REPORT

ON
(Comparative study of consumers behavior towards Home Loans of
SBI And HDFC BANK)
TRAINING

Submitted to:
Satyug Darshan Institute of Engineering and Technology

By:

ISHAN CHUGH

Batch 2015 2018

In Partial Fulfillment of
Bachelor of Business Administration
(IIFSB)

MAHARSHI DAYANAND UNIVERSITY

ROHTAK (HARYANA)

(November, 2016)

Satyug Darshan Institute of Engineering and Technology

Bhupani Lalpur Road, Village Bhupani
Faridabad - 121002, NCR, Haryana, India
 DECLARATION

I, Ishan Chugh hereby declare that this summer training report is the record
of authentic work carried out by me during the period from ---------- to -----
and has not been submitted to any other University or Institute for the award
of any degree / diploma etc.

(Signature)

Date:
 BONAFIDE CERTIFICATE

This is to certify that Mr. Ishan Chugh of Satyug Darshan Institute of

Engineering and Technology has successfully completed the project work
titled (Comparative study of consumers behavior towards Home Loans of
SBI And HDFC BANK)
in partial fulfillment of requirement for the completion of Bachelor in
Business Administration (BBA IIFSB) course as prescribed by the
Maharshi Dayanand University, Rohtak, (HARYANA).
This project report is the record of authentic work carried out by him/her
during the period from ------- to -------. He / She has worked under my
guidance.

(Signature)
Mr. VIJAY KAMBOJ
Assistant Professor, BBA Department
Project Guide (Internal)
Date:

Counter signed by

(Signature)
Mr. Ravi Bakshi
Department Coordinator (BBA Department)
Date:
 TABLE OF CONTENT

S.NO PARTICULARS PAGE NO.

1 Introduction to the study

2 Company Profile

3 Research Methodology
Objectives of the Study
Scope of the Study
Research Design
Method of Data Collection
Limitations of the Study
4 Data Processing & Analysis

5 Conclusion and Suggestions

6 Bibliography

7 Annexure
 Chapter-1
INTRODUCTION TO STUDY
 BANKING SECTOR

The banking sector is the lifeline of any modern economy. It is one of the important
financial pillars of the financial sector, which plays a vital role in the functioning of an
economy. It is very important for economic development of a country that its financing
requirements of trade, industry and agriculture are met with higher degree of commitment
and responsibility. Thus, the development of a country is integrally linked with the
development of banking. In a modern economy, banks are to be considered not as dealers
in money but as the leaders of development. They play an important role in the mobilization
of deposits and disbursement of credit to various sectors of the economy. The banking
system reflects the economic health of the country. The strength of an economy depends
on the strength and efficiency of the financial system, which in turn depends on a sound
and solvent banking system. A sound banking system efficiently mobilized savings in
productive sectors and a solvent banking system ensures that the bank is capable of meeting
its obligation to the depositors.

In India, banks are playing a crucial role in socio-economic progress of the country
after independence. The banking sector is dominant in India as it accounts for more than
half the assets of the financial sector. Indian banks have been going through a fascinating
phase through rapid changes brought about by financial sector reforms, which are being
implemented in a phased manner.

The current process of transformation should be viewed as an opportunity to

convert Indian banking into a sound, strong and vibrant system capable of playing its role
efficiently and effectively on their own without imposing any burden on government. After
the liberalization of the Indian economy, the Government has announced a number of
reform measures on the basis of the recommendation of the Narasimhan Committee to
make the banking sector economically viable and competitively strong.
The current global crisis that hit every country raised various issue regarding
efficiency and solvency of banking system in front of policy makers. Now, crisis
has been almost over, Government of India (GOI) and Reserve Bank of India
(RBI) are trying to draw some lessons. RBI is making necessary changes in his
policy to ensure price stability in the economy. The main objective of these
changes is to increase the efficiency of banking system as a whole as well as of
individual institutions. So, it is necessary to measure the efficiency of Indian
Banks so that corrective steps can be taken to improve the health of banking
system

HOME LOAN
Housing is one of the best human needs of the society. It is closely linked
with the process of overall socio-economic development of a country.
India, being a highly populated country, there is a great need and scope for
the development of Housing Sector. Unfortunately, for some reasons or the
other, the housing sector in India has remained underdeveloped in the past,
however, it is hoped that there would be improvement in the near future.

Housing is a growing industry. There is substantial gap between demand

and supply and is persisting for a very long period. According to an
estimate by the National Building Organization, the cumulative shortage
of total dwelling houses in the country by the end of 1991 was 31 million.
It is further estimated by this organization that the demand for housing will
be around 4.5million units, leaving a gap of one million housing units
annually. Hence, based upon this estimate, the cumulative shortage of
housing may reach to 41million units by the end of this century.

Presently, funds required per dwelling shelter are so high that the
individuals saving is not adequate to meet the expenditure of house
building. As a result, there is great demand for external housing finance.
Housing was given due priority only in 1988 when a National Housing
Policy was announce. The policy reflected the trust that housing was not
merely consumption expenditure but also a productive investment which
would provide economic activity in the country. Besides this, the policy
also envisaged that an impetus given to housing would stimulate economic
development through creation of substantial employment opportunities.
Consequently, the institutional mechanism for housing was strengthened
by the establishment of National Housing Bank (NHB) by the Reserve
Bank of India.

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 & SBI 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 HDFC 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

0% brokerage on first sale properties access the entire market under our roof site
visits to the properties short listed by you. Help in negotiating the best price. Help
the legal documentation.

LISTINGS BELOW ARE THE STEP INVOLVED IN AVAILING OF A

HOMELOAN

A person applies for a home loan

The executive meets the applicant & briefs him the entire loan process,
requirements & the various options available.
The applicant chooses a housing finance company (HFC) & handover the
income
Document to the executive are the income documents are headed over to
the HFC for eligibility & approval.
The HFC verifies the documents & checks the repaying capacity, saving
habits, tenure of services etc. of the applicant & approves the loan amount.
After approval an offer letter is given to the applicant by the HFC, along
with list of original title documents that have to hand over to the HFC.
The applicant gives the original property title document to the HFC
The HFC scrutinizes the legal & the technical aspects of the original title
document.
If the HFC is satisfy as to the legal & technical aspect of the document
then the applicant is called to sign the loan agreement
The loan disbursement schedule is decided by the HFC according to the
stage of construction (If property under construction) or a onetime
payment is made if property is ready for Possession.
The applicant gets possession of the property depending upon the level of
completion of the property.
 The applicant can start paying the EMIs.

