LIC Housing Finance Limited 5.1 ESTABLISHMENT OF LICHFL The Life Insurance Corporation of India has been established by the government of India under the company law of 1956, to provide the life insurance for Indian citizens and collect their small savings for their bright future. LIC of India is providing loans for housing since 1964 i . The LIC of India is the largest provider of funds for the house construction and house purchase. It invests about 12 to 19 ii percent of its total investible resources in the housing sector. LICs investment account for about 70 percent of total indirect institutional finance. It caters to the housing finance requirements of state housing boards, Apex co-operative societies and HUDCO. The remaining portion of funds are channelised directly to its policy holders agents employees, staff house building programs and co-operative housing societies promoted public limited companies. Some of the well-known schemes in which it directly lends are: Bima Niwas Yojana (BNY), Own Your Home Scheme (OYHS), and Own Your Apartment Scheme (OYAS). In 1989 Government of India disclosed its new “Rastriya Grah Nirman Neeti” and established National 148
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LIC Housing Finance Limited5.1 ESTABLISHMENT OF LICHFL
The Life Insurance Corporation of India has been established by the
government of India under the company law of 1956, to provide the life
insurance for Indian citizens and collect their small savings for their bright
future. LIC of India is providing loans for housing since 1964i. The LIC of
India is the largest provider of funds for the house construction and house
purchase. It invests about 12 to 19ii percent of its total investible resources in
the housing sector. LICs investment account for about 70 percent of total
indirect institutional finance. It caters to the housing finance requirements of
state housing boards, Apex co-operative societies and HUDCO. The remaining
portion of funds are channelised directly to its policy holders agents
employees, staff house building programs and co-operative housing societies
promoted public limited companies. Some of the well-known schemes in which
it directly lends are: Bima Niwas Yojana (BNY), Own Your Home Scheme
(OYHS), and Own Your Apartment Scheme (OYAS). In 1989 Government of
India disclosed its new “Rastriya Grah Nirman Neeti” and established National
Housing Bank (NHB) in the same time in 19 june 1989 Life Insurance
Corporation of India also established a separate corporation for the housing
finance that is Life Insurance corporation Housing Finance Limited
(LICHFL) LIC Housing Finance Ltd. is one of the largest Housing Finance
company in India. The company was promoted by LIC of India and went
public in the year 1994. The Company launched its maiden GDR issue in 2004.
The company enjoys ‘AAA’ rating from CRISIL on its debt issuances indicating
highest safety with regard to the ability to service interest and repay capital.
The company recently launched its maiden Fixed Deposit program, rated
FAAA/stable by CRISILiii.
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LIC Housing Finance Limited
5.2 OBJECTIVES OF LICHFL
Due to insufficient investment and higher required of housing finance LIC of
India established LICHFL to fill the gap of housing investment demand and
supply The main objectives of the Company are:
(i) To provide secured housing finance at an affordable cost;
(ii) To promote sound healthy, viable and efficient housing finance to
cater to all segments of the population;
(iii) To provide housing finance to adequately serve different regions and
different income groups;
(iv) To make housing more affordable;
(v) To augment and upgrade the housing stock in the country;
(vi) To augment the financial resources for the sector;
(vii) To enable the housing finance system to assess the capital market for
resources;
(viii) To providing long term finance to individuals for purchase /
construction / repair and renovation of new / existing flats / houses;
(ix) To provide finance on existing property for business / personal
needs and give loans to professionals for purchase / construction of
Clinics / Nursing Homes / Diagnostic Centers / Office Space and
also for purchase of equipments; and
(x) To promote saving for housing.
5.3 ORGANISATION OF THE LICHFL
Organization is the process of so combining the work which individuals
or groups have to perform with facilities necessary for its execution, that the
duties so performed provide the best channels for efficient, systematic, positive
and coordinated application of available efforts. Organization is the executive’s
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LIC Housing Finance Limited
structure of an enterprise- a basic framework within which the executive’s
decision-making behavior occurs. The managerial function of organizing is the
process of establishing relationship among available organization resources so
that their structure enables achievement of objectives of the enterprise.
