A

PROJECT REPORT

ON

COMPARATIVE STUDY OF HOME LOANS PROVIDED BY DIFFERENT

BANKS

(Only public sector banks)

A training report submitted in partial fulfillment of the requirement for the degree of

Master Of Business Administration

Batch 2020

Submitted by: Manpreet Kaur

Course: MBA

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 University Roll No. 2005320

DECLARATION

I hereby declare that the project report entitled “Comparativestudy of home loanprovided by

different banks” (only public sector banks).

Submitted to Institute Of Management Studies , Bhaddal in partial fulfillment of requirements of

MBA programmed is a bonafide work carried out by Manpreet kaur under the guidance of

Bhawanpreet Kaur.

Teacher signature: Student signature:

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 ACKNOWLEDGEMENT

I acknowledge with gratitude my thanks to Mrs Surinderjit Kaur , Manager of the Roper central

cooperative Bank .Ltd. Evening Branch ,Ropar to provide me for undergoing 6 weeks Training .

My special thanks to all the staff members of the ropar central cooperative bank Ltd. for their

valuable suggestions.

I express our profound gratitude to Mrs . Bhawanpreet Kaur , HOD of our Department of IMS

for his expert guidance in this training project.

We also thank the entire staff members, for their valuable suggestions and for their co-operation

towards the completion of this project.

Last but not the least we thank our parents for their encouragement and support.

TeacherSignature:StudentSignature:

3
 CONTENTS

Chapter No. Chapter Name Page No.

1. Introduction of Bank 5-15

2. Objectives, Need & Scope of the study 16-18

3. Research Methodology 19-21

4. Introduction to the Topic 22-52

5. Data Analysis and Interpretation 53-64

6. Finding 65-66

7. Suggestions 67

8. Limitations 68

9. Conclusion 69

10. Bibliography 70

11. Questionnaire 71-73

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 CHAPTER 1

INTRODUCTION OF BANK

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 INTRODUCTION OF CO-OPERATIVE BANK

A co-operative bank is a financial entity which belongs to its members, who are at the same time

the owners and the customers of their bank. Co-operative banks are often created by persons

belonging to the same local or professional community or sharing a common interest. Co-

operative banks generally provide their members with a wide range of banking and financial

services (loans, deposits, banking accounts). A bank that holds deposits makes loans and

provides other financial services to cooperatives and member-owned organizations. Also known

as Banks for Cooperatives.

It’s a bank made for the economically weaker section of the society, those banks help them

getting loans in lower interest etc. U can say like for farmers or any small scale undertakings or

transactions.

While the co-operative banks in rural areas mainly finance agricultural based activities including

farming, cattle, milk, hatchery, personal finance etc. along with some small scale industries and

self-employment driven activities, the co-operative banks in urban areas mainly finance various

categories of people for self-employment, industries, small scale units, home finance, consumer

finance, personal finance, etc .

Though registered under the Co-operative Societies Act of the Respective States the banking

related activities of the co-operative banks are also regulated by the Reserve Bank of India. They

are governed by the Banking Regulations Act 1949 and Banking Laws (Co-operative Societies)

Act, 1965.

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 PRIMARY COOPERATIVE CREDIT SOCIETY

It is a village institution , which directly deals with the rural people .It encourages savings among

the agriculturalists , accept deposits from them, gives loan to the needy borrowers and collects

repayments. The funds of the society are derived from the share capital, deposits of members and

loan from CCBs. The borrowing powers of the members as well as of the society are fixed .

1. CATEGORIES:

There are two main categories of the co-operative banks.

(a) Short term lending oriented co-operative Banks - within this category there are three

sub categories of banks viz state co-operative banks, District co-operative banks and Primary

Agricultural co-operative societies.

(b) Long term lending oriented co-operative Banks- within the second category there are

land development banks at three levels state level, district level and village level.

7
The co-operative banking structure in India is divided into following main 5 categories:

1. Primary Urban Co-op Banks.

2. Primary Agricultural Credit Societies.

3. District Central Co-operative Banks.

4. State Co-operative Banks.

5. Land Development Banks.

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 FUNCTIONS OF CO-OPERATIVE BANK

 Co-operative Banks are organized and managed on the principal of co-operation, self-help, and

mutual help. They work on the basis of “no profit no loss”. Profit maximization is not their goal.

 Co-operative bank do banking business mainly in the agriculture and rural sector. However,

UCBs, SCBs, and CCBs operate in semi urban, urban, and metropolitan areas also.

 The State Co-operative Banks (SCBs), Central Co- operative Banks (CCBs) and Urban Co-

operative Banks (UCBs) can normally extend housing loans up to Rs 1 lakh to an individual. The

scheduled UCBs, however, can lend up to Rs 3 lakh for housing purposes. The UCBs can

provide advances against shares and debentures.

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 FINANCE FUNCTIONS:

 Cooperative banks in India finance rural areas under:

 Farming.

 Cattle.

 Milk.

 Personal finance.

 Cooperative banks in India finance urban areas under:

 Self-employment.

 Industries.

 Small scale units.

 Home finance.

 Consumer finance.

 Personal finance.

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 STRUCTURE OF CO-OPERATIVE BANK IN INDIA

The State Co-operative Bank (SCB) which is also known as the Apex Bank among the co-

operatives functions at the state level. At the district level, there is the District Central Co-

operative Bank (DCCB) for each district. At the base of the pyramid there are the Primary Credit

Societies or the Primary Agricultural Credit Societies (PACS) which cover small towns and

villages. Each higher level co-operative bank is a federation of those below having membership

and loan operations restricted to their affiliated units.

 SCB -The State Co-operative Bank.

 DCCB - The District Central Co-operative Bank.

 PACS - The Primary Agricultural Credit Societies.

