1 A PROJECT ON HOUSING FINANCE WITH REFERENCE TO SBI PREPARED BY AMIT C. BAKALKAR. T.Y.B.COM. (BANKING AND INSURANCE) GUIDE PROF. MRS. MUGDHA KESKAR. SUBMITTED TO UNIVERSITY OF MUMBAI VIDYA PRASARAK MANDAL’S K.G JOSHI COLLEGE OF ARTS AND N.G. BEDEKAR COLLEGE OF COMMERCE THANE 2010-2011 (V TH SEMISTER)
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1
A PROJECT ON
HOUSING FINANCE
WITH REFERENCE TO SBI
PREPARED BY
AMIT C. BAKALKAR. T.Y.B.COM. (BANKING AND INSURANCE)
GUIDE
PROF. MRS. MUGDHA KESKAR.
SUBMITTED TO
UNIVERSITY OF MUMBAI
VIDYA PRASARAK MANDAL’S
K.G JOSHI COLLEGE OF ARTS
AND N.G. BEDEKAR COLLEGE OF COMMERCE
THANE
2010-2011 (VTH SEMISTER)
2
DECLARATION
Researcher Amit C. Bakalkar student of Joshi Bedekar
College studying in T.Y.B.Com (Banking & Insurance)
Semester V (2010-2011) hereby declare that I have
completed the project on “Housing Finance with reference to
SBI” successfully in the current academic year.
The information submitted is true and original to the
best of my knowledge.
Place: __________
Date: ___________ Signature of StudentSignature of StudentSignature of StudentSignature of Student
3
A C K N O W L E D G E M E N T
Acknowledgement is not a mere formality or ritual but a
genuine opportunity to express the indebtedness to all those without
who’s active support and encouragement this project wouldn’t have
been possible.
Hence, it gives me immense gratification to place on records
my profound gratitude sincere appreciation to each and every one of
those who have helped me in this endeavour.
Firstly I would like to thank the Staff of the SBI Branch for
allowing me to do my project there and providing valuable help in
collecting the data.
I extend my sincere thanks to PROF. MUGDHA KESKAR for her
continuous guidance, cooperation and valuable suggestions to initiate
and carry out the study.
Date.
BAKALKAR AMIT CHANDRAKANT.
4
I N D E X
RESEARCH METHODOLOGYRESEARCH METHODOLOGYRESEARCH METHODOLOGYRESEARCH METHODOLOGY ABSTRACT..................................................................................................... 1
OBJECTIVES OF THE STUDY.................................................................... 3
NEED OF THE STUDY................................................................................. 4
SCOPE OF THE STUDY............................................................................... 4
DESIGN OF STUDY...................................................................................... 5
TOOLS AND TECHNOLOGIES USED....................................................... 7
LIMITATIONS OF THE STUDY.................................................................. 8
CHAPTER CHAPTER CHAPTER CHAPTER 1111
1. INTRODUCTION TO H1. INTRODUCTION TO H1. INTRODUCTION TO H1. INTRODUCTION TO HOUSING OUSING OUSING OUSING FINANCEFINANCEFINANCEFINANCE
1.6.2. Hardware and Software Technologies: 1.6.2. Hardware and Software Technologies: 1.6.2. Hardware and Software Technologies: 1.6.2. Hardware and Software Technologies:
� Home PC with Internet access
� MS Word and Excel-2007.
� World Wide Web or Internet
16
LIMITATIONS OF THE STUDY
Some of the limitations of the project that were encountered during
the study are:
• In case of interaction with the representative of a particular bank it
happens many a time that the representative cannot disclose all the
data because of certain reasons like banks privacy policy etc. thus
getting clear picture about the service provided is not possible.
• Due to paucity of time, only important factors have been analyzed and
discussed.
• To collect the data from banks was quite difficult due to non-
cooperation of banks. This proved to be major limitation of the study.
• To access such a large number of customers was difficult because of
non-cooperative attitude of respondents.
• Lack of data was also the other limitation of the study as some of
banks do not have proper data on topic.
• Generally the data on the websites of the banks are not fully disclosed
i.e. other than the charges mentioned on the website there are many
hidden charges which increases the cost like service charge etc
• Ignorance and reluctant attitude of customers was also a major
limitation in this study.
• I have tried a lot to overcome the above mentioned limitations as far
as possible.
17
CHAPTER -1
INTRODUCTION TO HOUSING FINANCE
1.1. INTRODUCTION
The realty boom in India has given a new dimension to the finance
sector in India - both in Home Loans and Home Insurance segments.
This has not only given a competitive edge to the finance companies
to provide attractive options to customers but has also contributed to
the increased investments in the real estate sector. This has resulted
in 13 new institutions foraying into the housing finance business in
the last three years.
Home loans work like any other debt. That is, loans are simply
specific money that borrow from a bank, a private lender, or some
other type of lender. Afterwards, borrowers must repay our debts
with interest. However, unlike other types of loans, home loans are
different in several respects. Owning a piece of land or property is a
lifetime dream for every individual. There are many home loans
provider in the market. There are different type of home loan i.e.
• Home Purchase Loans Home Purchase Loans Home Purchase Loans Home Purchase Loans
• Home Improvement Loans Home Improvement Loans Home Improvement Loans Home Improvement Loans
• Home Construction Loans Home Construction Loans Home Construction Loans Home Construction Loans
• Home Extension Loans Home Extension Loans Home Extension Loans Home Extension Loans
• Home Equity Loans Home Equity Loans Home Equity Loans Home Equity Loans
• Land Purchase Loans Land Purchase Loans Land Purchase Loans Land Purchase Loans
Home purchase loans: Home purchase loans: Home purchase loans: Home purchase loans:
These are the basic forms of home loans used for purchasing of
a new home. With about a million home lenders and mortgage
brokers it's becoming a tough challenge as the days are progressing.
But at the same time, when the sites are coming up with all the
latest tools and relevant information for us, and with all such
conveniences, obtaining a home purchase loan or mortgage has
become really pretty simple. However, at the same time though,
borrower may be flummoxed to look so many attractive rates and
offers in the market, not to forget the hidden costs associated with
each of them.
Home improvement loanHome improvement loanHome improvement loanHome improvement loan:
Home improvement loans are used to finance improvements
and add on to the existing set of credentials of beauty on borrower’s
owned house, recently purchased property or rented accommodation.
Home improvement loans are used to maintain or enhance the value
of his house. In general it includes: repairs, remodeling, energy-
related items (permanent in nature), repairs, a new kitchen, a new
bathroom, terrace, an extension or general property improvements.
Luxury items and fireplaces are generally not eligible, though. Many
improvements in landscape and even swimming pools are nowadays
considered to be a part of home improvement.
19
Home construction loan:Home construction loan:Home construction loan:Home construction loan:
Home construction loans are used to finance for the
construction of our newly acquired home or if a person is planning to
build a home. The factors include in calculations for house building
costs are as follows.
• Design of the house
• Construction cost
• Financing Cost
• Buildable site
All the above mentioned costs will help the Bank to determine
the amount need to borrow. For example, besides calculating the
construction costs, Bank may also be required to consider the total
expenditures to develop the site in order to build. Each site is unique
requiring different expenditures so this specific rupee amount will
vary from site location to site location.
PaymentPaymentPaymentPayment: : : : Before the house starts getting build, Bank will be required
to pay a deposit to purchaser builder as well as paying a deposit for
the land if he is buying land. As work progresses he will need to
make payments to the builder. Certain loans can be structured for
progress payments to be made during construction. Home extension
loans are used by customers to get loans from the banks to extend
their houses, by adding more rooms, kitchens, wash rooms, terraces,
or any other rooms for his growing family. It may also be used to
enclose open balcony/terrace space, or constructing a Pujaghar.
20
Maximum Amount of Home Extension Loans: Maximum Amount of Home Extension Loans: Maximum Amount of Home Extension Loans: Maximum Amount of Home Extension Loans:
Banks generally offers about 70-85% of the total amount of
home extension as loan. The amount of loan sanctioned also depends
on a number of factors such as the age of the applicant at the time of
loan, tenure of the loan, repayment capacity of the borrower; his/her
credit history etc.
Home equity loan:Home equity loan:Home equity loan:Home equity loan:
Home equity loans helps customer to encash the market value
of the commodity by taking a loan by mortgaging the property. So,
Home equity loans are availed by customers, who wish to mortgage
his/her property to the bank for taking some loan for some other
purpose. Then, it's up to the bank's discretion to consider the market
value of the property and accordingly decide how much to pay to the
customer. Both the residential as well as non residential property can
be considered for the approval of the loan, provided the mortgager is
a licensed title holder and the land is free from any kind of dispute.
Home equity loans don't restrict one to use the loan money in specific
investments. It might also be used in marriage, higher education,
medical expenses, etc. However it should not be used in any illegal or
speculation purposes.
Land purchase loanLand purchase loanLand purchase loanLand purchase loan:
Land Purchase loans are used by customers who wish to
purchase a plot of land for commercial or residential purpose.
21
Bridge loansBridge loansBridge loansBridge loans
Bridge loans are designed for people who wish to sell the
existing home and purchase another one. The bridge loans help
finance the new home, until a buyer is found for the home. Bridge
loans are used by customers as an effective vehicle to capitalize on a
purchase opportunity. It can be considered as a short term financing
scheme which is generally expected to be paid back, within the range
of 6-36 months.
