ABSTRACT:

Many banks provide home loans whether commercial banks or financial institutions to
the people who want to have a home. HDFC-(Housing Development And Finance Corporation)
Home Loan, India have been serving the people for a round three decades and providing various
housing loan according to their varied needs at attractive & reasonable interest rates. Owing to
their wide network of financing, HDFC Housing Loans provides services at your doorstep and
helps you find a home as per your requirements .Many banks are providing home loans at
cheapest rate to attract consumers towards them. The more customer friendly attitude of these
banks, currently offer to consumers cheapest loan over homes
Objective of this study is to understand the process and key issues in Sanctions home
loan .&to understand the process and key issues in Disbursement, Credit Policy of HDFC,
Restricted Areas of Credit of the Bank. In this Study it is observed that what are the key issues in
Sanction as well as Disbursement of the Loan Proposal, I studied the Credit policy of the
Financial Institution, I Observed that what are the General causes of the Rejection of the
Proposal. And also what are the restricted areas of Credit. And after the Comparative study I
understood that what are the Credit norms of the both institution and how it differs from each
other. The most important that I came to know what is the Importance of the Credit Appraisal
System and how the case is appraised for securing the Credit.

Credit Appraisal System playing most important Role in reducing the Risk of Default
And by adopting the said Recommendations the HDFC Home Finance Company Ltd should
function very smoothly and the Default be reduced.

1
 INTRODUCTION
In finance, a loan is the lending of money from one individual, organization or entity to
another individual, organization or entity. A loan is a debt provided by an organization or
individual to another entity at an interest rate, and evidenced by a promissory note which
specifies, among other things, the principal amount of money borrowed, the interest rate the
lender is charging, and date of repayment. A loan entails the reallocation of the subject asset(s)
for a period of time, between the lender and the borrower.
The loan is generally provided at a cost, referred to as interest on the debt, which provides an
incentive for the lender to engage in the loan. In a legal loan, each of these obligations and
restrictions is enforced by contract, which can also place the borrower under additional
restrictions known as loan covenants. Although this article focuses on monetary loans, in
practice any material object might be lent.
Acting as a provider of loans is one of the principal tasks for financial institutions such as banks
and credit card companies. For other institutions, issuing of debt contracts such as bonds is a
typical source of funding.
“In a loan, the borrower initially receives or borrows an amount of money, called
the principal, from the lender, and is obligated to pay back or repay an equal amount of money
to the lender at a later time”

TYPES OF LOAN
1) Secured
2) Unsecured
3) Demand
4) Subsidized
5) Concessional
6) Personal
7) Commercial
Home Credit B.V. is an international non-bank financial institution founded in 1997 in
the Czech Republic. The company operates in 14 countries and focuses on lending primarily to
people with little or no credit history. As of 2016 the company has over 15 million active
customers, with two-thirds of them in Asia and 7.3 million in China. Major shareholder of
company is PPF, a privately held international financial and investment group, which controls an
88.62%stake.
In 1999 Home Credit as. was founded in the Czech Republic and in 1999 company expanded
to Slovakia. In 2000s company started to expand to Independent States countries - Russia,
Kazakhstan, Ukraine and Belarus. As of 2007 the company was the second largest consumer
lender in Russia. In 2010s company expanded to Asia - China, India, Indonesia,
Philippines and Vietnam. In 2010 the company was first foreign company to set up as a
consumer finance lender in China. In 2015 company launched its operations in the United States
of America through a partnership

2
Definition of Home Loan:-
Loan acquired from a financial institution to purchase a home. Home loans consist of an
adjustable or fixed interest rate and payment terms. Home loans may also be referred to
as mortgage loans.

shelter is a basic human need and productive investment. Home loan means a sum of
money borrowed from a financial Institution or Bank to purchase a house. Home loan
consists of an adjustable or fixed rate payment terms. As most of the people don’t have
the cash funds to pay for a home, outright they can apply for a home loan which will
pay the upfront costs for the home also which will have to be paid back monthly over a
specified period of time. Without home loans most of the people could not afford to buy
a home. According to National Association of Home Builders, the housing industry as a
whole contributes about 17% to 18% of the nation’s GDP. The most common purpose
of a home loan is to provide funds to a buyer who needs to purchase a home. Home
Equity loans allow a home owner to borrow against the difference between the home’s
value and the current loan balance.