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 PRIMARY AGRICULTURAL CREDIT SOCIETY

At the base of the co-operative credit structure are the primary agricultural credit societies

(PACS) occupying a predominant position. The organization of PACS dates back to 1904 when

the first co-operative credit society act was passed. These societies were started with the main

objective of providing cheap credit to farmers. They interact directly with the borrowers by

providing them loans and collecting the repayment of loan already given. They are the basic

units having links the ultimate borrowers and the hire financing institutions.

DISTRICT CULTURAL CO-OPERATIVE BANK

There are now 351 DCCBs which land about Rs. 14000 crore annually. The Central Co-

operative Bank is usually located at the head quarters of the district. Central Co-operative banks

are generally of two types one is the membership type i.e. federating members known as

'Banking Union' and the other is the mixed membership type, consisting of both primary

members and individual having some financial status, influence or special business experience in

the field of co-operative banking. The main function of Central Co-operative Banks is to land

money to their affiliated primary societies.

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 STATE CO-OPERATIVE BANK

There is 29 STATE Co-operative Banks in the country. The SCBs have assumed a key position

in the co-operative credit structure because it is only through them that the RBI provides loans

and advances to agriculturist.

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DCCBs of PSCB (District Central Cooperative Banks):
S. NO. NAME OF THE CENTRAL LOCATION PHONE NO.
COOPERATIVE BANK

1. AMRITSAR CENTRAL AMRITSAR 0183-543351,543076 

COOPERATIVE BANK 

2. BHATINDA CENTRAL BHATINDA 0164-212104 

COOPERATIVE BANK

3. FARIDKOT CENTRAL
COOPEATIVE BANK FARIDKOT 01639-50144,50225 

4. FAZILKA CENTRAL FAZILKA 01634-22245,25245 

COOPERATIVE BANK

5. FEROZEPUR CENTRAL FEROZEPUR 01632-46680,46082 

COOPERATIVE BANK

6. GURDASPUR CENTRAL GURDASPUR 01874-30355 

COOPERATIVE BANK

7. HOSHIARPUR CENTRAL HOSHIARPUR 01882-24100,20771 

COOPERATIVE BANK

8. JALANDHAR CENTRAL JALANDHAR 0181-224571,224298 

COOPERATIVE BANK

9. KAPURTHALA CENTRAL KAPURTHALA 01822-33469,33223 

COOPERATIVE BANK

10. LUDHIANA CENTRAL LUDHIANA 0161-411966,441281 

COOPERATIVE BANK

11. MANSA CENTRAL COOPERATIVE MANSA 01652-25381,25078 

BANK

12. MOGA CENTRAL COOPERATIVE MOGA 01636-23629,29520 

BANK

13. MUKTSAR CENTRAL MUKTSAR 01633-62078,64457 

COOPERATIVE BANK

14. NAWANSHAR CENTRAL NAWANSHAR 01823-23977,20034 

COOPERATIVE BANK

15. PATIALA CENTRAL COOPERATIVE PATIALA 0175-224758,217053 

BANK

16. ROPAR CENTRAL COOPERATIVE ROPAR 01881-20412,20481 

BANK

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 PRESENT SITUATION OF THE CENTERAL CO-OPERATIVE BANK

Name "The CENTRAL CO-OPERATIVE BANK (ROPAR)”.

Establishment 1927.

Approved by RBI (Reserve Bank of India).

Address of Head Office Railon Road.

Near D.A.V School,

ROPAR. (Phone no. - 01881-220412).

E-mail ccb_ropar@yahoo.co.in

15
 CHAPTER – 2

Objectives of the study:

Need of the study:

Scope of the study:

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 OBJECTIVES OF THE STUDY

 To study the satisfaction level of consumers regarding home loan facilities provided by

bank.

 To study the procedures of home loan adopted by different banks.

 To study the difficulties faced by customers while availing home loan.

 To know about the preference of the customers.

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 NEED OF THE STUDY

The Indian housing finance industry has grown by leaps and bound in few years. A total home

loans disbursement by banks hasraised which witnesses phenomenal growth from last 5 years.

There are greater numbers of borrowers of home loans. So by this study I can find out

satisfaction level of customers and problems faced by them in obtaining home loans.

SCOPE OF THE STUDY

Based on the findings and recommendations of the study the present study will be confined to

three commercial Banks in Ropar city namely PNB, State SBI and the Co-operative Bank. It

includes public sector banks.

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 CHAPTER – 3

RESEARCH METHODOLOGY

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 RESEARCH DESIGN

This project is based on exploratory study. It was an exploratory study when the customer

satisfaction level was studied to suggest new methods to improve the services of banks in

providing home loans.

SAMPLING PLAN

A sampling plan is a definite plan for obtaining sample from given population. It is an effective

step in collection of data & has a greater influence on quality of results.

SAMPLING TECHNIQUE

The technique used for my study is simple random sampling that consists of questionnaire,

which is given to respondents who are the customers of home loans.

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 POPULATION

In this study, the population of the study was includes 3 banks in public sector like: PNB,SBI

and CO-OP banks providing home loans in Ropar taken. Consumers also taken from Ropar city

who had avail loan from the banks in Ropar.

DATA COLLECTION METHOD

There are two types of data collection methods use in the Research Methodology

Primary data:

Primary data has been collected with the help of questionnaires which were filled by consumer

who availed home loan from banks.

Secondary data:

Secondary data also used in the project which were collected from various sources like

magazines, journals and different internet websites.

SAMPLE SIZE

Sample size of the researchis 50 consumers from Ropar city.

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 CHAPTER- 4

INTRODUCTION TO THE TOPIC

22
 INTRODUCTION TO HOME LOANS

Home is a dream of a person that shows the quantity of efforts, sacrifices luxuries and above all

gathering funds little by little to afford one’s dream. Home is one of the things that everyone one

wants to own. Home is a shelter to person where he rests and feels comfortable. Many banks

providing home loans either commercial banks or financial institutions to the people who want to

have a home. Many banks are providing home loans at cheapest rate to attract consumers

towards them. The more customer friendly attitude of these banks, currently offer to consumers

cheapest loan over homes.

