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Perfect is the famous saying and when a person get practical experience under the
guidance of expert of the respective field, the knowledge gained is priceless.

With the sense of great pleasure and satisfaction, I present this project report entitled
task successfully is never a man efforts similarly completion of this report is the result of
invaluable support and contribution of number of the peoples in direct and indirect
manner. In the light of foregoing, first of all my heartfelt great fullness and thanks goes to
for giving opportunity to work for his highly esteemed organization and for being a
constant source of inspiration and guidance throughout the project. Without his able
support the project would not have seen the light of the day.

At this juncture, I would also like to thank all the other team members of the BANK OF
INDIA PANIGAON. Without their indispensable cooperation, the project wont have
been completed within the stipulated time period. Finally I would like to thank the staff
of other home loan provider banks, without whose cooperation in providing the data for
the project would have been impossible.

Modern organizations are highly complex ad dynamics systems. They operate under very
turbulent social economic and political environment. They are required to reconcile
several incompatible goals. Conflicting roles and divergent interest they are also fraught
with the use risk and uncertainties, hence tactful management of such organization to
plan to execute guide, coordination and control the performance of people to achieve
predetermined goals. Management has to keep the organization vibrant moving and in
equilibrium. It has to achieve goal which themselves are changing it is therefore a
problem highly complex and ticklish.

This information will be asset to marketing manager in making effective decisions. The
researches are used to acquire and analyze information and to make suggestions to
management as to how marketing problems should be solved.

The marketing research is the process which links to manufacturer, dealers and
individuals through information in important part of curriculum of M.B.A. programme is
project taken by the students to institute under which he or she is studying, after
completion of third semester of the programme.
The objective of this project is to enable the students to understand the application of the
academics in the real business life. I am fully confident that this project report will be
extremely useful to the management.


The roof over ones head and ground beneath ones feet count as the bare necessities of
life. Theres nothing quite like owing a home, however humble to give that warm and
glowing feeling. But when one buys a home, one has much more than a feel good
purchase in mind! Its also a crucial investment decision, perhaps the biggest spending
decision of ones life. There are ample opportunities today for young salaried investors to
plan their moves early and buy a house at right time- and at right price. In the process,
not only do they fulfill that cherished dream of owing a house, but also put themselves on
the path to acquiring property that would meet the needs and aspirations of their growing
family, even as it leads to wealth creation. Every individual aspires to own a home. But
many either spend a lifetime saving to purchase a house or exhaust money on monthly
house rents.

Take a house loan and let the monthly rent (easily converted into affordable EMIs)
build dream home.

The main objective of the study is to find out the tariff changes charges by other banks in
comparison to BOI.

The aim of the study is to help BOI to know where it lacks in loans and how for the
performance of other banks is better so that BOI figure out the common problems
being faced by the customers while dealing in the loan department so that further
BOI can improve its services and schemes offered by them to their customers.


The overall demand in residential sector has grown by about 7-8% in the past few
months as compared to the same period last year. The growth is on account of two main

One, income tax exemption.

Two, with no similar rebates available for individuals in the high income group,
they are creating a second asset.

Add to this the stable property prices over the last year and plunging interest rates,
planning for dream,] home could not have been better timed. Rock-bottom interest rates,
standardization of periodicity of interest calculation across lenders (which make it easier
to compare loans), lower interest charges, waiver of loan application processing fee and a
customer friendly attitude is reason enough to celebrate the ascension of the home loan
consumer as the king.

In response, private players like ICICI Bank, IDBI Bank, Standard Chartered Bank and
few others too lowered their rates.

Market leader BANK OF INDIA also brought down its interest rate to 8.50% very
recently, to participate in the interest rate war. If one is still not satisfied with the lowered
loan rates theres more. Some industry watchers believe that the floating home loan rate
will slip to 8% for long term loans another two or three years.

Most banks have changed the way the interest is calculated from annual rest to monthly
rests. Under the annual rest method, the EMIs (equal monthly installment) one pay
through a year, are factored in as part-repayment of the principal component only at the
end of each year. In other words one has to pay interest even on the installments one has
paid until they are reduced from the principal at the end of each year. Under monthly
rests, the principal is lowered by the appropriate amount each month. The thumb rule
being that the more frequently interest is calculated, the better for the creditor.

BOI added monthly rests on its fixed interest loans apart from annul rests. As a result the
fall in the EMIs on fixed interest loans (where the interest rate is constant for the entire
tenure of the loan, irrespective of the changes in the lending rates) is more pronounced
than on floating rate loans (where the loan interest rate varies with the changes in the
interest rate). For example, the EMI on a fifteen year fixed interest loan for Rs. 15 lakh
has come down by Rs. 15 lakh has come down by Rs. 840, the corresponding fall in the
EMI on a floating rate loan is only 4165. apart from lowering the cost of ones loan, the
switchover to monthly rests has another advantage : it makes it easier to compare loans.


Home loans are loans you have access to, depending on whether you want to buy or build
a house and can also be used to repair or extend an existing house.
Who can avail of these loans?

According to lending institutions, any Indian resident who is over 21 years of age
at the beginning of the loan and below 65at its maturity can avail of the loan. Salaried
Employees as well as Self- Employed citizens can apply. NRI Salaried and RBI Self
Employed, under RBI guidelines, can approach only nationalized banks and other HDFC
for loans.

Why should one option for a loan to buy a house?

Taking a loan seems like a good option when the money at hand is insufficient to buy the
house of your dreams. Consider couples in their twenties and thirties. They enjoy a good
income currently, buy their accumulated capital isnt enough to purchase a house.
Whereas a home loan can give them access to capital their current earnings.
Also, if you take a 10 years old loan when you are thirty, you could repay it by the time
youre forty. So you dont have to be burdened with the interest and are free to plan your
retirement savings.

The Quantum of loan that one can avail of :

Loan sanctioned depend on your repayment capacity which is based on your current
income and your future repayment capacity. You would include your spouses name to
enhance the loan amount.The maximum loan can be sanctioned varies with each
bank/institutions and ranges from Rs.10 lakhs to Rs. 1 crore.

Benefits of taking a home loan:

A home loan is very different from a personal loan like a car loan for instance. You can
utilize a home loan for financing an asset that will hold its value and even appreciate over
the period of the loan. Though its price could fluctuate in the short terms, Total Estate
will show capital appreciation over the years. The value of your house generally while
the loan remains constant. If you had opted to wait, save up and buy a house, it would, in
the long run cost you much more; home loans also come with many tax benefits.

Tax benefits of taking a home loan:

The income tax authorities look with favor upon those servicing a housing loan from
specified financial institutions. And, it is up to you to be wise enough to take advantage
of this.

Section 24 of the Income Tax:

Interest on loan till Rs.1.5 lakhs per annum is exempted form income tax (under section
23/24(1) of the Income tax act).

Section 88 of Income Tax Act:

You get a 20% rebate on repayment of principle during a financial year. Once again, over
the years, the principle repayment eligible for rebate has been enhanced from Rs.10,000
to the current limit of Rs.20,000 Stamp duty, registration fee or transfer of such house
property to the assesses is also considered under this amount.

Financial Institutions, which give, home loans:

Leading Banks Housing finance companies


There are several expenses involved apart from repayment of the actual loan amount:

1. Processing fees- A processing fee (PF) is charges at the time of submission of the
application form and covers expenses incurred for processing the application form. This
fee has to be paid upfront by the customer in some cases, it is non-refundable.
2. Administration fees- to meet operating expenses.
3. Pre-EMI- A simple interest calculated on the disbursement amount in case of a plot
under construction.
4. EMI- The EMI is an abbreviated form of the equated money installment and is
simply referred to as monthly installment in common parlance. And, being a self-
explanatory term that is exactly what it is. The amount you will have to pay you financier
every month when repaying your loan. Being a monthly payment, at the end of the year,
you would have paid 12 EMIs.


Broadly two types- fixed rate and variable rate loans; while the former deals with a fixed
rate of interest over the entire duration of the loan, the latter has the rate of interest
changing according to the fluctuations in the market.


Up to 85-90% of the total cost based primarily upon the individuals payback capacity.


These are likely to vary with respect to the different types of housing loans:

The maximum period of the loan is normally fixed by HFIs. However, HFIs do
provide for different tenors with different terms and conditions.
The Installment that you pay is normally restricted to amount 45% of your
monthly gross income.
You will be eligible for a loan amount, which is the lowest as per your eligibility.
This is calculated on the basis of your gross income and payback capabilities.
Some HFIs insist on guarantees from other individuals for due repayment of your
loan. In such cases you have to arrange for the personal guarantee before the
disbursement of your loan tasks place.
Most HFIs have a panel of lawyers who go through your property documents to
ensure that the documents are clear and are not misrepresented. This is an added
benefit that you get when you avail of a loan from an HFI.
You repay the loan either through Deduction against Salary, Post dated cheques,
and standing instructions or by Cash/DD.


There are different types of home loan tailored to meet ones needs heres all some of

Home purchase loan: This is the basic home loan for the purchase of new home.
Home improvement loans: These loans are given for implementation repair
works & renovation in a home that has already been purchased by the client.
Home construction loan: This is available for the construction of new home.
Home extension loan: This is given for expanding or extending an existing home
for e.g.: addition of an extra room etc.
Home conversion loan: This is for those who have financed the present home
with home loan & wish to purchase& move to another home for which some
extra funds are required through home on version loan ,existing loan is
transferred to the new home including the extra amount required eliminating the
pre payment of the previous loan.
Land purchasing loan: this loan is available for the purchasing of land for both
construction and investment purpose.
Bridge loan: these are designed for those people who wish to sell the existing
home & purchase another one. The bridge loan help finance the new home, until a
buyer is found for the home.


BANK OF INDIA Home Loan, India have been serving the people for around 3 decades
and providing various housing loan according to their varied needs at attractive and
reasonable interest rates. Owing to their wide network of financing, BOI Home Loans
provide services at doorstep and helps you find a home as per your requirements.
1. 1. Provides loans to purchase a Plot for construction of a House, to
purchase/construct house/flat, as well as for renovation/ repair/alteration/addition
to house/flat Maximum loan amount is Rs.500 lacs and repayment ranges up to 30
years, with reasonable margin and nominal processing charges. No
commitment /administrative charges
2. The loan is available at very competitive rates of interest, currently available in
the industry.
3. Option for different EMI amounts for different periods during tenure of loan to
suit customers repayment capacity
4. Prepayment of Loan permitted. No prepayment charges under floating rate option
5. Interest is calculated on daily balance basis which is of great advantage to
customer as it results in lower interest amount.
6. Loan to NRIs as well as Persons of Indian Origin.
7. Simplified application form/procedures for convenience of customers, and speedy
8. Free Personal Accident Insurance cover (Renewed at banks discretion)
9. Life Insurance Cover to borrowers for Loan Protection(optional)

10. Please visit our nearest Branch and avail loan to own your dream home

Bank of India was founded on 7th September, 1906 by a group of eminent businessmen
from Mumbai. The Bank was under private ownership and control till July 1969 when it
was nationalised along with 13 other banks.

Beginning with one office in Mumbai, with a paid-up capital of Rs.50 lakh and 50
employees, the Bank has made a rapid growth over the years and blossomed into a
mighty institution with a strong national presence and sizable international operations. In
business volume, the Bank occupies a premier position among the nationalised banks.

The Bank has 4963 branches in India spread over all states/ union territories including
specialized branches. These branches are controlled through 54 Zonal Offices. There are
60 branches/ offices and 5 Subsidaries and 1 joint venture abroad.

The Bank came out with its maiden public issue in 1997 and follow on Qualified
Institutions Placement in February 2008.

While firmly adhering to a policy of prudence and caution, the Bank has been in the
forefront of introducing various innovative services and systems. Business has been
conducted with the successful blend of traditional values and ethics and the most modern
infrastructure. The Bank has been the first among the nationalised banks to establish a
fully computerised branch and ATM facility at the Mahalaxmi Branch at Mumbai way
back in 1989. The Bank is also a Founder Member of SWIFT in India. It pioneered the
introduction of the Health Code System in 1982, for evaluating/ rating its credit portfolio.

Presently Bank has overseas presence in 22 foreign countries spread over 5 continents
with 60 offices including 5 Subsidiaries, 5 Representative Offices and 1 Joint
Venture, at key banking and financial centres viz., Tokyo, Singapore, Hong Kong,
London, Jersey, Paris and New York

Contribution of foreign branches in the global business of the Bank as at 30.06.2015 is

as under:



Business Mix
The current bank

Bank of India, Mumbai Main Branch

The earlier holders of the Bank of India name had failed and were no longer in existence
by the time a diverse group of Hindus, Muslims, Parsees, and Jews helped establish the
present Bank of India in 1906 in Bombay. It was the first bank in India whose promoters
aimed to serve all the communities of India. At the time, banks in India were either
owned by Europeans and served mainly the interests of the European merchant houses, or
by different communities and served the banking needs of their own community.

The promoters incorporated the Bank of India on 7 September 1906 under Act VI of
1882, with an authorised capital of 10 million (US$160,000) divided into 100,000
shares each of 100 (US$1.60). The promoters placed 55,000 shares privately, and issued
45,000 to the public by way of IPO on 3 October 1906; the bank commenced operations
on 1 November 1906.

The lead promoter of the Bank of India was Sir Sassoon J. David (18491926). He was a
member of the Sassoon family, who in turn were part of a Bombay community of
Baghdadi Jews that was notable for its history of social service. Sir David was a prudent
banker and remained the bank's chief executive from its founding in 1906 until his death
in 1926.

The first board of directors of the bank consisted of Sir Sassoon David, Sir Cowasjee
Jehangir, J. Cowasjee Jehangir, Sir Frederick Leigh Croft, Ratanjee Dadabhoy Tata,
Gordhandas Khattau, Lalubhai Samaldas, Khetsety Khiasey, Ramnarain Hurnundrai,
Jenarrayen Hindoomull Dani, and Noordin Ebrahim Noordin.

