by ajay jangir

8/8/2019 by ajay jangir

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I A bh is he k s ha rm a d ec la re t ha t t hi s p ro je ct r ep or tComparative Analysis of Home Loans And Its

Operat ions is based on my project s tudy. This projectreport is my original work and this has not been used forany purpose anywhere.

Abhishek Sharma

M.B.A. IIIrd Sem.

PREFACE


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Realizing that the practical examination is an academic for all round development

of a personal. As a part of the course Curriculum Application, the student has to

undergo practical training for one and half month.

The object of training is to provide the student with an insight to the practical

aspects of organization working and environment. Such type of training helps

students to work on real industrial environment, and to gain practical

knowledge and build confidence.

I have much pleasure in submitting the project report on COMPARATIVE ANALYSIS OF HOME LOANS AND ITS

OPERATIONS AND MARKETING taken at UNION BANK,

JAIPUR.


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Acknowledgement

It is with great of gratitude and happiness that I present a thoroughly made project on the

Comparative Market Analysis of Home Loans and its day to day operations offered by

UNION BANK and other major players in this sector.

This project is an insight into the current banking scenario of country in Home Loan

Division. In the completion of the project many people have worked with me to carry

forward my project. I express my deep sense of gratitude to all that have directly or

indirectly helped in the successful completion of the project.

I would like to thanks Mr.B.L.Meena ( BRANCH MANAGER) as my Project Guide ,

whose guidance provide me to experience the practical working and understanding , and

all the UNION Bank staff for their interest, untiring efforts, unfailing courtesy,

encouragement and cooperation in making a project a success.

I would also like to give my sincere gratitude to Mrs. Surjit Bishnoi(HOD) OF

Shekhawati Institute of Management, Sikar as my Faculty Guide or Mentor, and all

for providing the precious knowledge in regard of my project.

There can possibly be no claim to the perfection in the project. In the case I request to

bear with any errors, omissions or discrepancies that may have crept in despite due care

and caution on my part.


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Executive summary

Real estate in India is currently one of the hottest investments options in Asia . A recent

survey of the real estate scenario acknowledge the Indian metropolis of Mumbai ,

Bangalore and New Delhi as the top three investors' choices for real estate investment in

Asia. But there were concerns mainly related to the availability of necessary funds for

investment and in the more recent times, the boom in the real estate market opened the

doors for a host of realty funds from financial institutions. Prior to five years, the real

estate segment in India was neither organized nor were there too many large institutions

in the construction industry. But now with an organized finance sector and with the

increase in transparency levels, it has become easier to create financing vehicles.The decrease in housing loan interest rates and an increase of disposable income has

contributed largely to an increased demand in the residential segment. In spite of a rise in

home loans interest rates and qualitative sanctions being levied by the RBI on banks,

buying interest has not waned because home loans are still cheaper than ten years ago.

The retail markets are also undergoing a defining change with the introduction of larger

retailing formats. The financial institutions also wasted no opportunity in tapping the

fund requirement catering to the inflow of potential buyers in the retail sector . While

most funds were initially floated by financial Institutions or banks such as SBI, LIC,

HDFC , ICICI Bank , UNION Bank of India and IDBI Bank , and even retailers have

now entered the real estate sector for creating more retail facilities and have been hugely

successful.

As the realty prices in India skyrockets, housing complexes mushrooming and city

landscapes becoming unrecognizable, the growth across all real estate segments and

experts estimate that demand will remain steady at the currently high levels because of the improving economic environment and the real estate sector is expected to grow 30%

every year. This rising property prices encourage banks and financial institutions to lend

more with the increase in collateral values. Although the home loan providers have hiked

their rates twice in less than three months, home loans continue to be nearly 45 per cent
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cheaper than what they were in early 2001. Because if statistics are referred to, the

interest rates which now range between 9-10 per cent, are still much lower than what they

were ten years ago, at 16-17 per cent.

In addition to funds being raised by the Indian financial institutions like HDFC, ICICI

and IDFC abroad, the money could be used to develop business and IT parks and

townships. A study has revealed that as many as one million homes are financed every

year in India now with an estimated home mortgages market of US$ 10.7 billion -

contributing to India's phenomenal realty prospect.


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ContentsINTRODUCTION...............................................................................................................

...................

ABOUT UNION BANK OF

INDIA...........................................................................................

MISSION AND CORE

VALUES.................................................................................................

SHAREHOLDING PATTERN..

BOARD OF

DIRECTORSMILESTONES

...

INDUSTRY

SCENARIO........................................................................................................................

HOME LOAN IN INDIA.

.

TYPES OF HOME LOANS.

.

TAX BENEFITS ON HOME LOANS.

.

UNION BANK POWER HOME..

.

OVERVIEW

.

LOAN

PURPOSES...

ELIGIBILITY

...


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DOCUMENTATION

...

LOAN

AMOUNT.

TERMS AND

CONDITION

FAIR PRACTICE CODE FOR

LENDERS.

OPERATION FLOW OF HOME

LOANS

ELIGIBILITYCALCULATION..

EMI

CALCULATION..

LOAN TO VALUE

TABLE.........

HIERARCHY OF

OPERATIONS

COMPARATIVE ANALYSIS OF HOME LOANS

FEATURES OFFERED BY OTHER

BANKS.

Research methodology

ANALYSIS AND FINDINGS..

.

RECOMMENDATIONS AND SUGGESTIONS...


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SUMMARY AND CONCLUSION.

.

APPENDIXES.

.

Questionnaire...

REFERNCES AND BIBLIOGRAPHY...


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Overview of Union Bank Of India

About Union Bank:

The dawn of twentieth century witnesses the birth of a banking enterprise par

excellence- UNION BANK OF INDIA- that was flagged off by none other than the

Father of the Nation, Mahatma Gandhi. Since that the golden moment, Union

Bank of India has this far unflinchingly traveled the arduous road to successful

banking........ a journey that spans 88 years. We at Union Bank of India, reiterate

the objective of our inception to the profound thoughts of the great Mahatma...

"We should have the ability to carry on a big bank, to manage efficiently

crores of rupees in the course of our national activities. Though we have

not many banks among us, it does not follow that we are not capable of

efficiently managing crores and tens of crores of rupees."

Union Bank of India is firmly committed to consolidating and maintaining its

identity as a leading, innovative commercial Bank, with a proactive approach tothe changing needs of the society. This has resulted in a wide gamut of products

and services, made available to its valuable clientele in catering to the smallest of

their needs. Today, with its efficient, value-added services, sustained growth,

consistent profitability and development of new technologies, Union Bank has

ensured complete customer delight, living up to its image of, GOOD PEOPLE

TO BANK WITH . Anticipative banking- the ability to gauge the customer's

needs well ahead of real-time - forms the vital ingredient in value-based services

to effectively reduce the gap between expectations and deliverables.

The key to the success of any organization lie with its people. No wonder, Union

Bank's unique family of about 27,772 qualified / skilled employees is and ever will


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be dedicated and delighted to serve the discerning customer with

professionalism and wholeheartedness.

Union Bank is a Public Sector Unit with 55.43% Share Capital held by the

Government of India. The Bank came out with its Initial Public Offer (IPO) in

August 20, 2002 and Follow on Public Offer in February 2006. Presently 44.57 %

of Share Capital is presently held by Institutions, Individuals and Others.

Over the years, the Bank has earned the reputation of being a techno-savvy and

is a front runner among public sector banks in modern-day banking trends. It is

one of the pioneer public sector banks, which launched Core Banking Solution in

2002. Under this solution umbrella, All 2805 Branches of the Bank havebeen 1200 networked ATMs, with online Telebanking facility made available to all

its Core Banking Customers - individual as well as corporate. In addition to this,

the versatile Internet Banking provides extensive information pertaining to

accounts and facets of banking. Regular banking services apart, the customer

can also avail of a variety of other value-added services like Cash Management

Service, Insurance, Mutual Funds and Demat.

