Professional Documents
Culture Documents
SUMMER TRAINING
REPORT
ON
SUBMITTED TO
Mr. SUMIT SURI
MANAGER
HDFC LTD.
YAMUNA NAGAR
SUBMITTED BY
SHWETA NAGPAL
MBA
BPSM UNIVERSITY
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ACKNOWLEDGEMENT
Perfect is the famous saying and when a person get practical experience under the guidance of expert of the
respective field, the knowledge gained is priceless.
With the sense of great pleasure and satisfaction, I present this project report entitled COMPARISON OF
HOME LOAN SCHEME OF DIFFERENT BANKS completing a task successfully is never a man efforts
similarly completion of this report is the result of invaluable support and contribution of number of the peoples
in direct and indirect manner. In the light of foregoing, first of all my heartfelt great fullness and thanks goes to
Mr. SUMIT SURI as a MANAGER of HDFC LIMITED for giving opportunity to work for his highly esteemed
organization and for being a constant source of inspiration and guidance throughout the project. Without his able
support the project would not have seen the light of the day.
At this juncture, I would also like to thank all the other team members of the HDFC LIMITED. Without their
indispensable cooperation, the project wont have been completed within the stipulated time period. Finally I
would like to thank the staff of other home loan provider banks, without whose cooperation in providing the data
for the project would have been impossible.
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PREFACE
Modern organizations are highly complex ad dynamics systems. They operate under very turbulent social
economic and political environment. They are required to reconcile several incompatible goals. Conflicting roles
and divergent interest they are also fraught with the use risk and uncertainties, hence tactful management of such
organization to plan to execute guide, coordination and control the performance of people to achieve
predetermined goals. Management has to keep the organization vibrant moving and in equilibrium. It has to
achieve goal which themselves are changing it is therefore a problem highly complex and ticklish.
This information will be asset to marketing manager in making effective decisions. The researches are used to
acquire and analyze information and to make suggestions to management as to how marketing problems should
be solved.
The marketing research is the process which links to manufacturer, dealers and individuals through information
in important part of curriculum of M.B.A. programme is project taken by the students to institute under which he
or she is studying, after completion of third semester of the programme.
The objective of this project is to enable the students to understand the application of the academics in the real
business life. I am fully confident that this project report will be extremely useful to the management.
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INTRODUCTION
The roof over ones head and ground beneath ones feet count as the bare necessities of life. Theres nothing
quite like owing a home, however humble to give that warm and glowing feeling. But when one buys a home,
one has much more than a feel good purchase in mind! Its also a crucial investment decision, perhaps the
biggest spending decision of ones life. There are ample opportunities today for young salaried investors to plan
their moves early and buy a house at right time- and at right price. In the process, not only do they fulfill that
cherished dream of owing a house, but also put themselves on the path to acquiring property that would meet the
needs and aspirations of their growing family, even as it leads to wealth creation. Every individual aspires to
own a home. But many either spend a lifetime saving to purchase a house or exhaust money on monthly house
rents.
Take a house loan and let the monthly rent (easily converted into affordable EMIs) build dream home.
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HOME LOAN
Home loans are loans you have access to, depending on whether you want to buy or build a house and can also
be used to repair or extend an existing house.
Who can avail of these loans?
According to lending institutions, any Indian resident who is over 21 years of age at the beginning of the
loan and below 65at its maturity can avail of the loan. Salaried Employees as well as Self- Employed citizens
can apply. NRI Salaried and RBI Self Employed, under RBI guidelines, can approach only nationalized banks
and other HDFC for loans.
Why should one option for a loan to buy a house?
Taking a loan seems like a good option when the money at hand is insufficient to buy the house of your dreams.
Consider couples in their twenties and thirties. They enjoy a good income currently, buy their accumulated
capital isnt enough to purchase a house. Whereas a home loan can give them access to capital their current
earnings.
Also, if you take a 10 years old loan when you are thirty, you could repay it by the time youre forty. So you
dont have to be burdened with the interest and are free to plan your retirement savings.
The Quantum of loan that one can avail of :
Loan sanctioned depend on your repayment capacity which is based on your current income and your future
repayment capacity. You would include your spouses name to enhance the loan amount.The maximum loan can
be sanctioned varies with each bank/institutions and ranges from Rs.10 lakhs to Rs. 1 crore.
Benefits of taking a home loan:
A home loan is very different from a personal loan like a car loan for instance. You can utilize a home loan for
financing an asset that will hold its value and even appreciate over the period of the loan. Though its price could
fluctuate in the short terms, Total Estate will show capital appreciation over the years. The value of your house
generally while the loan remains constant. If you had opted to wait, save up and buy a house, it would, in the
long run cost you much more; home loans also come with many tax benefits.