In 1921, BoI entered into an agreement with the Bombay Stock Exchange to manage its
clearing house.

BoI's international expansion began in 1946 when the bank BoI opened a branch in
London, the first Indian bank to do so. This was also the first post-World War II overseas
branch of any Indian bank.

The 1950s saw BoI open numerous branches abroad: Tokyo and Osaka in 1950,
Singapore in 1951, Kenya and Uganda in 1953, Aden in 1953 or 1954, and Tanganyika in

After a brief hiatus, BoI returned to international expansion, opening a branch in Hong
Kong in 1960. A branch in Nigeria followed in 1962.

Then came nationalizations abroad, and at home. The Government of Tanzania

nationalised BoI's operations in Tanzania in 1967 and folded them into the government-
owned National Commercial Bank, together with those of Bank of Baroda and several
other foreign banks. Two years later, in 1969, the Government of India nationalised the
14 top banks, including Bank of India. In the same year, the People's Democratic
Republic of Yemen nationalised BoI's branch in Aden, and the Nigerian and Ugandan
governments forced BoI to incorporate its branches in those countries. The next year,
National Bank of Southern Yemen incorporated BoI's branch in Yemen, together with
those of all the other banks in the country; this is now National Bank of Yemen. BoI was
the only Indian bank in the country.

In 1972 BoI sold its Uganda operation to Bank of Baroda. The next year BoI opened a
representative office in Jakarta.

In 1974 BoI opened a branch in Paris. This was the first branch of an Indian bank in

In 1976 the Nigerian government acquired 60% of the shares in Bank of India (Nigeria).

In 1978 BoI opened a branch in New York. Also in the 1970s, BoI opened an agency in
San Francisco.

In 1980 Bank of India (Nigeria), changed its name to Allied Bank of Nigeria to reflect the
fact that it was no longer a subsidiary of Bank of India.

In 1986 BoI acquired Parur Central Bank in (Ernakulam District, Kerala State) in a
rescue. Parur Central Bank (or Karur Central Bank, or Paravur Central Bank) had been
founded in 1930, and at the time of its failure had 51 branches. BoI amalgamated Parur
Central Bank in 1990.
The next year, 1987, BoI took over the three UK branches of Central Bank of India
(CBI). CBI had been caught up in the Sethia fraud and default and the Reserve Bank of
India required it to transfer its branches.

2003: BoI opened a representative office in Shenzhen.

2005: BoI opened a representative office in Vietnam.
2006: BoI plans to upgrade the Shenzen and Vietnam representative offices to
branches, and to open representative offices in Beijing, Doha, and Johannesburg.
In addition, BoI plans to establish a branch in Antwerp and a subsidiary in Dar-es-
Salaam, marking its return to Tanzania after 37 years.

In 2007 BoI acquired 76% of Indonesia-based PT Bank Swadesi.

BoI established a wholly owned subsidiary, Bank of India (New Zealand) Ltd., in
Auckland, New Zealand on 6 October 2011. Then BoI established a wholly owned
subsidiary, Bank of India (Uganda) Ltd., on 18 June 2012. Most recently, BoI opened its
wholly owned subsidiary Bank of India (Botswana) Ltd., on 9 August 2013.

CMDs since nationalisation

19691970 : Tribhovandas Damodardas Kansara

19701975 : J.N.Saxena
19751977 : C.P.Shah
19771980 : H C Sarkar
19811984 : N Vaghul
19841986 : T. Tiwari
19871991 : R. Srinivasan
19921995 : G. S. Dahotre
19951997 : G. Kathuria
1997-1998 : M.G.Bhide
19982000 : S Rajagopal
2000-2003 : K.V.Krishnamurthy
2003-2005 : M.Venugopalan
2005-2007 : M Balachandran
2007-2009 : T. S. Narayanswami
20092012 : Alok Kumar Mishra (Former chairman of Indian Bank's Association)
2012-2015 : Ms. V.R.Iyer [3]
2015-2015 : B.P. Sharma [Executive Director with Additional charge as MD &
2015- : Melwyn Rego [MD & CEO]

International Operations

The bank has presence across 4 continents and 18 countries covering all the major
financial centres such as London, New York, Paris, Tokyo, Singapore and Hong Kong. As
on March 31, 2011, bank has a network of 29 branches and offices abroad, including 5
representative offices.

The bank has also received permission from RBI to expand its overseas operations in
Bangladesh, Canada, China, Egypt, New Zealand, Madagascar, Qatar, South Africa, UK
(Leeds and Coventry), UAE and Vietnam. In New Zealand, the subsidiary Bank of India
(New Zealand) Limited has been registered as a bank by the local regulators RBNZ on
March 31, 2011. The bank has a Global Processing Centre (GPC) at Singapore with
identical IT systems at Bank?s foreign branches, thereby improving the
Management Information system and the customer service.

The bank is acting as Mandated Lead Arranger (MLA) and Joint Book Runner (JBR) for
Multicurrency International Syndication loans and has arranged loan in USD, JPY,
EURO and GBP currencies for Indian Corporates for their expansion / acquisition and
Joint Ventures, covering a wide range of industries. The bank has also opened Global
Remittance Centre (GRC) in Mumbai. The inward remittances, SB accounts, NRE/NRO
Account opening of NRI customers have been centralized at GRC. The bank has initiated
the process for establishing a hub for the purpose of handling the documentation part of
Trade Finance portfolio.

Products & Services

Bank of India provides a wide range of products and services in deposits, loans, NRI
banking, cards, and online services such as Internet banking. Following are the new
products and services introduced:

Kits introduced for NRI Customers opening NRE/ NRO accounts at foreign
Calculation of interest on Savings Bank account, from April 01, 2010, has been
changed from monthly product basis to daily product basis
Launched Marathi version of the Bank?s website
As per Finance Ministry guidelines and recommendations, the bank?s
corporate website (English) has been enabled for persons with Disabilities.
The bank introduced issuance of instapin for DebitcumATM Card. This will
address the customer grievance for nonreceipt of Repin and also save the effort
and expense in generating and mailing Repins.
As a fraud prevention measure, SMS alerts Star Sandesh are generated and
provided to all customers who have registered their mobile number with the bank
for all Debit transactions from delivery channels
Enabling internet banking customers to make online Fixed Deposit
Star eTrade Online share trading Integration with Gupta Equities Extended the
facility of online ePayment to the customers holding Bank?s Debit
cumATM card. This will enable the customers to use their DebitcumATM
cards for epayments in addition to credit card and Internet banking account.
Mobile Banking facility is introduced as the latest alternate delivery channel
which allows customers to do banking activities virtually from the convenience of
the Mobile phone at any time and from anywhere. This facility is extended to all
Retail internet banking customers.
Online Interbank Fund Transfer across banks, through Star Connect Internet
Banking Services, using RTGS/ NEFT
BOI Star ePay for Autopay or online payment of various utility services/ bills
ePayment for Direct & Indirect, Central Excise & Service Tax and eFreight
Online payment of Directorate General of Foreign Trade (DGFT) license fees
Online application for education loan, online booking of Railway & Airlines
Facility to make online bidcumapplication for Application Supported by
Blocked Amount (ASBA) IPO issues by retail internet banking customers having
account with any DPO.

Bank?s Subsidiaries / Associates

BOI Shareholding Ltd. (BOISL)

Bank?s association with the Capital Market spans a period of nine decades. The
clearing and settlement function of Bombay Stock Exchange (BSE) was being handled by
the Bank since 1921. In 1989, Bank setup ??BOI Shareholding Ltd. (BOISL)?
, joint venture with BSE, to manage the clearing house activities of the Stock
Exchange. The bank is holding 51% of its paid up capital of Rs 2 crore.

The company has been carrying out the rolling and weekly settlements of trades executed
by member brokers operating on the Exchange, BOISL is also a Depository Participant
(DP) of both the Depositories viz. the National Securities Depository Ltd. (NSDL) and
the Central Depository Services (India) Ltd. (CDSL) and provides depository services to
the clearing members and investors. BOISL is the first Securities Clearing House in the
country to have been awarded the ISO 90012000 ISO Certification.

Securities Trading Corporation of India Ltd. (STCI)

STCI Ltd. is one of the leading primary dealers in the country. It was established in 1999
with the objectives of widening the gilt and other debt security market through
development of a vibrant secondary market. Bank of India with 29.96% holding is the
single largest stakeholder in STCI having paidup capital of Rs 380 crore. The company
is an associate company of the bank in terms of Accounting Standards 21 (AS21) of the
Institute of Chartered Accountants of India.

With growing perception that primary dealership by itself is no longer an attractive

business, STCI decided to hive off the primary dealership business to its new subsidiary
namely STCI Primary Dealer Ltd. which commenced its operations from June 25, 2007.
The subsidiary which started on a cautious note has made steady progress since then.
After formation of subsidiary, STCI took up activities of IPO funding, margin funding,
commodity future trading, Asset Management, investments in short term corporate loans /
CP, equity trading.

Star Union Daiichi Life Insurance Company Ltd. (SUDLife)

Bank of India, Union Bank of India and Daiichi Mutual Life Insurance Company, Japan
have formed ??Star Union Daiichi Life Insurance Company? to take
advantage of the growing insurance market and to provide quality assured insurance to its
clients spread across the length and breadth of the country. The company has commenced
insurance business since February 2009. BOI holds 48% in the company?s paid
up capital of Rs 250.00 crore.

Union Bank holds 26% stake and Daiichi Mutual Life Insurance Company, Japan holds
26% in addition to the bank?s stake. In terms of the Joint Venture Agreement,
the bank has transferred its 3% stake in favour of Union Bank.

ASREC (India) Ltd. (Associate)

The company was floated by the Specified Undertaking of the Unit Trust of India to
undertake securitization and asset reconstruction activities. The company was granted
Certificate of Registration by RBI under the SARFAESI Act, 2002 in the second half of
FY 200405 and has since commenced fullfledged operation. Currently the Bank is
holding 26.02% stake, in the equity capital of the company which is Rs 27.06 crore.

Indo Zambia Bank Ltd. (IZB)

IZB is a joint venture of three Indian Banks viz. Bank of India, Bank of Baroda, Central
Bank of India and Government of Zambia. Each of the Indian Banks holds 20% of the
share capital, whereas Government of Zambia holds 40% of the share capital. Indo
Zambia Bank Ltd is fine example successful joint venture. It enjoys the patronage of two
friendly republics, the Government of Republic of Zambia and Government of India.

PT Bank Swadeshi Tbk, Indonesia

During FY 200708 the bank acquired a stake of 76% in PT Bank Swadeshi Tbk at a
total consideration of Indian Rs 3.77 crore. The Bank has three Directors on the Board of
PT Bank Swadeshi Tbk.

Bank of India (Tanzania) Ltd.

Bank of India (Tanzania) Ltd. is wholly owned subsidiary of the Bank and commenced
operations on June 16, 2008 with first branch at DarEsSaleam.

Bank of India (New Zealand) Ltd.

Bank of India (NewZealand) Ltd. is wholly owned subsidiary of the bank with Rs
176.95 crore paid up capital. The bank has received a license to operate as a bank from
Reserve Bank of New Zealand on March 31, 2011. The operations are likely to start

Business Initiatives

Keeping its growth aspirations in mind, the bank embarked upon a new bold vision
Sankalp 10,000. Sankalp 10,000 rests on the three pillars of customer first, building
winning teams and high performance driven culture. Under Project Sankalp, the
organizational structure of the bank has been redesigned in September 2010 with its
division in two distinctly separate groups of businesses i.e. (a) National Banking Group
and (b) Wholesale and International Banking Group in order to have a more focused
attention to each business segment. The two groups are headed by the two executive
directors of the bank.

National Banking Group (Head Office) The national banking group is

comprised of rural banking, financial inclusion, retail banking and SME banking
business units.
Wholesale and International Banking Group (Head Office) The wholesale and
international banking group are comprised large corporate banking, mid
corporate banking, project finance, transaction banking, international banking and
15 rural centralized Credit Processing Centers (CPC) have been started at
Belgaon, Ujjain, Barabanki, Mehasana, Ludhiana, Karad, Amalapuram, Tanjavur,
Barasat, Hardoi, Nadiad, Ratnagiri, Nashik, Solapur and Barnagar.
In all, 40 focused districts have been identified in 19 zones to target large and
medium farmers and large institutions with high credit quality.
Five New Retail Business Centres were launched in 5 identified Zones namely
Bangalore, Chandigarh, Mumbai South, New Delhi and Pune on Pilot basis on
January 14, 2011.
Five SME City Centres at Ahmedabad, Coimbatore, Kolkata, Ludhiana, and Pune
were launched on December 14, 2010. Subsequently, seven more SME City
Centres at Bangalore, Chandigarh, Hyderabad, NewDelhi, Nagpur, Mumbai North
and Vadodara have started functioning.
MidCorporate branches at Ernakulam, Andheri and Seepz opened, 10 Mid
Corporate CPCs started functioning and large corporate branches at Mumbai
(Nariman Point) and Hyderabad opened.
The bank is treating financial inclusion as social cause and implementing it as a
movement taking all banking products and services to those who are currently
deprived from these services. So far, first step towards achievement of financial
inclusion was opening of NoFrill Accounts and accordingly, the Bank has
opened 50.07 lakh NoFrill Accounts.
The bank is also implementing IT solutions on end to end basis using hand held
devices and smart cards. The bank has issued/ enrolled 6.01 lakh smart cards.

It was first nationalised bank to establish to a fully computerized and ATM

The first Indian bank to open its branch outside country in London in 1946.
The bank became the first to open branch in Europe Paris in 1974.
The bank is the first PSU Bank in India to implement Twofactor Authentication
(2FA) Star Token for both Retail and Corporate internet banking customers as
an additional security measure.
The first banks to recognize the difficulties faced by MSME in the wake of
economic slowdown and proactively set up MSME Care Centres (Help Desks) to
provide timely and needy support to MSME units. A Nodal Officer for SME has
been identified in each zones to take care of MSME clients.



