Comparative Analysis of Home Loan in UTI Bank

Executive Summary
Introduction:
The robust growth in the demand for housing finance in recent years
has been remarkable because lower interest rates, tax incentives rates for home
ownership, massive competition by providers of housing finance has helped consumers
considerable. The primary market for housing finance has now matured.
For taking the advantage of this emerging trend in the Home Loan sector, this project
has been undertaken in the UTI BANK HUBLI.
Home finance is the long term financial assistance specifically advanced to
acquire/purchase/construct a dwelling unit against the security of first charge on the
property to be founded. Apart from financial assistance home finance provides legal
technical assistance to the customer in selecting a sound property.
Due to the increase in the income level of the middle class in India. Their has been stiff
competition among all the Banks to attract the customers & also the products have been
designed in the same way.
KLESs Institute of Management Studies and Research
Topic:
Comparative analysis of Home Loan in UTI Bank
Objectives and sub-objectives:
Main objectives:
To make the comparative analysis of home loans among three
organizations viz., ICICI Bank and LIC Housing Finance.
Sub-objectives:
To study the overall process of Home loans (sanctioning and disbursement of the
home loan);
The eligibility criteria for the customers;
To study the verification process of the documents;
To study the rate of interest provided by UTI Bank and other housing finance
institutions;
To study the strength and weakness of UTI Bank (home loan).
To find out the awareness level among the people of Hubli & Dharwad About
the loans being provided by UTI Bank.
Scope of study:
This study is exclusively done in the UTI Bank Ltd Hubli. The time
frame of this study taken is for one month i.e. from May 10th to July 10th.
Methodology:
The method adopted was Structured Interview method, where the
information is collected by direct interaction with the staff of financial
institutions/banks and my external guide and also from the manuals, broachers and from
web sites.
A questionnaire had been designed to find out the awareness level among the
people of Hubli & Dharwad.
Geographical area:
Hubli & Dharwad
Source of data collection:

Primary source:
The method adopted was personal interview method to collect the required
information. Personal interview and discussion was made with the manager.
A questionnaire was designed to find out the awareness level among the people
about UTI Bank loans.
Secondary source:
Manuals, Brochures and Websites.
Company manuals, brochures have been referred to gather information.
The websites of all the compared banks have been very useful source of
information.
FINDINGS:
All the three Banks/Financial Institutions provide loan for Construction,
Purchase of Land, and Extension/improvement.
Apart from these ICICI Home Finance Co. Ltd, LIC Housing Finance Ltd
provide
loan against Property and also for Non Residential Premises.
UTI Bank provides Maximum amount of Housing Loan of up to Rs.5 Crores.
ICICI Home Finance Co. Ltd has fixed different percentages based on purpose
whereas LIC HFL has fixed as 85% of cost of Project. UTI Bank has 74 % for
plot purchase & 85 % for construction.
The documentation is required for sanctioning Home Loans is same for all
banks. But LIC HFL is giving more importance for legal documents compared
to other Banks.
All the above Housing Finance Institutions will have the same type of security
but LIC also sometimes considers the security of the guarantor.
Processing fees charged by LIC is more compared to the other Banks.
All the Housing Financial Institutions are collecting their loan amount in EMIs,
UTI bank does not have ECS facility (electronic clearance service) but it does
have auto debit facility available.
LIC HFL is charging fees for Part Pre payment resulting to a burden to
customers.
The awareness level about the UTI Banks loans is 43%.
RE
COMMEDATIONS
Keeping in mind the competitiveness of the other banks & financial institutions
UTI Bank should also provide loans for non-residential premises.
Based on the purpose UTI Bank should customize their percentage of funding
for the project.
The documentation process should be made easy as most people feel it as it is
very complex. They should specify all the legal documents required for the
processing of the loan in advance.
UTI should implement the Electronic Clearance System [ECS] as it is a
convenient way for the customers to pay their monthly EMI.
They should try to cut down the fees charged to switch on to the new interest
rate as it is a burden for the customers.
As the awareness level about the loan products of UTI Bank is 43% in the twin
cities. The Bank has to develop new strategis to create awareness about the
different products of UTI Bank
Different segments of market have to be approached with different strategies and
Medias.
Attending regular trade fairs.
Conclusion
The bottom line of comparing loans from various Banks/ Housing Finance
Institutions is almost always the interest rate; competition is narrowing down the cost
differential between companies. This means that choosing a loan product has become
even more difficult as prospective borrowers have to draw comparisons across the entire
matrix of add-on benefits and services provided by lending institutions.
The growth of Retail and Consumer lending in India must be seen as arising
from a strong growth in incomes amongst the middle class and the more affluent
segments, leading to changes in the consumer behavior.
UTI Banks home loans, which traditionally concentrated most on the salaried
class, are also widening its customer base. Its more customer oriented approach is
yielding rich benefits for the organization.
UTI Bank is expanding its network by adding new offices in new cities.
UTI Bank is providing a very good service to the customer and it can be
termed as satisfactory.
But I feel that, it can improve its performance and service by being more
flexible and alert in regard to the customers requirments.
Executives in this organization are very good and co-operative.
To conclude, the overall performance of the UTI Bank Is satisfactory.
Though the study was done for a short period it was a very good experience
and learning experience.
INTRODUCTION TO BANKING:
A bank [bk] is a business that provides financial services, usually for profit.
Traditional banking services include receiving deposits of money, lending money and
processing transactions. A commercial bank accepts deposits from customers and in turn
makes loans based on those deposits. Some banks (called Banks of issue) issue
banknotes as legal tender. Many banks offer ancillary financial services to make
additional profit; for example: selling insurance products, investment products or stock
broking
Currently in most jurisdictions commercial banks are regulated and require permission
to operate. Operational authority is granted by bank regulatory authorities and provide
rights to conduct the most fundamental banking services such as accepting deposits and
making loans. A commercial bank is usually defined as an institution that both accepts
deposits and makes loans; there are also financial institutions that provide selected
banking services without meeting the legal definition of a bank (see banking
institutions).
Banks have a long history, and have influenced economies and politics for centuries. In
history, the primary purpose of a bank was to provide liquidity to trading companies.
Banks advanced funds to allow businesses to purchase inventory, and collected those
funds back with interest when the goods were sold. For centuries, the banking industry
only dealt with businesses, not consumers. Commercial lending today is a very intense
activity, with banks carefully analysing the financial condition of its business clients to
determine the level of risk in each loan transaction. Banking services have expanded to
include services directed at individuals and risk in these much smaller transactions are
pooled.
A bank generates a profit from the differential between what level of interest it pays for
deposits and other sources of funds, and what level of interest it charges in its lending
activities.
This difference is referred to as the spread between the cost of funds and the loan
interest rate. Historically, profitability from lending activities has been cyclic and
dependent on the needs and strengths of loan customers. In recent history, investors
have demanded a more stable revenue stream and banks have therefore placed more
emphasis on transaction fees, primarily loan fees but also including service charges on
array of deposit activities and ancillary services (international banking,foreign
exchange, insurance, investments, wire transfers, etc.). However, lending activities still
provide the bulk of a commercial bank's income.
FUNCTION OF BANKS:
Although the basic type of services offered by a bank depends upon the type of bank
and the country, services provided usually include:
Taking deposits from their customers and issuing checking and savings accounts
to individuals and businesses
Extending loans to individuals and businesses
Cashing cheques
Facilitating money transactions such as wire transfers and cashiers checks
Issuing credit cards, ATM cards, and debit cards
Storing valuables, particularly in a safe deposit box
Cashing and distributing bank rolls
Consumer & commercial financial advisory services
Pension & retirement planning
TYPES OF BANKS:
Banks' activities can be divided into
retail banking, dealing directly with individuals and small businesses;
business banking, providing services to mid-market business;
corporate banking, directed at large business entities; and
investment banking, relating to activities on the financial markets.
Most
banks are profit-making, private enterprises. However, some are owned by

government, or are non-profits.
Central banks are non-commercial bodies or government agencies often charged with
controlling interest rates and money supply across the whole economy. They generally
provide liquidity to the banking system and act as Lender of last resort in event of a
crisis
BANKING IN INDIA:
Banking in India originated in the first decade of 18th century with The General Bank
of India coming into existence in 1786. This was followed by Bank of Hindustan. Both
these banks are now defunct. The oldest bank in existence in India is the State Bank of
India being established as "The Bank of Bengal" in Calcutta in June 1806. A couple of
decades later, foreign banks like Credit Lyonnais started their Calcutta operations in the
1850s. At that point of time, Calcutta was the most active trading port, mainly due to the
trade of the British Empire, and due to which banking activity took roots there and
prospered. The first fully Indian owned bank was the Allahabad Bank, which was
established in 1865.
By the 1900s, the market expanded with the establishment of banks such as Punjab
National Bank, in 1895 in Lahore and Bank of India, in 1906, in Mumbai - both of
which were founded under private ownership. TheReserve Bank of India formally took
on the responsibility of regulating the Indian banking sector from 1935. After India's
independence in 1947, the Reserve Bank was nationalized and given broader powers.
Early history
At the end of late-18th century, there were hardly any bank in India in the modern sense
of the term. At the time of the American Civil War, a void was created as the supply of
cotton to Lancashire stopped from the Americas. Some banks were opened at that time
which functioned as entities to finance industry, including speculative trades in cotton.
With large exposure to speculative ventures, most of the banks opened in India during
that period could not survive and failed. The depositors lost money and lost interest in
keeping deposits with banks. Subsequently, banking in India remained the exclusive
domain of Europeans for next several decades until the beginning of the 20th century.
10
The Bank of Bengal, which later became the State Bank of India.
At the beginning of the 20th century, Indian economy was passing through a relative
period of stability. Around five decades have elapsed since the India's First war of
Independence, and the social, industrial and other infrastructure have developed. At that
time there were very small banks operated by Indians, and most of them were owned
and operated by particular communities. The banking in India was controlled and
dominated by the presidency banks, namely, the Bank of Bombay the Bank of Bengal
and the Bank of Madras - which later on merged to form the , and Imperial Bank of
India, upon India's independence, was renamed the State Bank of India. There were also
some exchange banks, as also a number of Indian joint stock banks. All these banks
operated in different segments of the economy. The presidency banks were like the
central banks and discharged most of the functions of central banks. They were
established under charters from the British East India Company. The exchange banks,
mostly owned by the Europeans, concentrated on financing of foreign trade. Indian joint
stock banks were generally under capitalized and lacked the experience and maturity to
compete with the presidency banks, and the exchange banks. There was potential for
many new banks as the economy was growing.
LordCurzon had observed then in the context of Indian banking: "In respect of
banking it seems we are behind the times. We are like some old fashioned sailing
ship, divided by solid wooden bulkheads into separate and cumbersome
compartments."
Under these circumstances, many Indians came forward to set up banks, and many
banks were set up at that time, and a number of them set up around that time continued
to survive and prosper even now like Bank of India and Corporation Bank, Indian Bank,
Bank of Baroda, and Canara Bank.
During the Wars
11
The period during the First World War (1914-1918) through the end of the Second
World War (1939-1945), and two years thereafter until the independence of India were
challenging for the Indian banking. The years of the First World War were turbulent,
and it took toll of many banks which simply collapsed despite the Indian economy
gaining indirect boost due to war-related economic activities. At least 94 banks in India
failed during the years 1913 to 1918 as indicated in the following table:
Years
1913
1914
1915
1916
1917
1918
Number of banks Authorised capital Paid-up Capital

