pnb home laon report

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A
PROJECT REPORT ON
“MARKETING OF BANKING ASSESTS HOME LOANS”

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
I gratefully acknowledge the help and co-operation of the entire
Department of Punjab National Bank (Retail Assests Branch) at the outset; I
would like to thank Mr. Sandeep Sharma for giving me an opportunity to learn at
Punjab National Bank – Retail Assests.
I would like to thank my guide Prof. Shradha Shinde Mam for his
valuable guidance in making my project successful. I also wish to thank the IBMR
staff whose contribution cannot be overemphasized. With all their encouragement
and well wishes, my project proved to be fruitful.

Date:
Place:
Pune-411019.

(Akash Gupta)

DECLARATION
I hereby declare that the Project Report entitled “Investment in working capital
market analysis” 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 is original work and
the conclusions drawn therein are based on the material collected by me.

Date:
Place: CHINCHWAD,

(Akash Gupta)

SL NO

CONTENTS

1

EXECUTIVE SUMMARY

2

BANKS IN INDIA

3

COMPANY PROFILE

4

PRODUCTS AND SERVICES

5

OBJECTIVES OF STUDY

6

REVIEW OF LITREATURE

7

RESEARCH METHODOLY

8

DATA ANALYSIS

9

ACTIVITY CHARTS

10

INTERPRETATIONS

11

CONCLUSIONS & SWOT ANALYSIS

12

LIMITATIONS

12

BIBLOGRAPHY

PAGE NO

EXECUTIVE SUMMARY
The major participants of the Indian financial system are the commercial banks, the financial
institutions (FIs), encompassing term-lending institutions, investment institutions, specialized
financial institutions and the state-level development banks, Non-Bank Financial Companies
(NBFCs) and other market intermediaries such as the stock brokers and money-lenders. The
commercial banks and certain variants of NBFCs are among the oldest of the market
participants. The FIs, on the other hand, are relatively new entities in the financial market place.
Bank of Hindustan, set up in 1870, was the earliest Indian Bank . Banking in India on
modern lines started with the establishment of three presidency banks under Presidency Bank's
act 1876 i.e. Bank of Calcutta, Bank of Bombay and Bank of Madras. In 1921, all presidency
banks were amalgamated to form the Imperial Bank of India. Imperial bank carried out limited
central banking functions also prior to establishment of RBI. It engaged in all types of
commercial banking business except dealing in foreign exchange.
Reserve Bank of India Act was passed in 1934 & Reserve Bank of India (RBI) was
constituted as an apex bank without major government ownership. Banking Regulations Act was
passed in 1949. This regulation brought Reserve Bank of India under government control. Under

the act, RBI got wide ranging powers for supervision & control of banks. The Act also vested
licensing powers & the authority to conduct inspections in RBI
In 1955, RBI acquired control of the Imperial Bank of India, which was renamed as State Bank
of India. In 1959, SBI took over control of eight private banks floated in the erstwhile princely
states, making them as its 100% subsidiaries.
RBI was empowered in 1960, to force compulsory merger of weak banks with the strong
ones. The total number of banks was thus reduced from 566 in 1951 to 85 in 1969. In July 1969,
government nationalised 14 banks having deposits of Rs.50 crores & above. In 1980,
government acquired 6 more banks with deposits of more than Rs.200 crores. Nationalisation of
banks was to make them play the role of catalytic agents for economic growth. The Narsimham
Committee report suggested wide ranging reforms for the banking sector in 1992 to introduce
internationally accepted banking practices.
The amendment of Banking Regulation Act in 1993 saw the entry of new private sector
banks.
Banking Segment in India functions under the umbrella of Reserve Bank of India - the
regulatory, central bank. This segment broadly consists of:
Commercial; Banks
Co-operative Banks

Commercial Banks
The commercial banking structure in India consists of:


Scheduled Commercial Banks



Unscheduled Banks
Scheduled commercial Banks constitute those banks which have been included in the
Second Schedule of Reserve Bank of India(RBI) Act, 1934. RBI in turn includes only those
banks in this schedule which satisfy the criteria laid down vide section 42 (60 of the Act. Some
co-operative banks are scheduled commercial banks albeit not all co-operative banks are. Being a
part of the second schedule confers some benefits to the bank in terms of access to accomodation

by RBI during the times of liquidity constraints. At the same time, however, this status also
subjects the bank certain conditions and obligation towards the reserve regulations of RBI. This
sub sector can broadly be classified into:
1. Public sector
2. Private sector
3. Foreign banks.