OVERVIEW

Your Home is a place where you relax after coming back from your day’s tiring work, it is that

place where you can give time to your family & spend beautiful moments with them. To acquire

a home which can be christened your “Own House” is a life-time decision & has to be taken with

a lot of planning & requires huge finances. Your Dream Home is not very far away with a Home

Loans which will fulfill your Dream into a reality. We at Deal for Loans are working constantly

to get you the best Loans Deal & have brought a small guide which would answer some

important questions related to Home Loans & help you decide your loans deal.

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 DEFINITION

Home Loan is a Secured Loan offered against the security of a house/property which is funded

by the bank’s loan, the property could be a personal property or a commercial one. The Housing

Loan is a loan taken by a borrower from the bank issued against the property/security intended to

be bought on the part by the borrower giving the banker a conditional ownership over the

property i.e. if the borrower is failed to pay back the loan, the banker can retrieve the lent money

by selling the property.

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 ADVANTAGES OF HOME LOAN

The various benefits of home loans arising to the customers are:

Attractive interest rate:

The various banks offer attractive interest rates to boost and help their customers. Many banks

provide loans on fixed or floating rates to facilitate consumers as per their needs.

Help in owning a home:

The home availed by a person with the help of banks, because they provide technical and

financial assistance to customers for owning their dream home.

No requirement of guarantor:

The commercial banks now a dayliberalize their laws regarding home loans. Some of banks

don’t even require the guarantor to grant loan to their consumers. They also make consumers free

by reliving him to find a guarantor to complete the proceedings of availing loan.

Door-Step Services:

These doors to step services are provided from enquiry stage to the final disbursement takes

place such services are beneficial for customers in present busy life. Banks like ICICI bank and

standard chartered bank provide door to step services to customers to borrow loan.

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Loan period:

There are many banks which provide maximum loan tenures up to 15-20 years based on the loan

amount and the creditability of customers. This relieves the customers to repay loan amount till a

long period.

For accidental death insurance:

Some banks provide free accidental death insurance with housing loan which is also beneficial

for the customers. These benefits or advantages of home loans are responsible for making than so

popular among customer that a person who doesn’t have their home and want to buy, they do it

with home loan. Home loans help such persons in making their dream home.

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 DISADVANTAGES OF HOME LOAN

The main disadvantages of home loans are high lightened as below:

Delays in processing:

Many times, there are huge delays in processing of providing home loans because various

formulations to be fulfilled in this process. Due to these delays customers feel mentally as well

as financially weak.

Fluctuating interest rates:

Some banks give home loans at floating rates, which fluctuate at different intervals due to some

reasons. These changes sometimes, may lead to increase in interest rate which will increase the

cost of home loans to the customers.

High Cost:

The public sector banks charge high processing cost for home loan’s sanctioning. They are

forced to pay serious charges at various stages to fulfill the requirements. Some consumers are

not able to pay such charges so such people could not avail the benefits of home loan schemes.

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Problems in disbursement:

There are many problems in disbursement of home loan amount. There are some delays in

disbursement of loan amount to the customers due to legal formalities. This causes problems to

the customers.

These are limitations or disadvantages of home loans. But sometimes some banks charges high

installments to repay loan amount. Such also causes problem to customers. These limitations can

be removed by providing good and promote services to the customers.

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 DISBURSEMENT OF HOME LOANS

The every bank has its own procedure to disburse the loan amount among customers. After

choosing your right home, the next step is disbursement of home loans. The loan amount is

disbursed after identifying and selecting the property or home that are purchased and submit the

requisite legal documents. In the disbursement of home loans a clear title and full verification

to ensure that a person has full rights on his house. The 230A clearance of seller and 371

clearances from the appropriate authority of income tax are also needed.

Eligibility criteria:

However, if one is a resident or non-resident individual who is planning to buy a house in India,

one can apply for a home loan. If a person has decided to buy a property in the near future,

he/she can apply for a loan before even selecting the property. Once the maximum amount to put

into the property has been decided, the Housing Finance Institutions or Banks will let the

customer know that how much he/she is eligible for and this helps to plan out the budget.

Conditions regarding co-applicants:

All Housing Finance Institutions lay down conditions on who can be co-applicants. All co-

owners to the property need to be co-applicants to the loan necessarily. These institutions do not

permit minors to join in as either co-owner or as co-applicants because a minor is not eligible to

enter into a contact as per law. They do not permit even friends or relatives who are not blood

relatives to take a property jointly.

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 Income Clubbing of Co-applicants- It is as follows:-
Combination Income Clubbing:

 Husband-Wife- Income of husband-wife can be clubbed.

 Parent-son- It can be clubbed if only son is there but not if any male siblings exist.

 Brother-Brother- If they are currently staying together and intend to stay together in the new

property, then only, their income-can be clubbed for above purposes.

 Brother-Sister- No clubbing-is possible.

 Sister-Sister- No clubbing is possible.

 Parent-Minor- Child- No clubbing is possible in this case also.

GENERAL TERMS AND CONDITIONS

The following are the terms and conditions applicable to the basic home loan product only.

These are likely to change on the basis of thevariations of the home loan product. Typically, in

general home loans, the following conditions are applicable: -

 The loan to value ratio (LTV) cannot exceed a particular percentage. This differs from

product to product and from one Housing Finance Institutional Bank (HFI/B) to another. The

components of the value of the property calculated here are covered under cost of property.

 The maximum tenure of the bank is nominally fixed by HFI/Bs. However, HFls/Bs do

provide for different tenures with different terms and conditions.

 The installment that one pay is normally restricted to about 50 per cent of the monthly gross

income of the candidate.

