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Proposal for CCS Project

Title of the CCS / Dissertation:

Study of financial exposure of Indian commercial banks to real estate sector.

Name of the Guide: Prof. Ashok Thampy

Name(s) and Roll number(s) of the Student(s):
Suraj Kumar Bhagat (1311411)
Sumit Raj (1311408)

Need for the proposed work:
The contribution of the real estate sector to Indias gross domestic product (GDP) has been
estimated at 6.3% in 2013 and the segment is expected to generate 7.6 million jobs during the
same period. It is also expected to generate more than 17 million employment opportunities
across the country by 2025. However, Banks credit exposure to the real estate and housing
sector declined from 10% (as a percentage of Gross Bank Credit) in FY10 to 7.9% in FY13.
Being such a vital sector in Indian economy, it makes sense to examine the role of
commercial banks in funding this growth and their corresponding risks and returns. The
current policy scenario regarding funding of real estate by banks and RBI guidelines also
needs to be studied. Real estate industry is capital intensive and hence funding options are
vital to its growth.

1. To study the role of bank credit among current project financing options available to
real estate market in India.
2. To explore the total balance sheet exposure of Indian commercial banks to real estate
sector and its recent trends.
3. To study the various business, operational, financial and regulatory risks of banks in
financing of real estate sector.

Brief description of the CCS /Dissertation:
The project will cover the considerations for banks before funding any real estate project.
It will look into how the banks assess their risks and returns while financing any real
estate project. The data from the balance sheets of 3-4 commercial banks will be obtained
and their real estate exposure as a percentage of overall gross credit will be obtained. We
will also look in differences in approaches of private and public sector banks while
funding real estate sector. The project will also cover that how the banks overall real
estate exposure is affecting its NPAs.
We will also examine the role of overall policy and regulatory environment in funding of
real estate projects in the country by banks.


1. Secondary Study: We will go through library resources/journals/web to get a deep
understanding of present condition of financing of real estate sector in India. We will
study the risk and return that a financial bank has to face while it finances to a real
2. Primary Study: We will go to a few banks and look at their balance sheet to analyse
the trend of financing to real estate sector.
3. Research Outcome: As mentioned below in expected outcome.

Detailed work plan along with time schedule:
Exact work plan will be figured out on the basis of further discussions with project
guide and Area chair.

Expected outcome:
1. Trends in commercial bank financing of real estate sector
2. Various criteria that Indian financial banks look for before financing to real estate
3. The risk and return that a bank faces in financing to real estate sector
4. Recommendations for possible changes in policies and regulatory environment in
financing of real estate that will reduce risk of NPAs.

References (list the books, articles, etc. in detail):
References will be provided later.