The Bank will ever strive in its endeavor to provide services to its customer and

enhance its businesses thereby fulfilling its vision of becoming THE BANK OF

FIRST CHOICE IN OUR CHOSEN AREA BY BUILDING BENEFICIAL AND

LASTING RELATIONSHIP WITH CUSTOMERS THROUGH A PROCESS OF

CONTINUOUS IMPROVEMENT .


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Our Mission and Values

Our Mission

Customer Service and Product Innovation tuned to diverse needs of individual

and corporate clientele.

Continuous technology up gradation while maintaining human values.

Progressive globalization and achieving international standards.

Efficiency and effectiveness built on ethical practices.

Core Values

Customer Satisfaction through

Providing quality service effectively and efficiently

"Smile, it enhances your face value" is a service quality stressed on

Periodic Customer Service Audits

Maximization of Stakeholder value

Success through Teamwork, Integrity and People


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Share Capital of Union Bank Authorized Share Capital : Rs. 1500 Crores Paid Up Share Capital : Rs. 505.12 Crores


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DISTRIBUTION OF SHAREHOLDING HOLDING AS ON 30.06.2010 SL NO CATEGORY NO. OF SHARES PERCENTAGE

A. PROMOTER'S HOLDING

1PROMOTERS*

Indian Promoters 280000000Foreign Promoters

2Persons acting in Concert

Sub Total 280000000 B NON PROMOTERS HOLDING

3INSTITUTIONAL INVESTORS

a) Mutual Funds & UTI 44121539

b) Banks,FinancialInstitutions,Insurance 17594124

Companies (Centra/State Govt.Institutions)

c) FIIs & Foreign Mutual Funds 93196653

Sub Total 154912316

4OTHERSa) Private Corporate Bodies 21640965

b) Indian Public 48364617c) NRIs/OCBs 200002d) Any other (please specify)-GDR

Sub Total 70205584

GRAND TOTAL 505117900As defined in Regulation 2(h) of SEBI (Substantial Acquisition of Shares and* Takeovers) Regulations, 1997

The Promoter's holding shall include all Entities in the promoter's group-individualor body corporate

# As defined in Regulation 2(e) of SEBI (Substantial Acquisition of Shares andTakeovers) Regulations, 1997

Note :-


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Shareholding

Share Capital - Rs. 358.56 crores


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Net Worth - Rs. 8,741.76 crores

Book Value per share - Rs. 254.42

Market Price as on 11/7/08 - Rs. 665.25

Market Cap as on 11/7/08 - Rs. 23,856 crores (US $ 5.56 billion)

Board of Directors

The Bank has 11 members on the Board. Dr. P. J. Nayak is the Chairman and CEO of the

Bank.

The members of the Board are:

Chairman & CEO SHRI M.V.NAIR

Executive Director SHRI S.Raman

Government of India Nominee SHRI K.V. EAPENGovernment of India nominee

on the recommendation of RBI

Chartered Accountant Director

WORKMEN DIRECTOR

SHRI K. SIVARAMAN

K.S. SREENIVASAN

SHRI N. SHANKAR


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Director DEBASIS GHOSHGovernment Nominee Director

under General Category

SMT. RANI SATISH

Director SHRI ASHOK SINGH

Director Dr. Gulfam Mujibi

Director PROF. M.S. SRIRAM

Director Shri Arun Kumar Nanda

Director Shri.S. Ravi

* JAIPUR Main Branch Head :


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INDUSTRY OVERVIEW

Home Loans in India

The Home loan sector in India is the pi-vital role player in the growth of the real estate

scenario in India . With tax incentives given to the housing finance sector in the annual

budget, transactions related to buying and selling of residential properties increased

considerably and was much higher as compared to previous years.

Since the new class of buyers are relatively younger set of customers who are more aware

about legal documentation and approvals, buyers are now more 'end-users' rather than

investors; the property market in India undergoes transformation to align itself withglobal standards with an increased emphasis on quality & cost control and documentation

methods. In the current economy of India, the real estate sector has the maximum

propensity to generate income and demand for materials, equipment and services. It can

be said that housing finance companies were formed for co-existing with buyer's

requirements of housing loans for investing in properties. Home loans are made available

by financial institutions to both Indian and NRI customers at floating and fixed rate of

interest and also at attractive EMI options.

For construction or buying a new home

For home repairs and renovations

For purchase of plots

Against mortgage of property

No tax benefits are available for NRI customers unless you file returns and thereby

become eligible to avail of the tax benefits.

Besides home loans , Commercial property loans are also available and different

financial institutions in India provide commercial loans at different rates and different

upper limits.
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Real estate loans are available to builders, promoters and real estate developers . The

experience and financial standing of the builders is taken into account before the loan is

granted which is to be returned with the minimum installments.

Today, the amount of money that a city dweller spends on rent is roughly the same, or

only slightly less than the amount he pays as an EMI on a housing loan. Earlier the home

loan sector in India was solely dependent on nationalized and public sector banks, but the

entry of public sector banks into the housing finance business marked the beginning of

the first round of interest rate cuts. And this reduction in interest rates has enhanced the

borrowing power of customers. Moreover, HFCs are offering incentives to attract

investors like

Some companies sanction the housing loan without requiring you to identify

property as a pre-requisite for eligibility

Free accident insurance & property insurance

Waiving of pre-payment penalty

Waiving of processing fee

The realty boom in India has given a new dimension to the finance sector in India - both

in Home Loans and Home Insurance segments. This has not only given a competitive

edge to the finance companies to provide attractive options to customers but has also

contributed to the increased investments in the real estate sector. This has resulted in 13

new institutions foraying into the housing finance business in the last three years.

Major Home Loan ProvidersBanks & Public Sector

Housing Finance Companies

And Financial Institutions

State Bank of India, Bank of Baroda Housing Finance, LIC

Housing Finance, PNB Housing Finance, SBI Home Finance,

HDFC, ICICI Bank Ltd, Standard Chartered- Grind lays, IDBI

Bank Ltd, etc.
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Types of Home Loans

A person seeking investments for house or a property opts for Home Loans for a variety

of purposes ranging from construction to renovation. The Housing Finance

Companies (HFCs) now offer individuals with various alternatives to choose from

while buying a home loan. And the availability of Home Loans offered is as varied as

their requirements.

Home Purchase Loans

Home Construction Loans

Home Improvement Loans

Home Extension Loans

Home Conversion Loans

Land Purchase Loans

Stamp Duty Loans

Balance Transfer Loans

Refinance Loans

Loans to NRIs

Home Purchase Loans:

This is the basic home loan for the purchase of a new home.

Home Construction Loans:
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This loan is available for the construction of a new home on a said property. The

documents that are required in such a case are slightly different from the ones you submit

for a normal Housing Loan . If you have purchased this plot within a period of one year

before you started

construction of your house, most HFCs will include the land cost as a component, to

value the total cost of the property. In cases where the period from the date of purchase of

land to the date of application has exceeded a year, the land cost will not be included in

the total cost of property while calculating eligibility.

Home Improvement Loans:

These loans are given for implementing repair works and renovations in a home that has

already been purchased, for external works like structural repairs, waterproofing or

internal work like tiling and flooring, plumbing, electrical work, painting, etc. One can

avail of such a loan facility of a home improvement loan, after obtaining the requisite

approvals from the relevant building authority.

Home Extension Loans:

An extension loan is one which helps you to meet the expenses of any alteration to the

existing building like extension/ modification of an existing home; for example addition

of an extra room etc. One can avail of such a loan facility of a home extension loan , after

obtaining the requisite approvals from the relevant municipal corporation.

Home Conversion Loans:

This is available for those who have financed the present home with a home loan andwish to purchase and move to another home for which some extra funds are required.
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Through a home conversion loan, the existing loan is transferred to the new home

including the extra amount required, eliminating the need for pre-payment of the previous

loan.