The bank received the Winners Award in International Banking Technology

Award 2010 from IBA in the Best Business Enablement Initiative category in
recognition of its achievement in Banking Technology for the Year 2009.
The bank adjudged FEEY Most Efficient Public Sector Bank 2010 by Dalal
Mumbai North Zone of the bank received Third Prize for use of Official
Language Hindi in Bank from Government of India, Ministry of Home Affairs,
Official Language Department.
The bank received the consolation prize from Maharashtra State Level Bankers
Committee for commendable work done in implementation of official language in
The bank received National Award for Best Bank in West Zone for PMEGP under
lending to KVIC in August 2010.
The bank has been rated by The Economic Times/The Nielsen company survey ?
?The Most Trusted Brands? (MTB) 2010 as follows: Under
PSU Banking Category 2nd next to SBI Under Top Service Brands 8th rank


Best Performance in Western Zone under the Rural Employment Generation

Program (REGP) of KVIC.
The bank rated by the Economic Times / The Nielsen Company survey as ?
?The Most Trusted Brands? (MTB) 2009 as follows : Under
PSU Banking Category 2nd next to SBI. Under Top Service Brands 8th
The Debutant 1st time in top 100
NDTV Profit Business Leadership Awards 2009 Best PSU Bank
Outlook money NDTV Profit Awards 2009 Best Education Loan Provider
Runner up
CIO Green Information Technology Award
Dun & Bradstreet Rolta Corporate Awards 2009, Best Bank under Banking
FEEY Most Efficient Public Sector Bank Awards 2010 by Dalal Street
Second Rank for excellent performance in lending to Micro & Small Enterprises
Sector by the Ministry of Micro, Small & Medium Enterprises. Also, ??
Best Performing bank? for covering maximum number of Micro &
Small accounts under collateral free lending scheme of CGTMSE


The NDTV Business Leadership Awards 2008 India?s Best PSU Bank
Business World PWC Survey No. 1 Public Sector Bank
Business Today KPMG Survey Ranked No. 1 The Best Banks 2008.
Dun & Bradstreet Study 2008 Best Public Sector Bank and Overall Best Bank
in the country.
Dun & Bradstreet Rolta Corporate Awards 2008 Top Indian Company under ?
Prestigious CIO 100 Award 2008 for the Bank?s Green IT initiative


Second National Award for excellence in lending to MSE sector for the year
Golden Jubilee Award 2007, for performance under KVIC during 20062007
under Western Region, issued by Ministry of Micro, Small & Medium Enterprise,
Government of India.
Best Performance Award under ??Mission Shakti? for financing
Women SHGs during 200708 in the State of Orissa by the Government of
The bank was awarded International Award for Excellence in outsourcing
sponsored by Everest Group & Forbes at New York, USA


In treasury advisory services for corporate clients, the compete principally with foreign
banks in foreign exchange and derivatives trading as well as SBI and other public sector
banks ion the foreign exchange and money market business.

1. Integrated Treasury with experienced and dedicated staff.

2. Major participant in Forex Market.
3. Active Player in Money and Fixed Income Markets.
4. Hedging solutions for all currency and interest rate exposures.
5. Competitive pricing of Sale of Gold coins - with assured purity (9999) Swiss
6. Pricing of liability products.

7. Coordinate ALCO and capital requirements of the Bank.


BANK OF INDIA brings back you a wide range of loans to cater your financial needs.
The bank offers the following loans:

1) Home Loan-Home loan as name suggest is the loan against buying property. Every
individual currently have dreams to have their own home. To make affordable best option
is home loan. Again their are sub-categories of home loans which are as below.

Home loan for residents

Loans for repairs and extension
Land purchase loan
Top-up loans
Loan for Earnest Money Deposits (EMD)
Reverse Mortgage Loans
Loan against property

You may also find different variant of home loans other than above. But I listed basic
type of home loans.

2) Personal Loan-It is the loan granted to fulfill your expenses which ranges from
buying some expensive electronic gadgets to booking your air tickets Yes
people used to use this facility for anything they can. They forget that usually rate of
interest on such loans will be higher than other types of loans. But still to have something
in advance end up them to borrower of such type of loans. Here we may find two types of

Secured Loans-Where you provide some collateral as a safety against loans.

Unsecured Loans-In such type of loans borrower collateral not required.

3) Car Loan or Vehicle Loan-This is usually used to meet your financial requirement
when one is planning to have his dream car or bike. It is usually a secured loan where
collateral is your vehicle and in case of default lender may recover it by taking back your
vehicle. But some lenders offer unsecured loans where your credit score matters more.
4) Education Loan-This is actually a handy tool for parents who not planned well for
their kids higher education. For a detailed view on this visit my earlier post Know all
about Education Loan features.

5) Gold Loan-This was one of the easiest and fastest way of loan when gold rate was at
its peak. But currently lot of lenders may not feel it better collateral due to falling in gold
price, especially gold loan companies. Recently RBI banned any gold loans against gold
ETFs and gold mutual funds. Eventhough it forms easiest and fastest way of getting loan
but better to look for risks involved in it, especially when you are dealing with NBFCs.

6) Loan against Insurance Policies-You can use your insurance investment as either
collateral or take loan from insurer itself if that policy is eligible for loan. Usually loans
will be available after 3 years of policy period. You will get loan easily on your policy
from insurer. But other method to take loan is to pledge your policy document with banks
and take loan on that. LIC will offer you loan on your policy with the interest rate of
10%, which I think competitive pricing compare to other type of loans.

7) Loan against Bank FDs-This is one form of loan where your collateral is your bank
FD itself. Suppose you have bank FD of around Rs.10,00,000 then you are usually
eligible to get loan upto Rs.8,00,000. But interest rate will 1-2% higher than your FD
rate. But still this form of loan is also fastest and best way.

8) Loan from PPF or EPF-You can avail loan from PPF when one satisfies certain
conditions. For detailed view on the same visit my old post PPF-Loan and Withdrawal.
You can avail loan from EPF too. But you can avail loan from EPF only for special
purposes like purchase of plot, medical treatment, education or marriage of children,
construction or purchase of house, re-payment of home loan, renovation of home or pre-
retirement. But all are not eligible to take loans. Their are certain conditions like
minimum years of completion, age or proof you need to produce. So it seems bit lengthy

9) Loan against Shares or Mutual Funds-Few lenders offer loan against your
investment value of shares or mutual funds. But you will not get more value from this.
Reason is, both the investments (if mutual fund is of equity oriented) then fluctuation in
values will be high. Hence to protect their loan amount usually lenders offer less loan.

10) Loan from unrecognized sector-This is one of the easiest but costliest way of
fulfilling your financial dream. Usually interest rate will be in the range of 20%-30% but
you can get it immediately. Such type of loans are useful who are running out of time and
not have any source also to fund their financial requirements. But looking at this option is
costly affair. Hence it is highly advisable to avoid such funding.

Is their any thumb rule like how much percentage of income one should have loans? Yes
to have control over your financial life, it is always advisable to have EMI outgo not
more than 60%, this includes all loans one have taken. Otherwise you may be in financial
mess. But taking all types of loans for which you are eligible is also a not wise decision
especially in case of personal loans. People tend to attractive for easy offers and low
EMIs but forget about the interest and processing fee costs involved on loan. Hence
understand your priorities before going for loan.


BOI Limited offers loans for the following purposes:

Land purchase
Home construction/purchase
Home extension
Home improvement loans
Short-term bridge loans
Non-resident premises loans for professionals.


You can avail of maximum of up to 85% of the cost of the property, including the cost of
the land.


You can repay the loan over a maximum period of 20 years. Repayment will not
ordinarily extend beyond your age of retirement (if you are employed) or on your
reaching 65 years of age, whichever is earlier. However, BOI will endeavor to determine
the repayment period to suit your convenience.

The rate of interest of BOI is 8.50%.under the monthly rest option, interest is calculated
on monthly rests. Principal repayment is credited at the end of every month.
1. 1. Provides loans to purchase a Plot for construction of a House, to
purchase/construct house/flat, as well as for renovation/ repair/alteration/addition
to house/flat Maximum loan amount is Rs.500 lacs and repayment ranges up to 30
years, with reasonable margin and nominal processing charges. No
commitment /administrative charges
2. The loan is available at very competitive rates of interest, currently available in
the industry.
3. Option for different EMI amounts for different periods during tenure of loan to
suit customers repayment capacity
4. Prepayment of Loan permitted. No prepayment charges under floating rate option
5. Interest is calculated on daily balance basis which is of great advantage to
customer as it results in lower interest amount.
6. Loan to NRIs as well as Persons of Indian Origin.
7. Simplified application form/procedures for convenience of customers, and speedy
8. Free Personal Accident Insurance cover (Renewed at banks discretion)
9. Life Insurance Cover to borrowers for Loan Protection(optional)

10. Please visit our nearest Branch and avail loan to own your dream home


Security for the loan normally is first mortgage of the property to be financed and/or
such other collateral security as may be necessary. Interim security may be required, if
the property is under construction. Collateral or interim security could be assigned to life
insurance policies, the surrender value of which is at least equal to the loan amount,
guarantees from sound and solvent guarantors, pledge of shares and such other
investments that are acceptable to the BOI.

Loans from BOI are available even if you are availing a housing loan from your
employer. BOI has already entered into arrangements with several employers enabling
employees to avail of loans both from the employer as well as BOI for the same property.
Please do ensure that the title of the property is clear, marketable and free from
encumbrance. To elaborate there should not be any existing mortgage, loan or litigation
which is likely to affect the title to the property adversely.


Allotment letter of the o-operative society/association of the apartment owners.

Copy of approved drawings of proposed construction/purchase/extension.
Agreement for sale/sale deed/detailed cost estimate from architect/engineer for
the property to be purchased/constructed/extended/renovated.
If you have been in your present employment/business or profession for less than
a year, mention an a separate sheet details of the of the occupations for previous
five years, giving position held, reason for change and period of same.
Applicable processing fees.
Proof of residence: attested copy of any one of the following:

Ration card
Driving license
Voters identity card
Current telephone bill/electricity bill/gas bill
Proof of identity: attested copy of ay one of the following:
Driving license
Voters identity car5d identity card issued by the employer (if employed in
state/central government)
PAN card
Certificate of loan outstanding issued by the lender (for refinance cases only)
Any other information regarding your repayment capacity that is necessary and
will assist HDFC in appraising the loan proposal.



Verification of the employment form with only part I filled in.

Latest original salary slip/salary certificate showing all deductions.
If your job is transferable, permanent address where correspondence relating to
the application can be mailed.
A letter from your employer agreeing to deduct the EMI towards the repayment
of the loan from your salary. This will expedite the processing of your loan
Your updated original bank pass book/s or original bank statement/s showing
salary and saving entries for the last six months.
A photo-copy of your Form-16 (issued by your employer) for the last assessment


Balance Sheets and Profit & Loss Accounts of the business/profession along with
copies of individual income tax returns for the last three years certified by the
Chartered Accountant.
A note giving information on the nature of your business/profession, form of
organization, clients, suppliers, etc.
Copies of individual tax chalans for the last three years
Copy of advance tax chalan (if any)
Your updated original Bank Pass Book/s or Original Bank Statement/s showing
saving s entries for the last twelve months.


You are eligible for certain tax benefits on principal and interest components of a loan
under the Income Tax Act, 1961.


The repayment capacity as determined by the BOI will help in deciding how much we
can borrow (the cost of the property or Rs.1crore whichever is lower). Repayment
capacity takes into consideration factors such as income, age, qualifications, number of
dependents, spouses income, assets, liabilities, stability and continuity of occupation and
saving history. And, of course, BOIs main concern is to make sure you can comfortably
repay the amount you borrowed.


BOIs Home Loans offers you various unique benefits and are easy to arrange and
repayable in easy monthly installments. The terms of the loan can be structured
according to the customer requirement.

Home loans can be applied for by either individually or jointly. Proposed owner of the
property, in respect of which the loan is being sought, will have to be co-applicants.
However, the co-applicants need not be co-owners. Loans can avail up to a maximum of
85% of the cost of the property (including the cost of the land). BOI lends up to a
maximum of Rs. 10000000 on a home loan to an individual. You can repay the loan over
a maximum period of 20 years. They determine the loan amount after evaluating the
repayment capacity of the individual. BOIs main concern is to help individuals
comfortably repay the borrowed amount.


BOI has over the years invested substantially into the computer systems and training.
This has enabled BOI to respond to customer needs and build up capabilities to approve
loan on the spot or disburse them fast.


BOI has offices spread all over the country. This extensive network helps BOI in
providing service to large and well spread out clients. This network of interconnected
offices (on data circuits) helps BOI to process applications for purchase of property
anywhere in India.


BOI is a pioneer of housing finance in India and has been a leader in the business for the
last 25 years. BOI has vast experienced and very committed and skilled staff to handle
housing loan applications and solving customer problems.


BOI believes that it is in the business of providing solutions to an individuals need for
owing a house, and not just in the business of providing finance. Keeping this in mind
BOI will provide free counseling to on how and where to buy a house in India (property
services) or what are the prices and trends in the real estate market or what precautions
one should take before buying a house. This service is offered at any of the BOIs


BOI has qualified legal and technical staffs who liaise with developer to collect and
scrutinize the property documents and permissions. We have master files of most projects
being developed by the reputed developers. It has always been BOIs endeavor to protect
the interest of the borrower, as we believe that the buying a house is one of the most
Important decisions in this life.


Keeping in mind the fact that each individual has unique problem requiring unique
solution, BOI has developed various repayment options like Step Up Repayment Facility
(SURF), Flexible Loan Installment Plan (FLIP) Balloon Payment plan and Structured
Repayment Plan.