1.2. HOME LOAN INDUSTRY
After going through
researcher came to conclude the following indicated in different
forms:
DiagramDiagramDiagramDiagram
22
. HOME LOAN INDUSTRY IN INDIA
After going through previous studies of Home loans in India
came to conclude the following indicated in different
DiagramDiagramDiagramDiagram 1111.1.1.1.1: Housing in India: Housing in India: Housing in India: Housing in India
studies of Home loans in India
came to conclude the following indicated in different
DiagramDiagramDiagramDiagram
DiagramDiagramDiagramDiagram
23
DiagramDiagramDiagramDiagram 1.1.1.1.2: Demographics in Housing2: Demographics in Housing2: Demographics in Housing2: Demographics in Housing
Table 1Table 1Table 1Table 1.1.1.1.1: major home loan providers: major home loan providers: major home loan providers: major home loan providers (Source: Researchers methodology)
27
1.3. INDIA'S MORTGAGE MARKET SCORES OVER WEST
1. In India, the borrower contributes a higher share of his own
funds (24-46% of house value) at the time of purchasing a
house.
2. The loan installments too eat away a smaller portion of the
borrowers� income.
3. The installment to income ratio-ranged between 34% and 40%,
in India is lower than some countries in the West.
4. This is based on an analysis by rating agency Fitch of the home
loan asset pool that it rates.
5. This is because borrowers� income has kept pace with rise in
property prices.
6. The extent of second houses purchased is also limited and most
borrowers stick to their repurchase schedules.
7. The Diagrams computed by Fitch based on the asset pool that it
rates implies that on an average, the borrower funds up to 30%
of the house value through his own capital
8. This among other things increases the borrowers willingness to
repay.
9. Some bankers say the black money component is also high in
the Indian realty market, resulting in higher borrower equity.
28
10. Another notable factor is that delinquencies have remained
range-bound in the last 33 months, according to residential
mortgage index launched by the ratings firm.
11. The index which tracks home loans that have not repaid for
over 90 days has moved in a narrow range between 0.90% and
1.07%.
29
CHAPTER -2
COMPANY PROFILE
2.1. INTRODUCTION
State Bank of India (SBI) has history of more than 200 years
of existence. The evolution of State Bank of India can be traced back
to the first decade of the 19th century. It began with the
establishment of the Bank of Calcutta in Calcutta, on 2 June 1806.
The bank was redesigned as the Bank of Bengal, three years later, on
2 January 1809. It was the first ever joint-stock bank of the British
India, established under the sponsorship of the Government of
Bengal. Subsequently, the Bank of Bombay (established on 15 April
1840) and the Bank of Madras (established on 1 July 1843) followed
the Bank of Bengal. These three banks dominated the modern
banking scenario in India, until when these banks were
amalgamated to form the Imperial Bank of India, on 27 January
1921.
An important turning point in the history of State Bank of
India is the launch of the first Five Year Plan of independent India, first Five Year Plan of independent India, first Five Year Plan of independent India, first Five Year Plan of independent India,
in 1951in 1951in 1951in 1951. The Plan aimed at serving the Indian economy in general
and the rural sector of the country, in particular. Until the Plan, the
commercial banks of the country, including the Imperial Bank of
India, confined their services to the urban sector. Moreover, they
were not equipped to respond to the growing needs of the economic
revival taking shape in the rural areas of the country. Therefore, in
order to serve the economy as a whole and rural sector in particular,
30
the All India Rural Credit Survey Committee recommended the
formation of a state-partnered and state-sponsored bank.
The All India Rural Credit Survey Committee proposed the takeover
of the Imperial Bank of India, and integrating with it, the former
state-owned or state-associate banks. Subsequently, an Act was
passed in the Parliament of India in May 1955. As a result, the State
Bank of India (SBI) was established on 1 July 1955. This resulted in
making the State Bank of India more powerful, because as much as a
quarter of the resources of the Indian banking system were controlled
directly by the State. Later on, the State Bank of India (Subsidiary
Banks) Act was passed in 1959. The Act enabled the State Bank of
India to make the eight former State-associated banks as its
subsidiaries.
The State Bank of India emerged as a pacesetter, with its operations
carried out by the 480 offices comprising branches, sub offices and
three Local Head Offices, inherited from the Imperial Bank. Instead
of serving as mere repositories of the community's savings and
lending to creditworthy parties, the State Bank of India catered to
the needs of the customers, by banking purposefully. The bank
served the heterogeneous financial needs of the planned economic
development.
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
31
Foreign Offices division, the Foreign Department and the
International Services division.
In recent years the bank has focused on three prioritiesIn recent years the bank has focused on three prioritiesIn recent years the bank has focused on three prioritiesIn recent years the bank has focused on three priorities:
1. computerizing its operations and
2. Changing the attitude of its employees (through an ambitious
program aptly named 'Parivartan' which means change) as a
large number of employees are very rude to customers.
2.2 ROOTS:
The State Bank of India traces its roots to the first decade of
19th century, when the Bank of Calcutta, later renamed the Bank of
Bengal, was established on 2 June 1806. The government
amalgamated Bank of Bengal and two other Presidency banks,
namely, the Bank of Bombay (incorporated on 15 April 1840) and the
Bank of Madras on 27 January 1921, and named the reorganized
banking entity the Imperial Bank of India. All these Presidency
banks had been incorporated as joint stock companies, and were the
result of the royal charters. The Imperial Bank of India continued as
a joint stock company. Until the establishment of a central bank in
India the Imperial Bank and its early predecessors served as India's
central bank, at least in terms of issuing the currency. The State
Bank of India Act 1955, enacted by the Parliament of India,
authorized the Reserve Bank of India, which is the central banking
organization of India, to acquire a controlling interest in the Imperial
Bank of India, which was renamed the State Bank of India on 30
April 1955.
32
2.3 ASSOCIATE BANKS:
There are seven other associate banks that fall under SBI.
They all use the "State Bank of" name followed by the regional
headquarters' name. These were originally banks belonging to
princely states before the government nationalized them in 1959. In
tune with the first Five Year Plan, emphasizing the development of
rural India, the government integrated these banks with the State
Bank of India to expand its rural outreach. The State Bank group
refers to the seven associates and the parent bank. All the banks use
the same logo of a blue keyhole. Currently, the group is merging all
the associate banks into SBI, which will create a "mega bank", and
one hopes, streamline operations and unlock value.
State Bank of Bikaner and Jaipur (SBBJ)
State Bank of Hyderabad (SBH)
State Bank of Mysore (SBM)
State Bank of Patiala (SBP)
State Bank of Saurashtra (SBS)
State Bank of Travancore (SBT)
33
2.4. BRANCHES
The corporate center of SBI is located in Mumbai. In order to
cater to different functions, there are several other establishments in
and outside Mumbai, apart from the corporate center. The bank
boasts of having as many as 14 local head offices and 57 Zonal
Offices, located at major cities throughout India. It is recorded that
SBI has about 10000 branches, well networked to cater to its
customers throughout India.
2.5. FOREIGN OFFICES:
State Bank of India is present in 32 countries, where it has 84
offices serving the international needs of the bank's foreign
customers, and in some cases conducts retail operations. The focus of
these offices is India-related business.
2.6. ATM SERVICES
SBI provides easy access to money to its customers through
more than 8500 ATMs in India. The Bank also facilitates the free
transaction of money at the ATMs of State Bank Group, which
includes the ATMs of State Bank of India as well as the Associate
Banks – State Bank of Bikaner & Jaipur, State Bank of Hyderabad,
State Bank of Indore, etc. Account holder may also transact money
through SBI Commercial and International Bank Ltd by using the
State Bank ATM-cum-Debit (Cash Plus) card.
34
2.7 GROUP COMPANIES:
SBI Capital Markets Ltd
SBI Mutual Fund (A Trust)
SBI Factors and Commercial Services Ltd
SBI DFHI Ltd
SBI Cards and Payment Services Pvt Ltd
SBI Life Insurance Co. Ltd - Bancassurance (Life Insurance)
SBI Funds Management Pvt Ltd
SBI Canada
35
2.8. PRODUCTS AND SERVICES
2.8.1. Personal Banking
1) SBI Term Deposits SBI Loan For Pensioners
2) SBI Recurring Deposits Loan Against Mortgage Of
Property
3) SBI Housing Loan Against Shares & Debentures
4) SBI Car Loan Rent Plus Scheme
5) SBI Educational Loan Medi-Plus Scheme
2.8.2. Other Services
6) Agriculture/Rural Banking
7) NRI Services
8) Demat Services
9) Corporate Banking
10) Internet Banking
11) Mobile Banking
12) International Banking
13) Safe Deposit Locker
14) RBIEFT
15) E-Pay
16) E-Rail
17) SBI Vishwa Yatra Foreign Travel Card
18) Broking Services
19) Gift Cheques. Etc.
36
2.9. PERFORMANCE:
• SBI Bank India had Total Profit of Rs.119,49,82,91,000 for the
financial year 2009 -2010, Which has increased approximately
8.69% as compared to last year’s Balance sheet.
2.10. ORGANIZATION:
State Bank of India is headed by Mr. Shri O. P. Bhatt,
Chairman.
2.11 THE BANK STANDS FOR BEST PRACTICES AS IT
CLAIMS ITSELF AS UNDER:
Best practices followed in SBI
People dealing People dealing People dealing People dealing
with with with with CustomerCustomerCustomerCustomer
End to End service by Permanent employees of SBI who are
accountable to Customer/Account holder.
Place Place Place Place SBI branch of borrower’s choice will service his loan account.
Customer can always meet our employees face to face.
Price Price Price Price Complete transparency. Interest charged on the daily reducing
balance.
Prepayment Prepayment Prepayment Prepayment
charges charges charges charges
No penalty for prepayments made, out of bonafide savings or
windfall gains for which evidence is produced.