that failed
12
42
11
13
9
7
(Rs. Lakhs)
274
710
56
231
76
209
(Rs. Lakhs)
35
109
5
4
25
1
Post-independence
The partition of India in 1947 had adversely impacted the economies of Punjab and
West Bengal, and banking activities had remained paralyzed for months. India's
independence marked the end of a regime of the Laissezfaire for the Indian banking.
The Government of India initiated measures to play an active role in the economic life
of the nation, and the Industrial Policy Resolution adopted by the government in 1948
envisaged a mixed economy. This resulted into greater involvement of the state in
different segments of the economy including banking and finance.
The major steps to regulate banking included:
In 1948, the Reserve Bank of India, India's central banking authority, was nationalized,
and it became an institution owned by the Government of India.
In 1949, the Banking Regulation Act was enacted which empowered the Reserve Bank
of India (RBI) "to regulate, control, and inspect the banks in India."
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The Banking Regulation Act also provided that no new bank or branch of an existing
bank may be opened without a licence from the RBI, and no two banks could have
common directors.
However, despite these provisions, control and regulations, banks in India except the
State Bank of India, continued to be owned and operated by private persons. This
changed with the nationalization of major banks in India on 19th July, 1969.
Nationalisation
By the 1960s, the Indian banking industry has become an important tool to facilitate the
development of the Indian economy. At the same time, it has emerged as a large
employer, and a debate has ensued about the possibility to nationalize the banking
industry. Indira Gandhi, the-then Prime Minister of India expressed the intention of the
GOI in the annual conference of the All India Congress Meeting in a paper entitled
"Stray thoughts on Bank Nationalisation." The paper was received with positive
enthusiasm. Thereafter, her move was swift and sudden, and the GOI issued an
ordinance and nationalised the 14 largest commercial banks with effect from the
midnight of July 19, 1969. Jayaprakash Narayan, a national leader of India, described
the step as a "masterstroke of political sagacity." Within two weeks of the issue of the
ordinance, the Parliament passed the Banking Companies (Acquition and Transfer of
Undertaking) Bill, and it received the presidential approval on 9th August, 1969.
A second dose of nationalisation of 6 more commercial banks followed in 1980. The
stated reason for the nationalisation was to give the government more control of credit
delivery. With the second dose of nationalisation, the GOI controlled around 91% of the
banking business of India.
After this, until the 1990s, the nationalised banks grew at a pace of around 4%, closer to
the average growth rate of the Indian economy.
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Liberalisation
In the early 1990s the then Narasimha Rao government embarked on a policy of
liberalisation and gave licences to a small number of private banks,
which came to be known as New Generation tech-savvy banks, which included banks
such as UTI Bank (the first of such new generation banks to be set up), ICICI Bank and
HDFC Bank. This move, along with the rapid growth in the economy of India,
kickstarted the banking sector in India, which has seen rapid growth with strong
contribution from all the three sectors of banks, namely, government banks, private
banks and foreign banks.
The next stage for the Indian banking has been setup with the proposed relaxation in the
norms for Foreign Direct Investment, where all Foreign Investors in banks may be
given voting rights which could exceed the present cap of 10%,at present it has gone up
to 49% with some restrictions.
The new policy shook the Banking sector in India completely. Bankers, till this time,
were used to the 4-6-4 method (Borrow at 4%;Lend at 6%;Go home at 4) of
functioning. The new wave ushered in a modern outlook and tech-savvy methods of
working for traditional banks.All this led to the retail boom in India. People not just
demanded more from their banks but also received more.
Current scenario
Currently (2007), overall, banking in India is considered as fairly mature in terms of
supply, product range and reach-even though reach in rural India still remains a
challenge for the private sector and foreign banks. Even in terms of quality of assets and
capital adequacy, Indian banks are considered to have clean, strong and transparent
balance sheets-as compared to other banks in comparable economies in its region. The
Reserve Bank of India is an autonomous body, with minimal pressure from the
government. The stated policy of the Bank on the Indian Rupee is to manage volatilitywithout any stated exchange rate-and this has mostly been true.
With the growth in the Indian economy expected to be strong for quite some timeespecially in its services sector, the demand for banking services-especially retail
14
banking, mortgages and investment services are expected to be strong. M&As,

takeovers, asset sales and much more action (as it is unravelling in China) will happen
on this front in India.
In March 2006, the Reserve Bank of India allowed Warburg Pincus to increase its stake
in Kotak Mahindra Bank (a private sector bank) to 10%. This is the first time an
investor has been allowed to hold more than 5% in a private sector bank since the RBI
announced norms in 2005 that any stake exceeding 5% in the private sector banks
would need to be vetted by them.
Currently, India has 88 scheduled commercial banks (SCBs) - 28 public sector banks
(that is with the Government of India holding a stake), 29 private banks (these do not
have government stake; they may be publicly listed and traded on stock exchanges) and
31 foreign banks. They have a combined network of over 53,000 branches and 17,000
ATMs. According to a report by ICRA Limited, a rating agency, the public sector banks
hold over 75 percent of total assets of the banking industry, with the private and foreign
banks holding 18.2% and 6.5% respectively.
15
RETAIL BANKING:
Retail banking is typical mass-market banking where individual customers use local
branches of larger commercial banks. Services offered include: savings and checking
accounts, mortgages, personal loans, debit cards, credit cards, and so forth.
TYPES OF RETAIL BANKING:
Commercial bank has two possible meanings:

o Commercial bank is the term used for a normal bank to distinguish it
from an investment bank.
o Commercial bank can also refer to a bank or a division of a bank that
mostly deals with deposits and loans from corporations or large
businesses, as opposed to normal individual members of the public
(retail banking).
Community development bank are regulated banks that provide financial

services and credit to underserved markets or populations.
Private banks manage the assets of high net worth individuals.
Offshore banks are banks located in jurisdictions with low taxation and
regulation. Many offshore banks are essentially private banks.
Savings bank accept saving deposits.
Postal savings banks are savings banks associated with national postal systems.
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CATEGORIZATION OF RETAIL BANK SERVICES:

CORE SERVICES
Payment services
FACILITATING SERVICES
SUPPORTING SERVICES
Cash
Internet banking
Foreign
currency
Telephone banking
requirements
Making payment at
Traveler cheques
doorstep.
DD/Bankers cheques
TT
EFT
Current account &
ATM card
Credit cards
savings account
Inter branch/inter bank
Debit cards
transfer of funds
Services to seniors
Safety vault
Telephone banking
Internet banking
Conversion of excess
balance to bank deposits
Loan Products:
Current account
Delivery of loan at
Consumer loan
promised time.
Savings account
Personal loan
Interest rate option:
Time deposit account
Housing loan
fixed/floating.
Educational loan
Flexibility
in
prepayment of loan.
Counseling on real
estate markets.
Legal
services
for
documentation.
ECS for payment of
loan installments.
Insurance products:
Current account
Additional
insurance
Life insurance
facility
for
family
Savings account
members.
Time deposit account
Counseling on post
Safety vault
retirement savings.
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BANKING ON RETAIL:
With a jump in the Indian economy from a manufacturing sector, that never really took
off, to a nascent service sector, Banking as a whole is undergoing a change. A larger
option for the consumer is getting translated into a larger demand for financial products
and customization of services is fast becoming the norm than a competitive advantage.
With the Retail banking sector expected to grow at a rate of 30% [Chanda Kochhar, ED,
ICICI Bank] players are focusing more and more on the Retail and are waking up to the
potential of this sector of banking. At the same time, the banking sector as a whole is
seeing structural changes in regulatory frameworks and securitization and stringent NPA
norms expected to be in place by 2004 means the faster one adapts to these changing
dynamics, the faster is one expected to gain the advantage.
In this article, we try to study the reasons behind the euphemism regarding the Retailfocus of the Indian banks and try to assess how much of it is worth the attention that it
is attracting.
Potential for Retail in India: Is sky the limit?
The Indian players are bullish on the Retail business and this is not totally unfounded.
There are two main reasons behind this. Firstly, it is now undeniable that the face of the
Indian consumer is changing. This is reflected in a change in the urban household
income pattern. The direct fallout of such a change will be the consumption patterns and
hence the banking habits of Indians, which will now be skewed towards Retail products.
At the same time, India compares pretty poorly with the other economies of the world
that are now becoming comparable in terms of spending patterns with the opening up of
our economy. For instance, while the total outstanding Retail loans in Taiwan is around
41% of GDP, the figure in India stands at less than 5%. The comparison with the West is
even more staggering. Another
18
Comparison that is natural when comparing Retail sectors is the use of credit cards.
Here also, the potential lies in the fact that of all the consumer expenditure in India in
2001, less than 1% was through plastic, the corresponding US figure standing at 18%.
But how competitive are the players?
The fact that the statistics reveal a huge potential also brings with it a threat that is true
for any sector of a country that is opening up. Just how competitive are our banks? Is
the threat of getting drubbed by foreign competition real? To analyze this, one needs to
get into the shoes of the foreign banks. In other words, how do they see us? Are we
good takeover targets?
Going by international standards, a large portion of the Indian population is simply not
bankable taking profitability into consideration. On the other hand, the financial
services market is highly over-leveraged in India. Competition is fierce, particularly
from local private banks such as HDFC and ICICI, in the business of home, car and
consumer loans. There, precisely lie the pitfalls of such explosive growth. All banks are
targeting the fluffiest segment i.e. the upwardly mobile urban salaried class. Although
the players are spreading their operations into segments like self- employed and the
semi-urban rich, it is an open secret that the big city Indian yuppies form the
Most profitable segment. Over-dependence on this segment is bound to bring in
inflexibility in the business.
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Retail banking is the buzzword in the banking circles and the customers are in for a
bonanza. Through retail banking, a set of products & services are designed for ultimate
customers for personal & non business use. Although, the retail business takes a long
period to build up volumes, banks are positioning on both retail assets & liabilities, as
part of broad business strategy. Due to the shrinking in big-ticket credit, growing NPAs
& deployable surplus arising out of deposit growth, banks are competing with one
another to garner the market share by offering newer products & services. The
prevailing situation in the economy has led to an increasing investor preference for bank
deposits. With more volatility in the equity market, the Retail investors have put in more
confidence, as they find no risk in the bank deposits, not withstanding the lower interest
rate.
Through various delivery channels coupled with technology, banks distribute
the products & services via ATM, phone banking, Any-time banking, Electronic Data
Capture Point-o-Sales [EDCPoS] & the internet banking, thereby reducing the necessity
for maintaining large network of branches. On the product diversification facilities, as
part of marketing efforts, the banks offer free ATM cards, free remittances, flexible
deposit schemes, home loans with flexible EMIs, consumer durable loan facilities etc.
Besides net banking, customers on the move can conduct their banking transactions
using mobile phone & vast network of ATMs spread across in the country, thereby
providing adequate scope for increasing retail segment base.
Banks offer personalized marketing services too through E-mail newsletters;
Web- based services & personal letters. With advancement in technology, the banks
have introduced wide range of customized products to customers. To quote on the
deposit front, a number of banks have made their term deposits schemes more flexible
to allow pre mature or partial withdrawal. Banks also increase the number of their highvalue customers, focusing on high net worth individuals by its preferred service &
tapping non- resident accounts through tailor made products & services. Unlike in
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corporate banking, with the effective use of IT every individual account is tracked to
know customer behavior, their potential defaults, deposit maturities etc.
Although banks focus on the main areas in retail banking, currently banks are targeting
more on retail lending products to deploy the surplus funds with them.
RETAIL LENDING: CHANGING DIMENSIONS

