A

SUMMER TRANNING
PROJECT REPORT
ON
“COMPARATIVE ANALYSIS OF HOME
LOANS AND ITS OPEARTIONS”

U
SUBMITTED IN PARTIAL FULFILLMENT
OF THE
REQUIREMENT OF MASTER OF
BUSINESS ADMINISTRATION
(M.B.A)

2009-2011

SUBMITTED BY SUBMITTED TO
Abhishek sharma Mr.SurjitBishnoi
MBA II year (III SEM) H.O.D.

Shekhawati Institute Of Management

Behind Circuit House ,Sikar

DECLARATION
I Abhishek sharma declare that this project report
“Comparative Analysis of Home Loans And It’s
Operations” is based on my project study. This project
report is my original work and this has not been used for
any purpose anywhere.

Abhishek Sharma

M.B.A. IIIrd Sem.

PREFACE
Realizing that the practical examination is an academic for all round development
of a personal. As a part of the course Curriculum Application, the student has to
undergo practical training for one and half month.

The object of training is to provide the student with an insight to the practical
aspects of organization working and environment. Such type of training helps
students to work on real industrial environment, and to gain practical
knowledge and build confidence.

I have much pleasure in submitting the project report on

“COMPARATIVE ANALYSIS OF HOME LOANS AND ITS
OPERATIONS AND MARKETING” taken at UNION BANK,
JAIPUR.
 Acknowledgement

It is with great of gratitude and happiness that I present a thoroughly made project on the
Comparative Market Analysis of Home Loans and its day to day operations offered by
UNION BANK and other major players in this sector.

This project is an insight into the current banking scenario of country in Home Loan
Division. In the completion of the project many people have worked with me to carry
forward my project. I express my deep sense of gratitude to all that have directly or
indirectly helped in the successful completion of the project.

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

whose guidance provide me to experience the practical working and understanding, and
all the UNION Bank staff for their interest, untiring efforts, unfailing courtesy,
encouragement and cooperation in making a project a success.

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

Shekhawati Institute of Management, Sikar as my Faculty Guide or Mentor, and all
for providing the precious knowledge in regard of my project.

There can possibly be no claim to the perfection in the project. In the case I request to
bear with any errors, omissions or discrepancies that may have crept in despite due care
and caution on my part.
 Executive summary

Real estate in India is currently one of the hottest investments options in Asia. A recent
survey of the real estate scenario acknowledge the Indian metropolis of Mumbai,
Bangalore and New Delhi as the top three investors' choices for real estate investment in
Asia. But there were concerns mainly related to the availability of necessary funds for
investment and in the more recent times, the boom in the real estate market opened the
doors for a host of realty funds from financial institutions. Prior to five years, the real
estate segment in India was neither organized nor were there too many large institutions
in the construction industry. But now with an organized finance sector and with the
increase in transparency levels, it has become easier to create financing vehicles.
The decrease in housing loan interest rates and an increase of disposable income has
contributed largely to an increased demand in the residential segment. In spite of a rise in
home loans interest rates and qualitative sanctions being levied by the RBI on banks,
buying interest has not waned because home loans are still cheaper than ten years ago.
The retail markets are also undergoing a defining change with the introduction of larger
retailing formats. The financial institutions also wasted no opportunity in tapping the
fund requirement catering to the inflow of potential buyers in the retail sector. While
most funds were initially floated by financial Institutions or banks such as SBI, LIC,
HDFC, ICICI Bank, UNION Bank of India and IDBI Bank, and even retailers have
now entered the real estate sector for creating more retail facilities and have been hugely
successful.

As the realty prices in India skyrockets, housing complexes mushrooming and city
landscapes becoming unrecognizable, the growth across all real estate segments and
experts estimate that demand will remain steady at the currently high levels because of
the improving economic environment and the real estate sector is expected to grow 30%
every year. This rising property prices encourage banks and financial institutions to lend
more with the increase in collateral values. Although the home loan providers have hiked
their rates twice in less than three months, home loans continue to be nearly 45 per cent
cheaper than what they were in early 2001. Because if statistics are referred to, the
interest rates which now range between 9-10 per cent, are still much lower than what they
were ten years ago, at 16-17 per cent.
In addition to funds being raised by the Indian financial institutions like HDFC, ICICI
and IDFC abroad, the money could be used to develop business and IT parks and
townships. A study has revealed that as many as one million homes are financed every
year in India now with an estimated home mortgages market of US$ 10.7 billion -
contributing to India's phenomenal realty prospect.
 Contents
INTRODUCTION...............................................................................................................
...................
ABOUT UNION BANK OF
INDIA...........................................................................................
MISSION AND CORE
VALUES.................................................................................................
SHAREHOLDING PATTERN………………………………………..
…………………………
BOARD OF
DIRECTORS………………………………………………………………………
MILESTONES……………………………………………………………………
……………...

INDUSTRY
SCENARIO........................................................................................................................
HOME LOAN IN INDIA………………………………………….
…………………………….
TYPES OF HOME LOANS……………………………………….
…………………………….
TAX BENEFITS ON HOME LOANS…………………………….
…………………………….

UNION BANK – POWER HOME…………………………………..

……………………………………………………………….
OVERVIEW………………………………………………………………………
…………….
LOAN
PURPOSES……………………………………………………………………………...
ELIGIBILITY……………………………………………………………………
……………...
 DOCUMENTATION……………………………………………………………
……………...
LOAN
AMOUNT……………………………………………………………………………….
TERMS AND
CONDITION……………………………………………………………………
FAIR PRACTICE CODE FOR
LENDERS…………………………………………………….

OPERATION FLOW OF HOME

LOANS……………………………………………………………
ELIGIBILITY
CALCULATION………………………………………………………………..
EMI
CALCULATION…………………………………………………………………………..
LOAN TO VALUE
TABLE……………………………………………………………….........
HIERARCHY OF
OPERATIONS………………………………………………………………

COMPARATIVE ANALYSIS OF HOME LOANS

FEATURES OFFERED BY OTHER
BANKS………………………………………………….
Research methodology

ANALYSIS AND FINDINGS……..

…………………………………………………………………….

RECOMMENDATIONS AND SUGGESTIONS…...

…………………………………………………
SUMMARY AND CONCLUSION……….
…………………………………………………………….
APPENDIXES……………………………….
………………………………………………………….

Questionnaire………………………………………………………………
…………...

REFERNCES AND BIBLIOGRAPHY…...

……………………………………………………………
Overview of Union Bank Of India

About Union Bank:

The dawn of twentieth century witnesses the birth of a banking enterprise par
excellence- UNION BANK OF INDIA- that was flagged off by none other than the
Father of the Nation, Mahatma Gandhi. Since that the golden moment, Union
Bank of India has this far unflinchingly traveled the arduous road to successful
banking........ a journey that spans 88 years. We at Union Bank of India, reiterate
the objective of our inception to the profound thoughts of the great Mahatma...
"We should have the ability to carry on a big bank, to manage efficiently
crores of rupees in the course of our national activities. Though we have
not many banks among us, it does not follow that we are not capable of
efficiently managing crores and tens of crores of rupees."

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

identity as a leading, innovative commercial Bank, with a proactive approach to
the changing needs of the society. This has resulted in a wide gamut of products
and services, made available to its valuable clientele in catering to the smallest of
their needs. Today, with its efficient, value-added services, sustained growth,
consistent profitability and development of new technologies, Union Bank has
ensured complete customer delight, living up to its image of, “GOOD PEOPLE
TO BANK WITH”. Anticipative banking- the ability to gauge the customer's
needs well ahead of real-time - forms the vital ingredient in value-based services
to effectively reduce the gap between expectations and deliverables.

The key to the success of any organization lie with its people. No wonder, Union
Bank's unique family of about 27,772 qualified / skilled employees is and ever will
be dedicated and delighted to serve the discerning customer with
professionalism and wholeheartedness.

Union Bank is a Public Sector Unit with 55.43% Share Capital held by the
Government of India. The Bank came out with its Initial Public Offer (IPO) in
August 20, 2002 and Follow on Public Offer in February 2006. Presently 44.57 %
of Share Capital is presently held by Institutions, Individuals and Others.

