Mba Report on housing loans

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A
PROJECT REPORT ON
“MARKETING OF BANKING ASSESTS”

SUBMITTED TO
SAVITRIBAI PHULE UNIVERSITY OF PUNE
IN PARTIAL FULFILLMENT OF TWO YEAR FULL TIME
MASTER OF BUSINESS ADMINISTRATION
SUBMITTED BY
AKASH GUPTA
(BATCH -2014-2016)
UNDER THE GUIDANCE OF
PROF.SHRADHA SHINDE

ASM's Institute of Business Management and Research (IBMR)
Block C,
MIDC,Chinchwad,
Pune, Maharashtra 411019

ACKNOWLEDGEMENT
1

I gratefully acknowledge the help and co-operation of the entire Department of Punjab
National Bank (Retail assets Branch) at the outset; I would like to thank Mr. Sanjay Kumar
Sharma for giving me an opportunity to learn at Punjab National Bank – Retail Assets.
I would like to thank my guide Prof. Shradha Shinde for her valuable guidance in
making my project successful. I also wish to thank the IBMR staff whose contribution made it
possible. With all their encouragement and well wishes, my project proved to be fruitful.

Date:
Place:
Pune-411019.

Akash Gupta

DECLARATION
2

I hereby declare that the Project Report entitled “Marketing Of Banking Assets” written and
submitted by me to the University of Pune in partial fulfillment of the requirements for the award
of degree of Master of Business Administration under the guidance of Prof. Shradha Shinde
original work and the conclusions drawn therein are based on the material collected by me.

Date:
Place: CHINCHWAD

Akash Gupta

3

LIST OF CONTENTS

SL NO

CONTENTS

PAGE NO

1

PROJECT OVERVIEW

2

COMPANY PROFILE

3

OBJECTIVES OF STUDY

4

REVIEW OF LITREATURE

5

RESEARCH METHODOLOGY

6

ACTIVITY CHARTS

7

KEY LEARNING

8

BIBLOGRAPHY

9

QUESTIONNAIRE

4

LIST OF TABLES

NO
1

TITLE

TABLE NO

PAGE NO

Are You Aware About Home Loans?

5.1

46

Which type of bank do you prefer taking
loan from

5.2

47

Which bank you prefer to take loan

5.3

48

WHICH LOAN DO YOU PREFER TO
TAKE

5.4

49

5.5

40

COMPARISON ON THE BASIS OF
FLOATING RATE AND FIXED RATE

5.6

41

What is the Profitability of PNB as
compared to SBI and ICICI

5.7

42

2

3

4

5
What is the interest rate of home loan in
PNB, SBI and ICICI bank for individual
customers
6

7

5

PROJECT OVERVIEW

PUNJAB NATIONAL BANK RETAIL ASSEST
Established in 1895 at Lahore, undivided India, Punjab National Bank (PNB) has the distinction
of being the first Indian bank to have been started solely with Indian capital. The bank was
nationalized in July 1969 along with 13 other banks. From its modest beginning, the bank has
grown in size and stature to become a front-line banking institution in India at present
A professionally managed bank with a successful track record of over 110 years.
Largest branch network in India - 4668 Offices including 238 Extension Counters spread
throughout the country.
Strategic business area covers the large Indo-Genetic belt and the metropolitan centres.
Ranked as 248th biggest bank in the world by Bankers Almanac, London.
Strong correspondent banking relationships with more than 217 international banks of the world.
More than 50 renowned international banks maintain their Rupee Accounts with PNB.
Well equipped dealing rooms; 20 different foreign currency accounts are maintained at major
centres all over the globe.
Rupee drawing arrangements with M/s UAE Exchange Centre, UAE, M/s Al Fardan Exchange
Co. Doha, Qatar, M/s Bahrain Exchange Co, Kuwait, M/s Bahrain Finance Co, Bahrain, M/s
6

Thomas Cook Al Rostamani Exchange Co. Dubai, UAE, and M/s Musandam Exchange, Ruwi,
Sultanate of Oman.

With over 38 million satisfied customers and 4668 offices, PNB has continued to retain its
leadership position among the nationalized banks. The bank enjoys strong fundamentals, large
franchise value and good brand image. Besides being ranked as one of India's top service brands,
PNB has remained fully committed to its guiding principles of sound and prudent banking. Apart
from offering banking products, the bank has also entered the credit card & debit card business;
bullion business; life and non-life insurance business; Gold coins & asset management business,
etc.
Since its humble beginning in 1895 with the distinction of being the first Indian bank to have
been started with Indian capital, PNB has achieved significant growth in business which at the
end of March 2009 amounted to Rs 3, 64,463 crore. Today, with assets of more than Rs 2, 46,900
crore, PNB is ranked as the 3rd largest bank in the country (after SBI and ICICI Bank) and has
the 2nd largest network of branches (4668 including 238 extension counters and 3 overseas
offices).During the FY 2008-09, with 39% share of low cost deposits, the bank achieved a net
profit of Rs 3,091 crore, maintaining its number ONE position amongst nationalized banks. Bank
has a strong capital base with capital adequacy ratio as per Basel II at 14.03% with Tier I and
Tier II capital ratio at 8.98% and 5.05% respectively as on March’09. As on March’09, the Bank
has the Gross and Net NPA ratio of only 1.77% and 0.17% respectively. During the FY 2008-09,
its’ ratio of priority sector credit to adjusted net bank credit at 41.53% & agriculture credit to
adjusted net bank credit at 19.72% was also higher than the respective national goals of 40% &
18%.
PNB has always looked at technology as a key facilitator to provide better customer service and
ensured that its ‘IT strategy’ follows the ‘Business strategy’ so as to arrive at “Best Fit”. The
bank has made rapid strides in this direction. Along with the achievement of 100% branch
computerization, one of the major achievements of the Bank is covering all the branches of the
Bank under Core Banking Solution (CBS), thus covering 100% of it’s business and providing
‘Anytime Anywhere’ banking facility to all customers including customers of more than 2000
rural branches. The bank has also been offering Internet banking services to the customers of
7