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 The total monthly outflow towards all the loans that have been availed of, including the

current loan is normally restricted to 50% of the gross monthly income.

o One will be eligible for a loan amount which is the lowest as per one's eligibility. This is

calculated as per the LTV norms, the HR, norms and the FOIR norms as mentioned above.

o Most HFls Bs considers the profile before they judge the repayment capacity. The judgment

is based on age, qualifications, number of dependents, employment details, employer

credentials, work experience, previous track record of repayment of any loans that have been

availed of, occupation, the industry to which the candidate's business relates to, if he/she is

self-employed, then the turnover in the last 3-4 years etc.

CHARGES APPLICABLE TO HOME LOAN

The different kinds of charges applicable to home loans are discussed below:

Processing fees:
First of all, comes the process fee. This is a charge that is levied by most HFls Bs. This has to be

paid at the time of submission of the application form. It's normally charged as a percentage of

the loan amount sanctioned. Some HFls also charge a flat fee based on the loan amount instead

of a percentage. When a lower amount is sanctioned the excess fees paid at the time of

submission of the application is adjusted with the charges, which one make to the HFI/ B

subsequently. Most HFls/Bs refund the processing fee if the loan application is rejected.

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Administrative fees:

This charge is again, normally, a percentage of the loan amount sanctioned. It is collected by the

HFI/B for the maintenance of customer's records, issuing interest certificates, legal charges,

technical charges, etc. though the tenure of the loan. It is payable by the customer when he/she

accepts the offer letter given by the HFI/B. This payment has to be made before the availment of

the disbursement. The mode of collection of these fees varies from one HFI B to another.

Rate of interest:

This is the rate of interest applicable on the loan amount through the tenure of the loan. It is

charged on the principal monthly reducing method. Most HFIs Bs give an option to select either

a Fixed rate of interest or a variable rate of interest.

Legal Charges:

Some HFIs/Bs mainly Public Sector Banks levy legal charges that they incur on getting the

property documents vetted by their panel of lawyers.

Technical Charges:

These charges are also levied by certain Housing Finance Institutions/Banks (HFIs/Bs) to meet

their expenses on the technical site visits to the customer's property. This ensures quality of

construction and construction within the norms as stipulated by the respective approval authority.

32
Stamp duty and registration charges:

HFIs that go in for a registered mortgage pass these charges on to the customer. These are rather

heavy in certain states depending on the laws laid down by the state where one buys a property.

Personal Guarantee from Charges:

Since the personal guarantee provided by the customer need to be stamped, these charges are

also recovered from the customer. They are charged to him by HFIs who demand for Guarantees.

Cheque Bounce Charges:

In case the cheques through which one makes a payment to HFls get dishonored, some minimum

charges are levied by the HFI. The same are recovered from the customer.

Delayed payment charges:

HFls/Bs charge delayed payment charges from the customer if he/she delays the payment of

installments beyond the due date.

Additional charges:
These are levied as a percentage on the delayed payment charges by most HFls. They are levied

if one fails to pay the dues within the stipulated time after a delay has taken place.

Incidental charge:
This is payable in case the HFI/B sends a representative from their organization to collect their

outstanding dues. It is normally charged at a flat rate per visit. These charges are levied by most

HFls/Bs.

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Prepayment Charges:

This is a penalty charged by HFls/Bs from when one makes either a part prepayment or a full

repayment of the loan. This charge is levied only on lump sum payments and not on the EMls

that one pays. This charge is levied on the amount prepaid by one and not on the entire

outstanding principal. These charges are gradually being discount.

Credit documentation:

Given below is the exhaustive list of credit documents- that need to be submitted for a general

home loan product. The documents vary from one HFI/B to another based on one's employer,

qualifications experience etc. The general requirements are as follows:

a) Income Document: For salaried slips for the last three months appointments letter-salary

certificate retainership agreement, if appointed as a consultant-Form 16 issued by the employer

in customer's name income document for self employee - last three years profit and loss account

statement duly attested by Chartered Accountants. Last three years Balance Sheets duly attested

by Chartered Accountant, last three years Income Tax Returns with computation chart duly filed

and certified by the Income Tax authorities.

b) Proof of employment: - Identify card issued by the employer- Visiting card.

c) Employer's details (In case of private limited companies).

d) Profile of employer on employers letterhead (to be signed by a senior person in the

organization) comprising .

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 Name of promoter/directors .

 Background of promoters/directors.

 Nature of business activity of your employer.

 Number of employees.

 List of branches/factories.

 List of suppliers.

 List of clients/customers.

 Turnover of employer

Annual reports of the employer for the last two to three years.

e) Proof of age (Anyone of the following): - Passport- Voter's ID card-PAN card-Ration

card-Employer's identity card-School leaving certificate-Birth certificate.

f) Proof of residence (Anyone of the following): - Ration card-Passport- PAN card-Rent

agreement, if the customer is staying currently on rent- Bank Pass book-Allotment letter from the

company if he/she is residing in company quarters.

g) Proof of name change (If applicable): - A copy of the official gazette -A copy of a

newspaper advertisement publicizing the name change-Marriage certificates.

35
Legal documentation:

Legal Documentation the typical legal documents that need to be submitted to the HFC arc

discussed here. Given below is a list of legal property documents that need to be submitted to the

HFC for mortgage of the property. The name and the list of documents vary from state to state

and also depend on the type of property being financed. A broad outline of the documents

required is given below.

a) Acceptance copy of the offer letter issued by the HFC/B.

b) Title documents of the property that include -sale agreement duly registered-Own

contribution receipts - Allotment letter-Registration receipt-Land documents indicating

ownership, if applicable- Possession letter-Lease agreement, if applicable (Property bought from

a development authority) - Mortgage deed if the HFC opts for a registered mortgage.

c) No Objection Certificate from the developer, society or development authority as

applicable.

d) Personal Guarantees, if applicable.

e) In case of alternator additional security, documents for the same depending upon the

security details.

f) Post dated cheques for the EMls. The above documents are only indicative in nature and

do not cover the entire list. It may, also be noted that in a resale case, the previous chain of

agreement also need to be taken.

