A

PROJECT REPORT
ON
“A STUDY OF ‘CAR LOAN’ WITH REFERENCE
TO SBI BANK”
AT

STATE BANK OF INDIA, MERI BRANCH

IN THE PARTIAL FULFILMENT OF BACHELOR OF
BUSINESS ADMINISTRATION
(BBA - FINANCE)

SUBMITTED TO
“SAVITRIBAI PHULE PUNE UNIVERSITY”

SUBMITTED BY
MISS: - AVANTIKA SHINDE
PROJECT GUIDE
PROF. RUPALI G. WAKCHAURE
AT

COMMERCE MANAGEMENT & COMPUTER SCIENCE

COLLEGE, NASHIK
ACADEMIC YEAR (2015-16)
 ACKNOWLEDGEMENT

I’m in successful completion of this work title “A Study of CAR

LOAN” at special environment at Commerce Management & Computer
Science College, of Gangapur Road, Nasik that always supports educational
activities, facilitated, and appreciated my work on this project.

I acknowledge the support & encouragement, extended for this study

by our principal, Mr. S. N. SHINDE.

I am very much thankful to branch manager Mrs. AMITA M.

PARAB and our PROF. R. G. WAKCHAURE who has encouraged, & guided
me for this project work. It would not have been possible for me to complete
this work without her suggestion, interaction, and help on every part of this
project.

I acknowledge the Authors, whose work has given me immense

information related to this subject and encouraged me to work further.

I am thankful to library staff & administrative staff of Commerce

Management & Computer Science College due to whom I was able to collect
information from Library and put more efforts in it. I am thankful to my mother
& father who motivated me to extend my reach with their helps & support &
contact with the SBI. I have been able to finally complete and submit it to the
authority to all who helped. I convey my sincere thanks to all.

PLACE:-

DATE: -
 DECLARATION

I Miss. AVANTIKA BHARAT SHINDE hereby declare that the

project report, “A Study of CAR LOAN” is research work made for “SBI Bank”
and work presented by me under the guidance of PROF. R. G.
WAKCHAURE. The empirical finding in this project report is based on the
data wholly collected by me. The matter presented in this project is not copied
from any source. I understand that any such copy is liable to the punishment in a
way to university authority deems fit. The work has not been submitted for the
award of any degree or diploma earlier to University of Pune.

The project is submitted to Pune University, in the partial fulfilment of

Bachelor Degree course in BUSINESS ADMINISTRATION.

AVANTIKA. B. SHINDE

PLACE:

DATE:
 Table of Content

CHAPTER INDEX PAGE NO.

NO:
CONTENTS
1. INTRODUCTION 1 to 5
1.1 EXECUTIVE SUMMARY
1.2 OBJECTIVES OF PROJECT
1.3 SELECTION OFTOPIC
1.4 OBJECTIVE OF STUDY
2. PROFILE OF BANK 6 to 18
2.1 BANK PROFILE OF SBI
2.2 FINANCIAL HIGHLIGHTS OF 10 YEARS
2.3 PRODUCT PROFILE
2.4 ORGANISATIONAL STRUCTURE
3. RESEARCH METHODOLOGY: 19 to 24
1. RESEARCH DESIGN AND PROCESS
2. SCOPE OF STUDY
3. LIMITATONS OF STUDY

4. THORETICAL BACKGROUND 25 to 30
 TOPIC UNDER STUDY
 DOCUMENTS INVOLVED IN CAR
LOANS.
 CAR LOAN PRODCEDURE
 EVALUATION OF DOCUMENTS
 SECTION PROCESS AND
DOCUMENTATION

5. ANALYSIS AND INTERPRETATION 37 to 45

6. FINDINGS AND SUGGESTIONS 46 to 47
9. CONCLUSION . 48
10. BIBLIOGRAPHY 49
11. ANNEXURE 50 to 52
INTRODUCTION
 INTRODUCTION

Banking Industry, which is basically the concern industry around which

the project is constructed, is a complex industry. Bank means a financial
institution which accepts the deposit of the purpose of lending or investment of
deposit of money from the public repayable on demand or otherwise withdrawal
by cheque draft or order or otherwise.

An efficient financial management is becoming inevitable for every

manager in today’s corporate world from traditional aspect for reusing funds
whenever needed the importance has shifted to day to day financial decision
making & problem solving. When initially the stress was on the internal
analysis of the firm, procurement of funds management of assets & allocation of
capital, the present importance shifted to decision making within the firm with
the modern aspect of finance function the responsibilities of finance manager as
also encouraged. In the process of making optional decision, he makes use of
certain analytical tools in the analysis planning & control activities of the firm.

