EXECUTIVE SUMMARY

The rolling growth of the two wheeler industry in India has been influencing several new

entrants to start manufacturing newer version of automobiles.

Leading banks in the public and private sector are providing two wheeler loans, right form

mopeds to motorbikes. These loans are available at attractive rates and best prices to attract new

customers.

The present study is an empirical research done on factors influencing the behaviour of the

customers towards two-wheeler loan of a selected city. A random sample was selected from the

selected areas and a questionnaire was prepared for the research process & to analyze the data.

The main findings reveal that people prefer private banks over public banks though the variation

in rates of interest is vast. Also low interest rate, small installments and long repayment are the

important features to select a bank for applying for loan. The report concludes with future bright

outlook.

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 INTRODUCTION

1.1 TWO WHEELERS LOANS INDIA

The surging growth of the two wheeler industry in India has been influencing several new
entrants to start manufacturing newer version of automobiles. In the last fiscal, the two wheeler
industry in the country has seen a remarkable double digit growth against the previous year. A
total of 5, 56,000 units of the automobiles were produced in India in the last financial year.
Leading two wheeler manufacturers like Bajaj Auto, Hero Honda, TVS Motor, Yamaha Motor
are continuously innovating and coming up with new two wheelers to rope in the increasing
number of potential consumers in India.

The annual sale of these various companies has also increased due to the two wheeler loans
offered by numerous financial institutions and banking organizations.

Leading banks in the public and private sector are providing two wheeler loans, right form
mopeds to motorbikes. These loans are available at attractive rates and best prices to attract new
customers. Quite a few banks are offering online loan application for the ease of prospective
clients. Private sector banks are ahead of their public sector counterparts in terms of efficiency of
application and processing of loans. On the spot loan offers are given by various banks and other
flexible schemes to suit the needs and pockets of customers.

By availing a two wheeler loan, many people in India have been able to get away with the hurdle
of huge amount of one time monetary investment. If you are taking the auto loan, then in most of
the cases you may have to give small down payment. However in some of the cases the
customers need not make any down payments at all.

1.2 Maximum Loan offered by Banks for Two Wheeler Loans

Loans are provided by banks from as low as Rs. 5000 to Rs. 150000. These loans can be paid in
easy installments. The installment period can range anywhere from six months to three years,
depending on the finance option chosen by the customer. In case of new vehicles, banks

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 generally finance up to a maximum of 90% of the cost of the vehicle.

In case of old/second hand vehicles, banks finance up to a maximum of 85% of the value of the
vehicle. Repayment is done by Equated Monthly Installments or EMI.

1.3 Interest Charged by Bank on Two Wheeler Loans

Although Public sector banks are offering lower interest rate than their private counterparts but
they are lagging behind due to poor quality of service. Interest rates depend on the two wheeler
model, loan tenure. Interest is generally calculated on a monthly reducing balance.

Repayment is done mainly through equated monthly installments..

1.4 There are some criteria based upon which the auto loans for two-wheeler are
sanctioned:

The individuals seeking loans should have annual gross income of about INR 50,000 or
more.
The individual can be a businessman, professional or car is job holder.
Loans are provided for both new vehicles or for used two wheelers that are up to 3 year
old.
If you are a transport operator then you have to down-pay minimum margin money of
about 15 % of the invoice value, tax amount and premium of insurance for buying a brand
new three wheeler.
For a used one, you have to pay minimum margin money of about 25%. Requirement of
guarantee is not mandatory, however in some of the cases you may be asked to deposit
any collateral security.
Repayment is usually done within 60 months in equated monthly installments. The
interest rates may be higher in the private banks and private financial institutions.
One thing should be noted that all such terms and conditions may vary from one bank to
another, one financial institution to another.

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 2 LIST OF BANKS IN INDIA PROVIDING
TWO-WHEELERS LOAN

2.1 The following are the list of Public Sector Banks in India
Allahabad Bank IDBI Bank
Syndicate Bank
Andhra Bank Indian Bank
UCO Bank
Bank of Baroda Indian Overseas
Union Bank of India
Bank of India Bank
United Bank of
Bank of Maharastra Oriental Bank of
India
Canara Bank Commerce
Vijaya Bank
Central Bank of Punjab & Sind Bank
India Punjab National
Corporation Bank Bank
Dena Bank State Bank of India

2.2 List of Private Banks in India

Bank of Punjab Federal Bank Laxmi Vilas Bank

Bank of Rajasthan HDFC Bank South Indian Bank
Catholic Syrian ICICI Bank United Western
Bank IndusInd Bank Bank
Centurion Bank ING Vysya Bank UTI Bank
City Union Bank Jammu & Kashmir
Dhanalakshmi Bank Bank
Development Credit Karnataka Bank
Bank Karur Vysya Bank
2.3 List of Foreign Banks in India

ABN-AMRO Bank BNP Paribas Bank JPMorgan Chase

Abu Dhabi Citi Bank Bank
Commercial Bank Deutsche Bank Standard Chartered
Bank of Ceylon HSBC Bank

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 3 Public bank: Bank Of Baroda
For those individuals who prefer to travel more
conservatively or to get to their destinations faster, a two-
wheeler is as much a boon as it is to a car owner. With newer models coming out each year, the
options available to the customer are both attractive as well as convenient.

Bank of Baroda's Two-Wheeler Loan make it possible to purchase a two-wheeler and pay
back in easy monthly instalments, thereby reducing the burden of a one-time payment.

All resident Indians, salaried, professionals, self-employed, businessmen and farmers can apply
for this loan.