CBS branches like booking of tickets, payment of bills of utilities, purchase of airline tickets etc.
Towards developing a cost effective alternative channels of delivery, the bank with more than
2150 ATMs has the largest ATM network amongst Nationalised Banks.
With the help of advanced technology, the Bank has been a frontrunner in the industry so far as
the initiatives for Financial Inclusion is concerned. With it’s policy of inclusive growth in the
Indo-Gangetic belt, the Bank’s mission is “Banking for card based technology enabled Financial
Inclusion with the help of Business Correspondents/Business Facilitators (BC/BF) so as to reach
out to the last mile customer. The BC/BF will address the outreach issue while technology will
provide cost effective and transparent services. The Bank has started several innovative
initiatives for marginal groups like rickshaw pullers, vegetable vendors, diary farmers,
construction workers, etc. The Bank has already achieved 100% financial inclusion in 21,408
villages.
Backed by strong domestic performance, the bank is planning to realize its global aspirations. In
order to increase its international presence, the Bank continues its selective foray in international
markets with presence in Hong Kong, Dubai, Kazakhstan, UK, Shanghai, Singapore, Kabul and
Norway. A second branch in Hong Kong at Kowloon was opened in the first week of April’09.
Bank is also in the process of establishing its presence in China, Bhutan, DIFC Dubai, Canada
and Singapore. The bank also has a joint venture with Everest Bank Ltd. (EBL), Nepal. Under
the long term vision, Bank proposes to start its operation in Fiji Island, Australia and Indonesia.
Bank continues with its goal to become a household brand
With global expertise. Amongst Top 1000 Banks in the World, ‘The Banker’ listed PNB at 250th
place. Further, PNB is at the 1166th position among 48 Indian firms making it to a list of the
world’s biggest companies compiled by the US magazine ‘Forbes’.

8

HISTORY OF PUNJAB NATIONAL BANK

1895-

PNB established in Lahore by Lala Lajpat Rai.

1904-

PNB established branches in Karachi and Peshawar.

1939-

PNB acquired Bhagwan Dass Bank Limited.

1947-

Partition of India and Pakistan at Independence. PNB lost its premises in
Lahore, but continued to operate in Pakistan.

1960-

PNB amalgamated Indo-Commercial Bank Limited

(established in 1933)

in a rescue.
19611963-

PNB acquired Universal Bank of India.
The Government of Burma nationalized PNB's branch in
Rangoon (Yangon).

1965-

After the Indo-Pak war the government of Pakistan seized all

the offices in

Pakistan of Indian banks, including PNB's head office, which may have moved to
Karachi. PNB also had branches in East Pakistan (Bangladesh).
1969-

The Government of India nationalized PNB and 13 other major
19th July, 1969.

1978-

PNB opened a branch in London.
9

banks on

1988-

PNB acquired Hindustan Commercial Bank Limited in a rescue.

1993-

PNB acquired New Bank of India, which the Government of India had
nationalized in 1980.

19982003-

PNB set up a representative office in Almaty, Kazakhstan.
PNB took over Nedungadi Bank (established the bank in 1899), the oldest
private sector bank in Kerala. It was incorporated in 1913 and in 1965 had
acquired selected assets and deposits of the Coimbatore National Bank. At the
time of the merger with PNB, Nedungadi Bank's shares had zero value, with
the result that its shareholders received no payment for their shares.

10

VISION

"To be a Leading Global Bank with Pan India footprints and become a household brand in
the Indo-Gangetic Plains providing entire range of financial products and services under
one roof"

MISSION

‟Banking for the unbanked”

11

PERFORMANCE OF BANK

Financial Performance of the Bank

Punjab National Bank continues to maintain its frontline position retained its NUMBER ONE
position among the nationalized banks in terms of number of branches, Deposit, Advances, total
Business, operating and net profit in the year 2008-09. The impressive operational and financial
performance has been brought about by Bank’s focus on customer based business with thrust on
SME, Agriculture, more inclusive approach to banking; better asset liability management;
improved margin management, thrust on recovery and increased efficiency in core operations of
the Bank. The performance highlights of the bank in terms of business and profit are shown
below:

Parameters

Mar'07

Mar'08

Mar'09

CRAR

Operating Profit*

3617

4006

5744

26.02

Net Profit*

1540

2049

3091

41.67

Deposit

139860

166457

209760

22.47

Advance

96597

119502

154703

26.55

Total Business

236456

285959

364463

24.15

(Rs.Crores)


Respective figure for the corresponding financial year

12

PUNJAB NATIONAL BANK
HOUSING FINANCE LTD
INTRODUCTION
This is a wholly owned subsidiary of Punjab National Bank, is engaged in providing housing
loans for purchase, construction and up gradation of a dwelling unit. The company offers Loans
for construction or for purchase of house/flat from development authorities and also from private
builders/ group housing societies as well as for renovation/ repairs .Company also provide finance
for construction of residential projects. Loans to NRIs are also provided for purchase/ construction
of house/ flat along with a resident/ non-resident co-borrower.

PRODUCTS AND SERVICES
• APNA GHAR YOJANA
• GHAR SUDHAR YOJANA
• LOAN AGAINST PROPERTY
• LOAN FOR COMMERCIAL PROPERTY

13

APNA GHAR YOJANA
We provide housing finance to individuals for construction or for acquisition/
purchase of house/flat from development authorities such as
DDA/HUDA/PUDA/RHB etc. and also from private builders/groups housing
societies. We consider enhancement in loan amount in the event of escalations in
cost.
ELIGIBILITY:
a) Individuals in permanent service or having their own business (Resident or non
-resident).
b) Age of the applicant should not be more than 60 years in case of service class
and 65 years in case of businessman or self employed;
LOAN AMOUNT:
a) Minimum loan amount would be Rs.50,000/- and maximum loan amount
depends entirely on the repayment capacity of the borrower(s).
b) Actual loan eligibility shall be on the basis of repayment capacity as determined
be PNBHFL taking into account income, age, qualification and occupation.
c) Income of borrower(s) j co-borrower(s) shall be clubbed together for calculation
of loan eligibility / the level of finance in case of joint application
MARGIN:
The borrower's contribution shall be minimum 20% of the total cost of project,
including stamp duty and registration charges.
INTEREST RATES: (Effective from 1.07.2006)