Financial analysis is an essential perquisites for making sound financials

decision. This study is intended to probe into the management of non- forming
assets in the.

This study is completely based on analyses & interpretation of published

accounts of the bank & personal interview of the senior official (BRANCH
MANAGER) of the SBI bank.
 1

EXECUTIVE SUMMARY:
In the global growing competition, the productivity of any business concern
depends upon the behavioural aspect of customers and their perception towards
various schemes. This project report consists of various chapters on car loan
beginning with introduction of bank, its product profiles, organisational
structure, research methodology, achievements and analysis and interpretation
of data.

The project takes into account the awareness level about analysis of car loan
among the economy. The analysis of project has been taking into consideration
by the inputs given by SBI bank and its various customers.

The project includes survey regarding awareness level regarding car loans
among people of lower to middle class, their investments choices, their choices
for various schemes, and their knowledge about the concepts of bank assurance.
It also includes experience while working on this project our survey concludes
that if proper study is done there is huge potential in car loans.

As we know that only analysis and conclusion is not the end of a research, so it
also consists of recommendation part which is covered after a depth study of the
analysis part of thesis.

In each of chapters as described further every chapter has been scheduled in

manner so as to enable reader to appreciate the contents easily. The report is
supported by figures and data wherever necessary with view to assist in
developing a clear cut understanding of the topic.

I hope this report will be extremely useful for those it is meant.

 2

OBJECTIVES OF THE PROJECT

1. To evaluate the state bank of India Banks Quality.

2. To understand the Meaning & importance of Car Loans.

3. To study the eligibility criteria for sanctioning working of car loans to

commercial & house.

4. To analyze the procedure followed bank for sanctioning loans.

 3

SELECTION OF TOPIC:

 Topic selection is one of the important aspects of my project as it

decides the course of action to be followed. The topic given by
my project guide was study of car loan by the bank of SBI.

 To satisfy customer's need is the mission and purpose of every

business. Any nationalized bank co-operative bank, private
sectors bank etc. providers provide car loan services to the
organization or companies. In our economy bank are the golden
sources which can help us to fulfilling our demand by providing
us financial services. I.e. Loan for certain period of time then we
have to repay the sum in installments with interest or as per the
rule held by the bank.

 Analyzing how bank finance car loan to business unit is

important topic for the management.
 4
OBJECTIVE OF THE STUDY

 To have comprehensive understanding of the organization.

o To know its product profile as well as organizational structure.

o To study why a business unit required car loan.
 What are the risk factors taken into consideration while sanctioning the
proposal?

 To understand overall process of sanctioning of car loan fund to a

business unit by a Bank.

 They should be your short term & long term objective for your Car
Modification & Accessories Business.
 5

BANK PROFILE
 PROFILE OF SBI/JOURNEY AND VISION OF SBI

Date of Establishment 02-06 1806

Revenue 23600.5 ( USD in Millions )
Market Cap 1202842.3026579 ( Rs. in Millions )
Corporate Address State Bank Bhavan, Corporate Centre , Madame
Cama Road, Nariman Point Mumbai-400021,
Maharashtra
www.sbi.co.in

Management Details Chairperson - Arundhati Bhattacharya

MD - VG Kannan

Directors - Pushpendra Rai, Girish Kumar

Ahuja, Urjit R Patel, Anjuly Chib Duggal,
Tribhuwan Nath Chaturvedi, Deepak I Amin,
MD Mallya, Sanjiv Malhotra, Sunil Mehta

Business Operation Bank – Public

 6

GENERAL INFORMATION OF SBI MERI :

Name of Organisation : State Bank of India (SBI)

Bank Address : Dindori Road, Meri, Near Pokar Colony,

Nasik.

Phone No : 2530294

BRANCH CODE : 10376

SBI BANK :
 Founded : 1 July 1955
 Revenue : US Dollar 36.950 billion (2015)
 Profit : US Dollar 3.202 billion(2015)
 Total Assets : US Dollar 359.237 billion (2015)
 Total Equity : US Dollar 20.854 billion (2015)

The State Bank of India, the country’s oldest bank and a premier in terms
of balance sheet size, number of branches, market capitalization and
profits is today going through a momentous phase of Change and
Transformation – the two hundred year old public sector behemoth is
today stirring out of its Public Sector legacy and moving with an ability
to give the Private and Foreign Banks a run for their money.