The HDFC Bank provides good and affordable facilities to their customers. Less paper
work is there and all functions or processes done in Legal manner. This report shows
that the How to apply for home loan & what exact processes. All things were done by
Legal format. Customer has known their policy which is provided by the bank. The
credit policy and credit facilities which are provided from banks. Disbursements in the
Home Loan Policy and their solutions for the Approval or Sanctioning the loan
proposal
HDFC Bank provides Home Loan with attractive benefits and easy processes for having Home
Loan. This provides various facilities for EMI. The Bank transacts both traditional commercial
banking as well as investment banking. HDFC, the promoter of the bank has entered into an
agreement with National Westminster Bank Pc. and its subsidiaries (NatWest Group) for
subscribing 20% of the banks issued capital and providing technical assistance in relation to the
banks proposed banking business.
Housing finance all over the world are undergoing tremendous changes and have acquired great
significance in the present day context of liberalization, globalization and modernization of the
society. A good number of research works have been undertaken by individual researchers and
institutions invariably dealing with different aspects of housing finance. A brief review of the
major studies which are particularly pertinent for the present study is attempted here

3
 COMPANY PROFILE
1994 - The Bank was Incorporated on 30th August. A new private sector Bank promoted by
housing Development Corporation Ltd. (HDFC), a premier housing finance company. The bank
is the first of its kind to receive an in-principle approval from the RBI for establishment of a
bank in the private sector. Certificate of Commencement of Business was received on 10th
October 1994 from RBI.

- The Bank transacts both traditional commercial banking as well as investment banking. HDFC,
the promoter of the bank has entered into an agreement with National Westminster Bank Pc. and
its subsidiaries (NatWest Group) for subscribing 20% of the banks issued capital and providing
technical assistance in relation to the banks proposed banking business.

1995

- 70 No. of equity shares issued to subscribers to the Memorandum & Articles of Association on
30th August 1994. On the same date 500,00,000 equity shares were allotted to HDFC promoters.
509,20,000 shares were allotted to HDFC Employees Welfare Trust and HDFC Bank Employees
Welfare Trust on 22nd December,1994.

- On 16.1.1995, 90,79,930 No. of equity shares were allotted to Jarring ton Pvt Ltd. Another
400,00,000 equity shares were allotted on private placement basis to NatWest Group on
9.5.1995. 500,00,000 shares were allotted to the public on 9.5.95 (all were taken up).

- The Bank opened its first branch in Ramon House at Church gate, Mumbai on January16th.

- The Bank has created an efficient operating system using well tested state-of-the-art software.

4
-1996

-HDFC Bank has entered the banking consortia of over 50 corporates, including some leading
multinational companies, flagship companies of local business houses and strong public sector
companies.

- HDFC Bank has set up a state-of-the-art dealing room to handle all transactions possible in
Indian financial markets.

- The Certificates of Deposits were awarded a PP1+ rating which is the highest rating for short
term instruments indicating superior capacity for repayment.

1997

- The bank is one of the largest mobilisers of retail deposits through its network of 20 branches.
Its credit deposits ratio was53.8%.

- The bank has set up a ultra-modern hub at Poway in Mumbai where the bank's central
computer is housed. This hub housed in 35,000 square feet of space, houses data of all the
branches and facilitates the introduction of new products and services.

- HDFC has installed state-of-the-art systems to facilitate inter-connectivity between branches

and link up with on line system.

- The bank has also recently signed up as a depository participant, under the newly set up NSDL,
wherein the members clearing accounts settlement for dematerialized shares can be done through
the bank.

- HDFC Bank, one of the nine new-generation private sector banks, has planned to set up an all-
India on-line automated teller machine (ATM)network.

5
- HDFC Bank proposed to launch tale-banking for the first time in June in Mumbai at its
Chandiveli branch.

- HDFC Bank has drawn up plans to become a niche player in corporate banking by sticking to
top-rung corporate.

- HDFC Bank has become the first private sector bank to conclude a structured interest rate
option deal.

- HDFC Bank has launched its Versova branch, the 11th branch in Mumbai.

- HDFC Bank, as part of its expansion plans in the South, has opened another branch in Chennai.

- HDFC Bank has entered into strategic alliances with 10 overseas banks to provide customers
with a wide range of derivatives including interest rate and foreign currency swaps.

- HDFC Bank on October 14 introduced ATMs that converse in a regional language.

- HDFC Bank has introduced the Freedom Account for the average retail customer located in the
major metros as a means to wean away the middle-income market from nationalized banks.

