TABLE OF COTENTS

Chapter
CHAPTER 1
Section
1.1 Introduction to Subject
1.2 Objective, Need, Scope & Methodology 29-35
CHAPTER 2
Section2.
1 Introduction to Company
2.2 Overview of the industry (History, Growth, Landmarks, major
players and their market share)
2.3 Profile of the organization
2.4 Companys history
2.5 Recent achievements and milestones
2.6 Product range of the company/industry
2.7 Performance of the company over the last few years(Statistical
Profile)
2.8 Financial status of the organization
2.9 Future prospects/ plans36-65
CHAPTER 3
Survey of Literature66
CHAPTER 4
Interpretation67-69
CHAPTER 5
Section
5.1 Conclusion
5.2 Limitations70-72
CHAPTER 6
References

CHAPTER 7
Questionnaire

CHAPTER 1Section

INTRODUCTION TO SUBJECT:
Home loans work like any other debt. That is, loans are simply specific
money thatwe borrow from a bank, a private lender, or some other type
of lender. Afterwards, wemust repay our debts with interest. However,
unlike other types of loans, home loansare different in several
respects.Owning a piece of land or property is a lifetimedream for every
individual
.
There are many home loans provider in the market.
There are different type of home loan i.e.

Home Purchase Loans

Home Improvement Loans

Home Construction Loans

Home Extension Loans

Home Equity Loans

Land Purchase Loans

Bridge Loans
Home purchase loans:
These are the basic forms of home loans used for purchasing of a new
home. With about a million home lenders and mortgage broker sit's
becoming a tough challenge as the days are progressing. But at the same
time, when the sites are coming up with all the latest tool sand relevant
information for us, and with all such conveniences, obtaining a home
purchase loan or mortgage has become really pretty simple. However, at
the same time though, we may be flummoxed to look so many attractive
rates and offers in the market, not to forget the hidden costs associated
with each of them.
Home improvement loan:
Home improvement loans are used to finance improvements and add on
to the existing set of credentials of beauty on your owned house, recently
purchased property or rented accommodation. Home improvement loans
are used to maintain or enhance the value of your house. In general it
includes: repairs, remodeling, energy-related items (permanent in
nature),repairs, a new kitchen, a new bathroom, terrace, an extension or
general property improvements. Luxury items and fireplaces are
generally not eligible, though. Many improvements in landscape and
even swimming pools are nowadays considered to be a part of home
improvement.
Home construction loan:

Home construction loans are used to finance for the construction of our
newly acquired home or if we are planning to build a home.
The factors include in calculations for house building costs?

Design of the house

Construction cost

Financing Cost

Buildable site All the above mentioned costs will help us to determine
the amount we may need to borrow. For example, besides calculating the
construction costs, we may also be required to consider the total
expenditures to develop the site in order to build. Each site is unique
requiring different expenditures so this specific rupee amount will vary
from site location to site location.
Payment:
Before the house starts getting build, we will be required to pay a
deposit to your builder as well as paying a deposit for the land if we are
buying land. As work progresses you will need to make payments to the
builder. Certain loans can bestructured for progress payments to be made
during construction.
Home extinction loan
Home extension loans are used by customers to get loans from the banks
to extend their houses, by adding more rooms, kitchens, wash rooms,
terraces, or any other rooms for your growing family. It may also be
used to enclose open balcony/terrace space, or constructing a Puja ghar.
Maximum Amount of Home Extension Loans:
Banks generally offers about 70-85% of the total amount of home
extension as loan. The amount of loan sanctioned also depends on a
number of factors such as the age of the applicant at the time of loan,

tenure of the loan, repayment capacity of the borrower; his/her credit

history etc.
Home equity loan:
Home equity loans helps customer to en cash the market value of the
commodity by taking a loan by mortgaging the property. So, Home
equity loans are availed by customers, who wish to mortgage his/her
property to the bank for taking some loan for some other purpose. Then,
it's up to the bank's discretion to consider the market value of the
property and accordingly decide how much to pay to the customer. Both
the residential as well as non residential property can be considered for
the approval of the loan, provided the mortgager is a licensed title holder
and the land is free form any kind of dispute. Home equity loans don't
restrict one to use the loan money in specific investments. It might also
be used in marriage, higher education, medical expenses, etc. However it
should not be used in any illegal or speculation purposes.
land purchase loan:
Land Purchase loans are used by customers who wish to purchase a plot
of land for commercial or residential purpose. Everyone has his/her
dream perfectly sketched in his souls and so is his ambition to get his
house erected on the exact location he dreamt that to be. If you have
found and short listed the piece of land, and have arrived here for
finance, you have come to the best place you could have arrived in the
web. Now, that you have decided to purchase a land as an investment or
for your own dream home, you will realize that a land purchase loan is
one you will cherish. Loans that are strictly for land purchase can be as
scarce as good residential plots. While many lending firms around the
nation compete to provide mortgages for the purchase of a house on a
lot, only local institutions typically will be interested in lending for an
empty lot. Bridge loans are designed for people who wish to sell
the existing home and purchase another one. The bridge loans help
finance the new home, until a buyer is found for the home.
Bridge loan:
Bridge loans
are used by customers as an effective vehicle to capitalize ona purchase
opportunity. It can be considered as a short term financing scheme which

is generally expected to be paid back, within the range of 6-36 months,

till the timethe borrower gets more permanent and lower cost
financing.So, bridge loans, (or swing loans as they are otherwise said) is
a short term loanprovided by various banks like Bank of India, Citibank,
ICICI etc. often used forcommercial real estate purchases, retrieve real
estate from foreclosure.Bridge loans in corporate finance are called gap
financing, and are used to cover thetime between redemption of issuance
of one bond and its replacement by a new issue.They can also be
operating loans for periods between LOI and acquisition, or quietperiod
and IPO.Bridge loan may contain a decent proportion of prepaid interest,
sometimes as muchas six months. If the home gets sold before that time,
you may receive interestpayments back, but if it hasn't sold, you may be
required to continue payments.
1.2 Section
OBJECTIVES
To study the cost of home loans provided by the bank.
To know that which bank provide batter loan schemes.
To analyze the home loan scheme by PNB and SBI banks.
To know the consumer perception about the home loan of PNB and SBI.
SCOPE OF THE STUDY:
This study is analysis and comparison of home loansprovided by the SBI
and PNB banks. It is helpful in analysing the home loan serviceprovided
to the customer and their comparison.
RESEARCH METHODOLOGY
Design of Research:
The research will be exploratory in nature. A population of peoples who
take homeloan from these banks will be considered for this study. I will

try to explore about thehome loans which would make a difference in the
behavior of the consumer. Effortwill be made to throw light on most of
the factors which have either indirect or directeffect on the behavior of
the consumer. I will also explore the impact of home loanson the market
share of the banks.
Sampling plan:

Population:The study aimed to include the customers of SBI and PNB in

nawanshahr, tomake a comparative analysis of home loan schemes of
these two banks..

Sample Size:A Sample size of 100 respondents will be taken for the
current study because it isnot possible to cover the whole universe in the
available time period. So it isnecessary to take the sample size. In 100
respondents 50 respondents from PNBand 50 from SBI. The sample will
the peoples of age group lying betweeneighteen to thirty years. The
sample will be taken in the form of strata based onage, sex, and income
group.