PERIOD

FLOATING RATE OF
INTEREST(%)
14

3-YEARLY FIXED
RATE OF INTEREST

(%)
1-10 Years
11 – 15 Years
16 – 20 Years

9.00
9.25
9.50

10.50
10.50
1.50

SECURITY:
Security for the loan is first charged by way of equitable/registered mortgage of the property to be
financed and/ or such other collateral securities as may be necessary. Loans to allottees of
flats/houses of development authorities or members of co-op. housing societies or reputed
private builders can be considered on the basis of tripartite agreement and/or interim security.
With respect to property under construction, interim security may be required. Collateral/interim
security may be assignment of Life Insurance Policies, guarantees from sound and solvent
guarantors, pledge of marketable shares and such other investments acceptable to PNBHF.
LOAN DISBURSEMENT:
For outright purchase of house/flat, the loan amount will be paid in lump-sum to the vendor at the
time of registration after satisfying that the borrower has paid/provided for the balance amount.
For houses/flats under construction, the loan amount will be disbursed in stages based on the
progress of construction. Disbursement win be made after the property has been technically
appraised and all legal documentation has been completed. The borrower has to invest his
proportionate share of the cost, prior to disbursement of loan.
The loan can be disbursed either in lump sum or installments according to the requirement of the
development authority/society/ private builder.
LOAN REPAYMENT:
Loan repayment shall normally be in Equated Monthly Installments (EMI) comprising of principal
and interest over a maximum period of 20 years. The table below shows the EMI for a loan of Rs.
1,00,000/- at different rates of interest.

9.00% 9.25%
05
07

No. of Years /Term of loan
9.50%
9.75
10.00 10.25

10.50

10.75 11.00 11.25

2076

2088

2101

2113

2125

2138

2150

2162

2175

2187

1609

1622

1635

1648

1661

1674

1687

1700

1713

1726

15

10
15
20

1267

1281

1294

1308

1322

1336

1350

1364

1378

1392

1015

1030

1045

1060

1075

1090

1106

1121

1137

1153

900

916

933

949

966

982

999

1016

1033

1050

SPECIAL REPAYMENT PLANS
In deserving cases, installments may be fixed in increasing/decreasing order or in lump sum or
even linked to Life Insurance Policies, under PNB Housing Finances special repayment plans like:

Graduated repayment plan

Decreasing repayment plan

LIC linked repayment plan

Balance payment facility

16

GHAR SUDHAR YOJANA
Under "Ghar Sudhar Yojna", we make available housing finance to individuals for up gradation,
renovation or repair of house/flat. It includes among others, internal & external repairs, water
proofing, roofing, flooring, electrical, woodwork etc.

ELIGIBILITY:
Individuals who are in permanent service or self employed or have their own business. Age of the
applicant should not be more than 60 years.
LOAN DETAILS:
Loan Amount
Minimum amount of loan is Rs. 50,000. Maximum amount of oan shall not exceed Rs. 10,00,000.
Borrower's minimum contribution will be 25% of the estimated cost of repairs/renovations. Actual
loan amount shall be calculated on the basis of repayment capacity of the borrower as determined
by PNBHFL.
INTEREST RA.TES (With effect from 1.07.2006)
For loans upto Rs.10 Lakhs
Period

Rate of Interest (%)
11.25

Upto 15 Years

For loans above Rs.10 Lakhs
17

Period

Rate of Interest (%)
11.00

Upto 15 Years
Upto 10 YRS rate of interest is 9 %

SECURITY:
Normally, the security for the loan shall be first charge by way of Equitable/Registered mortgage
of the property. However, PNB Housing Finance at its discretion, can sanction a loan on the basis
of:
• Pari-passu/second charge in the case of Central/State Govt./Public
Sector/Nationalized Bank employees and other similar bodies or
• Other securities such as assignment of LIC policies (surrender value at least equivalent to the
amount of loan), pledge of marketable shares and such other investments acceptable to PNBHF.
Besides this, personal guarantee from sound and solvent guarantors may be asked for.

LOAN DISBURSEMENT:
A loan will be disbursed in lump sum or in stages (not more than three) based on the progress of
renovation/repair. Disbursement will be made after the property has been technically appraised
and all legal documentation and other formalities have been completed. The borrower has to
invest his share of the cost in full prior to disbursement of the loan. The borrower is expected to
complete the repair/renovation within six months.
REPAYMENT:
Loan repayment shall normally be in Equated Monthly Installments (EMI) comprising of principal
and interest over a maximum period of 10 years.
Monthly reducing Balance (%)

No. of
Years
1
2

9.00

9.25

9.50

9.75

10.00 10.25 10.50 10.75 11.00

11.25

8746

8757

8769

8780

8792

8804

8815

8827

8839

8850

4569

4580

4592

4603

4615

4627

4638

4650

4661

4673

18

3
4
5
6
7
8
9
10

3180

3192

3204

3215

3227

3239

3251

3263

3274

3286

2489

2501

2513

2525

2537

2549

2561

2573

2585

2597

2076

2088

2101

2113

2125

2138

2150

2162

2175

2187

1803

1815

1828

1841

1853

1866

1878

1891

1904

1917

1609

1622

1635

1648

1661

1674

1687

1700

1713

1726

1466

1479

1492

1505

1518

1531

1545

1558

1571

1585

1355

1368

1381

1395

1408

1422

1436

1449

1463

1477

1267

1281

1294

1308

1322

1336

1350

1367

1378

1392

LOAN AGAINST PROPERTY
We provide loans to individuals against mortgage of their existing residential immovable property
situated in urban/semi-urban/metro centres. Finance would be made available for personal
requirements of borrowers such as education, marriage of children, family function, foreign travel,
medical expenses, furnishing the house, buying a computer or other consumer durables, etc. by
mortgaging their existing immovable property.
ELIGIBILITY:
Any individual having regular source of income can apply for the loan. Age of the applicant
should not be more than 55 years.

19

LOAN AMOUNT:
Minimum loan amount would be Rs. 50,0001-. Maximum Loan Amount would be 50 % of the
market value of the property as certified by PNBHF's approved valuer OR actual loan eligibility
as determined on the basis of repayment capacity of the borrower, whichever is less. In case other
earning family members are offered as co-borrowers, their income can also be clubbed with that
of the borrower for computation of eligible loan amount.
INTEREST RATES: (With effect from 1.07.2006)
Interest rate for individuals will be 11.50% and for builders (floating rate) will be 12.00%

SECURITY:
We shall require Equitable I Registered Mortgage of property against which loan is being sought.
Guarantee of one/ two persons will be required as per existing guidelines of the company.
LOAN DISBURSEMENT
The loan would be disbursed directly to the borrower in lump sum through his bank account.
Disbursement will be made after the property has been technically and legally appraised and legal
documentation has been completed.