BOI Ltd has a hitherto with you, right through .This statement BOI proves time and
Again by developing close relationship with individual customers and by constantly
Developing and marketing in the market new and innovative products that increase the
Comfort level of the customers. Along the same philosophy BOI came up with Step Up
Repayment Facility which once again reassures customers that HDFC helps you achieve
your dream.

This facility is especially helpful to those customers who want to get a loan on an amount
that is not falling within the permissible limit of their repayment capacity. It also is in line
with BOIs aim to provide greater degree of personalization in service and the tools.
Hence there can be the situation wherein the applicant is not in the position to pay the
required EMI which is calculated by the ILPS (Individual loan processing system).BOI
in this case offers to let the applicant use one of the two plans to repay the loan amount.

The EMI Chooser 1

In this plan the applicant gets the advantage from BOI to select the amount that
he wants to pay as his fist EMI. This means that BOIwill let the applicant decide
what amount he can comfortably pay to BOI in the first term of his Loan Repayment
Schedule. The system will calculate the next two EMIs for the next two terms

The customer can hence decide when he wants to repay the maximum amount of the
Loan to BOI and when he wants to repay minimum leftover or remaining amount of the
loan in the form of still smaller EMIs.

The EMI Chooser 2

This plan is an extension of the aforementioned plan .In this plan BOI helps the
Applicant by letting him choose two EMIs .This means that the Applicant can select the
amount that he wants two pay for both the First and the Second terms of his repayment
schedule. This translates into more help and more convenience to the applicant. However
the benefits of these plans dont stop here.

The Applicant can also allocate the term length for which he wants to pay what amount
This translates into a great advantage to the Applicant .He can now link

1. His current salary

2. The rate of average increment,
3. His existing and expected obligations,
4. His existing and expected expenses
5. The length of the term among others.

BOI can hence assist the Applicant in developing a much more personalized loan plan as
compared to its competitors in the Housing Loan market.

The Applicant can also save money by using these plans .This is because the total
Outflow in case of a regular plan is more as compared to these special plans. The
Applicant will hence obtain more benefit in case of Prepayment and elsewhere.

C. All Loans from BOI Ltd are subject to Tax exemption and be treated as Rebate.
Hence BOI lets the customer save their hard earned money.


Another First of its kind product from BOI .This is also to assist the Applicant to easily
secure a loan in the following condition. FLIP is used when the applicant and co-
applicant want to jointly repay the loan. There is however a problem in the situation
which would otherwise not allow the loan to be sanctioned. There are two applicants
hence two incomes .Therefore in the joint payment they can combine their income to
repay the loan .Let there be Mr. A and B who want to take a loan for 14 years .A is the
father and B is the son of A .Now consider the situation in which A and B want to take a
loan and jointly repay it .But A is 52 years old and B is only 25 .Hence A will retire after
8 years and will not be repaying the EMI but B can continue to repay the loan. In that
case although there will be a problem at other places but in BOI this is solved by taking
different incomes in the terms. Hence the income that will be considered earlier will be
the fathers income and at his retirement or at any other selected stage of repayment we
will begin to consider only the income of the son.

The advantage of FLIP in terms of the Applicant is that of joint payment, personalization,
easy repayment, and freedom from many possible problems. In the Illustration the father
is going to pay only for 105 months and after that we are to consider the sons salary only
for the next remaining 60 months.


BOI has a tie-up with a large number if public sector organizations and banks which
enable us to offer loans to your employees with the flexibility of their spouse also
availing a loan from his/her own employer.


BOI has state of art storage facilities which are theft and fire proof, at various locations
where loan and property documents are stored. In this way valuable documents are stored
safely over the period of the loan and are released almost immediately after a customer
repay his loan.

BOI through its E-mail services can promptly respond to queries. In addition, BOI can
promptly send its application form cum brochure and other detail on its loan products by
e-mail to interested individuals. For Non-resident Indians our interactive website offers
another means of contacting us. In our effort to reach out globally dispersed Non-resident
Indians, we will continuously enhance our website.


BOI offer the option of a home conversion loan to its existing customer who are
interested in moving to a new house. Through this scheme the customer can apply to
have their existing loan transferred towards the purchase of the new home. Customers
may also apply for an additional loan amount for the purchase of the new house. This
gives the customers the option of selling t6heir existing house if they wish to, without
having to repay their old loan


Individuals may make an application for the loan even if the property has not been
selected or the construction has not commenced. BOI can provide assistance in locating
an appropriate house to such customers.


As an exclusive offer to its existing customers BOI offers Home Improvement Loan up to
100% of the improvement cost as compared to the home improvement loans up to 70%
of the improvement cost offered to the general public.


A processing fee of 0.5% of the loan amount applied for rs.5 per rs.1000 of the loan
applied for is payable when the application form is submitted to HDFC. This fee is in the
respect of costs incidental to the application. For example:

Loan applied for fees

Rs.20000 Rs.100
Rs.100000 Rs. 500

On approval of the loan, a loan offer is made to you on acceptance of the offer. You have
to pay an administrative fee of Rs.0.5% of the loan approved. You can also pay the
processing fee and administrative fee upfront i.e. 1% of the loan at the time of
submission of the loan application itself. This fee is in respect of the costs incidental to
the application. Taxes as applicable will be charged on the fees collected.


For Fixed Rate Home Loan an early redemption charge of 2% of the amount being
prepaid is payable, if the amount being repaid is more than 25% of the opening balance.
However under Adjustable Rate Home Loan option early redemption charges of 2% is
payable only in case of commercial refinance. You may be required to submit the copies
of your Bank Statements or any other documents that BOI deems necessary to verify the
source of prepayment.
You can make payment for fees and charges by cheque marked payees account only
drawn on a bank in a city where BOI has an office or by demand draft (payable at par to

Customer can either download (in PDF format) the application form or get the
application form by E-mail. Alternately the customers can collect the application form
from any of your nearest BOI offices. Customer need to submit it along with supporting
documents and processing fee at any BOI office that is convenient to the customer.
Customers can make payments by the cheque marked payees account only drawn on a
bank in a city where the BOI has an office, by demand draft (payable at part to BOI) or
by cash. Customer can make an application at any time after they have decided to acquire
a house even when the house has not been selected or construction has not commenced.
BOI will consider your application, make enquiries as it deems necessary and convey its
decision to you. On acceptance of the offer, you will have to pay an administrative fee for
the loan approved. Customer can take the disbursement of the loan after the property has
been completed and you have invested your own contribution in full (own contribution is
the total cost of the property less BOIs loan). The loan will be disbursed in full or in
suitable installments (normally not exceeding three in number)taking into account the
requirement of the funds and the progress of the construction, as assessed by BOI and not
necessarily according to the builders agreement.


Data Entry



The Loan

Double Checking
Over (DCOVR)
Over (ROVR)


First of all documents are collected


Research methodology is an important part of every project. Because it helps in knowing

how to select the representative sample from the world or the general population, the
right research tools and techniques to complete the research.
The study of the consumer behavior is important because he is the king. The research
process is based upon survey method, so in order we go to service provider and services
user which is the customers.
The research involves the following steps:

Define the problem and research objective: The problem and objective is to
assess the services offered by the various service providers and what the customer
Developing the research plan: The second stage of the research methodology is to
develop a research plan. The research plan designed to take the decision on the
data sources, research approaches, research instruments, sampling plan and
contact methods.
Survey research: It was a descriptive research.
Research instrument: The use of an effective research instrument is very
important because through this instrument we collect data in this project through
observations and personal interview were conducted.
Personal interview: as we were doing direct selling we interacted with my
customers and asked about their views in selecting a service and what are their
wants and expectations from a service provider.
Sampling plan: After finalizing the research approach and instruments a sampling
must be designed.
Sampling unit: Data have been collected from banks.
Sampling size: It has been collected from four banks.
Sampling procedure: what process should be used to collect the sample. So,
representation sample, convenience sampling is used.
Collect the information: After completing all the steps, the data are collected from
different sources.
Analyze the information: After the data is collected they are analyzed to know the
findings. The data is then tabulated to develop the frequency distribution.
Present the findings: As the last step, the findings are presented that are relevant
to the major marketing decisions.


The home loans provided by the banks are more or less same at the basic level. The
banks generally try to go ahead of other banks in terms of attracting number of customers
to their countries. For this they are trying to offer some unique services as per the unique
requirements of the unique important customers.



ROI(FIXED) 8.50% 1 -5 Yrs. -16% Up to 5yrs- Year 1 - 8%
5 - 10 Yrs. - 16 9.25% (up to 20 Year 2 & 3 -
% 10 -15 Yrs. lakh) 9%
- 16% &
15 -20Yrs- 10% (above 20
13.75% lakh)

5 to 10yrs-10%
(up to 20 lakh)
10.25% (above
20 lakh )
10 to 20 yrs-
10.50% (up to 20
10.75% (above
20 lakh)
ROI(FLOATING) Up to 30lakh- 1 - 5 Yrs.- 16 Up to 5yrs- Year 4 onwards
8.50% % 8.75% (up to 20 -
30 lakh- 5 - 10 Yrs.- lakh)
50lakh-9% 11.25 % & up to 50 lakh-
Above50lakh- 10 - 15 Yrs.-16 9.50% (above 20 9.25%
9.25% % lakh)
15 - 20 Yrs- 16 over 50 lakhs-
% 5 to10yrs-9% 9.75%
(up to 20 lakh)
9.50%(above 20
lakh )

10 to20yrs-
9.25% (up to 20
9.75% (above 20

PROCESSING FEE 0.5% 0.5% 0.5% 0.5%

PENALTY 2% 2% 2% 2%
TENURE 25 years 15 years 20 years 25 years
MINIMUM AGE 21 25 25 25
MAXIMUM AGE 60 55 55 55

The markets for home loans have been sizzling in India. The spurt in growth in recent
years and the prospect of continued buoyancy in demand have attracted many players to
the industry which till a couple of years back had major players- BOI,SBI,PNB,ICICI,
HDFC and LIC Housing Finance. The result is cut-throat competition, which has
benefited the loan seekers. The home loan market has grown at a compounded rate of
over 40% over the last four years. And from what industry experts believe that there is a
little chance that there will be any significant decline in the growth rates going forward.
So what have been the key factors in triggering of this high growth period?
There are several reasons for the same on the demand side:-

Faster rise income as compared to property prices, thus making housing more
Decline interest rates, which have greatly reduced the cost of borrowing (both
o0n interest and capital).

Then there are factors on the supply side too which have supported this growth:-

More competition in the housing finance sector resulted in companies charging

lower interest rates, sometimes even at the cost of spread (i.e. profit margin)
The fee for getting the home loan has reduced dramatically over the last couple of
years. From over 2% of the loan amount to as long as 0.25% (some companies
are known to wave of the fee entirely). Housing Finance Companies have
introduced several new products to meet the needs of wide variety of customers.
One such scheme, the Step up Loan, where EMIs increases as the income of the
individual increases has been a big hit with the individuals just starting off with
their careers.
One other factor is increasing collaboration between Housing Finance Companies
and builders. Such partnership minimizes the service and funding related issues
significantly thus making it easier to buy property.

One innovation in the housing finance sector has been the introduction of floating rate
home loan simply put the cost of such home loan or the interest rate not fixed during the
tenure of the loan. Instead interest rate is benchmarked against some index/ indicator. So
as the benchmark rate moves up or down, the cost of your loan too changes, at some
predetermined frequency (usually once a quarter).

Ideally loan seekers should opt for a floating rate home loan when it is expected that the
interest rate will decline going forward. Fixed rate loans should be preferred when the
interest rates are expected to rise.

But is the choice that simple? In todays environment when there is a lot of talk about
rising interest rate, should investor shun floating rate home loan. Altogether is there still
some merit in this instrument? In the last one year, there was a trend of floating rate
home loans being more popular as compared to the fixed rate loan.
There are three important issues which one needs to consider before opting for one type
of a loan over the other:-
First, an important determinant of what you go in for should be the long term
expectation of interest rate. For example if you (or the experts) expects the rates
to rise for the next one year, but then decline gradually over the next several years
a floating rate product may be preferable. The other option for going in for a fixed
rate product and then switching at the end of the year will entail costs (there could
be penalty of 1%-2% of the outstanding loan amount) and may not make financial
sense. Moreover floating rate home loans do not change the rate of interest every
quarter (even though they review the rate every quarter). The attraction of a
floating rate home loan is that it does not attract a part prepayment charge. This
could appeal to individuals who get lump sum bonuses which they can use to
reduce their loan exposure.
Second, the issue whether fixed rate home loan are actually fixed rate. When
considering a fixed rate home loan over floating rate of home loan a strong selling
point is that if interest rate were to rise dramatically you will be protected.
Apparently the reality is some what different. It seems that companies that have
given out fixed rate home loans can revise their rates upwards in exceptional
circumstances (significant rise in interest rate for one) so if you think interest rate
will remain rage bound over the near term and decline over the long term, you are
still better off with the floating rate product.
Third, a fixed rate loan is generally priced higher as compared to the floating rate
product. This holds true in the current environment where the fixed rate loan is at
a higher interest rate as compared to the floating rate loan. The difference is
currently about 0.25% to 21%. So if you expect that interest rate are likely to
move up, but only to the extent of this differential, then you should ideally be in
different between the two types of loan. The deciding factors then should be
when you think the rates will increase and also the long term expectations of
interest rates.

As always there is no one answer to whether you should go in for floating or a fixed rate
home loan. If you are a person with very little appetite for risk or negative surprises, opt
for fixed rate home loan. But in case you can take on some risk a floating rate home loan
is worth a look.