Costs hidden in Costs hidden in Costs hidden in Costs hidden in
fine print fine print fine print fine print No hidden costs
Transparency Transparency Transparency Transparency Complete transparency. All the features of our product,
including interest rates, are in the public domain.
Table Table Table Table 2.2.2.2.1111: Best Practices in SBI: Best Practices in SBI: Best Practices in SBI: Best Practices in SBI (Source: Researchers methodology)
2.12 SHARE HOLDERS
DiagramDiagramDiagramDiagram
5%
0%
12%
10%
As on 31st March 2010
37
SHARE HOLDERS:
DiagramDiagramDiagramDiagram 2222....1111: Shareholders of SBI: Shareholders of SBI: Shareholders of SBI: Shareholders of SBI
62%
10%11%
Share holdings
As on 31st March 2010
Promoters
MFs/UTI
Banks/Fis
Insurance Co.
FIIs
Promoters
MFs/UTI
Banks/Fis
Insurance Co.
FIIs
38
2.13. UNIQUE FEATURES OF SBI HOME LOAN PRODUCTS:
• Provision for on the spot "In principle" approval.
• Loan sanctioned within 6 days of submission of required
documents.
• Option to avail Home Loan as a Term Loan or as an Overdraft
facility to save on interest and maximise gains.
• Option to club income of borrower’s spouse and children to
compute eligible loan amount.
• Provision to club depreciation, expected rent accruals from
property proposed to compute eligible loan amount.
• Provision to finance cost of furnishing and consumer durables
as part of project cost.
• Repayment permitted upto 70 years of age.
• Free personal accident insurance covers upto Rs.40 Lac.
• Optional Group Insurance from SBI Life at concessional
premium (Upfront premium).
39
CHAPTER - 3
HOME LOAN PRODUCTS OFFERED BY SBI
DiagramDiagramDiagramDiagram 3333....1111: : : : Home Loan Products Offered by SBIHome Loan Products Offered by SBIHome Loan Products Offered by SBIHome Loan Products Offered by SBI
(Source: Researchers methodology)
40
3.1. SBI EASY HOME LOAN
For loan amount up to Rs.50 Lacs
SBI Easy is available up to 30th June 2010
Getting One’s dream home has become easier with SBI Easy
Home Loan. With low interest rates for home loan under Rs. 50 lakhs
category, SBI Easy ensures that he is not burdened with high
interest for one’s home loan. Plus with over 12000 SBI branches
nationwide borrower can get his Home Loan account parked at a
branch nearest to borrower’s present or proposed residence.
Interest Rate:
Interest rate during the first year (i.e. till first anniversary date from
the date of first disbursement) is fixed at 8%8%8%8% pppp.a.a.a.a.
Interest rate during next two years is fixed at 9999% p. a% p. a% p. a% p. a
Interest rate after three years may be Fixed or Floating as per
the borrower’s choice made at the time of sanction. If floating rate
option is chosen, then the rate will be 2.5% below SBAR. If fixed rate
option is chosen, then the rate will be 0.75% below SBAR prevailing
on the third anniversary date from the date of first disbursement,
and shall have a reset frequency of 5 years from the third
anniversary date of the loan. Fixed interest rate shall be subject to
force-majeure clause. (SBAR = 11.75% p.a.)
41
Processing Fee:
The revised processing fee structure (including service tax) from 9th
November 2009 is as under:
Table Table Table Table 3.13.13.13.1: loan amount in SBI easy home loan : loan amount in SBI easy home loan : loan amount in SBI easy home loan : loan amount in SBI easy home loan
Table Table Table Table 3.23.23.23.2:::: loan amount in SBI advantage home loan loan amount in SBI advantage home loan loan amount in SBI advantage home loan loan amount in SBI advantage home loan
(Source: www.sbi.co.in)
44
3.3. HOME LOAN PRODUCT VARIANTS
i) SBI Max Gain
Home Loan as an Overdraft
An innovative and customer-friendly product to enable the borrower
to earn optimal yield on his savings and minimize interest burden on
Home Loans, with no extra cost.
The loan is granted as an Overdraft facility with the added flexibility
for him to operate his Home Loan Account like borrower’s SB or
Current Account.
The product serves to minimize borrower’s interest cost by enabling
an individual to park his surplus funds in “SBI-Max gain” (with the
benefit to withdraw the surplus funds whenever his require),
specially in the wake of low yields from other deposit/ investment
avenues.
Minimum Loan Amount: Rs.5 lacs
ii) SBI Freedom
A revolutionary product designed for customers who are on the
lookout for a source of finance for a property they want to invest in
without mortgaging the same. All Borrowers have to do is pledge any
financial security that borrower has and he will get a Home Loan for
his dream home.
45
A must-take for those who do not want to pay stamp duty for
mortgage of their property or go through the hassles of creation of
mortgage.
Borrower also has an option to take the loan by way of mortgage of
the property and pledge financial securities in lieu of margin money.
Repayment is highly customized, giving borrower the option to repay
through regular EMIs or through maturity proceeds of the securities
pledged.
ii) SBI Realty
Home Loans for purchase of land for the purchase of plot of land for
the purchase of construction of a dwelling unit
A unique product if borrower is on the lookout for a loan to purchase
a plot of land for house construction. The loan is available for a
maximum amount of Rs.1 crore* and with a comfortable repayment
>Rs.1 Crore 25% for Loan amount up to Rs.1 Crore + 50% for loan in excess of Rs.1 crore
For e.gFor e.gFor e.gFor e.g. If project cost is 2.5 crores the margin would be calculated as – 25% of cost of property at loan amount Rs.1 Crore + 50% of rest of the project cost, i.e. 25% of Rs.1.33 Cores + 50% of Rs.1.17 crores = Rs.88.75 Lacs
Table Table Table Table 3.33.33.33.3: : : : Margin of bank on loan amount.Margin of bank on loan amount.Margin of bank on loan amount.Margin of bank on loan amount. (Source: www.sbi.co.in)
Customers are also eligible to avail another Housing Loan for
construction of house on the plot financed above with the benefit of
46
running both the loans concurrently. (House construction should
commence within 2 years from the date of availment of “SBI-Realty”
Housing Loan)
iv) SBI Flexi
Home Loans with a combination of Fixed and Floating Interest.
RATES RATES RATES RATES
Home Loans with an option to choose a combination of floating
interest rate and fixed interest rate, in a pre determined ratio.
Minimum Loan Amount Rs.5.00 lacs.
A customized product designed to enable borrowers to hedge their
Home Loan against unfavourable movement in interest rates. The
product gives the borrower, a onetime irrevocable option to choose
one of the three customized combinations of fixed and floating
interest rates and also to choose the order in which the fixed and
floating rate will be availed.
47
v) NRI Home Loans
Home Loan to Non Resident Indians (NRIs) and persons of Indian
origin (holding a foreign passport)
Eligibility Eligibility Eligibility Eligibility
Individual(s) over 18years of age with a steady source of income who
� Are Non Resident Indians (NRIs) holding a valid Indian
passport.
� Are persons of Indian origin (PIOs) holding a foreign passport.
� Minimum employment tenure in India/abroad not less than 2
years.
Loan Amount Loan Amount Loan Amount Loan Amount
The loan amount is to be determined on the basis of repayment
capacity taking into account income, age, assets and liabilities,
qualifications, stability of occupation, and employment prospects on
return. The loan amount is subject to the following:
Minimum: Rs. 3 lacs
Maximum: Maximum permissible loan amount would be determined
by EMI/NMI ratio criteria as applicable to regular Home Loans
scheme for Resident Indian customers, which is 40% for Net Annual
Income (NAI) upto Rs.2 Lac, 50% for NAI above Rs..2 Lac and upto
Rs.5 Lac, 55% for NAI above Rs.5 Lacs.
48
vi) SBI Optima
Innovative and value added products extended to existing Home loan
borrowers with a satisfactory repayment record of 3 years and whose
loan is Standard Asset, with a view to reinforce the customer loyalty
and to maintain long term relationship with the borrowers. In case of
take-over of Home Loans from other Banks/HFCs, the borrower
should have fulfilled the above conditions with the present
Bank/HFC.
vii) SBI Tribal Plus
Special Home Loan scheme for hilly/tribal areas.
'SBI-Tribal Plus' Home Loans, a Special Scheme designed for
Hill/Tribal areas for extending financial assistance to individuals in
such areas to:
a)a)a)a) Purchase or construction of a new house / flat (without
mortgage of land)
b)b)b)b) Purchase of an existing (old) house / flat which is not more than
10 years old (In such cases, valuation report from our
empanelled valuer and a certificate on the condition of the
house to be given by a structural engineer or Govt. approved
architect should be taken);
c)c)c)c) Repair /Renovation/extension of an existing house or flat.
49
viii) Gram Niwas
Home Loans to farming and poorest of the poor in rural areas.
The Scheme covers all rural and semi-urban centers. “Rural
Area” for the purpose of the Scheme is the area comprised in any
village including the area comprised in any town, the population of
which does not exceed 50000 as per 2001 census. The scheme seeks to
provide home loans to farming and poorest of the poor in rural areas
for the purpose of purchase or construction of a house, repairs and
renovation, purchase of plot for the purpose of construction of a
house/shed etc.
ix) Sahyog Niwas
Rural home loans to self help groups
The Sahyog Niwas scheme has been instituted to finance the
self help groups with a good track of payment record for 2 years, for
on lending to members for housing in rural areas, covering the
following purposes.
1) For the purchase or construction of a house exclusively or
including the housing needs of activities carried by them.
2) For the renovation or repair of an existing house / shed
3) For the purchase of a plot of land for the purpose of house
construction.