Resources are personnel, function, and physical factors. Relationships center
round status, role, responsibility, authority and accountability, structure may be
fictionalized-line, line and staff, committee and project. In the organization
employees are placed in the four categories: to managers, middle managers,
first line managers, and operative. How these organizational categories are
determined, and how is the interaction among these levels defined? Who
reports to whom, and who has the authority to make decisions? These are just
some of the aspects of the organization that we are going to be looking in the
housing industry. Diagram below will represent the picture of organizational
and management structure of specialized housing finance institution in India.
Following diagram exhibits the organizational and management position of the
LICHFL, it is clear that LICHFL adopt the line structure and clear hierarchy
and unity of command, specialization, clear unbroken line of authority,
delegation, span of control by the different senior executives at different level.
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Managing Director
General Manager
Deputy Manager
Vice Chairman
Branch Manager
Section Manager
Chairman
Executive Staff
LIC Housing Finance Limited
Management Structure
From the above structure it is very clear that all the major decisions-making
powers in the hand of top management at the head office level and regional level. For
the sanctioning of the certain level of loan amount in the hand of branch level like the
5-10 lacss, and than upto 20-25 lacss in the hand of regional level, General Manager,
Deputy General Manager level, and above that it is in the hand of top executives at
the head office leveliv. Same hierarchy has been followed in others matters of
management. Major policy decisions are taken by the top level managers at the head
office level regarding the interest rates changes, investments, maximum and minimum
loan amount reduction of processing and administrative expenses. 09 persons are in
the board of directors list (Seven non executives and two executives directors), 1 is
General manger (taxation) & company secretary, 8 are senior executives and six are
Regional Managers of different regions (Central Region, South Central Region,
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Head Office Level
Branch Level
Regional Level
LIC Housing Finance Limited
Eastern Region, Western Region, Southern Region, Northern Region)v. The Company
possesses one of the industry's most extensive marketing network in India :
Registered and Corporate Office at Mumbai, 7 Regional Offices, 13 Back Offices, 1
customer service point and 183 marketing units across India backed by chain of camp
offices. In addition the company has appointed over 1292 Direct Sales Agents
(DSAs), 6800 Home Loan Agents (HLAs) and 535 Customer Relationship Associates
(CRAs) to extend its marketing reach. Back Offices spread across the country conduct
the credit appraisal and administrative functions. The Company has set up a
Representative Office in Dubai and Kuwait to cater to the Non-Resident Indians in the
Gulf countries covering Bahrain, Dubai, Kuwait, Qatar and Saudi Arabia. Today the
Company has a proud group of over 12,00,000 prudent house owners who have
enjoyed the Company's financial assistance.
Subsidiary companies:
The financial statements along with the Reports of the Directors of the
Company’s wholly owned subsidiaries namely LICHFL Care Homes Limited,
LICHFL Financial Services Limited, LICHFL Trustee Company Private Limited and
LICHFL Asset Management Company Private Limited for the year ended 31st March
2008, are attached along with the statement pursuant to Section 212 of the Companies
Act, 1956, with respect to the said subsidiaries. The brief reviews of the subsidiary
companies are as under:
1. LICHFL Care Homes Limited
To address to the crying need of housing for the senior citizens of the country,
the Company had promoted LICHFL Care Homes Limited, to establish and operate
assisted living centres. It launched its eco-friendly pilot project in Bangalore with
cost-effective independent cottages and all other on-campus amenities, fully
structured and self-contained to address every possible need of residents. It has
library, community centre, home theatre, meditation centre, doctors on call and
ambulance to take the ailing to the nearest city medicare centre – all that would make
the lives of senior citizens comfortable and satisfying. During the current year, the
Company proposes to start construction of project at Bhubaneswar and finalise the
purchase of land for few more projects. Company’s total loss was 13,04,457 rupees
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LIC Housing Finance Limited
(31 March 2010)for the previous financial years of the subsidiary since it became
subsidiary of LICHFL.