Interest rate: 12.75%(Fixed)

Processing charges: 2%.Minimum - Rs. 250/-

Documents:

salaried person-

Application form with photograph

Identity & residence proof
Latest salary slip
Form 16
Last 6 months bank statement.

self-employed-

Application form with photograph

Identity & residence proof
Last 2 years income tax returns
Last 6 months bank statement

Eligibility: Total (Income tax return for 3 years).existing deductions (pf) and proposed
installments at 60% of monthly gross salary.85% of quotation price.

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 Terms & Conditions

Loan amount: Finance for a minimum of Rs. 5000 and a maximum of Rs. 1 Lakh (or
five times of the monthly income, whichever is less) can be availed of through the loan.
Down payment: Margin of 10% on loan amount.
Repayment period: The loan amount can be repaid in maximum 60 months from the
date of disbursement of loan.
As a security, the vehicle to be purchased out of the loan is to be hypothecated to the
bank.

For loan exceeding Rs. 50000, a third party guarantee and / other securities like NSC,
Share certificates, etc or a mortgage of property owned.

The vehicle will have to be insured with the bank's clause

Characteristics
Banks and lending institutions offer loans to individuals for a number of purposes. Of
these, automobile and vehicle loans are very popular as they help facilitate a
comfortable lifestyle and offer a better mode of transport. In this section to our
Introduction to Two wheeler loan not only will you learn about the bike loans but also
the finance rates. A Two Wheeler loan is one which is offered by lenders to those who
wish to get a two wheeler vehicle (motorcycle or scooter). Bike loans are very popular
as they are far more affordable to a large segment of the population. Quite a few banks
and motorcycle lending financial companies offer bike loans in India. At
BankandFinance.com, prospective borrowers can access information on the best
lending companies and their finance rates for the next motorcycle purchase. Getting
loans in India has become easy and simple, where you just need to know your eligibility
and if one can meet the specified requirements.

Going for a two wheeler loan is a good and practical idea when one is looking for a
vehicle. Using public transport is becoming quite difficult due to growing pressures on
the system. With the rise in population, public transportation has become overcrowded
and it is very difficult to get a seat on the bus or even get on it. Getting a two-wheeler is

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 one way to meet transportation needs, travel comfortably and get to places on time.

Loans in India are available to salaried and self-employed professionals. With the
release of new models in scooters and motorbikes every year on to the market, buyers
are always looking for vehicles which not only look trendy but also offer good gas
mileage. This helps them to save money on insurance and maintenance as well. The
demand for two wheelers keeps going up every year as they are an efficient way to get
around and maneuver through tough traffic conditions. With the increase in usage of
two wheelers, there has been a lot of competition with banks and other motorcycle
lending companies in India for loan finance. A two wheeler loan is available at attractive
finance rates to customers along with easy repayment options in the form of monthly
installments or EMI. There are many motorcycle lending services which offer 70% to
90% of loan to value for the bike loans.

Advantages and Disadvantages

Applicants can get a vehicle in no time. Generally, banks take 48 hours to
sanction a two wheeler loan after the verification of documents.

As there are a number of motorcycle lending companies and banks in India,

applicants can easily get loans at low finance rates along with good repayment
options.

The bike loan repayment and tenure period is very flexible and easy. Borrowers
can choose pay off the loan with in 12, 24, or 36 months.

Minimum documentation is needed to get bike loans in India.

Bike loans are a hassle free process, where no guarantor or security is needed.

Customers can use the BankandFinance.com financing calculator to estimate the

down payments, monthly payments and interest rates before applying for two
wheeler loans.

Before applying for a two wheeler loan, applicants should consider a few things. The
first thing to do is to look at their financials and check if they can pay off the loan
amount taken and how long it would take. Check with the banks or the loan finance
companies on finance rates and documentation needed. Borrowers have to keep in

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 mind that if they don't have the repayment capacity and have a history of defaults, then
the banks and motorcycle lending services can repossess vehicle if payments are not
made. This process can have a negative impact on a persons credit score and
eventual ability go get loans for other needs. It pays to use the financing calculator to
know the monthly payments on bike loan or any other type and stay on a repayment
schedule.

Motorcycle lending services and banks will always check to see if applicants have a
good credit history and repayment schedule. Banks should feel that applicants are a
good credit risk and able to repay the loan amount. After verifying documents and
information, only then do they sanction the loan amount. If borrowers have a good
credit history, they can negotiate and get better finance rates from lenders. As there are
many lending companies and banks vying for business in India, customers benefit in
the form of cheaper and low finance rates to meet their needs.

The minimum and maximum two wheeler loan amounts that banks offer is Rs.5000 to
Rs. 150,000. The maximum amount that a bank can sanction depends on the vehicle
type (new or used). If the vehicle is new, banks would normally offer 85% of the loan
amount. If the vehicle is used, banks can offer 90% of the loan value. For example, if
you are looking for a used motorcycle which cost Rs. 100,000 then the bank can give a
loan up to Rs. 90,000. The remaining Rs. 10,000 will have to be paid upfront by the
buyer. That finance rates vary from one bank to another is a given. Prospective buyers
should do their due diligence and find out which bank or lender offers the best loans.
One can fill out a free quote estimate on the BankandFinance.com site and get the
latest and most accurate information on the cheapest motorcycle loan. Use the bike
loans calculators to calculate monthly payments and then work on the personal budget.

Gather information about the two wheeler interest rate from various lenders by
providing personal information, vehicle details, and loan amount on are looking for.
Lending rates from various banks should be gathered and compared to get low and
cheap rates. Once the application has been submitted by a customer, representatives
from the bank/lenders contact the person for more information on their credit history,
income, loan amount required and so on. They will explain the benefits, offers and
finance rates being offered by the bank. If the motorcycle lending company feels that an

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 applicant can repay the loan amount, then bike loans application gets expedited quickly.
The banks will verify credit history, documents and then process the loan application.