4) For the extension of existing house / work space to existing
house / shed.
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x) SBI Happy Home Loans
Home loans at 8% p.a.
The SBI Happy Home Loans scheme enables the genuine
needy buyers to buy dwelling units by freezing interest rate at 8%
p.a. for a period of one year from the date of disbursement on new
Home Loans including SBI Special Home Loans scheme.
xi) SBI Green Home Loan
State Bank of India has adopted a Green Banking Policy with
an objective of contributing towards the fight against the adverse
climate change. One of the initiatives approved by the Board for this
purpose is incentivizing customers who go in for Green Projects, i.e.
those projects which reduce Carbon Emissions and promote
Renewable Energy. “Green Housing” or “Green Home” is one of the
types of projects identified for this purpose.
At present State Bank of India is the only Bank in the country
supporting the cause of Green Buildings by offering a 5% concession
in margin, 0.25% concession in interest rate and waiver of processing
fees, on the existing home loan products to customers who go in for
Green Projects.
51
3.4. HOME LOAN TOP-UP PRODUCTS
i) SBI Home Line
SBI Home Line Special Personal Loans come with inbuilt
provision to sanction personal loans to home loans borrowers with a
satisfactory repayment record of 3 years. The rate of interest charged
on these personal loans is only 50 bps above the Home Loan interest
rate applicable to the repayment tenure opted by the borrower
(floating rates only), prevailing as on the date of sanction of “SBI-
Home Line” Special Personal Loans.
ii) SBI Home Plus
SBI Home plus is scheme is launched for granting personal
loans to the banks home loans customers against the security of their
house property. All home loans customers with a satisfactory
repayment record of at least one year and who maintain a Savings
bank or current account with us.
The loan can be used for any purpose, viz. extension/repair of
house, purchase of car/ consumer durables, education / medical
expenses of family members, personal expenses, etc. There will be no
need to obtain documentary evidence for the end-use of funds.
However a certificate from the customer in the application to the
effect that the loan will not be used for speculative purposesloan will not be used for speculative purposesloan will not be used for speculative purposesloan will not be used for speculative purposes would be
obtained.
52
iii) SBI Life style Loan
Loans to meet life style needs of Home Loans customers.
State Bank Of India launched the SBI Life Style Loans to help home
loan customers meet any short term expenditure, (Vacation travel,
purchase of Gold, Lifestyle goods) except speculative investments,
which adds comfort to the life style of the borrower with satisfactory
repayment record. SBI has tie up with various reputed travel houses,
lifestyle product companies for discounts to our customers.
53
3.5. RELATED HOME LOAN PRODUCTS
i) Earnest Money Deposit (EMD) Scheme
Many Government agencies, like Urban Development Authorities
and Housing Boards, periodically come out with schemes for sale of
plots/houses, wherein applicants have to submit 10-20% of the cost of
plot/house as Earnest Money Deposit (EMD) and allotments are
made by draw of lots.
The SBI EMD scheme is designed for financing against earnest
money for allotment of a house/plot. Individuals above 21 years of age
and with a steady source of income are eligible to avail loans under
this scheme.
Salient Features of the Scheme:Salient Features of the Scheme:Salient Features of the Scheme:Salient Features of the Scheme:
• No minimum income criteria.
• Margin waived in all cases.
• Eligible for 100% of application money, subject to maximum
loan amount of Rs.10 Lacs.
• Waiver of security in all cases irrespective of the loan amount.
• The above mentioned features of the scheme are applicable
subject to the following conditions:
54
ii) SBI Reverse Mortgage Loan
LLLLoans for welfare of senior citizens in India.oans for welfare of senior citizens in India.oans for welfare of senior citizens in India.oans for welfare of senior citizens in India.
bill - both self attested and originals verified & attested by the
bank) along with the duly filled in KYC form (form to collect
from the bank)
(4) Other Bank/Institution Check List ( In case of Takeover Loans)
� Sanction Letter of the other bank/institution.
� Loan account statement from the date of sanction till date.
� Pre-closure letter inclusive of penalty from the other
bank/institution.
� Letter of original documents held in their custody.
� Receipts for the total amount of the project issued by
builder/seller to the purchaser/bank/institution.
59
(5) PERSONAL DOCUMENTS Check List
(From the Applicant / Co- applicant and Guarantor, if any)
SELF ATTESTED COPIES OF DOCUMENTS Sl.No.1 to 6:
1. Proof of Identity (passport/pan card)
2. Proof of Residence (telephone/electricity bill/ company letter)
3. Salary Slip - last 3 months. (Attested by the employer)
4. Salary account bank statement - last 6 months (bank attested)
5. Form 16 for the last two years.
6. Income Tax Saral copy for the last two years.
7. Photograph - 2 nos.
8. Application Form
9. Company Profile – details of company
60
(6) Check list by the Purpose
Confirmation of Income
� If borrower is a salaried person, please provide two recent
consecutive pay slips or a copy of borrower’s employment
contract or a letter from his employer.
� If borrower is self-employed, please provide copies of borrower’s
last two Financial Accounts as prepared by his accountant.
� Appointment Letter
� Salary Certificate
� Retainer ship Agreement, if appointed as a consultant
� FORM 16 issued by the employer in borrower’s name.
� Last three years income tax returns duly filed and certified by
the Income Tax Authorities
� Similar Document -separately for each co-applicant.
Employment Proof
� Identity card issued by borrower’s employer
� Visiting card
61
Age Proof
� Passport
� Voter's ID card
� PAN card
� Ration card
� Employer's Identity card
� School leaving certificate
� Birth certificate
Residence Proof
� Ration card
� Passport
� PAN card
� Rent agreement, if borrower’s is staying currently on rent
� Bank Pass book
� Allotment letter from borrower’s company if borrower’s is
residing in company quarters.
62
Name Change Proof (If Applicable) Name Change Proof (If Applicable) Name Change Proof (If Applicable) Name Change Proof (If Applicable)
a. A copy of the official gazette
b. A copy of a newspaper advertisement publicizing the name
change
c. Marriage certificate
Investment Proof (If Applicable)
a. Bank statement for the last six months of all operating and
salary accounts
b. Bank statements for the last six months of all current accounts,
if self-employed.
c. Any other photocopies of investments held, if required by the
Bank
63
Property Title Proof
� Original Sale agreement with Builder/Developer duly
registered, Registration receipt
� Tripartite agreement from builder/developer
� Land documents indicating ownership, e.g.- Photocopies of title
deeds, if applicable
� A certificate by the legal advisor of the builder to the effect that
the builder has a good reputation and it is free from
encumbrance and other charges.
� A certificate from builder's Chartered Accountant certifying
that the builder has not mortgaged the property anywhere else.
� Certified true copy of approved plan.
� Copies of receipts of payments made to builder/developer.
� Allotment letter
� Possession letter
� Lease agreement, if applicable (Property bought from a
development authority)
� Mortgage deed if the Bank opts for a registered mortgage.
� No Objection Certificate from the developer, society or
development authority as applicable
� Personal Guarantees, if applicable.
64
� In case of alternate or additional security, documents for the
same depending upon the security details.
� For self-construction: Approved plans and clearance certificates
along with estimates
� Post dated cheques for the EMIs.
Confirmation of Rental Income
Copy of the existing tenancy agreement, or a rental appraisal,
from a local real estate agent signed by branch manager, or rental
manager.
Deposit or Investments
� Evidence of borrower’s deposit or investment funds, i.e. a bank
statement or term deposit receipt.
� For low equity loans (5-19% deposit), copy of his savings
account statements over the last six months.
Sale and Purchase Agreement
� If borrower is planning to buy a property, please provide a copy
of the successful sale and purchase agreement signed by both
borrower and the vendor.
� If borrower’s is planning to sell or have already sold his existing
property, please provide a copy of that property's sales and
purchase agreement.
65
New Customer to the banks of India
• If borrower’s is refinancing from another bank please provide
copies of his loan statements covering the last six months.
• Please provide copies of borrower’s account statements covering
the last six months from his current bank.
• Please provide copies of borrower’s identification and if
borrower has arrived in the country within the last 5 years,
please provide a copy of his passport.
GOVERNMENT VALUATION AND RATING
System A copy of the latest Government or Ratings Valuation is to be
provided. Depending on the age and value indicated in conjunction
with the amount required to borrow, the Bank may require a
Registered Valuation and borrower’s Banker will advise borrower.
66
4.3. PURPOSE
The bank offers home loans for purchase and/or construction of
house property as well as plot loans.
It offers loans for:
• Purchase/ Construction of new House/ Flat
• Purchase of an existing House/ Flat
• Purchase of a plot of land for construction of House
• Extension/ repair/ renovation/ alteration of an existing House/
Flat
• Purchase of Furnishings and Consumer Durables as a part of
the project cost
• Takeover of an existing loan from other Banks/ Housing
Finance Companies
67
4.4. QUANTUM OF LOAN
Actual loan amount will be determined taking into consideration
such factors as applicant’s income and repaying capacity, age, assets
and liabilities, cost of the proposed house/flat etc.
Applicants aged between 18 and 45 years, can get 60 times Net
Monthly Income (NMI) or 5 times Net Annual Income (NAI) and for
applicants aged over 45 years of age, it is 48 times NMI or 4 times
NAI.