State Bank of India is an Indian multinational, public sector banking and

financial services company. It is a government-owned corporation with
its headquarters in Mumbai, Maharashtra. As of 2014-15, it has assets of
INR 20, 48,080 crores and 16,333 branches, including 191 foreign offices
spread across 36 countries, making it the largest banking and financial
services company in India by assets.
 7
The bank traces its ancestry to British India, through the Imperial Bank of
India, to the founding in 1806 of the Bank of Calcutta, making it the
oldest commercials bank in the Indian Subcontinent. Bank of Madras
merged into the other two presidency banks-Bank of Calcutta Bank of
Bombay-to form the Imperial bank of India, which in turn became the
State Bank of India. The Government of India nationalized the Empirical
Bank of India in 1955, with the Reserve Bank of India taking a 60%
stake, and renamed it the State Bank of India. In 2008, the government
took over the stake held by the Reserve Bank of India. SBI has been
ranked 285th in the Fortune Global 500 ranking of the world’s biggest
corporations for the year 2012.

The State Bank Group has the largest banking branch network in India.
SBI has 14 local head offices situated at Chandigarh (Punjab Haryana),
Delhi, Lucknow (Uttar Pradesh), Patna (Bihar),Kolkata (West Bengal),
Guwahati (North East Circle), Bhubaneswar (Orissa), Hyderabad
(Andhra Pradesh),Chennai(Tamil Nadu),Trivandrum (Kerala),
Bangalore(Karnataka), Mumbai (Maharashtra), Bhopal (Madhya
Pradesh) & Ahmadabad (Gujarat) and 57 Zonal offices those are located
at important cities throughout the country.

Logo and slogan

 The logo of the State Bank of India is a blue circle with a small cut in the
bottom that depicts perfection and the small man the common man -
being the centre of the bank's business. The logo came from National
Institute of Design (NID), Ahmedabad and it was inspired by Kankaria
Lake.

 Slogans: "PURE BANKING, NOTHING ELSE", "WITH YOU

- ALL THE WAY", "A BANK OF THE COMMON MAN",
"THE BANKER TO EVERY INDIAN", "THE NATION
BANKS ON US"
8
State Bank of India is one of the Big Four banks of India, along with
Bank of Baroda, Punjab National Bank and ICICI Bank. State Bank of
India is a regional banking behemoth and has 20% market share in
deposits and loans among Indian commercial banks.

SBI provides a range of banking products through its network of branches

in India and overseas, including products aimed at non-resident Indians
(NRIs). SBI has 14 regional hubs and 57 Zonal Offices that are located at
important cities throughout India.

As of 2014-15, the bank had 191 overseas offices spread over 36

countries having the largest presence in foreign markets among domestic
banks. It has branches of the parent in Moscow, Colombo, Dhaka,
Frankfurt, Hong Kong, Tehran, Johannesburg, London, Los Angeles, and
Male in the Maldives, Muscat, Dubai, New York, Osaka, Sydney, and
Tokyo. It has offshore banking units in the Bahamas, Bahrain, and Cape
Town.

9
10
PRODUCT PROFIE OF SBI:

 Deposits

 Loans

 Investment / Insurance

 DEBIT & CREDIT Cards

 Online Services

 Wealth Management

 Money Transfers

 Bank Accounts

 Property solutions

 Insurance

 Corporate Net Banking

 Cash Management

 FX Online

 SME Services

 Online Tax

 Custodial Services

11
ORGANISATIONAL STRUCTURE:

12
13
  Recent awards and recognitions:
 SBI was the only bank featured in the "top 10 brands of India" list in an
annual survey conducted by Brand Finance and The Economic Times in
2010.

 SBI was named the 29th most reputed company in the world according to
Forbes 2009 rankings

 SBI was 50th Most Trusted brand in India as per the Brand Trust Report
2013, an annual study conducted by Trust Research Advisory, a brand
analytics company and subsequently, in the Brand Trust Report 2014,
SBI finished as India's 19th Most Trusted Brand in India.

 SBI won National Award for its performance in the implementation of

Prime Minister’s Employment Generation Programme (PMEGP) scheme
for the year 2012.