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You get a 20% rebate on repayment of principle during a financial year. Once again, over the years, the principle
repayment eligible for rebate has been enhanced from Rs.10,000 to the current limit of Rs.20,000 Stamp duty,
registration fee or transfer of such house property to the assesses is also considered under this amount.
Financial Institutions, which give, home loans:
Leading Banks Housing finance companies
FINANCIAL IMPLICATIONS OF AVAILING A LOAN (SMALL OR BIG)
There are several expenses involved apart from repayment of the actual loan amount:
1. Processing fees- A processing fee (PF) is charges at the time of submission of the application form and
covers expenses incurred for processing the application form. This fee has to be paid upfront by the customer
in some cases, it is non-refundable.
2.
Administration fees- to meet operating expenses.
3. Pre-EMI- A simple interest calculated on the disbursement amount in case of a plot under construction.
4. EMI- The EMI is an abbreviated form of the equated money installment and is simply referred to as
monthly installment in common parlance. And, being a self-explanatory term that is exactly what it is. The
amount you will have to pay you financier every month when repaying your loan. Being a monthly payment, at
the end of the year, you would have paid 12 EMIs.
TYPES OF LOANS AVAILABLE
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HDFC
INTRODUCTION
HDFC (Home Development Finance Corporation) Home Loan, India have been serving the people for around 3
decades and providing various housing loan according to their varied needs at attractive and reasonable interest
rates. Owing to their wide network of financing, HDFC Home Loans provide services at doorstep and helps you
find a home as per your requirements.
COMPANY PROFILE
HDFC Limited founded in 1997 by Ravi Maurya and Hansmukh bhai Parekh, is an Indian NBFS focusing on
home loans. HDFC operates through almost 450 locations throughout the country with its corporate head
quarters in Mumbai, India. HDFC also has an international office in Dubai, UAE with service associates in
Kuwait. HDFC is the largest housing company in India for the last 27 years.
HDFC was amongst the first to receive an in principal approval from RBI to set up a bank in the private sector,
as a part of the RBIs liberalization of the Indian banking industry. It was incorporated on 30th august 1994 in the
name of HDFC Bank Limited, with its registration office in Mumbai. HDFC began its operations as a
scheduled commercial bank on 16th January 1995.
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Personal loans.
Consumer loans.
Auto loans
Loans against shares
Loans against RBI bonds
Loans against insurance policy
E- Instant loans give the facility of loans approval in the 60 second on the internet.
HDFC has offices spread all over the country. This extensive network helps HDFC in providing services
to large and well spread out clients. This network of interconnected offices (on data circuits) helps HDFC
to process application for purchase of property anywhere in India. HDFC has further established an office
in Dubai and service associates in Kuwait, Oman and Quarter to make to easier for Middle East based
non-resident Indians to apply for loan to HDFC-India.
9) HDFC is pioneer of housing finance in India and has been a leader in business for the last 23 years.
HDFC has vast experience and a very committed and skilled staff to handle housing loan applications
and solving customer problems.
HDFC LOAN SCHEME PURPOSE
HDFC Limited offers loans for the following purposes:
Land purchase
Home construction/purchase
Home extension
Home improvement loans
Short-term bridge loans
Non-resident premises loans for professionals.
LOAN AMOUNT
You can avail of maximum of up to 85% of the cost of the property, including the cost of the land.
LOAN TENURE
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that is not falling within the permissible limit of their repayment capacity. It also is in line with HDFCs aim to
provide greater degree of personalization in service and the tools. Hence there can be the situation wherein the
applicant is not in the position to pay the required EMI which is calculated by the ILPS (Individual loan
processing system).HDFC in this case offers to let the applicant use one of the two plans to repay the loan
amount.
The EMI Chooser 1
In this plan the applicant gets the advantage from HDFC to select the amount that
he wants to pay as his fist EMI. This means that HDFC will let the applicant decide
what amount he can comfortably pay to HDFC in the first term of his Loan Repayment Schedule. The system
will calculate the next two EMIs for the next two terms
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In the Illustration the father is going to pay only for 105 months and after that we are to consider the sons salary
only for the next remaining 60 months.
PARI PASSU/SECOND MORTGAGE ARRANGEMENT:
HDFC has a tie-up with a large number if public sector organizations and banks which enable us to offer loans
to your employees with the flexibility of their spouse also availing a loan from his/her own employer.
SAFE DOCUMENT STORAGE FACILITIES:
HDFC has state of art storage facilities which are theft and fire proof, at various locations where loan and
property documents are stored. In this way valuable documents are stored safely over the period of the loan and
are released almost immediately after a customer repay his loan.
