sbi nri home loan for clg presentation(final)

A study on housing loan with special reference to

SBI NRI home loan

Presented by:- Harshita Narayan Roll no. - 50013

CONTENTS1) Objective of the study

2) Company profile

3) Product profile

4) Methodology

5) Analysis of data with findings

6) Recommendation

Objective of the study1) To compare different variables of the home loan of

different banks in order to understand the present status of SBI in the market.

2) To investigate specific communication channel

through which NRI and NRI relatives can be informed about the SBI NRI home loan products.

3) To investigate the criteria by which customers select

their financial institutions. So, that the bank must excel on these criteria to project a good image.

Company profile

State Bank of India is a multinational banking and financial services company based in India.

It is a government owned corporation with its headquarters in Mumbai, Maharashtra.

SBI has 14 regional hubs and 57 Zonal Offices that are located at important cities throughout the country.

It was named the 29th most reputed company in the world according to Forbes 2009 rankings

PRODUCT PROFILE(SBI NRI home loan)

SBI PROVIDES HOME LOAN TO NRI FOR THE FOLLOWING PURPOSE

Purchase of new home in India For acquisition of residential accommodation in India. Home improvement or extension For repair or renovation of existing residential

accommodation. Purchase of Land or Home furnishing and consumer durables Investment made from own resource during the preceding

12 months of purchase of property/construction/repairs/extension of house will be reimbursed by the Loan amount .

SBI NRI home loan variants SBI – Maxgain It provides home loan in the form of current account

overdraft, where you can park your surplus funds and withdraw them in times of need from SBI.

SBI – Realty It provides home loan for purchase of land for house

construction.

SBI – Home equity It provide personal loan to the banks home loan customers

against the security of their house property

Methodology Product – SBI NRI home loan

Geographical market – Patna district

Sample size – 102 Research tool – Structured questionnaire, focused group discussion and use of secondary data source .

Analysis tool – MS Excel , SPSS

Target population -- The target population comprised men and women over 21 years old.

Objective 1

To compare different variables of the home loan of different banks in order to understand the present status of SBI in the market.

INTEREST RATE OF DIFFERENT BANKS ON A LOAN AMOUNT OF 20 LACS

SBI Axis bank HSBC HDFC Canara bank

Bank of Baroda

9.4

9.6

9.8

10

10.2

10.4

10.6

10.8

11

9.95

10.75

11

10.525

10.25

10.5

INTEREST RATE(in %)

PROCESSING CHARGE OF DIFFERENT BANKS ON A LOAN AMOUNT OF 20 LACS

SBI

Axis ban

k

Standard

Chartere

dHSB

CHDFC

Canara

bank

Bank o

f Baro

daICICI

LICHFL

0

2000

4000

6000

8000

10000

12000

14000

16000

18000

20000

5000

10000

20000 20000

10000 10000 10000 10000 10000

PROCESSING CHARGE(in Rs)

COMPARISION OF DIFFERENT BANKS ON THE BASIS OF PAY BACK PERIOD

SBI Axis bank HSBC HDFC Canara bank

Bank of Baroda

ICICI0

5

10

15

20

25

3030

25 25

10

25

15 15

Pay back period(in years)

EMI(Equated monthly instalment )on a loan amount of Rs 20 Lacs for 20 year

SBI Axis bank HSBC HDFC Canara bank Bank of Baroda

18500

19000

19500

20000

20500

21000

19234

20305

20644

20035

19633

19968

EMI(Equated monthly instalments,in Rs)

FINDINGS SBI provides a pay back period of 30 years which is

longest as compared with other banks.

SBI charges lowest interest rate as compared with other banks.

SBI charges lowest EMI as compared with other banks.

SBI charge a processing fees of a 20 Lacs which is again the lowest amount charged.

Objective 2

To find out the specific communication channel through which NRI and NRI relatives can be informed about the SBI NRI home loan products.