Sampling technique:
The sampling technique will be probabilistic sampling more specifically
therandom convenient and judgemental sampling will be used. As in
probabilisticsampling the select unit for observation with known
probabilities so thatstatistically sound assumptions are supported from
the sample to entire populationso that we had positive probability of
being selected into the sample. I will go forstratified random sampling as
we are interested to study the home loan by SBIand PNB banks, so we
will make the strata on the basis of age, occupation,income level, gender.
And from each strata we will go for random sampling.
Sources of Data:

I will use primary source of data that is structured questionnaire. As

these banks areestablished from so many years, so many researchers
have done research on this topic,so we will find secondary data also and
also use this data for the help of this research.So, this research data will
collected from the primary source and secondary source.
Our method of collecting the data is from the questionnaire that will be
filled by the respondent from the sample, it will be structured
questionnaire.
Tools and Techniques:
As no study could be successfully completed without proper tools
& techniques, samewith my project. For the better presentation and right
explanation I used tools of statistics and computer very frequently and I
am very thankful to all those tools forhelping me a lot. Basic tools which
I used for project are:
BAR CHARTS
PIE CHARTS
TABLES
Bar charts and pie charts are very useful tools for every research to show
the result ina clear, simple way. Because I used bar charts and pie charts
in my project forshowing data in a systematic way. So I need not
necessary for any observer to read allthe theoretical detail, simple on
seeing the charts anybody that what is being said.
Technological Tools:
MS WORD
MS-EXCEL

CHAPTER 2
2.1 Section
INTRODUCTION TO COMPANY:PUNJAB NATIONAL BANK :
PNB has over 4500 branches and offices bringing the Punjab National
Bank to yourdoorstep. Around 2400 offices come under the network of
Centralized BankingSolution or CBS. A need for centralized banking
system prompted PNB to gocomputerized and what followed was the
establishment of CBS in Punjab NationalBank branches in all the
leading cities like Delhi, Pune, Chennai, Mumbai,Ahmedabad,
Chandigarh, Gurgaon, Hyderabad, Jalandhar, Kolkata, Ludhiana,
Nodaland Bangalore.Internet Banking Services are provided to all
customers in the CBS branches. Abranch and ATM locator is also
available on the official website of Punjab NationalBank. For an
overview of the annual report or the bank profile, the site can
beresourceful. The website also provides info on the careers and
recruitments at PNBand the exam results. The careers at nationalized
banks like PNB are the most soughtafter one and candidates are selected
on the basis of their exam result.PNB topped the Best Paying
Commercial Bank category with an overall rating of 87.45% as
evaluated by the SSS Retirement, Death & Funeral Benefits Program.
STATE BANK OF INDIA:
State Bank of India (SBI) is India's largest commercial bank. SBI has a
vast domesticnetwork of over 9000 branches (approximately 14% of all
bank branches) andcommands one-fifth of deposits and loans of all
scheduled commercial banks in India.The State Bank Group includes a
network of eight banking subsidiaries and severalnon-banking
subsidiaries offering merchant banking services, fund
management,factoring services, primary dealership in government
securities, credit cards andinsurance.The eight banking subsidiaries
are:State Bank of Bikaner and Jaipur(SBBJ),State Bank of Hyderabad
(SBH).State Bank of India (SBI),State Bank of
Indore (SBIR),State Bank of Mysore (SBM),State Bank of Patiala
(SBP),State Bank of Saurashtra (SBS) and State Bank of Travancore
(SBT).Today, State Bank of India (SBI) has spread its arms around the

world and has anetwork of branches spanning all time zones. SBI's
International Banking Groupdelivers the full range of cross-border
finance solutions through its four wings - theDomestic division, the
Foreign Offices division, the Foreign Department and theInternational
Services division.
2.2 Section
OVERVIEW OF THE INDUSTRY:
HISTORY:
Banking in India has a long and elaborate history of more than 200
years. Thebeginning of this industry can be traced back to 1786, when
the countrys first bank,Bank of Bengal, was established. But
the industry changed rapidly and drastically,after the nationalization of
banks in 1969. As a result, the public sector banks beganexperiencing
numerous positive changes and enormous growth. Then came the muchtalked-about liberalization and economic reforms that allowed banks
to explore newbusiness opportunities and not just remain constrained
to generating revenues frommere borrowing and lending. This provided
the Indian banking scenario a remarkablefacelift that only continues to
get better with time. However, even today, despite theforay of
foreign banks in the country, nationalized banks continue to
be biggestlenders in the country. This is primarily due to the size of the
banks and thepenetration of the networks.The Indian banking system can
be classified into nationalized banks, private banksand specialized
banking institutions. The industry is highly fragmented with 30banking
units contributing to almost 50% of deposits and 60% of advances.
TheReserve Bank of India is the foremost monitoring body in the Indian
Financial sector.It is a centralized body that monitors discrepancies and
shortcomings in the system.Industry estimates indicate that out of 274
commercial banks operating in the country,223 banks are in the public
sector and 51 are in the private sector. These private sectorbanks include
24 foreign banks that have begub their operations here. The
specializedbanking institutions that include cooperatives, rural banks,
etc. form a part of thenationalized banks category.Opportunities

The Banking sector is considered the most lucrative option in todays job
market. Inthe industry, a position in Treasury or Forex is considered
right on top and this isfollowed by careers in Private Banking,
Investment Banking and Retail Banking. Onecould work in a variety of
areas in banking industry including Recurring Deposit
account, banking officer, probationary officer, loan officer, assessor,
personal loanofficer, home loan officer, home loan agent, loan manager,
mortgage loan underwriter,loan processing officer, accountant,
product marketing and sales executive, andcustomer service executive
among others.In the Financial Services, some of the important jobs
include that of a stockbrokerwho is essentially a person who buys and
sells securities on behalf of individuals andinstitutions for some
commission. While some brokers like to practice with individualclients
others work for institutions. Brokers who work for institutional investors
areoften called securities traders. Many prefer to work as dealers,
advisors and securitiesanalysts. Security analysts are those who advise
companies on floatations of sharesas they are expected to have sound
knowledge of capital markets.Investment analysts are the backbone of
the financial services sector. They study thefinancial reports of
companies, assess various statistical information,
profitabilityprojections, compare financial results, survey the industry as
a whole and on the basisof the available information, and finally
conclude to a decision. Equity Analysts do jobs similar to investment
analysts and research the equity markets and makepredictions.
Growth:
The limit for foreign direct investment in private banks has been
increased from 49%to 74%. In addition, the limit for foreign institutional
investment in private banks is49%. Liberalization and globalization have
created a more challenging environmentin the banking sector as well as
in the other segments of the financial sector such asmutual funds, Non
Banking Finance Companies, post offices, capital markets,
venturecapitalists, etc.
Research and Markets has announced the addition of 'Indian Retail
Banking, 2006' totheir offering. Indian Retail Banking continues to

redefine the credit growth in thecountry. It grew by a whopping 44.4%

in 2005-06 to touch Rs 3,538 billion. This leapwas despite the increase
in risk weight by RBI for housing and real estate loans duringAugust,
2005. Housing, which constitutes more than 52% of all retail loans, grew
at arobust rate of 44.35% during 2005-06. In order to help banks in India
to understandthe market and competition and plan future strategies, we
have just come out with anIndustry Insight on Indian Retail banking 2006 edition.This report analyses the retail banking market and its
segments in India and presentsthe key trends, along with issues and
challenges. The report also paints a futureoutlook for the market.
Besides it profiles 21 major players in the retail banking spaceand their
strategies.Finally, it seems Reserve Bank of India's (RBI) flurry
of measures to restrain thehome finance market is paying off. With
tightening of interest rates by the RBI and asimultaneous increase in real
estate prices in a few markets, the banking sector iswitnessing a decline
in the growth of its home loan portfolio.
The home loan industry is experiencing a growth of 25% this year, as
against 30%growth in home loans earlier. Rajiv Sabharwal, senior
general manager, ICICI Bank,
15which has recorded the highest incremental growth in home finance
segment in recentpast, said, The real estate prices have become very
high in few markets, which hasresulted in the fall in growth rates for
home loans for the banking industry. Home loangrowth has reduced to
25% from its earlier growth rate at 30% and since we are anintegral part
of the industry, there will be some impact on us too.He added that the
bigger impact had come from real estate prices, but obviouslyinterest
rates hikes will also have an impact. He, however, declined to disclose
thebanks current home loan growth rate. Echoing a similar view, a
senior official of State Bank of India (SBI) said the home loan market is
showing some signs of slowing down.However, another major
player, Housing Development Finance Corporation (HDFC)said the
housing finance market for the middle class segment was growing at
ahealthy pace.PNB Bank is a leading home loan lender of the country
with about 30% market share.Retail lending comprises 70% of the total
loan portfolio of the bank, of which thehome loan lending is about 50%.