One can gather information on two wheeler finance options from top banks like SBI
Bank, HDFC Loans, ICICI Bank, AXIS and many more. You can receive HDFC bike
loan details and lending rates along with other various banks by going through
BankandFinance.com.

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 CONCEPT OF THE STUDY
ELIGIBILITY CRITERIA

Salaried or self-employed individual

Age: between =>21 years (at the time of application) and <= 65 years (at the end of the
loan tenor)

Minimum gross income: equivalent to rs. 54,000/- p.a. If you reside in Mumbai, Delhi,
Chennai, Bangalore, Kolkata, Pune and rs. 42,000/- p.a. For all other cities

Residing for atleast 1 year in the city

Atleast 1 year at the given residence address (in case of transfer from other location with
less than 1 year at current location - please provide relevant documents to the bank during
loan approval stage)

Working for atleast 1 year

A phone at your residence or office

DOCUMENTATION REQUIRED

Proof Of Identity : Any one of Passport Copy/ Photo Credit card- front & reverse/
Voters ID card/ Driving Licence/ PAN card/ Copy of Company ID card of MNC/ Public
Ltd./ PSU/ Govt. company/ Ration Card (If Photo is given).

Address Proof : Any one of Passport Copy/ Voters ID card/ Driving Licence/ Rental
agreement/ Telephone Bill/ Electricity bill/ Gas Connection Bills/ Ration Card/ Sale deed/
Property purchase agreement/ Credit Card billing statement (latest)/ LIC policy/ Letter
from Company or Company provided Accommodation (List of the company's as per the
Banks List- ID card of MNC/ Public Ltd.,/ PSU/ Govt. Company Containing the
residence address), Address proof in the name of the applicant's Spouse or parents name
is acceptable.

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 Income Proof For Salaried : Latest Salary slip for Govt. employees; If Salary slip is not
available, Only salary certificate to be accepted with deductions, For Partnership/
Proprietary firms & Pvt. Ltd. Co's- Salary Certificate to be accepted with the following
mitigates: Salary Certificate to clearly state the deductions, Name & Designation of the
authorized signatory. For Self-Employed - Copy of the latest I. T. return.

FEES & CHARGES FOR TWO WHEELER LOANS

Description of Charges

Loan Processing Charges

Maximum - 4% of Loan Amount or Rs.600/- whichever is higher

Rate of interest: 15%

Pre-payment charges

Within 1 year from 1st EMI - 6% of principal outstanding

13-24 months from 1st EMI - 5% of principal outstanding
Post 24 months from 1st EMI - 3% of principal outstanding
No foreclosure allowed within 6 months from date of availing the Two Wheeler loan
No Due Certificate / No Objection Certificate (NOC): Nil
Duplicate no due certificate / NOC: Rs 250/-
Solvency Certificate: NA
Charges for late payment of EMI: 2.5% Per Month on the Unpaid Installment
Charges for changing from fixed to floating rate of interest: NA
Charges for changing from floating to fixed rate of interest: NA
Stamp Duty & other charges: As per applicable laws of the state
Credit assessment charges: Upto Rs.750/-
Non standard repayment charges: Rs 250/-
Outstation clearing charges: Rs 25/- per cheque
Cheque swapping charges: Rs 500/-
Loan cancellation / re-booking charges: Rs 1000/-
Bounce Cheque Charges: Rs 450/-

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 Duplicate Repayment Schedule charges: Rs 500/-
Legal, Repossession & Incidental charges: At actuals
Direct Sourcing Charges: Upto Rs.750/- per vehicle
Transaction Fee for Suraksha Kavach: Rs 100/- per Cover Note Issued
Service Charges: Rs 50/-
Special NOC: Rs. 500/- per request

4.4 FEATURES & BENEFITS

Flexible repayment options, ranging from 12 to 48 months available even at the point of
purchase.

A. Hassle free loans - No guarantor required

Speedy loan approval
Available for almost all models at attractive interest rates
Free gifts from time to time on approval of your Two Wheeler Loan

B. Special Schemes
FastTrack - If a spot approval is what you need, this highly flexible scheme gets you a
loan of up to 70% with minimum interest rates.
EasyLoan - This great scheme gets you a loan of upto up to 85% with minimal
documentation. All you need as a Surrogate Income proof is:
- A copy of credit card and credit card billing statement for the last 2 months OR
- A repayment track record OR
- Last 3 months bank statements.

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 COMPANY PROFILE
HISTORY OF ALLAHABAD BANK

ALLAHABAD BANK LTD was incorporated in August 1962 in the name of 'ALLAHABAD
Bank,with its registered office in Mumbai, India. ALLAHABAD Bank commenced operations
as a Scheduled Commercial Bank in January 1995.

If ever there was a man with a mission it was Hasmukhbhai Parekh, Founder and Chairman-
Emeritus, of ALLAHABAD Group. ALLAHABAD BANK LTD was amongst the first to set
up a bank in the Govt sector. The bank was incorporated on 30th August 1994 in the name of
ALLAHABAD Bank Limited, with its registered office in Mumbai.It commenced operations
as a Scheduled Commercial Bank on 16th January 1995. The bank has grown consistently and is
now amongst the leading players in the industry .
ALLAHABAD is India's premier housing finance company and enjoys an impeccable track
record in India as well as in international markets. Since its inception in 1977, the Corporation
has maintained a consistent and healthy growth in its operations to remain the market leader in
mortgages. Its outstanding loan portfolio covers well over a million dwelling units.

ALLAHABAD has developed significant expertise in retail mortgage loans to different market
segments and also has a large corporate client base for its housing related credit facilities. With
its experience in the financial markets, a strong market reputation, large shareholder base and
unique consumer franchise, ALLAHABAD was ideally positioned to promote a bank in the
Indian environment In a milestone transaction in the Indian banking industry.