DISBURSEMENT

Customer loan will be disbursed after you identify & select the property or the
home that customer are purchasing and on their submission of the requisite legal
documents.
While the customer may be under impression that the list of documents asked for
it is rather extensive. Each and every single document asked for will be verified
& check to ensure their safety. This may take some time but the banks want to
ensure a clear title and will complete all the legal & technical verification to ensure
that they have full right to their home.
The 230 a clearance of the sellers or 371 clearance from the appropriate income
tax authorities (if applicable) is also needed on satisfactory completion of above,
on registration of conveyance deed and on the investment of your own
contribution, the loan amount (as warranted by the stage of construction) will be
disbursed by HDFC
The disbursement will be in favor of the builder/seller.

At HDFC Bank Home Loans, we disburse the loan amount after you identify and
select the property or home that you are purchasing and submit the requisite legal
documents.
While you may be under the impression that the list of documents asked for is
rather extensive, please note that it is for your own good. Each and every single
document asked for will be verified and checked to ensure your safety.
This may take some time but we want to ensure a clear title and will complete all
the legal and technical verifications to ensure that you have full rights to your
home.
Your loan will be disbursed after you identify and select the property or home that
you are purchasing and on your submission of the requisite legal documents.

The 230 A Clearance of the seller and / or 37I clearance from the appropriate
income tax authorities (if applicable) is also needed.
On satisfactory completion of the above, on registration of the conveyance deed
and on the investment of your own contribution, the loan amount (as warranted
by the stage of construction) will be disbursed by HDFC Bank.
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
.

TENURE

Generally the maximum tenure of home loans is 15 years, with a few lenders
offering tenure of 20 years or more. HDFC 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 HDFC is

Tenure Interest Type Interest Rate

.15 -20 Fixed 13.75 %

10 -15 Fixed 16 %
5 - 10 Fixed 16 %
1-5 Fixed 16 %
 1-5 Floating 16 %
5 - 10 Floating 11.25 %
10 - 15 Floating 16 %
15 - 20 Floating 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

The interest rates and EMIs are not only the cost factor. Never underestimate
how much the processing fee and administration fees amount to. A 0.5%
administration fees and 0.5% processing fee on say, a Rs.500000 loan would be
Rs.5000. other timesit could be just one fee (either administration or processing
but could yet work out to be much more if it is considerably higher at, say, 2.5%
or 3%. The various other fees, which one is required to pay along with the margin
amount are:

INTEREST TAX:

This is tax payable on the interest paid on a home loan and not the principal. This
is sometimes included in the interest rate of the loan, or may be charged separately
as interest tax.

PROCESSING CHARGE

It is the fee payable to the lender on applying for a loan. It is either a fixed amount
not linked to the loan or may be a percent of the loan amount. The loan amount
received by you can be less than processing fee.
PREPAYMENT PENALTIES

When the loan is paid back before the end of the agreed duration a penality is
charged by some banks or companies, which is usually between 1% and 2% of the
amount being prepaid.

OTHERS

It is quite possible that some lends may levy a documentation or consultant charge.

HDFC BANK ANNOUNCES ITS BASE RATE, VALID FROM JULY 1,

2010

HDFC Bank has announced a shift in the existing benchmark rate from Floating
Reference Rate (FRR)/ I-BAR the Base Rate (I-Base). The same will be effective
for all its mortgage products from July 1, 2010.
The HDFC Bank Base Rate (I-Base) has been fixed at 7.50%. This is the
minimum rate that HDFC Bank will charge to its new customers.

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.

Tax benefits of taking a home loan:

The income tax authorities look with favor upon those servicing a housing loan
from specified financial institutions. And, it is up to you to be wise enough to take
advantage of this.

Section 24 of the Income Tax:

Interest on loan till Rs.1.5 lakhs per annum is exempted form income tax (under
section 23/24(1) of the Income tax act).

Section 88 of Income Tax Act:

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 IMPSBIATIONS 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

Broadly two types- fixed rate and variable rate loans; while the former deals with
a fixed rate of interest over the entire duration of the loan, the latter has the rate of
interest changing according to the fluctuations in the market.

LOAN THAT ONE CAN AVAIL

Up to 85-90% of the total cost based primarily upon the individuals payback
capacity.

GENERAL CONDITIONS THAT GOVERN A HOME LOAN:

These are likely to vary with respect to the different types of housing loans:

The maximum period of the loan is normally fixed by HFIs. However,

HFIs do provide for different tenors with different terms and conditions.
The Installment that you pay is normally restricted to amount 45% of your
monthly gross income.
You will be eligible for a loan amount, which is the lowest as per your
eligibility. This is calculated on the basis of your gross income and
payback capabilities.
Some HFIs insist on guarantees from other individuals for due repayment
of your loan. In such cases you have to arrange for the personal guarantee
before the disbursement of your loan tasks place.
Most HFIs have a panel of lawyers who go through your property
documents to ensure that the documents are clear and are not
 misrepresented. This is an added benefit that you get when you avail of a
loan from an HFI.
You repay the loan either through Deduction against Salary, Post dated
cheques, and standing instructions or by Cash/DD.

WHAT ALL ONE CAN TAKE THE LOAN FOR?

There are different types of home loan tailored to meet ones needs heres all some
of them.

Home purchase loan: This is the basic home loan for the purchase of new
home.
Home improvement loans: These loans are given for implementation
repair works & renovation in a home that has already been purchased by
the client.
Home construction loan: This is available for the construction of new
home.
Home extension loan: This is given for expanding or extending an
existing home for e.g.: addition of an extra room etc.
Home conversion loan: This is for those who have financed the present
home with home loan & wish to purchase& move to another home for
which some extra funds are required through home on version loan
,existing loan is transferred to the new home including the extra amount
required eliminating the pre payment of the previous loan.
Land purchasing loan: this loan is available for the purchasing of land
for both construction and investment purpose.
Bridge loan: these are designed for those people who wish to sell the
existing home & purchase another one. The bridge loan help finance the
new home, until a buyer is found for the home.
 CHAPTER-2
COMPANY PROFILE
 HDFC BANK

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.

ABOUT THE PROMOTER

HDFC, the promoter, is Indias premier housing finance company and enjoy an
impeccable track record in India as well as in international markets.