In the first half of fiscal 2007, the bank experiencedtotal home loan
disbursements of Rs 13,400 crore.
MAJOR PLAYERS
:The financial sector in India has become stronger in terms of capital and
the numberof customers. It has become globally competitive and diverse
aiming, at higherproductivity and efficiency.Exposure to worldwide
competition and deregulation in Indian financial sector has ledto the
emergence of better quality products and services. Reforms have
changed theface of Indian banking and finance. The banking sector has
improved manifolds interms of capital adequacy, asset classification,
profitability, income recognition,provisioning, exposure limits,
investment fluctuation reserve, risk management, etc.
TOP 10 PLAYERS IN BANKING & FINANCE
State Bank of India
HDFC bank
Citibank
ICICI Bank
Punjab National bank
UTI
Bank
Hongkong & Shanghai Banking Corp.
Kotak Mahindra Bank
Sundaram Bank
Oriental Bank of Commerce
TOP 10 PLAYERS IN INSURANCE
Life Insurance corporation of IndiaBajaj Allianz General InsuranceICICI
Prudential Life InsuranceICICI Lombard General InsuranceBirla Sunlife
InsuranceTata AIG General InsuranceNew India Assurance Co.Iffco
Tokio General InsuranceOriental Insurance Co.HDFC Standard Life
Insurance

2.3 Section
PROFILE OF THE ORGANISATION:
PROFILE OF PNB:
The profile of the PNB shows superior
banking services
incorporate, personal and international banking, industrial
and agricultural finance andfinance of trade. Punjab
National Bank boasts of a varied clientele consisting of
smalland medium industrial units, exporters, multinational companies, Indianconglomerates and NRI. The
Bank is changing outdated front and back end
processesto modern customer friendly processes to help
improve the total customer experience.With about 8500
of its own 10000 branches and another 5100 branches of
itsAssociate Banks already networked, today it offers the
largest banking network to theIndian customer. The Bank
is also in the process of providing complete
paymentsolution to its clientele with its over 8500 ATMs,
and other electronic channels suchas Internet banking,
debit cards, mobile banking, etc.The objectives of the
Companyare in line with objectives laid down by RBI for
the Primary Dealers:
Strengthen the infrastructure in the government securities market in
order to make itvibrant, liquid and broad based.
Ensure the development of underwriting and market making capabilities
forGovernment Securities

Improve secondary market trading system, which would contribute to

price discovery,enhance liquidity and turnover and encourage voluntary
holding of Governmentsecurities amongst a wider investor base

Become an effective conduit for conducting open market operations.

PROFILE OF SBI:
The SBIs powerful corporate banking formation deploys multiple
channels to deliverintegrated solutions for all financial challenges faced
by the corporate universe. TheCorporate Banking Group and the
National Banking Group are the primary deliverychannels for corporate
banking products.The Corporate Banking Group consists of dedicated
Strategic Business Units thatcater exclusively to specific client groups or
specialize in particular product clusters.Foremost among these a
specialized group is the Corporate Accounts Group (CAG),focusing on
the prime corporate and institutional clients of the countrys
biggestbusiness centers. The others are the Project Finance unit and the
Leasing unit.TheNational Banking Group also delivers the entire
spectrum of corporate bankingproducts to other corporate clients, on a
nationwide platform.The bank is also looking at opportunities to grow in
size in India as well asInternationally. It presently has 82 foreign offices
in 32 countries across the globe. Ithas also 7 Subsidiaries in India SBI
Capital Markets, SBICAP Securities, SBI DFHI,SBI Factors, SBI Life
and SBI Cards - forming a formidable group in the IndianBanking
scenario. It is in the process of raising capital for its growth and
alsoconsolidating its various holdings. Throughout all this change, the
Bank is alsoattempting to change old mindsets, attitudes and take all
employees together on thisexciting road to Transformation. In a recently
concluded mass internalcommunication programme termed Parivartan
the Bank rolled out over 3300 twoday workshops across the country and
covered over 130,000 employees in a period of 100 days using about
400 Trainers, to drive home the message of Change andinclusiveness.
The workshops fired the imagination of the employees with some
otherbanks in India as well as other Public Sector Organizations seeking
to emulate theprogramme
.
2.4 section
COMPANY HISTORY:
PNB HISTORY:

Punjab National Bank of India was established by Lala Lajpat Rai in the
pre-independence India in 1895 in Punjab, with Lahore as its head
office. Today it is thesecond largest public sector bank in India. It was
nationalized in 1969 along with 13other major commercial banks. The
privatization started in 1989 when 30 per cent of its shares were offered
to the public and it was listed on the stock exchange.In 1992,PNB
became the first Philippine bank to reach P100 billion in assets. Later
that year,privatization continued with a second public offering of its
shares.In August 2005, PNB was fully privatized. The joint sale by the
Philippinegovernment and the Lucio Tan Group of the 67% stake
in PNB was completed withinthe third quarter of 2005. The Lucio Tan
Group exercised its right to match the P43.77 per share bid offered by a
competitor and purchased the shares owned by thegovernment. The
completion of sale is expected to speed up the development of PNBs
franchise and operational competitiveness.
SBI HISTORY:
The origins of State Bank of India date back to 1806 when the Bank
of Calcutta (latercalled the Bank of Bengal) was established. In 1921,
the Bank of Bengal and twoother Presidency banks (Bank of Madras and
Bank of Bombay) were amalgamated toform the Imperial Bank of India.
In 1955, the controlling interest in the Imperial Bank of India was
acquired by the Reserve Bank of India and the State Bank of India
(SBI)came into existence by an act of Parliament as successor to the
Imperial Bank of India.

Today State Bank of India (SBI) has spread its arms around the world
and has anetwork of branches spanning all time zones. SBI's
International Banking Groupdelivers the full range of cross-border
finance solutions through its four wings - theDomestic division, the

Foreign Offices division, the Foreign Department and theInternational

Services division.
2.5 Section
RECENT ACHIVEMENTS AND MILESTONES:
PNB Recent achievements and milestones
Punjab National Bank (PNB), has announced that it has completed 100%
corebanking implementation at all its 4604 branches and extension
counters through theFinacle Universal Banking Solution from Infosys,
on Sun infrastructure and theOracle Database setting a significant
milestone for themselves and a new benchmark for the Indian banking
industry.Completed in November 2008, 4 months ahead of schedule, the
bank implementedindustry-leading Finacle core banking solution from
Infosys across its operationsrunning a flexible, and scalable database
platform from Oracle and innovative serversfrom Sun
Microsystems With an increasingly dynamic business and regulatory
environment, PNB sought tonot only achieve automation, but
also centralize operations, standardize branchprocesses, achieve high
scalability for future business growth, provide flexibility of creating
innovative banking products to its lines of business, and at the same
time,reduce overall costs.The visionary zeal and the futuristic view of
the Banks top management in the year2007-2008 incubated the idea of
introduction of a Centralised Banking solution. Thebold and innovative
thought culminated into the CBS architecture with Finacleapplication on
Oracle Database and Sun hardware platform with Solaris
OperatingSystem.With Finacles agile and future proof technology, the
bank today has over 22,500concurrent users. The solutions scalability
has also enabled the banks scalability tobe the best in the country with
the number of peak transactions at 3.5 million.Finacle core banking
platform also provides the bank with exceptional agility forproduct
innovation and improved flexibility of operations. With seamless
integrationof delivery channels such as ATM and internet banking
solutions, PNB is able toprovide 24X7 services to customers at
a reduced transaction cost.PNBs choice of the Oracle Database has
provided the banks IT infrastructure withrobustness, management

features, security and scalability as well as performancerequirements to

service 3.5 million transactions and 22500 concurrent users
asignificant achievement in the Indian banking industry. In addition, the
OracleDatabase will help PNB take control of its enterprise information,
gain better businessinsight, and quickly and confidently adapt to an
increasingly changing competitiveenvironment.
20With secure, highly available and scalable grids of low-cost servers
and storage,Oracle customers can tackle the most demanding transaction
processing, datawarehousing, business intelligence and content
management applications.The 100% implementation of Finacle
Core Banking Solution shall enable PNB tofurther reduce operational
costs and revenue leakage while improving productivity of branches,
introduction of new and innovative products and visibility of business.
Theanywhere anytime banking facility will enable the bank to offer
products for everysegment of the customer.PNB long-standing and
progressive partnership also highlights Finacles leadership inlarge scale
banking transformation, the solutions future proof technology
andpowerful capabilities. India is a strategic market for Finacle and we
look forward toclosely collaborating with Punjab National Bank for their
future growth plans.
SBI RECENT ACHIVEMENTS AND MILESTONES:
AWARDS:
SBI has been the proud recipient of the ICRA Online Award - 8
times,CNBC TV 18, Crisil Award 2006 - 4 Awards, The Lipper Award
(Year 2005-2006)and most recently with the CNBC TV - 18 Crisil
Mutual Fund of the Year Award2007 and 5 Awards for our schemes.
SBI Card reaches three million milestone:
SBI Card, a joint venture between State Bank of India and GE Money,
announced yet another landmark achievement of crossing the three
millioncardholders-mark. Roopam Asthana, CEO-SBI Card, said,
"This milestone is even more remarkable aswe have added one million
cardholders in just ten months. Our objective is to accelerate the pace
of growth by extending the benefits to a broader range of consumers in
Tier II cities, along with improvedvalue propositions for the urban