MISSION

I. World Class Indian Bank

II. Benchmarking against international standards.
III. To build sound customer franchises across distinct businesses
IV. Best practices in terms of product offerings, technology, service levels, risk management
and audit & compliance
VISION STATEMENT OF ALLAHABAD BANK

The ALLAHABAD Bank is committed to maintain the highest level of ethical standards,
professional integrity and regulatory compliance. ALLAHABAD Banks business philosophy is

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 based on four core values such as:-

1. Operational excellence.
2. Customer Focus.
3. Product leadership.
4. People.
The objective of the ALLAHABAD Bank is to provide its target market customers a full range
of financial products and banking services, giving the customer a one-step window for all his/her
requirements. The ALLAHABAD Bank plus and the investment advisory services programs
have been designed keeping in mind needs of customers who seeks distinct financial solutions,
information and advice on various investment avenues.

BUSINESS SEGMENT

ALLAHABAD Bank offers a wide range of commercial and transactional banking

services and treasury products to wholesale and retail customers. The bank has three key
business segments:

Wholesale Banking Services:

The Bank's target market ranges from large, blue-chip manufacturing companies in the Indian
corporate to small & mid-sized corporate and agri-based businesses. For these customers, the
Bank provides a wide range of commercial and transactional banking services, including
working capital finance, trade services, transactional services, cash management, etc. The bank
is also a leading provider of structured solutions, which combine cash management services with
vendor and distributor finance for facilitating superior supply chain management for its
corporate customers. Based on its superior product delivery / service levels and strong customer
orientation, the Bank has made significant inroads into the banking consortia of a number of
leading Indian corporate including multinationals, companies from the domestic business houses
and prime public sector companies. It is recognized as a leading provider of cash management
and transactional banking solutions to corporate customers, mutual funds, stock exchange
members and banks.

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 Retail Banking Services :

The objective of the Retail Bank is to provide its target market customers a full range of
financial products and banking services, giving the customer a one-stop window for all his/her
banking requirements. The products are backed by world-class service and delivered to the
customers through the growing branch network, as well as through alternative delivery channels
like ATMs, Phone Banking, Net Banking and Mobile Banking.

The ALLAHABAD Bank Preferred program for high net worth individuals, the
ALLAHABAD Bank Plus and the Investment Advisory Services programs have been designed
keeping in mind needs of customers who seek distinct financial solutions, information and
advice on various investment avenues. The Bank also has a wide array of retail loan products
including Auto Loans, Loans against marketable securities, Personal Loans and Loans for Two-
wheelers. It is also a leading provider of Depository Participant (DP) services for retail
customers, providing customers the facility to hold their investments in electronic form.

ALLAHABAD Bank was the first bank in India to launch an International Debit Card in
association with VISA (VISA Electron) and issues the Master card Maestro debit card as well.
The Bank launched its credit card business in late 2001. By September 30, 2005, the bank had a
total card base (debit and credit cards) of 5.2 million cards. The Bank is also one of the leading
players in the "merchant acquiring" business with over 50,000 Point-of-sale (POS) terminals for
debit / credit cards acceptance at merchant establishments.

Treasury:

Within this business, the bank has three main product areas - Foreign Exchange and
Derivatives, Local Currency Money Market & Debt Securities, and Equities. With the
liberalization of the financial markets in India, corporate need more sophisticated risk
management information, advice and product structures. These and fine pricing on various
treasury products are provided through the bank's Treasury team. To comply with statutory
reserve requirements, the bank is required to hold 25% of its deposits in government securities.
The Treasury business is responsible for managing the returns and market risk on this investment
portfolio.

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 PRODUCT OF ALLAHABAD BANK

ACCOUNT & DEPOSITS SERVICE

Banking should be effortless. With ALLAHABAD Bank, the efforts are rewarding. No matter
what a customer's need and occupational status, we have a range of solutions that are second to
none. Whether you're employed in a company and need a simple Savings account or run your
own business and require a robust banking partner, ALLAHABAD Bank not only has the perfect
solution for you, but also can recommend products that can augment your planning for the
future.

It includes these services: -

Saving accounts.

Current accounts.

Fixed deposits.

Demate account.

Safe deposits lockers.

Savings Accounts

These accounts are primarily meant to inculcate a sense of saving for the future, accumulating
funds over a period of time. Whatever persons occupation, bank have confident that person will
find the perfect banking solution. There some saving accounts like: -

Regular Saving Account:

An easy-to-operate savings account that allows you to issue cheques, draw Demand Drafts and
withdraw cash. Check up on your balances from the comfort of your home or office through Net
Banking, Phone Banking and Mobile Banking. If you need money urgently then you can take
money from the ATM machine. There are 1977 ATM centers across the country.

Saving plus Account

Introducing the best banking option for you with ALLAHABAD Bank Savings plus Account.
Now you can get access to some of the finest banking facilities with ALLAHABAD Bank's

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 Savings plus Account. All you have to do is maintain an Average Quarterly Balance of Rs.
10,000/-.

Saving Max Account

Welcome to a world of convenience. Presenting Savings Max account, loaded with maximum
benefits to make your banking experience a pleasure. By maintaining an average quarterly
balance of just Rs. 25,000/- you get a host of premium services from ALLAHABAD Bank
absolutely free.

Senior Citizen Account

ALLAHABAD Bank appreciates your needs and endeavors, which is why, they present an
account especially dedicated to customer, which like a dutiful child will help you fulfill your
needs in the best manner possible.