ELECTRONIC MAIL:
HDFC through its E-mail services can promptly respond to queries. In addition, HDFC can promptly send its
application form cum brochure and other detail on its loan products by e-mail to interested individuals. For Nonresident Indians our interactive website offers another means of contacting us. In our effort to reach out globally
dispersed Non-resident Indians, we will continuously enhance our website.
HOME CONVERSION LOAN:
HDFC offer the option of a home conversion loan to its existing customer who are interested in moving to a new
house. Through this scheme the customer can apply to have their existing loan transferred towards the purchase
of the new home. Customers may also apply for an additional loan amount for the purchase of the new house.
This gives the customers the option of selling t6heir existing house if they wish to, without having to repay their
old loan
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fees
Rs.20000
Rs.100000
Rs.100
Rs. 500
On approval of the loan, a loan offer is made to you on acceptance of the offer. You have to pay an
administrative fee of Rs.0.5% of the loan approved. You can also pay the processing fee and administrative fee
upfront i.e. 1% of the loan at the time of submission of the loan application itself. This fee is in respect of the
costs incidental to the application. Taxes as applicable will be charged on the fees collected.
CHARGES:
For Fixed Rate Home Loan (FRHL) an early redemption charge of 2% of the amount being prepaid is payable, if
the amount being repaid is more than 25% of the opening balance. However under Adjustable Rate Home Loan
(ARHL) option early redemption charges of 2% is payable only in case of commercial refinance. You may be
required to submit the copies of your Bank Statements or any other documents that HDFC deems necessary to
verify the source of prepayment.
You can make payment for fees and charges by cheque marked payees account only drawn on a bank in a city
where HDFC has an office or by demand draft (payable at par to HDFC).
HOW TO APPLY
Customer can either download (in PDF format) the application form or get the application form by E-mail.
Alternately the customers can collect the application form from any of your nearest HDFC offices. Customer
need to submit it along with supporting documents and processing fee at any HDFC office that is convenient to
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STAGES OF
HOME LOAN
Data Entry
Application
DISBURSE
The Loan
Munirka
HUB
Fix
Chrg
es
Login
Double Checking
Over (DCOVR)
Scanning
Recommendation
Over (ROVR)
PROCESS
First of all documents are collected
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RESEARCH MYTHODOLOGY
Research methodology is an important part of every project. Because it helps in knowing how to select the
representative sample from the world or the general population, the right research tools and techniques to
complete the research.
The study of the consumer behavior is important because he is the king. The research process is based upon
survey method, so in order we go to service provider and services user which is the customers.
The research involves the following steps:
Define the problem and research objective: The problem and objective is to assess the services offered
by the various service providers and what the customer wants.
Developing the research plan: The second stage of the research methodology is to develop a research
plan. The research plan designed to take the decision on the data sources, research approaches, research
instruments, sampling plan and contact methods.
Survey research: It was a descriptive research.
Research instrument: The use of an effective research instrument is very important because through
this instrument we collect data in this project through observations and personal interview were
conducted.
Personal interview: as we were doing direct selling we interacted with my customers and asked about
their views in selecting a service and what are their wants and expectations from a service provider.
Sampling plan: After finalizing the research approach and instruments a sampling must be designed.
Sampling unit: Data have been collected from banks.
Sampling size: It has been collected from four banks.
Sampling procedure: what process should be used to collect the sample. So, representation sample,
convenience sampling is used.
Collect the information: After completing all the steps, the data are collected from different sources.
Analyze the information: After the data is collected they are analyzed to know the findings. The data is
then tabulated to develop the frequency distribution.
Present the findings: As the last step, the findings are presented that are relevant to the major marketing
decisions.