This will be subject to a maximum EMI/NMI ratio as under:
Net Annual IncomeNet Annual IncomeNet Annual IncomeNet Annual Income EMI/NMI RatioEMI/NMI RatioEMI/NMI RatioEMI/NMI Ratio
Up to Rs.2 lacs 40%
Above Rs.2 lacs to Rs. 5 lacs 50%
Above Rs. 5 lacs 55%
Table Table Table Table 4.24.24.24.2: Criteria for Loan Amount : Criteria for Loan Amount : Criteria for Loan Amount : Criteria for Loan Amount
(Source: Researchers methodology)
� Increase up to 5% in the EMI/NMI ratio may be permitted by
the sanctioning authority, depending on the availability of
disposable surplus income after meeting expenditure towards
maintenance of family.
4.5. EQUATED MONTHLY
The staff at the selected Branch did not want to reveal the
actual method adopted by SBI as they used to have a computer
software Application for the purpose that looks just as below:
DiagramDiagramDiagramDiagram
However, the actual calculation m
follows:
From various resources, it is found that:
1.1.1.1. The EMI break up, for SBI is:
• 68% - Principal Component and
• 32% - Interest Component
2.2.2.2. The way EMI is calculated c
heads:
• Flat rate system and
• Reducing balance system.
68
.5. EQUATED MONTHLY INSTALLMENT CALCULAT
The staff at the selected Branch did not want to reveal the
actual method adopted by SBI as they used to have a computer
software Application for the purpose that looks just as below:
DiagramDiagramDiagramDiagram 4.14.14.14.1: : : : Home Home Home Home EMI CalculatorEMI CalculatorEMI CalculatorEMI Calculator
However, the actual calculation model for EMI could be as
From various resources, it is found that:
The EMI break up, for SBI is:
Principal Component and
Interest Component
The way EMI is calculated can be broadly categorized under
Flat rate system and
Reducing balance system.
INSTALLMENT CALCULAT ION:
The staff at the selected Branch did not want to reveal the
actual method adopted by SBI as they used to have a computer
software Application for the purpose that looks just as below:
odel for EMI could be as
an be broadly categorized under two
69
The flat rate system:
The rate of interest on the loan amount is calculated over the
full duration of the loan, the principal and the interest is divided over
the number of installments and the value arrived is borrower’s EMI.
Let us understand this better:
Table Table Table Table 4.34.34.34.3: : : : EMI calculation in the flat rate systemEMI calculation in the flat rate systemEMI calculation in the flat rate systemEMI calculation in the flat rate system
(Source: Researchers methodology)
A flat rate loan is the most expensive as in this case the
interest is calculated on the entire loan amount and no principal
deduction is taken into account. Thus the effective rate of interest
works out to be much higher.
70
REDUCING BALANCE SYSTEM:
The interest is charged on the outstanding balance of the loan, which
goes on reducing. Hence the cost of the same loan amount on an
annual reducing balance method works out to 29% and 35% on a
monthly reducing balance method. Again in case of reducing system,
Table Table Table Table 4.44.44.44.4: EMI calculation in Reduced balanced system: EMI calculation in Reduced balanced system: EMI calculation in Reduced balanced system: EMI calculation in Reduced balanced system
(Source: Researchers methodology)
Daily reducing balance method (Used by SBI)
Here, there is immediate reduction in principal thereby
reducing the interest calculated on it. If borrower has taken a loan of
Rs.1, 00,000/- at 21% interest for 3 years and he pay Rs.3, 760/- on
Jan 10, the lender will consider total outstanding principal as Rs.96,
240/- from Jan 11. The interest will be calculated on Rs.1,00,000/-
from Jan 1 to Jan 10 and from Jan 11, interest will be calculated on
Rs.96,240/-. With a lower outstanding principal, the total interest
paid out reduces and so does the EMI.
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Monthly reducing balance method
Here, the principal component is deducted at the end of every
month and then the interest is calculated on this new outstanding
reduced principal. The above table gives the cash outflow on a loan of
Rs.1, 00,000/- at 21% interest for 3 years, when interest is calculated
by monthly reducing balance method.
Annual reducing balance method
Here the principal component of EMI though reduced every
month, is summated annually. Therefore, the interest is calculated
on the original loan amount for the entire year. At the end of the
year, the accumulated principal component is deducted from the
original loan amount and the interest for the next year is on this
reduced loan amount. If borrower has taken a loan of Rs.1,00,000/- at
21% interest for 3 years, the EMI will be Rs.4,018/-.
Which EMI plan to choose?
1.1.1.1. Payment of EMIs in advance or in arrears?Payment of EMIs in advance or in arrears?Payment of EMIs in advance or in arrears?Payment of EMIs in advance or in arrears?
Paying the EMI at the beginning of the month (EMI in
advance) means that he lock borrower money for the month;
while paying in arrears, (i.e. at the end of the month) gives
him an extra month before the payout. The effective rate of
interest on the loan also goes up when he pay the EMI at the
beginning of the month. Hence if two schemes offer the same
EMI, choose the one, which allows payment in arrears.
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2. Advance EMI payment
In advance EMI schemes a certain number of EMIs are
collected from the borrower in advance. The number of EMIs
that have to be paid out in advance varies with the interest
charged on the loan. The more borrower pay in advance the
lesser should be the interest charges.
Also in 100% financed loans, some EMIs have to be paid
upfront as advance. This effectively reduces the loan amount
and in real terms the financier has not given him 100% finance
but charges interest on the entire cost of the asset.
3. Deposit linked plan
Here, the financier offers a lower rate of interest,
provided the borrower invests 20% to 25% of the asset cost as a
fixed deposit with the financier. The interest on this deposit is
usually lower than the interest charged on the loan. Here
again borrower’ must consider the cost of parking borrower’s
funds in the deposit as the returns on it may not weigh
favourably with the low interest charged on the loan.
In the end, the thumb rule of EMI to remember: EMI is lowest,
when interest is calculated on a daily reducing basis. The
reason why EMI varies for the same loan amount, tenure and
interest rate is the difference in the compounding frequency of
interest rates.
73
bank remember that one liner joke - “Why sharks never take
lenders?” The answer is “Professional courtesy”.
4. Pre-EMI:
In case of part of disbursement of the loan, monthly
interest is payable only on the disbursement amount. This
interest is payable monthly till the final disbursement is made,
Note: 75 % of the processing fee may be refunded in the following Note: 75 % of the processing fee may be refunded in the following Note: 75 % of the processing fee may be refunded in the following Note: 75 % of the processing fee may be refunded in the following
cases: cases: cases: cases:
• Rejection of loan application on account of unsatisfactory pre-
sanction survey report.
• Rejection of loan application on account of unsatisfactory
legal/valuation reports.
• In cases where applications are sanctioned or rejected after
complete loan processing, fee will not be refunded.
(ii) Legal Charges: (ii) Legal Charges: (ii) Legal Charges: (ii) Legal Charges:
Advocate's fee for property search and the title investigation report.
a. Legal Fee/charges: Rs.1500/-
b. Govt. Stamp Govt. Stamp Govt. Stamp Govt. Stamp duty:duty:duty:duty: 0.25% of loan amount as stamp duty at the
time of equitable mortgage creation at the Bank.
c. Approx Govt. Stamp papers of Rs.1500/-(approx) for execution
of loan documents at the time of sanction
(Legal/Engineer/Processing fee cheques to be paid at the time of
submission of application form to the bank. Govt Stamp duty of
0.25 %( prevailing now) of the loan amount and Rs750/- approx
to be paid at the time of documentation of loan. Insurance will
Interest rate for proposals sanctioned Interest rate for proposals sanctioned Interest rate for proposals sanctioned Interest rate for proposals sanctioned between 1st Julybetween 1st Julybetween 1st Julybetween 1st July
2010 and 30th September 2010.2010 and 30th September 2010.2010 and 30th September 2010.2010 and 30th September 2010.
Floating Floating Floating Floating interest rate after 3rd year
1.75% above Base Rate, Currently effective
rate being 9.25% p.a.
FixedFixedFixedFixed interest rate after 3rd year
3.50% above the Base Rate prevailing at the time of reset,
With a reset frequency of 5 years.
Table Table Table Table 4.94.94.94.9: Rate of interests of : Rate of interests of : Rate of interests of : Rate of interests of SBI Easy Home LoanSBI Easy Home LoanSBI Easy Home LoanSBI Easy Home Loan
(Source: www.sbi.co.in)
78
SBI ADVANTAGE HOME LOAN (JULY 2010)SBI ADVANTAGE HOME LOAN (JULY 2010)SBI ADVANTAGE HOME LOAN (JULY 2010)SBI ADVANTAGE HOME LOAN (JULY 2010)
Interest rate for proposals sanctioned Interest rate for proposals sanctioned Interest rate for proposals sanctioned Interest rate for proposals sanctioned between 1st Julybetween 1st Julybetween 1st Julybetween 1st July
2010 and 30th September 2010.2010 and 30th September 2010.2010 and 30th September 2010.2010 and 30th September 2010.
Floating Floating Floating Floating interest rate after
3rd year
2.25% above the Base Rate, Currently
effective rate being 9.75% p.a.
FixedFixedFixedFixed interest rate after 3rd
year
3.50% above the Base Rate prevailing at the
Time of reset, with a reset frequency of 5 years.
Table Table Table Table 4.104.104.104.10: Rate of interests of : Rate of interests of : Rate of interests of : Rate of interests of SBI Advantage home loanSBI Advantage home loanSBI Advantage home loanSBI Advantage home loan
(Source: www.sbi.co.in)
4.12. MORATORIUM
Up to 18 months from the date of disbursement of first
instalment or 2 months after final disbursement in respect of loans
for construction of new house/ flat (moratorium period will be
included in the maximum repayment period)
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4.13. GUARANTOR:
• The bank insists on a Guarantor till the property is
registered/title transferred on borrower’s name and Equitable
Mortgage registered in favour of the bank.