Over the years, the Bank has earned the reputation of being a techno-savvy and
is a front runner among public sector banks in modern-day banking trends. It is
one of the pioneer public sector banks, which launched Core Banking Solution in
2002. Under this solution umbrella, All 2805 Branches of the Bank have
been 1200 networked ATMs, with online Telebanking facility made available to all
its Core Banking Customers - individual as well as corporate. In addition to this,
the versatile Internet Banking provides extensive information pertaining to
accounts and facets of banking. Regular banking services apart, the customer
can also avail of a variety of other value-added services like Cash Management
Service, Insurance, Mutual Funds and Demat.

The Bank will ever strive in its endeavor to provide services to its customer and
enhance its businesses thereby fulfilling its vision of becoming “THE BANK OF
FIRST CHOICE IN OUR CHOSEN AREA BY BUILDING BENEFICIAL AND
LASTING RELATIONSHIP WITH CUSTOMERS THROUGH A PROCESS OF
CONTINUOUS IMPROVEMENT”.
 Our Mission and Values

Our Mission

• Customer Service and Product Innovation tuned to diverse needs of individual

and corporate clientele.

• Continuous technology up gradation while maintaining human values.

• Progressive globalization and achieving international standards.

• Efficiency and effectiveness built on ethical practices.

Core Values

• Customer Satisfaction through

• Providing quality service effectively and efficiently

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

• Periodic Customer Service Audits

• Maximization of Stakeholder value

• Success through Teamwork, Integrity and People

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

•
 DISTRIBUTION OF SHAREHOLDING HOLDING AS ON 30.06.2010

SL NO CATEGORY NO. OF SHARES PERCENTAGE

A. PROMOTER'S HOLDING

1PROMOTERS*

Indian Promoters 280000000

Foreign Promoters

2Persons acting in Concert

Sub Total 280000000

B NON PROMOTERS HOLDING

3INSTITUTIONAL INVESTORS

a) Mutual Funds & UTI 44121539

Banks,Financial
b) 17594124
Institutions,Insurance
Companies (Centra/State Govt.
Institutions)
c) FIIs & Foreign Mutual Funds 93196653

Sub Total 154912316

4OTHERS
a) Private Corporate Bodies 21640965
b) Indian Public 48364617
c) NRIs/OCBs 200002
d) Any other (please specify)-GDR
Sub Total 70205584

GRAND TOTAL 505117900

As defined in Regulation 2(h) of SEBI (Substantial Acquisition of Shares and
* Takeovers) Regulations, 1997
The Promoter's holding shall include all Entities in the promoter's group-individual
or body corporate
# As defined in Regulation 2(e) of SEBI (Substantial Acquisition of Shares and
Takeovers) Regulations, 1997

Note :-
 Shareholding

• Share Capital - Rs. 358.56 crores

• Net Worth - Rs. 8,741.76 crores

• Book Value per share - Rs. 254.42

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

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

Board of Directors

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

The members of the Board are:

Chairman & CEO SHRI M.V.NAIR

Executive Director SHRI S.Raman
Government of India Nominee SHRI K.V. EAPEN
Government of India nominee
on the recommendation of RBI
SHRI K. SIVARAMAN

Chartered Accountant Director

WORKMEN DIRECTOR
K.S. SREENIVASAN

SHRI N. SHANKAR
 Director DEBASIS GHOSH
Government Nominee Director
SMT. RANI SATISH
under General Category

Director SHRI ASHOK SINGH

Dr. Gulfam Mujibi

Director

Director PROF. M.S. SRIRAM

Director Shri Arun Kumar Nanda
Shri.S. Ravi
Director

* JAIPUR Main Branch Head :

 INDUSTRY OVERVIEW
Home Loans in India

The Home loan sector in India is the pi-vital role player in the growth of the real estate
scenario in India. With tax incentives given to the housing finance sector in the annual
budget, transactions related to buying and selling of residential properties increased
considerably and was much higher as compared to previous years.

Since the new class of buyers are relatively younger set of customers who are more aware
about legal documentation and approvals, buyers are now more 'end-users' rather than
investors; the property market in India undergoes transformation to align itself with
global standards with an increased emphasis on quality & cost control and documentation
methods. In the current economy of India, the real estate sector has the maximum
propensity to generate income and demand for materials, equipment and services. It can
be said that housing finance companies were formed for co-existing with buyer's
requirements of housing loans for investing in properties. Home loans are made available
by financial institutions to both Indian and NRI customers at floating and fixed rate of
interest and also at attractive EMI options.

• For construction or buying a new home

• For home repairs and renovations

• For purchase of plots

• Against mortgage of property

No tax benefits are available for NRI customers unless you file returns and thereby
become eligible to avail of the tax benefits.
Besides home loans, Commercial property loans are also available and different
financial institutions in India provide commercial loans at different rates and different
upper limits.
Real estate loans are available to builders, promoters and real estate developers. The
experience and financial standing of the builders is taken into account before the loan is
granted which is to be returned with the minimum installments.
Today, the amount of money that a city dweller spends on rent is roughly the same, or
only slightly less than the amount he pays as an EMI on a housing loan. Earlier the home
loan sector in India was solely dependent on nationalized and public sector banks, but the
entry of public sector banks into the housing finance business marked the beginning of
the first round of interest rate cuts. And this reduction in interest rates has enhanced the
borrowing power of customers. Moreover, HFCs are offering incentives to attract
investors like

• Some companies sanction the housing loan without requiring you to identify
property as a pre-requisite for eligibility

• Free accident insurance & property insurance

• Waiving of pre-payment penalty

• Waiving of processing fee

The realty boom in India has given a new dimension to the finance sector in India - both
in Home Loans and Home Insurance segments. This has not only given a competitive
edge to the finance companies to provide attractive options to customers but has also
contributed to the increased investments in the real estate sector. This has resulted in 13
new institutions foraying into the housing finance business in the last three years.

Major Home Loan Providers

Banks & Public Sector State Bank of India, Bank of Baroda Housing Finance, LIC
Housing Finance Companies Housing Finance, PNB Housing Finance, SBI Home Finance,
And Financial Institutions HDFC, ICICI Bank Ltd, Standard Chartered- Grind lays, IDBI
Bank Ltd, etc.
Types of Home Loans

A person seeking investments for house or a property opts for Home Loans for a variety
of purposes ranging from construction to renovation. The Housing Finance

Companies (HFCs) now offer individuals with various alternatives to choose from
while buying a home loan. And the availability of Home Loans offered is as varied as
their requirements.

• Home Purchase Loans

• Home Construction Loans

• Home Improvement Loans

• Home Extension Loans

• Home Conversion Loans

• Land Purchase Loans

• Stamp Duty Loans

• Balance Transfer Loans

• Refinance Loans

• Loans to NRIs

Home Purchase Loans:

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

Home Construction Loans:

This loan is available for the construction of a new home on a said property. The
documents that are required in such a case are slightly different from the ones you submit
for a normal Housing Loan. If you have purchased this plot within a period of one year
before you started

construction of your house, most HFCs will include the land cost as a component, to
value the total cost of the property. In cases where the period from the date of purchase of
land to the date of application has exceeded a year, the land cost will not be included in
the total cost of property while calculating eligibility.

Home Improvement Loans:

These loans are given for implementing repair works and renovations in a home that has
already been purchased, for external works like structural repairs, waterproofing or
internal work like tiling and flooring, plumbing, electrical work, painting, etc. One can
avail of such a loan facility of a home improvement loan, after obtaining the requisite
approvals from the relevant building authority.

Home Extension Loans:

An extension loan is one which helps you to meet the expenses of any alteration to the
existing building like extension/ modification of an existing home; for example addition
of an extra room etc. One can avail of such a loan facility of a home extension loan, after
obtaining the requisite approvals from the relevant municipal corporation.