Land Purchase Loans:

This loan is available for purchase of land for both home construction or investment

purposes

Stamp Duty Loans:

This loan is sanctioned to pay the stamp duty amount that needs to be paid on the

purchase of property.

Balance-Transfer Loans:

Balance Transfer is the transfer of the balance of an existing home loan that you availed

at a higher rate of interest (ROI) to either the same HFC or another HFC at the current

ROI a lower rate of interest.

Re-finance:

Refinance loans are taken in case when a loan for your house from a HFI at a particular

ROI you have taken drops over the years and you stand to lose. In such cases you may

opt to swap your loan. This could be done from either the same HFI or another HFI at the

current rates of interest, which is lower.

NRI Home Loans:

This is tailored for the requirements of Non-Resident Indians who wish to build or buy a

home or property in India. The HFCs offer attractive housing finance plans for NRI

investors with suitable repayment options.
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Tax Benefits on Home Loans

As the Indian real estate market makes an upward swing, and investors optfor housing finance or home loans , tax benefits obtained from them is a

lucrative option. Customers availing of Home Loans can claim a certain

portion of the interest and principal that they pay towards the loan

installments for reducing tax liability. Resident Indians are eligible for

certain tax benefits on principal and interest components of a loan under the

Income Tax Act, 1961. Moreover, an added tax benefits under Sec 80 C on

repayment of principal amount up to Rs. 1,00,000 p.a. can be availed that

can further reduce your tax liability by about Rs. 30,000 p.a.

Tax benefits can be claimed on both the principal and interest components of

the home loan as per the Income Tax Act, 1961. These deductions are

available to assesses, who have taken a loan to either buy or build a house,

under Section 24(b). Interest on borrowed capital is deductible up to Rs 2,

00,000 if the following conditions are satisfied:

Capital is borrowed on or after April 1, 1999 for acquiring or

constructing a property.

The acquisition/construction should be completed within 3 years from

the end of the financial year in which capital was borrowed.

The person, extending the loan, certifies that such interest is payable

in respect of the amount advanced for acquisition or construction of

the house
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A loan for refinance of the principle amount outstanding under an

earlier loan taken for such acquisition or construction.

If the conditions stated above are not fulfilled, then the interest on borrowed

capital is deductible up to Rs 30,000 though the following conditions have to

be satisfied:

Capital is borrowed before April 1, 1999 for purchase, construction,

reconstruction repairs or renewal of a house property.

Capital should be borrowed on or after April 1, 1999 for

reconstruction, repairs or renewals of a house property.

If the capital is borrowed on or after April 1, 1999, but construction is

not completed within 3 years from the end of the year, in which

capital is borrowed.

In addition to the above, principal repayment of the loan/capital borrowed is

eligible for a deduction of up to Rs 100,000 under Section 80C from

assessment year 2006-07.

Terms and conditions for availing Tax benefits on Home Loans

Tax deductions can be claimed on housing loan interest payments,

subject to an upper limit of Rs 2, 00,000 for a financial year. Interest

on the fresh loan can be claimed as a deduction, subject o the stated

upper limit.

An additional loan for extension/addition to the same house and the

person's deductions on the existing loan are less than Rs 2, 00,000; he


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benefits, previously claimed, will be clubbed to the income and taxed

accordingly.

Tax benefits on interest on housing loans are allowable only for the

original loan and for a second loan taken to repay the first loan and

not for subsequent loans. This means that if you have already availed

of one loan to refinance the original loan and want to now avail a third

loan to refinance the second loan, tax rebate on interest payments will

not be permissible. This is because the Section 24 (1) only talks of the

second loan and not of subsequent loans. Even if you take the second

loan at a rate of interest higher than the original loan, you will beeligible for a tax rebate on the second loan.
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UNION BANK

Power Home

Quick and easy home loans

Overview:

Union Bank's Power Home puts an end to your Real Estate troubles. Augment your reach

and buy the house that you've set your heart on

Features Attractive interest rates

Balance Transfer facility

Doorstep service

Option to choose from floating rate or fixed rate

Benefits given by Union Bank:

Free personal accidental & property insurance.

No Prepayment charges.


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Power Home: Loan Purposes

You can apply for Power Home for the following purposes -

Purchase of a plot of land and construction of a house thereon

Construction of a house on plot of land already owned

Purchase of a new house or flat

Residual age of the property should not be less than 30 years old (Home

Acquisition Plan)

Extension or renovation or repair of a house or flat already owned by self (improvement or extension plan)

Take-over of existing Housing Loan (Balance Transfer)

Pre-allotment booking finance

Loan takeover with additional refinance (Balance Transfer + top up)

Loan to NRI for purchase of ready residential property only

Purchase of residential plots only


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Power Home: Eligibility

Salaried Individuals

Any individual who is in permanent service in Government or reputed companies.

The applicant in all the cases should be above 21 years of age at the time of loan

commencement and up to the age of superannuation .

Professionals

Professionals (i.e., doctors, engineers, dentists, architects, chartered accountants,

cost accountants, company secretary, and management consultants only) can

apply.

The applicant should be above 21 years of age at the time of loan commencement

and up to 65 years or less at the time of loan maturity.

Self Employed Individuals

Any individual filing Income Tax returns can apply.

The applicant in all the cases should be above 21 years of age at the time of loan

commencement and up to 65 years or less at the time of loan maturity.


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Power Home: Documentation

Documents Required

The following documents are required along with your loan application

In Society Cases

Society Allotment Letter.

Site Plan

Society Receipt.

Development Charges (Rs. 10/Square yard ).

In Case of Housing Board

Allotment Letter.

Possession letter.

Regularization cum NO dues Certificate.

Convenience Deed (for structure). Perpetual Lease Deed (for Land).

In case of Development Authority


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Site Plan.

DA Registered Lease Deed.

In Case of Industrial Corporation

Allotment Letter.

Site Plan.

File Documentation

Purpose Salaried Others

Proof of

identity

Voter's ID card or driving license or

PAN card or photo credit card or employees ID card or defense or

police or government department ID

card

Voter's ID card or drivlicense or PAN card or ph

credit card

Proof of

Income

Latest salary slip showing all

deductions or Form 16 along with

recent salary certificate

IT returns for the last 2 years a

computation of income for

last 2 years certified by a CA

Proof of residenceBank account statement or latestelectricity bill or latest mobile or

telephone bill or latest credit card

statement or latest LIC policy or

insurance premium receipt or

Bank account statement or lateelectricity bill or latest mobile

telephone bill or latest credit

card statement or latest LIC

policy or insurance premium


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employers letter certifying the

current mailing address or latest NSC

or other similar instruments

indicating the address or existinghouse lease agreement

receipt or latest NSC or other

similar instruments indicating

the address

Bank statement or

Pass Book where

salary or income

is credited

Last 6 months Last 6 months

Guarantor form Optional Optional

PROPIETORSHIP FIRM

Last three yrs. Saral form.

Computation of income.

Trading &P&L a/c.

Balance sheet.

PARTNERSHIP FIRM

The above Documents +

Partners Capital a/c.

Partnership Deed.


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COMPANY

Memorandum &Articles of Association. Board Resolution.

COMMON DOCUMENTS

Either single a/c or joint a/c with other family members (father,mother,son) with

regular source of income

Individuals who may be employed/self-employed in business having regular

income

Last one year Statement in case of Current A/C.

Address proof.

Photo ID. IF Customer is already taken any other Loan than Track Record of that loan.

Indian Citizen -21 years of age

Note:

With these Documents we also take a blank cheque of processing fee.

(That is Max.0.50% of loan amount )


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Security

Equitable mortgage of the property to be financed by way of deposit of title deeds.