14.71%

55.88%

3.92 %

7.84 %

17.65 %

Which magazine do you read regularly

The Economist

India Today

Outlook

Frontline

Others

39.21 %

13.73 %7.84%

7.84%

13.73 %

17.65 %

Which newspaper do you read regularly

Times of India Hindustan times

Danik Jagran Hindustan

Prabhat Khabar i-next

others

32.35 %

5.88 %

3.92 %29.42 %

20.59 %

7.84 %

Which TV channel do you watch mostly

Star PlusSonyZee NetworkColorsDoordarshanOthers

75.5%

12.75 %

6.86 %

4.9 %

Do you check mails regularly

Daily

Once in a week

Once in fortnight

Rarely

FindingsType of media Media vehicle Specific media

vehiclePercentage

Print media Newspaper Times of India, Hindustan times and Danik Jagran

66.67 %

Magazines India today,The Economist and Frontline

78.43 %

Electronic media Internet E-mails 75.5 %

Television Star Plus,Colors and Doordarshan

82.36 %

Objective 3

To investigate the criteria by which customers

select their financial institutions. So, that the bank must excel on these criteria to project a good image.

Research tool:- Factor analysis

The respondents were asked to indicate their degree of agreement with the following statements using a 5-point scale(0=not important , 5=very important)

1) V1= Interest rate2) V2= Pay Back Period3) V3= Speed of Processing4) V4= Equated monthly instalment5) V5= Loan to value ratio(LTV ratio)6) V6= Processing fees/other charges7) V7=Eligibility criteria8) V8=Number of documents9) V9= Personal accident insurance

Total Variance Explained

Comp-onent Initial Eigenvalues Extraction Sums of Squared

Loadings

Total% of

VarianceCumulative

% Total% of

VarianceCumulative

%

1 Interest rate 1.417 15.745 15.745 1.417 15.745 15.745

2Pay back period 1.225 13.610 29.355 1.225 13.610 29.355

3Speed of processing 1.175 13.054 42.410 1.175 13.054 42.410

4 EMI 1.049 11.656 54.065 1.049 11.656 54.065

5 LTV ratio .991 11.009 65.075

6 Processing fee .911 10.117 75.192

7Eligibility criteria .791 8.790 83.982

8No. of documents .742 8.248 92.230

9Personal accident insurance

.699 7.770 100.000

FACTORS Factor 1 Factor 2 Factor 3 Factor 4

V3 Speed of Processing 0.714 Convenience benefits

V7 Eligibility criteria 0.732

V8 Number of documents

0.447

V1 Interest rate 0.744 Monetary benefits

V4 Equated monthly instalment

0.673

V5 Loan to value ratio(LTV ratio)

0.710 Added benefits

V9 Personal accident insurance

0.710

V2 Pay Back Period 0.781 Duration benefits

V6 Processing fees/other charges

0.616

Findings

The result of factor analysis showed that

interest rate, pay back period ,speed of processing and equated monthly instalment are the four main criteria by which customers select their financial institutions.

KEY FINDINGSSBI charges lowest interest rate,EMI and

processing fee and provides maximum repayment period of 30 years.

The result of factor analysis showed that interest rate, pay back period ,speed of processing and equated monthly instalment are the four main criteria by which customers select their financial institutions.

Recommendations

It should tie up with overseas placement agencies like alankar manpower to get a prospective list of customers.

It should build more apartments like crystal city specially for NRI and their relatives.

It should conduct more events like NRI meet and travel agent meet to create awareness.

SBI should advertise through hoardings near passport office,airport and in gurudwara.

Continued……….. It should provide advertisement of SBI NRI home loan in India

Today, The Economist and Frontline magazine in print media.

SBI should provide advertisement of SBI NRI home loan in times of India, Hindustan times and Prabhat khabar in print media to capture the attention of the target audience.

It should advertise in star plus, colors and Doordarshan in case of electronic media.

The result of factor analysis showed that interest rate, pay back period ,speed of processing and equated monthly instalment are the four main criteria by which customers select their financial institutions. So, SBI bank must excel on these criteria to project a good image.

Limitations The sample size is restricted to 102 respondents due to

time limit.The study is conducted considering the prevailing condition which is likely to change in future.

Due to time and costs constraints the study was limited to Patna, Bihar only.

Some of the respondents were not willing to responds to our questionnaire.

Few respondents were hesitant while answering the questions.