LOAN REPAYMENT
The loan would be repaid by way of Equated Monthly Installments (EMIs) consisting of principal
and interest within a maximum period of 15 years. Repayment will commence in the month
subsequent to the month in which loan has been disbursed.

LOAN FOR C0MMERCIAL PROPERTY

20

We provide loans to individuals against mortgage of their existing residential immovable property
situated in urban/semi-urban/metro centers. Finance would be made available for personal
requirements of borrowers such as education, marriage of children, family function, foreign travel,
medical expenses, furnishing the house, buying a computer or other consumer durables, etc. by
mortgaging their existing immovable property.
ELIGIBILITY:
Any individual having regular source of income can apply for the loan. Age of the applicant
should not be more than 55 years.
LOAN AMOUNT:
Minimum loan amount would be Rs. 50,000/-. Maximum Loan Amount would be 50 % of the
market value of the property as certified by PNBHF's approved value OR actual loan eligibility as
determined on the basis of repayment capacity of the borrower, whichever is less. In case other
earning family members are offered as co-borrowers, their income can also be clubbed with that
of the borrower for computation of eligible loan amount.
INTEREST RATE: (With effect from 1.07.2006)
Interest rate both for individuals and builders will be 12.00%.

SECURITY:
We shall require Equitable/Registered Mortgage of property against which loan is being sought.
Guarantee of one/ twu persons "vill be required as per existing guidelines of the company.
LOAN DISBURSEMENT
The loan would be disbursed directly to the borrower in lump sum through his bank account.
Disbursement will be made after the property has been technically and legally appraised and legal
documentation has been completed.

LOAN REPAYMENT:
The loan would be repaid by way of Equated Monthly Installments (EMIs) consisting of principal
and interest within a maximum period of 10 years. Repayment will commence in the month
subsequent to the month in which loan has been disbursed.

21

PNB HOME LOAN


ELIGIBILITY



DOCUMENTATION



EXTENT OF LOAN



RATE OF INTEREST



REPAYMENT & SECURITY



FEATURES & CONDITIONS OF PNB HOME LOAN

22

PNB HOME LOAN
Punjab National Bank provides its customers with various Home loan policies and features at
highly competitive rates. They know the needs of the Indian customers that they have to deal
with, on a regular basis, and provide the policies accordingly. The PNB Home Loan cater mainly
to the requirement of the middle class individuals of India, as Pnb itself is one of the leading
public –sector banks of the nation.

23

The PNB Home loans are very easily available, and have an even easier process of repayment
that is given over a prearranged time period. This period of time is determined, when the PNB
Home loans are being finalized and along with the loans, the buyers get the opportunity of
having a life insurance covered against him. The basic grounds on which the PNB Home loans
are provided are:


Extending, repairing, modification and even renovating of an already existing building or
flat.



Purchase or building of a new house or flat.

The basic interest of the PNB Home loans may be around 9.5%, and the time period may vary
from a minimum of 5 years to a maximum of 25 years. However there is a certain limitation of
the loan amount that an individual may take from the bank. The maximum amount of the loan
amount sanctioned under PNB Home loans is need based. It generally takes around 7 days to
process the PNB Home loans, from the day it has been finalized with the bank.
Apart from all these details, the PNB Home loans also enable us to choose between fixed and
floating rates that may be applicable from time to time, and keep varying from one time period to
another. As far as the eligibility is concerned, a person between the age group of 18 to 60 years
may be qualified to apply for the PNB Home loans. Along with this, it has also to be noted that
the annual income of the individual, who is applying for the loan, must be greater than or equal
to 1.2 Lac INR.

Eligibility


Age of the applicant must be less than 60 years.



Existing home loan borrower can also apply provided their loan account is regular and no
IR irregularity persist.

Documents Needed

24

1. Proof of identity
2. Proof of income
3. Proof of residence
4. Bank statement or Pass Book where salary or income is credited.
5. Education Certificate
6. Photos
7. Salary slip & form 16
8. Income tax return last 3 years along with balance sheets.
9. Assets liabilities statements.
10. Documents of property.
11. Estimate of construction.
12. Guarantor
Freehold and Leasehold Property
1.

The loan can be granted both for freehold and leasehold property.
2. In case of leasehold, loan can be granted on the basis of power of attorney basis from original
allotee where DDA/PUDA/HUDA permit conversion of leasehold into freehold property
otherwise advance is not permitted against plot purchased on Power of Attorney basis.

Extent of loan


For construction/purchased of house/flat 75% of the cost of construction or purchase of
house/flat.



For carrying out repairs/renovation/additions/alternation: - 75% of the estimated cost
subject to maximum of Rs. 20 lacs.



Loan upto Rs. 20 lacs for purchase of land/plot



Loan is available maximum upto Rs. 2 lacs for furnishing.
25

Margin
Land/Plot

40%

Construction/repair/addition

25%

Rate of Interest
(Effective from 1st May 2009 – BPLR 11.00%)

Housing finance to

Fixed option for loans

Floating option for loans

Upto 20

Above 20 Lacs.

Upto 20 lacs. Above 20 Lacs.

Individuals including
NRI’S /Flexible Housing
Scheme
Lacs.
(i) upto 5 years

9.25%

10.00%

8.75%

9.50%

(ii) Above 5 years & upto 10

10.00%

10.25%

9.00%

9.50%

years
(iii) Above 10 years & upto 20 10.50%

10.75%

9.25%

9.75%

years
(iv) Above 20 years & upto 25

11.00%

9.50%

10.00%

10.75%

years


The interest rate can be fixed or floating



Option can be changed from fixed to floating and vice versa with flat charges of 2% fee
on balance outstanding.



Fixed interest rate be reset after a block of 5 year in respect of loans disbursed on or after
1.08.2006

26

Documentation charges
Rs. 1350 + Service Tax
Upfront Fee
0.90% of the loan amount + Service Tax& Education Cess
Repayment


Maximum 25 years.