CO-OPERATIVE BANKS
There

are

two

main

categories

of

the

co-operative

banks.

(a) Short term lending oriented co-operative Banks - within this category there are
three sub categories of banks viz state co-operative banks, District co-operative banks and
society.
(b) Long term lending oriented co-operative Banks - within the second category there
are land development banks at three levels state level, district level and village level.
The co-operative banking structure in India is divided into following main 5 categories:
1. Primary Urban Co-op Banks.
2. Primary Agricultural Credit Societies.
3. District Central Co-op Banks.
4, State Co-operative Banks.
5. Land Development Banks

BANKS IN INDIA

s S. N. Public Sector Banks

Private Sector

Foreign Banks

Banks
1.

Allahabad Bank

Bank of Punjab Ltd.

ABN-AMRO Bank N.V

2.

Andhra Bank

Centurion Bank Ltd.

Abu Dhabi Commercial Bank Ltd

3.

Bank of Baroda

Development Credit Bank Ltd.

American Express Bank Ltd.

4.

Bank of India

HDFC Bank Ltd.

BNP Paribas

5.

Bank of Maharashtra

ICICI Bank Ltd.

Citibank N.A

6.

Canara Bank

IndusInd Bank Ltd.

DBS Bank Ltd

7.

Central Bank of India

Kotak Mahindra Bank Ltd.

HSBC Ltd.

8.

Corporation Bank

UTI Bank Ltd.

Standard Chartered Bank

9.

Dena Bank

Yes Bank Ltd

10.

Indian Bank

Bank of Rajasthan Ltd.

11

Indian Overseas Bank

Dhanalakshmi Bank Ltd.

12.

Oriental Bank of Commerce

Federal Bank Ltd

13.

Punjab and Sind Bank

ING Vysya Bank Ltd.

14.

Punjab National Bank

Jammu and Kashmir Bank Ltd.

15.

Syndicate Bank

Karnataka Bank Ltd

16.

UCO Bank

Karur Vysya Bank Ltd

17.

Union Bank of India

Ratnakar Bank Ltd

18.

United Bank of India

SBI Commercial and

19.

Vijaya Bank

International Bank Ltd
South Indian Bank Ltd
20.

IDBI Bank
United Western Bank Ltd

21.

LIMITATION OF THE STUDY

The scope of the present study has been limited interns of period of study as well as sources and
nature of data. The period covered by the study extends over 5 years from F.Y 2008-2009 to
2011-2012. At the time of study, the data could be available up to 2011-2012. The limitations of
this study are as follows:

1. The study is mainly on secondary data. It is come mostly on the basis of and published
financial document, like balance sheet, profit and loss account and other related journals,
magazines and books etc.
2. The study follows with specific tools financial ratio analysis.
3. The lack of sufficient time and resources is another limitation of the study. The study is
fully based on the student’s financial resources and is to be completed within limited
time. The report has taken only 5-years data for the study from year 2008-2009 to 20112012.
4. The study is limited from the point of view of submission on partial fulfilment of the
requirement for the Master degree in Business Administration (MBA).

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

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

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’.

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

banks on

19th July, 1969.
1978-

PNB opened a branch in London.

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.

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

PERFORMANCE OF BANK


FINANCIAL PERFORMANCE OF PNB



AWARDS & RECOGNITION

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

AWARDS & RECOGNITIONS

"Best IT Team of the Year Award"At the IDRBT Banking Technology awards for the year 2005-06.
SKOTCH Challenger AwardFor Change Management for the year 2005-06

Best IT User in Banking & Financial Services Industry – 2004
By NASSCOM in partnership with Economic Times.