There are various kinds of saving accounts in the ALLAHABAD Bank like: -

Kids advantage account

Start saving for your child today and secure his/her future a sentence tells by the ALLAHABAD
bank. Open a Savings Account and transfer money every month into customers Kids Advantage
Account and watch the savings grow as customers child grows. The accumulated savings in the
Kids Advantage Account can over the years help in meeting customer child's needs.

Main features and benefits of this account are as follow:-

Current accounts

ALLAHABAD Bank Current Account gives the power of inter-city banking with a single
account and access to more than cities. From special cheques that get treated at par with local
ones in any city where branch, faster collection of outstation cheques (payable at branch
locations), free account to account funds transfer between ALLAHABAD Bank accounts to Free
inter-city clearing of up to 100 lakhs per month, banks priority services have become the
benchmark for banking efficiency.

Now, with an ALLAHABAD Bank Current Account, experience the freedom of multi-city
banking. Person can have the power of multi-location access to his account from any of our 761
branches in 327 cities. Not only that, he can do most of his banking transactions from the

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 comfort of his office or home without stepping out.

There are various kinds of current account in this bank like: -

Plus current account

Premium current account

Business needs a partner who can manage finances while concentrate on growing business.
Form this account customer can avail benefits of inter-city banking account that requires an
average quarterly balance of only Rs. 25,000, offers Payable-At-Par cheque book facility &
FREE inter-city clearing transactions across our network up to Rs.25 Lacs per month.

A Current Account with the benefits of accessing account from a large network of branches, and
through direct access channels - the phone, mobile, Internet and through the ATM.

Regular current account

A Current account is ideal for carrying out day-to-day business transactions. With the
ALLAHABAD Bank Regular Current Account, customer can access account anytime,
anywhere, pay using payable at par cheques or deposit cheque at any ALLAHABAD bank
branch. It also facilitates FREE NEFT transactions & FREE RTGS collections for faster
collections in account. Regular Current Account requires to maintain an average quarterly
balance of only Rs. 10,000.

With a vast network of branches in cities all over the country, and access to a multitude of
ATM's, customer can keep track of all transactions anytime.

The Lockers and their contents can be nominated to people near and dear to you.

Nomination facility is available to individual hirer of Safe Deposit Locker.

In the case of a sole hirer of a safe deposit locker, nomination can be made in favor of only one
individual.

Where the safe deposit locker is hired in the name of a minor, the nomination shall be made by a
person lawfully entitled to act on behalf of the minor.

Terms & Conditions

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 For obtaining a Locker at ALLAHABAD Bank you must be an account holder with Bank.

Lockers can be allotted individually as well as jointly.

The Locker holder is permitted to add or delete names from the list of persons who can operate
the Locker and can have access to it.

Loss of Key is to be immediately informed to the concerned Branch.

LOAN SERVICES

In todays competitive world every thing happens only with the help of money or through the
money every person need money. But some time a person has not cash on hand at that time he
needs lone either from any friend or from any financial institute. Lone dose not mean that only
lower class person needs it but also upper class person it is needed.

As per the requirement of the every person there are much type of loans are there in the
ALLAHABAD bank.

Personal loan

A person has so many dreams but some time due to scarcity of money a dream cant be satisfy.
So, here one solution for that person this is personal loan. From this he/she can fulfill their needs
or requirement. It can be any thing either a dream of vacation or son/daughters admission to
college or any wedding, so personal loan can be helpful in this entire requirement.

As person ordered in the hotel for tea or coffee and it is immediately came fast, same over here
any person want to get a personal loan with the nominal documents he can get the loan.

Home loan

ALLAHABAD Bank brings, ALLAHABAD home loans to doorstep. With over 30 years of
experience, a dedicated team of experts and a complete package to meet all housing finance
needs, ALLAHABAD Home Loans, help people realize dream.

Vehicles loan

Nowadays the life is being so fast, time value is becoming more important so to reach at the
destination of any business related occasion or for a boy to reach college or any where at the fix
time there are so many requirement of vehicles. But every people have no capacity to purchase

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 vehicles with cash so for that here in the ALLAHABAD bank vehicles loan is available. There
are many types of vehicles loan.

Types of vehicles loan:

Two wheeler loans.

New car loan.

Used car loan.

Tractor loan (for agree culture business).

Commercial vehicle loan.

So, as per the requirement of the person there are these types of loans are available this are at
the chip rate and hassel free from more documentation and other procedure. And commercial
businessman can get the benefits of the commercial vehicles loans. Thus as per the need of
different people there are vehicle loans available. And also terms and condition are different as
per the requirement.

Gold loan

With ALLAHABAD Bank's Gold Loan, person can get an instant loan against gold jewellery
and ornaments. The procedure is simple, documentation is minimal and approval is quick. A
person can get 70% loan on the value of the gold jewellery and ornaments.There is also
availability of the overdraft on the gold jewellery. With this a customer can get free additional
services like free personalized cheque book, free international debit card, and free net banking
phone banking services.

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 ROLE IN BUSINESS
With a number of private players exiting this segment either completely or
in selected areas due to rising default rates and high operating expenses,
growth in two-wheeler finance is likely to be spearheaded by public sector
banks, which have a wider reach and broader customer base. The growth
will also be fuelled by the increase in the number of underlying asset,
according to Mr Manoj Mohta, Head Research Crisil Research.

The two-wheeler finance industry contracted by 25-30 per cent in 2008-

09; however, there could be a modest growth in 2009-2010 due to an
increase in the underlying asset and the support provided by public sector
banks, he said.

Cautious growth

Public sector banks, Mr Mohta pointed out, would try to increase their
market share in the two-wheeler finance segment but they would not be as
aggressive as in home or auto loans owing to the high delinquency rate in
this segment.