Five steps to take a right loan:-

Gather data on interest rate. Get interest rate information from morethan one
source and get the same information from each so you can compare the offers.
Get information on fees. Find out about processing fees, administration charges
and other costs that may be involved in taking the home loan. A written
statement of all the fees from the housing finance companies will ensure that
there will be no surprises later on. Use the lowest amount of fees to negotiate with
the other lenders.
Get pre-approval letter. This gives you substantial leverage as you are then seen
as serious buyer by the seller of the property. Also, having the letter in your hand
will set a limit to the amount of money you can commit to the property. This will
help in identifying the right property.
Bargain for a lower rate of interest. Housing finance will reduce their rack rates
for customers with the good credit record. A bargain deal will easily fixed a
home loan at significantly lower rates (at times you can get a discount of as high
as 0.50 percent). Here again get a confirmation of the rate (and for how long it
will remain fixed) via a letter.

Watch out for a predatory lending. Dont include false information on your home
loan application to get quick approval. Also do not borrow more money than you
need or can afford.

A floating interest rate allows customer to take advantage of interest rate movements.
They get immunity from adverse movements and read the benefits of any fall in interest
rate but a floating rate loan makes sense only when interest rate are high so that they can
take advantage of possible fall. But predicting interest rate movement could confound
even seasoned market watchers.

If they are looking for a home loan, be prepared to cough up a pretty sum as down
payment. The RBI, in a recent meeting with the bankers cautioned banks against lending
100% of the property value. That is because of increasing competition in home loan some
banks have been funding even 110% of the agreement value. This means your loan not
only pay for the property, it helps with the stamp duty and registration charges and even
furnishing. Its being sweet deal so for, as borrower not only need have no access to other
funds, they also get tax breaks.

The RBIs position is that lending such sums will remain additional risk for the bank. In
case of default, the bank may not have sufficient collateral security to recover dues and
may have to write off the additional borrowings. However, the bankers do not seen
unduly worried. Non performing assets in the housing segment are quite low below 1%
and that, say bankers, is due to the higher asset quality.



The industry has been witnessing very fast growth rate, which is 6% growth in
the first
Quarter of 2002-2003 as against 3-5% growth recorded in the first quarter of
The market faces a high demand curve, thoroughly mismatched by a low supply
Investment is based in assets that are securities & those that have historically
appreciate rapidly.
Tax benefit & other facilities provided on loan repayments.

The foreclosure rules of court of law such as provision regarding the ownership
of not more than one house (in Delhi) binds the industry.
The healthy of an HFC depend upon its ability to mob up low cost funds.
AN HFC is unable to tap the rural market due to lack of proper retrieval
procedures so whilst
The rural market offers a higher rate of return; it has a higher risk & default rate.
Many legal impendent exist, deferring purchase of certain types of property
beyond a
Certain extent thereby negatively impacting weak mortgage laws, resulting in an
increase in risk compo ending this.


The housing industry faces a severe shortage of houses. The total demand for
houses is Expected to touch around 19.40 million units by the year 2003 of these
12.8 million
Dwelling units (65-98%) would be in rural areas & 6.6 millions dwelling units
(34.02%) in urban areas.
While the loan facility is backed by the security of property this sector represent a
low margin But on the low margin but on the same line low risk segment. The
address this
Market the ones lies on the HFCS to device bold & innovative alternatives like
mortgage Based securities use of method such as door to door collection of
installments assessing the Creditworthiness of the prospective client and
providing for group securities.
The roles of NHB in refinancing & providing regulation of housing finance
The governments initiatives to promote the sector & its contribution in uplifting
the sector.

The industry faces increased competition as more & more foreign backs & Housing
Finance Companies are providing loan facility.


1) Save substantial interest.

2) Prepay whenever the customer.
3) Reduce their loan outstanding.
4) Access the surplus finds anytime.
5) Use surplus funds to invest when the right opportunities arises.


Product is very good but it is mainly suitable for higher income group & is not suitable
for the Middle income group


There is ample scope for financing flats & apartments for the salaried class in the higher
income Group.


1) Nationalized banks like BOI, SBI, Union Bank, PNB.

2) Private Banks likes HDFC & standard chartered & Citi Bank with its home credit

Consumer friendly housing finance company


ICICI home finance company ltd was incorporated on May 28, 1999 as 100% subsidiary
of ICICI Personal Financial Services Limited (ICICI PFS). ICICI finance company Ltd
was set up with objective of providing long term housing loan to individual and
corporate. The company was registered on March 302000 with National Housing Act,
1987 in terms of Housing Financing Companies (NHB) direction, 1989 with effect from
May 3, 2002, ICICI home finance has become a 100% subsidiary of ICICI bank Ltd.


ICICI home loans are at present available to customer in 150 cities/towns across the
country. Loans are offered for the purchase of new homes. Purchase of resale homes and
home improvement. Besides the companies also offers loans for commercial property
and loans against existing property. The loans are offers foe tenors up to 30 years. The
company has also introduced several customers friendly services such as door step
services, know your loan on phone facility and ICICI home search free property
brokerage services. ICICI Personal Financial Services Limited (ICICI PFS) formerly
ICICI credit was one of the first four companies to obtain registration as non banking
financial banking companies(NFBc) from the reserve bank of India (RBI)on sep 10,
1997 under the new section 45 I A of the RBI act ,1939.

During the year 1998-1999, there was a significant shift in the companys operations
from leasing and hire purchase to distribution and servicing the all the retail products for
ICICI, including two auto loans, consumer durable finance & another financial products.
The company has become a critical part of ICICIs retail strategy aims at offering a
comprehensive range of products &services to retail customers. In view of this
reorientation of the business, the name of the company was changed from ICICI
Corporation Limited to (ICICI PFS) effective march 22, 1999.

ICICI commenced its custodial services business in 1992 & played a pioneering role in
the business when it accepted the custodian role for the first ever GDR issue by an Indian
corporate (reliance industry Ltd). ICICI has a major market share in the segment act as
custodian of 41 ADR/GDR issues & in the process, has established the relationship will
all the major overseas institutional investors including foreign institutional investors
(FIIs) & as on the June 30,1999, the value of asset held in our custody exceeded us 2
billion. At present, ICICI offers a full range of custodial services for primary and
secondary market operation pertaining to debt, equity, money market instruments
GDR/EURO issues conversion & GDR arbitrage to:
1) Overseas institutional investors like

2) Overseas government agencies.
3) Institutional looking for proprietary investment.
4) Mutual funds
5) Private investment companies
6) Large corporate
7) High net worth individual

As a value added services ICICI custodial services division assist the client in
preparation, submission & follow up for various applications by FIIS/OCB with


Your search for the perfect home loan ends here at ICICI Bank Home Loans, even before
your have found the perfect property.

The moment you decide to buy a home, you can put in your application for a home loan.
Yes, you can apply for a home loan even before you have selected the property.

The property need not even be in the same city where you are residing. The only
condition being that ICICI Bank has Home Loans operations in both the cities.
Should there be a change in your financial status or plans, you can withdraw your
sanction within 6 months of approval of your home loan.

However, we are always ready to assist our customers in the event of legitimate
problems. And, we might reconsider this if we find that there are satisfactory reasons for
the delay.
And, neither would we charge you extra for this delay.

If it is refinancing you are interested in, it is possible within 6 months from the date of
purchase of property.


At ICICI bank they are committed to making banking a pleasure. This commitment is
manifested in services they offer a wide range of account, investment scheme &
facilities. Each services offer their customer security, flexibility of operations &
maximum returns.
The various services provided under this is as follow:
1) Maximum cash-saving account
2) Quantum fixed deposits
3) Quantum optima value added saving account
4) Money plus-current act
5) ATM
6) Treasure chest cocker facility
7) Power pay roll
8) Retail treasury instruments


ICICI bank now brings back account & ICICI credit card to customers fingertips .with
mobile commerce customer can perform a wide range of query based transaction from
their orange tm (Mumbai) & Airtel (DELHI) mobile phone , without even making a call.

1) Access multiple accounts

2) Balance inquiry to the linked account
3) Cheque book request
4) Mini statement listing of last three transactions5) Request for account statements (by
mail or fax)

1) Attractive IR
2) Door step service from enquiry stage till the final disbursement.
3) No guarantor required.
4) Can transfer your existing high interest rate loan.
5) Special 100% funding for special properties.


With ICICI Bank Home Loans, you can get a home loan suited to your needs. The home
loan amount depends on your repayment capability and is restricted to a maximum of
80% of the cost of the property or the cost of construction as applicable. A number of
factors are taken into account when assessing your repayment capacity. Repayment
capacity takes into consideration factors such as income, age, qualifications, number of
dependants, spouse's income, assets, liabilities, stability, continuity of occupation and
savings history.
However, there are ways by which you can enhance your eligibility.

If your spouse is earning, put him/her as a co-applicant. The

additional income shall be included to enhance your loan amount.
In case of any co-owners they must necessarily be co-applicants.

The final amount to be sanctioned will depend on your repayment capacity. However,
what you ultimately are entitled to will have to conform within the limits fixed for each

Also, when the company looks at the total cost, registration charges, transfer charges and
stamp duty costs are included.

Documents required for Home Loan Sanction

ICICI Bank Home Loans, Indias leading Home Loans Provider, offers attractive
interest rates and unbeatable benefits to ensure that you get the best deal. Keeping your
convenience in consideration, we ask you for minimal mandatory documents for the
sanctioning of your home loan, to keep the process totally hassle-free.

We require the following documents to sanction your home loan:

Sanction Documents Completed application form
Fee Cheque
Photo Identity Proof
Age Proof
Signature Verification Proof
Residence Address Proof
Document for the Salaried
Last 3 months Salary Slip
Form 16
Bank Statement for the last 6 months from Salary Account
Repayment Track record of existing loans / Loan closure letter

Document for the Self-employed

Income Tax Return / Computation of Total Income / Auditors Report / Balance Sheet / Profit
& Loss Account certified by Chartered Accountant for last 2 years (3 years for Home Equity)
(both for business and personal of partners/directors)
Bank statement for the last 6 months from operating account
Repayment Track record of existing loans / Loan closure letter
Board Resolution in case of a company
Proof of existence
Office Address Proof
Photo Identity Proof, Residence Address Proof, Signature Verification Statement for all the main
partners / directors.

1) Customer must be at 21 year of age when the loan is sanctioned.

2) The loan must terminate before or when you twin 65 year of age or before retirement,
Whichever is earlier.
3) Customer must be employed or self employed with regular source of income


A number of factors are taken into account when assessing repayment capacity.
Customer income, age, number of dependents, qualification, asset &liabilities,
stability and continuity of customer employment. Business is one of them.
However there are ways by which you can enhance your eligibility.
If the customer spouse is earning put he/she as a co-applicant. the additional
income shall be included to enhance the loan amount. Incidentally, if there are
any co owners they must necessarily be co-applicant customer fiances income
can also be considered sanctioning the loan on your combined
Income .the disbursement of the loan, however will be done only after the submit
proof of Marriage. Providing additional security like bonds, fixed deposits & LIC
policies may also help to enhance Eligibility.
While there is no need for guarantor, it could be that having one might enhance
your credibility with us. If so, our loan officer would provide customer with
positive necessary details.
The final act to be sanctioned will depend on your repayment capacity. However,
what customers ultimately are entitled to will have to conform within the limits
fixed for each loan.
Also when the company looks at the total cost, registration charges, stamp duty,
transfer charges are also included.


We at ICICI bank understand the value of owing your house. Our affordable home loans
can make all the difference to their dreams of owing home.


Provide facility for search of free online property. A one stop shop for all their
Real Estate needs.


0% brokerage on first sale properties access the entire market under our roof site visits to
the properties short listed by you. Help in negotiating the best price. Help the legal

A person applies for a home loan

The executive meets the applicant & briefs him the entire loan process,
requirements & the various options available.
The applicant chooses a housing finance company (HFC) & handover the income
Document to the executive are the income documents are headed over to the HFC
for eligibility & approval.
The HFC verifies the documents & checks the repaying capacity, saving habits,
tenure of services etc. of the applicant & approves the loan amount.
After approval an offer letter is given to the applicant by the HFC, along with list
of original title documents that have to hand over to the HFC.
The applicant gives the original property title document to the HFC
The HFC scrutinizes the legal & the technical aspects of the original title
If the HFC is satisfy as to the legal & technical aspect of the document then the
applicant is called to sign the loan agreement
The loan disbursement schedule is decided by the HFC according to the stage of
construction (If property under construction) or a onetime payment is made if
property is ready for Possession.
The applicant gets possession of the property depending upon the level of
completion of the property.
The applicant can start paying the EMIs.


Customer loan will be disbursed after you identify & select the property or the home that
customer are purchasing and on their submission of the requisite legal documents.
While the customer may be under impression that the list of documents asked for it is
rather extensive. Each and every single document asked for will be verified & check to
ensure their safety. This may take some time but the banks want to ensure a clear title and
will complete all the legal & technical verification to ensure that they have full right to
their home.
The 230 a clearance of the sellers or 371 clearance from the appropriate income tax
authorities (if applicable) is also needed on satisfactory completion of above, on
registration of conveyance deed and on the investment of your own contribution, the loan
amount (as warranted by the stage of construction) will be disbursed by ICICI.
The disbursement will be in favor of the builder/seller.

At ICICI Bank Home Loans, we disburse the loan amount after you identify and select
the property or home that you are purchasing and submit the requisite legal documents.
While you may be under the impression that the list of documents asked for is rather
extensive, please note that it is for your own good. Each and every single document
asked for will be verified and checked to ensure your safety.
This may take some time but we want to ensure a clear title and will complete all the
legal and technical verifications to ensure that you have full rights to your home.
Your loan will be disbursed after you identify and select the property or home that you
are purchasing and on your submission of the requisite legal documents.
The 230 A Clearance of the seller and / or 37I clearance from the appropriate income tax
authorities (if applicable) is also needed.
On satisfactory completion of the above, on registration of the conveyance deed and on
the investment of your own contribution, the loan amount (as warranted by the stage of
construction) will be disbursed by ICICI Bank.