2. LICHFL Financial Services Limited
LICHFL Financial Services Limited was incorporated on 31st October 2007
for undertaking non fund based activities like marketing of housing loans, insurance
products, credit cards, mutual funds, personal loans etc. Effective steps for starting the
business of the Company are also being taken. However, till 31st March 2010, the
Company has earned profit 5,38,625 rupees.
3. LICHFL Trustee Company Private Limited
LICHFL Trustee Company Private Limited was incorporated on 5th March
2008 for undertaking the business of trustees of venture capital trust, funds – in India
and offshore fund. Company’s total loss was 37,602rupees till 31 March 2010.
4. LICHFL Asset Management Company Private Limited
LICHFL Asset Management Company Private Limited was incorporated on
14th February 2008 for undertaking the business of managing, advising, administering
mutual funds, unit trust, investment trust in India as well as in abroad. This subsidiary
company was also in loss its total loss was 91,05,977 rupees till March 2010.
5.4 RESOURCES OF FINANCIAL FUNDS-
The Authorized Capital of the Company is Rs.1500 Million (Rs.150
Crores) and its paid up Capital is Rs.850 Millions (Rs.85 Crores). The
Company is recognized by National Housing Bank and listed on the National
Stock Exchange (NSE) & Bombay Stock Exchange Limited (BSE) and its
shares are traded only in Demat format. The GDR's are listed on the
Luxembourg Stock Exchange.
The sources of funds of LICHFL are broadly categories in two
categories shareholders’ fund and loan funds this can be derived by below flow
chart
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Sources of Funds of LICHFL
Share holders’ Fund Loan Funds
Capital Unsecured LoansSecured LoansReserves and Surplus
LIC Housing Finance Limited
Table 5.4.1
Sources of Funds of LICHFL (Amount in
Rupees) Sources Of Funds 31.03.2011 31.03.2010
Share holders' fund
Capital * 949,963,475 949,963,475
Reserves and Surplus ** 40,741,077,797 32,926,760,119
Total 493,319,369,712 381,458,291,350Source: computed from annual reports
According to above information it is clear that capital position was same
in 2011 and 2010 but reserve and surplus have been increased form
Rs.32,926,760,119 to 40,741,077,797 the total increment was of
Rs.7814317678. Secured loan increased from Rs. 310,149,822,039 to
407,006,087,696 and unsecured loan also increased from Rs. 37,431,745,717 to
Rs. 44,622,240,744 the detail of these sources of funds were as under-
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LIC Housing Finance Limited
* CAPITAL (Amount in Rupees)
CAPITAL 31.03.2011 31.03.2010Authorised (Equity Shares of Rs.10/- each) 1,500,000,000 1,000,000,000(a) Issued, Subscribed and Paid Up 474,663,000 Equity Shares of Rs.2/- each(Previous year 94,932,600 of Rs. 10/ each) fully paid up
949,326,000 949,326,000
(b)Add: Amount received on forfeited shares 637,475 637,475
Total (a+b) 949,963,475 949,963,475
Source: computed from annual reports
The authorized capital of company was 100 crore rupees in the F.Y.
2007 that has been increased upto Rs.150 crore for the F.Y. 2010-11. Issued,
Subscribed and paid up capital of the company was same 94.9326 crore rupees
for the FY 2009-10 and 2010-11. Total amount received on forfeited shares
was 0.0637 crore rupees and total capital was 94.9963crore rupees.
