Student, Department of Business Management,
Jhulelal Institute of Technology.
Prof. Amar Satijani
Assistant Professor, Department of Business Management,
Jhulelal Institute of Technology, Nagpur
In this paper is made to understand and analyze the study aims to analysis of personal installment loan services between an SBI and HDFC Bank over the period of 2019-2020. The study revealed that personal installment loan services have been popularizing among the customers of medium-low income levels in the society. It is demonstrated that the SBI Bank is providing better services as compare to HDFC Bank as regards personal installment loan facilities, terms and conditions, fees target market and Customized products. it is observed that SBI Bank are more dynamic, more technological oriented and aggressive customers than the HDFC Bank moreover, SBI Bank is more technological than HDFC Bank in the context of designing the personal loan features. Finally, the study highlights the major components of personal installment loan system in the shed light of total disbursed amount, total outstanding amount, total customer achieved. SBI Bank rate of interest is better than HDFC Bank.
Keywords: SBI Bank, HDFC Bank, interest rate, personal loan, policies & term and condition.
Introduction to personal loan
It is an unsecured loan taken by individuals from a bank or a non-banking financial company (NBFC) to meet their personal needs. It is provided on the basis of key criteria such as income level, credit and employment history, repayment capacity, etc.
Unlike a home or a car loan, a personal loan is not secured against any asset. As it is unsecured and the borrower does not put up collateral like gold or property to avail it, the lender, in case of a default, cannot auction anything you own. The interest rates on personal loans are higher than those on home, car or gold loans because of the greater perceived risk when sanctioning them.
However, like any other loan, defaulting on a personal loan is not good as it would reflect in your credit report and cause problems when you apply for credit cards or other loans in future.
The State Bank of India (SBI) is an Indian multinational, public sector banking and financial services statutory body. It is a government corporation statutory body headquartered in Mumbai, Maharashtra. SBI is ranked as 236th in the FortuneGlobal500 list of the world’s biggest corporations of 2019.]It is the largest bank in India with a 23% market share in assets, besides a share of one-fourth of the total loan and deposits market.
The bank descends from the Bank of Calcutta, founded in 1806, via the Imperial Bank of India, making it the oldest commercial bank in the subcontinent.
HDFC Bank was incorporated in August 1994. As of September 30, 2019, the Bank had a nationwide distribution network 5,314 branches and 13,514 ATM’s in 2,768 cities/towns.
The Housing Development Finance Corporation Limited (HDFC) was amongst the first to receive an ‘in principle’ approval from the Reserve Indian Bank of India (RBI) to set up a bank in the private sector, as part of RBI’s liberalization of the Indian Banking Industry in 1994. The bank was incorporated in August 1994 in the name of ‘HDFC Bank Limited’, with its registered office in Mumbai, India. HDFC Bank commenced operations as a Scheduled Commercial Bank in January 1995
The study is about the comparison between two bank services regarding personal loan for Nagpur city.
So, the purpose is as follow
- To know the policies of SBI and HDFC bank
- To know how to calculate the equated monthly installment of consumer
- To know the comparison between interest rate of both bank
- To determine the other bank those are competing with the same product rang in personal loan
- Service level and associate approach
- To find out level of brand awareness
- To find out company market share
The primary data is collected from the respondents by administering the structured questionnaire and also through observation, interview and discussion with management. A well-structured questionnaire was used to collect the primary data. Simple random sampling method was used among the sample size of 50 customers of Nagpur from HDFC & SBI Bank.
This will give the theoretical basis required for the report presentation which can be available from various sources such as magazines, office files, inter office manual and web site.
The Table Showing rating of SBI Bank & HDFC Bank personal loan by customers
Compare between SBI and HDFC Bank Regarding Personal Loan
These banks offer the best personal loan products to suit your desires/needs. Here, we will help you compare and choose the right option for yourself.
Example– If you have borrowed a sum of Rs. 10,00,000 from a bank at an annual interest rate of 10.5% (10.5%/12=0.875 monthly) for 10 years (10×12=120 months), your EMI will be:
Rs. 10,00,000 *0.00875 * (1 + 0.875)120 / ((1 + 0.875)120 – 1) = Rs. 13,493
Now, you will pay Rs. 13, 493 for 120 months to repay your personal loan amount. Thus, your total payable=13, 493×120=16,19,220.
- 45% customers are preferring the SBI Bank when taking personal loan and only 30% customers prefer HDFC Bank
- Family members are creating more effects on decision regarding personal loan.
- Interest rate is main factor consider by customers when taking loan.
- Most of the customers prefers the repayment of loan in higher duration.
- Most of people customers consider the policies of bank regarding personal loan.
- 50% of customers give higher rating to the SBI bank
- In HDFC Bank only 30% customers give the higher rating to the SBI Bank.
- Most of government employee prefer are prefer the SBI Bank.
- Similarly, self-employed & businessmen are preferring the HDFC bank.
- Low income class people face difficulty to taking personal loan.
Areas in Research: –
In my report I have tried to show the basic different between the Personal Loan of HDFC & SBI Banks. Both the Banks are good in terms of customer satisfactions has an edge because it is the leading Government regulated bank in India. HDFC is new to this segment (when compared to SBI) SBI is preferred because it’s a government bank. Procedure of loan financing is easy in HDFC Bank. Family members & increasing standard of living plays an important role in influencing the decision of taking home loan
- SBI Bank is leading Bank in the country, it provides a variety of products and services to different segments of customers.
- The Bank aims to serve customers from teenagers to seniors’ citizens, hence different products designed to suit specific requirements of the above.
- Aims to serve all classes of the society from the salaried middle class to the high-income business class. Customers are categorized and segmented according to their requirements and needs.
For Example: – The saving regular and Plus Account aimed to served middle class customers so minimum balance required to be maintained in RS 5,000/- or RS 10000.
While the Saving Max Account is targeted at high income customers, the minimum balance requirement is RS.25000.
- SBI Bank provides personal loan at low interest rate which good for customers.
The Bank prides itself with the ability to provide differentiate products in the crowded market of saving accounts. Bank offers free insurance, special co-branded debit cards which makes its product unique.
When the survey was conducted, I have found some suggestion for the bank through survey. They are as follow:
- Bank formalities should very high please reduce the bank formalities.
- Customers expect more finance from bank if possible then increase their limit.
- Few percentages of women are using the service of Bank .so they should be provided various schemes and concessions in loan to motivate them to be connected with bank.
- SBI Bank need to promote and encourage people to using internet banking.
- HDFC Bank need to promote and encourage people to using internet banking.
- For online Banking English is necessary so everybody should have basic knowledge regarding English.
- Customer want proper knowledge of product or services.
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