Installment can be fixed upto maximum age of 65 years.



The income of spouse and earning children can be taken into account provided they are
made co-borrower.



Father/Mother can also be made co-borrower in cases property is in single name of his
/her son and also clubbing of their income is permitted for determining eligibility criteria.



Minimum 24 advance cheque should be obtained as and when, 6 cheques remain, fresh
lot to be obtained out of 24, 23 cheques should be of the amount equal to the balance.



Loan is to be repaid in EMI within a period of 25 years or before the borrower attains the
age of 65 years.

Security


Equitable/Registered mortgage of immovable property.



Tripartite agreement be executed amongst Housing Board/ Dev Authority / Coop
Society / Builder the borrower and the bank where mortgage cannot be created
immediately.



Equitable mortgage of other immovable property or pledge of NSC etc. upto 125% of
loan amount if property is being purchased from 1 st P/A holder and where there is delay
in the execution of Tripartite agreement.



Verification of security is required once in 2 years.

Features
27



Loan can be sanctioned by branch/hub near to the present place of work/posting
/residence of the borrower.



Loan can be sanctioned even if property is in the name of wife/parents provided that the
owner is made co-borrower.



Loan can be granted for 2nd house in the same city.



Loan can be granted for purchase of house for rental purpose



For take over, permission of higher authority is not required.

Important Conditions : Loan cannot be granted


For construction in Un-authorized colonies.



If property is to be used for commercial purpose.



Without approved Map.

COMPARISION BETWEEN ICICI AND STATE BANK OF INDIA
ICICI BANK
ICICI Bank is India's second-largest bank with total assets of about Rs.1,676.59 bn(US$
38.5 bn) at March 31, 2005 and profit after tax of Rs. 20.05 bn(US$ 461 mn) for the year ended
March 31, 2005 (Rs. 16.37 bn(US$ 376 mn) in fiscal 2004). ICICI Bank has a network of about
573 branches and extension counters and over 2,000 ATMs. ICICI Bank offers a wide range of
28

banking products and financial services to corporate and retail customers through a variety of
delivery channels and through its specialised subsidiaries and affiliates in the areas of investment
banking, life and non-life insurance, venture capital and asset management. ICICI Bank set up its
international banking group in fiscal 2002 to cater to the cross border needs of clients and
leverage on its domestic banking strengths to offer products internationally. ICICI Bank currently
has subsidiaries in the United Kingdom, Canada and Russia, branches in Singapore and Bahrain
and representative offices in the United States, China, United Arab Emirates, Bangladesh and
South Africa.

ICICI TODAY
Today Icici offers wide range of banking products and financial service to corporate and
retail customer through a variety of delivery channels and throughits specialized subsdiary
affiliates in the areas of investmrnt banking,life and no life insurance,venture capital and account
management.

TYPES OF LOAN
HOME LOAN
Overview
ICICI Bank Home Loans, offer unbeatable benefits to ensure that you get the best deal without
any hassles. As one of the leading home loan provider, ICICI Bank understands how special
building a new home is for you and our Home Loan help you lay the foundation for your dream
home. ICICI offers you the most convenient home loan plans to suit your needs. With so many
attractive features in every type of home loan we offer, creating the home you always wanted is
no longer a distant dream.
Loan Feature
Loan Amount 80% of the cost of the property
Interest Rate

10.1% to 11.25%

Tenure

Maximum 20 years

Pre Payment
Charges

2% on the principal outstanding
29

Service
Charges

0.50% - 1.00% of the loan amount or Rs.1500/- (Rs.2000/- for Mumbai, Delhi
& Bangalore), whichever is higher + applicable Service Tax & Surcharge

Docs Required : Home Loan

Salaried

Self

ID Proof

Passport/PAN card/Driving
License/Voter ID
Passport/PAN card/Driving License/Voter ID
Card/Any other valid ID Card/Any other valid ID proof
proof

Address Proof

Electricity bill/telephone
Electricity bill/telephone bill/Driving
bill/Driving License/Voter
License/Voter ID Card/Passport/Any other valid
ID Card/Passport/Any
Address Proof
other valid Address Proof

DOB Proof

10th class
certificate/certificate of
birth

10th class certificate/certificate of birth

Income Tax Return / Computation of Total
Income / Auditors Report / Balance Sheet / Profit
& Loss Account certified by Chartered Accountant
for last 3 years (3 years for Home Equity) (both
for business and personal of partners/directors)
Last 3 months
Bank Statement for last 6 month from
Salary Slip
operating account
Form 16
Repayment Track record of existing loans /
Bank Statement for
Financial Docs
last 6 months from Salary Loan closure letter
Board Resolution in case of a company
Account
Proof of existence of Business
Processing fee
Office Address Proof
cheque
Photo Identity Proof, Residence Address
Proof, Signature Verification is required to be
provided for all the main partners / directors.
Processing fee cheque
CAR LOAN

30

Overview
Turn your dream into reality. Own that new car you have always desired, with a little help from
ICICI. The bank offer cars loans up to 90% of the ex-showroom price of the car. Its interest rates
would pleasantly surprise you. What's more, you can take up to 5 years to repay the loan. ICICI
Bank offers new car loans with fixed rate option only.
Turn your dream into reality. Own that new car you have always desired, with a little help from
ICICI. The bank offer cars loans up to 90% of the ex-showroom price of the car. Its interest rates
would pleasantly surprise you. What's more, you can take up to 5 years to repay the loan. ICICI
Bank offers new car loans with fixed rate option only.
Loan Feature
Loan Amount 90% of ex-showroom price
Interest Rate

11.5% to 16.5%

Tenure

Up to 5 Years

Pre Payment
Charges

Lower of the two amount : 5% on the principal outstanding or Interest
outstanding for unexpired period of the loan.
Loan Processing Fees
New Car

Service
Charges

Gross Loan Processing Documentation
Amt
Fee Amt
Charges
<2.5 L

Rs.2500/-

Rs.350/-

2.5 L to 3.9
Rs.3500/L

Rs.350/-

4 L to 4.9 L Rs.4000/-

Rs.350/-

5 L to 5.9 L Rs.4200/-

Rs.350/-

>10 L

Rs.350/-

Rs.5000/-

31

PERSONAL LOAN
Overview
ICICI Personal Loans is provided only to an existing ICICI Bank customer. It is possible to
secure a loan even without having to visit your bank branch. If you have been an ICICI Bank
customer for the past 9 months, you might have a pre-approved loan offer waiting for you.
Loan Feature
Loan Amount

Upto Rs 15,00,000/- depending on your eligibility, income and repayment
capacity.