**RESERVES AND SURPLUS (Amount in Rupees)
RESERVES AND SURPLUS 31.03.2011 31.03.2010
(a) Capital Reserve 4,793,333 4,793,333
(b)Share Premium 9,012,854,875 9,012,854,875
(c)Special Reserve - I (in terms of Section 36(1)(viii) of the Income-tax Act,1961 and Section 29C of National Housing Bank Act, 1987) (Upto financial year 1996-97)
389,800,000 389,800,000
(d)Special Reserve - II (in terms of Section 36(1)(viii) of the Income-tax Act,1961 and Section 29C of National Housing Bank Act, 1987) (From financial year 1997-98)
14,544,901,385 11,924,901,385
(e)Market fluctuation Reserve 0 0(f)General Reserve 11,480,400,108 7,980,400,108(g)Surplus in Profit and Loss Account 5,308,328,096 3,614,010,418
TOTAL 40,741,077,797 32,926,760,119Source: Computed from annual reports
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LIC Housing Finance Limited
Capital reserves was 0.4793 crore rupees, share premium was 901.2854
crore rupees, special reserve-І was Rs. 38.98 crore , special reserve-II was Rs.
1454.490 crore, general reserve was 1148.04 crore and surplus was 530.83
crore rupees and total reserves and surpluses were 4074.107 crore rupees for
the year ended 31 March 2011.
***SECURED LOANS (Amount in Rupees)
SECURED LOANS 31.03.2011 31.03.2010
Non-Convertible Debentures with zero coupon debentures 258,900,731,890 170,534,030,527
Term Loans from scheduled banks 125,286,165,395 116,515,995,391
From National Housing Bank (Refinance) 15,334,941,411 12,914,131,121
From Life Insurance Corporation of India 7,484,249,000 10,185,665,000
Interest accrued and due on loan – - 0
Total 407,006,087,696 310,149,822,039
Source: Computed from annual reportsLoans and advances from banks and other loans and advances are secured by a negative lien on all assets of the Company and an irrecovable Power of attorney given by the Company for creation of Mortgage on the properties of the borrowers of Housing Loans and for recovery of monies directly from the borrowers of Housing Loans.
Secured loan comprises four types of funds namely- Non convertible
debentures, Term loans for scheduled banks, Refinance from NHB and Loan
from LIC of India. Total secured loans were of Rs. 40700.608 crore which was
31014.982 crore rupees in FY2009-10. The part of non-convertible debentures,
term loan from scheduled banks and refinance of NHB were increasing
gradually but the part of LIC of India was decreasing.
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LIC Housing Finance Limited
****UNSECURED LOANS (Amount in Rupees)
No. UNSECURED LOANS 31.03.2011 31.03.2010
1 Public deposits@ 2,457,918,820 3,261,937,820
2 Other loans and advances
I Upper tier II Bonds# 15,000,000,000 5,000,000,000
Ii Subordinated Bonds ## 15,000,000,000 10,000,000,000
Iii Life Insurance Corporation of India 1,862,862,826 1,568,050,539
Iv Commercial Paper – 5,350,000,000 8,300,000,000Less: Discount not written off – -48,540,902 -148,242,642[Maximum outstanding during the year Rs.12,350,000,000 – (Previous Year Rs.14,800,000,000 )]
5,301,459,098 8,151,757,358
v Non-convertible Debentures & 5,000,000,000 9,450,000,000
Total 44,622,240,744 37,431,745,717Source: Computed from annual reports## Subordinated bonds are repayable at par after ten years from the date of issue i.e. 24th October, 2005 @ The company is in the process of creating a floating charge on the statutory liquid assets in favour of the Trustee for Depositors -The company has designated the following liquid assets amounting to Rs.1227749208 ( Previous Year Rs. 414634208) for this purpose Government Securities 1,065,650,000
Fixed Deposits Placed with Bank 162,099,208
Total 1,227,749,208
# Upper Tier II Bonds are redeemable at the end of 15 years from the deemed date of
allotment (with call option exercisable after 10 years) with prior approval of National
Housing Bank
& Due and payable within one year Rs. 5,000,000,000
Unsecured loans play an important role in the financial situation of the
company. Total unsecured loans were 4462.22 crore rupees for the FY 2010-11
which shows 719.05 crore rupees increment over the previous financial year.