Since its inception in 1997, HDFC has maintained a consistent growth in its
operation and profitability. Its outstanding loan portfolio covers over a million
dwelling units. HDFC has developed significant expertise in retail mortgage loans
to different market segment and also has a large corporate client base in relation
to its housing related credit facilities and its investment in portfolio.

With its tremendous brand equity, the strong reputation in the Indian and
international financial services market, large shareholder base and unique
consumer franchise, HDFC was ideally positioned to promote a bank in the

Indian environment. HDFC (together with its fully owned subsidiary HDFC
Investment Limited) owns about 31 % of the equity. They had started with a
strategic alliance with the Natwest group in UK with 20% equity, which has
divested later on. The bank has also signed a memorandum of understanding for
strategic business collaboration with chase Manhattan Bank in Feb. 2, 1999.

BUSINESS PHILOSOPHY

The mission of the HDFC Bank is to be world class Indian bank. This would
imply a bank that would meet various financial needs of its customers in a
convenient and cost effective manner at international standard of service.

The bank seeks to achieve the status of a preferred organization among its major
constituents- customers, shareholders, regulators, employees, suppliers etc. while
maintaining the highest level of integrity and corporate governance.

The business philosophy at HDFC bank is based on four core values: operational
excellence, customer focus, and product leadership and people competitors.

The Bank faces the strong competition in all of their principal lines of business.
Their primary competitors are large public sector banks, other private sector
banks, foreign banks and in some product areas, non-banking financial
institutions.
WHOLESALE BANKING

Principal competitors in wholesale banking are public and new private sector
banks as well as foreign banks. The large public sector banks have traditionally
been the market leaders in the commercial lending. Foreign banks have focused
primarily on serving the needs of multinational companies and the Indian
corporations with cross- border financing requirements including trade,
transactional and foreign exchange services, while the large public sector banks
have extensive branch networks and large local currency funding capabilities.

RETAIL BANKING

In retail banking, their principal competitors are the large public sector banks,
which have much larger deposit bases and branch networks,, other new private
sector banks and foreign banks in case of retail loan products. The retail deposit
shares of the foreign banks are quite small in comparison to the public sector
banks, and have also declined in the last five years, which we attribute principally
to the competition from new private sector banks. However, some of the foreign
banks have a significant presence among non-resident Indians and also compete
for non-branch based products such as auto loans and credit cards. They face
significant competition primarily from foreign banks. In provision of debit cards
and also expect to face competition from foreign banks when we begin offering
credit cards. In mutual fund sales and other investment related products, their
principal competitors are brokers and foreign private banks.

TREASURY

In treasury advisory services for corporate clients, the compete principally with
foreign banks in foreign exchange and derivatives trading as well as SBI and other
public sector banks ion the foreign exchange and money market business.

LOANS

HDFC brings back you a wide range of loans to cater your financial needs.
The bank offers the following loans:

1) Personal loans.
2) Consumer loans.
3) Auto loans
4) Loans against shares
5) Loans against RBI bonds
6) Loans against insurance
 7) E- Instant loans give the facility of loans approval in the 60 second on the
internet.
8) 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

You can repay the loan over a maximum period of 20 years under both FRHL and
ARHL. Repayment will not ordinarily extend beyond your age of retirement (if
you are employed) or on your reaching 65 years of age, whichever is earlier.
However, HDFC will endeavor to determine the repayment period to suit your
convenience.

RATE OF INTEREST

The rate of interest of HDFC is 8.75%.under the monthly rest option, interest is
calculated on monthly rests. Principal repayment is credited at the end of every
month.
At HDFC you have the choice between the normal FRHL and the innovative
ARHL. Alternatively you can also avail the part of the loan under FRHL and
balance under ARHL.
HDFC also offers you the option to switch between schemes for the nominal fee.
Interest rates on ARHL will be linked to HDFCs Retail Prime Lending Rate
(RPLR) which currently is 13.75% .The rate on your loan will be revised every
three months from the date of first disbursement, if there is a change in RPLR, i.e.
the interest rate on your loan may change. However, the EMI on the home loan
disbursed will not change. (if the interest rate increases, the interest component in
an EMI will increase and the principal component will reduce, resulting in an
extension of the term of the loan, and vice versa when the interest rate
decreases).customer will be provided with an annual statement indicating the
details of the interest and principal payment made during the year.

SECURITY

Security for the loan normally is first mortgage of the property to be financed
and/or such other collateral security as may be necessary. Interim security may be
required, if the property is under construction. Collateral or interim security could
be assigned to HDFC of life insurance policies, the surrender value of which is at
least equal to the loan amount, guarantees from sound and solvent guarantors,
pledge of shares and such other investments that are acceptable to the HDFC.

Loans from HDFC are available even if you are availing a housing loan from your
employer. HDFC has already entered into arrangements with several employers
enabling employees to avail of loans both from the employer as well as HDFC for
the same property. Please do ensure that the title of the property is clear,
marketable and free from encumbrance. To elaborate there should not be any
existing mortgage, loan or litigation which is likely to affect the title to the
property adversely.
DOCUMENTS/SUPPORTING DOCUMENTS TO BE ATTATCHED:

FOR ALL THE APPLICANTS:

1) Allotment letter of the o-operative society/association of the apartment

owners.
2) Copy of approved drawings of proposed construction/purchase/extension.
3) Agreement for sale/sale deed/detailed cost estimate from
architect/engineer for the property to be
purchased/constructed/extended/renovated.
4) If you have been in your present employment/business or profession for
less than a year, mention an a separate sheet details of the of the
 occupations for previous five years, giving position held, reason for
change and period of same.
5) Applicable processing fees.

6) Proof of residence: attested copy of any one of the following:

a) Ration card
b) Passport
c) Driving License
d) Voters identity card
e) Current telephone bill/electricity bill/gas bill
7) Proof of identity: attested copy of ay one of the following:
a) Passport
b) Driving License
c) Voters identity car5d identity card issued by the employer (if
employed in state/central government)
d) PAN card
8) Certificate of loan outstanding issued by the lender (for refinance cases
only)
9) Any other information regarding your repayment capacity that is necessary
and will assist HDFC in appraising the loan proposal.

ADDITIONALLY

IF YOU ARE EMPLOYED:

1) Verification of the employment form with only part I filled in.