Golden Peacock AwardFor Excellence in Corporate Governance - 2005 by Institute of Directors.

FICCI's Rural Development AwardFor Excellence in Rural Development – 2005

Skotch Challenger Award for Exemplary use of Technology
For becoming a pioneer in Public Banks – 2005
Golden Peacock National Training - 2004 & 2005
By Institute of Directors

National Award for Excellence in SSI Lending
Ranked 2nd for 4 consecutive years - 2002, 2003, 2004 & 2005

Banking Technology Awards 2004 Runner up in 'Best IT Team of the Year Award 2005'
Jointly Adjudged by IBA, Finacle & TFCI

Money Outlook Award - 2004
Runner up in 'Best Bank (public Sector) of the year Award' –2005
Niryat Bandhu Gold Trophy
For excellence in export performance for 3 consecutive years 2001, 2002 & 2003 by Federation
of Indian Exporters Organization (FIEO)

21st Amongst Top 500 Companies
By the leading Financial Daily the Economic Times, June 2005

9th amongst India's Top 50 Most Trusted
A.C Nielson Survey, The Economic Times Dec 2004

Service Brands 3rd Rank amongst Banking Sector in India 323rd Rank in the World
The Bankers' Almanac, January 2006
368 amongst Top 1000 Global Banks
The Banker, London July 2005

PUNJAB NATIONAL BANK SUBSDIARIES

PNB Gilts LTD
A Subsidiary of Punjab National Bank which was amongst the first ones to get the license for
undertaking activities in the Government Security market, as a primary dealer in 1996. The
company received ISO 9002 certification from British Standard Institution, making it as the first
primary dealer in India to achieve this certification for its quality systems and procedures. This
certificate has been granted to the company as a whole including its corporate and branch offices.

MISSION

BACKGROUND
In the year 1996 Reserve Bank of India introduced the system of Primary Dealers with a view to
strengthen the institutional infrastructure of Government Securities market. Six entities were
granted licenses of which PNB Gilts was one. The Company was established as a wholly owned
subsidiary of PUNJAB NATIONAL BANK with an initial paid up capital of Rs.50 crores which is
also the minimum capital requirement for a Primary Dealer.

The net-worth of the Company has increased from Rs.50 crs to Rs.541.33 crs in a span of 8 years.
RBI, New Delhi, granted its certificate of registration vide its letter dated 10th February 1998, to
carryon the business of a Non-Banking Finance Company. The Company decided to expand its
capital base & came with an IPO of Rs.3.5 crore shares at an offer price of Rs 30/- per share
aggregating Rs.105 crore in July :woo. This increased the paid up capital of the Company to Rs
135.01 crores and reduced the holding of Punjab National Bank to 74.07%.

OBJECTIVES
The objectives of the Company are in line with objectives laid down by RBI for the Primary
Dealers:





Strengthen the infrastructure in the government securities market in order to make it vibrant,
liquid and broad based.
Ensure the development of underwriting and market making capabilities for Government
Securities.
Improve secondary market trading system, which would contribute to price discovery, enhance
liquidity and turnover and encourage voluntary holding of Government securities amongst a
wider investor base.
Become an effective conduit for conducting open market operations.

Besides the above, the Company has been pioneer in retailing of Government Securities
contributing to a deep and broad-based market. The Marketing Department specifically caters to
select segments viz. Provident Funds, Trusts, Regional Rural Banks, Co-operative Banks,
Corporate & Individuals to create awareness and encourage healthy investment practices.

PRODUCTS & SERVICES
Being a primary dealer in the Government Securities Market the company undertakes more than
90% of its operations in Government Securities. The range of product and services offered by the
company includes:











Treasury Bills
Central Government Dated Securities
State Government Securities
PSU Bonds
Inter-Corporate Deposits
CSGL accounts
Money market instruments
Merchant Banking
Mutual Fund Distribution

In addition to the above, we also offer advisory services to our clients to manage the government
securities portfolio.
The Company has well-defined systems and procedures. The Internal Control & Management
systems are in place and are in accordance with the guidelines issued By the Regulatory
Authorities.
The Company has a lean staff of 38 employees spread over the Country with 31 employees in the
Head Office in New Delhi & rest in our branches at Mumbai, Chennai, Kolkata, Ahmedabad and
Bangalore.
During the years the Company has emerged as a leading Primary Dealer in the country. We have
to our credits ...