Part of Bonds , Debentures and Life Insurance Corporation Of India were
increasing but the part of commercial paper borrowings was decreasing.
LICHFL started public deposit scheme in 2008 in this scheme company got
15.702 crore rupees in 2008 and 245.79 crore rupees in 2010-11.
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LIC Housing Finance Limited
Domestic borrowings
During the volatile and rising interest rate scenario, the Company was
able to contain its borrowing costs. As a policy, efforts were made to re-price
the existing borrowings either by negotiation or through entering into
derivatives. The company’s borrowing is planned taking into consideration LM
gaps, interest rate mismatches. But, this depends on the prevailing market
conditions. LIC housing finance has got the highest rating in four categories (1)
Bank borrowings (2) Non convertible debentures (3) Commercial paper and (4)
Public deposit schemes, from CRISIL/CARE rating agencies, which has helped
the company to procure funds at very competitive rates. The Company also
explored the option of public deposit and mobilized Rs.245.79 crore. The
composition of outstanding borrowings as on 31st March 2011 and the ratings
assigned by rating agencies were as under:
Table 5.4.2
Borrowings of LICHFL
Particulars% to total
borrowingRating
Term loans from scheduled
banks27.78% “AAA/Stable”/ P1+ by CRISIL
Refinances from NHB 3.40%
Term loans from LIC of India 1.66%
Upper tier II bonds 3.33%“AAA/Stable” by CRISIL /
“CAREAAA” by Care
Non-convertible debentures 58.39%“AAA/Stable” by CRISIL /
“CAREAAA” by Care
Subordinated bonds II tier 3.33% “AAA/ Stable” by CRISIL
Public deposit 0.57% “FAAA” by CRISIL
Commercial paper 1.13% P1+by CRISIL
Others 0.41%
Source: Computed from annual reports
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LIC Housing Finance Limited
5.5 SCHEMES OF LIC HOUSING FINANCE LIMITED
'You have a need, we have a scheme.'
This simple principle has made LIC Housing Finance one of the biggest
success stories of recent times. Company offers home loans at low and
attractive interest rate to Resident Indians as well as Non-Resident Indians.
Company’s special schemes for Pensioners have been appreciated by all.
Company provides loans not only for purchase, construction, repair, renovation
or purchase of plot, but also for consumer durables. Company offers two
schemes of ‘Sampurna Griha’ for buying of housing goods up to Rs. 2 Lacs.
Interest Rate has been fixed at a very low value as they aim to increase the
standard of living of the people. Company announced a special scheme called
‘Green House’ for professionals like Doctors, Software Engineers, CA's etc.
Step-Up EMI scheme has been introduced for those youngsters below the age
of 35 years who have future prospects of increase in income. Company also
offers special facilities to NRI's in Gulf countries residents.
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Home Loan
Residential Indian
Pensioners
Builders/Developers
Loans to Professionals
Reserve Mortgage
Home Entity
Facilities
Corporate Employees
Office premises
Loan of Credit to corporate
Co-Op. Societies
Non-Residential Indians
Staff Quarters
Individual Loan
Corporate Loan
Others
Public agencies
LIC Housing Finance Limited
LOAN CLASSIFICATION CHART OF LICHFL
Individual loan
(a) For Resident Indians
Schemes for individual at the basis of citizenship can be broadly
classified in two categories one for Resident Indians and another for Non-
Resident Indians. At the basis of purpose schemes can be divided in five
6 Security1. Equitable Mortgage of Residential House/Flat/Plot2. Demand Promissory Note.
7 Upfront Fees1.00% of Loan Amount Sanctioned + Service Tax as applicable.
8 Special ConditionsAll conditions including payment of margin money as per RBI Guidelines.
9 Rate of Interest As per current rateSource: Company documents and brochure(c) For pensioners
(i) Before retirement-
LICHFL has special schemes for pensioners, before their retirement.