36
 PUNJAB NATIONAL BANK HOME LOAN

PNB reaches out to you with fast, friendly and most convenient home loans for:

• Construction or purchase of house/ flat.

• Purchase of house/ flat on First Power of Attorney basis from the original allottee.

• Carrying out repairs/ renovations/ additions/ alterations to existing house/ flat.

SPECIAL FEATURES:

To cover the loan outstanding, life Insurance cover is also available on payment of one time

premium which can also be financed by the Bank.

EXTENT OF LOANS:

 Individual:

For construction/purchase of house/ flat: - 75% of the cost of construction of house or purchase

of house/ flat.

For carrying out repairs/ renovation/ additions/ alterations: - 75% of the estimated cost subject to

maximum of Rs. 20lacs.

Loan upto Rs.20 Lacs for purchase of Land/Plot.

Loan is available maximum upto Rs.2 Lacs for furnishing.

37
SECURITY:

• Mortgage of property for which finance is being given.

• In case of purchase of house/ flat from housing board/ society where mortgage   cannot be

created immediately, a tripartite agreement shall be executed amongst   the housing board/

society, borrower and the Bank.

• In case of purchase of house/ flat on first power of attorney, additional security   equal to 125%

of the loan amount by way of mortgage of some other property or   pledge of bank's FDR/ LIC

policy/ Govt. Securities, NSCs, KVPs, IVPs, / PSU Bonds   etc. has to be provided.

Fixed Rate of Option is subject to Reset Clause of Five Years.

Extra rate of interest of 0.50% on Card Rates to be charged in respect of persons already having

one or more houses and availing housing loan for subsequent house(s).Option for Fixed or

Floating Rate of Interest exercised by the borrower will not be allowed to be changed for a

minimum period of 3 years, where after any change would be at the discretion of the Sanctioning

Authority.

UPFRONT FEE:

0.90% of the loan amount + Service Tax .

DOCUMENTATION CHARGES:

Rs.1, 350/- + Service Tax .

38
REPAYMENT:

Loan is to be repaid in equated monthly installments within a period of 25 years or before the

borrower attains the age of 65 years.

DISBURSEMENT:

• For outright purchase of house/ flat, the loan amount will be paid in lump sum to the   vendor.

• For house/ flat under construction, the loan amount will be disbursed in stages as per

progress of construction/ demand by selling agency.

39
 RATE OF INTEREST CHARGED BY PNB

TENURE RATE OF INTEREST @ percent p.a

Loan Amt. up to Rs.20 Loan Amt. above Rs.20
For loans repayable in/up to
lakh lakh

Up to 5 years
9.00 10.00
- floating

-fixed 9.25 10.25

Above 5 years &up to 10 years-

9.50 10.00
- floating

Fixed 10.25 10.50

Above 10 years & upto 20 years- floating 9.75 10.25

-fixed 10.75 11.00

Above 20 years & upto 25 years- floating 10.00 10.50

-fixed 11.25 11.50

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 SBI (STATE BANK OF INDIA) HOME LOAN

"THE MOST PREFERRED HOME LOAN PROVIDER" voted in AWAAZ Consumer Awards

along with the MOST PREFERRED BANK AWARD in a survey conducted by TV 18 in

association with AC Nielsen ORG Marg in 21 cities across India. 

SBI Home Loans now offers Interest Rates concessions on GREEN HOMESin accordance with

SBI's commitment to Environment protections Home Loans come to you on the solid foundation

of trust and transparency built in the tradition of State Bank of India. Best Practices followed in

SBI mentioned below will tell you why it makes sense to do business with State Bank of India.

   Best practices followed in SBI

People dealing with End to End service by Permanent employees of SBIwho are

you accountable to you.

SBI branch of your choice will service your loan account. You can
 Place
always meet our employees face to face.

 Complete transparency.
 Price
Interest charged on the daily reducing balance.

No penalty for prepayments made, out of bonafide savings or

Prepayment charges
windfall gains for which evidence is produced.

Costs hidden in fine

 No hidden costs
print

 Transparency  Complete transparency. All the features of our product, including

41
 interest rates, are in the public domain.

UNIQUE FEATURES:

 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 maximize gains (see SBI MaxGain in the following sections).

 Option to club income of your 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 up to 70 years of age.

 Free personal accident insurance coversup to Rs.40 Lac.

 Optional Group Insurance from SBI Life at concessional premium (Upfront premium

financed as part of project cost).

 Interest calculated on daily reducing balance basis, and starts from the date of disbursement.

Plus’ schemes which offer attractive packages with concessional interest rates to Govt.

Employees, Teachers, Employees in Public Sector Oil Companies.

 Special scheme to grant loans to finance Earnest Money Deposits to be paid to Urban

Development Authority/ Housing Board, etc. in respect of allotment of sites/ house/ flat.

 Option to avail loan at the place of employment or at the place of construction.

42
 PACKAGES OF EXCLUSIVE BENEFITS:

 Complimentary international ATM-Debit card.

 Complimentary SBI Classic/ International Credit Card. 

 Option for  internet-banking.

 Concessional package under ‘Credit Khazana’ for prospective Auto Loan, Student Loan,

Personal Loan  borrowers whose accounts are conducted satisfactorily.

50% concession in charges in respect of all personal remittances collection of outstation cheques.

Personal loan at attractive rates under SBI Home Plus scheme tailored exclusively for SBI Home

Loan customers.

PURPOSES:

 Purchase/ Construction of 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.

43
ELIGIBILITY:

Minimum age 18 years as on the date of sanction.

Maximum age limit for a Home Loan borrower is fixed at 70 years, i.e. the age by which the loan

should be fully repaid. Availability of sufficient regular and continuous sourcesof income for

servicing the loan repayment.