Home Conversion Loans:

This is available for those who have financed the present home with a home loan and
wish to purchase and move to another home for which some extra funds are required.
Through a home conversion loan, the existing loan is transferred to the new home
including the extra amount required, eliminating the need for pre-payment of the previous
loan.
Land Purchase Loans:

This loan is available for purchase of land for both home construction or investment
purposes
Stamp Duty Loans:

This loan is sanctioned to pay the stamp duty amount that needs to be paid on the
purchase of property.
Balance-Transfer Loans:

Balance Transfer is the transfer of the balance of an existing home loan that you availed
at a higher rate of interest (ROI) to either the same HFC or another HFC at the current
ROI a lower rate of interest.
Re-finance:
Refinance loans are taken in case when a loan for your house from a HFI at a particular
ROI you have taken drops over the years and you stand to lose. In such cases you may
opt to swap your loan. This could be done from either the same HFI or another HFI at the
current rates of interest, which is lower.
NRI Home Loans:

This is tailored for the requirements of Non-Resident Indians who wish to build or buy a
home or property in India. The HFCs offer attractive housing finance plans for NRI
investors with suitable repayment options.
 Tax Benefits on Home Loans

As the Indian real estate market makes an upward swing, and investors opt
for housing finance or home loans, tax benefits obtained from them is a
lucrative option. Customers availing of Home Loans can claim a certain
portion of the interest and principal that they pay towards the loan
installments for reducing tax liability. Resident Indians are eligible for
certain tax benefits on principal and interest components of a loan under the
Income Tax Act, 1961. Moreover, an added tax benefits under Sec 80 C on
repayment of principal amount up to Rs. 1,00,000 p.a. can be availed that
can further reduce your tax liability by about Rs. 30,000 p.a.

Tax benefits can be claimed on both the principal and interest components of
the home loan as per the Income Tax Act, 1961. These deductions are
available to assesses, who have taken a loan to either buy or build a house,
under Section 24(b). Interest on borrowed capital is deductible up to Rs 2,
00,000 if the following conditions are satisfied:

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

constructing a property.

• The acquisition/construction should be completed within 3 years from

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

• The person, extending the loan, certifies that such interest is payable
in respect of the amount advanced for acquisition or construction of
the house
 • A loan for refinance of the principle amount outstanding under an
earlier loan taken for such acquisition or construction.

If the conditions stated above are not fulfilled, then the interest on borrowed
capital is deductible up to Rs 30,000 though the following conditions have to
be satisfied:

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

reconstruction repairs or renewal of a house property.

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

reconstruction, repairs or renewals of a house property.

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

not completed within 3 years from the end of the year, in which
capital is borrowed.

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

eligible for a deduction of up to Rs 100,000 under Section 80C from
assessment year 2006-07.

Terms and conditions for availing Tax benefits on Home Loans

• Tax deductions can be claimed on housing loan interest payments,

subject to an upper limit of Rs 2, 00,000 for a financial year. Interest
on the fresh loan can be claimed as a deduction, subject o the stated
upper limit.

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

person's deductions on the existing loan are less than Rs 2, 00,000; he
 can claim further benefits from the additional loan taken, subject to
the upper limit of Rs 2, 00,000 for a financial year.

• Tax benefits under Section 24 and deduction under section 80C of the
Income Tax Act can be claimed only when the payment is made. If a
person fails to make EMI payments, he cannot claim tax benefits for
the same.

• According to the Income Tax Act, only the person who has taken the
loan can claim tax rebates.

• The interest on home loans taken for repairs, renewals or

reconstruction, also qualifies for the deduction of Rs 2, 00,000.

• A husband and wife, both of whom are tax-payers with independent

income sources, get tax deduction benefits, with respect to the same
housing loan; to the extent of the amount of loan taken in their own
respective name.

• If a person buys a house and sells it within the same year/after 3 years,
and if any profit is made, then a capital gains tax liability arises on the
same for which the individual is liable to pay short-term capital gains
tax since the sale took place in the same year. But, if the sale had
taken place after 3 years, then a long-term capital gains tax liability
would have arisen.

• If it is proved that the home loan is simply an arrangement between

the loan-seeker and the builder or with a third party for the purpose of
claiming tax benefits, then tax benefits will not be allowed and
 benefits, previously claimed, will be clubbed to the income and taxed
accordingly.

• Tax benefits on interest on housing loans are allowable only for the
original loan and for a second loan taken to repay the first loan and
not for subsequent loans. This means that if you have already availed
of one loan to refinance the original loan and want to now avail a third
loan to refinance the second loan, tax rebate on interest payments will
not be permissible. This is because the Section 24 (1) only talks of the
second loan and not of subsequent loans. Even if you take the second
loan at a rate of interest higher than the original loan, you will be
eligible for a tax rebate on the second loan.
 UNION BANK

Power Home
Quick and easy home loans
Overview:

Union Bank's Power Home puts an end to your Real Estate troubles. Augment your reach
and buy the house that you've set your heart on

Features

• Attractive interest rates

• Balance Transfer facility
• Doorstep service
• Option to choose from floating rate or fixed rate

Benefits given by Union Bank:

• Free personal accidental & property insurance.

• No Prepayment charges.
 Power Home: Loan Purposes

You can apply for Power Home for the following purposes -

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

• Construction of a house on plot of land already owned
• Purchase of a new house or flat
• Residual age of the property should not be less than 30 years old (Home
Acquisition Plan)
• Extension or renovation or repair of a house or flat already owned by self
(improvement or extension plan)
• Take-over of existing Housing Loan (Balance Transfer)
• Pre-allotment booking finance
• Loan takeover with additional refinance (Balance Transfer + top up)
• Loan to NRI for purchase of ready residential property only
• Purchase of residential plots only
 Power Home: Eligibility

Salaried Individuals

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

• The applicant in all the cases should be above 21 years of age at the time of loan
commencement and up to the age of superannuation.

Professionals

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

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

• The applicant should be above 21 years of age at the time of loan commencement
and up to 65 years or less at the time of loan maturity.

Self Employed Individuals

• Any individual filing Income Tax returns can apply.

• The applicant in all the cases should be above 21 years of age at the time of loan
commencement and up to 65 years or less at the time of loan maturity.
 Power Home: Documentation

Documents Required

The following documents are required along with your loan application

• In Society Cases

• Society Allotment Letter.

• Site Plan
• Society Receipt.
• Development Charges (Rs. 10/Square yard).

• In Case of Housing Board

• Allotment Letter.
• Possession letter.
• Regularization cum NO dues Certificate.
• Convenience Deed (for structure).
• Perpetual Lease Deed (for Land).

• In case of Development Authority

 • Site Plan.
• DA Registered Lease Deed.

• In Case of Industrial Corporation

• Allotment Letter.
• Site Plan.

File Documentation

Purpose Salaried Others

Voter's ID card or driving license or
PAN card or photo credit card or Voter's ID card or driving
Proof of
employees ID card or defense or license or PAN card or photo
identity
police or government department ID credit card
card
Latest salary slip showing all IT returns for the last 2 years and
Proof of
deductions or Form 16 along with computation of income for the
Income
recent salary certificate last 2 years certified by a CA
Proof of residenceBank account statement or latest Bank account statement or latest
electricity bill or latest mobile or electricity bill or latest mobile or
telephone bill or latest credit card telephone bill or latest credit
statement or latest LIC policy or card statement or latest LIC
insurance premium receipt or policy or insurance premium
 employers letter certifying the
current mailing address or latest NSC receipt or latest NSC or other
or other similar instruments similar instruments indicating
indicating the address or existing the address
house lease agreement
Bank statement or
Pass Book where
Last 6 months Last 6 months
salary or income
is credited
Guarantor form Optional Optional

• PROPIETORSHIP FIRM

• Last three yrs. “Saral” form.

• Computation of income.
• Trading &P&L a/c.
• Balance sheet.

• PARTNERSHIP FIRM

The above Documents +

• Partner’s Capital a/c.

• Partnership Deed.
• COMPANY

• Memorandum &Articles of Association.

• Board Resolution.