Under this scheme minimum loan amount Rs. 100000.00 is available for
purchase / construction and extension of house or flat. Persons whose age is 50
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LIC Housing Finance Limited
years or more and having a pension scheme after retirement may apply for loan
under this scheme. Person has to provide a undertaking letter to the company
that the entire loan or 30% or an amount as decided by the area office will be
repaid out of the retirement benefits is required. The balance is to be repaid
from the pension income. The amount of principal to be repaid at the time of
retirement will depend on the pension amount the applicant is eligible after
retirement. Maximum loan term is 15 years or 70 years of age whichever is
earlier.
Before retirement
1 Loan Amount Min Rs.100000.002 Purpose purchase, construction, extension of House / Flat
3Loan to Property Cost
85% of total Cost of the property including Stamp Duty and Registration Charges.
4 Loan TermThe term of the loan will be up to 15 years or 70 years of age whichever is earlier.
5Repayment Mode
Entire loan or 30 % or an amount as decided by the Area Office will be repaid out of the retirement benefits is required. The balance is to be repaid from the pension income
6 SecurityA Guarantor acceptable to the Company is requiredEquitable Mortgage of Residential House/Flat/Plot
7 Upfront Fees 8 Rate of Interest As per current rate
9Special conditions
(i) Persons whose age is 50 or more and having a pension scheme after retirement may apply for loan under this scheme.
(ii) An undertaking letter that the entire loan or 30 % or an amount as decided by the Area Office will be repaid out of the retirement benefits is required.
(iii) The balance is to be repaid from the Pension Income. The amount of Principal to be repaid at the time of retirement will depend on the Pension amount the applicant is eligible after retirement.
Source: Company documents and brochure
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LIC Housing Finance Limited
(ii) After retirement-
LICHFL introduced schemes for pensioners, after their retirement.
Under this scheme minimum loan amount is Rs. 100000.00 and loan is
available for purchase / construction and extension of house or flat. Persons
who have retired and having a stable income throughout their life from pension
may apply for loan. Under this scheme pension or any portion thereof is not
allowed. Maximum loan term is 70 years of age.
After retirement
1 Loan Amount Min Rs.100000.00
2 Purpose purchase, construction, extension of House / Flat
3Loan to
Property Cost
85% of total Cost of the property including Stamp Duty and
Registration Charges.
4 Loan Term 70 years of age.
5Repayment
Mode
The loan is to be repaid before the applicant attains the age
of 70 years.
6 SecurityA Guarantor acceptable to the Company is required
Equitable Mortgage of Residential House/Flat/Plot
7 Upfront Fees
8 Rate Of Interest As per current rate
9Special
conditions
(i) Pensioners having a stable income throughout their
life from pension may apply for loan under this
scheme.
(ii) Commutation of Pension or any portion thereof is
not allowed.
Source: Company documents and brochure
(d) Facilities
(i) Green-Channel facility:
LICHFL provides a green channel facility for
Professionals like Practicing Doctors, Chartered Accountants, Cost
Accountants, Executives holding IIM diplomas and Computer Engineers.
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LIC Housing Finance Limited
Loans can be applied under any of the usual Schemes. A one-time
processing and Administrative fee (non-refundable) @ 1.0% of loan applied
for, is payable. Inspection of property and title clearances are undertaken
simultaneously as soon as the loan is sanctioned. Under this scheme loan is
disbursed quickly. Collateral security of LIC Policy upto the extent of 50% of
the loan amount is sufficient.
(ii) Step-up EMI Facility:
This facility is extended, keeping in view the prospective increase in
income of the Borrowers, and is available to people who have good prospect of
future increase in income, viz., young Professionals/Executives who are less
than 35 years of age.
This facility envisages flexible mode of repayment through Stepping up
of EMI during the tenure of loan. Under this Facility, the EMI will initially be
fixed at a lower amount; this would be changed twice (i.e., on the 6 th and the
11th year) during the loan tenure (15 years); the rate at which the EMI will be
stepped-up in the 6th and 11th year would be at 10/15/20 % of the initial EMI as
preferred by the Applicant.