• Guarantor details in the application with Assets & Liabilities
duly filled in along with the above mentioned documents are
required.
• For Takeover Loans From Other Banks – Guarantor Is A Must
• An eligibility criterion of guarantor is that: 80% of the net
credit worthiness of the guarantor should be more than the loan
amount (takeover amount).
• The Title holders of the property should ONLY be the
borrowers. If the agreement is on the joint names (maximum
three persons), then the Sale deed also should be on the joint
names and the loan also will be on the joint names. The same is
also applicable for take over loans.
i.e. Joint Owners then Joint name in the loan application /
Single Owner then Single name in the loan application.
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4.14. TAX BENEFITS
• Both principal as well as interest of home loans attract tax
benefits. With effect from 1st April 2005 (i.e. assessment year
2005-07) under section 80C of the Income Tax Act 1965:
• Principal amount of repayment of loan along with other savings
such as PF, PPF, and Life Insurance premium etc up to a
maximum of Rs 1, 00,000/- will be eligible for deduction from
gross income.
• Interest paid on loan after completion of construction will be
deductible from income from property
• For self occupied - Income will be treated as nil and interest
payment will be treated as minus income which will be adjusted
against other income. For rental property - It will be adjusted
against rental income.
4.15. PACKAGE OF EXCLUSIVE BENEFITS
• Complimentary international ATM-Debit card.
• Complimentary SBI Classic/ International Credit Card with
waiver of joining and first year's fees.
• Option for E-banking.
• Concessional package under 'Credit Khazana' for prospective
car loan borrowers whose accounts are conducted satisfactorily.
• 50% concession in charges in respect of all personal
remittances/ collection of outstation cheques.
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4.16. INSURANCE COVER
Compulsory insurance of property, Optional life cover from
SBI Life & free accident insurance cover for borrower available. The
house/flat to be insured against the risk of
fire/riots/earthquake/lighting/floods etc. in the joint names of the
borrower and the bank for the actual project cost after netting off the
cost of land, stamp duty an registration charges.
People seeking home loan often encounter such worries like
what if anything happens to them in that case what would happen to
the home loan? Naturally, their main concern is that should
something happen to them their folks would have to encounter the
problem of facing the impact of repaying the loan debt. Home loan
insurance is completely different from home insurance.
This type of insurance covers the amount of home loan
borrower owe to the bank. This doesn't include the amount he has
already paid but the amount still to be paid and evidently his family
members will not face the problem of paying the amount being owed
to the bank but the insurance provider will bear the brunt of the
same. The insurance companies are not very impending about how
much amount is to be paid as part of the insurance premium as the
premium amount varies depending on the case.
The premium amount broadly relies on conditions like - age of
the person availing the loan (the younger the person, the lower the
premium amount); loan amount (the lesser the loan amount, the
lower the premium); period of the loan (the more the loan repayment
82
period, more is the premium); another important factor is the health
of the loan taker (the premium amount would be low in case of good
health of the individual). SBI offers mortgage life insurance policy to
the SBI home loan applicants thereby consolidating the insurance
premium along with the EMIs. The State Bank of India offers a free
personal accident insurance cover to their clients availing home loan
so that the client's family doesn't have to face any problem if he/she
meets an accident that proves to be fatal.
83
4.17. VALUATION POLICIES
The existing valuation policy was reviewed, and ECCB
approved the following valuation and re valuation policy w.e.f.
01.04.08 for individual home loans (IHLS):
Purpose Of Home LoanPurpose Of Home LoanPurpose Of Home LoanPurpose Of Home Loan Valuation PolicyValuation PolicyValuation PolicyValuation Policy
Construction of new dwelling unitConstruction of new dwelling unitConstruction of new dwelling unitConstruction of new dwelling unit
Valuation of land plus project cost i.e. stage-wise
estimated expenditure obtained from the
empanelled architect / engineer irrespective of
loan amount. Disbursement to be made according
to the stage of construction.
For loans unto Rs. 2 laces at rural /semi-urban
branches, the sanctioning authority may waive
valuation as above and my assess the valuation
based on market prices by enquiry and a
certificate by the contractor/engineer involved in
construction.
Purchase of second sale plot Purchase of second sale plot Purchase of second sale plot Purchase of second sale plot
/dwelling units/dwelling units/dwelling units/dwelling units
Valuation report obtained from the empanelled
architect/engineer/valuer irrespective of the loan
amount and age of the property.
Purchase of new dwelling unitsPurchase of new dwelling unitsPurchase of new dwelling unitsPurchase of new dwelling units
For loans up to Rs 20 lacks, reasonableness of the
price mentioned in the underlying sale
did/agreement to sale etc. ascertained by the
sanctioning authority as per prevailing market
prices. For loans above Rs.20 lacks, valuation
report obtained from an external empanelled
architect/ engineer / valuer.
Purchase of plot for constructions of Purchase of plot for constructions of Purchase of plot for constructions of Purchase of plot for constructions of
dwelling unit from regiondwelling unit from regiondwelling unit from regiondwelling unit from regional govt.al govt.al govt.al govt.
housing development housing development housing development housing development authoritiesauthoritiesauthoritiesauthorities
Table Table Table Table 5.15.15.15.1: Systems and procedures in lending process : Systems and procedures in lending process : Systems and procedures in lending process : Systems and procedures in lending process
(Source: Researchers methodology)
(RACPC - The staff from respective Retail Asset Central Processing Cells)
85
5.2. PROMOTION AND DISTRIBUTION OF THE PRODUCTS
(a) PROMOTION:
• State Bank of India, has come up with a non-conventional
method to promote its home loan business.
• SBI promotes home loan segment at its ‘Home Fair Melas’ Home Fair Melas’ Home Fair Melas’ Home Fair Melas’ at
each circle level.
• SBI also use to enter into an agreement with the known
builders to promote its home loan segment.
• The bank is looking forward to develop special processing
channels so as to provide quick services to home loan
customers.
• There would be no processing fees on loans, adding that the
home loans approved at the fair would bear 0.25 per cent less
interest than the nominal rate from the start of fourth year of
repayment.
• Around 24 property dealers and builders were present at the
fair.
• Several kinds of staff are involved in these Fairs, who include:
� Marketing Associates
� Field Officers
� Associated Builders and
� The staff from respective Retail Asset Central
Processing Cells (RACPC).
86
• The staff do undertake several initiatives with the prospective
customers at these Fairs itself like:
� Enquiries
� Guidance
� Instructions
� Requirement Specifications
� Application forms distribution
� Application Approvals and
� Customer Services
(b) DISTRIBUTION:
State Bank of India supplies and sells its home loan products
through its over 11,440 branches nation-wide and associated
RACPCs.
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5.3. PROCESS UNDERTAKEN
5.3.1. APPLICATION SUBMISSION
• The home loan application form of SBI is rather lengthy
compared to the forms at other private sector lenders.
• Completely filled in Form along with the necessary
documents.
• Need to submit the documents from builder.
• In my case, the project had APF not in SBI (basically already
approved by SBI); so not much documentation was required.
• Otherwise they would make a surge report, which can
consume some time. I guess they are quite strict about it.
88
5.3.2. PRE-SANCTION PROCESS
1. The Field Officers hold Personal Discussion Personal Discussion Personal Discussion Personal Discussion with the prospect
customer regarding Interest Rate, Eligibility, EMI and all the
terms and conditions
2. The prospect customer’s options customer’s options customer’s options customer’s options and acceptance are ascertained
and recorded.
3. Necessary documents documents documents documents are collected from the customer.
4. Pre-Inspection Sheet is maintained along with the documents
to record inspection by the Bank’s staff (or) outsourced agency.
5. Bank's Field Investigation Field Investigation Field Investigation Field Investigation for address proof/Employment etc.
6. All the documents are sent to Retail Assets Central Processing
Cell (RACPC) for credit apcredit apcredit apcredit appraisal praisal praisal praisal based on the customer’s
financial capacities.
7. All the terms are conditions including Loan amount, interest
rate, tenure, EMI etc are determined.
8. The RACPC would submit its credit appraisal report credit appraisal report credit appraisal report credit appraisal report on the
customer to the branch.
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� Legal Opinion:
• Empanelled Lawyer(s) does submit the Title Deed verification
and the search report for 30 years in respect of properties of
the customer.
• The legal clearances/ opinion of the flat/property which
borrower is buying / staying /constructing have to be obtained
from an advocate from Bank panel.
• Submission of legal documents & legal check.
• The search report reveals encumbrance on the property based
on which the grant of loan can be avoided and the prospect
borrower may be asked to rectify it.
� Valuation check:
• The Engineer’s valuation of the property and estimate for the
construction to be obtained with bank panel engineer.
• In case of takeover loans, two panel engineer valuation is
required and the least value between them should be more
than the takeover amount.
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PRECAUTIONS TO BE TAKEN:
• Applications form to be complete in all respects.
• Market information about the potential borrower should be
gathered.
• Pre-sanction survey should be conducted wherever required.
• The authenticity of salary slip, form 16 return, and proof of
identification, address and income etc. should be cross checked.
• Income from all sources is to be considered, wherever
applicable, when the sanctioning authority is satisfied about
the quantum and uninterrupted flow thereof during the tenure
of the loan.
5.3.3. SANCTION STAGE
• The branch manager would consider the credit appraisal report
of RACPC and will take a decision whether to sanction or not
the loan to the customer.
• The decision is informed to the prospect customer the decision
so taken via Field Officer.
• If the decision is “sanctioned”, the Field Officer would issue
Offer letter to the prospect.
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5.3.4. POST-SANCTION PROCESS
• Registration of Property documents
• Signing of Agreements and submitting post-dated cheques
• SBI insists on all the margin money contributions to have been
made to the seller and the money receipts to be handed over to
them prior to the loan disbursement.