14
16
17
18
 RESEARCH
METHODOLOGY
 RESEARCH METHODOLOGY
Research in common parlance refers to a search for knowledge. One can
also define research as a scientific and systematic search for pertinent
information on a specific topic. In fact research is an art of scientific
investigation. Another meaning of research as “a careful investigation or inquiry
especially through for new facts in any branch of knowledge.” Project method
gives guidelines how the data is collected and the presentation at information. It
must be collected with the help of some technique. Redman and Mory define
research as a “systemized effort to gain new knowledge.” Some people consider
as movement a movement from the known to the unknown it is actually a
voyage of discovery.

 Primary data collection

The first-hand information bearing on any research, which has been collected by
the researcher, may be called “primary data”. Collecting information various
with the help of records of the Bank.

 Secondary data collection:

The Secondary Data on the other hand, are based on second-hand information.
The data which have been already been collected, compiled & presented easier
by any agency may be used for the purpose of investigated such data may be
called “Secondary Data”. Collecting the information with the help of Annual
Reports, Magazines, Internet, and Reference Book. The Secondary data provide
by organization. The needed information is collected from Journals Annual
Reports, magazines etc.

19
Research Process
The research was carried out as per steps of consumer research process.
The figure below depicts a model of consumer research processes.

Defining the objective of the research

Collecting & Evaluating secondary data

Designing of primary research study

Collection of primary data

Processing & Interpretation of data

Step 1: Defining the objective of the research

The first step in consumer research is to carefully define the objective of

study. The objective of the study were decide at the outset to ensure that
research design is appropriate the statement of objectives helped to define the
type and level of information needed.

Step 2: Collecting and evaluating secondary data

A search for secondary data generally follows the statement of objective.

Secondary information is any data originally generated from some other
purpose other than the present research objective. It includes finding based on
research done by outside organization, data generated in house for earlier
studies, details of past customer transaction and even customer information
collected by the firm sale departments like sales, call report etc. locating
secondary data is called secondary research. In this, secondary data was not
available as earlier study were not carried out o this topic at on store level to
meet the objective for which primary research is undertaken.

20
Step 3: Designing of primary research study

The design of research study is based on the purpose of study. A

quantitative study was undertaken as descriptive information was needed.

Research design is the specification of procedure for collecting and

analyzing the data necessary to identify and react to a problem or opportunities
such that the difference between the cost of obtaining various level of accuracy
and expected. Value of the information associated with each level, accuracy is
maximized.

Step 4: Collecting primary data

Primary data- The primary data is the 1st hand and fresh data which researcher
collect for his research work.

Step 5: Processing and analyzing the data

Analysis of data is done to built a sort of intellectual model where the

relationship involved are carefully brought out so that some meaningful
interface can be drawn, it involved the presentation of data through tables,
graphs, diagrams, statistical tool used to translate responses in to meaningful
information from the collected data, interference have been drawn from the
analyzed data with proper supportive data.

21
 Scope of the Study

The scope of the project remains purely on the study of car loan of SBI Bank is
DSA with the view know the assessment of the loan how customer can assess
the loan what are the interest rate procedure can be known from this study. It
also analyse the defaulter in car loan of SBI bank so that bank can take
precaution while the granting the loan.

There is wide scope of study of car loan analysis.

22
 LIMITATIONS OF THE STUDY:

1) Generally banks do not allow the outsider to have any study or research
work in bank. Therefore getting a project work in bank itself was very
difficult.

2) The time span of the project was very short, which itself act as a major
constraints moreover studying the guidelines & to apply it practically
within short time span was a task of great pressure.

3) Due to confidentiality some of the information which is important for

the project could not be collected. There was restriction in disclosing such
information or data.

23
24
THEORETICAL
BACKGROUND
 THEORETICAL BACKGROUND
Meaning of Car Loan
 A Car Loan is a loan offered by a Bank towards the purchases of a new
or used car. Getting your first dream car has become easier with various
low interest car loans available in India.

Definition of the Car Loan

 A Type of Car Loan approved for people with substandard credit scores
or limited credit histories. There is no official cut off score for prime
verses subprime, but it should be noted...
 A short term loan in which the borrower’s car title is used as collateral.
The borrower must be the lien holder (i.e. own the car outright). Loans
are usually for less than 30 days. If the loan is not repaid, the lender can
take ownership of the car and sell it to recoup the loan amount.

CAR LOAN FEATURES & BENEFITS :

 No Advance EMI (Equated Monthly Instalments).

 Longest repayment Tenures (7 years).

 Lowest Interest Rate.

 Lowest EMI.

 LTV 85% on road price of car (Include Registration insurance & 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 any time during the months.