COMMON DOCUMENTS

• Either single a/c or joint a/c with other family members (father,mother,son) with
regular source of income
• Individuals who may be employed/self-employed in business having regular
income
• Last one year Statement in case of Current A/C.
• Address proof.
• Photo ID.
• IF Customer is already taken any other Loan than Track Record of that loan.
• Indian Citizen -21 years of age

Note:

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

(That is Max.0.50%of loan amount)
 Power Home: Loan Amount

The limits on the loan

Max. Rs. 300 lacs for Mumbai, Delhi, Kolkata, Chennai, Bengaluru,
Ahmedabad, Hyderabad, Gurgaon, Noida and New Delhi.
For other Cities Rs. 100 lacs.
Max. Rs. 10 lacs for repairs

Margin

• For loan up to rs. 200 lacs, 20% of the cost of the property

• For loan up to rs. 200 lacs, 35% of the cost of the property

Power Home: Terms and Conditions

Repayment

• Repayment period for home loans shall not exceed 25 years

• Repayment period of pre-allotment bookings of housing loans shall not exceed

1½ year

• Repayment period of improvement or renovation or extension of existing property

shall not exceed 10 years
Security

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

Disbursement

The loan will be disbursed in full or in suitable installments, taking into account the
requirement of funds and progress of construction, as assessed by the Bank directly to
seller or builder or local development authority or supplier of materials etc.

Processing charges or admission fee

Processing fee equivalent to 0.50% of the loan amount (applied for) will be collected
along with the application form (taxes as applicable).

Penalty for early closure

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

Value Added Services

Credit card will be issued free of annual fees.

No hidden or built-in costs
Quick processing and disposal of loan applications
Flexible repayment options

Other Attaractive Features

• Bank reserves the right to reject any application without assigning reasons thereof
• The applicant will undertake to inform the Bank as and when there is a change in
address or employment
• No repayment penalty
 • Flexible repayment schedule
• Easy and convenient EMIs
• Sanction within 72 hours on receipt of application in full as per requirement
• Pay interest on daily reduced balances

The terms and conditions mentioned above and elsewhere under the scheme are
subject to modification from time to time solely at Bank's discretion.

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

Period Fixed Floating

Upto 5 yrs. 9.75% BPLR -2.75%=9.00%
>5 yrs.-10 yrs. N.A. BPLR -2.50%=9.25%
>10yrs. to 15 yrs. N.A. BPLR -2.25%=9.50%
>10yrs. to 25 yrs. N.A. BPLR -2.25%=9.50%

Rate of interest (w.e.f 15.02.2010) for Home Loans up to rs. 5.00 lacs and
30.00lakh

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

Fixed Floating

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

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

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

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

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

Period Fixed Floating

Upto 5 yrs. 10.75% BPLR -2.50%=9.25%
>5 yrs.-10 yrs. N.A. BPLR -2.25%=9.50%
>10yrs. to 15 yrs. N.A. BPLR -2.00%=9.75%
>15yrs. to 25 yrs. N.A. BPLR -2.00%=9.75%

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

Period Fixed 4th yrs Onward Floating

Upto 5 yrs. 10.75% BPLR -2.25%=9.50%
>5 yrs.-10 yrs. N.A. BPLR -1.75%=10.00%
>10yrs. to 15 yrs. N.A. BPLR -1.50%=10.25%
>15yrs. to 20 yrs. N.A. BPLR -1.50%=10.25%

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

Period Fixed Floating

Upto 5 yrs. N.A. BPLR -1.75%=10.00%
>5 yrs.-10 yrs. N.A. BPLR -1.25%=10.50%
>10yrs. to 15 yrs. N.A. BPLR -1.00%=10.75%
>15yrs. to 25 yrs. N.A. BPLR -1.00%=10.75%

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

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

 First 3 years (Fixed) 8.50%

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

Tenure Repayable in up to 10 years

First 3 years (Fixed) 8.50%

4th year onwards

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

Loans above 5 lakhs and

up to 30 lakhs Repayable in more than 10 and up to 25
Tenure
years

First 3 years (Fixed) 8.50%

4th year onwards

BPLR - 2.50% i.e. 9.25 %
(Floating)

Tenure Repayable in up to 10 years

First 3 years (Fixed) 8.50%

4th year onwards

BPLR - 2.50% i.e. 9.25 %
(Floating)
Loans above 30 lakhs
and up to 50 lakhs
Tenure Repayable in more than 10 and up to 25 years

First 3 years (Fixed) 8.50%

4th year onwards

BPLR - 2.25% i.e. 9.50 %
(Floating)

Loans above 50 lakhs Tenure Repayable in up to 10 years

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

 4th year onwards
BPLR - 1.75% i.e. 10.00 %
(Floating)

Tenure Repayable in more than 10 and up to 25 years

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

4th year onwards

BPLR - 1.50% i.e. 10.25 %
(Floating)

Power Home: Fair Practice Code for Lenders

As directed by the Reserve Bank of India, vide circular. The Bank has adopted modified
Fair Practice Code for lenders as approved by the Board of Directors. The salient features
of the same are:

Applications for Loan

In the loan application form, the Bank shall provide comprehensive information
including information about fees and charges if any payable for processing and
amount of such fees refundable in case of non acceptance of application,
prepayment options and other matter which affects the interest of the borrowers, of
all categories of loans, irrespective of the amount of loan sought by them.

Processing

• The Bank shall provide acknowledgement for receipt of all loan applications
indicating the time frame within which the application will be disposed of.
 • The Bank shall verify the loan application and if additional details / documents
are required, these will be sought from the applicant.

• For all categories of loans and irrespective of any threshold limits, the Bank will
be expected to process the application without delay. In case the application is
turned down, the Bank will convey in writing to the applicant the reasons for
rejection within one month.

Loan Appraisal and Terms and Conditions

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

credit application as per the extant instructions and credit policy of the bank.
The availability of adequate margin and security will not be a substitute for
due diligence on the creditworthiness of the customer.

• All the terms and conditions and other caveats will be duly communicated by
an authorized official of the Bank to the customer in writing.

• The acceptance of the customer will be obtained on the sanction letter with the
customer's signature under the caption "I/WE ACCEPT ALL THE TERMS
AND CONDITIONS WHICH HAVE BEEN READ AND UNDERSTOOD
BY ME/US".

• A copy of the loan agreement along with all the enclosures quoted in the loan
agreement will be furnished to the customer at the time of issue of the
sanction letter.

• The sanction letter / loan agreement will clearly state that the credit facilities
will be extended solely at the discretion of the Bank and that drawings under
the following circumstances will be solely at the discretion of the Bank.
 • Drawings beyond the drawing power / sanctioned limits.

• Honoring of cheques issued for the purpose other than specifically

stipulated in the sanction.

• Drawings in an account once it is classified as NPA.

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

and conditions by the borrower.

• Meeting further requirements of the borrower on account of growth in

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

Disbursement of loans including changes in terms & conditions

• The disbursement will be done immediately on compliance of all the terms and
conditions of the sanction by the borrower and the branches need not refer to the
sanctioning authority for disbursement.

• Any changes in the terms and conditions of the sanction such as interest and
charges will be notified to the borrower before effecting the changes.

• Any changes in interest rate and charges will be effected only prospectively after
giving due notice to the borrower.

Post disbursement supervision

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

periodic inspection, will be stipulated at the time of issue of the sanction letter.
The sanction letter would also mention whether the Bank or the borrower will
bear the cost of inspection.
 • The Bank will issue notices to the borrowers in advance in case the Bank decides
to recall the advance / accelerate the payment / accelerate the performance under
the loan agreement. Or seek additional securities.

• The Bank shall release all securities on receiving payment of loan. However, the
Bank may decide to exercise the right to set off any legitimate right or lien for any
other claim against borrower. In case the Bank decides to retain the security, the
borrower will be notified about the remaining claims and the documents under
which the Bank is entitled to retain the security till the relevant claim is paid /
settled.

Others

• The Bank will not interference in the affairs of the borrowers except where
provided for in the terms and conditions of the loan sanction documents, such as
periodic inspection, scrutiny of books of accounts, verification of stocks and book
debts, and scrutiny of QIS statements.

• In case any information not disclosed earlier by the borrower has come to the
notice of the Bank, the Bank will have the right to elicit the necessary information
from the borrower and initiate action to protect its interest.

• While, the Bank may participate in credit-linked schemes framed for weaker
sections of the society, the Bank shall not discriminate on grounds of sex, caste
and religion in the matter of lending.

• In the matter of recovery of loans, the Bank shall not resort to undue harassment
such as persistently bothering the borrowers at odd hours and use of muscle
power.

