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UNIVERSITY OF LUCKNOW

DEPARTMENT OF BUSINESS
ADMINISTRATION

HOUSING FINANCE
SUBMITTED TO:

Mr. Amit Sir


SUBMITTED BY:

Ankit Singh
Anuradha Anand
Daniyal Kazim
Kunwar Saksham Sagar
Monika Gautam
Nidhi Pal

INTRODUCTION

Housing is one of the basic needs of mankind in terms of safety,


security, self-esteem, social status, cultural identity, satisfaction and
achievement. Growth in the housing sector is regarded as one of the
indicators, which has a reflection on the health of a particular economy.
Today, for India to achieve balanced economic growth, it is essential to
boost construction activity in the housing sector. Since independence
growth in the Indian population has aggravated the problem of housing
for Indian citizens.

In pursuance of National Housing Policy of Central Government,


Reserve Bank of India has been facilitating the flow of credit to
housing sector.

During last few years, the housing finance has emerged as one of the
sectors attracting a large quantum of bank finance. The current focus of
RBIs regulation is to ensure orderly growth of housing loan portfolio
of banks.

ICICI BANK
BANK PROFILE:

ICICI Bank is India's second-largest bank with total assets of about Rs.1,67,659
crores and profit after tax of Rs. 2,005 crores.

ICICI Bank has a network of about 560 branches and extension counters and over
1,900 ATMs. 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 specialized subsidiaries and affiliates in the areas of investment banking,
life and non-life insurance, venture capital and asset management.

PROFITABILITY:
35%

increase in profit after tax to Rs. 6.15 billion from Rs. 4.55 billion.

22%

increase in profit after tax to Rs. 20.05 billion from Rs. 16.37 billion.

Improvement
79%

in net interest margin to 2.4% compared to 1.9%.

increase in fee income to Rs. 20.98 billion from Rs. 11.75 billion.

BALANCE SHEET:
46%
68%

year-on-year growth in advances and 34% growth in total assets.


year-on-year growth in retail portfolio, now constituting 61% of

loans.
Deposit

growth of 47% compared to system deposit growth of 14%.

PROCEDURE $ DOCUMENTATTION
ELIGIBILITY:
A person is eligible for an ICICI bank home loan if he/she is:
Minimum age of 21 years and
Employed or self-employed with a regular income.
LOAN PURPOSE:
To construct or purchase a house or flat.
For improvement or renovation.
Plot purchase, plot cum construction.
Balance transfer.
One can apply even before selecting a property. A loan amount would be
sanctioned, based on repayment capacity, which will help the customer
in deciding budget and plan the buying of house.

LOAN STRUCTURE:
A home loan ranging from a minimum of Rs. 1 lac to a maximum of Rs. 3
crores can be availed of. The loan amount depends on:
A maximum of 85% of the cost of property or cost of construction as
applicable.
The bank taking into account age, income, qualifications, number of
dependents, assets, liabilities, stability/ continuity of employment/ business
and the income of the co-applicant would determine repayment capacity.
CO-APPLICANT:
All owners of the property need to be the co-applicant. One can also
include spouse, as a co-applicant for the home loan and his/her income will
be included to enhance loan eligibility.
RATES OF INTEREST:
If the loan amount is taken by men -9.65%
And if it is taken by women- 9.60%

DOCUMENTATION

CALCULATION
The calculation is done on compounding basis and also shown in
rental form

If the loan amount is Rs. 50 lacs.


Time period is 30 years.
The rate of interest as per ICICI bank:
o
o

Men- 9.65%
Women-9.60%

Rent -10,000 per month.


Increment in rent after 1 year is 10%.
Either person goes for home loans or stay on
rent?

Rs. 8,69,43,620

CONCLUSION
On the basis of Loan and Rent:

Loan amount after 30 years comes to Rs. 8,69,43,620 and Rs.


8,57,22,964. whereas the rental amount is Rs. 6,90,99,630 after 30 years.

The person should prefer for Rental basis because the net cost that is
incurred on rent is less than that of taking loan from bank.

On The Basis Of Private Sector Banks And Public


Sector Banks:
Housing finance is a highflying sector these days and is tipped to
grow at a phenomenal 39% p.a. Keeping in view the global economic
environment banks and financial institutions have brought sea changes
in their strategies and there is shift from sellers market to buyers market.
Liberal tax incentives by the government, low and competitive interest
rates for housing finance has made this sector as red hot sector. About
six seven years ago, finance was available at 15-17 percent. Now it has
gradually come down to 9-10 percent.

As the customer expectations are changing and increasing day by day the bank
has recognized the changing needs and has come up with different schemes for
different customers. In case of public sector banks, the need is to make the
processing of the scheme easier and to change the inner atmosphere of the banks.
In case of private banks, there is a need of opening more and more branches, so
that more number of people can be made aware about the services available.

The housing finance industry at present is witnessing an unprecedented


competition. Apart from the established players, there are a number of new
entrants in this segment. However, the huge market size coupled with the steady
growth rate in the industry means that the pie is large and is getting even larger,
and that every player can have a piece of it.