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Intoduction of Uco Bank

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Comparative Analysis of Home Loan with reference to UCO Bank and State Bank of India Presented by: ANUJ DUSAD

UCO BANK UCO Bank, formerly United Commercial Bank, established in 1943 in Kolkata, is one of the oldest and major commercial banks of India. Ghanshyam Das Birla, an eminent Indian industrialist, during the Quit India movement of 1942, had conceived the idea of organizing a commercial bank with Indian capital and management, and the United Commercial Bank Limited was incorporated to give shape to that idea. The Bank was started with Kolkata as its Head Office with an issued capital of 2 crores and a payed-up capital of 1crore.



Its name was changed to UCO Bank, in 1985, by an act of Indian Parliament as a bank in Bangladesh existed with the name “United Commercial Bank” which caused confusion in the international banking arena. As of 6 January 2013 the bank had 2550 Service Units spread all over India, with four overseas branches two each in Singapore and Hong Kong. The Bank has 44 Zonal Offices spread all over India.



UCO Bank's headquarter is located on B.T.M. Sarani, Kolkata.



Mr. Arun Kaul is currently the Chairman and Managing director of UCO Bank.  

PRODUCTS & SERVICES      Deposit schemes • No-frills Savings Bank Account • Money Back Recurring Deposits • Friend-in-Need Schem      Loan schemes • UCO Home, • UCO Car, • UCO Trader • Education Loan • UCO Cash • UCO Rent • UCO Mortgage

HOME LOAN  ELIGIBLITY • Individual (including NRI and PIO) having minimum 21 years of age and maximum 60 years of age (salaried person) and 65 years of age (non-salaried person) inclusive of repayment period. PURPOSE • Purchase and construction of independent house/ready built flat for residential, Extension/Repair/Renovation of existing house/flat, for furnishing of house property, Purchase of old house/flat INCOME CRITERIA For salaried person • Net take home pay should not be less than 40% of gross salary after deduction of P.F, IT and other statutory deduction including proposed EMI for applicants having gross monthly income up to Rs. 50 thousand. • In case of Net take home pay up to 30% of gross salary & Net take home pay up to 25% of gross salary For non salaried person • Last income tax assessment order/return

• Quantum of loan Location/Centr For Construction/ e Purchase/ Takeover A/Cs

For Repair/ Extension/ Renovation

Metro/Urban/Se No upper limit mi-urban

Rs. 25 lac.

Rural

Rs. 7.5 lac.

No upper limit

FOR take over home loan • Minimum loan =5 lac. • Minimum loan= NO UPPER LIMIT

CURRENT RATE OF INTEREST ON LOANS • Base rate 10.20% p.a EMI for Rs 1 lac. MONTH                               EMI 2135 • 60 1333 • 120 1087 • 180 978 • 240 923 • 300 • If the amount of loan less than 75 lac. The rate of interest is 10.20% • If the amount of loan more than 75 lac. The rate of interest is 10.20% + .25%.

Processing Fee • 0.5% of the loan amount, minimum Rs.1500/- & maximum Rs. 15000/ Repayment • The maximum period of repayment is 25 years/300 EMI . Security & Guarantee • EMTD of property financed. • No third party guarantee

Tax Benefits • Tax relief on principal and interest components of this loan would be available as per provisions prevailing under Income Tax Act.  Insurance • Insurance cover on house property under UCO Griha Raksha Yojana scheme to cover the risk of damage to home by natural calamities. • UCO Griha Lakshmi Yojana to cover the outstanding loan in case of accidental or natural death of borrower.

STATE BANK OF INDIA •



• •

State Bank of India (SBI) is a multinational banking and financial services company based in India. It is a government-owned corporation with its headquarters in Mumbai, Maharashtra. As of December 2012, it had assets of US$501 billion and 15,003 branches, including 157 foreign offices, making it the largest banking and financial services company in India by assets. 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 the country. SBI is a regional banking behemoth and has 20% market share in deposits and loans among Indian commercial banks. The State Bank of India was named the 29th most reputed company in the world according to Forbes 2009 rankings and 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.