• In the case of receipt of request for transfer of borrowed account, either from the
borrower or from other banks / FIs which propose to take over the loan, the
Banks' consent or objection, if any, shall be conveyed within 21 days from the
date of receipt of request.
Grievance Redressal

Though the sanction of the loans will be at the sole discretion of the Bank, borrowers will
have an opportunity to appeal against the decision of the Bank's functionaries. Any such
grievance received from the borrower will be heard and disposed of by the next higher
authority. For this purpose the following review structure is available to the borrower,

Grievance against decision of Reviewing Authority

Branch Head Zonal Head
VP / AVP Zonal Head
Zonal Head President (Credit) for corporate advances
President (Merchant Banking) for capital-
market related advances and
Senior Vice President (Retail Banking) for
retail advances.
Corporate Credit & Retail Loans Executive Director
(under Retail Banking)
All others Chairman and CEO
 Operation Flow of Home loans in UnionBank

Details:

• Login of Files: Details related to customer is stored in Excel Sheet.

• Field Investigation: Income Documents of customer is verified.

• Credit Appraisal Sheet: At this stage preparation of loan eligibility and

calculation of EMI take place.

Calculation of Eligibility

• IIR – Income to installment rates

• FOIR – Fixed obligation installment rate

% Salaried Self Employed Self

Employed
(professional)
If net salary If net income is If net income
45% is7500 to9999 8000 to9999 is 7500 to9999
If net salary is If net salary is If net salary is
50% 10000 to 10000 to 19999 10000 to
19999 19999
 If net salary is If net salary is If net salary is
55% 20000 above. 20000 above. 20000 above.

For Example –

Salary (pm) = 10,000

Then, applicable FOIR = 10,000 * 45%
= 4,500/969
= 4.64 lacs
Now, a max. limit of loan to be provided is 4.64 lacs

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

In Calculation of Net Salary

• case of salaried person we calculate the average of the six months pay slip.(If Net
Salary is variable)

• In case of self employed we use the following formula-

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

income
From other sources +100% rental income + 20 % of
Agriculture income (if cont for last 3 years)
 EMI Calculation

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

Here:
P = Principal Amount
R = Rate of interest
N = No. of years

Amortization

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

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

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

Principal amount = EMI – Interest

= 969 – 900
= 69 Rs.

• Loan Kit Signature: Loan agreement is signed by customer and PDC’s is

taken
from customer.
 Loan to Value (Funding) Table

Types of Loans LTV Max.Years

Construction 85% 18
Purchase 85% 18
Plot/Land Purchase 75% 10
Repair/Extension 75% 10
Land Purchase + 85% 18
Construction
Balance Transfer 85% 18
NRI
• Land Purchase 10
• House Purchase 15
 Loan Tenure

S.No. Category Tenure

1. Salaried Up to retirement/20 yrs.

(whichever is earlier)

2. Self Employee Maximum 15 yrs /subject to65

yrs(whichever is earlier)

3. Professional Maximum 20 yrs/subject to 65

yrs(whichever is earlier)

Mode of Payment

• PDC’s (Post dated checks).

• S.I.(Standard Institution)
• ECS (Electronic Clearance)
 Hierarchy of Operations

Comparative Analysis of Home

Loans

Bank/Housing Processin
Pre-Payment
Finance g 0-5 Years 6-10 Years Over 10 Years
Penalty
Corporation Fee
Fixed Floating Fixed Floating Fixed Floating
No penalty if upto 25% of loan is
ABN-Amro 0.50% cleared per year. Else 2% on the 7.75 7.25 7.75 7.75 7.75 7.25
amount in excess of 25%
Allahabad Bank 0% 7.75 7.25 8.25 7.75 8.75 7.75
Andhra Bank 2% 8.50 8.00 9.25 8.75 9.50 9.00
Bank Of Baroda 0% Upto 3% 9.0 7.50 9.5 8.0 10.0 8.25
Bank of India 8.5 7.5 9.25 7.75 9.25 8.25
Bank of
- 7.5 - 8.0 - 8.25
Maharashtra
Bank of Punjab 11.75 7.50 11.75 7.50 11.75 7.50
Bank of Rajasthan 8.0 7.5 8.25 7.5 8.5 8.0
Birla Home
8.00 8.00 8.5 8.5 8.75 8.75
Finance
Central Bank of
0% 0 8.5 8.0 9.0 8.5 9.5 9.0
India
Corporation Bank 0% 0 8.0 7.5 9.00 8.25 - 8.50
Canara Bank 8.0 7.50 9.00 8.00 9.25 8.00
Can Fin Homes 7.75 7.25 8.75 8.0 8.75 8.0
Citibank 8.25 8.25 8.25 8.25 8.25 8.25
Dena Bank 0.50% 0% 8.75 7.25 9.25 7.75 9.50 8.0
Dewan Housing
Finance Ltd ? 0 0 8.5 8.0 8.5 8.0 8.5 8.0
DHFL
Federal Bank - 7.25 - 7.5 - 8.0
GIC Housing
9.75 7.5 9.75 8.0 10.0 8.25
Finance
HDFC Bank 1.0% 2% 8.75 8.25 8.5 8.0 8.25 7.5
Up to 25% of the loan amount
every financial year - NIL, For
HSBC 1.8% amount over 25% of loan 8.0 7.75 8.0 7.75 8.0 7.75
amount in every financial year-
2% of amount prepaid
IDBI 0.75% 2% 9.25 7.5 9.25 8.0 9.25 8.25
ICICI 0.50% 2% 9.0 8.0 9.0 8.0 9.0 8.0
Indian Bank 0 0 7.75 7.25 8.25 7.75 8.75 7.50
Indian Overseas
0.5% 8.25 7.75 9.25 9.25
Bank
Kotak Mahindra
Nominal fee 8.5 8.5 8.25 7.25 8.0 7.5
Bank
LIC Housing
1% 8.0 7.5 8.0 7.5 8.0 7.5
Finance
Oriental Bank of
8.0 7.5 8.5 8.0 8.75 8.25
Commerce
Punjab National
9.25 7.75 10.25 8.0 10.5 8.25
Bank
Standard No fee for part-prepayment. Else
10.5 10.5 10.5 10.5 10.5 10.5
Chartered Bank 2.5%
State Bank Of
7.5 7.25 8.25 8.0 8.5 8.25
Hyderabad
State Bank of
0% 0 8.0 7.5 8.5 8.0 8.75 8.25
India
State Bank of
1% 7.75 7.5 8.25 8.0 8.5 8.25
Mysore
State Bank of
0.5% 7.5 7.0 8.5 8.0 8.75 8.25
Travencore
Sundaram Home
9.00 8.75 9.00 8.75 9.00 8.75
Finance
Syndicate Bank Rs 1000 0 8.0 7.75 8.5 8.25 8.75 8.50
Tata Home
12.0 7.75 12.0 8.25 12.0 8.5
Finance
Union Bank of
0 9.75 9.5 10.25 10.0 10.75 10.5
India
At PLR Minus At PLR Minus At PLR Minus
United Bank of 2.00% subject to 2.00% subject to 2.00% subject to
1% 8.5 9.0 9.25
India a minimum of a minimum of a minimum of
9.5% 9.5% 9.5%
Vijaya Bank 1% 7.5 7.0 8.5 8.0 8.75 8.25

Note:

• LTV – 85%
• Minimum Return – 1.20 lac
Features Offered By Other Banks
SBI

Unique features:
The most preferred home loan provider. The latest offer is an interest rate
concession on GREEN HOMES in accordance with SBI's commitment to Environment
protection. Having a vast variety of products to suite every kind of customer.
Minimum age limit 18 yrs & Maximum age limit for a Home Loan borrower is fixed at
70 years, i.e. the age by which the loan should be fully repaid.

• Provision for on the spot "In principle" approval.