 No pre-payment penalty

25
  Free-accident insurance, optional SBI life cover

 Overdraft facility available

 Competitive interest rates

 No foreclosure charges

 Car financed on “Road Price”

CAR LOAN FINANCIAL SCHEME:

Available for purchase of New Car/Van/Jeep/Multi Utility Vehicle

(MUV)/sports Utility Vehicle (SUV) or for old vehicle that are not older than 3
years (Depreciation @ 15% p.a. on current invoice /showroom invoice).
Finance will be provided for purchase of vehicle of indigenous/foreign makes.

 Eligibility:
To available an on SBI car loan you should be;

 Individual between the ages of 21 to 65 years of age.

 Regular employee of State/Central Govt., public sector under

taken private company as a reputed establishment.

 Professional self- employed, business man

Proprietary/Partnership Firms who is an income tax assessee.

 Person engaged in agricultural & allied activities.

 Net annual income Rs. 2, 50,000/- and above.

26
  Loan Amount: There is no upper limit for the amount of car loan. A
maximum Loan amount of 48 times of net monthly income or 4 times of
net annual income can be sanctioned.

 Margin: 15% of the on road price (which includes vehicles registration

charges, insurance 1 time road tax & accessories).

 Rate of Interest: BPLR System Base Rate System

Less than 3 yrs 3 yrs & above Less than 3 yrs 3 yrs & above

10.50% 11.00% BR+1.00% BR+7.50%+TP

@ Till 30/06/2012 Car Loan was fixed Rate Loan from 1/07/2012 new Car
Loan will be floating i.e. to be changed with change in BR. The old car loans
will be mandatorily migrated to base rate system on the reset date.

 Security:
The Vehicle purchased with the amount of loan is to be hypothecated to
the Bank.

Guarantee / Collateral Security

i) Third party guarantee /Collateral Security is waived in following

cases:

 Permanent Employees of Central Govt. / state Govt.

/PSUs/MNCs/Listed companies at BSE/NSE whose shares are
actively traded and quoted above par.

 For other than salaried class borrowers where ex – showroom

cost of the car are exceeding Rs. 6 lakhs.

ii) However the guarantee of parent(s) / Spouse will be taken in case

their income has been considered for determining loan taken.

27
  Mode of disbursement: Loan disbursed directly to the authorised
dealer.

 Process fees: Upfront Fee & Documentation Charges

1) @ 0.51% of the loan amount, with a maximum of Rs. 500/- per

car Loan Application.

 Repayment: You can enjoy the longest repayment period in the

industry with us as long as 84 months.

 Reimbursement of cost of car purchased by own sources.

 We also reimburse finance for the car purchased out of own funds which
are not more than 3 months old @ rate of interest applicable to New Car.

CAR LOAN INTEREST RATE:

The SBI Bank provides the loan to the customer by imposing different type of
interest rate on him.

1. Reducing:

 In this type the bank will give the loan to the customer by interest of 25%
P.A. on loan amount. This interest is goes decreasing month by month the
customer repay the amount in the form of EMI.

2. Flat:

 In this type bank will give the loan to customer by interest of 15 % P.A.
This interest remains flat till the last EMI is to be paid by customer

28
 DETAILS OF SBI CAR LOAN
SBI Car Loan Interest Rates Updated on 1st March 2016

SBI Bank Car Loan Interest Rate: (Daily Reducing balance) 10.45% floating

 Processing Fees : 0.51% of Loan Amount, with minimum of Rs. 250 &
maximum Rs. 500

 SBI Bank Car Loan Tenure: 1 year to 7 years

 SBI Bank Car Loan Amount

Up to 10.45% for New Vehicle

16.95 To 7.20% for used car with maximum as Rs. 2, 50,000/-

 Guarantor Requirement: Guarantor is mandatory

Interest Rate 10.45% p.a.

1) SBI Car Loan Scheme
Tenure Rate of Interest

For all Tenures For term loan & old 0.75% above
base rate i.e., 10.45% p.a.

2) NRI Car Loan

Tenure Rate of Interest

For all Tenures 0.75% above base rate i.e., 10.45%

p.a.

29
3) Certified pre-owned car loan scheme

Tenure Rate of Interest

Up to 3 years 6.00% above base rate i.e., 15.70%

p.a.

Above 3 years 6.50% above base rate i.e., 16.20%

p.a.
4)
SBI COMBO Loan Scheme
Tenure Rate Of Interest

For all Tenure For Term Loan;

0.75% above base rate i.e.,

10.45% p.a.