2) Latest original salary slip/salary certificate showing all deductions.
3) If your job is transferable, permanent address where correspondence
relating to the application can be mailed.
4) A letter from your employer agreeing to deduct the EMI towards the
repayment of the loan from your salary. This will expedite the processing
of your loan application.
5) Your updated original bank pass book/s or original bank statement/s
showing salary and saving entries for the last six months.
6) A photo-copy of your Form-16 (issued by your employer) for the last
assessment year.

IF YOU ARE SELF EMPLOYED:

1) Balance Sheets and Profit & Loss Accounts of the business/profession

along with copies of individual income tax returns for the last three years
certified by the Chartered Accountant.
 2) A note giving information on the nature of your business/profession, form
of organization, clients, suppliers, etc.
3) Copies of individual tax chalans for the last three years
4) Copy of advance tax chalan (if any)
5) Your updated original Bank Pass Book/s or Original Bank Statement/s
showing saving s entries for the last twelve months.

TAX BENEFIT

You are eligible for certain tax benefits on principal and interest components of a
loan under the Income Tax Act, 1961.

ELIGIBILITY

The repayment capacity as determined by the HDFC will help in deciding how
much we can borrow (the cost of the property or Rs.1crore whichever is lower).
Repayment capacity takes into consideration factors such as income, age,
qualifications, number of dependents, spouses income, assets, liabilities, stability
and continuity of occupation and saving history. And, of course, HDFCs main
concern is to make sure you can comfortably repay the amount you borrowed.

ABOUT THE PRODUCT

HDFCs Home Loans offers you various unique benefits and are easy to arrange
and repayable in easy monthly installments. The terms of the loan can be
structured according to the customer requirement.

Home loans can be applied for by either individually or jointly. Proposed owner
of the property, in respect of which the loan is being sought, will have to be co-
applicants. However, the co-applicants need not be co-owners. Loans can avail up
to a maximum of 85% of the cost of the property (including the cost of the land).
HDFC lends up to a maximum of Rs. 10000000 on a home loan to an individual.
You can repay the loan over a maximum period of 20 years. They determine the
loan amount after evaluating the repayment capacity of the individual. HDFCs
main concern is to help individuals comfortably repay the borrowed amount.
SUPERIOR PROCESSING CAPACITY:

HDFC has over the years invested substantially into the computer systems and
training. This has enabled HDFC to respond to customer needs and build up
capabilities to approve loan on the spot or disburse them fast.

BRANCH NETWORK:

HDFC has offices spread all over the country. This extensive network helps
HDFC in providing service to large and well spread out clients. This network of
interconnected offices (on data circuits) helps HDFC to process applications for
purchase of property anywhere in India. HDFC has further established an office
in Dubai and service associates in Kuwait, Oman, Qatar, Bahrain and Saudi
Arabia to make it easier for Middle east based non-resident Indians to apply for
the loan to HDFC-India.

EXPERIENCED TRAINED STAFF:

HDFC is a pioneer of housing finance in India and has been a leader in the
business for the last 25 years. HDFC has vast experienced and very committed
and skilled staff to handle housing loan applications and solving customer
problems.

FREE COUNSELLING:

HDFC believes that it is in the business of providing solutions to an individuals

need for owing a house, and not just in the business of providing finance. Keeping
this in mind HDFC will provide free counseling to on how and where to buy a
house in India (property services) or what are the prices and trends in the real
estate market or what precautions one should take before buying a house. This
service is offered at any of the HDFCs offices.

LEGAL AND TECHNICAL GUIDANCE:

HDFC has qualified legal and technical staffs who liaise with developer to collect
and scrutinize the property documents and permissions. We have master files of
most projects being developed by the reputed developers. It has always been
HDFCs endeavor to protect the interest of the borrower, as we believe that the
buying a house is one of the most Important decisions in this life.
FLEXIBLE (CUSTOMIZED) REPAYMENT SCHEMES:

Keeping in mind the fact that each individual has unique problem requiring unique
solution, HDFC has developed various repayment options like Step Up
Repayment Facility (SURF), Flexible Loan Installment Plan (FLIP) Balloon
Payment plan and Structured Repayment Plan.

STEP UP REPAYMENT FACILITY

HDFC Ltd has a hitherto with you, right through .This statement HDFC proves
time and Again by developing close relationship with individual customers and
by constantly
Developing and marketing in the market new and innovative products that
increase the
Comfort level of the customers. Along the same philosophy HDFC came up with
Step Up Repayment Facility which once again reassures customers that HDFC
helps you achieve your dream.

This facility is especially helpful to those customers who want to get a loan on an
amount
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

The customer can hence decide when he wants to repay the maximum amount of
the Loan to HDFC and when he wants to repay minimum leftover or remaining
amount of the loan in the form of still smaller EMIs.
The EMI Chooser 2

This plan is an extension of the aforementioned plan .In this plan HDFC helps the
Applicant by letting him choose two EMIs .This means that the Applicant can
select the amount that he wants two pay for both the First and the Second terms
of his repayment schedule. This translates into more help and more convenience
to the applicant. However the benefits of these plans dont stop here.

The Applicant can also allocate the term length for which he wants to pay what
amount
This translates into a great advantage to the Applicant .He can now link

1. His current salary

2. The rate of average increment,
3. His existing and expected obligations,
4. His existing and expected expenses
5. The length of the term among others.

HDFC can hence assist the Applicant in developing a much more personalized
loan plan as compared to its competitors in the Housing Loan market.

The Applicant can also save money by using these plans .This is because the total
Outflow in case of a regular plan is more as compared to these special plans. The
Applicant will hence obtain more benefit in case of Prepayment and elsewhere.

C. All Loans from HDFC Ltd are subject to Tax exemption and be treated as
Rebate. Hence HDFC lets the customer save their hard earned money.

FLEXIBLE LOAN INSTALMENT PLAN (FLIP)

Another First of its kind product from HDFC .This is also to assist the Applicant
to easily secure a loan in the following condition. FLIP is used when the applicant
and co-applicant want to jointly repay the loan. There is however a problem in the
situation which would otherwise not allow the loan to be sanctioned. There are
two applicants hence two incomes .Therefore in the joint payment they can
combine their income to repay the loan .Let there be Mr. A and B who want to
take a loan for 14 years .A is the father and B is the son of A .Now consider the
situation in which A and B want to take a loan and jointly repay it .But A is 52
years old and B is only 25 .Hence A will retire after 8 years and will not be
repaying the EMI but B can continue to repay the loan. In that case although there
will be a problem at other places but in HDFC this is solved by taking different
incomes in the terms. Hence the income that will be considered earlier will be the
fathers income and at his retirement or at any other selected stage of repayment
we will begin to consider only the income of the son.