Interest Rate

14% to 19%

Tenure

12 to 60 months.

Pre Payment
Charges

Lower of the two amount :5% on the principal outstanding or Interest
outstanding for unexpired period of the loan.

Service Charges

2% or 3 % depending on the location of loan amount + Origination Charges
of 1.5% of loan amount

32

STATE BANK OF INDIA

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,
Maharastra and also its corporate office in Mumbai, Maharashtra. As of December 2013, it had
assets of US$388 billion and 17,000 branches, including 190 foreign offices, making it the
largest banking and financial services company in India by assets.
State Bank of India is one of the Big Four banks of India, along with Bank of Baroda, Punjab
National Bank and ICICI Bank.
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 commercial bank in the Indian
Subcontinent. Bank of Madras merged into the other two "presidency banks" in British
India, Bank of Calcutta and Bank of Bombay, to form the Imperial Bank of India, which in turn
became the State Bank of India. Government of India owned the Imperial Bank of India in 1955,
withReserve Bank of India (India's Central Bank) 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.
State Bank of India is a regional banking behemoth and has 20% market share in deposits and
loans among Indian commercial banks.

TYPES OF LOANS:

HOME LOAN
Overview
"THE MOST PREFERRED HOME LOAN PROVIDER" voted in AWAAZ Consumer Awards
along with the MOST PREFERRED BANK AWARD in a survey conducted by TV 18 in
association with AC Nielsen-ORG Marg in 21 cities across India. SBI HOME LOANS now
offers Interest Rates concessions on GREEN HOMES in accordance with SBI's commitment to
Environment protection. SBI Home Loans come to you on the solid foundation of trust and
transparency built in the tradition of State Bank of India.
Loan Feature
Loan Amount Up to 90%
33

Interest Rate

10.3% to 10.5% p.a. (depending upon the amount)

Tenure

Maximum 30 years or up to the age of 70 years

Pre Payment
Charges

Nil

Service
Charges

0.25% of the loan amount , minimum Rs.1000/- for less than 25 lacs.Above
Rs.25 Lacs and upto Rs.75 Lacs is Rs.6500/-. Above 75 Lacs Rs.10000/-

Docs Required : Home Loan

Salaried

Self

ID Proof

PAN Card/ Voters ID/ Passport/ Driving PAN Card/ Voters ID/ Passport/
License
Driving License

Address Proof

Recent Telephone Bill/ Electricity
Recent Telephone Bill/ Electricity Bill/
Bill/ Property tax receipt/ Passport/
Property tax receipt/ Passport/ Voters ID
Voters ID

DOB Proof

10th class certificate

10th class certificate

Financial Docs

Completed
application
form • Proof of business address in

Passport
size
photograph respect
of
businessmen/
• Proof of Identity - PAN Card/ Voters industrialists
ID/
Passport/
Driving
License • Sale Deed, Agreement of Sale,
• Proof of Residence - Recent Telephone Letter
of
Allotment,
Non
Bill/ Electricity Bill/ Property tax receipt/ encumbrance certificate, Land/
Passport/
Voters
ID Building Tax paid receipt etc. (as
• Statements (latest 3 months bank applicable and subject to satisfaction
statement / 6 months bank passbook) report from our empanelled lawyer)
and Signature identification from present • Copy of approved plan and
bankers
approval from the Local Body
• Statement of Bank Account/ Pass
Book
for
last
6
months
with Personal Assets and Liabilities
statement and Proof of business
address for non-salaried individuals.
Personal Assets and Liabilities
statement
34

Proof of business address for nonsalaried individual

PERSONAL LOAN
Overview
SBI Saral - Personal Loan makes funds readily available to you whenever you desire or need.
Access this facility from over 3000 branches across the country and confidently face the
challenge of meeting any kind of personal expenses
Loan Feature
Loan
Amount

Minimum: Rs.24,000/- in metro and urban centres,Rs.10,000/- in rural/semiurban centres.Maximum : 12 times Net Monthly Income for salaried individuals
and pensioners subject to a ceiling of Rs.10 lacs

Interest Rate 8.5% above Base Rate floating, currently 18.5% p.a
Tenure

up to 48 months

Pre Payment
No prepayment penalties
Charges
Service
Charges

Processing Charges: 2%-3% of loan amount

CAR LOAN
Overview
Move ahead in life with SBI Car Loans with more than 6000 Branches offering Car Loans. If
you have been putting off purchasing that Car, SBI invites you to an attractive Car Loan Scheme
with low interest rates, free accidental insurance, easy repayment options, optional SBI life
cover, total transparency. Loan finance will include vehicle registration charges, insurance, onetime road tax and accessories worth Rs.25000/-.
35

Loan Feature
Loan Amount

85% to 90% of on-road price

Interest Rate

10.75% Per Annum

Tenure

Up to 84 Months

Pre Payment Charges

No pre-payment charges

Service Charges

Processing Charges: Rs. 500/- per Car Loan Application

BUSINESS LOAN
Overview
Traders Easy Loan scheme is launched by SBI to provide hassle free loan to Traders. Any
businessman/ entrepreneur/ professional and self employed person can avail this loan. Loan
under the scheme can be availed to meet normal business requirements and is sanctioned against
equitable mortgage of property.
Loan Feature
Loan Amount

Upto Rs 5 crore

Interest Rate

12.50-13.00%

Tenure

Maximum 5 years

Pre Payment Charges

Not provided
Processing charges:

Service Charges
1% of the loan amount

36

RESEARCH
METHODOLOGY
INTRODUCTION
The procedure adopted for conducting the research requires a lot of attention as it has direct
bearing on accuracy, reliability and adequacy of results obtained. It is due to this reason that
research methodology, which we used at the time of conducting the research, needs to be
elaborated upon. Research Methodology is a way to systematically study & solve the research
problems. If a researcher wants to claim his study as a good study, he must clearly state the
methodology adopted in conducting the research so that it may be judged by the reader whether
the methodology of work done is sound or not.