Disbursement

The loan will be disbursed in full or in suitable installments, taking into account the

requirement of funds and progress of construction, as assessed by the Bank directly to

seller or builder or local development authority or supplier of materials etc.

Processing charges or admission fee

Processing fee equivalent to 0.50% of the loan amount (applied for) will be collected

along with the application form (taxes as applicable).

Penalty for early closure

2% of the principle outstanding in case of takeover by other bank or HFC, otherwise nil.

Value Added Services

Credit card will be issued free of annual fees.

No hidden or built-in costs

Quick processing and disposal of loan applications

Flexible repayment options

Other Attaractive Features

Bank reserves the right to reject any application without assigning reasons thereof

The applicant will undertake to inform the Bank as and when there is a change in

address or employment

No repayment penalty


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Flexible repayment schedule

Easy and convenient EMIs

Sanction within 72 hours on receipt of application in full as per requirement

Pay interest on daily reduced balances

The terms and conditions mentioned above and elsewhere under the scheme are

subject to modification from time to time solely at Bank's discretion.

Rate of interest (w.e.f 15.02.2010) for Home Loans up to rs. 5.00 lacs

Period Fixed Floating

Upto 5 yrs. 9.75% BPLR -2.75%=9.00%

>5 yrs.-10 yrs. N.A. BPLR -2.50%=9.25%

>10yrs. to 15 yrs. N.A. BPLR -2.25%=9.50%

>10yrs. to 25 yrs. N.A. BPLR -2.25%=9.50%

Rate of interest (w.e.f 15.02.2010) for Home Loans up to rs. 5.00 lacs and

30.00lakh

Period 1 st , 2nd, 3rd 4 th yr Onwards

Fixed Floating

Upto 5 yrs 9.75% BPLR-2.75% i.e.9.00%

5-10 yrs N.A. BPLR -2.50% i.e.9.25%

>10-15yrs N.A. BPLR-2.25% i.e.9.50%

>15yrs to 20yrs N.A. BPLR-2.25% i.e.9.50%


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Rate of interest (w.e.f 15.02.2010) for Home Loans up to rs. 30.00 lacs to

50.00 lacs


Upto 5 yrs. 10.75% BPLR -2.50%=9.25%

>5 yrs.-10 yrs. N.A. BPLR -2.25%=9.50%

>10yrs. to 15 yrs. N.A. BPLR -2.00%=9.75%

>15yrs. to 25 yrs. N.A. BPLR -2.00%=9.75%

Rate of interest (w.e.f 15.02.2010) for Home Loans up to rs. 50.00 lacs to

200.00 lacs

Period Fixed 4 th yrs Onward Floating

Upto 5 yrs. 10.75% BPLR -2.25%=9.50%

>5 yrs.-10 yrs. N.A. BPLR -1.75%=10.00%

>10yrs. to 15 yrs. N.A. BPLR -1.50%=10.25%

>15yrs. to 20 yrs. N.A. BPLR -1.50%=10.25%

Rate of interest (w.e.f 15.02.2010) for Home Loans above 200.00 lacs


Upto 5 yrs. N.A. BPLR -1.75%=10.00%

>5 yrs.-10 yrs. N.A. BPLR -1.25%=10.50%

>10yrs. to 15 yrs. N.A. BPLR -1.00%=10.75%

>15yrs. to 25 yrs. N.A. BPLR -1.00%=10.75%

INTEREST RATES UNDER FESTIVE OFFER (Till 15th Jan. 2010):

Loans up to 5 lakhs Tenure Repayable in up to 25 years


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First 3 years (Fixed) 8.50%

4th year onwards (Floating) BPLR - 2.75% i.e. 9.00 %

Loans above 5 lakhs and

up to 30 lakhs

Tenure Repayable in up to 10 years


4th year onwards

(Floating)BPLR - 2.75% i.e. 9.00 %

TenureRepayable in more than 10 and up to 25

years


4th year onwards


Loans above 30 lakhs

and up to 50 lakhs

Tenure Repayable in up to 10 years


4th year onwards


Tenure Repayable in more than 10 and up to 25 years


4th year onwards


Loans above 50 lakhs Tenure Repayable in up to 10 years

First 3 years (Floating) BPLR - 2.50% i.e. 9.25 %


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4th year onwards


Tenure Repayable in more than 10 and up to 25 years

First 3 years (Floating) BPLR - 2.50% i.e. 9.25 %

4th year onwards


Power Home: Fair Practice Code for Lenders

As directed by the Reserve Bank of India, vide circular. The Bank has adopted modified

Fair Practice Code for lenders as approved by the Board of Directors. The salient features

of the same are:

Applications for Loan

In the loan application form, the Bank shall provide comprehensive information

including information about fees and charges if any payable for processing and

amount of such fees refundable in case of non acceptance of application,

prepayment options and other matter which affects the interest of the borrowers, of

all categories of loans, irrespective of the amount of loan sought by them.

Processing

The Bank shall provide acknowledgement for receipt of all loan applications

indicating the time frame within which the application will be disposed of.


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The Bank shall verify the loan application and if additional details / documents

are required, these will be sought from the applicant.

For all categories of loans and irrespective of any threshold limits, the Bank will

be expected to process the application without delay. In case the application is

turned down, the Bank will convey in writing to the applicant the reasons for

rejection within one month.

Loan Appraisal and Terms and Conditions

The sanctioning authority will be expected to ensure proper assessment of the

credit application as per the extant instructions and credit policy of the bank.

The availability of adequate margin and security will not be a substitute for

due diligence on the creditworthiness of the customer.

All the terms and conditions and other caveats will be duly communicated by

an authorized official of the Bank to the customer in writing.

The acceptance of the customer will be obtained on the sanction letter with the

customer's signature under the caption "I/WE ACCEPT ALL THE TERMS

AND CONDITIONS WHICH HAVE BEEN READ AND UNDERSTOOD

BY ME/US".

A copy of the loan agreement along with all the enclosures quoted in the loan

agreement will be furnished to the customer at the time of issue of thesanction letter.

The sanction letter / loan agreement will clearly state that the credit facilities

will be extended solely at the discretion of the Bank and that drawings under

the following circumstances will be solely at the discretion of the Bank.


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Drawings beyond the drawing power / sanctioned limits.

Honoring of cheques issued for the purpose other than specifically

stipulated in the sanction.

Drawings in an account once it is classified as NPA.

No drawings will be allowed in case of non-compliance of the terms

and conditions by the borrower.

Meeting further requirements of the borrower on account of growth in

business will be subject to proper review of the credit limits.

Disbursement of loans including changes in terms & conditions

The disbursement will be done immediately on compliance of all the terms and

conditions of the sanction by the borrower and the branches need not refer to the

sanctioning authority for disbursement.

Any changes in the terms and conditions of the sanction such as interest and

charges will be notified to the borrower before effecting the changes.

Any changes in interest rate and charges will be effected only prospectively after

giving due notice to the borrower.

Post disbursement supervision

The post disbursement supervision, such as submission of periodical reports and

periodic inspection, will be stipulated at the time of issue of the sanction letter.

The sanction letter would also mention whether the Bank or the borrower will

bear the cost of inspection.


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The Bank will issue notices to the borrowers in advance in case the Bank decides

to recall the advance / accelerate the payment / accelerate the performance under

the loan agreement. Or seek additional securities.

The Bank shall release all securities on receiving payment of loan. However, the

Bank may decide to exercise the right to set off any legitimate right or lien for any

other claim against borrower. In case the Bank decides to retain the security, the

borrower will be notified about the remaining claims and the documents under

which the Bank is entitled to retain the security till the relevant claim is paid /

settled.

Others

The Bank will not interference in the affairs of the borrowers except where

provided for in the terms and conditions of the loan sanction documents, such as

periodic inspection, scrutiny of books of accounts, verification of stocks and book

debts, and scrutiny of QIS statements.