PSBs would move cautiously to partially fill the vacuum created by the exit
of private players, said a senior official at a public sector bank. Two-
wheeler finance portfolio offers potential and can be beneficial for banks to
cross-sell products if the customers are well selected, he said.

UCO Bank is hopeful of disbursing Rs. 200 crore worth fresh two-wheeler
loans in 2009-2010. Many private players have exited this segment and
this gives us more scope for lending. We are hopeful of disbursing Rs. 200
crore worth fresh loans this year, said Mr S.K. Goel, Chairman and
Managing Director, UCO Bank. The banks two-wheeler loan portfolio
currently stands at about Rs. 100 crore.

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 Stress on due diligence

It has tied up with Hero Honda, Bajaj and TVS for two-wheeler loans. The
urban and semi-urban market has a good potential and we will try to tap it,
Mr Goel said.

Allahabad Bank expects 10-15 per cent growth in the segment, according to
a senior official at the bank. If the identification of customer is correct,
income level is taken into consideration and a due diligence process is in
place then I do not see any reason why the portfolio should not do well,
said Mr K.R. Kamath, Chairman and Managing Director, Allahabad Bank.

United Bank of India gives two-wheeler loans to customers who have a

salary-linked account with the bank in order to ensure that the loan does not
turn into an NPA, said Mr T.M. Bhasin, Executive Director of the bank.

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 CURRENT SCENARIO
The automobile sector is a key player in the global and Indian economy. The global motor
vehicle industry (four-wheelers) contributes 5 per cent directly to the total manufacturing
employment, 12.9 per cent to the total manufacturing production value and 8.3 per cent to
the total industrial investment. It also contributes US$560 billion to the public revenue of
different countries, in terms of taxes on fuel, circulation, sales and registration. The
annual turnover of the global auto industry is around US$5.09 trillion, which is equivalent
to the sixth largest economy in the world (Organisation Internationale des Constructeurs
d'Automobiles, 2006). In addition, the auto industry is linked with several other sectors in
the economy and hence its indirect contribution is much higher than this. All over the
world it has been treated as a leading economic sector because of its extensive economic
linkages. Indias manufacture of 7.9 million vehicles, including 1.3 million passenger
cars, amounted to 2.4

consists of 500 firms in the organised sector and around 31,000 enterprises in the
unorganised sector. In the domestic market, the firms in this sector supply components to
vehicle manufacturers, other component suppliers, state transport undertakings, defence
establishments, railways and even replacement market. A variety of components are
exported to OEMs abroad and after-markets worldwide. The automobile manufacturing
sector, which involves assembling the automobile components, comprises two-wheelers,
three-wheelers, fourwheelers, passenger cars, light commercial vehicles (LCVs), heavy
trucks and buses/coaches. In India, mopeds, scooters and motorcycles constitute the two-
wheeler industry, in the increasing order of market share. In 2005-06, the Indian auto
sector had produced over 7.6 million two wheelers and 1.3 million passenger cars and
utility vehicles. India is a global major in the two-wheeler industry producing
motorcycles, scooters and mopeds principally of engine capacities below 200 cc. It is the
second largest producer of two-wheelers and 13th largest producer of passenger cars in
the world. Tata figures among the ten largest global manufacturers of LCVs, heavy
trucks, buses and coaches, while it is among the top 25 in passenger car manufacturing.
The two-wheeler industry in India has grown at a compounded annual growth rate of

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 more than 10 per cent (in number) during the last five years and has also witnessed a shift
in the demand mix, with sales of motorcycles showing an increasing trend. Indian
twowheelers comply with some of the most stringent emission and fuel efficiency
standards worldwide. The passenger car segment has been growing at a rapid pace -- from
over 6,50,000 vehicles sold during 2001 to over a million vehicles sold during 2004-05,
showing an annual growth rate of 17.36 per cent.

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 FUTURE PROSPECTS

GRAPH 1: NO. OF RESPONDENTS

FEMALE, 18

MALE, 32

INFERENCE:

In our survey of knowing consumer behaviour towards two-wheeler loan we have taken feed
back from 50 respondents.

64% of our respondents were male and 36% were female.

Now-a-days even the females have started earning or become independent so the number of
females purchasing the two-wheeler on their own has also increased.

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 GRAPH 2: AGE OF RESPONDENTS
16
16 14
14
no. of respondents

12
10
8 7
FEMALE
6 5
MALE
4 2 2 2
2 1 1
0 0 0 0 0 0 0
0
<20 21-25 26-30 31-35 36-40 41- 45 46-50 51 &
above
age ( in years)

INFERENCE:

We have divided our respondents into eight different age-groups and have also taken into
consideration their gender.

In our survey we could find majority of the people falling in the age group of 26years to 30years.
Out of total 50 respondents 30 respondents belonged to this age group.

People belonging to this age group mostly prefer loans for purchase of two-wheeler. The major
reasons cited here were that they completed initial few years of their job and now they have
reach to the level and have become mostly independent to pay the fuel expenses from their
salary. With the job tenure of around 2 to 3 years they have saving, from which they are capable
of paying down payment of two wheeler loan and also earning enough to pay EMI.

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 GRAPH 3: PROFESSION OF RESPONDENTS
11

9
AVG. SALARY(per month)
8
NO. OF RESPONDENTS

Rs. 5000- Rs.10000

6 Rs.10000- Rs.15000
Rs.10001- Rs.20000

4 4 Rs.20001- Rs.30000
Above Rs.30000

2 2

1 1 1 1

SALARIED SELF-EMPLOYED RETIRED STUDENT

INFERENCE:

Here we have compiled two attributes of our survey. One is the type of the profession and the
other is the average monthly income that people are earning.