affluent customers." SBI Card recently signed up Indian cricketerYuvraj

Singh as its brand ambassador.
SBI joins Chinese bank to touch 10,000 branches:
Public sector State Bank of India on Sunday became only the second
bank in theworld to have 10,000 branches when Union Finance Minister
P Chidambaraminaugurated its latest branch here.Speaking on the
occasion, Chidambaram said China's ICBC Bank was the other bank to
have 10,000 branches. Opening 10,000 branches was a great feat. "It is
not an easymilestone though the SBI was the bank of the government
and Indian people evenbefore other banks were nationalised," he
said.People all over the world, including the Chinese, would now know
about this smallvillage where the 10000th branch of the SBI had been
opened, he said adding theywould be amazed by the bank's growth. The
bank should be proud of the achievementhe said and wished that the
bank opened one lakh branches.The Minister said out of the over 100
crore people, seventy 75 per cent did not haveany type of insurance.
Similarly, 50 per cent of the 11 crore farmers did not have bank account.
Banks should go to the people and enroll them as account holders.
'That iswhat economists say is financial inclusion,' he said.
2.6 Section
PRODUCT RANGE OF COMPANY/INDUSTRY:
The products and services provided by the SBI and PNB are in various
fields, such as:
Banking services
NRI services

International banking

Corporate banking

Agricultural banking

International banking
2.7 Section
PERFORMANCE OF COMPANTY IN LAST FIVE YEARS:
PNB performance in last five years:
1st Quarter Net Income UP 48% Year-on-YearTaking-off from a
breakthrough performance in 2007 with a registered net income of P1.5
billion, PNB continues to reap the benefits from its efforts to strengthen
corebusinesses, reduce non-performing assets and manage costs.
Net Income for the 1stQuarter of 2008 registered P457 million, up 48%
from P308 million of the sameperiod last year. This performance bucks
industry trends for the 1st quarter of 2008based on published income
reports.Even as the operating environment proved volatile where
negative trends are expected,PNB still managed to reflect a 136%
growth in foreign exchange gains year-on-year,from P242 million to
P571 million. A relentless focus in generating low-cost fundsfrom
deposits and other funding sources led to a reduction in total interest
expense byas much as 27%. Total deposits closed firm at P180
billion.Operating expenses were down 23% despite investments made in
systemsenhancement and upgrading of facilities. The Bank has recently
implemented a newgeneration core banking system: Flexcube an endto-end solution designed toautomate both corporate and retail banking
businesses; and effectively in-source coreoverseas operations to its
global data center in the Philippines. PNBs Japan,Singapore, Hongkong
and United States branches as well as the London subsidiaryhave
already been converted and the rest of the Bank is expected to go live
soon.
22billion, up 25% from end-2007. Combined new bookings for the 1st
quarter 2008already reached the half-billion mark. PNBs Net Loans and
Receivables closed P77billion.As of March 31, 2008, PNBs Capital

Adequacy Ratio under Basel II remainedformidable at 18.51%, still way

above the 10% ratio required by the Bangko Sentralng Pilipinas. Subject
to appropriate approvals and clearances, PNB is going to thecapital
markets to raise a minimum of P3 billion of Tier 2 Capital in preparation
forits maturing subordinated notes in February 2009.PNB will emerge as
the 4th largest domestic bank in the country in terms of asset sizeonce its
planned merger with Allied Banking Corporation (ABC) is completed.
Therespective Board of Directors of PNB and ABC passed resolutions
last April 30, 2008approving the plan to merge the two banks. This
transaction is subject to the approvalof shareholders and regulatory
authorities and is expected to be completed by the 3rdquarter of 2008.
SBI performance in last five years:
State Bank of India (SBI) is all geared up toincrease its business per
employee and profit per employee as it thinks that for SBI,these two
parameters are among the lowest in the industry.On one hand, the bank
is trying to reduce its staff strengthwhich would eventually improve the
ratios; but on the other, the bank is also goingflat out to increase its
customer base."Our business per employee and profit per employee is
one of the lowest in theindustry," SBI had recently said in a joint
statement issued by the management andunions.SBI's generates Rs 2.99
crore of business per employee, while its profit peremployee is just
about Rs 2.17 lakh. By contrast, majority of the large public sectorbanks
are better in terms of both these parameters.For instance, Canara Bank
has a business per employee (BPE) of Rs 4.42 crore, whileUnion Bank
of India's BPE is at Rs 4.36 crore and Bank of Baroda's (BoB) Rs
3.51crore. These are according to their respective annual reports for
2005-06.On the other hand, Canara Bank's profit per employee (PPE) is
also on the higher sideat Rs 3.02 lakh. The PPEs of Union Bank and
BoB are at Rs 2.66 lakh and Rs 2.13lakh, respectively."Over the years,
we have been steadily losing our marketshare from about 35% in1970s
to around 16% in 2006. Our vast network is failing to attract the new
anddemanding young customers," SBI said in that statement, which is
addressed to allSBI officers and employees and aimed at changing
their attitude towards customers.

The statement was jointly signed by chairman OP Bhatt, managing

directors TSBhattacharya and Yogesh Agarwal and top office bearers
of its officers andemployees associations.To address these issues, both
the management and unions have agreed to work handin hand. They
have appealed to the bank's staffs to go flat out to increase its
customerbase."Let us be conscious of the customer's overall needs rather
than only thetransaction at hand. Let us expand our customer base," the
statement read.The bank has nearly 37 lakh savings bank accounts in the
Bengal circleitself.Meanwhile, the country's largest and oldest bank has
offered an exit optionscheme (EOS) to its employees. The bank has
some 2.1 lakh staffs, out of whichnearly 1.4 lakh are clerical and
subordinate employees.
2.8 Section
Annual results
FINANCIAL STATUS OF THE ORGANISATION:
PNB financial status for last five years:
Mar ' 08
Mar ' 07
Mar ' 06
Mar ' 05
Mar ' 04
Sales 14,265.02 11,537.48 9,584.15 8,459.85 7,778.94Operating
profit 10,029.21 7,149.74 5,721.06 4,683.04 4,056.84Interest 8,73
0.86 6,022.91 4,917.39 4,453.11 4,154.99Gross profit 4,006.24 3,
230.64 2,874.77 2,707.21 3,120.86EPS (Rs) 64.98 48.84 45.65 4
4.72 41
Balance sheet
Mar ' 08

Mar ' 07
Mar ' 06
Mar ' 05
Mar ' 04
Sources of funds
Owner's fund
Equity share capital 315.30 315.30 315.30
315.30 265.30Share application money - - - - -Preference share c
apital - - - - -Reserves & surplus 10,467.35 9,826.31 8,758.68 7,5
33.50 4,425.47Loan funds Secured loans - - - - Unsecured loans 1,66,457.23 1,39,859.67 1,19,684.92 1,03,166.8
9 87,916.40
Total 1,77,239.88
1,50,001.28
1,28,758.90
1,11,015.69
92,607.16
Uses of funds
Fixed assets
Gross block 3,699.64 2,247.74 2,106.92 1,875.65 1,645.93Less :
revaluation reserve 1,535.70 293.85 302.38 312.49 321.04Less :
accumulated depreciation 1,384.12 1,237.92 1,076.69 910.42 746
.08Net block 779.83 715.98 727.84 652.74 578.81Capital work-in-