PRODUCTS & SERVICES  RETAIL BANKING • Term Deposits • Recurring Deposits • Home Loan • Educational Loan • Personal Loan • For Pensioners • Against Mortgage of Property • Against Shares & Debenture

HOME LOAN ELIGIBILTY •MINIMUM 18 YEARS •MAXIMUM 65 YEARS PURPOSE • Construction, repair, purchase flat , renovation. LOAN AMOUNT  1)Income of your spouse/ your son/ daughter living with you, provided they have a steady income and his/ her salary account is maintained with SBI. 2) Expected rent accruals (less taxes, cess, etc.) if the house/ flat being purchased is proposed to be rented out. 3)Depreciation subject to condition.

SECURITY: Primary:The loan will be secured by Equitable / Registered mortgage/extension of mortgage of the land and building/flat for which the loan is to be sanctioned. Collateral:If mortgage of the property being financed is not possible, Bank may accept, at it discretion, security of adequate value in the form of Life Insurance policies, Government Promissory Notes. INTEREST RATE: Base Rate: 9.70% . REPAYMENT PERIOD: 30 YEARS. PROCESSING FEES: 0.25% OR 1000/- Rs min. or 10000/-Rs.  

   Inspection: The Bank will have the right to inspect, at all reasonable times, the borrower’s property by an officer of the Bank or a qualified auditor or a technical expert as decided by the Bank and the cost thereof shall be borne by the customer.    Insurance: • The house/flat shall be insured comprehensively for the market value covering fire, flood, Earthquake etc. • In the joint names of the Bank and the borrower. Cost of the same shall be borne by the borrower.

COMPARISION UCO BANK

SBI BANK

ELIGIBILITY

MIN. 21 YEARS,MAX. 60 YEARS.

MIN 18 YEARS , MAX. 60 YEARS

REPAYMENT PERIOD

25 YEARS

30 YEARS

PROCESSING FEES

0.5% OR MIN. FEES 1500/MAX. FEES 15000/-.

0.25% OR MIN. FEES 1000/- & MAX. FEES 1000/-

SANCTIONED TIMING

4 DAYS

6 DAYS

PRE PAYMENT CHARGES IN TAKE OVER LOAN

NO CHAGES

2% CHARGES

UCO BANK

SBI BANK

INTEREST RATE

10.20%

9.70%

THIRD PARTY GUARANTEE

NOT REQUIRED

REQUIRED

RESEARCH METHODOLOGY OBJECTIVES OF THE STUDY • To study the cost of home loans provided by the bank. • To know that which bank provide batter loan schemes. • To analyze the home loan schemes by UCO bank and SBI bank. • To know the customer perception about the home loan of UCO bank and SBI bank. • To know the customer satisfaction level about home loan. • To analyze the history of UCO bank and SBI bank. • To study consumer preference for the above two mentioned housing finance players.

SCOPE OF THE STUDY • This study is analysis and comparison of home loans provided by the UCO and SBI banks. It is helpful in analyzing the home loan service provided to the customer and their comparison.  Research Design:      DESCRIPTIVE RESEARCH DESIGN” to know the Comparative analysis of home loan with reference to UCO  bank and State Bank of India This helped us in having enough provision for protection against bias and maximizes reliability. Descriptive study, as its name implies, is designed to describe something –for example, the characteristics of the users of a given product, the degree to which product use varies with income, age, or other characteristics.

• Data Collection Method PRIMARY DATA COLLECTION Primary data was collected with the help Of questionnaire. SECONDARY DATA COLLECTION

Uco Bank And Sbi bank report, Articles, Newspapers, Journals, Magazines, Handouts, Pamphlets Describing the banks.