In our survey we have found that majority of people who preferred to purchase two-wheeler on
loan, are belonging to the salaried profession with monthly income in the range of Rs.15000 to
Rs. 20000. It is so because they were unable to pay the entire amount in a single payment and
hence they go for equal monthly installment option to reduce financial burden. They go for fix
number of instalment pattern in which every month a fix amount will be deducted from their
earning. By choosing this option they need not to en-cash their fixed deposits before maturity
and need not to bear loss of en-cashing fixed deposit before maturity. Some of them had also
given up the option of equal monthly installment when the surplus income increased; because of
the flexibility of paying the whole amount in one shot while the repayment period was still
remaining.

Another group of people who are self employed also purchased two-wheelers on loan. Here their
purpose is slightly differing than that of salaried. They prefer two-wheeler on loan because they
want to save money for business economic purpose. They prefer to invest money in the business
to generate better out put. Again they have to take certain financial risk so that they need cash on
hand. They do not want to block their money in any unnecessary activity.

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 GRAPH 4: TYPE OF TWO-WHEELER

26
NO. OF RESPONDENTS

2 15

1 SECOND-HAND
3
3 NEWLY PURCHASED

SCOOTERS
MOTOR
BIKES GEARLESS
SCOOTERS
TYPE OF TWO-WHEELER

INFERENCE:

In our survey we have asked question regarding which type of vehicle they are preferring
mostly. 29 respondents have replied that they bought motorbikes either new or second-hand.

Secondly loans were also taken to purchase gearless scooters i.e. Kinetic Honda, Activa and
many more.

People told us that due to the easy availability of vehicle loan it had been easier for them to buy
two-wheelers.

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 GRAPH 5: PRICE OF TWO-WHEELER BOUGHT
25

20
NO. OF RESPONDENTS

15

10

0
24 & LESS 25-34 35-44 45-54 55-64 65 & above
SECOND-HAND 1 2 3 1
NEW 1 11 20 7 4
PRICE OF TWO-WHEELER (in thousands)

INFERENCE:

When questioned about the price at which they brought two-wheeler our respondents gave
mixed response.

20 people have responded that they have purchased new vehicle between the price range of Rs.
45000 to Rs. 54000. While only 1 respondent had preferred to purchase second hand vehicle in
this price range. On the other hand in the price range of Rs.35000 to Rs.44000, 11 people had
given feed back that they bought new vehicle and 3 people said they bought second hand
vehicle.

So large no. of respondents have gone for purchasing new vehicles which are between the price
range of Rs.35,000 to Rs.54,000 on the reliability of the loan facility.

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 GRAPH 6: SOURCE OF LOAN APPLICATION

BANK

SHOWROOM

45

INFERENCE:

When respondents were asked to give feed back for source of loan application, only 5 people
said that they prefer show rooms and 45 people approached directly banks to take loans.

This is because ultimately the applicant has to deal with the bank only. So they chose to go to
banks and have a clear and face-to face conversation discussion about the loan and their queries
with the employees of the bank.

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 GRAPH 7: BANK SELECTED FOR TAKING LOAN

1
5 1 Dena Bank
4 Canara Bank

10 Bank of India
6 SBI
BOB
AXIS
14 9 ICICI
HDFC

PRIVATE BANK PUBLIC BANK

INFERENCE:

In our survey we found that out of 50 respondents 29 of them preferred to take the loan from
private banks while the remaining 21 respondents chose public banks for the same.

Now-a-days, majority of people prefer to take loan from private bank due to several reasons.

In private bank processing time is comparatively smaller. On one hand some private banks take
24 hours to clear loan papers and section the loan of applicant, on the other hand public banks
take 15 days to 1 month for clearing the loan papers and sanctioning the loan.

The process of documentation is also less complicated in private banks.

In addition to advantages in taking loan from private banks there are few draw backs. Sometimes
there are hidden charges are associated along with processing fees which is not clearly
mentioned in loan papers. Another draw back is the high rate of interest they are charging on
loans.

In case of public banks if they improve in the area of customer satisfaction and service they can
cater bigger market./ If they make their system and staff more efficient then loan is one of the
area which helps in increasing turn over of bank. They also need to do tie ups with various
automobile show room and should keep their stall at show room site so that they will get more
customers.

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 GRAPH 8: REASON FOR SELECTING THE
SPECIFIED BANK

CLUB OFFER
12%

PROCESSING TIME RATE OF INTEREST

36% 52%

INFERENCE:

We surveyed people for choosing a particular bank on the basis of some specific factor that
attracted them.

The key reason that people have chosen is rate of interest. Out of total respondents 52% people
have responded that they are looking first at rate of interest that they are charging on loan.

Along with rate of interest people have also given feed back that they want simple and faster
processing timing and club offers.

In our survey we found that HDFC bank is giving offers beyond loan amount that is hassle free
loans. They do not require any guarantor also.

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 GRAPH 9:
% OF RESPONDENTS FACED PROBLEM WHILE
APPLYING FOR LOAN

24%

YES NO

76%

INFERENCE:

In our survey we found that 76% of our respondents faced problem while applying for vehicle
loan. They did face the problem because of unawareness about the loan providers, their rate of
interest, terms and conditions, processing tenure, fees etc. Some of them were also dissatisfied
with the responses of the employees of the bank.

Only 24% of the people enjoyed the experience of taking the loan.

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 GRAPH 10 :
REASONS TO PURCHASE VEHICLE ON LOAN

18 INSUFFICIENT FUND

TAX SAVING

28 OTHER FACTORS

INFERENCE:

Majority of our respondents i.e. 58%, in our market survey, replied that for the reason of
insufficient fund they have taken loan to purchase the vehicle.

Second reason is to save the tax on the amount of loan.

Other reason included paying small amount in one go was convenient for them.