In case any information not disclosed earlier by the borrower has come to the

notice of the Bank, the Bank will have the right to elicit the necessary information

from the borrower and initiate action to protect its interest.

While, the Bank may participate in credit-linked schemes framed for weaker

sections of the society, the Bank shall not discriminate on grounds of sex, caste

and religion in the matter of lending.

In the matter of recovery of loans, the Bank shall not resort to undue harassment

such as persistently bothering the borrowers at odd hours and use of muscle

power.

In the case of receipt of request for transfer of borrowed account, either from the

borrower or from other banks / FIs which propose to take over the loan, the


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Banks' consent or objection, if any, shall be conveyed within 21 days from the

date of receipt of request.


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Grievance Redressal

Though the sanction of the loans will be at the sole discretion of the Bank, borrowers willhave an opportunity to appeal against the decision of the Bank's functionaries. Any such

grievance received from the borrower will be heard and disposed of by the next higher

authority. For this purpose the following review structure is available to the borrower,

Grievance against decision of Reviewing AuthorityBranch Head Zonal HeadVP / AVP Zonal HeadZonal Head President (Credit) for corporate advances

President (Merchant Banking) for capital-

market related advances and

Senior Vice President (Retail Banking) for

retail advances.Corporate Credit & Retail Loans

(under Retail Banking)

Executive Director

All others Chairman and CEO


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55%

If net salary is

20000 above.

If net salary is

20000 above.

If net salary is

20000 above.

For Example

Salary (pm) = 10,000

Then, applicable FOIR = 10,000 * 45%

= 4,500/969

= 4.64 lacs

Now, a max. limit of loan to be provided is 4.64 lacs

* For Self Employed 2 years average of Net Profit is considered.

In Calculation of Net Salary

case of salaried person we calculate the average of the six months pay slip.(If Net

Salary is variable)

In case of self employed we use the following formula -

Net income = net profit +depreciation (up to 150% of NP) + 50% of income


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From other sources +100% rental income + 20 % of

Agriculture income (if cont for last 3 years)


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EMI Calculation

P * r/12 (1 + r/12) n * 12 EMI =

(1 + r/12) n *12 1

Here:

P = Principal Amount

R = Rate of interest N = No. of years

Amortization

For Example - 1, 00,000 @ 10% for 20 years

Interest = 1, 00,000 * 10 % = 10,000

Interest per month = 10,000 / 12 = 900 Rs.

Principal amount = EMI Interest

= 969 900

= 69 Rs.

Loan Kit Signature : Loan agreement is signed by customer and PDCs istaken

from customer.


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Loan to Value (Funding) Table

Types of Loans LTV Max.YearsConstruction 85% 18Purchase 85% 18Plot/Land Purchase 75% 10Repair/Extension 75% 10Land Purchase +

Construction

85% 18

Balance Transfer 85% 18 NRI

Land Purchase

House Purchase

10

15


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Loan Tenure

S.No. Category Tenure

1. Salaried Up to retirement/20 yrs.

(whichever is earlier)

2. Self Employee Maximum 15 yrs /subject to65

yrs(whichever is earlier)

3. Professional Maximum 20 yrs/subject to 65

yrs(whichever is earlier)

Mode of Payment

PDCs (Post dated checks).

S.I.(Standard Institution)

ECS (Electronic Clearance)


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Hierarchy of Operations

Comparative Analysis of Home

Loans

Bank/HousingFinance

Corporation

Processing

Fee

Pre-PaymentPenalty 0-5 Years 6-10 Years Over 10 Years

Fixed Floating Fixed Floating Fixed Floating

ABN-Amro 0.50%No penalty if upto 25% of loan iscleared per year. Else 2% on theamount in excess of 25%

7.75 7.25 7.75 7.75 7.75 7.25

Allahabad Bank 0% 7.75 7.25 8.25 7.75 8.75 7.75Andhra Bank 2% 8.50 8.00 9.25 8.75 9.50 9.00Bank Of Baroda 0% Upto 3% 9.0 7.50 9.5 8.0 10.0 8.25

Bank of India 8.5 7.5 9.25 7.75 9.25 8.25Bank of Maharashtra - 7.5 - 8.0 - 8.25

Bank of Punjab 11.75 7.50 11.75 7.50 11.75 7.50Bank of Rajasthan 8.0 7.5 8.25 7.5 8.5 8.0Birla HomeFinance 8.00 8.00 8.5 8.5 8.75 8.75

Central Bank of India 0% 0 8.5 8.0 9.0 8.5 9.5 9.0

Corporation Bank 0% 0 8.0 7.5 9.00 8.25 - 8.50Canara Bank 8.0 7.50 9.00 8.00 9.25 8.00Can Fin Homes 7.75 7.25 8.75 8.0 8.75 8.0Citibank 8.25 8.25 8.25 8.25 8.25 8.25Dena Bank 0.50% 0% 8.75 7.25 9.25 7.75 9.50 8.0Dewan HousingFinance Ltd ?DHFL

0 0 8.5 8.0 8.5 8.0 8.5 8.0

Federal Bank - 7.25 - 7.5 - 8.0GIC HousingFinance 9.75 7.5 9.75 8.0 10.0 8.25

HDFC Bank 1.0% 2% 8.75 8.25 8.5 8.0 8.25 7.5

HSBC 1.8%

Up to 25% of the loan amountevery financial year - NIL, Foramount over 25% of loanamount in every financial year-2% of amount prepaid

8.0 7.75 8.0 7.75 8.0 7.75

IDBI 0.75% 2% 9.25 7.5 9.25 8.0 9.25 8.25ICICI 0.50% 2% 9.0 8.0 9.0 8.0 9.0 8.0Indian Bank 0 0 7.75 7.25 8.25 7.75 8.75 7.50


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Indian OverseasBank 0.5% 8.25 7.75 9.25 9.25

Kotak MahindraBank Nominal fee 8.5 8.5 8.25 7.25 8.0 7.5

LIC HousingFinance 1% 8.0 7.5 8.0 7.5 8.0 7.5

Oriental Bank of Commerce 8.0 7.5 8.5 8.0 8.75 8.25

Punjab NationalBank 9.25 7.75 10.25 8.0 10.5 8.25StandardChartered Bank

No fee for part-prepayment. Else2.5% 10.5 10.5 10.5 10.5 10.5 10.5

State Bank Of Hyderabad 7.5 7.25 8.25 8.0 8.5 8.25

State Bank of India 0% 0 8.0 7.5 8.5 8.0 8.75 8.25

State Bank of Mysore 1% 7.75 7.5 8.25 8.0 8.5 8.25

State Bank of Travencore 0.5% 7.5 7.0 8.5 8.0 8.75 8.25

Sundaram HomeFinance 9.00 8.75 9.00 8.75 9.00 8.75

Syndicate Bank Rs 1000 0 8.0 7.75 8.5 8.25 8.75 8.50 Tata HomeFinance 12.0 7.75 12.0 8.25 12.0 8.5

Union Bank of India 0 9.75 9.5 10.25 10.0 10.75 10.5

United Bank of India 1% 8.5

At PLR Minus2.00% subject toa minimum of 9.5%

9.0


9.25


Vijaya Bank 1% 7.5 7.0 8.5 8.0 8.75 8.25

Note:

LTV 85%

Minimum Return 1.20 lac


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Features Offered By Other Banks

SBI

Unique features:

The most preferred home loan provider. The latest offer is an interest rate

concession on GREEN HOMES in accordance with SBI's commitment to Environment

protection. Having a vast variety of products to suite every kind of customer.

Minimum age limit 18 yrs & 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 .

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 upto 70 years of age.

Free personal accident insurance covers upto Rs.40 Lac.

Optional Group Insurance from SBI Life at concessional premium (Upfront

premium financed as part of project cost).

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

disbursement.


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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.

Package 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 .