Large credit exposures are linked to banks capital. Limits have to be fixed for single
exposure in relation to the Capital funds. Thereby, clearly defined exposure ceiling for a
single counterparty or group of related counterparties is required to be fixed. In addition
to internal ceiling, appropriate levels of prudential exposure levels are also fixed.
Further the loan book containing a relatively high proportion of sizeable large
credit exposure is more susceptible to potential credit risk compared to a more widely
distributed/mixed portfolio. Thus, retail exposure, with strong dominance on local
populace & established personal contact with costumers, facilitates risk spreading &
quality assets.
Credit portfolio of banking business is fast changing in India. Retail lending is
becoming an important segment of bank credit. Its share in the aggregate outstanding
credit of SCBs in India has increased from 9 percent in 1995-96 to over 10 percent in
2001-02. In the face of slowdown in industrial activity, banks have aggressively
increased the share of credit towards to retail lending. The critical challenge for the
banking industry is approachability & accessibility the ability to make finance
available to those who need it, when they need it & in a manner they want it. The
industry must become more proactive & reach out to the customer, rather than expecting
the customer to reach out to the industry.
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RETAIL LENDING: REASON FOR RESURGENCE
A paradigm shift from corporate lending
The economic slowdown & poor industrial growth have reduced demand for the loans
& there is stiff competition in the corporate loans market due to the continuous fall in
interest rates. The corporate lending scene has also undergone a radical change in the
recent years. There are few opportunities in the wholesale segment that is the corporate
lending market. Competition has made it unviable to lend to blue chip corporates, since
they are now able to borrow at a few basis points above the yield on government
securities or at sub-PLR.Volatility has been very wide with corporates preferring to tap
global markets for funds. This as left only second rung corporates available for lending
by domestic banks. While it increases the threat to NPAs, the fact also remains that
there are too many banks chasing too few corporates with good rating status. Eying on
the mid corporates& retail finance market is more profitable than corporate banking
business since retail customers are less credit averse & more open to acquire assets
through the credit route.
Disintermediation
While on the one hand, we have been talking on the need to reduce NPAs; on the other
hand, disintermediation requires banking beyond its traditional contours. In times of
excess liquidity, disintermediation is a blessing in disguise as it diverts deposits to other
revenues. However it entails some negative effects too. It increase the cost of funds, as
there is a flight of deposits bearing lower interest rates to other avenues, leaving banks
with only high cost deposits. Already, the trend is seen on the deposit side, where PPF,
NSCs, mutual funds & insurance products are being accepted as substitutes. On the
lending side too, mutual funds are poaching on the best customers. What poses more
threat to banks is the fact that mutual funds are becoming the preferred lenders to
22
corporates. Having no provisioning requirement or priority sector lending obligation &

carrying almost no risk[as risks are passed on the investors], mutual funds are able to
lend with a much finer spread. As a result spreads for banks in lending have steadily
declined.
Differential Interest Rate
Price is an important aspect. As the Indian market is getting commoditized, interest rate
differential assumes a greater significance. For example even the lowest interest bearing
product-say housing finance-earns an interest of 10 to 11 percent[for more than 10 year
tenure] compared to sub-PLR lending at 8 to 9 percent interest rate to meet more risky
corporate loan demand. More importantly, the corporates, on the one hand, expect
highest returns & park deposits with the banks offering highest returns & on the other
hand, they raise their resources with the banks offering lowest interest rates. While
doing so, if a rival bank offers them better returns on deposits or lower interest on
borrowings, they change their loyalties. With the falling interest rates, they retire highcost old debt & replace it with low-cost loan & add to the profitability.
Increased Middle Class Demand
Despite slowdown in the economy, the purchasing power continued to be strong as

consumerism among the middle class is on the increase. An increasing number of
products & services on credit, & the rapidly growing middle class with a bias towards
consumerism are the key drivers for the growth in the retail lending. Increased middleincome segment, opening up of the economy, awareness & sophistication in urban &
semi-urban households for whom convenience, security & status are important,
contributed to higher demand for retail banking. The consumers are sensitive to the
impact of any purchase on the household budget & will postpone till they could save the
actual money required. To counter this, banks should evolve soft lending schemes to be
structured on the basis of repayment capacity of the household.
Volume orientation
Retail business is focused with the sole aim of expanding the portfolio with more
accounts, more customers & more balances, although the transaction cost is high across
23
the banks. The dominant issue here is that by increasing the volume through retail
lending, the cost could be brought down, which will eventually lead to more profit.
ABOUT UTI BANK:

UTI Bank India, the first bank to begin operations as new private banks in 1994 after
the Government of India allowed new private banks to be established. UTI Bank was
jointly promoted by the Administrator of the specified undertaking of the Unit Trust of
India (UTI-I), Life Insurance Corporation of India (LIC) and General Insurance
Corporation Ltd. Also with associates viz. National Insurance Company Ltd., the New
India Assurance Company, The Oriental Insurance Corporation and United Insurance
Company.
UTI Bank in India today is capitalized with Rs. 232.86 Crores with 47.50% public
holding other than promoters. It has more than 200 branch offices and Extension
Counters in the country with over 1250 UTI Bank ATM proving to be one of the largest
ATM networks in the country. UTI Bank India commits to adopt the best industry
practices internationally to achieve excellence.
By the end of December 2004, UTI Bank in India had over 2.7 million debit cards. This
is the first bank in India to offer the AT PAR Cheque facility, without any charges, to all
its Savings Bank customers in all the places across the country where it has presence.
With the AT PAR cheque facility, customers can name Cheques payments to any
beneficiary at any of its existence place. The ceiling per instrument is Rs.50, 000/-.
The latest offerings of the bank along with Dollar variant is the Euro and Pound Sterling
variants of the International Travel Currency Card. The Travel Currency Card is a
signature based pre-paid travel card which enables travelers global access to their
money in local currency of the visiting country in a safe and convenient way.
24
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
25
Organization
Basically an organization is a group of people intentionally organized to accomplish an
overall, common goal or set of goals. Business organizations can range in size from two
people to tens of thousands.
There are several important aspects to consider about the goal of the business
organization. These features are explicit (deliberate and recognized) or implicit
(operating unrecognized, "behind the scenes"). Ideally, these features are carefully
considered and established, usually during the strategic planning process. (Later, we'll
consider dimensions and concepts that are common to organizations.)
Types of organization
a. Formal organization.
b. Informal organization.
a. Formal organization:
The formal organization or group exist in all organization .it is a group of the
people working together in all co-operation under the authority towards common
goal, objectives for the mutual benefit of the participants.
The formal groups are created to carry out some specific work to meet
some goals of the organization
b. Informal Organization:
The informal organization refers to relationship between peoples in the
organization based not on procedure and regulation laid down in the organization
but on the personal attitude friendship or some common interest which may or may
not be work related informal organization.
26
Departmentation:
Departmentation is the process of dividing and grouping the activities of an
enterprise in the various units for the purpose of administration .the units for the
purpose of administration .the units are designated as departments division sector or
branches.
Departmentation facilitates the benefits of specialization .it aims
at achieving units of directing, co-operation, co-ordination, control and effective
communication .it leads to effective performance of activities of the enterprise
27
ORGANIZATION CHART OF UTI BANK

CHAIRMAN /CMD
DIRECTOR
CORPORATE BANKING
CORPORATE RETAIL BANKING
CORPORATE OPERATION BANKING
CORPORATE PROJECT AND PLANNING BANKING
CORPORATE FINANCE AND ACCOUNT BANKING
CORPORATE INSPECTION AND AUDIT BANKING
CORPORATE SUPPORT SERVICE BANKING
CORPORATE INFORMATION TECHNOLOGY BANKING
CORPORATE MARKETING BANKING
NORTH ZONE
SOUTH ZONE
EAST ZONE
WEST ZONE
SENIOR VICE
SENIOR VICE
PRESIDENT
SENIOR VICE
PRESIDENT
SENIOR VICE
PRESIDENT
VICE - PRESIDENT
VICE PRESIDENT
VICE PRESIDENT
VICE PRESIDENT
ASSISTANT VICE
PRESIDENT
ASSISTANT VICE
- PRESIDENT
ASSISTANT VICE
- PRESIDENT
ASSISTANT VICE
- PRESIDENT
OPERATIONS,
SALES MANAGERS
AND CREDIT
MANAGERS
OPERATIONS,
SALES MANAGERS
AND CREDIT
MANAGERS
OPERATIONS,
SALES MANAGERS
AND CREDIT
MANAGERS
OPERATIONS,
SALES MANAGERS
AND CREDIT
MANAGERS
OPERATIONS,
SALES & CREDIT
DEPUTY
MANAGERS
OPERATIONS,
SALES MANAGERS
AND CREDIT
DEPUTY
MANAGERS
OPERATIONS,
SALES MANAGERS
AND CREDIT
DEPUTY
MANAGERS
OPERATIONS,
SALES MANAGERS
AND CREDIT
DEPUTY
MANAGERS
EXECUTIVES
EXECUTIVES
EXECUTIVES
EXECUTIVES
JUNIOR
EXECUTIVES
JUNIOR
EXECUTIVES
JUNIOR
EXECUTIVES
JUNIOR
EXECUTIVES
SALES OFFICERS
SALES OFFICERS
SALES OFFICERS
SALES OFFICERS
SALES
SALES
SALES
PRESIDENT
SALES
EXECUTIVES
KLESs
EXECUTIVES
EXECUTIVES
EXECUTIVES
Institute
of Management
Studies and Research
28
BANK PROFILE UTI BANK BRANCH OFFICE HUBLI

UTI BANK branch office Hubli started on 10 October 2003 this
bank contains has five departments this bank located in DESPANDE NAGAR. Branch
manager .
Address: 163/20Akalburgi plaza, Despande Nagar, HUBLI 580029
Timings: 9.30 AM to 1.30 PM
CONTACT NO: 0836 2356981/2
Organization chart of HUBLI branch
SOUTH ZONE
SENIOR VICE
PRESIDENT
VICE - PRESIDENT
ASSISTANT VICE
PRESIDENT
OPERATIONS,
SALES MANAGERS
AND CREDIT
MANAGERS
OPERATIONS,
SALES & CREDIT
DEPUTY
MANAGERS
EXECUTIVES
JUNIOR
EXECUTIVES
SALES OFFICERS
SALES
EXECUTIVES
29
UTI bank has 5 departments

1. Cash department
2. Credit department
3. Marketing department
4. Clearing department
5. Operation department
CASH DEPARTMENT:
It is mainly concerned with cash transactions of day to day activities these dept
have playing very much important role because more number of people are coming to
this dept.
this dept has 50% to 80% decision making power this dept has fully co-operate
with other dept performance of this dept will be appraised by the way of branch
performance based. This dept would have any plans for reaching its targets.
FUNCTIONS OF CASH DEPARTMENT:
1. Handling daily cash transactions.
2. balancing figure at the end of the day
3. maintaining cash levels of the branch
MARKETING DEPARTMENT:
It is concerned with achieving branch targets through creating new customers and
provides better service to these customers these dept has 50% to 100% decision making
power this dept has fully co-operate with other dept this dept performance can be
appraised through branch performance this is having following plans for reaching its
targets by
a) By obtaining some new customers
b) By generating new business through existing customers.
30
FUNCTIONS OF MARKETING DEPARTMENT