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ANALYSIS OF DATA
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HDFC
ICICI
PNB
SBI
ROI(FIXED)
14%
1 -5 Yrs. -16%
5 - 10 Yrs. - 16 %
10 -15 Yrs. - 16%
15 -20Yrs-13.75%
Up to 5yrs-9.25%
(up to 20 lakh)
&
10% (above 20
lakh)
Year 1 - 8%
Year 2 & 3 - 9%
5 to 10yrs-10%
(up to 20 lakh)
&
10.25% (above 20
lakh )
10 to 20 yrs-10.50%
(up to 20 lakh)
&
10.75% (above 20
lakh)
ROI(FLOATING)
Up to 30lakh8.75%
30 lakh50lakh-9%
Above50lakh9.25%
1 - 5 Yrs.- 16 %
5 - 10 Yrs.- 11.25 %
10 - 15 Yrs.-16 %
15 - 20 Yrs- 16 %
Up to 5yrs-8.75%
(up to 20 lakh)
&
9.50% (above 20
lakh)
5 to10yrs-9%
(up to 20 lakh)
&
9.50%(above 20
lakh )
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10 to20yrs-9.25%
(up to 20 lakh)
&
9.75% (above 20
lakh)
PROCESSING FEE
PENALTY
TENURE
MINIMUM AGE
MAXIMUM AGE
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0.5%
2%
25 years
21
60
0.5%
2%
15 years
25
55
0.5%
2%
20 years
25
55
24
0.5%
2%
25 years
25
55
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The industry has been witnessing very fast growth rate, which is 6% growth in the first
Quarter of 2002-2003 as against 3-5% growth recorded in the first quarter of 2001-2002
The market faces a high demand curve, thoroughly mismatched by a low supply curve
Investment is based in assets that are securities & those that have historically appreciate rapidly.
Tax benefit & other facilities provided on loan repayments.
WEEKNESSES
1) The foreclosure rules of court of law such as provision regarding the ownership of not more than one
house (in Delhi) binds the industry.
2) The healthy of an HFC depend upon its ability to mob up low cost funds.
3) AN HFC is unable to tap the rural market due to lack of proper retrieval procedures so whilst
4) The rural market offers a higher rate of return; it has a higher risk & default rate.
5) Many legal impendent exist, deferring purchase of certain types of property beyond a
6) Certain extent thereby negatively impacting weak mortgage laws, resulting in an increase in risk compo
ending this.
OPPORTUNITIES
1)
2)
3)
4)
The housing industry faces a severe shortage of houses. The total demand for houses is
Expected to touch around 19.40 million units by the year 2003 of these 12.8 million
Dwelling units (65-98%) would be in rural areas & 6.6 millions dwelling units (34.02%) in urban areas.
While the loan facility is backed by the security of property this sector represent a low margin But on the
low margin but on the same line low risk segment. The address this
5) Market the ones lies on the HFCS to device bold & innovative alternatives like mortgage Based
securities use of method such as door to door collection of installments assessing the Creditworthiness of
the prospective client and providing for group securities.
6) The roles of NHB in refinancing & providing regulation of housing finance system.
7) The governments initiatives to promote the sector & its contribution in uplifting the sector.
THREATS
The industry faces increased competition as more & more foreign backs & Housing
providing loan facility.
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WEAKNESS
Product is very good but it is mainly suitable for higher income group & is not suitable for the Middle income
group
OPPORTUNITIES
There is ample scope for financing flats & apartments for the salaried class in the higher income Group.
THREATS
1) Nationalized banks like SBI, Union Bank, PNB.
2) Private Banks likes HDFC & standard chartered & Citi Bank with its home credit scheme.
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HISTORY
ICICI home finance company ltd was incorporated on May 28, 1999 as 100% subsidiary of ICICI Personal
Financial Services Limited (ICICI PFS). ICICI finance company Ltd was set up with objective of providing long
term housing loan to individual and corporate. The company was registered on March 302000 with National
Housing Act, 1987 in terms of Housing Financing Companies (NHB) direction, 1989 with effect from May 3,
2002, ICICI home finance has become a 100% subsidiary of ICICI bank Ltd.
OVERVIEW
ICICI home loans are at present available to customer in 150 cities/towns across the country. Loans are offered
for the purchase of new homes. Purchase of resale homes and home improvement. Besides the companies also
offers loans for commercial property and loans against existing property. The loans are offers foe tenors up to 30
years. The company has also introduced several customers friendly services such as door step services, know
your loan on phone facility and ICICI home search free property brokerage services. ICICI Personal Financial
Services Limited (ICICI PFS) formerly ICICI credit was one of the first four companies to obtain registration as
non banking financial banking companies(NFBc) from the reserve bank of India (RBI)on sep 10, 1997 under the
new section 45 I A of the RBI act ,1939.
During the year 1998-1999, there was a significant shift in the companys operations from leasing and hire
purchase to distribution and servicing the all the retail products for ICICI, including two auto loans, consumer
durable finance & another financial products. The company has become a critical part of ICICIs retail strategy
aims at offering a comprehensive range of products &services to retail customers. In view of this reorientation of
the business, the name of the company was changed from ICICI Corporation Limited to (ICICI PFS) effective
march 22, 1999.
