-loan-features.aspx7/27/2019 Deepak Sip Report 2013
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ANNEXURE 1
Questionnaire for Customer availing car loan from SBI
I am a student of IMIS, Bhubaneswar and presently doing a project on Study of Car loans to
professional, self employed & businessman. I request you to kindly fill in the questionnaire
below and I assure you that the data generated shall be kept confidential.
_______________________________________________________________________
Name: _______________________________
Occupation: ____________________________________________
Annual Income (Optional): _________________________________
Cell no. : __________________________________
1. How did you find the loan sanction process in your preferred bank?
a) Very good b) good c) average d) bad e) worst
2. In how many days loan was sanctioned?
a) 2-3 daysb) 5-7 daysc) 15 daysd) 1 month
3. What made you decide on taking loan from your preferred bank?
a) low interest rate b) faster service process c) min processing fee d) caring attitude ofEmployees
e) Others please specify___________________________
4. Is the documentation procedure is convenient?a) Yes b) May be c) No
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5. Rank the following factors according to your expectation for the services providedby your service provider. (1 Being lowest and 5 Being highest).
Sl No. Factors 1 2 3 4 5
1 Explains all
terms clearly2 High-speed
access
3 Staff are
considerate
4 Convenient
location
5 Protects
personal
information
6 Provides most
up-to-date and
accurate
information
7 Easy to find the
correct
information
6. For any future car loan purpose would you like to contact SBI?
a) Yes b) May be c) No
7. Would you recommend this bank to your friends, relatives, associates?(a) Yes [ ] (b) No [ ]
8. Any suggestion for improvement of car loan procedure in SBI:
--------------------------------------------------------------------------------------------------------------
Thank you for taking the time to fill in this survey
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ANNEXURE -2
Questionnaire for Non Customer of SBI availing Car loan
I am a student of IMIS, Bhubaneswar and presently doing a project on Study of Car loans to
professional, self employed & businessman .I request you to kindly fill in the questionnaire
below and I assure you that the data generated shall be kept confidential._______________________________________________________________________
Name: _______________________________________
Occupation: _________________________________________
Annual Income (Optional): _______________________________
Cell no. : _____________________________
1. From Where have you taken the car loan_______________________
2. How did you find the loan sanction process in your preferred bank?
a) Very good b) good c) average d) bad e) worst
3. Do you have any knowledge about the loan facility in SBI?
a) Yes b) No c) may be
4. Did the dealer explain you loan process of SBI at the first instance?
a) Yes b) No
5. Why have not you taken loan from SBI?
a) High interest rate b) delay service process c) high processing fee
d) Callous attitude of Employees
e) Others please specify___________________________
6. What made you decide on taking loan from your preferred bank?
a) Allow interest rate b) faster service process c) min processing fee
d) Caring attitude of Employees
e) Others please specify___________________________
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7. Rank the following factors according to your expectation for the services providedby your service provider. (1 Being lowest and 5 Being highest).
SL NO Factors 1 2 3 4 5
1 Explains all
terms clearly2 High-speed
access
3 Staff are
considerate
4 Choice of
payment
methods
5 Convenient
location
6 Protects
personalinformation
7 Provides most
up-to-date and
accurate
information
8 Easy to find
the correct
information
9 Nice and clean
environment
10 Good queuing
system
8. How will you rate SBI against your preferred bank?a) Very good b) good c) average d) not good e) bad
9. Would you like to be contacted by a bank representative? a) Yes b) No
10.Given a choice would you like to shift your car loan to SBI?a) Yes b) No c) may be
11. Would you recommend this bank to your friends, relatives, associates?
a) Yes [ ] b) No [ ]
--------------------------------------------------------------------------------------------------------------
Thank you for taking the time to fill in this survey
Students of IMIS
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ANNEXURE -3
Questionnaire for Dealers
I am a student of IMIS, Bhubaneswar and presently doing a project on Study of Car loans to
professional, self employed & businessman .I request you to kindly fill in the questionnaire
below and I assure you that the data generated shall be kept confidential.
1. How many vehicle inquiries do you get every day? _______________________
2. How many booking are financed? ____________________________
3. Which bank is most preferred? ___________________________
4. Are non bank finance companies are preferred than SBI?
a) Yes b) No
5. Which bank do you refer your customers to and why? _________________
_____________________________________________________________________
6. Reason for customers preferring non-banking finance companies over banks?
________________________________________________________________________
7. How you will rate SBI against any other bank?a. satisfactory
b. good
c. averaged. excellent
8. Performance of SBI representative at your showroom?a. poor
b. goodc. satisfactoryd. excellent
9. Your view at SBI financing service in comparison to other finance?a. poor
b. goodc. satisfactory
d. excellent10.Any suggestion for SBI car loan :-
Thank you
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