• Loan sanctioned within 6 days of submission of required documents.
• Option to avail Home Loan as a Term Loan or as an Overdraft facility to save on
interest and maximize gains (see SBI MaxGain in the following sections).
• Option to club income of your spouse and children to compute eligible loan
amount.
• Provision to club depreciation, expected rent accruals from property proposed to
compute eligible loan amount.
• Provision to finance cost of furnishing and consumer durables as part of project
cost.
• Repayment permitted upto 70 years of age.
• Free personal accident insurance covers upto Rs.40 Lac.
• Optional Group Insurance from SBI Life at concessional premium (Upfront
premium financed as part of project cost).
• Interest calculated on daily reducing balance basis, and starts from the date of
disbursement.
‘Plus’ schemes which offer attractive packages with concessional interest rates to Govt.
Employees, Teachers, Employees in Public Sector Oil Companies.
• Special scheme to grant loans to finance Earnest Money Deposits to be paid to Urban
Development Authority/ Housing Board, etc. in respect of allotment of sites/ house/
flat.
• Option to avail loan at the place of employment or at the place of construction.

Package of exclusive benefits:

• Complimentary international ATM-Debit card

• Complimentary SBI Classic/ International Credit Card.
• Option for internet-banking
• Concessional package under ‘Credit Khazana’ for prospective Auto Loan, Student
Loan, Personal Loan borrowers whose accounts are conducted satisfactorily
• 50% concession in charges in respect of all personal remittances/ collection of
outstation cheques
• Personal loan at attractive rates under SBI Home Plus scheme tailored exclusively
for SBI Home Loan customers.
 ICICI

Some of the special offers we have are:

ICICI Bank Home Loanoffers hassle free home
loans with the best deal. The loan tenure is maximum upto 25 years. They offer
multiple benefits on the loan taken.
• Simplified Documentation – The loan application process is easier and loan
approval process, faster with simplified documentation.
• Door Step Service – They personally deliver your Home Loan at your doorstep.
• Attractive Interest Rates –offers you a wide range of home loan rates to choose
from

• Attractive loan interest rates

• Home loan amounts suited to your needs
• Home Loan tenure upto 25 years
• Simplified Documentation
• Doorstep Delivery of home loan papers
• Sanction approval without having selected a property.
• Free Personal Accident Insurance (Terms & Conditions)

Insurance options for your home loan at attractive premium

No matter what the requirement, we have an appropriate plan for you, though most of our
home loan plans are for salaried/self-employed Resident Indians. Get the best deals ever,
and finance the perfect home, only from ICICI Bank.
 LIC Housing Finance

Special Features:
LIC Housing Finance offers home loans for construction/purchase of house/flat and
also for renovation of existing flat/house. While LIC Griha Prakash and are for
purchase, construction of properties and extension of residential units, LIC Griha
Sudhar Loan facilitates repairs/renovation of properties. Minimum age requirement is
21 years as on the date of sanction.

• Loan amount from Rs. 1 Lakh onwards

• Low interest rates
• No hidden costs
• Easy application & quick approvals
• Largest Network
• Tax Benefit

A financially strong and stable company we have already sanctioned loans to over 5
lakh
applicants.
With a network of more than 100 offices in the country we are always accessible to
you, wherever you may be.
 HDFC

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

package to meet all your housing finance needs. Their home loan is available for
individuals to purchase (fresh / resale) or construct houses. Application can be made
individually or jointly. HDFC finances up to 85% maximum of the cost of the property
(Agreement value + Stamp duty + Registration charges) based on the repayment
capacity of the customer.

Home Loan - Home loans for individuals to purchase (fresh / resale) or construct houses.
Application can be made individually or jointly. HDFC finances up to 85% maximum of
the cost of the property (Agreement value + Stamp duty + Registration charges).

Home Improvement Loan - HIL facilitates internal and external repairs and other
structural improvements like painting, waterproofing, plumbing and electric works, tiling
and flooring, grills and aluminum windows. HDFC finances up to 85% of the cost of
renovation (100% for existing customers).

Home Extension Loan - HEL facilitates the extension of an existing dwelling unit. All
the terms are the same as applicable to Home Loan.

Land Purchase Loan - Be it land for a dream house, or just an investment for the future,
HDFC Land Purchase Loan is a convenient loan facility to purchase land.

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

Choose from Fixed Rate or Floating Rate with options to structure your loan as Partly
Fixed or Partly Floating.
Flexible repayment options to suit your individual needs.

Loan cover Term Assurance Plan - HDFC Standard Life Insurance Company Ltd.
offers an insurance plan*, which is designed to ensure that life's uncertainties do not
affect your

family's interests and your precious home. LCTAP provides a lump-sum payment on the
unfortunate demise of the life assured.

This pure risk plan is designed in a way that the cover decreases as you repay your home
loan making it a low cost premium insurance plan.

*Insurance is the subject matter of solicitation.

Automated Repayment of Home loan EMI - You can give us standing instructions to
repay your Home Loan EMIs directly from your HDFC Bank Savings Account, thus,
saving you the trouble of procuring, signing and tracking post-dated cheques.

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

Customer privileges - If you are an existing HDFC Home Loan customer, you can
avail of other loans (such as Personal Loans, Car Loans, Two-wheeler Loans and Loan
against securities) at lower interest rates.
 IDBI

Advantages of IDBI Ultra Flexible Home Loans: Helps you realise your long
cherished dream of owning your home through hassle free and customer friendly
home loans. The tenor of a home loan can be up to 25 years for a resident individual
whereas for NRIs the maximum tenure is 15 years subject to maximum age of 60
years at maturity. Loan can be applied for a maximum of 90% of the property value
subject to credit discretion

• Maximum Funding
• Flexibility of choosing between Floating or Fixed interest rate
• Attractive rate of interest
• EMI on daily reducing balance
• Personalized doorstep service
• Simple documentation
• Legal and technical assistance
• Balance transfer facility
• Reassessment and adjustment of applicant's loan eligibility in case of change of
income and residence status

Special insurance cover for you

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

Features

• Tenure of a home loan can be up to 25 years for a resident individual whereas for
NRIs the maximum tenure is 15 years subject to maximum age of 60 years at
maturity.
• Loan can be applied for a maximum of 90% of the property value subject to credit
discretion.
• Security for the loan is a first mortgage of the property to be financed, normally
by way of deposit of the title deeds or such collateral security as may be
necessary.
• Title to the property should be clear and free from encumbrance, i.e., without any
pending legal litigation adversely affecting the ownership of the property.

• Other parameters considered include an account of your age, income, number of

dependents, financial stability and co-applicant’s income.

• Home Loan With Life Insurance

• You can include your spouse/parents/children as co-applicant if you require
higher eligibility subject to maximum of three applicants.
• The maximum possible tenure for a Resident Indian is 25 years if employed and
15 years if self employed. While the same for an NRI is 15 years.
• In the event of your opting to pre-pay the home loan with us, a nominal fee of 2%
is payable in case, it is transferred to another bank or housing finance company.
However, no charges are applicable if you prepay from your own sources after 6
months of commencement of EMI.
 Research Methodology

a) Title of the Study

Comparative analysis of home loan and its operation

b) Duration of the Project

Duration of Project is 45 days

c) Objective of Study

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

financial institutions. I wanted to come out with a fine essence for the success
behind organization. The objective of making comparative analysis with different
financial institution is to find out the major competitors in home loan sector.

d) Type of Research

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

than quantitative. The data collection method for this project begins with finding a
sample of the population. The population for this project was the various places
in Jaipur. (Johari Bazar,Bapu Nagar, Janta Store, M I Road, Tonk Road, Malviya
Nagar and Jhotwara Industrial Area) and at the Union bank of India at Jagatpura
branch in JAIPUR.

The research methodology adopted was both Primary and Secondary. Primary
data was collected to study the investment psyche of a person, their practice on
saving, investment options available and the need of financial planners to
manage individual’s wealth. Questionnaire was designed to ascertain the
investor’s behavior as well as to depict the future prospects and growth
momentum of the wealth management industry.
e) Sample Size and method of selecting sample

Data Collection Methods & Instruments

The instrument for data collection was a structured questionnaire targeted

towards people who do investments. This questionnaire was designed to know
the investment psyche of a person while investing in the financial products.

The mode of communication was informal & friendly conversation, which does
not limit discussion within a well-defined boundary.