Corporate loan :(a) Corporate employees
‘CORPORATE EMPLOYE ES' HOUSING LOAN SCHEME’
It is a special scheme for employees of approved corporates by
LICHFL under this scheme housing Loan is available for Construction /
Purchase / Extension / Renovation of House / Flat at concessional terms for
employees of approved 179 corporates with whom the company has a tie-up.
Any of the following concessions are applied selectively or in combination
depending on the tie-up which can be ascertained from the Nodal Area Office
from where the proposal originated.
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LIC Housing Finance Limited
Corporate Employees' Housing Loan Scheme
1 Loan Amount Min Rs.100000.00
2 PurposeConstruction / Purchase / Extension / Renovation of House / Flat
3Loan to Property Cost
-
4 Loan TermMaximum loan term is 20 years or retirement or age 70 years whichever is earlier
5Repayment Mode
Repayments by Equated Monthly Installment (EMI) through Salary Deduction.
6 SecurityLife Insurance policy as collateral Security may be waivedGuarantor may be waived
7 Upfront FeesUpfront Fees payable will be of only 0.50 % of the Loan Amount, subject to a maximum of Rs.10000/- .
8Rate Of Interest
0.25% lesser than the normal schemes.
9Special conditions
1. Joint Declaration by Employer and Employee for Deduction of EMI from salary and Recovery of Loan dues incase the employee resigns/ retires/ gets terminated.
2. Scheme is open for employees of Public Sector Undertakings, Reputed Public/ Private Limited Companies with atleast 50 employees. The Scheme can be made applicable to the employees after a Tie-up arrangement is finalized.
Source: Company documents and brochure
(b) Staff Quarters
LICHFL provides housing finance to reputed listed public limited or
PSUs. for construction or purchase of staff quarters. Under this scheme
minimum amount is Rs. 20 lacs and maximum Rs. Is 7.50 crore. Loan term is
minimum 5 years and maximum 7 years, modes of repayment are Equated
Monthly / Quarterly Instalment. Under this scheme equitable mortgage and any
other security is required.
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LIC Housing Finance Limited
Staff Quarters
1 Loan Amount Min Rs 20 lacs, Max Rs 7.50 crores.2 Purpose Construction/purchase of Staff Quarters.3 Loan to Property Cost 10% of Net Worth and 70% of Project Cost.4 Loan Term 5 to 7 Years 5 Repayment Mode Equated Monthly / Quarterly Instalment 6 Security Equitable Mortgage and any other security.
9 Special conditionsThis scheme only for Reputed Listed Public Limited or PSUs.
Source: Company documents and brochure
(e) Loans to Co-Operative Societies
Under this scheme loan is provided to the individual member of
housing Co-operative societies for construction / purchase / extension but on
the basis of applicant which may be Co-operative housing societies of reputed
public Ltd. or PSUs Minimum loan amount is Rs 5 lacs and max. 70% of
property cost, loan term is maximum 15 years. Repayment mode is Equated
Monthly Installment (EMI).
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LIC Housing Finance Limited
1 Loan Amount Min Rs 5 lacs - Max 70% of Property Cost
2 PurposeLoans to individual members of Housing Co-Operative Societies of the Applicant Company
3 Loan to Property Cost Max 70% of Property Cost4 Loan Term Max. 15 yrs5 Repayment Mode Equated Monthly Installment 6 Security Equitable Mortgage and Guarantee from Co.
7 Upfront FeesProcessing Fees: Upto 25 members: Rs 2500/-, and Rs 5000/- for more than 25 members. Admin Fees : 1% of amount sanctioned
8 Rate Of Interest As per current rate
9 Special conditionsThis scheme only for member of housing co-operative society.
Source: Company documents and brochure
(f) Loans to Public Agencies
Under this scheme loan is provided to the statutory bodies in public
housing which construct houses for sale. The minimum loan amount is Rs. 25
lacs and maximum 70% of the property cost. Maximum loan term is 10 years.