TO ENHANCE LOAN ELIGIBILITY YOU HAVE OPTION TO ADD:

1. Income of your spouse/ your son/ daughter living with you, provided they have a steady

income and his/ her salary account is maintained with SBI.

2. Expected rent accruals (less taxes, cess, etc.) if the house/ flat being purchased is proposed

to be rented out.

3. Depreciation, subject to some conditions.

4. Regular income from all sources.

PROCESSING FEE:

0.50% of Loan amount with a cap of Rs.10, 000/-(including Service Tax).

44
PRE-CLOSURE PENALTY:

No penalty if the loan is preclosed from own savings/windfall gains for which documentary

evidence is produced by the customer.

In case, such proof is not produced by the borrower, penalty @2% on the amount prepaid in

excess of normal EMI dues shall be levied if the loan is preclosed within 3 years from the date of

commencement of repayment.

SECURITY:

Equitable mortgage of the property.

Other tangible security of adequate value like NSCs, Life Insurance policies etc., if the property

cannot be mortgaged.

MAXIMUM REPAYMENT PERIOD:

For applicants up to 45 years of age: 25 years

For applicants over 45 years of age: 15 years.

45
MORATORIUM:

Up to 18 months from the date of disbursement of first installment 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).

DISBURSEMENT:

In lump sum direct in favour of the builder/ seller in respect of outright purchase.

The stage depending upon the actual progress of work in respect of construction of house/ flat

etc.

DOCUMENTS:

 Completed application form.

 Passport size photograph.

 Proof of Identity – PAN Card/ Voters ID/ Passport/ Driving     License.

 Proof of Residence – Recent Telephone Bill/ Electricity Bill/ Property tax receipt/ Passport/

Voters ID.

 Proof of business address in respect of businessmen/ industrialists.

 Sale Deed, Agreement of Sale, Letter of Allotment, Non encumbrance certificate, Land/

Building Tax paid receipt etc.

 Copy of approved plan and approval from the Local Body.

46
RATE OF INTEREST OF SBI HOME LOANS:

TENUR Rate of Interest @ percent p.a.

Loan Amt. upto Rs.20 Loan Amt. above Rs.20

For loans repayable in/upto
lac lac

Upto 5 years
10.50 11.00
- floating

-fixed 12.75 13.25

Above 5 years & upto 10 years-

10.75; 11.25
floating

-fixed 12.75 13.25

Above 10 years & upto 20 years-

10.75-11.00 11.25-11.50
floating

-fixed 12.75 13.25

Above 20 years & upto 25 years-

11.00 11.50
floating

-fixed 12.75 13.25

47
THE CO-OPERATIVE BANK HOME LOAN:

The Co-operative Bank Home Loans, offer unbeatable benefits to ensure that you get the best

deal without any hassles.

The largest home loan provider, Bank understands how special creating a new home is for you,

and our Home Loans help you lay the foundation for your dream home.

FEATURES:

 Home Loans are the best option you can go for to finance a new home. The Co-operative

bank offers you the most convenient and practical home loan plans to suit your needs. With so

many attractive features in every type of home loan it offers, creating the home you always

wanted is no longer a distant dream.

• Attractive loan interest rates.

•  Home loan amounts suited to your needs.

• Simplified Documentation.

• Doorstep Delivery of home loan papers.

•  Sanction approval without having selected a property.

•  Free Personal Accident Insurance (Terms & Conditions).

•  Insurance options for your home loan at attractive premium.

48
They provide two types of loan schemes.

 Urban Housing Loan Scheme.

 Rural housing Loan Scheme.

The loan under such scheme shall be implemented through the branches of the Punjab State

Cooperative Bank / Central Cooperative banks concerned and shall be limited to urban and/ rural

areas falling in the area of operation of the lending bank.

AREA OF OPERATIONS:

Loan shall be advanced to individual and member of Group housing Cooperative Societies in the

area of operation banks in state of Punjab.

ELIGIBLE BORROWERS:

 Individuals.

 Members of cooperative housing societies.

49
PURPOSES OF LOAN:

Loan shall be advanced under the scheme for purchase of built up house , construction of a new

house or repair/addition/alteration of existing house.

LOAN ELIGIBILITY:

Loan eligibility shall be calculated on the basis of repayment capacity of the borrower. The

repaying capacity shall be determined on the basis of land holding and other known sources of

income and commitments/ subsistence towards his family. A reasonable installment to income

ratio i.e. normally up to 35% of the gross income can also be considered for loan eligibility.

PERIOD OF LOAN:

The maximum period of loan shall be 15 years and loan shall be repayable in equated monthly

/half yearly installments. The first installment shall become due after expiry of 9 months from

the date of drawl of first installment in case of construction and where as in the case of purchase

of built up house it shall start after expiry of 3months from purchase.

SECURITY:

Security for the loan is a first mortgage of the property to be financed normally by way of

deposit of original title deeds.

DISBURSAL OF LOAN:
50
In case of urban housing loan scheme:

The loan shall be disbursed after the property is technically appraised, all legal documentation

completed and borrower having invested own contribution in full.

In case of purchase of plot construction, the disbursement shall be in 3 installment as follows:

For purchase of plot - 50%

Up to roof level – 25%

After roof level -25%

Loan will be disbursed at one go for purchase of a built up house. However for construction on

pre-owned plot, the disbursement shall be in two installments.

1st installment for after plinth level - 50%

2nd installment for construction of the building after roof level - 50%

In case of rural housing loan scheme:

 1st installment at the time of starting constructing after plinth level – 50%

 2nd installment after completion of roof level - 50%

2nd installment shall be disbursed after ensuring proper utilization of previous installment.

PROCESSING FEE AND OTHER CHARGES:

Processing fee and other charges @ 0.25% of loan amount shall be charged in the case of urban/

rural housing loan scheme.