SBI CAR LOAN ELIGIBILITY :

 Salaried individual

 Self Employed Individual

 Self Employed Professional like doctor, lawyer, etc.

 Aged above 18 years

 Good repayment capacity with fixed & stable income source

 Work for a stable company

 Try our car loan eligibility calculator to check how much loan
amount you are eligible for.

30
SECTION PROCESS AND CAR
LOAN DOCUMENTATION
SECTION PROCESS & DOCUMENTATION
CAR LOAN PROCESS

1. Find an advertisement for a car that you would like to purchase.

Remember to look at different options & discuss with your parents which
car will be best suit your needs in your present situation. For the you
consider, use “Edmunds car buying guide ‘or’ Kelly Blue Book” to learn
how the advertised prices compare with market prices generally for cars
are same make, year, and model.

2. After finding the ad for car of your choice, fill out the SECU Credit Union
auto loan application form. Decide whether you will have a down payment
or a trade-in. Use realistic value. If you don’t want to put down actual
information, you may make it up. Your job could be the job you have now
or a future job. (NOTE: this is a classroom activity and do not fax or send
in your assignment to the Cascade Bank)

3. Once you have found the automobile your choice & have determined the
amount you will be spending on the car, you need to calculate the monthly
payment. The “Amortization Calculator” may be helpful in calculating the
monthly payments according to the amount of borrowed principal.

4. Calculate the monthly payment for your car for each option below using
monthly payment formula (neatly handwritten)

Interest Rate Length in years

I 8% 5

II 9.70% 3

III 10.45% 4.5

IV 18% 2.5

V 22.25% 4

31
5. Provide a word processed summary of your project. Tell what you think your
best loan option would be, &justify that conclusion. Also, discuss what
situations might make you decide not to take each of the following:
I) The Lowest Interest Rate
II) The Smallest Monthly payment
III) The Shortest Time

IV) The Loan with the Lowest Cost

As part of your written summery, include what you have learned from
this project.

The following information must be included in your final Report

 Evaluation Sheet

 An ad for the car of your choice

 Monthly payments for each option calculated by using the monthly

payment formula (neatly handwritten)

 Total cost of the loan for each option (monthly payment multiplied
by number of payments-neatly handwritten.)

 Printed copy of an amortization schedule of the loan option that is

best for your situation.

 A word processed summary of which is the best loan option for

your situation along with a justification of why. A summary what
you learned from this project should be included in the written
summary.

32
 SECTION 2

After receiving the document from the customer the bank will decide how
much loan will have to be approving to the customer based on the following
calculation.

 If the customer is salaried person

 If the customer is salaried person the he will divided in the three
categories as below

ELITE APPROVED OPEN MARKET

Big Companies(M & M, Limited Companies Small companies

SIEMENS)

1. If the customer belongs to the ELITE group then the Loan amount will
be approve him by applying the multiplier to his salary

Salary x 18 = Loan Amount

2. If the customer belongs to the approved list category the loan amount
will be approve him can be calculate as-
Salary x 12 = Loan amount

3. If the customer belongs to the open market list category the loan amount
will be approve him can be calculate as-
Salary x 10 = Loan amount

If the customer self employed:

If the customer is self employed then loan amount will approve him can be
calculate as-

Net Profit x 1.1 – obligation = Loan amount

(Obligation’s = daily expenses + previous loan amount)

33
  Repayment

In this type if the customer has already taken the loan from the bank and
he field for new file for loan then the loan amount can be calculated as follows

Customer should have the paid EMI as,

Minimum EMI = 9 and MAX = 18

EMI amount x paid EMI (9 to 18) – obligation = Loan amount

SECTION 3

As after verifying all the document of the customer by the bank through the
bank verifying agencies according the criteria mention the amount is disbursed.

 Service charges for the SBI Loan

 Loan processing charges

This is 2% of the loan amount. So for a car loan of Rs.

50,000, you’ll pay Rs. 1,000. This can go as high as 5% in select
categories.

 Origination Charges

This is 1% of the loan amount. So on an amount of Rs.

50,000 you’ll pay Rs. 500. This is to be paid along with the
first repayment installment.

 Cheque swap Charges

If you need to change the post-dated cheques issued to SBI

bank, towards repayment of the car loan, SBI will charge
you Rs. 500.

 Cheque bounce charges : When a cheque issued by you to SBI

bounces, you pay a penalty Rs. 200.