ICICI commenced its custodial services business in 1992 & played a pioneering role in the business when it
accepted the custodian role for the first ever GDR issue by an Indian corporate (reliance industry Ltd). ICICI
has a major market share in the segment act as custodian of 41 ADR/GDR issues & in the process, has
established the relationship will all the major overseas institutional investors including foreign institutional
investors (FIIs) & as on the June 30,1999, the value of asset held in our custody exceeded us 2 billion. At
present, ICICI offers a full range of custodial services for primary and secondary market operation pertaining to
debt, equity, money market instruments GDR/EURO issues conversion & GDR arbitrage to:
1) Overseas institutional investors like
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Photo Identity Proof, Residence Address Proof, Signature Verification Statement for all the main partners /
directors.
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HOME LOAN
1) Customer must be at 21 year of age when the loan is sanctioned.
2) The loan must terminate before or when you twin 65 year of age or before retirement,
Whichever is earlier.
3) Customer must be employed or self employed with regular source of income
LOAN AMOUNT
A number of factors are taken into account when assessing repayment capacity.
Customer income, age, number of dependents, qualification, asset &liabilities, stability and continuity of
customer employment. Business is one of them. However there are ways by which you can enhance your
eligibility.
If the customer spouse is earning put he/she as a co-applicant. the additional income shall be included to
enhance the loan amount. Incidentally, if there are any co owners they must necessarily be co-applicant
customer fiances income can also be considered sanctioning the loan on your combined
Income .the disbursement of the loan, however will be done only after the submit proof of Marriage.
Providing additional security like bonds, fixed deposits & LIC policies may also help to enhance
Eligibility.
While there is no need for guarantor, it could be that having one might enhance your credibility with us.
If so, our loan officer would provide customer with positive necessary details.
The final act to be sanctioned will depend on your repayment capacity. However, what customers
ultimately are entitled to will have to conform within the limits fixed for each loan.
Also when the company looks at the total cost, registration charges, stamp duty, transfer charges are also
included.
HOMELOAN
We at ICICI bank understand the value of owing your house. Our affordable home loans can make all the
difference to their dreams of owing home.
FIND THE RIGHT HOME
Provide facility for search of free online property. A one stop shop for all their
Real Estate needs.
WHAT YOU GET
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AMOUNT
This largely depend on a no. of facts like ones age ,profession, salary, the city one reside is among other such
factors. it varies between 2.1lakh to 1crore depending on the lender- as the rule of the thumb, depending on HFC
one have to cough up 15% - 20% of the loan amount as the down payment. For smaller amount, this may not be
much. But for figure remaining into lakh this could make loads of difference. For e.g. an apartment of costing Rs
10 lakh may get 85% financing, so one will have to arrange for remaining Rs 15 lakh. If one takes this into
amount the additional thousands will definitely put a strain on ones finances
.
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TENURE
Generally the maximum tenure of home loans is 15 years, with a few lenders offering tenure of 20 years or more.
ICICI offers 15 year loan. The longer the tenure, the more one pay in total interest but ones monthly payment
will be less. So depending ones earning potential & bank balance one can choose an appropriate tenure. An
important requirement of most of the banks/ HFCs is that one pays up the entire loan before one retires. One can
always prepay ones entire loan amount before it is due. There is a trend to do away with the pre-payment penalty
being imposed by some lenders. So its best one checks on this as well.
INTEREST RATE
Without doubt the most important parameter to factor into ones calculations. The interest rates may vary from
institution to institution. Repayment is in the form of EMIs (equated monthly installment). The longer the
tenure, the more one pays in interest, but ones monthly payment will be less. The interest rate of ICICI is
Tenure
Interest Type
.15 -20
10 -15
5 - 10
1-5
1-5
5 - 10
10 - 15
15 - 20
Fixed
Fixed
Fixed
Fixed
Floating
Floating
Floating
Floating
Interest Rate
13.75 %
16 %
16 %
16 %
16 %
11.25 %
16 %
16 %
REFINANCE
This is concept that is yet to catch on in the home loan market but is bound to be a major service in the months to
come. Under this facility, one can take a new loan from another bank/HFC to pay back another loan before its
natural tenure. It gives one the opportunity of prepaying ones high cost debt and get a lower cost one. In todays
falling interest rate scenario one should use this vehicle to lower ones debt payment as much as possible. The
lender facilitates the shift by paying the outstanding and transferring the asset to other portfolio.