progress - - - - -Investments 53,991.71 45,189.84 41,055.31 50,6

72.83 42,125.49
Net current assetsCurrent assets, loans
&advances4,380.84 3,980.80 3,762.79 3,101.44 3,261.18Less :
current liabilities &provisions14,798.23 10,178.51 9,518.93
12,194.80 8,114.48Total net current assets -10,417.38 -6,197.71 5,756.14 -9,093.36 -4,853.30
Miscellaneous expenses notwritten- - - - SBI financial status for last five years:
Balancesheet
p/l a/c
cash flow etc.
2.9 Section
FUTURE PLANS:
PNB future plans:
PNB has initiated various steps in a bid to expand its operations in the
state of Kerala.These include opening new branches and increasing the
number of its core bankingsolutions branches. PNB currently has 71
CBS branches in Kerala and has registeredgood growth from this
region.PNB in looking at increasing its international presence and in line
with this, thecompany is planning to set up offices in UK, Singapore,
Hong Kong and Canada. TheCanada office is likely to open very soon,
while the other locations are likely tocommence operations by end of
this fiscal year.PNB unvieled its plans to raise additional capital of Rs.
21,000 million to fund itsbusiness expansion plans for this current fiscal.
SBI future plans:
SBI has set for itself an ambitious target of credit linking 1 million
SHGs up to March2008.The Bank has started to leverage our vast SHG
network for various servicesbeyond credit delivery.The State Bank of
India (SBI) has formulated a home-grown strategy to merge itssix

associated banks with it within this fiscal.SBI drawn up a home-grown

strategy to carry out the merger programme and we maytake up such
mergers one by one, or two at a time or in a phased manner. SBI wantthe
future mergers to be as smooth as the merger.Post-merger, the size of
SBIsbalance sheet will cr-oss Rs 12,00,000 crore and its profitablity
will increased.
CHAPTER 3
1) REVIEW OF LITERATURE:
1) In august 2001 James B. Thomson and Ben R.
Craighad studied about the Federal Home Loan Bank Lending to
Community Banks,are TargetedSubsidies Necessary? The GrammLeach-Bliley Act of 1999 amended thelending authority of the Federal
Home Loan Banks to include advancessecured by small enterprise loans
of community financial institutions. Threepossible reasons for the
extension of this selective credit subsidy tocommunity banks and thrifts
are examined, including the need to: subsidizecommunity depository
institutions, stabilize the Federal Home Loan Banks,and address a
market failure in rural markets for small enterprise
loans.They empirically investigate whether funding constraints impact
the small-business lending decision by rural community banks.
Specifically, theyestimate two empirical models of small-business
lending by community banks.The data reject the hypothesis that access
to increased funds will increase theamount of small-business loans made
by community banks.2)
2) In December 2006 Fulbag Singh and Reema Sharma had studied
about thehousing Finance in India. Housing, as one of the three basic
needs of life,always remains on the top priority of any person, economy,
government andsociety at large. In India, majority of the population lives
in slums and shabbyshelters in rural areas. From the last decade, the
Government of India has beencontinuously trying to strengthen the
housing sector by introducing varioushousing loan schemes for rural and
urban population. The first attempt in thisregard was the National
Housing Policy (NHP), which was introduced in 1988.The National

Housing Bank (NHB) was set up in 1988 as an apex institutionfor

housing finance and a wholly-owned subsidiary of Reserve Bank of
India(RBI). The main objective of the bank is to promote and establish
the housingfinancial institutions in the country as well as to provide
refinance facilities tohousing finance corporations and scheduled
commercial banks. Moreover, forthe salaried section, the tax rebates on
housing loans have been introduced.The paper is based on the case study
of LIC Housing Finance Ltd., whichanalyzes region-wise disbursements
of individual house loans, their portfolioamounts and the defaults for the
last ten years, i.e., from 1995-96 to 2004-05by working out relevant
ratios in terms of percentages and the compoundannual growth rates. A
relevant chart has also been prepared to highlight theresults.
3) In May 18, 2007 Michael LaCour-Little had studied about
the Economic FactorsAffecting Home Mortgage Disclosure Act
Reporting.
The public release of the 2004-2005 Home Mortgage Disclosure Act
data raised a number of questions given theincrease in the number and
percentage of higher-priced home mortgage loans andcontinued
differentials across demographic groups. Here we assess three
possibleexplanations for the observed increase in 2005 over 2004: (1)
changes in lenderbusiness practices; (2) changes in the risk profile of
borrowers; and (3) changes inthe yield curve environment. Results
suggest that after controlling for the mix of loantypes, credit risk factors,
and the yield curve, there was no statistically significant
increase in reportable volume for loans originated directly by lenders
during 2005,though indirect, wholesale originations did significantly
increase. Finally, given amodel of the factors affecting results for 20042005, we predict that 2006 results willcontinue to show an increase in
the percentage of loans that are higher priced whenfinal numbers are
released in September 2007.
4) In may 1991 Stephen F. Borde had studied about the Is the Savings
and LoanIndustry Facing Extinction? This article tells about the Saving
and loan crisis.Proposed solutions are discussed in the context of the

industry as it currently stands.With a somewhat similar liability structure

to that of banks (mainly short-termdeposits), the asset structure of S&Ls
is quite different. Whereas banks assetsconsist of short-term loans, S&L
assets consist largely of long-term loans, such ashome ownership
mortgages. Therefore, in the absence of adequate hedgingmeasures,
S&Ls are more vulnerable to interest rate risk, which can lead to
lowerprofits when interest rates rise.
5) In June 29, 2001 Joshua Rosner had studied about the Housing in the
NewMillennium: A Home Without Equity is Just a Rental with
Debt.They studied about the prospects of the U.S. housing/mortgage
sector over the nextseveral years. Based on our analysis, we believe
there are elements in place for thehousing sector to continue to
experience growth well above GDP. However, webelieve there are risks
that can materially distort the growth prospects of the sector.Specifically,
it appears that a large portion of the housing sector's growth in the1990's
came from the easing of the credit underwriting process. Such easing
includes:* The drastic reduction of minimum down payment levels from
20% to 0%* A focused effort to target the "low income" borrower* The
reduction in private mortgage insurance requirements on high loan to
valuemortgages* The increasing use of software to streamline the
origination process andmodify/recast delinquent loans in order to keep
them classified as "current"* Changes in the appraisal process which has
led to widespread overappraisal/over-valuation problemsIf these trends
remain in place, it is likely that the home purchase boom of the
pastdecade will continue unabated. Despite the increasingly more
difficult economicenvironment, it may be possible for lenders to further
ease credit standards and morefully exploit less penetrated markets.
Recently targeted populations that havehistorically been denied
homeownership opportunities have offered the mortgageindustry novel
hurdles to overcome. Industry participants in combination with
easedregulatory standards and the support of the GSEs (Government
SponsoredEnterprises) have overcome many of them.If there is an
economic disruption that causes a marked rise in unemployment,
thenegative impact on the housing market could be quite large. These

impacts come inseveral forms. They include a reduction in the demand

for homeownership, a declinein real estate prices and increased
foreclosure expenses.These impacts would be exacerbated by the
increasing debt burden of the U.S.consumer and the reduction of home
equity available in the home. Although we haveyet to see any materially
negative consequences of the relaxation of credit standards,we believe
the risk of credit relaxation and leverage can't be ignored. Importantly,
arelatively new method of loan forgiveness can temporarily alter the
perception ofcredit health in the housing sector. In an effort to keep
homeowners in the home andreduce foreclosure expenses, holders of
mortgage assets are currently recasting ormodifying troubled loans. Such
policy initiatives may for a time distort the relevancy ofdelinquency and
foreclosure statistics. However, a protracted housing slowdowncould
eventually cause modifications to become uneconomic and, thus, credit
quality
statistics would likely become relevant once again. The virtuous circle
of increasinghomeownership due to greater leverage has the potential to
become a vicious cycleof lower home prices due to an accelerating rate
of foreclosures.
6) In dec 2002 Melissa B. Jacoby had studied about the
Home Ownership Risk Beyonda Subprime Crisis: The Role of
Delinquency Management. They studied that Publicinvestment in and
promotion of homeownership and the home mortgage market oftenrelies
on three justifications to supplement shelter goals: to build household
wealthand economic self-sufficiency, to generate positive socialpsychological states, and todevelop stable neighborhoods and
communities. Homeownership and mortgageobligations do not
inherently further these objectives, however, and sometimesundermine
them. The most visible triggers of the recent surge in
subprimedelinquency have produced calls for emergency foreclosure
avoidance interventions(as well as front-end regulatory fixes). Whatever