• The customer needs to submit the cash amount for various submit the cash amount for various submit the cash amount for various submit the cash amount for various
• SBI would take 12 cheques of SBI a/c for security. 12 cheques of SBI a/c for security. 12 cheques of SBI a/c for security. 12 cheques of SBI a/c for security.
• borrower can link his SBI savings a/c to have standing
instruction to deduct EMI.
Normally, almost all home purchase transactions will entail payment
of an advance to the seller and on the day of registration, the
remaining contribution from the buyer and the loan amount from the
bank are exchanged with the property documents. Not with SBI.
And once the registration is done, the loan applicant needs to get the
latest Encumbrance Certificate (EC) from the Registrar’s Office and
submit it to SBI. Subsequent to this process, SBI will create an
equitable mortgage on the property in favour of the bank as
collateral. This entails a fee of Rs 7000 (I understand that this is a
percentage of the registered value of the property) to the loan
applicant. Only after all this is done, will the process be complete. I
never saw this equitable mortgage fee being mentioned anywhere in
the high decibel advertisements from SBI.
92
5.3.5. DISBURSEMENT
• The disbursement is made in phases correlating to the actual
progress made in the construction.
• The proper end-use of funds is ensured by visits to the sites.
• Certificate from the engineer may be required to be submitted
by the borrower stating the status of the project.
• By BC/DD crossed A/c Payee only incorporating the
builder’s/seller’s A/c No. and banker’s name and sent directly
to builder/seller by Regd. AD/Speed Post.
5.3.6. POST- DISBURSEMENT PROCESS
• Property inspection is carried out and recorded in the
Inspection Register at each stage of disbursement by the field
officers.
• The installments are disbursed in different proportions in
Maximum 25 years (or) Up to the age of 70 years (the age by
which the loan should be fully repaid) of the borrower, whichever
is early.
MAXIMUM REPAYMENT PERIOD: MAXIMUM REPAYMENT PERIOD: MAXIMUM REPAYMENT PERIOD: MAXIMUM REPAYMENT PERIOD:
� For applicants up to 45 years of age: 25 years
� For applicants over 45 years of age: 15 years
� Moratorium period (Repayment holiday):Moratorium period (Repayment holiday):Moratorium period (Repayment holiday):Moratorium period (Repayment holiday):
The moratorium period is included within the maximum
repayment period.
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5.3.8. PRE-CLOSURE
• Pre-closure is allowed by the Bank at any time after the
complete disbursal and before the actual tenure.
• If the loan is pre-closed from own resources for which proof is
submitted by the customer, penalty is not levied irrespective of
S.No.S.No.S.No.S.No. CompetitorCompetitorCompetitorCompetitor Severity of Competition(Low/moderate/High)?Severity of Competition(Low/moderate/High)?Severity of Competition(Low/moderate/High)?Severity of Competition(Low/moderate/High)?
• Majority of the competitors for the bank are from private
sector in region.
• The closest competitor for the bank is HDFC .Virtually; there
was an “ad war” with teasing rates between the two banks.
• Others include the local player Andhra bank and the private
giant ICICI.
6.2. STRENGTHS AND WEAKNESSES
S.NO.S.NO.S.NO.S.NO. StrengthsStrengthsStrengthsStrengths WeaknessesWeaknessesWeaknessesWeaknesses 1 Able Work Force Long Turnaround Time 2 Network Multiple Visits 3 Innovative Schemes Documentation Needs 4 Loan Pricing Competition 5 Lack Of Prepayment Penalty, Varied Customer Demands 6 Transparency Shortage Of Staff 7 The Interest Rates
Table Table Table Table 6.2 6.2 6.2 6.2 strengths and strengths and strengths and strengths and weaknesses (weaknesses (weaknesses (weaknesses (Source: Researchers methodology)
Table Table Table Table 6.36.36.36.3: : : : Size of home loanSize of home loanSize of home loanSize of home loan
Source: SBI Annual Report 08-09, 09-10)
DiagramDiagramDiagramDiagram 6.16.16.16.1: : : : Size of home loanSize of home loanSize of home loanSize of home loan
There has been steady increase in the home loan book size of
In the year 2009-10, the size had grown to 71,193
cr in the year 2008-09, which implies the size had
doubled in two years.
2007-08 2008-09 2009-2010
Financial yearFinancial yearFinancial yearFinancial year
SIZE OF HOME LOANSIZE OF HOME LOANSIZE OF HOME LOANSIZE OF HOME LOAN
increase in the home loan book size of
71,193 cr from
09, which implies the size had
77%
SHARE OF HOME LOANS IN TOTAL ADVANCES.SHARE OF HOME LOANS IN TOTAL ADVANCES.SHARE OF HOME LOANS IN TOTAL ADVANCES.SHARE OF HOME LOANS IN TOTAL ADVANCES.
6.4. SHARE OF HOME LO
Retail Credit segmentHome loans Other advances Total retail advances
• The home loan segment had got a small i.e., 23% share in the
total retail segment of advances by the branch in the year 2009
10.
• The other retail advances like car loans, educational loans,
personal loans etc got the 77% share of total retail advances of
Rs. 8,11,12,858 crores in the year.
101
23%
SHARE OF HOME LOANS IN TOTAL ADVANCES.SHARE OF HOME LOANS IN TOTAL ADVANCES.SHARE OF HOME LOANS IN TOTAL ADVANCES.SHARE OF HOME LOANS IN TOTAL ADVANCES.FOR 2009FOR 2009FOR 2009FOR 2009----10101010
Home loans
Other advances
.4. SHARE OF HOME LOANS IN TOTAL ADVANCE
Retail Credit segment Amount in Rs. crores % Home loans 2,42,28,515 23% Other advances 8,11,12,858 77% Total retail advances 10,53,41,373 100%
Table Table Table Table 6.46.46.46.4: : : : Share of Home LoansShare of Home LoansShare of Home LoansShare of Home Loans
Source: SBI Annual Report 08-09, 09-10)
DiagramDiagramDiagramDiagram 6.26.26.26.2: share of home loan : share of home loan : share of home loan : share of home loan
The home loan segment had got a small i.e., 23% share in the
total retail segment of advances by the branch in the year 2009
The other retail advances like car loans, educational loans,
personal loans etc got the 77% share of total retail advances of
crores in the year.
Home loans
Other advances
ANS IN TOTAL ADVANCE S.
100%
The home loan segment had got a small i.e., 23% share in the
total retail segment of advances by the branch in the year 2009-
The other retail advances like car loans, educational loans,
personal loans etc got the 77% share of total retail advances of
6.5. QUALITY OF ASSETS
Total Assets Total Assets Total Assets Total Assets Non Performing Assets Non Performing Assets Non Performing Assets Non Performing Assets in Home loan Segmentin Home loan Segmentin Home loan Segmentin Home loan Segment
• That implies the ratio of NPAs to total Advances is 1.72%, Of
course well within the limits.
NPA's1.72%
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. QUALITY OF ASSETS
Non Performing Assets Non Performing Assets Non Performing Assets Non Performing Assets in Home loan Segmentin Home loan Segmentin Home loan Segmentin Home loan Segment
Total Total Total Total Advances Advances Advances Advances
• Majority of the customers are very much concern about the
unreasonable delays in processing.
• Operational systems used by SBI are so complex.
• The transparency level of the bank is maintained low.
• Most of the existing customers are demand
rates.
11
7
5
10
Nature of Complaints(% of total) for the year 2009Nature of Complaints(% of total) for the year 2009Nature of Complaints(% of total) for the year 2009Nature of Complaints(% of total) for the year 2009
Majority of the customers are very much concern about the
unreasonable delays in processing.
Operational systems used by SBI are so complex.
The transparency level of the bank is maintained low.
Most of the existing customers are demanding for uniform
13
19
12
6
Nature of Complaints(% of total) for the year 2009Nature of Complaints(% of total) for the year 2009Nature of Complaints(% of total) for the year 2009Nature of Complaints(% of total) for the year 2009
Majority of the customers are very much concern about the
The transparency level of the bank is maintained low.
ing for uniform
Nature of Complaints(% of total) for the year 2009Nature of Complaints(% of total) for the year 2009Nature of Complaints(% of total) for the year 2009Nature of Complaints(% of total) for the year 2009----10101010
Tedious Procedures
Delays in Processing
Transparency
Negligence by staff
Lack of/improper guidance
Insurance cover
Teasing interest rates
Hidden charges
104
6.7. AWARDS AND REWARDS
� Best Bank 2009Best Bank 2009Best Bank 2009Best Bank 2009 State Bank of India has been adjudged the best
bank 2009 by Business India. (August-2009)
� Shri Om Prakash Bhatt Declared as one of the “25 most25 most25 most25 most
valuable Indiansvaluable Indiansvaluable Indiansvaluable Indians” by the week magazine for 2009. (Published in
August-2009 Issue)
� “Best Home Loan Provider 2008” by Outlook Money NDTV-
Profit.
� “The Most Preferred Home Loan Provider” by CNBC AWAAZ
Consumer Awards for 3 years consecutively.
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R E C O M M E N D A T I O N S
On the basis of the collected data and the analysis along with
detailed discussion made in conclusion of this report, some
suggestions can be made to the bank which will be helpful to them in
improving their services operational and financial performance.
These suggestions have been discussed as follows:
1. Using Information Technology and Electronic Data Interchange
at various stages of lending process would definitely give an edge
to the bank in fighting competition and arrive at a more realistic
lending decision. E.g.:
• Use of Central Mortgage Registry (proposed in the Budget-
2010 to be set up) for Title/Deed verification, which will
ensure that no two borrowers in the country will be able to
raise institutional loans against the same asset. This would
help the bank in reducing NPAs.