1. Achieving branch targets.
2. co-operating with sales executives
3. customer service
4. Opening of new accounts.
5. building new relations
OPERATION DEPARTMENT:
It is heart of the UTI bank this department has control the overall operations of the
UTI bank .This department has handling customer queries and giving proper
information to needy customers this department having 30% to 80% decision making
power. This dept is fully co-operate with other dept this dept performance can be
appraised branch performance and self appraised based .this dept also having plans to
achieve its targets
They are gross selling plan, marketing and contribution to the branch target plans to
reach its objectives.
FUNCTIONS OF OPERATION DEPARTMENT
1. DD drafting
2. Out station cheques realigning
3. Attending customers query regarding day to day transactions.
4. Handling government business.
5. Handling RTGS (Real time gross settlements system).
6. Transfers
7. Remittances.
31
CREDIT DEPARTMENT:
Credit department has mainly concern with credit transactions of the bank like
giving loans, recovers loans etc are included in these department this department
performance can be appraised through giving targets. This department having 50% to
80% decision making power and this department has co-operated with other department
whenever other departments needed. This department different plans for reaching its
targets they are, credit appraised of balance sheet, financial strength and ratio analysis.
FUNCTIONS OF CREDIT DEPARTMENT
1. Screening of proposals.
2. Documentations.
3. Disbursements of loans.
CLEARING DEPARTMENT:
Clearing has mainly concerned with clearing cheques of the customers this
department having 20% to 30% decision making power this department performance
can be appraised through branch performance ,this department does not have any plans
for reaching targets
FUNCTIONS OF CLEARING DEPARTMENT

1. Out stations of cheques.
2. Locals cheques.
3. CBSS (software name used for giving information to the current account
holders).
32
1. Basic services: basic services include

a) saving account
b) term deposit
c) recurring deposits
d) demat account
e) ATMs
f) En cash - 24
g) Special savings account
h) Residence and foreign currency account
i) Easy access through channels
j) I connect
k) corporate I connect
l) 24 - hr tele banking
TYPES OF ACCOUNTS:
1. Easy access account.
2. Salary account
3. Womens savings account
4. Senior privilege account
5. Defense Salary account
6. Trust/NGO savings account
7. Azadi-no frills
8. RFC(D)
33
1. Easy access account

The Easy access Savings Bank account is an endeavor by the bank to understand the
customers needs & redefine banking to suit the customers requirements for a truly
anywhere anytime banking experience.
A-Accessibility
Wide network of branches & one of the largest ATM networks in India giving the
customers easy access to their account. The anywhere banking concept allows the
customers to access/transact their account from any branch of the bank.
C-Convenience
An International Photo-signature Debit Card with withdrawal limit of Rs.40, 000 per
day, facilitating transfer funds, deposits of cash/cheques & payment of insurance
premium [LIC]. The Debit Card also comes with a comprehensive insurance cover
inclusive of zero lost card liability, purchase protection & personal accident Insurance
up to Rs.2 lacks.
C-Comfort
Internet Banking/ Telebanking- the ease of banking from home or office. Providing the
customer with the facility of online funds transfer, requests for
the customers new cheque book, Financial Advisory Services[FAS], shopping online &
information on mutual funds.
E-Earnings
Maximize returns on the account by availing the dual benefit of Flexi deposit. Any
balance in the customers account is in excess of Rs.10,000 or any higher limit specified
by the customer will be transferred automatically to high interest earning fixed deposit
account in multiplies of Rs.10,000.
S-Speed
At-Par cheque gives the customer the unique power to encash their cheque as a local
cheque at more than 143 centers where the bank has a presence at no extra cost.
S-Service
34
Service of the highest quality is rendered by an affable endearing & enthusiastic staff at
the branch.
2. Salary Account:
The complete financial solution
Seeking a convenient way to pay your employees?
Salary Savings Account from UTI Bank will do the job for you. We know how
important employee satisfaction is for an organization to grow to its full potential.
Which is why we have tailored our Salary Savings Account not only to be a convenient
way for you to manage salaries (across various centers, through our centralized
database), but also provide your employees with a range of value added benefits.
Salary Savings Account comes with a host of facilities that give your employees access
to the complete gamut of banking services (including overdrafts, loans and zero-balance
requirements) on a preferential basis. Making it the perfect incentive for your
employees.
Features
No minimum balance.
Banking available across the country.
Multi-city at par Cheque book.
Personal & accidental insurance cover up to Rs.2 lacs.
Joint account facility available.
2. Womens Savings Account :

Features: Savings account designed for special needs for women.
Anywhere banking facility with Priority Debit card.
Enhanced cash withdrawal limit of Rs.40, 000 per day through ATM.
FREE Zero Balance Minor Account.
FREE financial advisory services.
FREE Demand Drafts & Pay orders.
FREE At Par cheque books.
FREE delivery of computerized statement of account.
35
FREE collection of outstation cheques only postage will be collected.

Critical illness benefit.
Dual benefit of Encash 24 scheme.
Children education bonus.
Specially designed International Debit Card.
Discounts on retail purchases.
Concessional rates for Personal & consumer loans.
All will come with Average Quarterly balance of Rs.10, 000 only.
Special feature: Zero Balance Account
No maintenance charges.
Debit card offered to the minor above the age of 12 years, who can sign
uniformly.
Daily withdrawal limit of Rs.1500 at ATMs
Daily spend limits of Rs.1000 at merchant outlets.
Free monthly Statement clubbed with the statement of the smart privilege
account of the mother.
At- par cheque book at a nominal cost.
This account is a special feature to imbibe the significance of savings in your
child. The zero balance minor savings account is a unique feature that all
account holders can open for their children.
4. Senior Privilege Account:

Features: [For citizen above 60 years]
Free financial advisory services.
Free payable At-par cheques book.
Free Cash & cheque pick up facility.
Free demand drafts & pay orders.
Free collection of outstation Cheques only postage will be collected.
36
Free delivery of computerized statement of account. Free home banking

facility.
Critical illness insurance cover
All will come with average quarterly balance of Rs.10, 000 only.
5. Defense Salary Account:

Defense Salary account is a product designed keeping in mind how tough a life in the
Defense forces is. Not only does it come to you absolutely free, no minimum balance is
required either. The defense personnel can also access the entire UTI bank network,
including more than 2300 ATMs & 550 branch offices no matter where they are posted.
Banking Privileges:
At-par cheques Facility
As a Defense personnels job involves transfers across the country. With the at-par
cheque facility it will no longer be necessary to set up new bank accounts with each
transfer.
Additional Debit Card
Along with a free International Debit Card, They also get a free card for the joint
account holder. This means that their child or spouse also enjoy the same benefits of
banking with UTI.
Financial Advisory Services
The solutions provide by the UTI bank meet the twin goal of meeting their
requirements& to diversify & spread the risk of their investment portfolio, so that
they can look forward to an comfortable & worry-free life.
The investment plan may include:
Mutual Funds: Debt and equity

37
Bonds
UTI Bank Fixed Deposits
6. Trust/NGO Savings Account:

UTI Banks Trust Account is an effort to offer thoughtful banking for people who
spend their lives thinking of others. It is a complete solution for Trusts,
Associations, Societies, Government Bodies, Section 25 companies & NGOs, so
that the organizations can devote all of their time to their noble cause.
Features:
A Savings Account for their Trust with no minimum balance requirement.
A multi-city at-par cheque facility with no limit on clearing payments at centers
across the country wherever the is present.
Free Anywhere Banking across all the UTI branches & extension counters &
over all the UTI ATMs.
Free Demand Drafts or Pay Orders as & when required by the Trusts to remit
funds.
Free collection of cheques at outstation locations.
Monthly statement of account delivered at their doorstep.
Facility for collecting donations in the Trusts account through the UTI Banks
network of branches & extension counters across the country, as well as through
iConnect-UTIs Internet Banking facility.
Foreign Contribution Regulation Act[FCRA] Account: the FCRA account
enables approved organizations to receive foreign contributions for utilization in
their activities in India. The Bank will provide assistance in the process of
documentation & obtaining necessary approvals from the Ministry of Home
Affairs in New Delhi.
Free investment advice
38
Free Demat account.

Constituent Subsidiary General Ledger [SGL] account through which
investments in Government securities are carried out, it comes with a host of
value added services like concession in transaction & service charges.
An UTI Bank customer can donate funds to the Trust through the iConnect
internet facility. In such cases the Bank provides the details of the amount
donated & the donors name to the Trust so that they can issue the receipt to the
donor.
7. Azadi- No Frills Account:

It is a Savings Account that doesnt require a minimum balance.
The specifications required for qualifying for an Azaadi account are:
The sum total of all credit in the customers account does not exceed Rs.1
lacc during the financial year.
The customers do not intend to maintain an account balance higher than
Rs.50, 000 at any given instant.
The customer is unable to furnish full documentation as required ordinarily
for fulfilling of account opening norms.
Features:
Zero balance savings account: No need to maintain a fixed, mandatory
amount in the account.
Instant Welcome Kit: Handed over to the customer at the time of account
opening, the kit will consist of their account number, debit card, debit
card PIN, internet banking Pin & phone banking PIN.
International Debit Card: Which gives the customer access to over 1800
ATMs across the country, enabling the customer to make deposits or
withdraw cash at any time of day or night.
39
Phone banking & Internet banking: the customers can conveniently

check their balance, transaction details etc.anytime from anywhere over
phone or using the Internet, for no extra charge.
8. Resident Foreign Currency (Domestic) RFC (D) Account:

This account is specially designed keeping in mind the customers requirements when
they deal with foreign currency. The unnecessary worries that plague the customers
every time they travel abroad, worrying how to keep their foreign currency safe, if the
frequent fluctuations in forex market would affect them. This account also helps those
customers who regularly issue cheques 7 drafts for payment abroad.
Holding foreign currency is no longer restricted to the NRIs. For the first time
Reserve Bank of India has allowed Resident Indians to maintain foreign currency
accounts without any ceiling to it. This step is considered as a contribution of RBIs
gradual endeavor towards achieving Full Capital Convertibility.
PRODUCT FEATURES:
A Resident Foreign Currency (Domestic) Account, RFC (D), with UTI Bank
entitles the customer to maintain non-interest bearing account in four major
currencies (USD, EURO, and GBP & Japanese Yen).
There will be no ceiling on the balances held in the account.
Cheque books denominated in USD or GBP or EURO or YEN will be issued on
these accounts with 25 leaves. The cheques thereby branded as RFC (Domestic)
Account will not be presented in clearing & will be payable only at the issuing
branch.
The minimum balance for such a current account will be USD 100 or GBP 60 or
EURO 100 or YEN 20,000. There will be a penal charge of USD 5 or GBP 3 or
40
EURO 5 or YEN 1000 per quarter in case of failure to maintain the minimum
balance requirement.
LOANS:
A loan is a kind of advances made by a bank to its customer with or without
security .in the case of loan the bank makes a lump sum payment to the borrower under
a separate account or credits his existing account with the amount of loan sanctioned.
Such a loan is given for fixed period at an agreed rate if interest .the loan is required to
be repaid either in a lump sum at the end of the period or installment as per agreement.
SRAC (SETLITE RETAIL ASSET CENTER)
UTI BANK newly launched this center 8 th June 2006, in this center bank is providing
different kind of loans to the customers like;
Retail Loans OF UTI BANK:
Power Drive
Power Home
Asset power
Personal Power
Study Power
But in Hubli branch they are providing mainly three kinds of loans they are
a) Personal power b) Power home c) Mortgage loan.
41
This center located in PIZZA HUT near Desai cross, in this center six member are
working one is for personal loan another one is for housing loan and mortgage loan.
Another two members are working for document verification. This branch outsourced
one work that is generating leads for SRAC and it is also having recovery agency. In
this bank they are all using modern technology like internet, Xerox machine, printer etc
which is helpful for their work.
1. HOME LOANS
Power homes: UTI Bank home loan information
UTI Bank home loans have made it extremely easy to purchase a house or plot in
India
Home loans have never been so easy after India's license-permit Raj went for a toss.
Now the roles have been reversed with banks queuing up in front of potential customers
with a variety of offerings. The customer definitely is the king here.
UTI Bank offers loans for purchase of plot as well as construction of a house on it.
Loans are also offered for building a plot on land already owned. For purchasing old
houses or flat, the condition is that it shouldnt be not more than 15 years old.
Under the improvement / extension plan loans are also extended to conduct renovation
or repair works. The bank also takes up existing loans. Loans are also allotted against
property. The bank stipulates that the property should be situated with a radius of 50 km
from a UTI Bank branch.
Eligibility for home loan