MISCELLANEOUS CHARGES
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INTRODUCTION
PNB has over 4500 branches and offices bringing the Punjab National Bank to your doorstep. Around 2400
offices come under the network of Centralized Banking Solution or CBS. A need for centralized banking system
prompted PNB to go computerized and what followed was the establishment of CBS in Punjab National Bank
branches in all the leading cities like Delhi, Pune, Chennai, Mumbai, Ahmedabad, Chandigarh, Gurgaon,
Hyderabad, Jalandhar, Kolkata, Ludhiana, Nodal and Bangalore. Internet Banking Services are provided to all
customers in the CBS branches. A branch and ATM locator is also available on the official website of Punjab
National Bank. For an overview of the annual report or the bank profile, the site can be resourceful. The website
also provides info on the careers and recruitments at PNB and the exam results. The careers at nationalized banks
like PNB are the most sought after one and candidates are selected on the basis of their exam result. PNB topped
the Best Paying Commercial Bank category with an overall rating of 87.45% as evaluated by the SSS
Retirement, Death & Funeral Benefits Program.
PROFILE OF PNB
The profile of the PNB shows superior banking services in corporate, personal and international banking,
industrial and agricultural finance and finance of trade. Punjab National Bank boasts of a varied clientele
consisting of small and medium industrial units, exporters, multi-national companies, Indian conglomerates and
NRI. The Bank is changing outdated front and back end processes to modern customer friendly processes to help
improve the total customer experience. With about 8500 of its own 10000 branches and another 5100 branches
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PNB HISTORY
Punjab National Bank of India was established by Lala Lajpat Rai in the pre-independence India in 1895 in
Punjab, with Lahore as its head office. Today it is the second largest public sector bank in India. It was
nationalized in 1969 along with 13 other major commercial banks. The privatization started in 1989 when 30 per
cent of its shares were offered to the public and it was listed on the stock exchange.In 1992, PNB became the
first Philippine bank to reach P100 billion in assets. Later that year, privatization continued with a second public
offering of its shares. In August 2005, PNB was fully privatized. The joint sale by the Philippine government and
the Lucio Tan Group of the 67% stake in PNB was completed within the third quarter of 2005. The Lucio Tan
Group exercised its right to match the P 43.77 per share bid offered by a competitor and purchased the shares
owned by the government. The completion of sale is expected to speed up the development of PNBs franchise
and operational competitiveness.
Today, State Bank of India (SBI) has spread its arms around the world and has a network of branches spanning
all time zones. SBI's International Banking Group delivers the full range of cross-border finance solutions
through its four wings - the Domestic division, the Foreign Offices division, the Foreign Department and the
International Services division.
PNB RECENT ACHIEVEMENTS AND MILESTONES
Punjab National Bank (PNB), has announced that it has completed 100% core banking implementation at all its
4604 branches and extension counters through the Finacle Universal Banking Solution from Infosys, on Sun
infrastructure and the Oracle Database setting a significant milestone for themselves and a new benchmark for
the Indian banking industry. Completed in November 2008, 4 months ahead of schedule, the bank implemented
industry-leading Finacle core banking solution from Infosys across its operations running a flexible, and scalable
database platform from Oracle and innovative servers from Sun Microsystems With an increasingly dynamic
business and regulatory environment, PNB sought to not only achieve automation, but also centralize operations,
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PRODUCTS
PNB Apna Ghar Yojana home loans are meant for construction or for acquisition/purchase of house/flats. The
minimum loan amount would be Rs.50000 and maximum loan amount depends on the repayment capacity of the
borrower. In case of joint application, income of borrowers /co-borrowers is clubbed together for calculation of
loan eligibility. The loan repayment is in Equated Monthly Installments (EMI) over a maximum period of 20
years.
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2%
2%
(incase of refinance)
Part-payment Charges
Nil
Switching Charges
Nil
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i) Upto 5 years
ii) Above 5 & upto 10 years
iii) Above 10 & upto 20 years
iv) Above 20 yrs & upto 25
yrs.
9.25
10.00
10.50
10.00
10.25
10.75
10.75
11.00
Floating Option
Floating Option for
for
loans(Above 20
loans(Upto 20
lac)
lac)
8.75
9.50
9.00
9.50
9.25
9.75
9.50
10.00
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INTRODUCTION
State Bank of India (SBI) is India's largest commercial bank. SBI has a vast domestic network of over 9000
branches (approximately 14% of all bank branches) and commands one-fifth of deposits and loans of all
scheduled commercial banks in India. The State Bank Group includes a network of eight banking subsidiaries
and several non-banking subsidiaries offering merchant banking services, fund management, factoring services,
primary dealership in government securities, credit cards and insurance. The eight banking subsidiaries are: State
Bank of Bikaner and Jaipur (SBBJ),State Bank of Hyderabad (SBH).State Bank of India (SBI),State Bank of 13
Indore (SBIR),State Bank of Mysore (SBM),State Bank of Patiala (SBP),State Bank of Saurashtra (SBS) and
State Bank of Travancore (SBT). Today, State Bank of India (SBI) has spread its arms around the world and has
a network of branches spanning all time zones. SBI's International Banking Group delivers the full range of
cross-border finance solutions through its four wings - the Domestic division, the Foreign Offices division, the
Foreign Department and the International Services division.