The first stand alone Primary Dealer to come with an IPO & get listed.
The first PD to achieve ISO 9001:2000 certification.
The first to obtain a PH rating from CRISIL for its short-term borrowing program. At present
the rating from CRISIL is for borrowing up to Rs 250 crore.
The company has achieved a turnover of Rs.116468 crores during 2003-2004, making it one
of the largest debt traders in the country.

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

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
1-10 Years
11 – 15 Years
16 – 20 Years

SECURITY:

FLOATING RATE OF
INTEREST(%)
9.00
9.25
9.50

3-YEARLY FIXED
RATE OF INTEREST
(%)
10.50
10.50
1.50

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
10
15
20

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

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

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
Upto 15 Years

Rate of Interest (%)
11.25

For loans above Rs.10 Lakhs
Period
Upto 15 Years
Upto 10 YRS rate of interest is 9 %

Rate of Interest (%)
11.00

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.
No. of
Years
1
2
3
4
5
6

Monthly reducing Balance (%)
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

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

7
8
9
10

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.
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
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.

PNB HOME LOAN
 ELIGIBILITY
 DOCUMENTATION
 EXTENT OF LOAN
 RATE OF INTEREST
 REPAYMENT & SECURITY
 FEATURES & CONDITIONS OF PNB HOME LOAN

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.
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
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.

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

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



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.

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

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

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.

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
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.

AWARENESS ABOUT HOME LOANS

Awareness about home loans
Yes
No

Percentage
92
8

INTERPRETATION

The above Pie chart depicts that 92% of total sample size is aware about the home loans and only
8% are unaware.

EASE OF GETTING HOME LOAN

Ease Of Getting Home Loan
Yes
No

Percentage
51
49

INTERPRETATION
51% of the sample size finds easy to get the home loan while 49% finds it difficult The ratio is
more or less same.

PREFERENCE OF TAKING HOME LOAN

Preference of taking Home Loan
Yes
No

Percentage
76
24

INTERPRETATION
The above graph depicts that maximum percentage of the sample size prefers to go for home loan.

LOAN RECEIVED

Loan Recieved
Yes
No

Percentage
67
33

INTERPRETATION
It has been found from the graph that 67% of the sample size has gone for the home loan.

BANK PREFERENCE

PREFERENCE OF BANK
ICICI
PNBHF
LICHF
HDFC
OTHERS

PERCENTAGE
36
18
10
35
1

INTERPRETATION
The above graph depicts that only 18 % of the sample size has preferred to take home loan from
PNB and maximum percentage of the sample size preferred to take home loan either from ICICI
or HDFC and very few that is only one percent has the preference of other financial institutes.

PROVISION OF OPTIMAL/ECONOMICAL INTEREST RATE

Provision Of Optimal/Economical
Interest Rate
ICICI
PNBHF
LICHF
HDFC
OTHERS

Percentage
32
24
13
27
4

INTERPRETATION
The above graph shows that according to the 32 percentage of total sample size, ICICI provides
the optimal/economical interest rate. The next preference is given to HDFC and PNBHFL has
received the third preference for providing the optimal interest rate. And only 13 percent of the
sample preferred LICHF.

SUITABLE EMI

Preference of bank in case of
suitability of EMI
ICICI
PNBHF
LICHF
HDFC
OTHERS

Percentage
32
24
13
27
4

INTERPRETATION
The above graph shows that according to the 32 percentage of total sample size, ICICI provides
suitable EMI. The next preference is given to HDFC and PNBHFL has received the third
preference for providing suitable EMI. And only 13 percent of the sample preferred LICHF.