their merit, I contend that a systemof mortgage delinquency

management should be an enduring component of housingpolicy.
Furtherance of housing and household policy objectives hinges in part
on theconditions under which homeownership is obtained, maintained,
leveraged, and - insome situations - exited. Given that high leverage or
trigger events such as job lossand medical problems play significant
roles in mortgage delinquency independent ofloan terms, better
origination practices cannot eliminate the need for
delinquencymanagement.One function of this brief essay is to identify
an existing rough framework formanaging delinquency. Legal
scholarship should no longer discuss mortgageenforcement primarily in
terms of foreclosure law and instead should include otherdebtor-creditor
laws such as bankruptcy, industry loss mitigation efforts, and third-party
interventions such as delinquency housing counseling. In terms of
analyzingthis framework, it is tempting to focus on its impact on
mortgage credit cost andaccess or on the absolute number of homes
temporarily saved, but my proposedanalysis is based on whether the
system honors and furthers the goals of wealthbuilding, positive social
psychological states, and community development. Becausethose ends
are not inexorably linked to ownership generally or owning a
particularhome, a system of delinquency management that honors these
objectives shouldstrive to provide fair, transparent, humane, and
predictable strategies for home exit aswell as for home retention.
Although more empirical research is needed, this essaystarts the process
of analyzing mortgage delinquency management tools in theproposed
fashion.
7) In 1999 Yoko Moriizumi had studied about the Current Wealth, Housi
ng Purchaseand Private Housing Loan Demand in Japan. Japanese
households accumulate wealth for downpayments at a high rate.
Therefore,current wealth plays an important role in home acquisition as

public loans whosedirect mortgage lending is a strong support for home

purchasers. We estimate thewealth effect on private mortgage debt as
well as housing consumption by applying amodel where mortgage debt
demand is derived from house purchase decisions andis determined
jointly with housing consumption. We use a simultaneous equationTobit
estimation method. Wealth effects on private mortgage debt, likelihood
ofborrowing, and housing consumption are not elastic. On the other
hand, a change inhousing consumption affects the likelihood of
borrowing elastically much more thanthe private mortgage amount of
borrowers. Housing and private mortgage marketsfluctuate very closely
with the number of participants in the mortgage market.Therefore, the
number of housing starts is linked strongly to the private
mortgagemarket.
8)Robert B. Avery and Allen N. Berger had studied about the Loan
commitmentsand bank risk exposure. They studied about the
Loan commitments increase abank's risk by obligating it to issue future
loans under terms that it mightotherwise refuse. However, moral hazard
and adverse selection problems 32potentially may result in these
contracts being rationed or sorted. Dependingon the relative risks of the
borrowers who do and do not receive commitments,commitment loans
could be safer or riskier on average than other loans. theempirical results
indicate that commitment loans tend to have slightly betterthan average
performance, suggesting that commitments generate little risk orthat this
risk is offset by the selection of safer borrowers.
9)Sumit Agarwal,Souphala Chomsisengphet and
John C. Driscoll had studiedabout the Loan commitments
and private firms. They studied that,
Most loansare in the form of credit lines. Empirical studies of line
demand have beencomplicated by their use of data on publicly traded

firms, which have a widemenu of financing options. We avoid this

problem by using a uniqueproprietary data set from a large financial
institution of loan commitmentsmade to 712 privately-held firms. We
test Martin and Santomero's (1997)model, in which lines give firms the
speed and flexibility to pursue investmentopportunities. Our findings are
consistent with their predictions. Firms facinghigher rates and fees have
smaller credit lines. Firms with higher growthcommit to larger lines of
credit and have a higher rate of line utilization. Firmsexperiencing more
uncertainty in their funding needs commit to smaller creditlines. Almost
all firms convert unused credit line portions into spot loans andtake out
new lines.
10)
Faik Koray and Eric T. Hillebrand had studied about the
Interest Rate Volatility andHome Mortgage Loans . they studied that The
U.S. economy has experiencedsubstantial fluctuations in real and
nominal interest rates since the 1970s. Thispaper investigates
empirically the relationship between home mortgage loansand volatility
in mortgage rates for the period 1971:02 through 2003:03.Contrary to
common wisdom, we find a positive relationship between mortgagerate
volatility and home mortgage loans. Further investigation indicates
thatthis is due to volatility in the bond market. In times of high interest
volatility,households disinvest in government securities and invest in
real assets, whichyield a positive relationship between mortgage
rate volatility and homemortgage loans.
11) In nov 2000 Michelle J. White and Emily Y. Lin had studied about
theBankruptcy and the Market for Mortgage and Home Improvement
Loans. Theystudied that This paper investigates the relationship between
bankruptcyexemptions and the availability of credit for mortgage and
home improvementloans. We develop a combined model of debtors'
decisions to file forbankruptcy and to default on their mortgages and
show that the theory predictspositive relationships between both the
homestead and personal propertyexemption levels and the probability
of borrowers being denied mortgage(secured) and home improvement
loans. We test these predictions empiricallyand find strong and

statistically significant support when evidence from cross-state variation

in bankruptcy exemption levels is used. Applicants formortgages are 2
percentage points more likely to be turned down formortgages and 5
percentage points more likely to be turned down for homeimprovement
loans if they live in states with unlimited rather than lowhomestead
exemptions. These relationships also hold when we introduce statefixed
effects into the model.
12) In October 14, 2008 David P. Bernstein had studied about the Home
Equity Loansand Private Mortgage Insurance: Recent Trends &
Potential Implications. Theystudied about the the impact of increased
use of home equity lines and decreased private mortgage insurance
(PMI) on mortgage markets. The data confirms that in theyears leading
up to the mortgage crisis home buyers and lenders have
aggressivelyused piggyback loans to avoid taking out PMI on first
mortgages. Multiple-mortgagefinancing packages as a percent of newly
originated mortgages (mortgagesoriginated within the previous five
years) went from 14.8% in survey year 2001 to21.5% in survey year
2007. The multiple-mortgage percentage for seasonedmortgages
(mortgages originated more than five years prior to the origination
date)also increased by a modest amount. Further comparisons reveal a
large decrease inthe proportion of mortgages with PMI with the largest
decreases in PMI coverageoccurring among newly originated multiplelien packages. Data from the SCF wasused to compare five financial
characteristics (credit card debt, installment loans,consumer credit,
home-owners equity, and liquid assets) for multiple-lien versussinglelien households. The comparisons suggest single-lien households tend to
haveslightly stronger financial variables than multiple-lien households.
The data does notsupport the view that homeowners with multiple liens
are less risky and shouldtherefore be allowed to avoid PMI. The reduced
use of PMI and the increased use ofhome equity loans increased
mortgage holder risk in several different ways and wasa contributing
factor to the 2008 mortgage and financial crisis. This change in
lendingand borrowing behavior is not a subprime market problem.

13) In aug 2007 Michael LaCour-Little had studied about the The Home
PurchaseMortgage Preferences of Low- and Moderate-Income
Households.
Housingpolicy in the United States has long supported homeownership,
yet variationpersists across income groups. This article employs
recent mortgageorigination data to focus on the revealed preferences of
low- and moderate-income (LMI) households in home purchase
mortgage choice. I identify thefactors associated with conventional
conforming, FHA, nonprime and speciallytargeted programs. Empirical
results show that individual credit characteristicsand financial factors,
including pricing, generally drive product choice, withsome variation
evident when loans are originated through brokers. Results alsoindicate
that targeted conventional programs effectively compete
withgovernment-insured products in the LMI segment.
14) In 24 oct 2008 David C. Wheelock had studied about the
GovernmentResponse to Home Mortgage Distress: Lessons from
the Great. They studiedabout the The Great Depression was the worst
macroeconomic collapse in U.S.history. Sharp declines in household
income and real estate values resulted insoaring mortgage delinquency
rates. According to one estimate, as of January1, 1934, fully one-half of
U.S. home mortgages were delinquent and, on average,some 1000 home
loans were foreclosed every business day. This paperdocuments the
increase in residential mortgage distress during the Depression,and
discusses actions taken by state governments and the
federal governmentto reduce mortgage foreclosures and restore the
functioning of the mortgagemarket. Many states imposed moratoria on
both farm and nonfarm residentialmortgage foreclosures. Although
moratoria reduced farm foreclosure rates inthe short run, they appear
to have also reduced the supply of loans and madecredit more expensive
for subsequent borrowers. The federal government tooka number of
steps to relieve residential mortgage distress and to promote therecovery
and growth of the national mortgage market. The Home Owners
LoanCorporation (HOLC) was created in 1933 to purchase and refinance
delinquenthome loans as long-term, amortizing mortgages. Between
1933 and 1936, theHOLC acquired and refinanced one million