The research method here includes:1.
2.
3.
4.
5.
6.
7.

Meaning of research
Research problem
Research design
Sampling design
Data coIlection method
Data analysis and interpretation
Recommendations

37

Meaning of Research
Research is defined as "a scientific & systematic search for pertinent information on a specific
topic. Research is an art of scientific investigation. Research is a systematized effort to gain new
knowledge. It is a careful investigation or inquiry especially through search for new facts in any
branch of knowledge.
Research is an academic activity and this term should be used in a technical sense. Research corn
prices defining and redefining problems, formulating hypothesis or suggested solutions; making
deductions and reaching conclusions to determine whether they fit the formulating hypothesis.
Research is thus, an original contribution to the existing stock of knowledge making for this
advancement. The search for knowledge through objective and systematic method of finding
solution to a problem is research.

Research Problem
The first step while conducting research is careful definition of research problem.
Research design
A research design is the arrangement of conditions for collection and analysis of data in a manner
that aims to combine relevance to the research purpose with economy in procedure. Research
design is the conceptual structure within which research is conducted. It constitutes the blue print
for the collection measurement and analysis of data. Research design includes an outline of what
the researcher will do from writing the hypothesis and its operational implications to the final
analysis of data.
A research design is a framework for the study and used as a guide in collecting and analyzing the
data. It is a strategy specifying which approach will be used for gathering and analyzing the data.
It also includes the time and cost budget since most studies are done under these two constraints.
Research design can be categorized as:





Exploratory research
Descriptive
Diagnostic research
Experimental research

38

Sampling Design
Sampling is necessary because it is almost impossible to examine the entire parent population (i.e.
the entire universe) various factors such as time available, cost, purpose of study etc make it
necessary for the researchers to choose a sample. It should neither be too small nor too big. It
should be manageable.
Data Collection Method
After the sample has been taken the type of information to be sought was decided upon, the next
step is to collect the data. As the data collected is to be the base of what we plan to find out, the
relevant care should be taken that the errors in methods of collection of data involved are
minimized. The factors of availability of time, cost and human involvement come to effect the
reliability of the data collected. Broadly there are two types of data:



Primary data
Secondary data

Secondary data means the statistics not gathered for the immediate study at hand but for some
other data. It is the data collected by some one for purposes other than solving the problem being
investigated. On the other hand primary data are generated in a study specifically designed to
accommodate the data needs of the
problem at hand.
ANALYSIS AND INTERPRETATION OF DATA AND RECOMMENDATIONS
The data collected in the aforesaid manner have been tabulated in condensed form to draw the
meaningful result. The different techniques are adopted to analyze a data.
All the data and the material is arranged through internal resources and the last part of the project
consist of the conclusions drawn from the report, a brief summary and recommendations and
giving the final touch to the reports by stating a conclusion.

39

COMPARATIVE CUSTOMER PREFERENCE ANALYSIS
IN HOME LOAN SECTOR
SCOPE OF THE STUDY
The present study was conducted by the researcher in Delhi covering some main and popular
markets of Delhi because of constraints of time and money study could not be extended to other
cities. As Delhi being a popular and among the good cities of India is a good market of financial
products & also here customers of different classes like business segment, service segment, and
professional segment are in excess. Since the report aims at finding the potential for financial
products at Delhi itself taking into consideration certain limits and problems, the area was chosen
on the basis of coverage of product no. of respondents.
DELHI MARKET SEGMENT
The market of Delhi mainly comprises of the rural & urban people with population of around 15
million. The literacy rate is fairly high and there are around 65% males & 35% females.
This data clearly indicates the emergency of a middle class at Delhi. As is elsewhere, this class is
the harbors of modern facilities. Apart from other contribution, it is this class for its money. These
demands exhibits a vigilant
customer & financial products have been on their toes to return them to pay the least if not attract
the other ones.
Besides Delhi also boasts of a large financial market. It has an upcoming pharmacy distribution
network & lots of Govt. institutions. There is increasing use of Cyber Cafe Internet & cable

40

connection. The market size of the city is around 2 lacks, a significant chunk of which is occupied
by the upcoming middle classes.
Besides, there is good number of industries.
Apart from this, there are many management and engineering conege's and universities. The much
roaming growth of such institutions shows the presence of many high nets worth individual is
Delhi.
For the purpose of the study the respondents were selected from all corners of Delhi mainly
popular colonies and for gathering information about the trends, demands & brands available in
financial products.
The data was collected through questionnaires. The question consisted of 10 questions along with
the information regarding the occupation of the respondent. The number of respondents were kept
to 100. The graphs of all the findings question wise are given below along with the tables of the
data collected.

DATA ANALYSIS – PART I

Comparison of banks based on Interest Rates for home loan

41

10.3
10
10.4

9.75

10.2

10.15

10
9.8
9.6
9.4

9.25

9.15

9.2
9

Above 20 Lacs

8.8
8.6
8.4

Up to 20 Lacs
PNB

SBI

ICICI

Up to 20 Lacs

Above 20 Lacs

INTERPRETATION




In PNB Bank up to 20 lacs – 9.25% ; Above 20 lacs – 10%
In SBI up to 20 lacs – 9.15% ; Above 20 lacs – 9.75%
In ICICI up to 20 lacs – 10.15% ; Above 20 lacs – 10.30%

Comparison on the basis of Floating Rate and Fixed Rate

42

25

20

15

10.15

9.25

9.15

10

5

0

9.95

9.85

10.5

PNB

ICICI

SBI

Floating Rate

Fixed Rate

INTERPRETATION
The above graph shows the difference between Floating and Fixed rates of different banks
 For ICICI the Floating Interest Rate is 9.95% and Fixed Interest Rate is 10.15%
 For SBI the Floating Interest Rate is 9.85% and Fixed Interest Rate is 9.15%
 For PNB the Floating Interest Rate is 10.50% and Fixed Interest Rate is 9.25%

Comparision on the basis of Profitability

43

40%
35%

35%

30%

30%
25%

25%

25%
20%

20%

15%

15%
10%
5%
0%

PNB

ICICI
Profitability

SBI

Growth

*Source: Balance sheet of SBI, ICICI & PNB

INTERPRETATION


The above chart depicts profitability and growth of PNB with other banks. As we can see
that SBI bank has higher profitability and thus higher growth with respect to other banks

Comparision on basis of easy availability of home loans
44

27%

32%

41%

PNB

ICICI

SBI

BANK
PNB
SBI
ICICI

PERCENTAGE
32%
41%
27%

INTERPRETATIONS


The above pie chart shows that taking loan from SBI is easier as compared to PNB and
ICICI bank.