PROFILE
The SBIs powerful corporate banking formation deploys multiple channels to deliver integrated solutions for all
financial challenges faced by the corporate universe. The Corporate Banking Group and the National Banking
Group are the primary delivery channels for corporate banking products.
The Corporate Banking Group consists of dedicated Strategic Business Units that cater exclusively to specific
client groups or specialize in particular product clusters. Foremost among these a specialized group is the
Corporate Accounts Group (CAG), focusing on the prime corporate and institutional clients of the countrys
biggest business centers. The others are the Project Finance unit and the Leasing unit. The National Banking
Group also delivers the entire spectrum of corporate banking products to other corporate clients, on a nationwide
platform. The bank is also looking at opportunities to grow in size in India as well as internationally. It presently
has 82 foreign offices in 32 countries across the globe. It has also 7 Subsidiaries in India SBI Capital Markets,
SBICAP Securities, SBI DFHI, SBI Factors, SBI Life and SBI Cards - forming a formidable group in the Indian
Banking scenario. It is in the process of raising capital for its growth and also consolidating its various holdings.
Throughout all this change, the Bank is also attempting to change old mindsets, attitudes and take all employees
together on this exciting road to Transformation. In a recently concluded mass internal communication
programme termed Parivartan the Bank rolled out over 3300 two day workshops across the country and
covered over 130,000 employees in a period of 100 days using about 400 Trainers, to drive home the message of
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SBI has been the proud recipient of the ICRA Online Award - 8 times, CNBC TV 18, Crisil Award 2006 - 4
Awards, The Lipper Award (Year 2005-2006) and most recently with the CNBC TV - 18 Crisil Mutual Fund of
the Year Award 2007 and 5 Awards for our schemes.
SBI Card reaches three million milestones:
SBI Card, a joint venture between State Bank of India and GE Money, announced yet another landmark
achievement of crossing the three million cardholders-marks. Roopam Asthana, CEO-SBI Card, said, "This
milestone is even more remarkable as we have added one million cardholders in just ten months. Our objective is
to accelerate the pace of growth by extending the benefits to a broader range of consumers in Tier II cities, along
with improved value propositions for the urban affluent customers." SBI Card recently signed up Indian cricketer
Yuvraj Singh as its brand ambassador.
SBI joins Chinese bank to touch 10,000 branches:
Public sector State Bank of India on Sunday became only the second bank in the world to have 10,000 branches
when Union Finance Minister P Chidambaram inaugurated its latest branch here. Speaking on the occasion,
Chidambaram said China's ICBC Bank was the other bank to have 10,000 branches. Opening 10,000 branches
was a great feat. "It is not an easy milestone though the SBI was the bank of the government and Indian people
even before other banks were nationalised," he said. People all over the world, including the Chinese, would now
know about this small village where the 10000th branch of the SBI had been opened, he said adding they would
be amazed by the bank's growth. The bank should be proud of the achievement he said and wished that the bank
opened one lakh branches. The Minister said out of the over 100 crore people, seventy 75 per cent did not have
any type of insurance. Similarly, 50 per cent of the 11 crore farmers did not have bank account. Banks should go
to the people and enroll them as account holders. 'That is what economists say is financial inclusion,' he said.
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PRODUCTS
'SBI-Flexi' Home Loans are designed to enable borrowers to hedge their Home Loan against unfavorable
movement in interest rates and gives the customers a one time irrevocable option to choose one of the three
customized combinations of fixed and floating interest rates.
'SBI-Freedom' Home Loans are customized for high net worth individuals and offer benefits such as 100 per cent
finance of the project and no mortgage of the property, provided the individual could show liquid securities such
as LIC policies or NSCs.
ELIGIBILITY
The minimum age of the applicant is 18 years, on the date of the sanction of the loan.
The maximum age limit for a Home Loan applicant is 70 years. It is the maximum age limit, within which the
loan should be fully repaid.
The applicant should consist of sufficient, regular and continuous source of income for repaying the loan.
DOCUMENTS
Completed Application Form with one Passport Size Photograph
Identity Proof - the applicant can make use of his/her PAN Card/Voter ID/ Passport/Driving License, for the
purpose.
Residence Proof - the applicant can make use of his/her Recent Telephone Bill/ Electricity Bill/Property tax
receipt/Passport/Voters ID
Proof of business address in respect of businesspersons/ industrialists
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Age
Income
Loan Amount
Offered
Tenure
Current Experience
Documentation
Salaried
21years to 60years
Rs.1,20,000 (p.a.)