delinquent loans totaling $3.1 billion.The HOLC refinanced loans on

some 10 percent of all nonfarm, owner-occupieddwellings in the United
States, and about 20 percent of those with anoutstanding mortgage. The
Great Depression experience suggests howforeclosures might be reduced
during the present crisis.
15) In march 2001 Tullio Jappelli and Maria Concetta Chiuri had studied
about theFinancial Market Imperfections and Home Ownership: A
Comparative Study.They explore the determinants of the international
pattern of home ownershipusing the Luxembourg Income Study (LIS), a
collection of microeconomic dataon fourteen OECD countries. In most,
the cross-section is repeated over timeand includes several demographic
variables carefully matched between thedifferent surveys. This allows
us to construct a truly unique internationaldataset, merging data on more
than 400,000 households with aggregate paneldata on mortgage loans
and down payment ratios. After controlling fordemographic
characteristics, country effects, cohort effects and calendar timeeffects,
we find strong evidence that the availability of mortgage finance asmeasured by outstanding mortgage loans and down payment ratios affectsthe age-profile of home ownership, especially at the young end.
The resultshave important implications for the debate on the relationship
between savingand growth.
16) In 10 dec 2007 Irina Paley and Chau Do had studied about the
Explaining theGrowth of Higher-Priced Loans in HMDA: A
Decomposition Approach.
Theperiod 2004-2005 showed a significant increase in Home Mortgage
DisclosureAct (HMDA) rate spread reporting. Following the Oaxaca
(1973), Blinder (1973),and Fairlie (2005) decomposition techniques, this
study identifies the fractionof the increase due to the flattening of the
yield curve. Even after controlling forchanges in borrower risk
characteristics, the findings reveal that during 2004-2006, the flattening
of the yield curve explains a significant amount of theincrease in rate

spread reportable loans. This is the case for both prime andsubprime
originations.
17) In feb 1 2009 Vincent W. Yao and Eric Rosenblatt and Michael
LaCour-Little hadstudied about the unique paired loan dataset containing
information onmultiple conventional conforming mortgage loans of
households to examinehome equity extraction decisions over the period
2000-2006. The main questionaddressed is how much households
borrow when refinancing their currentmortgage debt in a cash-out
transaction. We also provide estimates of themarginal effect of
certain borrower characteristics. Results contribute both tothe literature
on refinancing behavior and the role of house price appreciationin
providing funds that may be used for consumer spending or other
purposes.
18) In aug 2004 Mark Carey and Greg Nini had studied about the Is the
CorporateLoan Market Globally Integrated? A Pricing Puzzle. We offer
evidence thatinterest rate spreads on syndicated loans to corporate
borrowers areeconomically significantly smaller in Europe than in the
U.S., other things equal.Differences in borrower, loan and lender
characteristics associated withequilibrium mechanisms suggested in the
literature do not appear to explainthe phenomenon. Borrowers
overwhelmingly issue in their natural homemarket and bank portfolios
display significant home "bias." This may explainwhy pricing
discrepancies are not competed away, but the fundamental causesof the
discrepancies remain a puzzle. Thus, important determinants of
loanorigination market outcomes remain to be identified, home "bias"
appears to bematerial for pricing, and corporate financing costs differ
in Europe and the U.S.
19) In july 2005 Gwilym B.J. Pryce and Patric H. Hendershott had
studied abot theThe Sensitivity of Homeowner Leverage to
the Deductibility of Home MortgageInterest.
Mortgage interest tax deductibility is needed to treat debt and
equityfinancing of homes equally. Countries that limit deductibility
create a debt tax penaltythat presumably leads households to shift from
debt toward equity financing. Thegreater the shift, the less is the tax
revenue raised by the limitation and smaller is its

negative impact on housing demand. Measuring the financing response

to alegislative change is complicated by the fact that lenders restrict
mortgage debt to thevalue of the house (or slightly less) being financed.
Taking this restriction into accountreduces the estimated financing
response by 20 percent (a 32 percent decline in debtvs a 40 percent
decline). The estimation is based on 86,000 newly originated UKloans
from the late 1990s.
20) In 1 nov 2007 Marsha Courchane studied about The Pricing of
Home MortgageLoans to Minority Borrowers: How Much of the APR
Differential.
The publicreleases of the 2004 and 2005 HMDA data have engendered a
lively debate overthe pricing of mortgage credit and its implications
regarding the treatment ofminority mortgage borrowers. We provide a
unique empirical assessment ofthis issue by using aggregated proprietary
data provided to us by lenders andan endogenous switching regression
model to estimate the probability oftaking out a subprime mortgage, and
annual percentage rate ("APR")conditional on getting either a subprime
or prime mortgage. We find that up to90 percent of the African
American APR gap, and 85 percent of the HispanicAPR gap, is
attributable to observable differences in underwriting, costing andmarket
factors that appropriately explain mortgage pricing
differentials.Although any potential discrimination is problematic and
should be addressed,our analysis suggests that little of the aggregate
differences in APRs paid byminority and non-minority borrowers are
appropriately attributed to differentialtreatment.
21) In 1991 Susan M. Wachter and Paul S. Calemhad studied about the
CommunityReinvestment and Credit Risk: Evidence from an Affordable
Home LoanProgram.This study examines the performance of home
purchase loansoriginated by a major depository institution in
Philadelphia under a flexiblelending program between 1988 and 1994.
We examine long-term delinquency inrelation to neighborhood housing
market conditions, borrower credit historyscores, and other factors. We
find that likelihood of delinquency declines withthe level of

neighborhood housing market activity. Also, likelihood ofdelinquency is

greater for borrowers with low credit history scores and thosewith high
ratios of housing expense to income, and when the property isunusually
expensive for the neighborhood where it is located.

CHAPTER 4
1)
What is your occupation?
INTERPRETATION:
SBI: NO.50
What is your occupation?
Business man
15
Student
0
Government Employee
22
Other
0
House wife
9
Interpretation
Total Number of Respondents was 46.
0 of our Respondents was Students.
22 of the Respondents were into government employees
15 of our Respondents were Businessman.
9 of our Respondents were Housewives.
None of our Respondent belonged to the category of others.
4 respondents did not answer.
2 ) From how many years you are associated with this bank?
Less than 1 year
1-5 years

10
24

More than 5

12

Interpretation
Total Number of Respondents was 46
10 persons are associated less than 1 year
24 persons are associated from 1-5 years.
12 persons are associated from more than 5 years.
3) How do you come to know about the home loan schemes of that bank?
News paper
Television
Internet
Other resources

18
14
10
4

Interpretation
Total Number of Respondents was 46
18 persons came to know from newspaper
14 persons came to know from television
10 persons came to know from internet
4 persons came to know from other resources
4) Are you aware of these type of home loans?
Home purchase loan
9
Home construction loan
18
Home improvement loan
6
Home equity loan
4
Land purchase loan
9

Interpretation
Total Number of Respondents was 46
Only 4 persons know home equity loan.
Many of peoples know home construction loan.
9 peoples know home purchase loan.
6 peoples knowhome improvement loans.
5) Are you aware all terms and conditions of home loans?
Yes
40
No
6
Interpretation
Total Number of Respondents was 46.
Many of persons know all terms and conditions of home loan i.e. 40.
6 persons had not know properly about all terms and conditions.
6)Are you satisfy with the interest rate charges by your bank?
Strongly agree
12
Agree
30
Disagree
4
strongly disagree
0
Interpretation

Total Number of Respondents was 46

12 among all consumers are strongly agreed by interest rate of the bank.
30 among all consumers are agreed by interest rate of the bank
4 among all consumers are disagreed by interest rate of the bank
0 among all consumers are strongly disagreed by interest rate of thebank
7) Your bank offer which type of services?
Mobile banking
24
Net banking
15
Forex banking
7
Interpretation
Total Number of Respondents was 46.
24 persons said that bank offer mobile banking services.
15 said that bank offer net banking services.
Only 7 persons said that bank offer forex banking services.
8) Do you agree that your bank loan processing is fast?
Strongly agree
8
Agree
26
Disagree
9
strongly disagree
3
Interpretation:Total Number of Respondents was 46.
8 persons strongly agree that bank home loan processing is fast.