Disbursement Documents

Property documents (as per P&D for respective states and as asked by empanelled lawyers for
individual cases)
Facility Agreement
Disbursal Request Form
Cheque Submission Form for Pre EMI and EMI cheques
ECS or Auto Debit for ICICI Bank account holders or Post Dated Cheques for EMI / Pre EMI
Personal Guarantors Documents (PG Form, Photograph, Identity Proof, Address Proof,
Signature Verification and Income documents, if applicable)

In case of property is owned by a company

Memorandum of Entry
Form 8


This largely depend on a no. of facts like ones age ,profession, salary, the city one reside
is among other such factors. it varies between 2.1lakh to 1crore depending on the lender-
as the rule of the thumb, depending on HFC one have to cough up 15% - 20% of the loan
amount as the down payment. For smaller amount, this may not be much. But for figure
remaining into lakh this could make loads of difference. For e.g. an apartment of costing
Rs 10 lakh may get 85% financing, so one will have to arrange for remaining Rs 15 lakh.
If one takes this into amount the additional thousands will definitely put a strain on ones

Generally the maximum tenure of home loans is 15 years, with a few lenders offering
tenure of 20 years or more. ICICI offers 15 year loan. The longer the tenure, the more
one pay in total interest but ones monthly payment will be less. So depending ones
earning potential & bank balance one can choose an appropriate tenure. An important
requirement of most of the banks/ HFCs is that one pays up the entire loan before one
retires. One can always prepay ones entire loan amount before it is due. There is a trend
to do away with the pre-payment penalty being imposed by some lenders. So its best one
checks on this as well.


Without doubt the most important parameter to factor into ones calculations. The interest
rates may vary from institution to institution. Repayment is in the form of EMIs
(equated monthly installment). The longer the tenure, the more one pays in interest, but
ones monthly payment will be less. The interest rate of ICICI is

Tenure Interest Type Interest Rate

.15 -20 Fixed 13.75 %

10 -15 Fixed 16 %
5 - 10 Fixed 16 %
1-5 Fixed 16 %
1-5 Floating 16 %
5 - 10 Floating 11.25 %
10 - 15 Floating 16 %
15 - 20 Floating 16 %


This is concept that is yet to catch on in the home loan market but is bound to be a major
service in the months to come. Under this facility, one can take a new loan from another
bank/HFC to pay back another loan before its natural tenure. It gives one the opportunity
of prepaying ones high cost debt and get a lower cost one. In todays falling interest rate
scenario one should use this vehicle to lower ones debt payment as much as possible. The
lender facilitates the shift by paying the outstanding and transferring the asset to other

The interest rates and EMIs are not only the cost factor. Never underestimate how much
the processing fee and administration fees amount to. A 0.5% administration fees and
0.5% processing fee on say, a Rs.500000 loan would be Rs.5000. other timesit could be
just one fee (either administration or processing but could yet work out to be much more
if it is considerably higher at, say, 2.5% or 3%. The various other fees, which one is
required to pay along with the margin amount are:


This is tax payable on the interest paid on a home loan and not the principal. This is
sometimes included in the interest rate of the loan, or may be charged separately as
interest tax.


It is the fee payable to the lender on applying for a loan. It is either a fixed amount not
linked to the loan or may be a percent of the loan amunt. The loan amount received by
you can be less than processing fee.


When the loan is paid back before the nd of the agreed duration a penality is charged by
some banks or companies, which is usually between 1% and 2% of the amount being


It is quite possible that some lends may levy a documentation or consultant charge.


ICICI Bank has announced a shift in the existing benchmark rate from Floating
Reference Rate (FRR)/ I-BAR the Base Rate (I-Base). The same will be effective for all
its mortgage products from July 1, 2010.
The ICICI Bank Base Rate (I-Base) has been fixed at 7.50%. This is the minimum rate
that ICICI Bank will charge to its new customers.
Some of our key benefits are:
Guidance through out the process
Home loan amounts suited to your needs
Home Loan tenure upto 20 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


PNB has over 4500 branches and offices bringing the Punjab National Bank to your
doorstep. Around 2400 offices come under the network of Centralized Banking Solution
or CBS. A need for centralized banking system prompted PNB to go computerized and
what followed was the establishment of CBS in Punjab National Bank branches in all the
leading cities like Delhi, Pune, Chennai, Mumbai, Ahmedabad, Chandigarh, Gurgaon,
Hyderabad, Jalandhar, Kolkata, Ludhiana, Nodal and Bangalore. Internet Banking
Services are provided to all customers in the CBS branches. A branch and ATM locator is
also available on the official website of Punjab National Bank. For an overview of the
annual report or the bank profile, the site can be resourceful. The website also provides
info on the careers and recruitments at PNB and the exam results. The careers at
nationalized banks like PNB are the most sought after 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.


The profile of the PNB shows superior banking services in corporate, personal and
international banking, industrial and agricultural finance and finance of trade. Punjab
National Bank boasts of a varied clientele consisting of small and medium industrial
units, exporters, multi-national companies, Indian conglomerates and NRI. The Bank is
changing outdated front and back end processes to modern customer friendly processes
to help improve the total customer experience. With about 8500 of its own 10000
branches and another 5100 branches of its Associate Banks already networked, today it
offers the largest banking network to the Indian customer. The Bank is also in the process
of providing complete payment solution to its clientele with its over 8500 ATMs, and
other electronic channels such as Internet banking, debit cards, mobile banking, etc.The
objectives of the Company are in line with objectives laid down by RBI for the Primary

Strengthen the infrastructure in the government securities market in order to make it

vibrant, liquid and broad based.
Ensure the development of underwriting and market making capabilities for
Government Securities
Improve secondary market trading system, which would contribute to price discovery,
enhance liquidity and turnover and encourage voluntary holding of Government
securities amongst a wider investor base
Become an effective conduit for conducting open market operations.


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 the
second largest public sector bank in India. It was nationalized in 1969 along with 13
other 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 Philippine government and the Lucio Tan
Group of the 67% stake in PNB was completed within the third quarter of 2005. The
Lucio Tan Group exercised its right to match the P 43.77 per share bid offered by a
competitor and purchased the shares owned by the government. The completion of sale is
expected to speed up the development of PNBs franchise and operational

Today, State Bank of India (SBI) has spread its arms around the world and has a network
of branches spanning all time zones. SBI's International Banking Group delivers the full
range of cross-border finance solutions through its four wings - the Domestic division,
the Foreign Offices division, the Foreign Department and the International Services

Punjab National Bank (PNB), has announced that it has completed 100% core banking
implementation at all its 4604 branches and extension counters through the Finacle
Universal Banking Solution from Infosys, on Sun infrastructure and the Oracle 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
implemented industry-leading Finacle core banking solution from Infosys across its
operations running a flexible, and scalable database platform from Oracle and innovative
servers from Sun Microsystems With an increasingly dynamic business and regulatory
environment, PNB sought to not only achieve automation, but also centralize operations,
standardize branch processes, 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 year 2007-2008 incubated the idea of introduction of a
Centralised Banking solution. The bold and innovative thought culminated into the CBS
architecture with Finacle application on Oracle Database and Sun hardware platform with
Solaris Operating System. With Finacles agile and future proof technology, the bank
today has over 22,500 concurrent users. The solutions scalability has also enabled the
banks scalability to be 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 for
product innovation and improved flexibility of operations. With seamless integration of
delivery channels such as ATM and internet banking solutions, PNB is able to provide
24X7 services to customers at a reduced transaction cost. PNBs choice of the Oracle
Database has provided the banks IT infrastructure with robustness, management
features, security and scalability as well as performance requirements to service 3.5
million transactions and 22500 concurrent users a significant achievement in the Indian
banking industry. In addition, the Oracle Database will help PNB take control of its
enterprise information, gain better business insight, and quickly and confidently adapt to
an increasingly changing competitive environment.20

With secure, highly available and scalable grids of low-cost servers and storage, Oracle
customers can tackle the most demanding transaction processing, data warehousing,
business intelligence and content management applications. The 100% implementation of
Finacle Core Banking Solution shall enable PNB to further reduce operational costs and
revenue leakage while improving productivity of branches, introduction of new and
innovative products and visibility of business. The anywhere anytime banking facility
will enable the bank to offer products for every segment of the customer. PNB long-
standing and progressive partnership also highlights Finacles leadership in large scale
banking transformation, the solutions future proof technology and powerful capabilities.
India is a strategic market for Finacle and we look forward to closely collaborating with
Punjab National Bank for their future growth plans.


PNB reaches out to you with fast, friendly and most convenient home loans for:

Construction or purchase of house/ flat.

Purchase of house/ flat on First Power of Attorney basis from the original allottee
Carrying out repairs/ renovations/ additions/ alterations to existing house/ flat
Special Feature- To cover the loan outstanding, life Insurance cover is also
available on payment of one time premium which can also be financed by the

PNB Apna Ghar Yojana home loans are meant for construction or for
acquisition/purchase of house/flats. The minimum loan amount would be Rs.50000 and
maximum loan amount depends on the repayment capacity of the borrower. In case of
joint application, income of borrowers /co-borrowers is clubbed together for calculation
of loan eligibility. The loan repayment is in Equated Monthly Installments (EMI) over a
maximum period of 20 years.
PNB Ghar Sudhar Yojana home loans are offered for up gradation, renovation or repair
of house/flat. It includes among others, internal and external repairs, water proofing,
roofing, flooring, electrical, woodwork etc. The loan amount ranges from a minimum of
Rs 50,000 to a maximum of Rs. 1000000. Borrower's minimum contribution will be 25%
of the estimated cost of repairs/renovations

For construction/purchase of house/flat: - 75% of the cost of construction of house or
purchase of house/flat. Cost of car parking up to the maximum extent of 5% of the cost
of flat/house can also be included in the cost of the project. For carrying out repairs/
renovations/ additions/ alterations: - 75% of the estimated cost subject to maximum of
Rs. 20 lacs.

Loan is available up to Rs. 20 lacs for purchase of Land/ Plot. Loan is available
maximum up to Rs. 2 lacs for furnishing


The products and services provided by the PNB are in various fields, such as:
NRI services
International banking
Corporate banking
Agricultural banking
International banking


Age of the applicant must be less than 60 years.

Existing home loan borrower can also apply provided their loan account is regular and no
IR irregularity persist.


1. Proof of identity
2. Proof of income
3. Proof of residence
4. Bank statement or Pass Book where salary or income is credited.
5. Education Certificate
6. Photos
7. Salary slips & form 16
8. Income tax return last 3 years along with balance sheets.
9. Assets liabilities statements.
10. Documents of property.
11. Estimate of construction.
12. Guarantor


The loan can be granted both for freehold and leasehold property.

In case of leasehold, loan can be granted on the basis of power of attorney basis from
original allotee where DDA/PUDA/HUDA permit conversion of leasehold into freehold
property otherwise advance is not permitted against plot purchased on Power of Attorney


For construction/purchased of house/flat 75% of the cost of construction or purchase of

house/flat. For carrying out repairs/renovation/additions/alternation: - 75% of the
estimated cost subject to maximum of Rs. 20 lacs. Loan up to Rs. 20 lacs for purchase of
Loan is available maximum up to Rs. 2 lacs for furnishing


Pre payment charges 2%

Balance Transfer Charges

(incase of refinance)

Part-payment Charges Nil

Switching Charges
(Fixed to Floating or vice-a-versa)


The loan will be sanctioned within 7 working days.


You can repay the loan over a maximum period of 25 years under both FRHL and ARHL
in SBI . Repayment will not ordinarily extend beyond your age of retirement (if you are
employed) or on your reaching 65 years of age, whichever is earlier.


Fixed Option Floating Floating Option

Fixed Option for
for loans(Above Option for for
For repayment period loans(Upto 20
20 loans(Upto 20 loans(Above 20
lac) lac) lac)
i) Upto 5 years 9.25 10.00 8.75 9.50
ii) Above 5 & upto 10
10.00 10.25 9.00 9.50
iii) Above 10 & upto 20
10.50 10.75 9.25 9.75
iv) Above 20 yrs & upto
10.75 11.00 9.50 10.00
25 yrs.

The interest rate can be fixed or floating

Option can be changed from fixed to floating and vice versa with flat charges of 2% fee
on balance outstanding.
Fixed interest rate be reset after a block of 5 year in respect of loans disbursed on or after

Rs. 1350 + Service Tax

For loans up to Rs. 300 lacs = 0.50% of the loan amount with a cap of Rs. 20,000/-
For loans above Rs. 300 lacs =0.90% of the loan amount
1. Loan is to be repaid in equated monthly installments within a period of 25 years or
before the borrower attains the age of 65 years.
2. Repayment of loan for repair/ renovation/ addition/alteration has, however been
restricted to 10 years. Father/Mother can also be made co-borrower in cases property is in
single name of his /her son and also clubbing of their income is permitted for
determining eligibility criteria. Minimum 24 advance cheque should be obtained as and
when, 6 cheques remain, fresh lot to be obtained out of 24, 23 cheques should be of the
amount equal to the balance. Loan is to be repaid in EMI within a period of 25 years or
before the borrower attains the age of 65 years.

Mortgage of property for which finance is being given

In case of purchase of house/ flat from housing board/ society where mortgage cannot be
created immediately, a tripartite agreement shall be executed amongst the housing board/
society, borrower and the Bank
In case of purchase of house/ flat on first power of attorney, additional security equal to
125% of the loan amount by way of mortgage of some other property or pledge of bank's
FDR/ LIC policy/ Govt. Securities, NSCs, KVPs, IVPs, / PSU Bonds etc. has to be

Loan can be sanctioned by branch/hub near to the present place of work/posting

/residence of the borrower.
Loan can be sanctioned even if property is in the name of wife/parents provided that the
owner is made co-borrower.
Loan can be granted for 2nd house in the same city.
Loan can be granted for purchase of house for rental purpose
For take over, permission of higher authority is not required.


For construction in Un-authorized colonies.

If property is to be used for commercial purpose.
Without approved Map.