The advantage of FLIP in terms of the Applicant is that of joint payment,

personalization, easy repayment, and freedom from many possible problems. 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 Non-resident 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
APPLICATION CAN BE MADE BEFORE SELECTING THE
PROPERTY:

Individuals may make an application for the loan even if the property has not been
selected or the construction has not commenced. HDFC can provide assistance in
locating an appropriate house to such customers.

HOME IMPROVEMENT LOANS:

As an exclusive offer to its existing customers HDFC offers Home Improvement

Loan up to 100% of the improvement cost as compared to the home improvement
loans up to 70% of the improvement cost offered to the general public

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 the customer. Customers can make payments by the cheque marked
payees account only drawn on a bank in a city where the HDFC has an office,
by demand draft (payable at part to HDFC) or by cash. Customer can make an
application at any time after they have decided to acquire a house even when the
house has not been selected or construction has not commenced.
HDFC will consider your application, make enquiries as it deems necessary and
convey its decision to you. On acceptance of the offer, you will have to pay an
administrative fee for the loan approved. Customer can take the disbursement of
the loan after the property has been completed and you have invested your own
contribution in full (own contribution is the total cost of the property less HDFCs
loan). The loan will be disbursed in full or in suitable installments (normally not
exceeding three in number)taking into account the requirement of the funds and
the progress of the construction, as assessed by HDFC and not necessarily
according to the builders agreement.
 STATE BANK OF INDIA

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 Change
and inclusiveness. The workshops fired the imagination of the employees with
some other banks in India as well as other PubSBI Sector Organizations seeking
to emulate the programme.

HISTORY

The origins of State Bank of India date back to 1806 when the Bank of Calcutta
(later called the Bank of Bengal) was established. In 1921, the Bank of Bengal
and two other Presidency banks (Bank of Madras and Bank of Bombay) were
amalgamated to form the Imperial Bank of India. In 1955, the controlling interest
in the Imperial Bank of India was acquired by the Reserve Bank of India and the
State Bank of India (SBI) came into existence by an act of Parliament as successor
to the Imperial Bank of India.

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.

SBI RECENT ACHIVEMENTS AND MILESTONES:

AWARDS:
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.

Main SBI Home Loan Schemes

SBI Realty : Purchase of plot of land

SBI Optima : Loan to existing home loan borrowers
SBI Green Home Loan : For homes that fight against the adverse climate
change, SBI offers 0.25% concession in interest rate and waiver of
processing fees
SBI Flexi : Combination of floating and fixed interest rate, in a pre
determined ratio
NRI Home Loans : Loans for NRIs and PIOs
SBI Freedom : Pledging other financial security than mortgaging the
house
SBI Max Gain : Operate your home loan account like your SB or Current
Account
PRODUCT RANGE OF COMPANY/INDUSTRY:

The products and services provided by the SBI are in various fields, such as:
Banking services
NRI services
International banking
Corporate banking
Agricultural banking
International banking

SBI HOUSING LOAN

Features
SBI Home Loan provides no cap on maximum loan amount for the
purchase/construction of house/flat.
There is an option to club the income of the applicant's spouse and children
to compute the eligible loan amount.
The bank provides free personal accident insurance cover.
A complimentary international ATM cum Debit card is also provided by
SBI.
On the spot "in principle" approval is a special provision for the applicant.
If all the required documents are submitted by the applicant, SBI Home
Loan is sanctioned within 6 days of the date of submission.
The applicant can also consider SBI's Home Loan as a Term Loan or as an
Overdraft facility, in case he/she wants to save on interest and maximize
gains.
SBI Home Loan also provides free personal accident insurance cover up
to Rs 40 Lakhs.
Repayment is permitted up to 70 years of age, which is an added advantage
of SBI Home Loan.

SCHEMES PROVIDED BY SBI

The Most Preferred Home Loan provider SBI Bank offers a Home Loan with
Attractive Interest Rates with Latest Schemes and Benefits. SBI also provides a
Housing loan with different schemes. Schemes Are:-

1. SBI Easy Home Loan

2. SBI Advantage Home Loan
3. SBI Housing Finance Scheme
4. SBI Happy Home Loans
5. SBI Life Style Loan
6. SBI Green Home Loan
7. SBI Home Plus
8. SBI Home Line
9. SBI MY HOME CAMPAIGN

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 SBI 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
Sale Deed, Agreement of Sale, Letter of Allotment, Non Encumbrance Certificate,
Land/Building Tax paid receipt etc.
Copy of Approved Plan and approval from the Local Body
Statement of Bank Account/ Pass Book for last 6 months
INTEREST RATE (SBAR is currently 11.75%)

Year 1 - 8% fixed
Year 2 & 3 - 9% fixed
Year 4 onwards - For loans up to 50 lakhs, 9.25% floating.
For loan amount over 50 lakhs, 9.75% floating

Eligibility Criteria & Documentation required for SBI Home Loan

 Salaried Self employed
Age 21years to 60years 21years to 70years
Income Rs.1,20,000 (p.a.) Rs.2,00,000 (p.a.)
Loan Amount
5,00,000 - 1,00,00000 5,00,000 - 2,00,00000
Offered
Tenure 5years-20years 5years-20years
Current
2years 3years
Experience
1) Application form with
1) Application form with
photograph
photograph
2) Identity & residence proof
2) Identity & residence
3) Education qualifications
proof
certificate & proof of business
3) Last 3 months salary
Documentation existence
slip
4) Business profile,
4) Form 16
5) Last 3 years profit/loss &
5) Last 6 months bank
balance sheet
salaried credit statements
6) Last 6 months bank statements
6) Processing fee cheque
7) Processing fee cheque

Other Products from SBI (State bank of India)

1) SBI Personal Loan

2) SBI Card
3) SBI Home Loan
4) SBI Housing Loan

LOAN TENURE

You can repay the loan over a maximum period of 25 years under both FRHL and
ARHL in SBI . Repayment will not ordinarily extend beyond your age of
retirement (if you are employed) or on your reaching 65 years of age, whichever
is earlier.
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
 CHAPTER-3
RESEARCH METHODOLOGY
 OBJECTIVES OF STUDY

The study mainly aims at studying the housing activities in Faridabad and financing
by SBI & HDFC in FARIDABAD. In addition to measuring the service quality being
provided by SBI & HDFC.