INSURANCE:

51
Comprehensive insurance in the joint names of the borrower and the bank shall be made the

property mortgaged against fire, riots earthquake lighting floods etc. in case of default bank will

be at liberty to get policy renewed by debit to house loan account of the borrower.

CUSTOMER PRIVILAGES:

If you are an existing Home Loan customer, you can avail of other loans (such as Personal

Loans, Car Loans, Two-wheeler Loans and Loan against securities) at lower interest rates.

RATE OF INTEREST:

TENURE Rate of Interest @ percent p.a.

Loan Amt. up to Rs.15 Loan Amt. above Rs.15

For loans repayable in/up to
lac lac

Up to 5 years
12.00 12.00
- floating

-fixed 12.00 12.00

Above 5 years & up to 10 years-

12.00 12.00
- floating

Fixed 12.00 12.00

52
 CHAPTER – 5

DATA ANALYSIS

&

INTERPRETATION

53
Q: 1 From which of the following institution you have taken the loan?

BANK NO. OF RESPONDENT %AGE OF RESPONDENT

SBI 10 20%

PNB 11 22%

CO-OPERATIVE 13 25%

OTHERS 16 33%

TOTAL 50 100%

SBI
PNB
COOPERATIVE
OTHERS

Interpretation:
This pie chart shows that 20% of respondents have taken loan from SBI, 22% from PNB, 25%

from The Cooperative, 33% from Others like, 5 PUNJAB N SINNDH BANK , 4 ICICI BANK ,

5 HDFC BANK ,2 AXIS BANK .

54
Q2. Which bank is more secure according to you?

BANK NO.OF RESPONDENT %AGE OF RESPONDENT

PNB 12 24%

SBI 13 26%

CO-OPERATIVE 14 28%

OTHERS 11 22%

TOTAL 50 100%

PNB
SBI
COOPERATIVE
OTHERS

Interpretation:

The pie chart shows that 28% of the respondents in matter of security of bank is in favors of

Cooperative bank, 26% of them in favors of SBI, 24% respondents are in favor of PNB, only

22% respondents are favoring Others LIKE ,5 PUNJAB N SINDH BANK ,4 HDFC BANK ,2

ICICI BANK.

55
Q3. What is the amount of loan availed by the customers?

AMOUNT(RS) NO. OF RESPONDENT %AGE OF RESPONDENT

Below 2 Lac 18 36%

2 – 10 Lac 25 50%

10-15 Lac 05 10%

Above 15 Lac 02 4%

TOTAL 50 100%

60%

50%

40%

30%

20%

10%

0%
BELOW 2 LAC 2-10 LAC 10-15 LAC ABOVE 15 LAC

Interpretation:

The above bar graph shows that 50% of customers have taken loan between Rs. 2-10 lac, 36%

below Rs. 2 lac, 10% between Rs. 10-15 Lac and 4% customers above Rs. 15 lac.

56
Q4. What is the purpose of the loan?

PURPOSES NO.OF RESPONDENT %AGE OF RESPONDENT

Construction 26 52%

Improvement 06 12%

Purchase 12 24%

Extension 05 10%

Equity 01 2%

TOTAL 50 100%

CONSTRUCTION
IMPROVEMENT
PURCHASE
EXTENTION
EQUITY

Interpretation:

This pie- chart shows that 52% of respondents have taken loan for construction purpose, 24%

have taken loan for purchase purpose 12% have taken loan for improvement purpose, 10% have

taken loan for extension purpose and rest 2% comes under equity purpose.

57
Q5. What is loan repayment period?

DURATION NO.OF RESPONDENT %AGE OF RESPONDENT

Up to 5 years 18 36%

Up to 10 years 13 26%

Up to 15 years 10 20%

Up to 20 years 09 18%

TOTAL 50 100%

upto 5 years
upto 10 years
upto 15 years
upto 20 years

Interpretation:

This pie-chart shows that 36% of customers have opted for loan repayment period of 5 years,

26% of respondents have opted for loan repayment period of 10 years, 20% of respondents have

opted for loan repayment period of 15 years and 18% have opted for loan repayment period of 20

years.

58
Q6. Who among your family mainly decides to take a loan?

DECIDER NO.OF RESPONDENT %AGE OF RESPONDENT

Self 32 64%

Parents 10 20%

Friends/ Relatives 04 8%

Others 04 8%

TOTAL 50 100%

self
parents
friends/reletives
others

Interpretation:

This pie chart shows that 64% of respondents have their own decision to take home loan, 20% of

respondents depend on their parents decisions and 8% by friends/ relatives and rest 8% by other

sources.

59
Q7. From where you come to know about a particular bank or Institution?

SOURCES NO. OF RESPONDENT %AGE OF RESPONDENT

Newspapers/ Magazines 18 36%

Internet/T.V. 12 24%

Exhibitions 09 18%

Builders/ Developers 11 22%

TOTAL 50 100%

newspaper/magazines
internet/tv
exhibitions
builders/developers

Interpretation:

This pie chart shows that newspaper/ magazines are main source of information for customers

i.e. 36% whereas 24% of customer comes to know from internet/ radio/T.V., 22% from builders/

developers and rest 18% from exhibitions.

60
Q8. How much are you satisfied from your service provider?
DECIDER NO.OF RESPONDENT %AGE OF RESPONDENT

Very Satisfied 10 20%

Satisfied 30 60%

Indifferent 02 4%

Dissatisfied 06 12%

Very Dissatisfied 02 4%

TOTAL 50 100%

very satisfied
satisfied
indifferent
dissatisfied
very dissatisfied

Interpretation:

These pie-chart shows that 60% of respondents are satisfied from their service providers and

20% are very satisfied, 12% are dissatisfied and 4% are very dissatisfied and 4% of the

respondents are indifferent towards it.