So it is clearly visible that the loan availability and conveniently has helped customers to get
away the hurdle of huge amount of one time monetary investment.

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 GRAPH 11:
SOURCE OF INFORMATION FOR VEHICLE LOAN

21 23
FAMILY/FRIENDS
DEALER
6
ADVERTISEMENT

INFERENCE:

In our survey, we found that people generally got the information about the vehicle loan from
their family or friends. So word-of-mouth publicity for vehicle loan is an important source of
information to customers. For this, the banks have to create good performance image in their
existing customers so the latter can advice others to prefer that specific for taking vehicle loan.

Also some of the respondents also searched about various types of schemes provided in different
vehicle loans in newspaper, internet and banks.

Now-a-days the dealers of the showroom are also giving information about the benefits of taking
vehicle loan.

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 GRAPH 12:
IMPORTANT FEATURE TO SELECT A BANK FOR
LOAN APPLICATION

2 Low interest rate

4
19 Small Installments
10
Longer repayment period

Low processing fees

Less Documentation
15

INFERENCE:

When asked about the important feature they look in a bank for vehicle loan, our 19 respondents
said that low rate of interest is preferred the most along with small down payments followed by
the longer repayment period.

Low processing fees and less documentation are the less important features that they seek for.

As seen in our survey earlier, 21 respondents have taken loan from public banks; though these
banks have long processing time and irregular process structure.

This is because public banks rate of interest ranges from 8.5% to 11% whereas the rate of
interest of some private banks is as high as 15%.

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 GRAPH 13:
RECOMMENDATION TO OTHERS FOR
VEHICLE LOAN

20% YES NO

80%

INFERENCE:

80% of our respondents have shown positive response towards recommending others to purchase
two-wheeler on loan.

Though people end-up giving a much higher amount in loan than a single payment while
purchasing a two-wheeler, then too they favour vehicle loan for the reasons:

Small installments
Longer repayment
Tax saving
No need to spend a huge amount in one go
Flexible repayment period

The other 20% would not like to recommend for vehicle loan because of long processing time,
more documentation and high amount paid than actual price.

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 LIMITATION

This gives an opportunity to customers to avoid making repayments and leaves banks
without a collateral. The phenomenon is said to be particularly visible in smaller towns
and rural areas. "Now we have come down hard on sub-dealers and we are not issuing
loans for temporary registrations," Khanna said.

Analysts say the increased proclivity to not repay loans is driven by the high interest
rates. "In cases where customers have also taken home loans on flexible interest rates, the
higher home repayments now may be pushing them to default on their two-wheeler
loans," an analyst said.

Most banks have significantly tightened loan sanctions. ICICI Bank that used to lend
close to Rs 400 crore per month for bike purchases last year, now disperses around Rs
300 crore per month. HDFC Bank, which issued close to 70,000 loans per month last
year, is issuing 45,000 loans now. Some banks that previously used to finance 90% of the
bike cost now do no more than 70%.

Currently, just 50% of two-wheeler purchases are made through loans, a figure that was
close to 70% last year.

The high depreciation costs of bikes place lenders at a huge disadvantage. "If there is a
default and we take back the bike, we lose between Rs 10,000 and Rs 15,000 in the sale
of the bike in the second hand market," said a bank official.

"There is a clear relation between the tightening of loans and the steep fall in bike sales,"
said N R Narayanan, head vehicle loan at Allahabad Bank.

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 SUGGESTIONS/RECOMMENDATION

Customer awareness programme is required so that more people should attract towards

vehicle loan product.

If there are any kind of hidden charges than that must disclose to customer before giving

loan to them.

The public banks must take some steps so that customers can get their loan in time. Like

phone verification by customer care that one customer is got their loan on time or not .It

must be before a certain date so necessary steps can be taken.

For the better service new offers/schemes would be require.

The banks customer care should more concern about the fastest settlement of customer

problems.

Before deducting or charging any monetary charge the banks must consult with customer.

Agents should be trained, well educated & proper trained to convince the people about

the product.

Special scheme should be implemented to encourage both customer and agents.

The banks must take feedbacks of customers regarding features & services.

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 CONCLUSION
After a careful presentation of the Marketing Aspects of Automobile Industry with
reference to Two-wheelers at Jabalpur.

This study finds some conclusions about different aspects of the topic under consideration
and observations about the survey made so far.

The conclusions drawn in this chapter are based on the primary and secondary data
collected and concerned parties interviewed during the field survey and systematically
analyzed in the different chapters. The hypothesis has been tested and verified with the
object of this research work. Recommendations are made after a detailed and objective
analysis of the brand management. Recommendations therefore, are related to the
improvement in Marketing Aspects of Automobile Industry with reference to Two-
wheelers in Maharashtra State. India is a vast country with ever growing and never
ending population comprising of 72% residing in areas.

Totally depending upon agricultural income and agricultural related activities for their
livelihood and many of them are illiterate and people below poverty line. Though the
lifestyle of masses have undergone a sea of changes with the increased infrastructure
facilities, application of modern techniques in cultivation and better access to urban areas.

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 BIBLIOGRAPHY

http://hubpages.com/hub/List-of-Top-10-Banks-in-India

http://www.indiahousing.com/sbi.html

http://www.indiahousing.com/banks-in-india/

http://www.moneyduniya.com/

http://www.automobileindia.com/two-wheelers/loans/

http://www.surfindia.com/finance/two-wheeler-loans.html

http://www.hdfcbank.com/personal/loans/two_wheeler_loans/two_wheeler_elg.htm

http://www.bankof baroda.com/loans/two-wheeler-loans/two_wheeler.htm

http://www.paisawaisa.com/loans/loan_bankmore.aspx?LoanDetailId=loSbYPoJmu4=

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