Self employed
21years to 70years
Rs.2,00,000 (p.a.)
5,00,000 - 1,00,00000
5,00,000 - 2,00,00000
5years-20years
2years
5years-20years
3years
1) Application form with photograph
1) Application form with photograph
2) Identity & residence proof
2) Identity & residence proof
3) Education qualifications certificate & proof of
3) Last 3 months salary slip
business existence
4) Form 16
4) Business profile,
5) Last 6 months bank salaried credit
5) Last 3 years profit/loss & balance sheet
statements
6) Last 6 months bank statements
6) Processing fee cheque
7) Processing fee cheque
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RUPEES
Upto 5 lakh
5lakh-10lakh
10lakh-20lakh
20lakh-50lakh
50lakh-1crore
1crore-5crore
Above 5 crore
Rs. 1000
Rs. 2000
Rs. 5000
Rs. 7000
Rs.8000
Rs.10, 000
Rs.20, 000
PREPAYMENT CHARGES
If paid from own source- Nil,
In other cases- 2% on principal amount prepaid
LATE PAYMENT CHARGES
If paid from own source- Nil,
In other cases- 2% on principal amount prepaid
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REVIEW OF LITERATURE
Ben R. Craig had studied about the Federal Home Loan Bank Lending to Community Banks, are Targeted
Subsidies Necessary? The Gramm-Leach-Bliley Act of 1999 amended the lending authority of the Federal Home
Loan Banks to include advances secured by small enterprise loans of community financial institutions. Three
possible reasons for the extension of this selective credit subsidy to community banks and thrifts are examined,
including the need to: subsidize community depository institutions, stabilize the Federal Home Loan Banks, and
address a market failure in rural markets for small enterprise loans. They empirically investigate whether funding
constraints impact the small-business lending decision by rural community banks. Specifically, they estimate two
empirical models of small-business lending by community banks. The data reject the hypothesis that access to
increased funds will increase the amount of small-business loans made by community banks.
2) In December 2006 Fulbag Singh and Reema Sharma had studied about the housing Finance in India. Housing,
as one of the three basic needs of life, always remains on the top priority of any person, economy, government
and society at large. In India, majority of the population lives in slums and shabby shelters in rural areas. From
the last decade, the Government of India has been continuously trying to strengthen the housing sector by
introducing various housing loan schemes for rural and urban population. The first attempt in this regard was the
National Housing Policy (NHP), which was introduced in 1988. The National Housing Bank (NHB) was set up
in 1988 as an apex institution for housing finance and a wholly-owned subsidiary of Reserve Bank of India
(RBI). The main objective of the bank is to promote and establish the housing financial institutions in the
country as well as to provide refinance facilities to housing finance corporations and scheduled commercial
banks. Moreover, for the salaried section, the tax rebates on housing loans have been introduced. The paper is
based on the case study of LIC Housing Finance Ltd., which analyzes region-wise disbursements of individual
house loans, their portfolio amounts and the defaults for the last ten years, i.e., from 1995-96 to 2004-05 by
working out relevant ratios in terms of percentages and the compound annual growth rates. A relevant chart has
also been prepared to highlight the results.
3) In May 18, 2007 Michael LaCour-Little had studied about the Economic Factors Affecting Home Mortgage
Disclosure Act Reporting. The public release of the 2004-2005 Home Mortgage Disclosure Act data raised a
number of questions given the increase in the number and percentage of higher-priced home mortgage loans and
continued differentials across demographic groups. Here we assess three possible explanations for the observed
increase in 2005 over 2004: (1) changes in lender business practices; (2) changes in the risk profile of borrowers;
and (3) changes in the yield curve environment. Results suggest that after controlling for the mix of loan types,
credit risk factors, and the yield curve, there was no statistically significant increase in reportable volume for
loans originated directly by lenders during 2005, though indirect, wholesale originations did significantly
increase. Finally, given a model of the factors affecting results for 2004-2005, we predict that 2006 results will
continue to show an increase in the percentage of loans that are higher priced when final numbers are released in
September 2007.
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CONCLUSION
The Indian customer has come a long way from purchasing to fulfilling their needs from buying a house
customers now grab everything that comes their way but they do their own survey of optimum loans; same is the
case with banks & housing loans. With innumerable choices before him, the customer is needed then king. It is
therefore imperative that if the bank has to succeed in competitive world, it should be technological starry.
Customer centric progressive driven by highest standard of cooperative governance & guided by sound ethical
values & above all should have personalized customer services. There is scope of exploiting the vast middle
income group by releasing loans with special interest rate, which would be beneficial to both parties.
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