61
Q9. Have you ever faced any problem from your Home Loan institution?

RESPONSE NO. OF RESPONDENT %AGE OF RESPONDENT

Yes 18 36%

No 32 64%

TOTAL 50 100%

yes
no

Interpretation:

This pie chart shows that 64% of respondents have faced no problem while 36% of respondents

have faced problem of intimation, proper dealing, networking, interest rates etc.

62
Q10. In future, if required, which of the following institution would you approach for taking a

Home Loan?

NAME NO. OF RESONDENT %AGE OF RESPONDENT

PNB 10 20%

SBI 12 24%

Cooperative 15 30%

Others 13 26%

TOTAL 50 100%

PNB
SBI
COOPERATIVE
OTHERS

Interpretation:

This pie chart shows that in future, 30% of customers would take home loan from Cooperative

Bank, 24% from SBI, 20% from PNB, 26% from other home loan institutions like , 5 PUNJAB

N SINDH BANK , 5 HDFC BANK , 2 AXIS BANK , 1 ICICI BANK .

63
Q11 what is the type of loan availed by customers?

TYPE OF LOAN NO. OF RESPONDENT %AGE OF RESPONDENT

Fixed Rate Home Loan 15 30%

Adjustable Rate Home Loan 35 70%

TOTAL 50 100%

fixed rate home loan

adjusted rate home loan

Interpretation:

This pie-chart shows that majority of customers opted for Adjustable Rate Home Loan i.e. 70%

and 30% have opted for Fixed Rate Home Loan.

64
Chapter – 6

Findings

Suggestion

Limitation

Conclusion

65
 FINDINGS

 Most of the customers are satisfied from the Cooperative bank services because of their

attractive interest rate charged on loans.

 Majority of the customers feel secured while availing loans from Cooperative banks

followed PNB or SBI.

 The main purpose of taking home loans is Construction followed by repairs, purchase or

improvement.

 Maximum customers availed loans on adjustable rates for their own benefits.

 The Customer availed loan amount of 2 lac to 10 lac.

 Maximum customer is problem faced by home loan.

 Know about a particular bank from news paper or magazines.

 Maximum customer is own decide to take a loan.

66
SUGGESTIONS

However, 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 banks which will be helpful to

them in improving their services.

These suggestions have been discussed as follows:

1. To increase their customers, the banks 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.

2. To satisfy their customers and for good dealings in future, the banks should make prompt

disbursement of loan amount to the customers so that they can buy or construct their dream home

as early as possible.

3. The Banks 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.

4. Although the interest rates on specific norms, yet customers seek less interest rate which can

lower their cost of house. So banks should try to lower their interest rates. Needles to say, that

the bank which is having lower interest rates, have the maximum clients for loans.

5. The public sector banks 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.

67
LIMITATIONS

 This study has been restricted to Ropar City only.

 The information provided by the respondents may be biased and incorrect.

 The sample may not represent the whole population.

 Paucity of time and resources could lead to the inability of conducting a large survey.

 Approaching customers who had taken loan from sample institutions were not easy.

 Most of the customers were busy and were not willing to answer.

68
 CONCLUSIONS

In this project report the summary of the whole project has been covered how the whole project

was carried out and the analysis was made. This project is based on the “Comparative study of

home loans provided by different banks” (only public sector bank). This topic covers the

objective of studying the customer satisfaction level and comparative study of disbursement of

home loans.

The Housing Loan is a loan taken by a borrower from the bank issued against the

property/security intended to be bought on the part by the borrower giving the banker a

conditional ownership over the property. There are some advantages and disadvantage of

availing bank loans. In this project study, first of all objectives were received to carry out this

project. To study the topic under research the secondary as well as primary data was collected

secondary data. The primary data was collected through questionnaires. Such banks are emerging

at higher position due to that public sector banks on ground of professionally managed services,

reliable & transparent system, easy query handling etc. The problem faced by customers while

availing home loans also revealed by this project

Finally the whole research was carried out in a systematic way to reach at exact results. The

whole research and findings were based on the objectives. However, the study had some

limitations also such as lack of time, lack of data, non-response, reluctant attitude and illiteracy

of respondents, which posed problems in carrying out the research. But proper attention was

made to carry out research in proper way which may beneficial for banks to enhance their

customer base.

69
 BIBLIOGRAPHY

 Manual of instructions on NFS advances

By GREWAL D.S.

Websites

 www.google.com
 www.deal4loans.com
 http://www.indiahousing.com
 http://www.statebankofindia.com
 http://www.business-standard.com

70
 QUESTIONNAIRE

I am an MBA Student conducting research for my summer training. Please spare your precious

time to fill the questionnaire.

Personal Details

Name:

Age:

Occupation:

Gender:Male Female

Income Level: 1 lakh to 2 lakh 2 to 5 lakh

5 lakh to 7 lakh More than 7 lakh

Q: 1 from which of the following institution you have taken the loan?

SBI PNB

COOPERATIVE OTHERS

Q2. Which bank is more secure according to you?

SBI PNB

COOPERATIVE OTHERS

Q3. What is the amount of loan availed by the customers?

Below 2 Lac 2 – 10 Lac

10-15 Lac Above 15 Lac

Q4. What is the purpose of the loan?

Construction Improvement

Purchase Extension

Equity

71
Q5. What us the type of loan availed by customers?

FRHL ARHL

Q6. What is loan repayment period?

Up to 5 years Up to 10 years

Up to 15 years Up to 20 years

Q7. Who among your family mainly decides to take a loan?

Self Parents

Friends/ Relatives Others

Q8. From where you come to know about a particular bank or Institution?

Newspapers/ Magazines Internet/T.V.

Exhibitions Builders/ Developers

Q9. How much are you satisfied from your service provider?

Very Satisfied Satisfied

Indifferent Dissatisfied

Very Dissatisfied

Q10. Have you ever faced any problem from your Home Loan institution?

Yes No

Q11.In future, if required, which of the following institution would you approach?

For taking a Home Loan?

PNB SBI

COOPERATIVE OTHERS

THANK YOU.

72
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