Security is equitable mortgage and guarantee from respective state govt.
Repayment mode is principal by quarterly / half yearly Installment, interest to
be paid monthly.
Public Agencies1 Loan Amount 70% of Property Cost2 Purpose Loans for Construction of Housing Projects for Sale3 Loan to Property Cost Max 70% of Property Cost4 Loan Term Max. 10 Years
5 Repayment ModePrincipal by Quarterly / Half yearly Instalment.Interest to be paid monthly
6 SecurityEquitable mortgage and guarantee from respective State Govt.
9 Special conditionsThis scheme only for Statutory Bodies in Public Housing.
Source: Company documents and brochure
Builders / Developers :
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LIC Housing Finance Limited
LICHFL also provide housing loan to professional developers for
construction of housing projects for sale under this scheme loan is provide for
these projects which are passed by the government and local bodies. Under this
scheme minimum loan amount is Rs. 20 lacs and maximum 50% of the project
cost up to Rs 5 crores. Loan term is minimum 6 month and maximum 2 years,
under this scheme repayment of principal by monthly / quarterly installment
but interest to be paid monthly.
Builders / Developers
1 Loan Amount Min Rs 20 lacs - Max Rs 5 crores2 Purpose Loans for Construction of Housing Projects for sale3 Loan to Property Cost Max 50% of Project cost up to Rs 5 crores4 Loan Term 6 Months to 2 Years
5 Repayment ModePrincipal by Monthly / Quarterly Instalment. Interest to be paid monthly
6 SecurityEquitable Mortgage, Personal guarantee and any other security
7 Upfront FeesProcessing Fees: Rs. 5000/- for appl. up to Rs 1 crore, Rs. 10,000/- for more than Rs 1 crore.Admin Fees : 1% of amount sanctioned
8 Rate Of Interest As per current rate9 Special conditions This scheme only for professional developers.
Source: Company documents and brochure
Others :
(a) Home entity
‘GRIHA VIKAS’
To full fill the other financial requirements of house ownerships
LICHFL launched a special scheme ‘Griha Vikas’ for those who want soan
against mortgage of residential house / flat. Under ‘Griha vikas’ scheme loan
against mortgage of house / flat can be taken for these purposes but age of the
property must not be more than 35 years :
i) Children’s education / marriage
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LIC Housing Finance Limited
ii) Foreign Travel
iii) Purchase of another property.
iv) Business expansion
Minimum loan amount is Rs. 2 lacs and maximum loan term is 15 years,
loan repayment mode is Equated Monthly Installments (EMI) Monthly Rest
Basis. ‘Griha Vikas’ scheme is available for both Residential and Non-
residential Indians.
Griha Vikas
1 Loan Amount Min Rs.2,00,000 Max Rs. 1 crore
2 Purpose
Loan against Mortgage of Residential House / Flat.
Source: Computed from Annual Reports* The Earnings Per Share have been computed in accordance with the Accounting Standard on 'Earning Per Share' (AS 20) issued by the 'Institute of Chartered Accountants of India'.
LICHFL is a second largest company in the field of housing finance its financial position is strong and management is quite
good so company is performing in a good way in share market. Its Earning per share was positive during the whole study period.
Earning per share was16.16 rupees in 2000-01, 23.88 rupees in 2002-03 but in 2004-05 due to recession its earning decreased
upto17.84 rupees. In next years company made good performance and in 2010-11 gained per share earning 102.65rupees which is the
highest rate among the study period.
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LIC Housing Finance Limited
Table 5.8.10
Operating and Administrative Expenses(Rs. In crores)
Particular2010-11
2009-10
2008-09
2007-08
2006-07
2005-06
2004-05
2003-04
2002-03
2001-02
2000-01
1999-00
1998-99
1997-98 1996-97
Operating and Administrative charges 470.84 214.0 154.51 154.5