26 persons agree that bank home loan processing is fast.

9 persons disagree that bank processing is fast.
3 persons strongly disagree that bank processing is fast.
9)Do you satisfy with the after home loan services provided by your
bank arebest as compare to other bank?
Strongly agree 12
Agree 30
Disagree 4
strongly disagree 0
Interpretation
Total Number of Respondents was 46
12 among all consumers are strongly agreed by after sale services of the
bank.
30 among all consumers are agreed by after sale services of the bank
4 among all consumers are disagreed by after sale services of the bank
0 among all consumers are strongly disagreed by after sale services
of the bank
10)
Does the cost of home loan is appropriate, according to your
demand?
Yes 33
No 13
Interpretation

Total Number of Respondents was 46.

33 persons said that home loan is appropriate according to theirdemand.

13 persons said that home loan is not appropriate according to
theirdemand.
11) Are you satisfy with the employees behaviour of the bank?
Strongly agree 19
Agree 23
Disagree 4
strongly disagree 0
Interpretation
Total Number of Respondents was 46.
19 persons very satisfied with the employee behaviour of the bank.
23 persons satisfied with the employee behaviour of the bank.
4 persons disagree with the employee behaviour of the bank.
No one is disagree with the employee behaviour of the bank.
12)
Does the bank give any discount upon loan services?
Yes
40
No
6
Interpretation
Total Number of Respondents was 46.
40 persons said that bank give discount upon loan services.
Only 6 persons said that bank does not give any discount upon loanservices.

13) Are you satisfy by the time taken in sanctioning the loan?
Yes
34
No
12
Interpretation:Total Number of Respondents was 46.
34 persons are satisfied by the time taken
12 persons are not satisfied by the time taken.
14) Have you face any difficulty during taking the loan?
Yes
39
No
7
Interpretation
o
Total Number of Respondents was 46.
39 persons face difficulty during taking the loan.
Only 7 persons does not face any difficulty during taking the loan.
15) Which grade you want to give of home loan schemes of the bank?
Excellent
24
Good
18
Average
4
below average
0
Interpretation
Number of Respondents was 46.
24 persons give excellent grade of the bank.
18 persons gove good grade to the bank.
Only 4 persons give average grade to the bank.
oNo none give below average grade to the bank.
PNB: NO.50
1) What is your occupation?
Business man
17
Student
0

Government Employee
Other
House wife

23
0
7

Interpretation
Total Number of Respondents was 47.
0 of our Respondents was Students.
23 of the Respondents were into government employees
17 of our Respondents were Businessman.
7 of our Respondents were Housewives.
None of our Respondent belonged to the category of others.
3 respondents did not answer.
2) From how many years you are associated with thisbank
Less than 1 year
1-5 years
More than 5

17
19
11

Interpretation
o
Total Number of Respondents was 47
17 persons are associated less than 1 year
19 persons are associated from 1-5 years.
11 persons are associated from more than 5 years.
3) How do you come to know about the home loan schemes of that bank?
News paper
12
Television
22
Internet
9
other resources
4
Interpretation
Total Number of Respondents was 47
12 persons came to know from newspaper
22 persons came to know from television
9 persons came to know from internet.
4 persons came to know from other resources.

4) Are you aware of these type of home loans?

Home purchase loan
9
Home construction loan
19
Home improvement loan
9
Home equity loan
2
Land purchase loan
8
Interpretation
Total Number of Respondents was 47.
Only 2 persons know home equity loan.
Many of peoples know home construction loan.
9 peoples know home purchase loan.
9 peoples know home improvement loans.\
5)Are you aware all terms and conditions of home loans?
Yes
34
No
13
Interpretation
Total Number of Respondents was 47.
Many of persons know all terms and conditions of home loan i.e. 34.
13 persons had not know properly about all terms and conditions.
6)Are you satisfy with the interest rate charges by your bank?
Strongly agree
11
Agree
34
Disagree
2
strongly disagree
0
Interpretation
Total Number of Respondents was 47.
11 among all consumers are strongly agreed by interest rate of the bank.
34 among all consumers are agreed by interest rate of the bank
2 among all consumers are disagreed by interest rate of the bank
0 among all consumers are strongly disagreed by interest rate of the bank
7) Your bank offer which type of services?

Mobile banking
Net banking
Forex banking

26
13
8

Interpretation
Total Number of Respondents was 47.
26 persons said that bank offer mobile banking services.
13 said that bank offer net banking services.
Only 8 persons said that bank offer forex banking services.
8)Do you agree that your bank loan processing is fast?
Strongly agree
4
Agree
21
Disagree
13
strongly disagree
9
Interpretation:Total Number of Respondents was 47.
4 persons strongly agree that bank home loan processing is fast.
21 persons agree that bank home loan processing is fast.
13 persons disagree that bank processing is fast.
9 persons strongly disagree that bank processing is fast.
9) Do you satisfy with the after home loan services provided by your bank are
best as compare to other bank?
Strongly agree
14
Agree
29
Disagree
4
strongly disagree
0
Interpretation
Total Number of Respondents was 47.
14 among all consumers are strongly agreed by after sale services of the bank.
29 among all consumers are agreed by after sale services of the bank
4 among all consumers are disagreed by after sale services of the bank
0 among all consumers are strongly disagreed by after sale services of the bank
10) Does the cost of home loan is appropriate, according to your demand?

Yes
29
No
18
Interpretation
Total Number of Respondents was 47.
29 persons said that home loan is appropriate according to theirdemand.
18 persons said that home loan is not appropriate according to theirdemand.
11)Are you satisfy with the employees behaviour of the bank?
Strongly agree
16
Agree
25
Disagree
6
strongly disagree
0
Interpretation
Total Number of Respondents was 47.
16 persons very satisfied with the employee behaviour of the bank.
25 persons satisfied with the employee behaviour of the bank.
6 persons disagree with the employee behaviour of the bank.
No one is disagree with the employee behaviour of the bank.
12)Does the bank give any discount upon loan services?
Yes
No

35
12

Interpretation
Total Number of Respondents was 47.
35 persons said that bank give discount upon loan services.
Only 12 persons said that bank does not give any discount upon loan services.
13)Are you satisfy by the time taken in sanctioning the loan?
Yes
30
No
17
Interpretation:Total Number of Respondents was 47.
30 persons are satisfied by the time taken
17 persons are not satisfied by the time taken

14)Have you face any difficulty during taking the loan?

Yes
43
No
4
Interpretation
Total Number of Respondents was 47.
43 persons face difficulty during taking the loan.
Only 4 persons does not face any difficulty during taking the loan.
15)Which grade you want to give of home loan schemes of the bank?
Excellent
18
Good
20
Average
8
below average
1
Interpretation
Total Number of Respondents was 47.
18 persons give excellent grade of the bank.
20 persons gove good grade to the bank.
Only 8 persons give average grade to the bank.
1 person give below average grade to the bank.

CHAPTER 5
5.1 Section
CONCLUSION:
All the people are availing loan facility from both the banks. No. of
respondents of SBI were 46 and 47 of SBI Bank. Peoples are relating
with PNB more satisfy withthe interest rate as compare to SBI. SBI
peoples much know about home loansthen PNB. Both PNB and SBI
mostly offer mobile banking services. Processingof SBI is fast then
PNB. After home loan services of PNB is good as compare toSBI.
Peoples related with SBI is more satisfy with the employee behaviour
ascompare to PNB.People are more satisfied by SBI for time taken for
sanctioningthe loan. From all this I conclude that SBI bank provide good

home loan servicesas compare to PNB and many peoples are very
satisfied from SBI.
5.2 Section
LIMITATIONS
Although best of the efforts were made to conduct a prefect survey but
still it facescertain limitation. Following were certain limitation of this
project.1.The survey was conducted only on 100 respondents.2.Some of
the respondents did not answer all the questions, which could hamperthe
final results to a certain extent.3.The study confines itself to the
respondents of NAWANSHAHAR
region only. Hence findings would not be relevant to other cities.
CHAPTER 6

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