Nil- In cases where the loans are prepaid by the borrower from their own sources
Nil- In cases where the borrower shifts to other bank within 30 days from the date
of issuance of circular for upward revision in the rate of interest to be charged in
his account or change in other terms of sanction.
2 % - In cases where the account is taken over by some other Bank/ Financial
institutions by way of a ailment of loan from such bank/ financial Inst


For outright purchase of house/flat, the loan amount will be paid in lump sum to
the vendor.
For house/flat under construction, the loan amount will be dispersed in stages as
per progress of construction/demand by selling agency.



State Bank of India (SBI) is India's largest commercial bank. SBI has a vast domestic
network of over 9000 branches (approximately 14% of all bank branches) and commands
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 several non-banking
subsidiaries offering merchant banking services, fund management, factoring services,
primary dealership in government securities, credit cards and insurance. 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 13 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 a network of branches spanning all time zones. SBI's International
Banking Group delivers the full range of cross-border finance solutions through its four
wings - the Domestic division, the Foreign Offices division, the Foreign Department and
the International Services division.


The SBIs powerful corporate banking formation deploys multiple channels to deliver
integrated solutions for all financial challenges faced by the corporate universe. The
Corporate Banking Group and the National Banking Group are the primary delivery
channels for corporate banking products.

The Corporate Banking Group consists of dedicated Strategic Business Units that cater
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 biggest business centers. The
others are the Project Finance unit and the Leasing unit. The National Banking Group
also delivers the entire spectrum of corporate banking products to other corporate clients,
on a nationwide platform. The bank is also looking at opportunities to grow in size in
India as well as internationally. It presently has 82 foreign offices in 32 countries across
the globe. It has 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
Indian Banking scenario. It is in the process of raising capital for its growth and also
consolidating its various holdings. Throughout all this change, the Bank is also
attempting to change old mindsets, attitudes and take all employees together on this
exciting road to Transformation. In a recently concluded mass internal communication
programme termed Parivartan the Bank rolled out over 3300 two day 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 and inclusiveness. The workshops fired
the imagination of the employees with some other banks in India as well as other Public
Sector Organizations seeking to emulate the programme.


The origins of State Bank of India date back to 1806 when the Bank of Calcutta (later
called the Bank of Bengal) was established. In 1921, the Bank of Bengal and two other
Presidency banks (Bank of Madras and Bank of Bombay) were amalgamated to form 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 a network of
branches spanning all time zones. SBI's International Banking Group delivers the full range
of cross-border finance solutions through its four wings - the Domestic division, the Foreign
Offices division, the Foreign Department and the International Services division.


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 Award 2007 and 5 Awards for our

SBI Card reaches three million milestones:

SBI Card, a joint venture between State Bank of India and GE Money, announced yet
another landmark achievement of crossing the three million cardholders-marks. Roopam
Asthana, CEO-SBI Card, said, "This milestone is even more remarkable as we 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 improved value propositions for the urban affluent customers." SBI Card
recently signed up Indian cricketer Yuvraj 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 the world to
have 10,000 branches when Union Finance Minister P Chidambaram inaugurated 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 easy milestone though the SBI was the bank of the government and Indian people
even before other banks were nationalised," he said. People all over the world, including
the Chinese, would now know about this small village where the 10000th branch of the
SBI had been opened, he said adding they would be amazed by the bank's growth. The
bank should be proud of the achievement he 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 have any 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 is what economists say is financial inclusion,' he said.

Main SBI Home Loan Schemes

SBI Realty : Purchase of plot of land

SBI Optima : Loan to existing home loan borrowers
SBI Green Home Loan : For homes that fight against the adverse climate
change, SBI offers 0.25% concession in interest rate and waiver of processing
SBI Flexi : Combination of floating and fixed interest rate, in a pre determined
NRI Home Loans : Loans for NRIs and PIOs
SBI Freedom : Pledging other financial security than mortgaging the house
SBI Max Gain : Operate your home loan account like your SB or Current


The products and services provided by the SBI are in various fields, such as:
Banking services
NRI services
International banking
Corporate banking
Agricultural banking
International banking


SBI Home Loan provides no cap on maximum loan amount for the
purchase/construction of house/flat.
There is an option to club the income of the applicant's spouse and children to
compute the eligible loan amount.
The bank provides free personal accident insurance cover.
A complimentary international ATM cum Debit card is also provided by SBI.
On the spot "in principle" approval is a special provision for the applicant.
If all the required documents are submitted by the applicant, SBI Home Loan is
sanctioned within 6 days of the date of submission.
The applicant can also consider SBI's Home Loan as a Term Loan or as an
Overdraft facility, in case he/she wants to save on interest and maximize gains.
SBI Home Loan also provides free personal accident insurance cover up to Rs 40
Repayment is permitted up to 70 years of age, which is an added advantage of
SBI Home Loan.

The Most Preferred Home Loan provider SBI Bank offers a Home Loan with Attractive
Interest Rates with Latest Schemes and Benefits. SBI also provides a Housing loan with
different schemes. Schemes Are:-

1. SBI Easy Home Loan

2. SBI Advantage Home Loan
3. SBI Housing Finance Scheme
4. SBI Happy Home Loans
5. SBI Life Style Loan
6. SBI Green Home Loan
7. SBI Home Plus
8. SBI Home Line


'SBI-Flexi' Home Loans are designed to enable borrowers to hedge their Home Loan
against unfavorable movement in interest rates and gives the customers a one time
irrevocable option to choose one of the three customized combinations of fixed and
floating interest rates.
'SBI-Freedom' Home Loans are customized for high net worth individuals and offer
benefits such as 100 per cent finance of the project and no mortgage of the property,
provided the individual could show liquid securities such as LIC policies or NSCs.


The minimum age of the applicant is 18 years, on the date of the sanction of the loan.
The maximum age limit for a Home Loan applicant is 70 years. It is the maximum age
limit, within which the loan should be fully repaid. The applicant should consist of
sufficient, regular and continuous source of income for repaying the loan.


Completed Application Form with one Passport Size Photograph

Identity Proof - the applicant can make use of his/her PAN Card/Voter ID/
Passport/Driving License, for the purpose.
Residence Proof - the applicant can make use of his/her Recent Telephone Bill/
Electricity Bill/Property tax receipt/Passport/Voters ID
Proof of business address in respect of businesspersons/ industrialists
Sale Deed, Agreement of Sale, Letter of Allotment, Non Encumbrance Certificate,
Land/Building Tax paid receipt etc.
Copy of Approved Plan and approval from the Local Body
Statement of Bank Account/ Pass Book for last 6 months
INTEREST RATE (SBAR is currently 11.75%)

Year 1 - 8% fixed
Year 2 & 3 - 9% fixed
Year 4 onwards - For loans up to 50 lakhs, 9.25% floating.
For loan amount over 50 lakhs, 9.75% floating

Eligibility Criteria & Documentation required for SBI Home Loan

Salaried Self employed

Age 21years to 60years 21years to 70years
Income Rs.1,20,000 (p.a.) Rs.2,00,000 (p.a.)
Loan Amount
5,00,000 - 1,00,00000 5,00,000 - 2,00,00000
Tenure 5years-20years 5years-20years
2years 3years
Documentation 1) Application form with 1) Application form with photograph
photograph 2) Identity & residence proof
2) Identity & residence proof 3) Education qualifications certificate &
3) Last 3 months salary slip proof of business existence
4) Form 16 4) Business profile,
5) Last 6 months bank salaried 5) Last 3 years profit/loss & balance
credit statements sheet
6) Processing fee cheque 6) Last 6 months bank statements
7) Processing fee cheque

Other Products from SBI (State bank of India)

SBI Personal Loan

SBI Card
SBI Home Loan
SBI Housing Loan


You can repay the loan over a maximum period of 25 years under both FRHL and ARHL
in SBI . Repayment will not ordinarily extend beyond your age of retirement (if you are
employed) or on your reaching 65 years of age, whichever is earlier.



Upto 5 lakh Rs. 1000

5lakh-10lakh Rs. 2000
10lakh-20lakh Rs. 5000
20lakh-50lakh Rs. 7000
50lakh-1crore Rs.8000
1crore-5crore Rs.10, 000
Above 5 crore Rs.20, 000


If paid from own source- Nil,

In other cases- 2% on principal amount prepaid


If paid from own source- Nil,

In other cases- 2% on principal amount prepaid

Ben R. Craig had studied about the Federal Home Loan Bank Lending to Community
Banks, are Targeted Subsidies Necessary? The Gramm-Leach-Bliley Act of 1999
amended the lending authority of the Federal Home Loan Banks to include advances
secured by small enterprise loans of community financial institutions. Three possible
reasons for the extension of this selective credit subsidy to community banks and thrifts
are examined, including the need to: subsidize community 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, they
estimate two empirical models of small-business lending by community banks. The data
reject the hypothesis that access to increased funds will increase the amount of small-
business loans made by community banks.

2) In December 2006 Fulbag Singh and Reema Sharma had studied about the housing
Finance in India. Housing, as one of the three basic needs of life, always remains on the
top priority of any person, economy, government and society at large. In India, majority
of the population lives in slums and shabby shelters in rural areas. From the last decade,
the Government of India has been continuously trying to strengthen the housing sector by
introducing various housing loan schemes for rural and urban population. The first
attempt in this regard was the National Housing Policy (NHP), which was introduced in
1988. The National Housing Bank (NHB) was set up in 1988 as an apex institution for
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 housing financial institutions
in the country as well as to provide refinance facilities to housing finance corporations
and scheduled commercial banks. Moreover, for the salaried section, the tax rebates on
housing loans have been introduced. The paper is based on the case study of LIC
Housing Finance Ltd., which analyzes region-wise disbursements of individual house
loans, their portfolio amounts and the defaults for the last ten years, i.e., from 1995-96 to
2004-05 by working out relevant ratios in terms of percentages and the compound annual
growth rates. A relevant chart has also been prepared to highlight the results.

3) In May 18, 2007 Michael LaCour-Little had studied about the Economic Factors
Affecting Home Mortgage Disclosure Act Reporting. The public release of the 2004-
2005 Home Mortgage Disclosure Act data raised a number of questions given the
increase in the number and percentage of higher-priced home mortgage loans and
continued differentials across demographic groups. Here we assess three possible
explanations for the observed increase in 2005 over 2004: (1) changes in lender business
practices; (2) changes in the risk profile of borrowers; and (3) changes in the yield curve
environment. Results suggest that after controlling for the mix of loan types, 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 a model of the factors affecting
results for 2004-2005, we predict that 2006 results will continue to show an increase in
the percentage of loans that are higher priced when final numbers are released in
September 2007.

4) In May 1991 Stephen F. Borde had studied about the Is the Savings and Loan
Industry 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-term deposits), the
asset structure of S&Ls is quite different. Whereas banks assets consist of short-term
loans, S&L assets consist largely of long-term loans, such as home ownership mortgages.
Therefore, in the absence of adequate hedging measures, S&Ls are more vulnerable to
interest rate risk, which can lead to lower profits when interest rates rise.

5) In June 29, 2001 Joshua Rosner had studied about the Housing in the New
Millennium: A Home without Equity is Just a Rental with Debt. They studied about the
prospects of the U.S. housing/mortgage sector over the next several years. Based on our
analysis, we believe there are elements in place for the housing sector to continue to
experience growth well above GDP. However, we believe 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 the 1990'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 value
mortgages * The increasing use of software to streamline the origination process and
modify/recast delinquent loans in order to keep them classified as "current" * Changes in
the appraisal process which has led to widespread over appraisal/over-valuation problems
If these trends remain in place, it is likely that the home purchase boom of the past
decade will continue unabated. Despite the increasingly more difficult economic
environment, it may be possible for lenders to further ease credit standards and more
fully exploit less penetrated markets. Recently targeted populations that have historically
been denied homeownership opportunities have offered the mortgage industry novel
hurdles to overcome. Industry participants in combination with eased regulatory
standards and the support of the GSEs (Government Sponsored Enterprises) have
overcome many of them. If there is an economic disruption that causes a marked rise in
unemployment, the negative impact on the housing market could be quite large. These
impacts come in several forms. They include a reduction in the demand for
homeownership, a decline in 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 have yet 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, a relatively new method
of loan forgiveness can temporarily alter the perception of credit health in the housing
sector. In an effort to keep homeowners in the home and reduce foreclosure expenses,
holders of mortgage assets are currently recasting or modifying troubled loans. Such
policy initiatives may for a time distort the relevancy of delinquency and foreclosure
statistics. However, a protracted housing slowdown could eventually cause modifications
to become uneconomic and, thus, credit quality statistics would likely become relevant
once again. The virtuous circle of increasing homeownership due to greater leverage has
the potential to become a vicious cycle of lower home prices due to an accelerating rate
of foreclosures.

6) In December 2002 Melissa B. Jacoby had studied about the Home Ownership Risk
beyond a Sub prime Crisis: The Role of Delinquency Management. They studied that
Public investment in and promotion of homeownership and the home mortgage market
often relies on three justifications to supplement shelter goals: to build household wealth
and economic self-sufficiency, to generate positive social-psychological states, and to
develop stable neighborhoods and communities. Homeownership and mortgage
obligations do not inherently further these objectives, however, and sometimes
undermine them. The most visible triggers of the recent surge in sub prime delinquency
have produced calls for emergency foreclosure avoidance interventions (as well as front-
end regulatory fixes). Whatever their merit, I contend that a system of mortgage
delinquency management should be an enduring component of housing policy.
Furtherance of housing and household policy objectives hinges in part on the conditions
under which homeownership is obtained, maintained, leveraged, and - in some situations
- exited. Given that high leverage or trigger events such as job loss and medical problems
play significant roles in mortgage delinquency independent of loan terms, better
origination practices cannot eliminate the need for delinquency management. One
function of this brief essay is to identify an existing rough framework for managing
delinquency. Legal scholarship should no longer discuss mortgage enforcement primarily
in terms of foreclosure law and instead should include other debtor-creditor laws such as
bankruptcy, industry loss mitigation efforts, and third-party interventions such as
delinquency housing counseling. In terms of analyzing this framework, it is tempting to
focus on its impact on mortgage credit cost and access or on the absolute number of
homes temporarily saved, but my proposed analysis is based on whether the system
honors and furthers the goals of wealth building, positive social psychological states, and
community development. Because those ends are not inexorably linked to ownership
generally or owning a particular home, a system of delinquency management that honors
these objectives should strive to provide fair, transparent, humane, and predictable
strategies for home exit as well as for home retention. Although more empirical research
is needed, this essay starts the process of analyzing mortgage delinquency management
tools in the proposed fashion.