34
  Charges for late payment

If you are late in paying the installment due on the SBI car
loans, you’ll be charged 2% per month as charges for late
payment.

 Interest rate can change

SBI Bank can, using its discretion change the interest rate on
the personal loan according to their terms and conditions. In
fact they can change virtually anything they want in the
terms and conditions.

 Changing mode of repayment : If you wish change the mode of repayment

of the SBI car loan, this need to be done with the permissions of SBI bank.
Stopping payments on post-dated cheques or otherwise canceling or
revoking mandates would be considered ‘committed with a criminal intent’
according to the SBI terms and conditions.

 WHAT ARE THE ELIGIBILITY CRITERIA FOR CAR LOAN?

Criteria Salaried Self-employed

Age 21 yr to 60 yrs 21 yr to 65 yrs

Net Salary Net annual income Rs.1, Net profit after tax- Rs.
00,000 P.A. 1,00,000P.A

Others- 2, 50,000. Others- 2,50,000

Eligibility Employees of public ltd Doctors, MBAs,

companies, private ltd. Architects, C.A...s,
Companies, Govt. Engineers, Traders,
companies or MNC Manufacturers

Years in current job/ 2 Year 3 Years

profession

Years in current 1 Year 1 Years

residence

35
DOCUMENTATION REQUIRED FOR CAR LOAN

 Personal security
 Light & Telephone bill
 Salary Certificate or Payment slip
 Permanent Address
 Guarantor
 Photographs

CAR LOAN DOCUMENTATION PROCESS IS MINIMAL &

GENERALLY BANKS REQUIRES THE FOLLOWING DOCUMENT.

 Identify Proof: Namely a copy of the Passport or PAN card or Voter’s ID

or Driving licence.

 Income Proof: In the form of usually the latest salary slip with the latest
income tax forms (form 16 in the case of the salaried individual, ITR from in
the case of a self employed individual).

 Residence Proof: In the form of a Ration card or Driving license or voters

ID or Passport copy or Telephone bill or Electricity bill or life insurance
policy or PAN card.

 A copy of the Bank statements pertaining to the most recent and relevant
time frame.

36
 ANALYSIS AND
INTERPRETATION OF
DATA
 ANALYSIS & INTERPRETATION OF DATA

CANARA BANK 70%

HDFC BANK 55%

SBI BANK 60%

OTHER BANK 20%

CAR LOAN
80%

70%

60%

50%

40%
Series 1
30%

20%

10%

0%
CANARA BANK HDFC BANK SBI BANK OTHER BANK
CANARA BANK HDFC BANK SBI BANK OTHER BANKS

37
Number of customer from business sector & service sector to buy cars & have
loans for the same.

TABLE
Occupation Services Business Total

% Fig of the responses 38% 62% 100%

OCCUPATIONAL RESPONSES

38%

Service Sector
62% Business Sector

INTERPRETATION:
From the above pie chart we can see that (62%) respondents are from business
& (38%) respondents are from service sector

38
39
40
Auto Loans Portfolio:

Auto Loans
20.00%

18.00%

16.00%

14.00%

12.00%

10.00%
Auto Loans
8.00%

6.00%

4.00%

2.00%

0.00%
2012-2013 2013-2014 2014-2015

Interpretation of Auto Loans Portfolio:

 In the year 2012-2013, there was a increase in Auto Loans at 8%. It has
significantly increased in the year 2013-2014 with a total percentage
increase of 12.60%. Comparing both years there is a significant
increase in Auto Loans by 4.6%.
 The Financial Year 2014-2015 came with a good increase in the
acceptability for Auto Loans with increase of 15.12%. As compared to
the previous year scope for Auto loans has increased from 8% to
15.12%. i.e. Total Percentage increase = 7.12%

41
Preference for vehicles:
SBI has taken various joint promotional activities with major car manufacturers
like Hyundai, Mahindra, Tractors, and TATA Motors from the financial year
2012-2013. The graph further shows the preference of vehicles on basis of the
customer’s choice on various companies of vehicles.

2013-2014 Total Sales

1,600,000

1,400,000

1,200,000

1,000,000
2013-2014
800,000
Total Sales
600,000

400,000

200,000

0
Mahindra TATA MOTORS Hyundai Ford Maruti Suzuki
Tractors

 SBI Bank derived 274 crores rupees profit in 2013-2014 on basis of Car
Loan on Mahindra Tractors for the farmers. The total numbers of cars
sold during this year were 2, 00,000.
 Hyundai Cars made a total sales of 1,467,400 i.e. 9% increase over the
previous year.
 Ford made sales of 2, 44,167 units and Maruti Suzuki made a total sales
of 1, 04,964 units.