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I CICI

Some of the special offers we have are:

ICICI Bank Home Loan offers hassle free home

loans with the best deal. The loan tenure is maximum upto 25 years. They offer

multiple benefits on the loan taken.

Simplified Documentation The loan application process is easier and loan

approval process, faster with simplified documentation.

Door Step Service They personally deliver your Home Loan at your doorstep.

Attractive Interest Rates offers you a wide range of home loan rates to choose

from

Attractive loan interest rates

Home loan amounts suited to your needs

Home Loan tenure upto 25 years

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

No matter what the requirement, we have an appropriate plan for you, though most of our

home loan plans are for salaried/self-employed Resident Indians. Get the best deals ever,

and finance the perfect home, only from ICICI Bank.
http://www.deal4loans.com/icici-hfc-home-loan.phphttp://www.icicibank.com/Pfsuser/loans/homeloans/hlratesandfees.htmhttp://www.icicibank.com/Pfsuser/loans/homeloans/hlloanamount.htmhttp://www.icicibank.com/Pfsuser/loans/homeloans/hltermsandcondi.htmhttp://www.icicibank.com/Pfsuser/loans/homeloans/hltermsandcondi.htmhttp://www.deal4loans.com/icici-hfc-home-loan.phphttp://www.icicibank.com/Pfsuser/loans/homeloans/hlratesandfees.htmhttp://www.icicibank.com/Pfsuser/loans/homeloans/hlloanamount.htmhttp://www.icicibank.com/Pfsuser/loans/homeloans/hltermsandcondi.htm


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LIC Housing Finance

Special Features : LIC Housing Finance offers home loans for construction/purchase of house/flat and

also for renovation of existing flat/house. While LIC Griha Prakash and are for

purchase, construction of properties and extension of residential units, LIC Griha

Sudhar Loan facilitates repairs/renovation of properties. Minimum age requirement is

21 years as on the date of sanction.

Loan amount from Rs. 1 Lakh onwards Low interest rates

No hidden costs

Easy application & quick approvals

Largest Network

Tax Benefit

A financially strong and stable company we have already sanctioned loans to over 5lakh

applicants.

With a network of more than 100 offices in the country we are always accessible to

you, wherever you may be.


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HDFC

Over 3 decades of exclusive experience, a dedicated team of experts and a complete

package to meet all your housing finance needs. Their home loan is available forindividuals to purchase (fresh / resale) or construct houses. Application can be made

individually or jointly. HDFC finances up to 85% maximum of the cost of the property

(Agreement value + Stamp duty + Registration charges) based on the repayment

capacity of the customer .

Home Loan - Home loans for individuals to purchase (fresh / resale) or construct houses.

Application can be made individually or jointly. HDFC finances up to 85% maximum of

the cost of the property (Agreement value + Stamp duty + Registration charges).

Home Improvement Loan - HIL facilitates internal and external repairs and other

structural improvements like painting, waterproofing, plumbing and electric works, tiling

and flooring, grills and aluminum windows. HDFC finances up to 85% of the cost of

renovation (100% for existing customers) .

Home Extension Loan - HEL facilitates the extension of an existing dwelling unit. All

the terms are the same as applicable to Home Loan.

Land Purchase Loan - Be it land for a dream house, or just an investment for the future,

HDFC Land Purchase Loan is a convenient loan facility to purchase land.

HDFC finances up to 70% of the cost of the land (Conditions Apply). Repayment of theloan can be done over a maximum period of 10 years.

Choose from Fixed Rate or Floating Rate with options to structure your loan as Partly

Fixed or Partly Floating.


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Flexible repayment options to suit your individual needs.

Loan cover Term Assurance Plan - HDFC Standard Life Insurance Company Ltd.

offers an insurance plan*, which is designed to ensure that life's uncertainties do not

affect your

family's interests and your precious home. LCTAP provides a lump-sum payment on the

unfortunate demise of the life assured.

This pure risk plan is designed in a way that the cover decreases as you repay your home

loan making it a low cost premium insurance plan.

*Insurance is the subject matter of solicitation.

Automated Repayment of Home loan EMI - You can give us standing instructions to

repay your Home Loan EMIs directly from your HDFC Bank Savings Account, thus,

saving you the trouble of procuring, signing and tracking post-dated cheques.

HDFC also offers In-house scrutiny of Property documents for your complete peace of

mind.

Customer privileges - If you are an existing HDFC 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 .
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IDBI

Advantages of IDBI Ultra Flexible Home Loans: Helps you realise your longcherished dream of owning your home through hassle free and customer friendly

home loans. The tenor of a home loan can be up to 25 years for a resident individual

whereas for NRIs the maximum tenure is 15 years subject to maximum age of 60

years at maturity. Loan can be applied for a maximum of 90% of the property value

subject to credit discretion

Maximum Funding

Flexibility of choosing between Floating or Fixed interest rate

Attractive rate of interest

EMI on daily reducing balance

Personalized doorstep service

Simple documentation

Legal and technical assistance

Balance transfer facility

Reassessment and adjustment of applicant's loan eligibility in case of change of

income and residence status

Special insurance cover for you

You can avail of a special insurance cover on your home loan for a small premium.

Features

Tenure of a home loan can be up to 25 years for a resident individual whereas for

NRIs the maximum tenure is 15 years subject to maximum age of 60 years at

maturity.


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Research Methodology

a) Title of the Study

Comparative analysis of home loan and its operation

b) Duration of the Project

Duration of Project is 45 days

c) Objective of Study

The foremost objective of this study is by making comparison between different

financial institutions. I wanted to come out with a fine essence for the success

behind organization. The objective of making comparative analysis with different

financial institution is to find out the major competitors in home loan sector.

d) Type of Research

This project is more of an exploratory research with more of qualitative analysis

than quantitative. The data collection method for this project begins with finding a

sample of the population. The population for this project was the various places

in Jaipur. (Johari Bazar,Bapu Nagar, Janta Store, M I Road, Tonk Road, Malviya

Nagar and Jhotwara Industrial Area) and at the Union bank of India at Jagatpura

branch in JAIPUR.

The research methodology adopted was both Primary and Secondary. Primarydata was collected to study the investment psyche of a person, their practice on

saving, investment options available and the need of financial planners to

manage individuals wealth. Questionnaire was designed to ascertain the

investors behavior as well as to depict the future prospects and growth

momentum of the wealth management industry.


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e) Sample Size and method of selecting sample

Data Collection Methods & Instruments

The instrument for data collection was a structured questionnaire targetedtowards people who do investments. This questionnaire was designed to know

the investment psyche of a person while investing in the financial products.

The mode of communication was informal & friendly conversation, which does

not limit discussion within a well-defined boundary.

Data Collection Sources

i) Primary Research

Research was done to get a detail overview of the wealth management industry

and study the need for financial planner in the current scenario. Questionnaire

was designed to study the investment psyche of a person, their practice on

saving, different investment options available and the need of financial planners

to manage individuals wealth. This project is mainly based on first hand

observation in the market, the way financial planning functions, scope of financialplanning and the need of a certified financial planner.

ii) Questionnaire Design

A structured questionnaire was designed covering both open and close ended

questions, to study the perception of people regarding investment avenues and

the concept of financial planner. {Specimen of the questionnaire is attached in

ANNEXURE A}.

iii) Secondary Research

Various sources of information were collected for attaining clarity on the

prospects of wealth management industry and the various financial planners in


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the market. The source also includes basic investment objectives and the various

types of investment avenues open to an individual.

However the following sources were considered for information gathering:

Companies websites

Articles and reports available on the web

News papers like Economics Times and Investment Insurance Magazines

Various other sources mentioned in the references, in ANNEXURE B

iv) Population considered for research

Sample Details

100 people belonging to different fields, who do investment, were asked to fill the

questionnaire, on the basis of which an attempt is made to study the prospects of

Financial Planning in the market. The sample unit consists of those people who

are trading in secondary markets, mutual funds, initial public offer, insurance,debt instruments as they can give the accurate information about financial

planning. A sampling frame has been developed so that everyone in the target

population has an equal chance of being sampled.