LONG TERM PREFERENCE

Long Term Preference
ICICI
PNBHF
LICHF
HDFC
OTHERS

Percentage
27
24
25
20
4

INTERPRETATION
The above pie chart depicts that maximum number of people has preferred ICICI bank for long
term loans and only 24 percent of sample size has given preference to PNBHF and only 4% has
given preference to other financial institutes.

CUSTOMER FRIENDLINESS

Customer Friendliness
ICICI
PNBHF
LICHF
HDFC
OTHERS

Percentage
26
18
24
17
15

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

PROMPT SERVICE

Prompt Service
ICICI
PNBHF
LICHF
HDFC
OTHERS

Percentage
45
13
23
14
5

INTERPRETATION
ICICI bank has found to be quickest in sanctioning the loan among other financial
institutes by maximum number of people.

POSITIVE ASPECT FOR SUCCESS OF PNBHF

LOWER INTEREST RATES
LOWER EMI'S

Positive Aspect For Success Of
PNBHF
SALES PROMOTION & BRAND
Customer Friendly Home Loan
Schemes
Easy Sanctioning Of The Home
Loans
Lower Interest Rates
Lower Emi's

Percentage
25
35
10
15
15

INTERPRETATION

The above graph depicts that customer friendly home loan schemes are the main aspect for the
success of PNBHF.

LAGGING AREA

Sales

1st Qtr

2nd Qtr

3rd Qtr

4th Qtr

Lagging Area
Confined Only In Urban Areas
Non Effective Advertisements
Delay In Processing

Percentage
12
78
10

INTERPRETATION

The above Pie chart shows that Non effective Advertisement is the lagging area of PNBHFL in
comparison to other home loan banks.

CONCLUSION AND
SWOT
ANALYSIS

AND LIMITATIONS

SWOT ANALYSIS
STRENGTHS






Brand name of Punjab National Bank (PNB) is established over the years.
Single window clearance - a single employee provides wide variety of
facilities to the borrower, minimizing the hassle of wastage of time.
Appraisal techniques are used.
Specialized software's are big assets.
There is no penalty for prepayment from borrowers own service.

WEAKNESSES






High interest rates as compared to other housing finance institutions.
Top management takes large amount of time to approve high value seeking loan
borrowers. No publicity.
No marketing managers work, only through dsa's (direct sales agent).
People are not aware of wide variety of schemes offered by the company; tend to think
the company as only providing home loans.
There is the shortage of staff at almost all branches which does not ensure easy
addressable of the customers problems.

Delegation of authority and responsibility is not proper.

OPPORTUNITIES


Special rates of interest are offered during exhibitions.





Special rates of interest can be introduced for employees of PSU'S & reputed national or
multinational companies'
Product life cycle is to be reviewed.
The growing category of the builders ensure that good, high value & qualitative projects,
providing them home loans with the new and innovative schemes can lead to over all
development of the company.

THREATS





The competition in market is very high due to the private players.
The rates of interest of other players are quite low.
Innovative schemes with horne loan from other players.
The processing process is quite slow which leads to low housing finance.

A fraud case involving 32 cases worth Rs.3 crores at the one branch of PNB Housing Finance
Limited in year 2002 leads decreasing brand name.

LIMITATIONS OF THE STUDY
There are always present some limitations under which researcher has to work. Here following
are some limitations under researcher had to work:
SAMPLE SIZE
The sample size surveyed was limited over 100 respondents which not may be fully
representative of the universe. A large sample size could not be taken due to time & cost
constraints.
NON - COVERAGE OF CERTAIN ASPECTS
There is wide range of perimeters affecting consumer behavior but only a few questions relating
to those determinants have been endorsed in schedule.
TIME CONSTRAINT
We had limited time for conducting this survey report. In this short period of all the respondents
had to be personally contacted for the purpose of survey & then their responses had to be
analysed . So, some shortfalls may be present.
LIMITATIONS OF SAMPLING TECHNIQUES

Limitations & biasness of convenience & judgment sampling used in the present study to some
extent.
MONEY
Available with the researcher also imposed a limitation on the comprehensive of
this research.

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

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