The study specifically aims at :

Studying the importance of housing, demand for housing and house finance
in India.
Evaluation of the role of SBI & HDFC in financing of houses in
FARIDABAD.
To identify the popular schemes of SBI & HDFC.
To analyze the trends in housing finance by SBI & HDFC.

To ascertain the problems of borrowers of SBI & HDFC while availing

housing loans.
To evaluate the impact of tax considerations on housing finance with respect
to SBI & HDFC.
Measuring the service quality being provided by SBI & HDFC to its
customers in FARIDABAD.
 SCOPE OF THE STUDY

The scope of the proposed study is restricted to FARIDABAD divisions of

both SBI and HDFC. FARIDABAD divisions of these organizations extend the
facilities of housing finance to its clients belonging to FARIDABAD region in the
State of HARYANA.

1) SBI HOUSING FINANCE LIMITED (SBI):

SBI Housing Finance Limited (SBI) as a subsidiary of STATE BANK OF INDIA

(SBI) was incorporated on June 19th 1989, to accelerate the development of housing. SBI
is the second largest Housing Finance Company in India.

To each one a home of his own is the main objective of SBI. It renders liberal
financial assistance to holders and others for purchase/construction of residential
houses/flats. The following are the other objectives of SBI:

(i) To provide loans to sector/private sector employees to construct residential

accommodation for their employees.
(ii) To mobilize insurance linked long term savings from the pubSBI to deploy
such funds in long-term finance in the housing sector.
(iii) To facilitate approval of builders in advance and offer them construction
finance to enhance customer servicing with a real estate market
information.
SBI Housing Finance provides long term finance to resident individuals of India and
Non-Resident Indians (NRIs) for the purchase, construction, repair and renovation of
new / existing flats / houses and mortgage. The Company is the only one of its kind
that offers a Life Insurance Policy as collateral security to back its loans. SBI also
provides finance on existing property of business / personal needs. The company has
been growing steadily over the last two decades both in terms of business and profits.

There are 6 Regional Offices, 112 Area Offices consisting of Operating

Offices and Extension Counters spread across Nation. SBI has got its Registered and
Corporate Office at Mumbai. It has a total team of 2,500 dedicated employees in the
Country.

With these SBI had widest network amongst all the Housing Finance
Companies in India. FARIDABAD branch of SBI was established in the year 1993
with just 20 employees and today it has a total of 6 branches in FARIDABAD at
various places like Ameerpet, Dilsukhnagar, Gacchibowli, Himayathnagar,
Kukatpally, and Secunderabad. There are about 107 fulltime employees in SBI,
FARIDABAD branches and more than 500 company appointed Direct Sales Agents
(DSAs) and Home Loan Agents (HLAs) working under FARIDABAD branches.
2) HOUSING DEVELOPMENT FINANCE CORPORATION (HDFC):

The Housing Development Finance Corporation (HDFC) was formally

promoted and incorporated on October 17, 1977 under the chairmanship of Deepak

S. Parekh. HDFC was promoted by HDFC, the International Finance Corporation

and His Royal Highness Aga Khan. Each party had contributed 5% of the equity of
the Corporation.

HDFC from its very first day of its operations was built as a principle centered
organization. An organization built on the basis of fairness and kindness, efficiency and
effectiveness. It has gradually built trust among the people strengthening
communications and participative management style. Trust is the very cement for
meaningful relationships and an open and creative management style. It is the very
foundation for measuring worth.

Objective of HDFC is to enhance residential housing stock and to promote

house ownership by providing individual household/families with long term housing
loans at commercially viable rate. More specifically, the objectives of HDFC are:

i. To finance mainly low and middle income group of people to

purchase/construct a single family dwelling unit primarily for self
occupation, and
ii. Granting loans to the co-operative sector for housing their employees.

HDFC provides long term finance to individuals for the purchase, construction,
repair and renovation of new/existing flats/houses and mortgage loans. HDFC is
specialized in the field of housing. Its own name was constituted from three words the
interlocking of three areas of housing, finance and development. HDFC being a pioneer
organization in the field of housing finance is a leading institution in retail lending housing
finance at time when no other major player was in the field. HDFC has consistently
endeavored to provide top notch service to its customers through its extensive network of
87 offices which inter linked Nation wide, and introduced innovative value added
products to enhance both its range and quality of service.
Research design
Research Design: A research design is the specification of methods and
procedures for acquiring the information needed. It is the overall operational
pattern or framework of the project that stipulates what information is to be
collected from which source by what procedures. Research design denotes the
description of the research design. The aim was to collect relevant information,
which fulfill our requirement and can be analyzed at a later stage of study without
any problem. This was to be done in minimum expenditures and least efforts and
in a set period of time. For my research I select DESCRIPTIVE RESEARCH
DESIGN to know the Comparative Study Of The Home Loan Scheme
Offered By SBI Bank And HDFC Bank and Assessing The level of Consumer
Satisfaction in FARIDABAD City. This helped us in having enough provision
for protection against bias and maximizes reliability.
Descriptive study, as its name implies, is designed to describe something for
example, the characteristics of the users of a given product, the degree to which
product use varies with income, age, or other characteristics.

Advantages Of Descriptive Study:

o Involve

relatively large number of observations.

o Analysis is more objective.

o Averages

and percentages are calculated.

 METHODOLOGY

Proposed study is an empirical one and is based on secondary data.

1)Primary data:
I will use primary source of data that is structured questionnaire. As these banks are
established from so many years, so many researchers have done research on this topic,
so we will find secondary data also and also use this data for the help of this research.
So, this research data will collected from the primary source and secondary source.
Our method of collecting the data is from the questionnaire that will be filled by the
respondent from the sample, it will be structured questionnaire.

2) Sample:

There are many housing finance institutions in India. As it is difficult to cover the
beneficiaries of all the housing finance institutions, two major players in India like
Life Insurance Corporation Housing Finance Limited (SBI) and Housing
Development Finance Corporation (HDFC) are selected for the proposed study. I can
use the simple random sampling. A simple random sample is subset of a statistical
population in which each member of the subset has an equal probability of choosen.

3)Sample Size:
As many as 150 questionnaires were distributed among 150 beneficiaries of SBI and
HDFC to obtain information in FARIDABAD region.