Personal Information:

Sex Ratio: From the total 100 respondents 15 were females and 85 were

males, as also shown in Fig.5.1 below.

Persons RatioMale 85


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Female 15

f) Scope of Study

There exist a potential growth in the wealth management industry and

thus this project authenticates the feasibility of financial planners in the

market.

Expanding needs and proliferation of financial products are making it

difficult for individuals to invest without planning. Most are aware that

planning is critical; yet dont have the time or the expertise to develop a

plan & therefore the role of Financial Planner comes in picture.

g) Limitation of the Study

The scope of the research was limited to top 7 wealth management

companies, namely SBI , ICICI, UTI Bank, HSBC Bank, HDFC Bank

The sample area was primarily in Jaipur. (Johari Bazar, M I Road, Tonk

Road, Malviya Nagar and Jhotwara Industrial Area) and at the Union Bank

of India branch Jagatpura.

The sample size comprised of 100 respondents from different fields and

income group, and their responses are presumed to represent the wealth

management market.

The score allotted by the different respondents on different parameter

might not be with the same yardstick, as individuals are subjective in

nature as well as the environment round them differs, which play a critical

role in building up a perception.


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SWOT ANALAYSIS

STRENGHTS:

Worldwide brand name of UBI as credible and trustworthy

Outstanding relationship management with customers.

Automated operations due to highly computerized network personal financial

review are the strongest tool with UBI, which facilitates the customers in doing

their risk prolifiling and investing their money accordingly. This PRF is providedfree of cost ion UBI.

It enjoys a good share of NRI business due to greater services to NRIs provided

worldwide.

A product know as GLOBAL PREMIER of UBI, according to which if you have

preimer account in UBI in India or in any country you will be recognized

globally as the premier customer of the bank, and for this you do not have to

maintain average quarterly balance of Rs.25 lakh separately to other countries as

well.

Withdrawal limit (Rs 1 lakh) provided by the bank is highest.

Bank provides the facility of doorstep banking to all customer.

WEAKNESS

Less number of branches in Rajasthan.

Only few ATM in Jaipur which is located at the branch only.

Lots of hidden charges especially in case of credit card facility, cash credit limit is

also less.

Minimum amount to open a fixed deposit is Rs10,000 which is comparatively

higher.


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OPPORTUNITIES:

Being a world class bank and having a good reputation, the goodwill can be

cashed upon with the growing economy of India.

Rapid growth of jaipur city is another prime opportunity and moreover new

industry in and around has sprung up.

Jaipur has great business and export of precious and semi precious and gems ,

jewellery and handicrafts, UBI has good opportunity to provide for better banking

at the national as well as international level.

The bank should focus on common customers for wealth management as they

have more day to day spare money.

Superior segment demarcation and co-ordination will be beneficial.

THREATS:

All the public sector bank has started to redefine their services in order to attract

customers attention.

Stringent norms by reserve bank of India at any time in near future can be threat

to foreign banks as their activities could be adversely affected.

The entry of other foreign banks can take away some of the business.

Many bank also coming up with ATMs which will act as a major threat.

The presence of other private sector bank and foreign bank in jaipur and because

of intense competition they are coming with the better products and services.

The cash credit limit provided by other nationalized bank is major thearts.

There is a myth surrounding the people that foreign bank are not trustworthy and

hence, do not rely on such banks.


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Special permission is required to open for the accounts of various segments like

politicians, exporters and jewelers.


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Analysis and Findings

Mortgage Market Growth. As Indias housing market continues to grow and mature, itwill be important to monitor the market. During the rapid expansion of the mortgage

market from about 2003 to 2008, many commercial banks eased their lending standards

as they pursued heightened demand in the market spurred by low interest rates and rising

personal incomes.

With demand outpacing housing supply, property prices in urban areas doubled in some

neighborhoods. Prices were also bolstered by some speculative activity in the market in

from mid-2005 to about early 2008. Thus, some commercial banks pursued aggressive

growth strategies, offering loans as high as 100% of the cost of the property.

Retail Asset Products - While working on the project I found out and analysis that

Retail advances of UNIONBANK grew from Rs. 8,928 crores as at end March'07 to Rs.

13,592 crores as at end March'08, a growth of 52% yoy. Retail Advances account for

23% of the total Advances of the Bank as at end March'08. The Bank has set up Retail

Asset Centers (RACs) at 70 towns and cities for focused retail lending.


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Lessons and Recommendations

Commercial Viability of Underserved Segments:

One of the most important lessons that can be learned from the Project is that

mortgages for customers in the Low-Middle Income segments can be commercially

viable. This borrower segment can be more risky, but, if underwritten and priced

appropriately, the risks can be adequately contained.

New Marketing Strategies:

Comparative advertising should be done to aware the consumers with the benefits

provided by the bank. Proper branding of Retail Asset Center should be made for a

large market capitalization and growth.

Payment System:

If facility of direct account transfer should be offered, then it will make payment

System easier for customer whose accounts are in other banks.

Funding Of Sources:

At present Axis Bank is providing 6.31% appox. retail advances of total deposits. If

increase in the percentage ratio 8-10%, then it will allow more finances of short term

loans to the customers which will assist the bank to increase their income sources.

Others:

Minimum limit of home Loans amount should be decreased to attract the small

home loan sector (construction, repair etc.).

Provide finances up to 85% of the cost of renovation (100% for existing

customers) .


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Summary/Conclusion

Finance for real estate is now easily available in India. The property boom is not

restricted to the national capital region but it has even transcended to satellite towns and

remote semi-urban areas in and around the national capital. The number of transactions in

the real estate sector has increased a number of times, making it profitable for the banks

and other lending institutions to offer more finance opportunities to the buyers.

In India, the most of the borrowers in home loan segment fall in the first time buyer

category. It means that they are either tenants or living with their parents in their ancestral

house. As the salaried-class is spreading and emerging stronger than ever, more and more

people are becoming capable of buying house. Their need to get finance from banks is

being taken care of by all the major players in the market. Banks like UBI, ICICI, SBI,

LIC, HDFC and all the nationalized banks are offering home loans at attractive rates.

The housing finance industry is getting increasingly commoditized. Competition within

the sector is ensuring that players offer consumers flexibility and features to choose from.

Features such as adjustable rate plans, lower processing fees, monthly rest, low interest

rates, low EMI, lower margin money, no pre-payment penalty have become common

across the industry. There is a growing trend among Banks and HFCs to include the cost

of registration, stamp duty, society charges and other associated costs while sanctioning

loans to differentiate and make the home loans products more attractive. This has resulted

in further lowering the threshold limit for buying a house for differentiation of their home

loan products, companies are also resorting to offering of free add-ons such as life

insurance, credit cards and consumer loans at reduced rates for furnishing the house.

Several housing finance companies have now begun to offer tailor-made loan schemes to

renovate, repair, extend, convert or otherwise improve ones home. Companies like

HDFC and others provide home improvement loans for purposes like external repairs,

water-proofing, roofing, internal and external painting, plumbing and electrical work,

tiling and flooring, grills and aluminum windows, construction of underground or


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overhead water tanks, paving of compound walls and setting up bore wells, among other

things.

Some of the major players in the housing finance industry have started organizing

property fairs, wherein the projects of different construction companies are broughttogether and bundled with a lower than normal interest rate loan product. Such initiatives

are expected to result in a more organized housing market and more value for the

customer.

On the services front the housing finance companies have begun addressing concerns of

borrowers through counseling and legal advisory services on matters pertaining to propertys title, its technical evaluation, its pricing etc. Customer relationship

management is emerging as one of the key areas of competition to win over new

customers. Housing finance companies have been upgrading their technology and

investing in sophisticated systems for sourcing, processing and managing information

pertaining to home loan customers.