42
  Why customers prefer Car loans of SBI Bank?

 For floating interest, longer the tenure, greater the chance of

increase in interest rates hence great risk f increase or decrease in
EMI.
 Regular prepayment beyond the EMI amount helps recover the
loan amount sooner.
 It is most beneficial to foreclose the loan as soon as possible.
 You can avail larger loans and for longer tenure as well. Also, you
can control the total amount of interest you will pay.
 You can make prepayments without losing liquidity.

Here’s a short example of two cases mainly one random bank ABC
bank and SBI bank:

PARTICULARS ABC BANK SBI BANK

DEALER PAYMENT 5.5L 2L(or up to 15% of OTR

price, not ExS as you get
85% loan on OTR
LOAN 3.5LAKHS 7lakh (>5L for the
Overdraft)
RATE OF INTEREST 13% 12% p.a
PER ANNUM (P.A)
TENURE 5YEARS 5years or as given

EMI 9625 18666

INTEREST PAID IN 5 275000 420000****

YEARS

43
Now at end of 6 months:

ABC SBI
Loan Amount 3.5L 7L
Paid EMI 9625x6=57750 9625x6=57750

Top ups done 0 3.5L

Remaining principal 3.5L – 5000*=345000 345000

Conclusion - Even if you pay the interest at 20% and tenure is 10 years,
you still pay the same amount of interest – which is MINISCULE. This scheme
i good for people who can invest well and use overdraft. Through this you can
get larger loan amount for a larger tenure.

MARKET SHARE OF CAR LOANS:

Market Share in car loans

13% 22%
SBI
16%
HDFC
KOTAK MAHIDRA
9%
26% AXIS BANK
ICICI BANK
16%
OTHERS

44
SCHEMEWISE DISBURSEMENT OF CAR LOAN:

Type of Loan Amount in cr.

Home Loan 39.44

Car Loan 37.68

Commercial Loan 30.52

Personal Loan 0.642

Home Loan
Car Loan
1%
Commercial Loan
Personal Loan
28%
36%

35%

45
FINDINGS
 FINDINGS:

 In today’s day the deemed of money are increased because the needs of
human being are increased.

 So the rate of interest of loan should be decreased or kept less.

 More people can afford the scheme of loan & can satisfy their needs as
per their requirements.

 Make process of loan more easy & convenient to understand the

customer.

 For the loan Bank requires some documents but some people cannot
have that.

 For example for the farmer he cannot have the document of fixed
income.

 Get the loan from Bank. So Bank can provide the option for documents.

46
SUGGESTIONS
 SUGGESTIONS:

 Sector the Bank should concentrate more on business sector

without neglecting the service sector.

 As maximum number of people has given preference to 85 %

amount of loan on the total price of the car, therefore Bank should
concentrate in this category of loan amount.

 As according to survey maximum number of customer are from

business.

 As maximum number of declare for used car were not willing to

make a tie-up with SBI Bank because of commission delays.
Therefore bank should make understanding with them & solve
their grievances as early as possible.

The loan amount should be sanctioned according to capability of

customer.

47
CONCLUSION
 CONCLUSION

A. The study of project reveals that the SBI bank was in the analysis
& interpretation of the project status that the bank provides various
types of car loan to the society. The Bank makes various steps in
reducing loss against the loans & advanced provided to the society.

B. As compared to the private financial organisation the SBI Bank

has made more efficient & valuable change in the facilities which
are to be provided to the common people with less charge.

C. Different types of loan like Car Loan are made available by the
bank. In the same manner crop loan for the farmers are provided as
per the NABARD & RBI norms. The SBI facility is also made
available to the farmer. The overall study reveals that the customers
connected to the SBI Bank are satisfied with the Bank.

D. The SBI Bank plays very important role in the development of

rural area by lending funds.

48
BIBLIOGRAPHY
 BIBLIOGRAPHY

 www.sbi.co.in
 www.wikipedia.com
 Business today (News Papers)
 Economic Times (News Papers)
 Financial Services (Nirali Publications)
 Cases in Finance (Nirali Publications)

49
ANNEXURE
ANNNEXURE
YEAR – 2013

50
YEAR-2014

51
YEAR - 2015

52