Data Collection Sources

i) Primary Research

Research was done to get a detail overview of the wealth management industry
and study the need for financial planner in the current scenario. Questionnaire
was designed to study the investment psyche of a person, their practice on
saving, different investment options available and the need of financial planners
to manage individual’s wealth. This project is mainly based on first hand
observation in the market, the way financial planning functions, scope of financial
planning and the need of a certified financial planner.

ii) Questionnaire Design

A structured questionnaire was designed covering both open and close ended
questions, to study the perception of people regarding investment avenues and
the concept of financial planner. {Specimen of the questionnaire is attached in
ANNEXURE A}.

iii) Secondary Research

Various sources of information were collected for attaining clarity on the

prospects of wealth management industry and the various financial planners in
the market. The source also includes basic investment objectives and the various
types of investment avenues open to an individual.

However the following sources were considered for information gathering:

• Companies websites

• Articles and reports available on the web

• News papers like Economics Times and Investment Insurance Magazines

• Various other sources mentioned in the references, in ANNEXURE B

iv) Population considered for research

Sample Details

100 people belonging to different fields, who do investment, were asked to fill the
questionnaire, on the basis of which an attempt is made to study the prospects of
Financial Planning in the market. The sample unit consists of those people who
are trading in secondary markets, mutual funds, initial public offer, insurance,
debt instruments as they can give the accurate information about financial
planning. A sampling frame has been developed so that everyone in the target
population has an equal chance of being sampled.

Personal Information:

• Sex Ratio: From the total 100 respondents 15 were females and 85 were
males, as also shown in Fig.5.1 below.

Persons Ratio
Male 85
Female 15

f) Scope of Study

• There exist a potential growth in the wealth management industry and

thus this project authenticates the feasibility of financial planners in the
market.

• Expanding needs and proliferation of financial products are making it

difficult for individuals to invest without planning. Most are aware that
planning is critical; yet don’t have the time or the expertise to develop a
plan & therefore the role of Financial Planner comes in picture.

g) Limitation of the Study

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

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

• The sample area was primarily in Jaipur. (Johari Bazar, M I Road, Tonk
Road, Malviya Nagar and Jhotwara Industrial Area) and at the Union Bank
of India branch Jagatpura.

• The sample size comprised of 100 respondents from different fields and
income group, and their responses are presumed to represent the wealth
management market.

• The score allotted by the different respondents on different parameter

might not be with the same yardstick, as individuals are subjective in
nature as well as the environment round them differs, which play a critical
role in building up a perception.
 SWOT ANALAYSIS

STRENGHTS:

• Worldwide brand name of UBI as credible and trustworthy

• Outstanding relationship management with customers.
• Automated operations due to highly computerized network personal financial
review are the strongest tool with UBI, which facilitates the customers in doing
their risk prolifiling and investing their money accordingly. This PRF is provided
free of cost ion UBI.
• It enjoys a good share of NRI business due to greater services to NRI’s provided
worldwide.
• A product know as GLOBAL PREMIER of UBI, according to which if you have
preimer account in UBI in India or in any country you will be recognized
globally as the premier customer of the bank, and for this you do not have to
maintain average quarterly balance of Rs.25 lakh separately to other countries as
well.
• Withdrawal limit (Rs 1 lakh) provided by the bank is highest.
• Bank provides the facility of doorstep banking to all customer.

WEAKNESS

• Less number of branches in Rajasthan.

• Only few ATM in Jaipur which is located at the branch only.
• Lots of hidden charges especially in case of credit card facility, cash credit limit is
also less.
• Minimum amount to open a fixed deposit is Rs10,000 which is comparatively
higher.
OPPORTUNITIES:

• Being a world class bank and having a good reputation, the goodwill can be
cashed upon with the growing economy of India.
• Rapid growth of jaipur city is another prime opportunity and moreover new
industry in and around has sprung up.
• Jaipur has great business and export of precious and semi precious and gems ,
jewellery and handicrafts, UBI has good opportunity to provide for better banking
at the national as well as international level.
• The bank should focus on common customers for wealth management as they
have more day to day spare money.
• Superior segment demarcation and co-ordination will be beneficial.

THREATS:

• All the public sector bank has started to redefine their services in order to attract
customer’s attention.
• Stringent norms by reserve bank of India at any time in near future can be threat
to foreign banks as their activities could be adversely affected.
• The entry of other foreign banks can take away some of the business.
• Many bank also coming up with ATM’s which will act as a major threat.
• The presence of other private sector bank and foreign bank in jaipur and because
of intense competition they are coming with the better products and services.
• The cash credit limit provided by other nationalized bank is major thearts.
• There is a myth surrounding the people that foreign bank are not trustworthy and
hence, do not rely on such banks.
• Special permission is required to open for the accounts of various segments like
politicians, exporters and jewelers.
 Analysis and Findings

Mortgage Market Growth. As India’s housing market continues to grow and mature, it
will be important to monitor the market. During the rapid expansion of the mortgage
market from about 2003 to 2008, many commercial banks eased their lending standards
as they pursued heightened demand in the market spurred by low interest rates and rising
personal incomes.
With demand outpacing housing supply, property prices in urban areas doubled in some
neighborhoods. Prices were also bolstered by some speculative activity in the market in
from mid-2005 to about early 2008. Thus, some commercial banks pursued aggressive
growth strategies, offering loans as high as 100% of the cost of the property.

Retail Asset Products - While working on the project I found out and analysis that
Retail advances of UNIONBANK grew from Rs. 8,928 crores as at end March'07 to Rs.
13,592 crores as at end March'08, a growth of 52% yoy. Retail Advances account for
23% of the total Advances of the Bank as at end March'08. The Bank has set up Retail
Asset Centers (RACs) at 70 towns and cities for focused retail lending.
 Lessons and Recommendations

• Commercial Viability of Underserved Segments:

One of the most important lessons that can be learned from the Project is that
mortgages for customers in the Low-Middle Income segments can be commercially
viable. This borrower segment can be more risky, but, if underwritten and priced
appropriately, the risks can be adequately contained.

• New Marketing Strategies:

Comparative advertising should be done to aware the consumers with the benefits
provided by the bank. Proper branding of Retail Asset Center should be made for a
large market capitalization and growth.

• Payment System:
If facility of direct account transfer should be offered, then it will make payment
System easier for customer whose accounts are in other banks.

• Funding Of Sources:
At present Axis Bank is providing 6.31% appox. retail advances of total deposits. If
increase in the percentage ratio 8-10%, then it will allow more finances of short term
loans to the customers which will assist the bank to increase their income sources.

• Others:
• Minimum limit of home Loans amount should be decreased to attract the small
home loan sector (construction, repair etc.).
• Provide finances up to 85% of the cost of renovation (100% for existing
customers).
 Summary/Conclusion

Finance for real estate is now easily available in India. The property boom is not
restricted to the national capital region but it has even transcended to satellite towns and
remote semi-urban areas in and around the national capital. The number of transactions in
the real estate sector has increased a number of times, making it profitable for the banks
and other lending institutions to offer more finance opportunities to the buyers.

In India, the most of the borrowers in home loan segment fall in the first time buyer
category. It means that they are either tenants or living with their parents in their ancestral
house. As the salaried-class is spreading and emerging stronger than ever, more and more
people are becoming capable of buying house. Their need to get finance from banks is
being taken care of by all the major players in the market. Banks like UBI, ICICI, SBI,
LIC, HDFC and all the nationalized banks are offering home loans at attractive rates.

The housing finance industry is getting increasingly commoditized. Competition within

the sector is ensuring that players offer consumers flexibility and features to choose from.
Features such as adjustable rate plans, lower processing fees, monthly rest, low interest
rates, low EMI, lower margin money, no pre-payment penalty have become common
across the industry. There is a growing trend among Banks and HFCs to include the cost
of registration, stamp duty, society charges and other associated costs while sanctioning
loans to differentiate and make the home loans products more attractive. This has resulted
in further lowering the threshold limit for buying a house for differentiation of their home
loan products, companies are also resorting to offering of free add-ons such as life
insurance, credit cards and consumer loans at reduced rates for furnishing the house.

Several housing finance companies have now begun to offer tailor-made loan schemes to
renovate, repair, extend, convert or otherwise improve one’s home. Companies like
HDFC and others provide home improvement loans for purposes like external repairs,
water-proofing, roofing, internal and external painting, plumbing and electrical work,
tiling and flooring, grills and aluminum windows, construction of underground or
overhead water tanks, paving of compound walls and setting up bore wells, among other
things.