4) Statistical Tools:
The data collected will be analyzed in one way and two way tables and through
Statistical techniques such as percentages, averages and growth rate.
Questionnaires:
This method of data collection is quite popular, particularly in case of big
enquiries. A questionnaire is a method of obtaining specific information about a
defined problem so that data, after analysis and interpretation, results in a better
appreciation of the problem. In order to motivate respondents and to get best of
the information from them, I was tried to build questionnaire that is interesting,
serve my objective, unambiguous and easy to complete and is not burdensome.
The aim was to enable ease in analysis and facilitate easy classification of response
to get meaningful outcome within acceptable limits.
A few were in disguised, where the true purpose was hidden but was
sufficient to bring in the right information from respondents. Depending on the
requirement, the questionnaire was prepared. The sequence of questions in
questionnaire was kept in a logical order. It included questions based on Simple
Category scale, Multiple Choice Single Response scale, Likert Scale and Rank
Order scale. After following a series of Trial and changes the finally evolved
questionnaire was being used for survey work.
 LIMITATIONS OF STUDY

Following are the limitations of the study:

1. The study covered only geographical boundaries of FARIDABAD City only which come under
FARIDABAD Municipal Corporation (FMC).

2. Due to the problem of illiteracy some house loan SBI applicants and loan takers could not
respond to questionnaire properly. However care was taken to their opinion as far as possible.

3. While studying the aspects of respondents of SBI and HDFC about

performance appraisal, certain items of investigation had to be dropped in view of non-response
from the respondents. Therefore, the study of respondents (borrowers) perception is limited to
the items which received enough response from them.
 CHAPTER-4
DATA PROCESS AND ANALYSIS
1) What is your occupation?

SBI HDFC
Business Man 28 22
Student 0 0
Government Employees 22 28
Other 0 0
House Wife 30 20

Interpretation:-
Total Number of Respondents was 80 of SBI & 70 Respondents was HDFC
0 of our Respondents was Students in both banks.
22 & 28 of the Respondents were into government employees in SBI & HDFC
respectively.
28 & 22 of our Respondents were Businessman in SBI & HDFC.
30 & 20 of our Respondents were Housewives in SBI & in HDFC.
None of our Respondent belonged to the category of others in both banks.
2) Which bank are you associated with?
SBI 80
HDFC 70

Interpretation :-
Total Number of Respondents is 150.
There are 70 assoicated with HDFC Bank.
80 persons are associated with SBI.
3) From how many years you are associated with this bank?

SBI HDFC
Less than 1year 30 20
1-5 years 20 30
More than 5 years 30 20

Interpretation :-
Total Number of Respondents was in 80 SBI & HDFC it was 70
30 persons are associated in SBI & in HDFC 20 persons less than 1 year
20 persons are associated in SBI & 30 persons in HDFC from 1-5 years.
30 persons are associated from more than 5 years in SBI & in HDFC there 20
persons.
4) How do you come to know about the home loan schemes of that bank?

SBI HDFC
Newspaper 30 30
Television 20 10
Internet 20 20
Other sources 10 10
Interpretation:-
Total Number of Respondents was 80 in SBI & in HDFC it was 70.
30 persons came to know from newspaper in SBI & in HDFC it was 30.
20 persons came to know from television in SBI & in HDFC it was 10.
20 persons came to know from internet in SBI & in HDFC it was 20.
10 persons came to know from other resources SBI & in HDFC it was 10.
5) Are you aware of these type of home loans?

SBI HDFC
Home purchase loan 20 10
Home construction loan 10 20
Home improvement loan 10 10
Home equity loan 10 20
Land purchase loan 30 10

Interpretation:-
Total Number of Respondents was 80 in SBI & 70 in HDFC it was
Only 10 persons know home equity loan of SBI & HDFC it was 20 persons.
30 people know home construction loan in both banks.
30 people know home purchase loan in both banks.
20 people know home improvement loans of SBI & HDFC it was.
40 people know land purchase loan in both banks.
.
6) Are you aware all terms and conditions of home loans?

SBI HDFC
Yes 50 40
NO 30 30

Interpretation:-
Total Number of Respondents was 80 in SBI & in HDFC it was 70.
Many of persons know all terms and conditions of home loan i.e. 50 in SBI & in
HDFC it was 40.
30 persons had not know properly about all terms and conditions of SBI & in HDFC
it was 30 persons.
7) Are you satisfied with the interest rate charges by your bank?
SBI HDFC
Strongly agree 30 20
Agree 10 20
Disagree 20 10
Strongly disagree 20 20

Interpretation:-
Total Number of Respondents was 80 in SBI & in HDFC it was 70.
30 among all consumers are strongly agreed by interest rate of the bank in SBI &
in HDFC it was 20.
10 among all consumers are agreed by interest rate of the bank in SBI & in HDFC
it was 20.
20 among all consumers are disagreed by interest rate of the bank in SBI & in HDFC
it was 10.
40 among all consumers are strongly disagreed by interest rate of both banks.
8) Your bank offers which type of services?

SBI HDFC
Mobile Banking 25 25
Net Banking 30 20
Forex Banking 25 25

Interpretation:-
Total Number of Respondents was 80 in SBI & in HDFC it was 70.
25 persons said that bank offer mobile banking services in SBI & in HDFC it was 25
persons.
30 persons said that bank offer net banking services in SBI & in HDFC it was 20
persons.
Only 25 persons said that bank offer Forex banking services in SBI & in HDFC it was
25 persons.
 9) Do you agree that your bank loan processing is fast?

SBI HDFC
Strongly Agree 30 40
Agree 10 20
Disagree 25 5
Strongly Disagree 25 5

Interpretation :-
Total Number of Respondents was 80 in SBI & in HDFC it was 70.
30 persons strongly agree that bank home loan processing is fast in SBI & in HDFC it
was 40 persons.
10 persons agree that bank home loan processing is fast in SBI & in HDFC it was 20.
25 persons disagree that bank processing is fast in SBI & in HDFC it was 5.
25 persons strongly disagree that bank processing is fast in SBI & in HDFC it was 5.
10) Are you satisfied with the after home loan services provided by your
bank as compared to other banks?