As the scope for product differentiation is increasingly getting limited, the housing

finance companies will increasingly compete on the strength of their service quality.

Rendering technology-enabled value added services would enable the housing finance

companies to better withstand the competition.

The procedure for taking a home loan is rather easy. You can directly approach the bank

or call for a meeting to be arranged with the bank's loan executive. This can also be done

over the Internet. The banks may ask for various proofs like those related to your

residence, income, spouse's income, number of dependants, etc. Based on a number of

parameters, the banks arrive at your credit rating and offer you varying amount of loans.

Home loans in India come in various forms inviting fixed interest rate or floating interest

rates. There are hybrid loans also that are a middle path between fixed and floating

options. The borrower can put a part of his loan amount under fixed rate and expose the


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other part to the floating rates that depend on market conditions and the interventions by

the Reserve Bank of India.

The Internet as a medium of loan arrangement is fast catching up in India. Many websites

are coming up that take care of individual and corporate finance for various purposes like buying real estate, investments, business operations , etc. This medium of finance is

growing rapidly although it is surely in its nascent age as far as the Indian market is

concerned.
http://www.ask4loan.co.uk/http://www.ask4loan.co.uk/


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Appendixes

PERFORMANCE HIGHLIGHTS

Q1 FY09

Net Profit 89 % yoy

Net Interest Income 93 % yoy

Fee Income 80 % yoy

Operating Revenue 82 % yoy

Operating Profit 118 % yoy

Net Interest Margin 3.35 %


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Cost of Funds 6.11 %

Major Highlights Q4 FY10

Q3FY10

Q4FY09

Growth YoY%

(Rs in Crores) 12MFY10

12MFY09

Growth YoY%

1148 914 912 25.88 Operating Profit 3659 3082 18.72

594 534 466 27.47 Net Profit 2075 1727 20.15

1.34 1.29 1.25 Return on Avg

Assets

1.25 1.27

0.81 0.58 0.34 Net NPA% 0.81 0.34

39.24 40.23 38.64 Cost to IncomeRatio

40.66 41.81

493 440 560 -11.96 Non InterestIncome

1975 1483 33.18

3.39 2.77 2.69 NIM 2.71 3.24


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Financial Performance (12 Months):

Union Bank of India reported its financial performance for the year ended 31stMarch 2010. Highlights of the audited results as compared to the previous periodare as under:-

The Banks net profit grew by 20.15% yoy to Rs20.75bn in FY10. Operating profitgrew by 18.72% YoY to Rs36.59bn in FY10. On a quarterly basis, the Banks netprofit for Q4 10 increased by 27.47% to Rs5.94bn from Rs4.66bn in the previous

year.

The Banks CASA deposit portfolio showed an impressive growth of 29.36% toRs539.57bn as on 31st March10 as against Rs417.11bn in the previous year.

Non-Interest income grew by 33.18% YoY to Rs19.75bn as against Rs14.83bn inthe previous year. Core fee based income grew by 32.74% to Rs8.96bn asagainst Rs6.75bn in the previous year.

The Bank has been consistently showing Return on Average Assets(RoAA) at1.25 or greater in the past 3 years. RoAA for the year ended 31st March10 was1.25 as against 1.27 in the previous year. RoAA for Q410 was at 1.34 as against1.25 in the corresponding period of the previous year.

The Net Interest Margin (on interest earning assets) of the Bank stood at 2.71%for the year ended 31st March10 as against 3.24% in the previous year.

The Banks Net Interest Income increased from Rs.3813 crs to Rs.4192 crs, agrowth of 9.94% YoY.

The banks non-interest fee based income grew by 33.18% to Rs 1975 crs in FY10 as against Rs 1483 crs in the previous year. Core fee based income grew by32.74% to Rs 896 crs from Rs 675 crs in the previous year.


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PROFITIBILITY


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FEE INCOME COMPOSITION

In Q1, Fees have grown particularly strongly in Capital Markets and

Corporate Banking


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BUSINESS OVERVIEW

TOP SECTOR EXPOSURES

Rank Sectors% of Total

Corporate Credit1 Gems & Jewellery 8.97**


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2 Metals 8.243 Infrastructure 7.704 Real Estate 7.68

5 Financial Companies* 7.336 Trade 5.647 Textiles 5.438 Petrochemicals 4.029 Food Processing 4.00

10 Chemicals 3.99

As on 30.6.2008

* Housing Finance Companies and other NBFCs.

** 76% of this exposure is backed by cash margins

RETAIL BANKING

INCREASING REACH


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RETAIL ASSETS


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Retail Assets grow 52% yoy.

Retail Assets constitute 24% of the Banks total advances, as against 23%

at end June07.

Growth driven through Retail Asset Centres (RACs).

70 RACs established so far .

COMPOSITION OF RETAIL ASSETS


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Questionnaire:

Name of respondent: .....................................................


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Address: ..........................................................................Phone no.: .......................................................................Personal Details:Age group-

[ ] 21-30 [ ] 31-40

[ ] 41-50 [ ] 50 and aboveOccupation-[ ] Service [ ] Business[ ] Professional [ ] Other

Income/Salary monthly-[ ] Less than 10,000 [ ] 10,000-15,000[ ] 15,000-20,000 [ ] 20,000 and above

(1) Do you have your own house?[ ] Yes [ ] no

Are you aware about home loan?[ ] Yes [ ] No

Have you taken home loan?[ ] Yes [ ] No

Are you satisfied about current home loan services?[ ] Very good [ ] Good[ ] Average [ ] Bad

From which bank have you taken home loan?[ ] SBI Bank [ ] ICICI Bank [ ] HDFC Bank

[ ] PNB Bank [ ] BOB Bank [ ] The bank of Rajasthan[ ] Union Bank of India

Do you know properly about the terms & conditions of home loan services?[ ] Yes [ ] No

(7) In which ground do you prefer in loan?[ ] Interest [ ] Society[ ]EMI

Are you know about product & services offered by Union Bank of India related homeloan?


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Would you like to recommend your friends and relatives about UBI home loan?[ ] Yes [ ] No

What do you think about future services related home loan?[ ] Very Good [ ] Neutral[ ] Good [ ] Bad

[ ] worst(11) Are you satisfied with Union Bank of Indias services?

[ ] Yes [ ] No(12) What types of changes you expect from Union Bank of India in feature?

Suggestion123


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References and Bibliography

Net Sites:

www.unionbank.com

www.emkayshare.com

www.indiaground.com/home_loans

www.in.ibtimes.com/articles/20070806

www.niftindia.com/union banklist.html

www.indiahousing.com

www.indiaearnings.moneycontrol.com/sub_india/compnews.php?autono=330584

www.equitymaster.com/DETAIL.ASP?story=2 & date

Releases: .

Annual Performance Report .

News Paper and Magazines :

Business World April June Editions. 4Ps of Marketing April June Editions.

Economic Times April June Editions
http://www.unionbank.com/http://www.emkayshare.com/http://www.indiaground.com/home_loanshttp://opt/scribd/conversion/tmp/scratch2553/www.in.ibtimes.com/articles/20070806http://www.niftindia.com/Axisbanklist.htmlhttp://www.indiahousing.com/http://www.indiaearnings.moneycontrol.com/sub_india/compnews.php?autono=330584http://www.equitymaster.com/DETAIL.ASP?story=2&datehttp://www.unionbank.com/http://www.emkayshare.com/http://www.indiaground.com/home_loanshttp://opt/scribd/conversion/tmp/scratch2553/www.in.ibtimes.com/articles/20070806http://www.niftindia.com/Axisbanklist.htmlhttp://www.indiahousing.com/http://www.indiaearnings.moneycontrol.com/sub_india/compnews.php?autono=330584http://www.equitymaster.com/DETAIL.ASP?story=2&date


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