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A PROJECT ON

HOUSING FINANCEWITH REFERENCE TO SBI

PREPARED BY

AMIT C. BAKALKAR.T.Y.B.COM. (BANKING AND INSURANCE) GUIDE PROF. MRS. MUGDHA KESKAR.

SUBMITTED TO UNIVERSITY OF MUMBAIVIDYA PRASARAK MANDALS K.G JOSHI COLLEGE OF ARTS AND N.G. BEDEKAR COLLEGE OF COMMERCE THANE

2010-2011 (VTH SEMISTER)

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DECLARATION

Researcher Amit C. Bakalkar student of Joshi Bedekar College studying in T.Y.B.Com (Banking & Insurance) Semester V (2010-2011) hereby declare that I have completed the project on Housing Finance with reference to SBI successfully in the current academic year. The information submitted is true and original to the best of my knowledge.

Place: __________ Date: ___________ Signature of Student

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ACKNOWLEDGEMENTAcknowledgement is not a mere formality or ritual but a genuine opportunity to express the indebtedness to all those without whos active support and encouragement this project wouldnt have been possible. Hence, it gives me immense gratification to place on records my profound gratitude sincere appreciation to each and every one of those who have helped me in this endeavour. Firstly I would like to thank the Staff of the SBI Branch for allowing me to do my project there and providing valuable help in collecting the data. I extend my sincere thanks to PROF. MUGDHA KESKAR for her continuous guidance, cooperation and valuable suggestions to initiate and carry out the study.

Date. BAKALKAR AMIT CHANDRAKANT.

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INDEXRESEARCH METHODOLOGY ABSTRACT..................................................................................................... 1 OBJECTIVES OF THE STUDY.................................................................... 3 NEED OF THE STUDY.................................................................................4 SCOPE OF THE STUDY............................................................................... 4 DESIGN OF STUDY...................................................................................... 5 TOOLS AND TECHNOLOGIES USED....................................................... 7 LIMITATIONS OF THE STUDY.................................................................. 8

CHAPTER 11. INTRODUCTION TO HOUSING FINANCE HOUSING 1.1. INTRODUCTION....................................................................................9 1.2. HOME LOAN INDUSTRY IN INDIA....................................................14 1.3. INDIA'S MORTGAGE MARKET SCORES OVER WEST................... 19

CHAPTER 22. COMPANY PROFILE 2.1. INTRODUCTION....................................................................................21 2.2. ROOTS.................................................................................................... 23 2.3. ASSOCIATE BANKS............................................................................. 24 2.4. BRANCHES.... 25 BRANCHES.... ... OFFICES.. .... 2.5. FOREIGN OFFICES.... 25 2.6. ATM SERVICES.................................................................................... 25 2.7. GROUP COMPANIES.......................................................................... 26 2.8. PRODUCTS AND SERVICES............................................................... 27 PERFORMANCE 2.9. PERFORMANCE 28 2.10. ORGANIZATION.................................................................................. 28 2.11. THE BANK STANDS FOR BEST PRACTICES................................ 29 HOLDERS......................... ................... 2.12. SHARE HOLDERS......................... 29 2.13. UNIQUE FEATURES OF SBI HOME LOAN PRODUCTS............... 304

CHAPTER 33. HOME LOAN PRODUCTS OFFERED BY SBI 3.1. SBI EASY HOME LOAN........................................................................ 32 3.2. SBI ADVANTAGE HOME LOAN.......................................................... 34 3.3. HOME LOAN PRODUCT VARIANTS.................................................. 36 3.4. HOME LOAN TOP-UP PRODUCTS..................................................... 43 3.5. RELATED HOME LOAN PRODUCTS................................................. 45