• Use of credit appraisal reports from CIBIL or Credit
Information Companies (CIC) to avoid frauds.
• Online Processing for various inspections and verifications
etc.
• Online Disbursals and Repayments.
106
2. To increase their customers, the bank should provide specialized
services in this sector. These services can be such as proper
guidance to the customer regarding the processing of loans,
especially for the customers who are illiterate.
3. To satisfy their customers and for good dealings in future, the
bank should make prompt disbursement of loan amount to the
customers so that they can buy or construct their dream home as
early as possible.
4. The Bank should use easy procedure, or say, less lengthy
procedure for the sanctioning of loan to the customer. There
should be less number of legal formalities, in case this exists,
then, these should be completed in less time. This will be helpful
in attracting more customers.
5. Although the interest rates on specific norms, yet customers seek
uniform interest rate giving equal justice to both the existing as
well as new customers.
6. The bank should improve their overall services to increase the
number of customers for home loans. They should recruit
professionals to provide such services and to satisfy the
customers.
7. Although SBI Bank is a market leader in 'home loans' sector but
they should innovate their services, viewing the- increasing
competitions from other banks such as HDFC.
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8. The Banks should try to provide proper knowledge regarding
their home loan schemes, even to people who don't know about
such schemes and their benefits especially in rural areas. So
they should provide knowledge to the ignorant customers,
especially in rural areas and backward urban area.
9. So, above are the main suggestions provided to the banks. By
considering these suggestions, the banks can strengthen their
customer base in home loans sector.
10. They should improve their services and reduce legal proceedings
and should be friendly to their customers.
11. The bank needs to take serious and sincere steps in reducing the
processing times by taking certain measures like using
Information Technology to process the documents.
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C O N C L U S I O N
The ratio of mortgage to GDP in India has remained low at
7%, as against 12% for china, 41% for Hong-Kong and more than
80%foor developed countries, thus providing for further growth in
the housing sector during the coming years. Hence, the banks
shall have more opportunities to tap the market.
Banks have been constantly increasing their market share,
there by intensifying competition from other banks as well as
Housing Finance Companies.
While the discounted / special scheme rates are offered to
new home loans, existing customers continue to ply higher rate of
interest. The Indian Bank’s Association has planned to introduce a
uniform rate for all borrowers. As being a Largest Lender in the
segment SBI needs to carry the same spirit and the move is in the
right direction is certainly expected from all the banks. We need to
watch how banks / HFCs adjust their lending portfolios to this
effect in future.
Last, but not the least, you may be the ‘King’ in the Market,
but, the Indian customer is your ‘Boss’ by whom, finally, your
7)7)7)7) Who are your main competitors and what’s the level of competition you
face from them?
Sr.No.Sr.No.Sr.No.Sr.No. CompetitorCompetitorCompetitorCompetitor Severity of CompetitionSeverity of CompetitionSeverity of CompetitionSeverity of Competition
Any additional Any additional Any additional Any additional
InfoInfoInfoInfo
Print Media
TV Advertisement
Personal Selling
Campaigns
Road-Side Hoardings
9)9)9)9) How are you distributing your Products?
S.NO.S.NO.S.NO.S.NO. ChannelChannelChannelChannel
(Sanctioned by)(Sanctioned by)(Sanctioned by)(Sanctioned by) Terms/ConditionsTerms/ConditionsTerms/ConditionsTerms/Conditions Proportion of SalesProportion of SalesProportion of SalesProportion of Sales
1
2
3
4
111
10)10)10)10) What is the Process Undertaken (within your branch)
S.NOS.NOS.NOS.NO StageStageStageStage
What is doneWhat is doneWhat is doneWhat is done
(operations)(operations)(operations)(operations)
/considerations/considerations/considerations/considerations Who does itWho does itWho does itWho does it
How many days How many days How many days How many days
it takesit takesit takesit takes
1 Promotion
2 Guidance to prospective
3 Application submission
4 Pre-Sanction Process
5 Sanction
6 Post-Sanction Process
7 Valuation
8 Inspections
9 Legal Sanctions
10 Disbursement
11 Post-Disbursement
Inspections
11)11)11)11) How do you see the performance of Marketing Associates and their role in
bringing sales?
12)12)12)12) How many sales you have made from Marketing Associates?
Number of Sales from MAs
Total Sales
% of Total Sales
13)13)13)13) What are the various standard formats (Proforma Sheets) that you use at
various stages?
Title of the Sheet Title of the Sheet Title of the Sheet Title of the Sheet Primary Contents Primary Contents Primary Contents Primary Contents Purpose Purpose Purpose Purpose Who Maintains it Who Maintains it Who Maintains it Who Maintains it
112
14)14)14)14) What did your customers prefer (Fixed/Floating Interest Rate)?
Type of Interest Type of Interest Type of Interest Type of Interest
Rate Rate Rate Rate
Number of Number of Number of Number of
Borrowers Borrowers Borrowers Borrowers
Fixed
Floating
15)15)15)15) What is the Authority Structure for distribution of Loans:
Terms/Conditions Terms/Conditions Terms/Conditions Terms/Conditions Sanctioned by Authoritative Sanctioned by Authoritative Sanctioned by Authoritative Sanctioned by Authoritative
16)16)16)16) How are the builders considered and approved?
17)17)17)17) What is the criterion for Repayment?
18)18)18)18) What are the Pre-Closure norms?
19)19)19)19) What is the criterion for Re-Phasement?
20)20)20)20) How are you providing for Bad Loans?
21)21)21)21) What is the Recovery Mechanism that you practice?
22)22)22)22) What is the nature of recovery agents?
23)23)23)23) How do you undertake Take Overs?
113
24)24)24)24) How many prospects (demand)- Applied-Sanctioned-Under Process-
Disbursed?
Customers Customers Customers Customers Number of Proposals Number of Proposals Number of Proposals Number of Proposals
Have shown interest in buying your products
Applied(Applications)
Approved
Sanctioned
Disbursed
25)25)25)25) How many Home loans you have disbursed to:
Target Segment Target Segment Target Segment Target Segment Number of accounts Number of accounts Number of accounts Number of accounts Amount (Rs.) Amount (Rs.) Amount (Rs.) Amount (Rs.)
Individuals from Weaker
sections
Mortgage loans
Salaried individuals
Self-Employed individuals
Realtors
Your Staff
26)26)26)26) What was the purpose of home loans towards which disbursements have
been made?
Purpose Purpose Purpose Purpose Number of Accounts Number of Accounts Number of Accounts Number of Accounts Amount(Rs.) Amount(Rs.) Amount(Rs.) Amount(Rs.)
To Pay for First homes
To Purchase second homes
To Improve/renovate existing homes
114
27)27)27)27) NMI Profile of Customers:
NMI Range NMI Range NMI Range NMI Range No. of Borrowers No. of Borrowers No. of Borrowers No. of Borrowers Total Amount (Rs.) Total Amount (Rs.) Total Amount (Rs.) Total Amount (Rs.)
Up to Rs.2 Lacs
Between Rs.2 Lacs
and Rs. 5 Lacs
Above Rs.5 Lacs
28)28)28)28) Loan Amount Disbursals:
Loan Amount Loan Amount Loan Amount Loan Amount No. of Borrowers No. of Borrowers No. of Borrowers No. of Borrowers
Upto Rs.5 Lac
Above Rs.5 Lac and up to Rs.10 Lac
Above Rs.10 Lac and upto Rs.20 Lac
Above Rs.20 Lac and upto Rs.50 Lac
Above Rs.50 Lac and upto Rs.1 Cr
Above Rs.1 Cr and upto Rs.5 Cr
Above Rs.5 Cr
29)29)29)29) Size Of Home Loan Book for the last 3 financial years:
Financial Year Financial Year Financial Year Financial Year % growth rate % growth rate % growth rate % growth rate
2006-07
2007-08
2008-09
31)31)31)31) What is the Share Of Home Loans in the retail portfolio?
115
32)32)32)32) How many Home Loans have been Taken Over from other Banks:
BankBankBankBank Number of AccountsNumber of AccountsNumber of AccountsNumber of Accounts Amount (Rs.)Amount (Rs.)Amount (Rs.)Amount (Rs.)
33)33)33)33) How many Outstanding Loan accounts are there?
Number of Accounts Outstanding Number of Accounts Outstanding Number of Accounts Outstanding Number of Accounts Outstanding
Total Amount Outstanding(Rs.) Total Amount Outstanding(Rs.) Total Amount Outstanding(Rs.) Total Amount Outstanding(Rs.)
Total Outstanding/Total Advances (%) Total Outstanding/Total Advances (%) Total Outstanding/Total Advances (%) Total Outstanding/Total Advances (%)
34)34)34)34) How are you mitigating risk factors in lending to the segment?
35)35)35)35) What is Net Income Generated on the segment?
Net Interest Income generated on Net Interest Income generated on Net Interest Income generated on Net Interest Income generated on
Home Loans Home Loans Home Loans Home Loans
Total Net Interest Total Net Interest Total Net Interest Total Net Interest
Income Income Income Income
% of Total Net % of Total Net % of Total Net % of Total Net
Income Income Income Income
36)36)36)36) Have you met the Targets set?
37)37)37)37) How many complaints have been reached at Banking Ombudsman’ s Office?
Total Complaints Total Complaints Total Complaints Total Complaints Share of Home Loans Share of Home Loans Share of Home Loans Share of Home Loans % of total % of total % of total % of total