Comparison on basis of Ease of documentation
45

45
40

40
35

35

30
25

25
20
15
10
5
0

PNB

SBI

BANK
PNB
SBI
ICICI

ICICI

PERCENTAGE
35
40
25

INTERPRETATIONS


Above pie chart state that documentation process for taking home loans is easier in SBI as
compared to PND and ICICI.

Comparision on basis of various loan products interest rates
46

PERSONAL LOAN

EDUCATIONAL LOAN

CAR LOAN

11

10.5

10.9

12.75

13

14

13.75

14.5

PNB

S BI

IC IC I

13.5

INTERPRETATIONS


PNB provides Personal loan @14% and Education Loan @12.75% and Car Loan
@10.5%.



SBI provides Personal loan @13.75 and Education Loan @13% and Car Loan @10.9%



PNB provides Personal loan @14.5% and Education Loan @13.5% and Car Loan @11%

47

Data Analysis Part II
QUESTIONS ASKED TO RESPONDENT
Are You Aware About Home Loans?

100

YES

Interest in home loans
Yes
No

NO

Percentage
100
0

INTERPRETATION

The above Pie chart depicts that
 60% of the people surveyed are interested in home loans.
48



40% of the people surveyed are not interested in home loans.
Which type of bank do you prefer taking loan from?

Private

Nationalized

Bank type

Percentage
30
70

Private
Nationalized

INTERPRETATION
The above chart depicts that:
 70% of the people surveyed chose Nationalized banks as the bank the prefer taking
loans from, clearly stating that Nationalized banks are more trusted than the Private
banks
 30% who chose Private bank, when asked for the reason of choosing those banks
gave customer satisfaction as the reason for doing so.

49

Which bank you prefer to take loan?

45
40
35
30
25
20
15
10
5
0

PNB

ICICI

SBI

Bank
PNB
ICICI
SBI
Others

Others

Percentage
30
22
40
8

INTERPRETATION
The above graph depicts that maximum percentage of the sample size prefers SBI bank over other
banks as interest rates of SBI is lower than other banks. SBI got the highest percentage of 40%,
while PNB was chosen by 30% of the sample, rest where by ICICI and other banks.

50

Which loan do you prefer to take?

50
45
40
35
30
25
20
15
10
5
0

Home Loan

Education Loan

Type Of Loan
Home Loan
Education Loan
Car Loan
Personal Loan

Car Loan

Personal Loan

Percentage
45
20
20
15

INTERPRETATION
It has been found from the graph that 45% of the sample has gone for the home loan, showing
that the demand for home loan is rising as compared to other loans . Education and Home Loan
both were favored by 20% of the sample respectively.

51

According To Your Opinion Which Bank Is More Customer Friendly?

PNB

ICICI

SBI

Customer Friendliness

Others

Percentage
26
18
24
15

ICICI
PNB
SBI
Others

INTERPRETATION

52

The above pie chart shows that maximum number of people finds ICICI more customer friendly
than other banks.

ACTIVITY CHART

Particular
1st week
nd

2 week
3rd week
th

4 week
th

5 week
th

6 week

Activity
Find out the project topic and discuss with company guide and college
guide.
Finalize the topic and making a schedule for how to go about with project.
Find out the company profile , history, current data and the various loan
schemes.
Learn what are the various documents and procedure required for the loan,
and checking the eligibility of customers
Collecting data of SBI bank, company profile, various types of loan
provided by the bank.
Collecting data of ICICI bank , company profile, various types of loan

7 week

provided by the bank
Making the comparison between PNB, SBI and ICICI bank. Preparing

8th week

thequestionnaire, conducting data analysis and finding interpretations
Preparation of the project report

th

KEY LEARING

53




Interest rate is the main factor considered by the customers while taking the loan.
30% of the customers have preferred to the loan from PNB and remaining from SBI,





ICICI and other banks.
Documentation of PNB is more legible than other banks.
In PNB various types of loans are available for lower income group.
Lower income group face difficulty while taking home loans as the they don’t have



enough collateral for guartnee.
As compared to SBI and ICICI bank PNB provides loans more quickly and in hassle free



manner.
Out of the governement employees surveyed majority preferred loans from Nationalized



Bank.
Housing loan is most demanded by the people in the current scenario, as it is difficult to



purchase a home without loan
Other than housing loan, Education loan is taken by people from PNB.

CONTRIBUTION TO THE ORGANIZATION

 Banks should introduce new Retail loan products, so as to cater to different customer
segments.
 Banks should also pay attention to customer satisfaction by working on fast and easy
services.
54

 Advertisements pays an important role in getting customer attention and banks should
focus on those.
 Banks should come up with information centers, so as to provide the customers with the
knowledge of various products in the market. Thus helping them make better choices.
 Banks should focus on strong branch network.
 Banks should also come up with different loan repayment and EMI schemes.

55

BIBLIOGRAPHY
Books
Agrawal, N.K. (2003) Marketing Of Banking Products, Sterling
Publishers Pvt, Ltd, New Delhi
Agrawal, N.P (1983) Analysis of Financial Statements, National
Publishing House, New Delhi.

Websites:


www.pnb.com



www.indiainfoline.com



www.sribd.com



www.sbi.co.in



www.icicibank.com

56

QUESTIONNAIRE
Survey Report
Data collected is only for academic record and it will be kept confidential.
Please fill the correct response (•)
Q1 Are You Interested In Taking Home Loans?
o Yes
o No
Q2 Which type of bank do you prefer taking loan from?
o Private Banks
o Nationalized Banks
Q3 Which bank you prefer to take loan?
o
o
o
o

SBI
ICICI
PNB
Others

Q4 Which loan do you prefer to take?
o
o
o
o

Home Loan
Education Loan
Car Loan
Personal Loan

Q5 Is your bank customer friendly?
o Yes
o No

57

Q6 How would you rate on your bank’s documentation procedure?
o Easy
o Average
o Difficult

58

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