The applicant should be 24 years of age when the loan commences. The loan period
should end with superannuation. For salaried employees, any permanent employee who
42
is in permanent government service or in any reputed firm having an UTI Bank is

eligible provided the net minimum salary is Rs 7,500.
The net minimum salary should be Rs 8,000 for those who dont have an account with
UTI Bank. For availing the loan, the UTI Bank allows clubbing of income of husband
and wife. For this the minimum aggregate net salary should be Rs 12,000, but the
housing loan would be provided only to one of the spouses.
For professionals, the minimum net annual income should be Rs 1.50 lakhs for
eligibility to avail loans. Doctors, engineers, dentists, architects, CAs, cost accountants,
company secretaries and management consultants are eligible. Clubbing the spouses
income is permissible, but the net aggregate income should be more than Rs 12,000 per
month. Here also, loan would be granted only to one person. The minimum age of the
applicant should be 24 years on commencement of loan and when the loan tenure ends,
the applicant should be less than 65 years.
For self-employed persons, clubbing of income of spouses is not permitted. The
net annual income should be Rs 1.50 lakhs. The age criteria are the same.
The repayment period should not exceed 20 years, including moratorium period, for
home acquisition plan/takeover of existing housing loan/takeover of existing housing
loan with additional refinance.
For pre-allotment bookings, repayment period should not be above 1 years. In
case of renovation and extension of existing property or loan against existing property,
repayment period should not exceed ten years.
The bank would not insist on collateral in case of flats or apartments being constructed
by reputed builders, provided the project is on the pre-approved list of any two of the
following housing finance firms: HDFC, SBI, LICHF, ICICIHF, HSBC and Citibank.
If the building is being constructed on a property already charged to the bank also no
collateral is required. For loan amounts of Rs 10 lakh and above, the bank would
conduct personal interviews of prospective customers. The property would have to be
43
fully insured against all possible hazards during the loan period in favor of the bank and
the cost of this should be borne by the borrower.
Disbursement of home loan

The loan would be directly disbursed to the builder, seller or the local authority or
supplier of materials. For takeover of loans, the pay order/DD would be credited to
account of the applicant.
The processing charge would be 1% of the loan amount. This would be collected along
with the loan application. For early closure of loan, like takeover of the loan by another
housing finance firm or bank, a charge of 2% of the principal outstanding amount is
charged.
For takeover of housing loans with additional refinance, the total exposure
should not exceed 85% of the loan. The stipulated maximum tenure is 20 years. Preallotment booking is offered only in case of properties being offered by state-run
agencies like housing boards. Private firms or promoters are barred.
Loans for renovation or extension of existing property and loans against existing
property are only offered to owners of existing property. In case of renovation or
extension of existing property maximum tenure is 120 months. For loans against
property, tenure is 10 years, with a diminishing interest of 12% per annum.
Documents required for home loan application

The Bank seeks Indian passport or voter identity card or driving license & a photograph
as proof of identity from customers. Salaried employees should submit income proof
like latest salary slip with all deductions or Form 16 with recent salary certificate. For
others, income tax returns of last 2 years and income computation certificate by a
chartered account are needed.
For both salaried customers as well as others, ration card, latest electricity bill, latest
44
telephone bill, passport/latest credit card bill should be submitted for residence proof,
apart from guarantor form. The UTI Power Home loan can be applied online
EMI CALCULATIONS:
FORMULA: EMI= (L*I)*(1+I) ^n / [(1+I) ^n-1]
Where L= Principal loan amount,
I= interest rate,
n = Loan period in months.
1. Amount: Rs.100000
Fixed interest rate: 11%
Tenure: 5 years.
EMI= (100000*0.009166)*(1+0.009166) ^60
[(1+0.009166) ^60)-1]
= 916.66*1.7289
0.7289
= Rs.2174.25
EMI =Rs.2174.25
2. Amount: Rs.100000
Floating Interest Rate: 13%
Tenure: 5 years
45
EMI = (100000*0.0108)*(1+0.0108)^60
[(1+0.0108) ^60 -1]
= 1083.33 * 1.90508
0.905083
= Rs.2280.26
EMI=Rs.2280.26
2. POWER DRIVE
Our Offering
Today, some of the worlds finest cars are available in India. But as expected, they come
with a price tag that put them beyond the reach of most people. Our Power Drive
scheme attempts to bridge that distance, by financing a major part of the cost of your
new car. So that you dont have to put the brakes on your ambition.
Terms
The maximum you can apply for is 85% of the cost of the vehicle, plus registration and
insurance costs, or 20 times your net monthly salary (or equivalent of net annual income
for self-employed persons), whichever is lower. You are charged a competitive interest
rate, and you can choose to repay your loan in 12, 24, 36, 48 or 60 Equated Monthly
Installments, which will be collected directly from your employer under the check-off
facility. For companies and self-employed persons, post-dated cheques will be collected.
Loan Amount
46
Cost of the vehicle plus registration and insurance OR 20 times of net monthly salary in
case of salaried persons / equivalent of net annual income as per latest IT Assessment
Order in case of others, whichever is less.
Margin
15% for Salaried Individuals
15% for self employed customers who have a previous banking relationship
and/or combined deposit of at least Rs. 50000/-, for period of six months
25% for self employed customers who do not have a previous banking
relationship
Parameters
Salaried
Others
Proof of Identity
Passport
identity
Card
Driving
Licence
Voter's Passport
Photograph
Firms
/
/ identity
Voter's Passport
Card
Voter's
/ identity Card / Driving
& Driving Licence & Licence & Photograph

Photograph
(For Partner signing the

documents)
&
Partnership Deed
Proof of Income
Latest
salary
showing
slip IT Returns for the Audited

all last
years
deductions or Form Computation
Financial
and Statements, IT Returns

of &
Computation
of
16 along with recent income for the last 2 Income for last 2 years
salary certificate.
years certified by a certified by CA.

CA
Proof
Residence
of Ration
Card/
Ration
Latest Electricity Bill/ Latest

Bill/
Card/
Municipal Registration
Electricity Certificate
Latest Electricity Bill /
47
Latest Telephone Bill/ Latest
Telephone
Bill/
Latest Telephone Bill
Passport/Latest Credit Passport/

Card Bill
Latest Credit Card

Bill
Bank Statement / Last 6 months
Last 6 months
Last 6 months
Pass Book where

salary/income
is
credited
Invoice
Yes
Yes
Yes
Guarantor Form
Yes
Yes
Yes
Eligibility
A) Salaried Individuals
i) Any individual who is in permanent service in Government / reputed companies and
having his / her salary account with our branch with a net minimum salary of Rs. 7500/OR
ii) Any individual with a minimum net monthly salary of Rs.10000/- p.m.
B) Self Employed Individuals
In case of self employed individuals, minimum net annual income should be Rs.2 lakhs.
The applicant in both cases should be above 24 years of age at the time of loan
commencement and 55 years or less at the time of loan maturity.
Interest Rates
48
The Bank offers very competitive Interest Rates on the Loan Amount. The current rate
of interest is 12.5%p.a. on a monthly reducing basis
Service Charges: 1% of loan sanctioned, payable upfront.
Pre-payment charges : No Pre-payment charges
Insurance: The vehicle will be comprehensively insured for the full amount
favoring the Bank.
Security
Hypothecation of the vehicle with Bank's charge being noted on the Registration
Certificate
3rd party guarantee of a person of satisfactory means not belonging to the

immediate family of the applicant
The branch will obtain collateral security such as units of UTI, NSCs, demat
shares, Bank deposits, Life Insurance policy and such other investments that are
acceptable to the Bank as under : For salaried persons 25% of the loan amount.
For others 50% of the loan amount.
EMI CALCULATIONS:
EMI= (L*I)*(1+I) ^n
[(1+I) ^n -1]
Amount= Rs.200000
Interest rate= 12.5%
Term= 4years.
EMI= (200000*0.0104)*(1+0.0104) ^48
[(1+0.0104) ^28 -1)]
= 2080*1.641
49
0.6431
= Rs.5314.33
EMI= RS.5314.33
3. LOAN AGAINST PROPERTY

The consumers can apply for this type of loan if they need funds to acquire new
property. A take over of their existing loan with refinancing is also possible.
Features:
Attractive interest rates
Balance transfer available with additional finance.
Door step service
There are four types of products
Loan against property- Residential
Loan against property- Commercial
Loan for purchase of commercial property
Take over of existing loan with additional refinance(balance transfer)
Eligibility:
The following are the eligibility criteria depending upon the income profile Salaried individuals
Any individual who is in permanent service in government or e reputed

company.
The applicant in all the cases should be above 24 years of age at the
time of loan commencement & up to the age of superannuation
Professionals
50
Professionals (i.e. Doctors, engineers, dentists, architects, chartered
accountants, company secretary & management consultants only) can apply.
The applicant in all the cases should be above 24 years of age at the time
of loan commencement & up to 65 years or less at the time of loan maturity.