7) In 1999 Yoko Moriizumi had studied about the Current Wealth, Housing Purchase and
Private Housing Loan Demand in Japan. Japanese households accumulate wealth for
down payments at a high rate. Therefore, current wealth plays an important role in home
acquisition as public loans whose direct mortgage lending is a strong support for home
purchasers. We estimate the wealth effect on private mortgage debt as well as housing
consumption by applying a model where mortgage debt demand is derived from house
purchase decisions and is determined jointly with housing consumption. We use a
simultaneous equation Tobit estimation method. Wealth effects on private mortgage debt,
likelihood of borrowing, and housing consumption are not elastic. On the other hand, a
change in housing consumption affects the likelihood of borrowing elastically much
more than the private mortgage amount of borrowers. Housing and private mortgage
markets fluctuate very closely with the number of participants in the mortgage market.
Therefore, the number of housing starts is linked strongly to the private mortgage market.

8) Robert B. Avery and Allen N. Berger had studied about the Loan commitments and
bank risk exposure. They studied about the Loan commitments increase a bank's risk by
obligating it to issue future loans under terms that it might otherwise refuse. However,
moral hazard and adverse selection problems potentially may result in these contracts
being rationed or sorted. Depending on 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. the empirical results indicate that commitment loans tend to have slightly
better than average performance, suggesting that commitments generate little risk or that
this risk is offset by the selection of safer borrowers.

9) Sumit Agarwal,Souphala Chomsisengphet and John C. Driscoll had studied about the
Loan commitments and private firms. They studied that, most loans are in the form of
credit lines. Empirical studies of line demand have been complicated by their use of data
on publicly traded firms, which have a wide menu of financing options. We avoid this
problem by using a unique proprietary data set from a large financial institution of loan
commitments made to 712 privately-held firms. We test Martin and Santomero's (1997)
model, in which lines give firms the speed and flexibility to pursue investment
opportunities. Our findings are consistent with their predictions. Firms facing higher
rates and fees have smaller credit lines. Firms with higher growth commit to larger lines
of credit and have a higher rate of line utilization. Firms experiencing more uncertainty in
their funding needs commit to smaller credit lines. Almost all firms convert unused credit
line portions into spot loans and take out new lines.

10) Faik Koray and Eric T. Hillebrand had studied about the Interest Rate Volatility and
Home Mortgage Loans. They studied that The U.S. economy has experienced substantial
fluctuations in real and nominal interest rates since the 1970s. This paper investigates
empirically the relationship between home mortgage loans and volatility in mortgage
rates for the period 1971:02 through 2003:03. Contrary to common wisdom, we find a
positive relationship between mortgage rate volatility and home mortgage loans. Further
investigation indicates that this is due to volatility in the bond market. In times of high
interest volatility, households disinvest in government securities and invest in real assets,
which yield a positive relationship between mortgage rate volatility and home mortgage

11) In november2000 Michelle J. White and Emily Y. Lin had studied about the
Bankruptcy and the Market for Mortgage and Home Improvement Loans. They studied
that this paper investigates the relationship between bankruptcy exemptions and the
availability of credit for mortgage and home improvement loans. We develop a combined
model of debtors' decisions to file for bankruptcy and to default on their mortgages and
show that the theory predicts positive relationships between both the homestead and
personal property exemption levels and the probability of borrowers being denied
mortgage (secured) and home improvement loans. We test these predictions empirically
and find strong and statistically significant support when evidence from cross-state
variation in bankruptcy exemption levels is used. Applicants for mortgages are 2
percentage points more likely to be turned down for mortgages and 5 percentage points
more likely to be turned down for home improvement loans if they live in states with
unlimited rather than low homestead exemptions. These relationships also hold when we
introduce state fixed effects into the model.

12) In October 14, 2008 David P. Bernstein had studied about the Home Equity Loans
and Private Mortgage Insurance: Recent Trends & Potential Implications. They studied
about the impact of increased use of home equity lines and decreased private mortgage
insurance (PMI) on mortgage markets. The data confirms that in the years leading up to
the mortgage crisis home buyers and lenders have aggressively used piggyback loans to
avoid taking out PMI on first mortgages. Multiple-mortgage financing packages as a
percent of newly originated mortgages (mortgages originated within the previous five
years) went from 14.8% in survey year 2001 to 21.5% in survey year 2007. The multiple-
mortgage percentage for seasoned mortgages (mortgages originated more than five years
prior to the origination date) also increased by a modest amount. Further comparisons
reveal a large decrease in the proportion of mortgages with PMI with the largest
decreases in PMI coverage occurring among newly originated multiple-lien packages.
Data from the SCF was used to compare five financial characteristics (credit card debt,
installment loans, consumer credit, home-owners equity, and liquid assets) for multiple-
lien versus single-lien households. The comparisons suggest single-lien households tend
to have slightly stronger financial variables than multiple-lien households. The data does
not support the view that homeowners with multiple liens are less risky and should
therefore be allowed to avoid PMI. The reduced use of PMI and the increased use of
home equity loans increased mortgage holder risk in several different ways and was a
contributing factor to the 2008 mortgage and financial crisis. This change in lending and
borrowing behavior is not a sub prime market problem.

13) In August 2007 Michael LaCour-Little had studied about the Home Purchase
Mortgage Preferences of Low- and Moderate-Income Households. Housing policy in the
United States has long supported homeownership, yet variation persists across income
groups. This article employs recent mortgage origination data to focus on the revealed
preferences of low- and moderate-income (LMI) households in home purchase mortgage
choice. I identify the factors associated with conventional conforming, FHA, nonprime
and specially targeted programs. Empirical results show that individual credit
characteristics and financial factors, including pricing, generally drive product choice,
with some variation evident when loans are originated through brokers. Results also
indicate that targeted conventional programs effectively compete with government-
insured products in the LMI segment.
14) In 24 October 2008 David C. Wheelock had studied about the Government Response
to Home Mortgage Distress: Lessons from the Great. They studied about the Great
Depression was the worst macroeconomic collapse in U.S. history. Sharp declines in
household income and real estate values resulted in soaring mortgage delinquency rates.
According to one estimate, as of January 1, 1934, fully one-half of U.S. home mortgages
were delinquent and, on average, some 1000 home loans were foreclosed every business
day. This paper documents the increase in residential mortgage distress during the
Depression, and discusses actions taken by state governments and the federal government
to reduce mortgage foreclosures and restore the functioning of the mortgage market.
Many states imposed moratoria on both farm and nonfarm residential mortgage
foreclosures. Although moratoria reduced farm foreclosure rates in the short run, they
appear to have also reduced the supply of loans and made credit more expensive for
subsequent borrowers. The federal government took a number of steps to relieve
residential mortgage distress and to promote the recovery and growth of the national
mortgage market. The Home Owners Loan Corporation (HOLC) was created in 1933 to
purchase and refinance delinquent home loans as long-term, amortizing mortgages.
Between 1933 and 1936, the HOLC acquired and refinanced one million delinquent
loans totaling $3.1 billion. The HOLC refinanced loans on some 10 percent of all
nonfarm, owner-occupied dwellings in the United States, and about 20 percent of those
with an outstanding mortgage. The Great Depression experience suggests how
foreclosures might be reduced during the present crisis.

15) In March 2001 Tullio Jappelli and Maria Concetta Chiuri had studied about the
Financial Market Imperfections and Home Ownership: A Comparative Study. They
explore the determinants of the international pattern of home ownership using the
Luxembourg Income Study (LIS), a collection of microeconomic data on fourteen OECD
countries. In most, the cross-section is repeated over time and includes several
demographic variables carefully matched between the different surveys. This allows us to
construct a truly unique international dataset, merging data on more than 400,000
households with aggregate panel data on mortgage loans and down payment ratios. After
controlling for demographic characteristics, country effects, cohort effects and calendar
time effects, we find strong evidence that the availability of mortgage finance - as
measured by outstanding mortgage loans and down payment ratios - affects the age-
profile of home ownership, especially at the young end. The results have important
implications for the debate on the relationship between saving and growth.

16) In 10 December 2007 Irina Paley and Chau Do had studied about the Explaining the
Growth of Higher-Priced Loans in HMDA: A Decomposition Approach. The period
2004-2005 showed a significant increase in Home Mortgage Disclosure Act (HMDA)
rate spread reporting. Following the Oaxaca (1973), Blinder (1973), and Fairlie (2005)
decomposition techniques, this study identifies the fraction of the increase due to the
flattening of the yield curve. Even after controlling for changes in borrower risk
characteristics, the findings reveal that during 2004-2006, the flattening of the yield
curve explains a significant amount of the increase in rate spread reportable loans. This is
the case for both prime and sub prime originations.

17) In Feb. 1 2009 Vincent W. Yao and Eric Rosenblatt and Michael LaCour-Little had
studied about the unique paired loan dataset containing information on multiple
conventional conforming mortgage loans of households to examine home equity
extraction decisions over the period 2000-2006. The main question addressed is how
much households borrow when refinancing their current mortgage debt in a cash-out
transaction. We also provide estimates of the marginal effect of certain borrower
characteristics. Results contribute both to the literature on refinancing behavior and the
role of house price appreciation in providing funds that may be used for consumer
spending or other purposes.

18) In august2004 Mark Carey and Greg Nini had studied about the Corporate Loan
Market Globally Integrated? A Pricing Puzzle. We offer evidence that interest rate
spreads on syndicated loans to corporate borrowers are economically significantly
smaller in Europe than in the U.S., other things equal. Differences in borrower, loan and
lender characteristics associated with equilibrium mechanisms suggested in the literature
do not appear to explain the phenomenon. Borrowers overwhelmingly issue in their
natural home market and bank portfolios display significant home "bias." This may
explain why pricing discrepancies are not competed away, but the fundamental causes of
the discrepancies remain a puzzle. Thus, important determinants of loan origination
market outcomes remain to be identified, home "bias" appears to be material 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 about the
Sensitivity of Homeowner Leverage to the Deductibility of Home Mortgage Interest.
Mortgage interest tax deductibility is needed to treat debt and equity financing of homes
equally. Countries that limit deductibility create a debt tax penalty that presumably leads
households to shift from debt toward equity financing. The greater 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 a legislative change is complicated by the
fact that lenders restrict mortgage debt to the value of the house (or slightly less) being
financed. Taking this restriction into account reduces the estimated financing response by
20 percent (a 32 percent decline in debt vs. a 40 percent decline). The estimation is based
on 86,000 newly originated UK loans from the late 1990s.

20) In 1 NOVEMBER 2007 Marsha Courchane studied about The Pricing of Home
Mortgage Loans to Minority Borrowers: How Much of the APR Differential. The public
releases of the 2004 and 2005 HMDA data have engendered a lively debate over the
pricing of mortgage credit and its implications regarding the treatment of minority
mortgage borrowers. We provide a unique empirical assessment of this issue by using
aggregated proprietary data provided to us by lenders and an endogenous switching
regression model to estimate the probability of taking out a sub prime mortgage, and
annual percentage rate ("APR") conditional on getting either a sub prime or prime
mortgage. We find that up to 90 percent of the African American APR gap, and 85
percent of the Hispanic APR gap, is attributable to observable differences in
underwriting, costing and market 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 by
minority and non-minority borrowers are appropriately attributed to differential

21) In 1991 Susan M. Wachter and Paul S. Calemhad studied about the Community
Reinvestment and Credit Risk: Evidence from an Affordable Home Loan Program. This
study examines the performance of home purchase loans originated by a major
depository institution in Philadelphia under a flexible lending program between 1988 and
1994. We examine long-term delinquency in relation to neighborhood housing market
conditions, borrower credit history scores, and other factors. We find that likelihood of
delinquency declines with the level of neighborhood housing market activity. Also,
likelihood of delinquency is greater for borrowers with low credit history scores and
those with high ratios of housing expense to income, and when the property is unusually
expensive for the neighborhood where it is located.

The Indian customer has come a long way from purchasing to fulfilling their needs from
buying a house customers now grab everything that comes their way but they do their
own survey of optimum loans; same is the case with banks & housing loans. With
innumerable choices before him, the customer is needed then king. It is therefore
imperative that if the bank has to succeed in competitive world, it should be
technological starry. Customer centric progressive driven by highest standard of
cooperative governance & guided by sound ethical values & above all should have
personalized customer services. There is scope of exploiting the vast middle income
group by releasing loans with special interest rate, which would be beneficial to both

The following suggestions are strongly recommended:

To broaden the customer base the vast middle income strata should be fully
Simplify the procedure, reduce service charges & demand only the basic essential
Most banks are reluctant to advance loan to the service class. E.g. law years,
police officers etc. this aspect must be exploited.
Adoption of flexible & more lenient penalty should the
Customer fails to deposit the payment on time. The penalty should be case to case
basis rather than the same for the entire customer base.
Restriction to be reduced to bare minimum for loan advances & for repayment.
For e.g. offers Long term repayment facilities & have no age restriction to
choosing repayment. The maximum age for repayment could be increase to 65-70
years of age. Such facility will grow fast retail segment of the bank.
Offer multiple repayment loans services. Class to be exploited by offering special
Rates & linking the repayment from the source where the pay cheque to the
employee is issued. This need to undergo special contract with government
organization to ensure implementation.