SAMPLING SAMPLE PLAN

QUESTIONNAIRE

SAMPLING METHOD

RANDOM SAMPLING

SAMPLE SIZE

25 each Respondents of UCO & SBI

SAMPLE UNIT

Respondents in Jaipur

FINDINGS & DATA ANALYSIS UCO BANK CUSTOMER OCCUPATION IN %

0.2 0.08 0.2

0.52

Business man Student Govt. employee House wife Other

SBI BANK CUSTOMER OCCUPATION IN %

12% 8% 24%

48% 8%

Business man Student Govt. employee House wife Other

2.From how many years you are associated with this  bank? UCO BANK

32%

24% 44%

Less than 1 year 1-5 year More than 5 year

SBI BANK

24% 32% 44%

Less than 1 year 1-5 year More than 5 year

3.How do you come to know about the  home loan schemes of that bank?

UCO BANK

16% 24%

4% 56%

News paper Television Internet Other

News paper 16% 4% SBI 60% BANK Television 20% Internet Other

4.Are you aware of these type of home loans?

UCO BANK

24% 12% 40% 24%

Home purchase loan Home improve ment loan Home construct ion loan Land purchase loan

8% 20% SBI BANK 48% 24%

Home purchase loan Home improvem ent loan Home constructio n loan Land purchase loan

5.Are you aware all terms and conditions of home loans? SBI BANK UCO BANK

28% 72%

YES NO

32% 68%

YES NO

6.Are you satisfy with the interest rate charges by your  bank?

• UCO BANK

13% 30%

57%

Strongly agree Agree Disagree Strongly disagree

• SBI 8% BANK 28%

64%

Strongly agree Agree Disagree Strongly disagree

7.Your bank offer which type of services? SBI BANK

UCO BANK

40%

60%

Mobile banking Net banking

24% 76%

Mobile banking Net banking

8.Do you agree that your bank loan processing is fast? SBI BANK

UCO BANK

12% 24%

8% 56%

Strongly agree Agree Disagree Strongly disagree

12% 32%

8%

48%

Strongly agree Agree Disagree Strongly disagree

9.Do you satisfy with the after home loan services provided  by your bank are best as compare to other bank? UCO BANK

8% 8% 20%

64%

 

SBI BANK

Strongly agree Agree Disagree Strongly disagree

13% 9% 22%

57%

Strongly agree Agree Disagree Strongly disagree

10.Does the cost of home loan is appropriate, according to  your demand? UCO BANK

56%

44%

SBI BANK

Yes No

52%

48%

Yes No

11.Are you satisfy with the employees behavior of the bank? UCO BANK

8% 16%

76%

Strongly agree Agree Disagree Strongly disagree

SBI BANK

20% 4% 60% 16%

Strongly agree Agree Disagree Strongly disagree

12.Does the bank give any discount upon loan services? UCO BANK

52%

48%

SBI BANK

Yes No

12% 88%

Yes No

13.Are you satisfy by the time taken in sanctioning the loan? UCO BANK

20% 80%

SBI BANK

Yes No

56%

44%

Yes No

14.Have you face any difficulty during taking the loan UCO BANK

28% 72%

SBI BANK

YES NO

52%

48%

YES NO

15.Which grade you want to give of home loan  schemes of the bank? UCO BANK

36%

4% 60%

SBI BANK

Excellent Good Average Below average

4% 52%

44%

Excellent Good Average Below average

SUGGESTION • • • • • • • • •

Daily reducing option should be introduced. Relevant information should be provided to customers time to time. Reduce the interest rate 10.20 % to 9.80%. Reduce the processing fees 1500/- to 1000/- rupees. People who deal with customers should have complete knowledge about the housing finance industry. Reduce the EMI 923/- rupees to 880/- rupees. Repayment period increase the 25 year to 30 year. Gave the advertisement in the newspaper in month one to two week. Gain the customer satisfaction level.

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