CHAPTER 54. TERMS AND NORMS 4.1. ELIGIBILITY.......................................................................................... 47 4.2. DOCUMENTS......................................................................................... 49 4.3. PURPOSE................................................................................................ 56 4.4. QUANTUM OF LOAN............................................................................ 59 4.5. EQUATED MONTHLY INSTALLMENT CALCULATION................ 60 4.6. MONETARY CEILINGS........................................................................ 65 4.7. TOTAL PROJECT COST....................................................................... 66 4.8. MARGIN................................................................................................. 66 4.9. SECURITIZATION................................................................................ 67 4.10. FEES OR CHARGES........................................................................... 67 4.11. RATE OF INTEREST.......................................................................... 69 4.12. MORATORIUM..................................................................................... 70 4.13. GUARANTOR....................................................................................... 71 4.14. TAX BENEFITS.................................................................................... 72 4.15. PACKAGE OF EXCLUSIVE BENEFITS............................................ 72 4.16. INSURANCE COVER.......................................................................... 73 4.17. VALUATION POLICIES...................................................................... 75

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CHAPTER 55. SYSTEMS AND PROCEDURES 5.1. STAFF INVLOVED AND THEIR ROLES............................................ 76 5.2. PROMOTION AND DISTRIBUTION OF THE PRODUCTS............... 77 5.3. PROCESS UNDERTAKEN.................................................................... 79

CHAPTER 66. PERFORMANCE EVALUATION 6.1. COMPETITORS...................................................................................... 91 6.2. STRENGTHS AND WEAKNESSES......................................................91 6.3. SIZE OF HOME LOAN.......................................................................... 92 6.4. SHARE OF HOME LOANS IN TOTAL ADVANCES.......................... 93 6.5. QUALITY OF ASSETS......................................................................... 94 6.6. NATURE OF COMPLAINTS COLLECTED FROM ONLINE CONSUMER FORUMS................................................................... 6.7. AWARDS AND REWARDS............................................................. 95 96

CHAPTER 77. RECOMMENDATIONS & CONCLUSIONS

APPENDIXQUESTIONNAIRE TO THE BANK OFFICIAL QUESTIONNAIRE TO CUSTOMERS

BIBLIOGRAPHY

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LIST OF DIAGRAMS Diagram No. 1.1 1.2 1.3 1.4 2.1 3.1 4.1 6.1 6.2 6.3 6.4 Name of Diagram Housing in India Demographics in Housing Housing Finance Timeline Improved Affordability Shareholders of SBI Home Loan Products Offered by SBI Home EMI Calculator Size of home loan Share of home loan Quality of Assets Customer complaints Page No. 14 15 15 16 29 31 60 92 93 94 95

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LIST OF TABLESTable No. 1.1 2.1 3..1 3.2 3.3 4.1 4.2 4.3 4.4 4.5 4.6 4.7 4.8 4.9 4.10 4.11 5.1 6.1 6.2 6.3 6.4 6.5 6.6 Name of the Table Major home loan providers Best Practices in SBI loan amount in SBI easy home loan loan amount in SBI advantage home loan Margin of bank on loan amount Eligibility Criteria & Documentation Criteria for Loan Amount EMI calculation in the flat rate system EMI calculation in Reduced balanced system Monetary ceilings Criteria of margin amount Securitization Processing fee amounts Rate of interests of SBI Easy Home Loan Rate of interests of SBI Advantage home loan Valuation policies. Systems and procedures in lending process Competitors Strengths and weaknesses Size of home loan Share of Home Loans Quality of assets. Customer complaints Page No. 18 28 33 35 37 48 59 61 62 65 66 67 67 69 70 75 76 91 91 92 93 94 95

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RESEARCH METHODOLOGYABSTRACTHome is a dream of a person that shows the quantity of efforts, sacrifices luxuries and above all gathering funds little by little to afford ones 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, whether 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. In view of acute housing shortage in the country, and keeping in mind the social economic role of commercial banks in the present times, The ICICI Bank and Standard chartered bank has become the first player in this sector to announce a housing loan for a 20 years period. No doubt it will enhance the end cost of the home but it will facilitate people to plan their house over longer duration now, it has been made easy for a person to buy that dream house which he dreamt of long ago. A home loan is a loan taken for buying or constructing a home or to make improvements to a residential property. Individual can get a loan from banks and registered housing finance companies. The Home loan sector in India is the pivotal role player in the growth of the real estate scenario in India. With tax incentives given9

to the housing finance sector in the annual budget of 2001, transactions related to buying and selling of residential properties increased considerably and was