Self employed individuals
Any individual filling income tax returns can apply.
The applicant in all the cases should be above 24 years of age at
the
time of loan commencement & up to 65 years or less at the time of loan

maturity,
Lease Rental Discounting (LRD)
All resident individuals can apply. The lessee must however be a
company as defined under the Companies Act, 1956. Funding will be done only
against ready commercial property. The same will be restricted to 85% of the net
present value of the future rentals or 50% of the value of the property whichever
is lower.
Loan Amount:
Limits for Asset power
Minimum-Rs 2 lacs
Maximum- Rs 150 lacs
Margin
20-30% in case of purchase of commercial property
40-55% in case of loan against residential/commercial property.
Documentation:
51
DOCUMENTS
Proof of identity
SALAREID APPLICANTS OTHER APPLICANTS

Voters ID card or driving Voters ID card or driving
license or PAN card or license or PAN card or
photo
credit
card
or photo credit card.
employees ID or defense or
police
Proof of income
or
department ID card.
Latest salary slip showing IT returns for the last 2
all
deductions
16with
Proof of Residence
government
or
recent
Form years & computations of

salary the income for the last 2
certificate.
years certified by an CA
Bank account statement or Bank account statement
latest electricity bill or latest or latest electricity bill or
mobile or telephone bill or latest
mobile
or
latest credit card bill or telephone bill or latest

insurance premium receipt credit
card
bill
or latest LIC policy or insurance
or
premium
Employers letter certifying receipt or latest LIC

the current mailing address policy
or
or latest NSC or other letter
certifying
similar
Employers
the
instruments current mailing address
indicating
the
existing
house
agreement.
addressor or latest NSC or other

lease similar
indicating the addressor

existing
Bank statement or pass Last 6 months
instruments
house
lease
agreement.
Last 6 months
book where salary or

income is credited
Guanranteetor Form
Lease agreement
Optional
Optional
Copy of lease agreement Copy of lease agreement
required for all lease rental required for all lease
52
discounting cases
rental discounting cases
EMI CALCULATIONS:
EMI= (L*I)*(1+I) ^n
[(1+I) ^n-1]
Amount= Rs.200000
Interest rate= 13%
Tenure=6 years.
EMI= (200000*0.0108)*(1+0.0108) ^72
[(1+0.0108) ^72-1]
= 2160*2.1671
1.1672
= Rs.4010.7
EMI= Rs.4010.7
4. LOAN AGAINST SECURITY

Overdraft against shares
Only individuals are permitted to apply
HUFs, limited companies, partnerships & sole proprietors are not eligible.
Facility available against more than 500 approved scrips.
Shares can be pledged from any Depository Participant across the country.
Overdraft against mutual funds
Only individuals are permitted to apply.
Maximum limit up to 50% of valuation.
Overdraft possible against more than 250 schemes.
Loan or Overdraft against NSC or KVP or LIC policy.
53
Option to either borrow lump sum or withdraw as & when required.

Loan or Overdraft against RBI Bonds Or US 64 Bonds
Option to either borrow lump sum or withdraw as & when required.
5. PERSONAL POWER
Features:
Loans for salaried & self employed individuals.
Special loans for Doctors, chartered accountants, engineers, architects, CS &
ICWA.
Loans are available from Rs.20000 to Rs. 20 lacs.
Repayment tenures from 12 to 60 months.
Attractive interest rates from 14.5% to 20%.
Free personal accident insurance cover with personal loan.
Loans can be used for any purpose with no questions asked regarding the end
use of the loan.
A balance transfer facility available for those who want to retire any higher cost
debt.
Loans available against repayment track record of any existing auto, personal or
home loan.
Loans available against proof of life insurance policy or premium receipts.
Zero balance SB account facility for personal loan customers
Simple procedure, minimal documentation & quick approval.
54
Documentation:
DOCUMENTS
Identity Proof
SALARIED INDIVIDUALS
Passport or voters card or driving license or PAN card &
Income Proof
photograph
Latest salary slip showing all deductions or Form 16 along
with current dated salary certificate(for salaried) or ITR(last
2 years) certified by a CA,balance sheet, profit & loss
Residence Proof
statement(for self employed)

Ration Card or passport or latest electricity bill or latest
telephone bill or latest credit card bill, bank statements, last 6
months bank statements.

of Latest bill or landline or mobile or WLL stating name of
Proof
telephone
borrower or address of borrower employment proof or

business continuity proof.
Eligibility:
Salaried Employees: Salaried doctors, CAs, Employees of select MNCs, public
& private limited companies, government sector employees including public
sector undertakings & central & local bodies.
Minimum age of applicant-21 years
Maximum age of applicant at loan maturity- 60 years.
Minimum employment- 2 years cumulative experience or 6 months for

salaried professional.
Minimum net monthly income- Rs.7000 per month.

55
Maximum loan available-Rs.10 lacs.
Special offer for salaried professional applicant.
Self- employed Doctors: that include self-employed MBBS or BDS & doctors
with higher qualification.
Minimum age of applicant- 24 years to 65 years at the time of loan
maturity.
Experience (doctor) - 2 years continuous employment.
Minimum annual income- Rs.2.40 lacs per annum gross receipts
(Rs.1.80 lacs per annum for select locations).
Maximum loan available- Rs. 20 lacs for self employed doctors.
Self employed Professionals: They include self employed chartered accountants,

engineers, MBA consultants, architects, company secretaries, cost accountants.
Age of the applicant-From 24 years to 65 years at the time of loan

maturity.
Minimum employment- 3 years continuous employment.
Minimum annual income-Rs 75000 per annum (RS 60000 for select
locations).
Maximum loan available-Rs 15 lacs for self employed.
Self employed normal: they include self employed sole proprietors, Partner &
directors in the business of manufacturing, trading 7 services.
Age of applicant- From 24 years to 65 years at the time of loan maturity.
Minimum employment- 3 years continuous employment
Minimum annual income-Rs.100000 per annum.

56
Maximum loan available-Rs. 10 lacs for self employed applicant.
EMI CALCULATIONS:
EMI= (L*I)*(1+I) ^n
[(1+I) ^n-1]
Amount=Rs.50000
Interest Rate=14.55
Tenure=12 months
EMI= (50000*0.01208)*(1+0.01208) ^12
[(1+0.01208) ^12-1]
= 604.166*1.1549
0.1549
= Rs.4504.5
EMI= Rs.4505.5
57
6. CONSUMER LOAN:
UTI Banks Consumer Power scheme will help the consumers to acquire consumer
durables at attractive interest rates.
Terms:
The consumers can apply for as less as Rs.25000 or as much as Rs2 lacs. The maximum
loan amount cannot exceed 85% of the cost of the durable, or 12 times their net monthly
salary(or equivalent of net annual income for self-employed persons),whichever is
lower. They are charged a competitive interest rate, & they can choose to repay their
loan in 12,24 or 36 equated monthly installments. If they are a salaried employee, their
equated monthly installments will be collected directly from their employer under the
check-off facility. For others, post dated cheques will be collected.
Eligibility:
A) Salaried Individuals who is in permanent service in government or reputed
companies with a net minimum salary of Rs.7500.
B) Self Employed Individuals In case of self employed individuals, minimum net
annual income of Rs 1 lacs.
The applicant in both cases should be above 24 years of age at the time of loan
commencement & 55 years or less at the time of loan maturity.
58
Documentation:
PURPOSE SALARIED
OTHERS
Proof
of Passport or voters Identity card or Passport or voters Identity
Identity
diving license & photograph.
card or diving license &
photograph.
of Latest salary slips showing all IT Returns for the last 2 years
Proof
income
deductions or Form 16 along with & computation of income for

recent salary certificate.
the last 2 years certified by a
CA.
of Ration card or Passport or latest Ration card or Passport or
Proof
Residence
electricity bill or latest telephone latest electricity bill or latest
Bank
bill or latest credit card bill.
telephone bill or latest credit
Last 6 months
card bill.
Last 6 months.
Yes
Yes
Yes
yes
statement
or
Pass
book
where
salary
or
income
is
credited
Invoice
Guarantor
Form
59
Loan Amount:
Minimum loan amount: Rs.25000
Maximum loan amount: Rs.200000
85% of the cost of the item or 12 times of the net monthly salary in case of salaried
persons or equivalent of net annual income as per latest IT Assessment order in case of
others, whichever is less.
Margin:
15% for salaried individuals
15% for self employed customers who have a previous banking relationship
&/or combined deposit of at least Rs.50000, for a period of six months.
25% for self employed customers who do not have a previous banking
relationship.
Interest rates:
A reasonable interest rate of 14.75% per annum is charged.
Service charges: 1% of the loan sanctioned payable upfront.
Prepayment charges: No prepayment charges.
Security:
Hypothecation of the article purchased.
3rd party guarantee of a person of satisfactory means not belonging to the

immediate family of the applicant.
60
Incase of non-salaried, the branch will obtain collateral security such as units of
UTI, NSCs, Demet shares, bank deposits, LIC policy & such other investments
that are acceptable to the bank for 25% of the loan amount.
7. EDUCATION LOAN:
Nature of loan:
The purpose of the product is to provide financial support to deserving students for
pursuing higher professional/technical education in India and abroad. The loan would
be provided to students who have obtained admission to career-oriented courses e.g.
medicine, engineering, management etc., either at the graduate or post-graduate level.
Quantum of Loan:
The quantum of finance under the scheme is capped at Rs. 7.5 lakhs for studies in India
and Rs. 15 lakhs for studies abroad, which would cover tuition fees, hostel charges (if
any), cost of books, etc. The minimum amount of loan would be Rs. 50,000/-.
Margin:
No margin for loans up to Rs. 4 lakhs. For loans above Rs. 4 lakhs, 5% margin for
studies within India and 15% for higher studies overseas.
Rate of interest:
At PLR, currently not exceeding 12% p.a.
Role of the Guardian:
61
The parent(s)/guardian of the student would be treated as a co-applicant of the loan.

His/her role would be, necessarily, like the primary debtor. He/she would be responsible
for the payment of the interest accrued on the loan account, prior to the commencement
of the EMIs.
Security:
Third Party Guarantee: It is necessary to have a 3rd party guarantee agreement in
place, especially in cases where the loan would be not be secured by liquid collaterals
(e.g. Units, FDs, NSCs, paid-up LIC policies, etc.). The guarantor should not be a close
relation of the student (i.e. parents/siblings/spouse, etc.) and should be good for 100%
of the loan amount. No 3rd party guarantee need be insisted upon for loan up to Rs. 4
lakhs. Computers and other related hardware financed under the scheme would have to
be, necessarily, charged to the Bank as primary security.
Collateral Security: Educational Loans sanctioned would need to be secured by
collateral securities, to the minimum extent of 100% of the loan amount.
Additional Security: In educational loans, since the ultimate exposure is on the
earning capacity of the student, post-completion of the course, it is essential to organize
a LIC policy assuring the life of the student, the sum assured being at least 100% of the
loan amount.
Repayment:
The loan would be repayable in a maximum of 84 installments from the
commencement of repayment. The 1st installment would be due 1 year after the
completion of the course or 6 months after getting a job, whichever is earlier.
62
However the total tenure of the scheme, i.e. from the date of the 1st disbursement
to the date of the last installment, should not exceed 12 years. The periodical
interest applied on the loan account, prior to the commencement of the actual
repayment, should be recovered from the account of the co-applicant, as and
when due.
8. TWO WHEELER LOAN:

Features:
Loans for salaried & self-employed individuals.
Attractive interest rates.
No income proof schemes available.
Loans available for UTI Bank Salary & Priority account holders.
Loans available from Rs.20000 to Rs.70000.
Loans tenure from 1 year to 3 years.
Eligibility:
Salaried Individuals.
Age (commencement & Termination) - Between 18 years to retirement

age.
Minimum Income- Rs.60000 to Rs.75000 per annum depending on the

two wheeler model.
Income eligibility-As per latest salary slip or Form 16.
Margin-15% to 20% depending on the two wheeler model.
63
Self-Employed Individuals
Age (commencement & Termination) - Between 21 years to 60 years.
Minimum Income- Rs.60000 to Rs.75000 per annum depending on the

two wheeler model.
Income eligibility-As per latest ITR.
Margin-15% to 20% depending on the two wheeler model.
Documentation:
ID Proof.
Photograph.
Income Proof.
Legal documents & Application form.
Residence Proof.
Dealer invoice.
Bank statement for last 3 months.
RTO forms.
Interest Rate:
The current rate of interest is 17% per annum on a monthly reducing basis.
Processing Fee:
2% of loan amount.
Pre-payment charges:
4% of the balance outstanding
64
Insurance:
The vehicle will be comprehensively insured for the full amount favoring the
Bank.
Additional Features:
1. For loans with margin of 30% or above.
2. Income Proof documents need not be provided.
3. Clubbed income of 2 individuals to be a minimum of Rs.7000.
4. Clubbed income in the following relationships.
Father & son or daughter
Mother & son or daughter.
Husband & wife.
Salary account scheme: This scheme is only for salary account customers of UTI Bank
only.
For salary account with credit of Rs.10000 & above.
For loans with income margin of 10% or above.
Identity, income & residence proof need not be provided.
Last 3 months Bank statement.
Priority Account Scheme Features: this scheme is only for Priority Accounts customers
of UTI Bank only.
100% of the on road price is financed.
Identity, income & residence proof need not be provided.
Last 3 months Bank statement.
65
ABOUT THE COMPETITORS:

ICICI BANK
ICICI Bank is India's second-largest bank. The Bank has a network of about 573
branches and extension counters and over 2,000 ATMs. ICICI Bank was originally
promoted in 1994 by ICICI Limited, an Indian financial institution, and was its whollyowned subsidiary.
ICICI was formed in 1955 at the initiative of the World Bank, the Government of India
and representatives of Indian industry. The objective was to create a development
financial institution for providing medium-term and long-term project financing to
Indian businesses.
In the 1990s, ICICI transformed its business from a development financial institution
offering only project finance to a diversified financial services group offering a wide
variety of products and services, both directly and through a number of subsidiaries and
affiliates like ICICI Bank.
66
In 1999, ICICI become the first Indian company and the first bank or financial
institution from non-Japan Asia to be listed on the NYSE. In 2001, ICICI bank acquired
Bank of Madura Limited.
ICICI Bank set up its international banking group in fiscal 2002 to cater to the cross
border needs of clients and leverage on its domestic banking strengths to offer products
internationally.
Today, ICICI Bank offers a wide range of banking products and financial services to
corporate and retail customers through a variety of delivery channels and through its
specialised subsidiaries and affiliates in the areas of investment banking, life and nonlife insurance, venture capital and asset management.
LIC HOUSING FINANCE LTD:

LIC Housing Finance Ltd. is one of the largest Housing Finance companies in India.
Incorporated on 19th June 1989 under the Companies Act, 1956, the company was
promoted by LIC of India and went public in the year 1994. The Company launched its
maiden GDR issue in 2004. The Authorized Capital of the Company is Rs.1000 Million
(Rs.100 Crores) and its paid up Capital is Rs.850 Millions (Rs.85 Crores). The
Company is recognized by National Housing Bank and listed in the NSE & BSE and its
shares are traded only in Demat format. The GDR's are listed on the Luxembourg Stock
Exchange.
The main objective of the Company is providing long term finance to individuals for
purchase / construction / repair and renovation of new / existing flats / houses.
The Company also provides finance on existing property for business / personal
needs and gives loans to professionals for purchase / construction of Clinics / Nursing
Homes / Diagnostic Centres / Office Space.
The Company possesses one of the industry's most extensive marketing network in
India : 6 regional offices and 115 area offices backed by chain of camp offices
67
nationwide, an offshore office in Dubai and Registered and Corporate Office at

Mumbai. It has a team of 875 dedicated employees.
Today the Company has a proud group of over 8,00,000 prudent house owners who
have enjoyed the Company's financial assistance. The Company has so far disbursed
Rs.250 Billion (Rs.25000 Crores). The Company also lends to Corporate Bodies and
Companies under different schemes for purchase / construction of office premises for
their own use, construction of staff quarters and also for onward lending to meet the
requirements of employees, and also to Builders and Developers for residential and
commercial projects.
In 2005-06, for the fifth year in a row, the Company received the 'AAA' credit
rating from CRISIL, indicating the highest level of safety. The Company has been
growing steadily since inception both in terms of business & profits.
COMPARISON OF UTI BANKS HOME LOANS WITH

OTHER TWO BANKS/FINANCIAL INSTITUTIONS.
PURPOSE:
UTI BANK
ICICI BANK
LIC HOUSING
FINANCE
Purchase of a plot & Purchase of Land.
Purchase of Land.
construction of the
Construction.
property of a house
thereon.
Construction.
Composite Loan.
a Purchase of Ready Built

House/Flat.
house on plot of land
Construction
of
already owned.
Purchase of a new
house or flat.
Loan against
Property.
Construction of Non
Purchase of Ready
Built House/Flat.
Repairs and
Renovations.
Purchase Consumer
Durables.
68
Residual age of the
Residential Premise (for
property should not
Professionals).
be less than 30 years
To extend/improve
old.
existing Home.
Extension or
Lease Rental
renovation or repair
of a house already
owned by self.
Discount.
Take over of existing
Loan against
Property.
Purchase/constructio
n of Non Residential
Premises.
loans.
loans.

housing loan(balance
transfer)
Pre allotment
booking finance.
Loans take over with

additional refinance.
Loan to NRI for

purchase of ready
residential property
only.
Purchase of
residential plots
only.
Inference:
All the above Banks/Financial Institutions provide loan for Construction, Purchase of
Land, and Extension/improvement.
69
Apart from these ICICI Home Finance Co. Ltd, LIC Housing Finance Ltd provide loan
against Property and also for Non Residential Premises
MINIMUM LOAN AMOUNT:

UTI BANK
ICICI BANK
LIC HOUSING
FINANCE
Rs.1 lakh
Rs.2 lakhs
Rs.50000
Inference:
LIC HFL has fixed least Minimum Amount of Loan of Rs.50000 followed by UTI
Bank with Rs.1 lakh.
MAXIMUM LOAN AMOUNT:

UTI BANK
Upto Rs.5 crores
ICICI BANK
LIC HOUSING
Rs. 3 crores
FINANCE.
Rs. 1 crore.
Inference:
70
COMPARISON OF RATE OF INTEREST:

UTI Bank
ICICI Bank
LIC housing finance
Fixed: 13%
Fixed: 14%
Fixed: 12%
Floating: 11%
Floating:11.5%
Floating: 11.5%
Inference:
All the banks maintain a fixed rate of interest.
FACTORS CONSIDERED WHILE ACCESING THE

REPAYMENT CAPACITY:
UTI Bank
ICICI Bank
Age
LIC housing finance
Age
Income
Bank statement
Salary
and Non Professionals-
3 years IT returns
Income papers
Occupation
Professionals
Up to 65 years.
Age
Net salary
IT returns
Salaried
class-58 years.
Central
Government
Employees-60 years.
Income
Occupation
Inference:
71
All the above Banks/Financial Institutions consider the same factors like Age, Income
and Occupation. ICICI bank considers 65 years for Professional & Non professionals,
58 years for salaried class & 60 years for central government employees.
COMPARISON OF MAXIMUM PERIOD:

UTI Bank
ICICI Bank
LIC housing finance
20 years
20 years
25 years
If the applicant is nearing
60 years of age then a 5
year term is given to
him.
Inference:
Both UTI & ICICI bank have a 20 years period but LIC HFL has 25 years period with
specifications for the applicant i.e if he is nearing 60 years of age then a 5 year term is
given to him.
72
PERCENTAGE OF FUNDING:
UTI Bank
ICICI Bank
LIC housing finance
75% for plot purchase
i.
Plot purchase-75%
85% of cost of project
85% for construction.
ii.
No Income Proof and
i.e plot purchase &
Lease Rental
construction.
Discount-50%
iii.
Construction/Purchase
of Ready Built
House/Flat-85%
iv.
Non Residential
Premises-
Doctors-85%
CAs/Engineers/ MBA
consultants-50%.
Inference:
73
ICICI Home Finance Co. Ltd has fixed different percentages based on purpose whereas
LIC HFL has fixed as 85% of cost of Project. UTI Bank has 74 % for plot purchase &
85 % for construction.
DOCUMENTATION:
UTI Bank
ICICI Bank
Voters identity
Photograph
For salaried:
All Legal
documents.
Photograph.
Application with
photographs.
Sale deed
income proof like
Age proof.
Records of rights.
latest salary slip
Address proof.
Mutation entries.
Last six month
Site map.
Encumbrance
with all
deductions or
Banks statements.
Form 16.
LIC housing finance
Processing Fee
For others: IT
cheque.
returns of last 3
Salaried class:
years & income

computation by a
CA.
Latest
Salary-slip.
certificate.
Estimate.
Approved plan
Building
74
Ration card.
Form 16.
Latest electricity
Business class:
bill.
Last 3 years Income
Valuers report
Latest telephone
Tax returns (self and
Salary
bill.
business).
Passport/ latest
credit card bill.
Residence proof.
Guarantor Form.
Last 3 years Profit
permission.
certificate/proof
of income.
/Loss and Balance

Sheet.
Inference:
The documentation is required for sanctioning Home Loans is same for all banks. But
LIC HFL is giving more importance for legal documents compared to other Banks.
SECURITY OF LOAN:
UTI Bank
ICICI Bank
Collateral security
Collateral security
LIC housing finance

Equitable Mortgage.
Guarantor (if necessary).
Inference:
All the above Housing Finance Institutions will have the same type of security but LIC
also sometimes considers the security of the guarantor.
75
PROCESSING FEES:
UTI Bank
ICICI Bank
LIC housing finance
1% of the loan amount
No processing fees only
0.5% to 1% of the loan.
administration fees are

collected i.e. 0.5618% of
the loan amount.
Inference:
REPAYMENT METHOD:
UTI Bank
ICICI Bank
LIC housing finance
PDC
PDC
EMI
Auto debit
ECS
PDC
EMI
EMI
ECS
Inference:
All the Housing Financial Institutions are collecting their loan amount in EMIs, so it
goes very easy for the customer who is taking loan. And again EMI is calculated on the
basis of loan amount, service left of the employees, tenure. UTI bank does not have
ECS facility (electronic clearance service) but it does have auto debit facility available.
MODE OF REPAYMENT:
UTI Bank
ICICI Bank
Post Dated Cheques.
Post Dated Cheques.
LIC housing finance

Post Dated Cheques.
76
Standing Instruction
Standing Instruction
Deduction at source
Inference:
LIC HFL has an additional repayment mode i.e. Deduction at Source (DAS), thus
making the customer to repay his loan more conveniently.
FEES CHARGED TO SWITCH ON TO NEW INTEREST

RATE:
UTI Bank
ICICI Bank
LIC housing finance
Rs.5000 is charged.
2.25% is charged
2% of the outstanding
loan amount.
Inference:
ICICI Bank is charging more fees to switch on to new Rate of Interest compared to
other institutes, while UTI Bank is charging Rs.5000 fees for the new interest rate.
FEES CHARGED FOR PART PRE PAYMENT:

UTI Bank
ICICI Bank
LIC housing finance
77
No fees is collected
2% on the principal
3% of the outstanding loan
outstanding on full
as on the date of
prepayment.
repayment.
Inference:
customers.
INSURANCE OF PROPERTY:
UTI Bank
ICICI Bank
LIC housing finance
Insurance is providing free
Only accidental is provided
Not mandatory. General
for both accidental as well
insurance is provided
as for property up to Rs.5
premium is paid by the
lakhs.
owner.
Inference:
UTI Bank provides insurance for both accidental as well as property where as
ICICI bank provides for only accidental.
78
Methodology:
The method adopted was Structured Interview method, where the
information is collected by direct interaction with the staff of financial
institutions/banks and my external guide and also from the manuals, broachers and from
web sites.
A questionnaire had been designed to find out the awareness level among the
people of Hubli & Dharwad.
Source of data collection:

Primary source:
The method adopted was personal interview method to collect the required
information. Personal interview and discussion was made with the manager.
A questionnaire was designed to find out the awareness level among the people
about UTI Bank loans.
Secondary source:
Manuals, Brochures and Websites.
a. Geographical Area:
79
The areas selected for the study are the twin cities of Hubli & Dharwad. The UTI
Banks Satellite Retail Asset Centre was launched in Hubli in 2006, so we can say it is
fairly young in this aspect. So it was relevant to find out the awareness among the
people of the twin cities about the loans which are being provided by UTI Bank in
Hubli.
b. about the company chosen for the study:
UTI bank has carved a niche for itself in Hubli in a very short period of time. It is doing
very well in the deposits as well as in the assets part of its banking but as the loans
section was recently introduced in Hubli it still needs time to device proper plans to
create awareness among the people about its products.
c. Sampling population:
Our sampling Population includes the salaried class, the professionals & the self
employed. We are specially targeting these class of people because they are the ones
who go in for the retail loans in a big way.
d. Data collection:
A questionnaire was designed to find out the awareness among the people about the UTI
Banks Loans.
e. Mode of data collection:
Personal interview was conducted with the officials of the organization, to gather the
information about regarding the various parameters involved in accessing the home
loans.
A questionnaire was also designed to find out the awareness level about the loan
products of UTI Bank.
f. Sample Size:
80
The sample size is 100. Convenient sampling method has been used while collecting the
data.
FINDINGS:
All the three Banks/Financial Institutions provide loan for Construction,
Purchase of Land, and Extension/improvement.
Apart from these ICICI Home Finance Co. Ltd, LIC Housing Finance Ltd
provide
loan against Property and also for Non Residential Premises.
LIC HFL has fixed least Minimum Amount of Loan of Rs.50000 followed by
UTI Bank with Rs.1 lakh.
All the banks maintain a fixed rate of interest.
All the three Banks/Financial Institutions consider the same factors like Age,
Income and Occupation. ICICI bank considers 65 years for Professional & Non
professionals, 58 years for salaried class & 60 years for central government
employees.
81
Both UTI & ICICI bank have a 20 years period but LIC HFL has 25 years period
with specifications for the applicant i.e if he is nearing 60 years of age then a 5
year term is given to him.
ICICI Home Finance Co. Ltd has fixed different percentages based on purpose
whereas LIC HFL has fixed as 85% of cost of Project. UTI Bank has 74 % for
plot purchase & 85 % for construction.
The documentation is required for sanctioning Home Loans is same for all
banks. But LIC HFL is giving more importance for legal documents compared
to other Banks.
All the above Housing Finance Institutions will have the same type of security
but LIC also sometimes considers the security of the guarantor.
All the Housing Financial Institutions are collecting their loan amount in EMIs,
so it goes very easy for the customer who is taking loan. And again EMI is
calculated on the basis of loan amount, service left of the employees, tenure.
UTI bank does not have ECS facility (electronic clearance service) but it does
have auto debit facility available.
LIC HFL has an additional repayment mode i.e. Deduction at Source (DAS),
thus making the customer to repay his loan more conveniently.
ICICI Bank is charging more fees to switch on to new Rate of Interest compared
to other institutes, while UTI Bank is charging Rs.5000 fees for the new interest
rate.
customers.
82
UTI Bank provides insurance for both accidental as well as property where as
ICICI bank provides for only accidental.
The awareness level about the UTI Banks loans is 43%.
CONCLUSION
The bottom line of comparing loans from various Banks/ Housing Finance
Institutions is almost always the interest rate; competition is narrowing down the cost
differential between companies. This means that choosing a loan product has become
even more difficult as prospective borrowers have to draw comparisons across the entire
matrix of add-on benefits and services provided by lending institutions.
The growth of Retail and Consumer lending in India must be seen as arising
from a strong growth in incomes amongst the middle class and the more affluent
segments, leading to changes in the consumer behavior.
The increase in the income of the middle class in India has made a significant
impact on the Home Loan Products as well. Many banks are competing hard to capture
83
the market. While smaller institutions are giving a run for its money by branching out to
the hinterland, big players like ICICI & LIC HFL are capturing the major market share.
UTI Banks home loans, which traditionally concentrated most on the
salaried class, are also widening its customer base. Its more customer oriented approach
is yielding rich benefits for the organization.
UTI Bank is expanding its network by adding new offices in new cities.
UTI Bank is providing a very good service to the customer and it can be
termed as satisfactory.
But I feel that, it can improve its performance and service by being more
flexible and alert in regard to the customers requirments.
Executives in this organization are very good and co-operative.
To conclude, the overall performance of the UTI Bank Is satisfactory.
Though the study was done for a short period it was a very good experience
and learning experience.
RECOMMENDATIONS:
Keeping in mind the competitiveness of the other banks & financial institutions
UTI Bank should also provide loans for non-residential premises.
Based on the purpose UTI Bank should customize their percentage of funding
for the project.
UTI Bank should try to cut down the processing fees as several Banks &
financial institutes have slashed their processing fees.
The documentation process should be made easy as most people feel it as it is
very complex. They should specify all the legal documents required for the
processing of the loan in advance.
84
UTI should implement the Electronic Clearance System [ECS] as it is a

convenient way for the customers to pay their monthly EMI.
They should try to cut down the fees charged to switch on to the new interest
rate as it is a burden for the customers.
As the awareness level about the loan products of UTI Bank is 43% in the twin
cities. The Bank has to develop new strategies to create awareness about the
different products of UTI Bank
Different segments of market have to be approached with different strategies and
Medias.
Building good relationship and rapport with existing customer.
Attending regular trade fairs.
LIMITATIONS:
The study is concentrated on Home loans only.
Constraints to get access to the employees for information due to their busy
schedule. Many of the employees were being transferred to other branches so it
was a really very tough getting the relevant information from them.
The comparison is limited to just three banks/ financial institutions.i.e. UTI
Bank, ICICI Bank & LIC Housing Finance corporation Limited because it was
very hard to get the relevant data from them.
85
Questionnaire
I, Miss. Pooja Sadhani, a student of 2nd semester of KLESs IMSR is
making a thorough study on UTI BANKS Satellite Retail Asset Centre for loans. I request
you to please co-operate & fill in your opinion to facilitate our study. Your response is crucial & is
used only for study purpose.
1. Name of the bank that you most frequently deal with.
SBI
Canara Bank
Syndicate Bank
ICICI bank
UTI Bank
HDFC Bank
LICO Bank
Others please specify____________
86
2. What was the driving factor that made you to become a part of the bank?
Convenience
Service
Interest Rate
Loan Facilities
3. Are you satisfied with the existing bank?
Yes
No
4. Do you have any existing loan?
Yes
No
5. If yes, Name the type of loan________________

Name of the bank________________
The interest rate _______________
6. Are you aware of UTI Banks Satellite retail Asset Centre for Loans?
Yes
No
7. If yes, how did you come to know about this centre?
Newspaper & magazines

Hoardings
Friends & Family
Internet
87
8. What are the services that you are aware of UTI banks Satellite Retail Asset Center?
Personal loans
Housing loans
Car loans
Top up
Take Over
All the above
None of these
9. Are you aware that UTI Bank is giving certain attractive packages in personal loan
such as cash back offer & free personal insurance cover?
Yes
No
10. Are you interested in availing the services of UTI Bank?
Yes
No
Personal Information
Name:
Age:
20-35 years
36-45 years
46-55 years
56 & above
Gender:
Male
Female
Profession:
Income per month:
Rs.10000-Rs.20000
Rs.21000-Rs.30000
Rs.31000-Rs.40000
Rs.41000 & above
88
Valuable time.
Thank You for your
89
HYPOTHESIS:
1. Awareness about the loans is directly dependant with the place.
Inference:
As the Pearson Chi- Square test value is less than 0.05 both the variables are dependent
on each other. So we can say that the place is directly dependent with the awareness
about the loans.
90
2. The profession of the respondent is dependent on the awareness about the loans
Inference:
The Pearson Chi-square value is less than 0.05 so we can say that the profession of the
respondent is dependent on the awareness of the loans. Professionals & self employed
are more aware about the loan products as compared to the service people.
91
3. <= 45% of the respondents are aware about the Loan products available in UTI Bank.
Inference:
We can conclude that 43% respondents are aware about the loan products of UTI Bank.
So this hypothesis is accepted.
92
4. How did you come to know about this centre?

News paper &
magazines
Hoardings
15
Friends & family

1
Internet
24
Inference:
Of the 43 respondents who are aware of the loans, majority of them have got the
information from their family & friends.About 15 respondents are aware through the
medium of newspapers & magazines & the remaining 3 as well as 1 respondents are
aware through internet & hoardings respectively.
93
5. What are the services you are aware of UTI Banks loan products.
I
Per
loan
Housing
loan
5
Car loan
3
Top up
Take
over
0
All the
loans
0
34
None
57
Inference:
Of the 43 respondents who know about the UTI loans, 34 respondents are aware of
all the loan products. 5 respondents are aware of the personal loans, 3 & 1
respondents are aware of the housing & car loans respectively.
94
BIBLOGRAPHY:
BOOKS:
Commercial Banking Published by ICFAI.
WEBSITES:
www.google.com
www.utibank.co.in
www.icici.co.in
www.lichfl.co.in
www.wikipedia.co.in
95

Comparative Analysis of Home Loan in UTI Bank

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Comparative Analysis of Home Loan in UTI Bank

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Executive Summary

KLESs Institute of Management Studies and Research

KLESs Institute of Management Studies and Research

Source of data collection:

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Extending loans to individuals and businesses

Facilitating money transactions such as wire transfers and cashiers checks

Issuing credit cards, ATM cards, and debit cards

Storing valuables, particularly in a safe deposit box

Cashing and distributing bank rolls

Consumer & commercial financial advisory services

Pension & retirement planning

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retail banking, dealing directly with individuals and small businesses;

business banking, providing services to mid-market business;

corporate banking, directed at large business entities; and

investment banking, relating to activities on the financial markets.

banks are profit-making, private enterprises. However, some are owned by

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KLESs Institute of Management Studies and Research

KLESs Institute of Management Studies and Research

Number of banks Authorised capital Paid-up Capital

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KLESs Institute of Management Studies and Research

banking, mortgages and investment services are expected to be strong. M&As,

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TYPES OF RETAIL BANKING:

Commercial bank has two possible meanings:

Community development bank are regulated banks that provide financial

Private banks manage the assets of high net worth individuals.

Savings bank accept saving deposits.

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CATEGORIZATION OF RETAIL BANK SERVICES:

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RETAIL LENDING: CHANGING DIMENSIONS

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RETAIL LENDING: REASON FOR RESURGENCE

A paradigm shift from corporate lending

corporates. Having no provisioning requirement or priority sector lending obligation &

Differential Interest Rate

Increased Middle Class Demand

Despite slowdown in the economy, the purchasing power continued to be strong as

ABOUT UTI BANK:

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KLESs Institute of Management Studies and Research

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ORGANIZATION CHART OF UTI BANK

BANK PROFILE UTI BANK BRANCH OFFICE HUBLI

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UTI bank has 5 departments

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FUNCTIONS OF MARKETING DEPARTMENT

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FUNCTIONS OF CLEARING DEPARTMENT

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1. Basic services: basic services include

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1. Easy access account