Some of the major players in the housing finance industry have started organizing
property fairs, wherein the projects of different construction companies are brought
together and bundled with a lower than normal interest rate loan product. Such initiatives
are expected to result in a more organized housing market and more value for the
customer.

On the services front the housing finance companies have begun addressing concerns of
borrowers through counseling and legal advisory services on matters pertaining to
property’s title, its technical evaluation, its pricing etc. Customer relationship
management is emerging as one of the key areas of competition to win over new
customers. Housing finance companies have been upgrading their technology and
investing in sophisticated systems for sourcing, processing and managing information
pertaining to home loan customers.

As the scope for product differentiation is increasingly getting limited, the housing
finance companies will increasingly compete on the strength of their service quality.
Rendering technology-enabled value added services would enable the housing finance
companies to better withstand the competition.

The procedure for taking a home loan is rather easy. You can directly approach the bank
or call for a meeting to be arranged with the bank's loan executive. This can also be done
over the Internet. The banks may ask for various proofs like those related to your
residence, income, spouse's income, number of dependants, etc. Based on a number of
parameters, the banks arrive at your credit rating and offer you varying amount of loans.

Home loans in India come in various forms inviting fixed interest rate or floating interest
rates. There are hybrid loans also that are a middle path between fixed and floating
options. The borrower can put a part of his loan amount under fixed rate and expose the
other part to the floating rates that depend on market conditions and the interventions by
the Reserve Bank of India.

The Internet as a medium of loan arrangement is fast catching up in India. Many websites
are coming up that take care of individual and corporate finance for various purposes like
buying real estate, investments, business operations, etc. This medium of finance is
growing rapidly although it is surely in its nascent age as far as the Indian market is
concerned.
 Appendixes

PERFORMANCE HIGHLIGHTS

Q1 FY09

• Net Profit 89 % yoy

• Net Interest Income 93 % yoy

• Fee Income 80 % yoy

• Operating Revenue 82 % yoy

• Operating Profit 118 % yoy

• Net Interest Margin 3.35 %

 • Cost of Funds 6.11 %

Major Q3 Q4 Growth (Rs in Crores) 12M 12M Growth

FY10 FY09 YoY% FY10 FY09 YoY%
Highlight
s Q4 FY10
1148 914 912 25.88 Operating Profit 3659 3082 18.72

594 534 466 27.47 Net Profit 2075 1727 20.15

1.34 1.29 1.25 Return on Avg 1.25 1.27

Assets
0.81 0.58 0.34 Net NPA% 0.81 0.34

39.24 40.23 38.64 Cost to Income 40.66 41.81

Ratio

493 440 560 -11.96 Non Interest 1975 1483 33.18

Income

3.39 2.77 2.69 NIM 2.71 3.24

Financial Performance (12 Months):

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

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

The Bank’s CASA deposit portfolio showed an impressive growth of 29.36% to

Rs539.57bn as on 31st March’10 as against Rs417.11bn in the previous year.

Non-Interest income grew by 33.18% YoY to Rs19.75bn as against Rs14.83bn in

the previous year. Core fee based income grew by 32.74% to Rs8.96bn as
against Rs6.75bn in the previous year.

The Bank has been consistently showing Return on Average Assets(RoAA) at

1.25 or greater in the past 3 years. RoAA for the year ended 31st March’10 was
1.25 as against 1.27 in the previous year. RoAA for Q410 was at 1.34 as against
1.25 in the corresponding period of the previous year.

The Net Interest Margin (on interest earning assets) of the Bank stood at 2.71%
for the year ended 31st March’10 as against 3.24% in the previous year.

The Bank’s Net Interest Income increased from Rs.3813 crs to Rs.4192 crs, a
growth of 9.94% YoY.

The bank’s non-interest fee based income grew by 33.18% to Rs 1975 crs in FY
10 as against Rs 1483 crs in the previous year. Core fee based income grew by
32.74% to Rs 896 crs from Rs 675 crs in the previous year.
Operating expenses are at Rs.2508 crs in 31st March’10 as against Rs.2214 crs
in the previous year. The ratio of Operating expenses to Average working funds
reduced to 1.52% as of 31st March’10 as against 1.63% in the previous year.

Business Growth
� Domestic Business mix of the Bank has registered growth of 22.33%
(y-o-y) to Rs.287942 Crore as on 31st March’10 from Rs 235376 crore
as on 31st March’09.

� Global Business mix of the Bank registered growth of 22.92% YoY to

Rs 291289 Crore as of 31st March’10

The Bank recorded a quarterly Operating profit of Rs.1148 crs for Q410
as against Rs.912 crs for Q409 registering increase of 25.88%.

� Net Profit increased from Rs. 466 crore to Rs 594 crore registering a
growth of 27.47% QoQ.

� Net Interest Margin (NIM) for quarter ended 31st March’10 is at 3.39%
as against 2.69% in the corresponding period of the previous year.

� Capital Adequacy as per Basel II stood at 12.51% as of 31st March’10

as against 13.27% in the previous year.

� Net Worth of the Bank posted a rise to Rs. 8758 crs as on 31 st

March’10 from Rs. 6964 crs as of March 09 due to plough back of
profits.
PROFITIBILITY
FEE INCOME COMPOSITION

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

Corporate Banking
 BUSINESS OVERVIEW

TOP SECTOR EXPOSURES

% of Total
Rank Sectors
Corporate Credit
1 Gems & Jewellery 8.97**
 2 Metals 8.24
3 Infrastructure 7.70
4 Real Estate 7.68
5 Financial Companies* 7.33
6 Trade 5.64
7 Textiles 5.43
8 Petrochemicals 4.02
9 Food Processing 4.00
10 Chemicals 3.99

As on 30.6.2008

* Housing Finance Companies and other NBFCs.

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

RETAIL BANKING

INCREASING REACH
RETAIL ASSETS
• Retail Assets grow 52% yoy.

• Retail Assets constitute 24% of the Bank’s total advances, as against 23%
at end June’07.

• Growth driven through Retail Asset Centres (RACs).

• 70 RACs established so far.

COMPOSITION OF RETAIL ASSETS

Questionnaire:

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

Address: ..........................................................................
Phone no.: .......................................................................
Personal Details:
Age group-
[ ] 21-30 [ ] 31-40
[ ] 41-50 [ ] 50 and above
Occupation-
[ ] Service [ ] Business
[ ] Professional [ ] Other
Income/Salary monthly-
[ ] Less than 10,000 [ ] 10,000-15,000
[ ] 15,000-20,000 [ ] 20,000 and above
(1) Do you have your own house?
[ ] Yes [ ] no
• Are you aware about home loan?
[ ] Yes [ ] No

• Have you taken home loan?

[ ] Yes [ ] No

• Are you satisfied about current home loan services?

[ ] Very good [ ] Good
[ ] Average [ ] Bad

• From which bank have you taken home loan?

[ ] SBI Bank [ ] ICICI Bank [ ] HDFC Bank
[ ] PNB Bank [ ] BOB Bank [ ] The bank of Rajasthan
[ ] Union Bank of India

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

(7) In which ground do you prefer in loan?

[ ] Interest [ ] Society
[ ]EMI

• Are you know about product & services offered by Union Bank of India related home
loan?
• Would you like to recommend your friends and relatives about UBI home loan?
[ ] Yes [ ] No

• What do you think about future services related home loan?

[ ] Very Good [ ] Neutral
[ ] Good [ ] Bad
[ ] worst
(11) Are you satisfied with Union Bank of India’s services?

[ ] Yes [ ] No
(12) What types of changes you expect from Union Bank of India in feature?
Suggestion…
1………………………………………………
2………………………………………………
3………………………………………………
 References and Bibliography

Net Sites:

• www.unionbank.com
• www.emkayshare.com
• www.indiaground.com/home_loans
• www.in.ibtimes.com/articles/20070806
• www.niftindia.com/unionbanklist.html
• www.indiahousing.com
• www.indiaearnings.moneycontrol.com/sub_india/compnews.php?autono=330584
• www.equitymaster.com/DETAIL.ASP?story=2&date

Releases:.
• Annual Performance Report.

News Paper and Magazines:

• Business World April – June Editions.

• 4P’s of Marketing April – June Editions.
• Economic Times April – June Editions