SBI HDFC
Strongly Agree 30 30
Agree 30 10
Disagree 20 30
Strongly Disagree 0 0

Interpretation:-
Total Number of Respondents was 80 in SBI & in HDFC it was 70.
30 among all consumers are strongly agreed by after sale services of SBI & in HDFC
it was 30.
30 among all consumers are agreed by after sale services in SBI & in HDFC it was 10.
20 among all consumers are disagreed by after sale services of the both banks.
among all consumers are strongly disagreed by after sale services of the bank
11) Does the cost of home loan is appropriate, according to your demand?

SBI HDFC
Yes 50 50
No 30 20

Interpretation:-
Total Number of Respondents was 80 in SBI & in HDFC it was 70.
50 persons said that home loan is appropriate according to their demand in SBI & in
HDFC it was 50 in demand.
30 persons said that home loan is not appropriate according to their demand in SBI &
in HDFC it was 20 persons.
12) Are you satisfied with the employee behavior at the bank?

SBI HDFC
Strongly Agree 50 40
Agree 20 10
Disagree 10 20
Strongly Disagree 0 0

Interpretation:-
Total Number of Respondents was 80 in SBI & in HDFC it was 70.
500 persons very satisfied with the employee behavior of the SBI & in HDFC it was 40
persons.
20 persons satisfied with the employee behavior of SBI & in HDFC it was 10 persons.
10 persons disagree with the employee behavior of SBI & in HDFC it was 20 persons.
No one disagrees with the employee behavior of the both banks.
13) Does the bank give any discount upon loan services?

SBI HDFC
Yes 50 50
No 30 20

Interpretation:-
Total Number of Respondents was 80 in SBI & in HDFC it was 70.
50 persons said that bank give discount upon loan services in SBI & in HDFC it was
50 persons.
Only 30 persons said that bank does not give any discount upon loan services in SBI &
in HDFC it was 20 persons.
14) Are you satisfied by the time taken in sanctioning the loan?

SBI HDFC
Yes 50 50
No 30 20

Interpretation:-
Total Number of Respondents was 80 in SBI & in HDFC it was 70.
50 persons are satisfied by the time taken by SBI & HDFC 50 persons was satisfied.
30 persons are not satisfied by the time taken by SBI & HDFC 20 persons was not-
satisfied.
15) Have you faced any difficulty during taking the loan?

SBI HDFC
Yes 50 50
No 30 20

Interpretation:-

Total Number of Respondents was 90 in SBI & in HDFC it was 60.

50 persons face difficulty during taking the loan by SBI & HDFC 50 persons.
Only 30 persons does not face any difficulty during taking the loan by SBI & HDFC it
was 20 persons.
16) Which grade you want to give of home loan schemes of the bank?

SBI HDFC
Excellent 40 30
Good 10 20
Average 30 20
Below average 0 0

Interpretation :-
Total Number of Respondents was 80 in SBI & in HDFC it was 70.
40 persons give excellent grade to SBI & 30 persons to HDFC.
10 persons gave good grade to SBI & HDFC it was 20 good.
Only 30 persons give average grade to the SBI & HDFC bank 20 persons give average.
No one give below average grade to the bank SBI & HDFC.
 CHAPTER-5
CONCLUSIONS AND SUGGESTIONS
 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.
 SUGGESTIONS

To broaden the customer base the vast middle income strata should be fully exploited.
Simplify the procedure, reduce service charges & demand only the basic essential
proof.
Most banks are reluctant to advance loan to the service class. E.g. law years officers
etc. this aspect must be exploited.
Adoption of flexible & more lenient penalty should the
Customer fails to deposit the payment on time. The penalty should be case to case basis
rather than the same for the entire customer base.
Restriction to be reduced to bare minimum for loan advances & for repayment. For e.g.
offers Long term repayment facilities & have no age restriction to choosing repayment.
The maximum age for repayment could be increase to 65-70 years of age. Such facility
will grow fast retail segment of the bank.
Offer multiple repayment loans services. Class to be exploited by offering special
reduced
Rates & linking the repayment from the source where the pay cheque to the employee
is issued. This need to undergo special contract with government organization to ensure
implementation.
 CHAPTER-6
BIBLIOGRAPHY
 Sharma, Reema The IUP Journal of Financial Economics, Article IKJF40612. New
Delhi. P-

Ashok. The Future Out look, A Study report by NHB, New Delhi. 2008, P-27.

Rana, P.S. Activities of NHB PubSBIation of National Housing Bank. 2008. P-16.
Leeladhar .V.2001, Handbook on Rural Housing and Infrastructure Central Building
Research Institute, Roorkee. P-32.
Subba Rao D. Reserve Bank of India Report RBI bulletin, New Delhi, P-12.
 CHAPTER-7
ANNEXTURES
QUESTIONNAIRE

Dear Sir/Madam,

I am ISHAN CHUGH doing BBA from SATYUG DARSHAN TECHNICAL

CAMPUS,FARIDABAD .I am studying the market potential for home loans.For this I have designed a
questionnaire to know your views.Please fill the given as per your thinking and experiences.I will be
thankful to you for this.

Name____________ Qualification_________
Age 18-25 25-35 35-40 above
Gender_________

1) What is your occupation?

Business man Government employee House wife Student Other

2) From how many years you are associated with this bank?
Less than 1 year 1-5 More than 5 year

3) How do you come to know about the home loan schemes of this bank?
News paper Television Internet Other resources

4) Are you aware of these types of home loans?

Home purchase loan Home construction loan Home improvement loan
Home extension loan Home equity loan Land purchase loan

5) Are you aware all terms and conditions of home loans?

Yes No

6) Are you satisfied with the interest rate charges by your bank?
Strongly agree Agree
Strongly disagree Disagree
7) Your bank offers which type of services?
Mobile banking Net banking Forex banking

8) Do you agree that your bank loan processing is fast?

Strongly agree Agree
Strongly Disagree Disagree

9) Do you satisfy with the after home loan services provided by your bank are best as compare
to other bank?
Strongly agree Agree Strongly disagree Disagree

10) Does the cost of home loan is appropriate, according to your demand?
Yes No

11) Are you satisfied with the employees behavior at the bank?
Strongly agree Agree Strongly disagree Disagree

12) Does the bank give any discount upon loan services?
Yes No

13) Are you satisfy by the time taken in sanctioning the loan?
Yes No

14)Have you face any difficulty during taking the loan?

Yes No
If yes then specify___________________________

15) Which grade you want to give of home loan schemes of your bank?
Excellent Good
Average Below average

16) Any suggestions that you want to give_________________________________

__________________________________________________________________