- HDFC Bank has launched an account in all its 28 branches across India that seeks to free
depositors from minimum balance requirement, for the first time in the country.

- HDFC has introduced a new loan product for the payment of betterment fees announced by the
Bangalore Mahanagar Palike. - HDFC Bank is all set to launch its debit card by April1998.

- HDFC Bank has tied up with the Ahmedabad Stock Exchange (ASE) to act as its clearing bank.

- HDFC Bank proposes to strengthen its branch network in Calcutta with the addition of two new
branches in the first quarter of the next fiscal.

6
 PRODUCT PROFILE
A Home Loan For every need of yours!

HDFC provides not just the most competitive interest rates and best level of service but also
product design to cater to the specify needs of consumers new product new features in the
existing product are the introduced based on the consumer feedback choose the HDFC that suits
your needs.

1. Home loan for ready and under construction property.

2. Home improvement loan
3. Home Extension loan
4. Home conversion loan
5. NRI Home loan
6. Top upload.

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 LITRETURE REVIEW

A study entitled “Performance of Housing Finance Companies” by Brar Jasmindeepet.al. (2005)

The objectives of this study were: to study the operational performance, and the financial
performance of the selected institutions. The study covers three institutions viz. HDFC, LIC &
PNB. The study is based on secondary data that have been collected from the annual reports and
web sites of the institutions selected under study. It covers the period from 1990-91 to 2002-03.
The performance of the selected institutions has been studied by using percentages, compound
growths rates and various ratios. Findings of the study are:- HDFC comes at the top among all
the institutions as far as loan sanctioned.

A study entitled “Comparative Study of Housing Loan of HDFC and Allahabad Bank” by
Anju Otwani (May. 2017), The objectives of this study were To undertake the comparative analysis
of public & private banks(Allahabad bank and HDFC bank) in housing loan sector. consumer
preference for the above two mentioned banks & to know the strength of HDFC brand. Also to
identify the popular schemes of the above two mentioned banks. People get knowledge about home
loans from Television , Internet etc According to survey, interest rates on home loan of HDFC
Bank are lower than Allahabad Bank. According to study, loan procedure of HDFC is easy than
Allahabad Bank .According to survey in the paper shows that interest rates on home loan of HDFC
Bank are lower than Allahabad Bank. According to my study, loan procedure of HDFC is easy
than Allahabad Bank
A study entitled “A Study on Customer Perception towards HDFC Limited” by Prof.
V.Vanaja Sindhuja J(April 2015) The study mainly focuses on studying the customers’ perception
towards HDFC Ltd., The study is based on descriptive research and follows a convenience
sampling technique with a sample size of 150. Findings reveal that the customers perceive the
overall service of the employees to be very good on an average. On a majority, the customers agree
that the products and processes are also effective. The following suggestions and recommendations
are offered based on the knowledge gained during the study and based on the findings of the
analysis. The customers felt that there is no proper pupation of repayments. The company can
improve the service by enabling automatic generated SMS or e-mails to be sent as soon as the
entries are made in the loan accounts of the customers in the system. The customers felt that the
RBI guidelines and any such changes on interest rates are not properly conveyed to them. The
company can improve the service by tele calling, sending SMS and e-mails to the customers
regarding the From the factor analysis that had been made, it is observed that the major factors that
influence customers in choosing housing finance company are competitive interest rate, flexible
repayment system, progressive funding and prepayment penalty
A study entitled “Consumer perception towords home loan in HDFC bank” – by Dr. N.
Chithra,Mrs. M.Selina Muthurani (June, 2015) objective of the study were To study the satisfaction
level of customers about home loans of HDFC Bank. & to study the difficulties faced by customers
while availing home loans in HDFC bank.Study on this topic give the results that HDFC Bank Ltd,
India’s second biggest private sector lender by assets. The bank expects to grow loans faster than
the banking sector during the financial year to march 2016. The study shows that HDFC bank
home loans has product portfolio for satisfying different consumer needs. The bank has got
goodwill and this can be used for promoting its services. If new promotional activity and services
introduced, it will help very much to organization to increase the business.

8
 OBJECTIVE OF STUDY
 To understand the process and key issues in Sanctions.

 To understand the process and key issues in Disbursement.

 To study the Credit Policy of HDFC.

 To study the Restricted Areas of Credit of the Bank.

 To study the Comparative Analysis of the Credit Appraisal System of HDFC with one of

the leading nationalized bank i.e. ICICI Home Finance Co.Ltd.

9
 RESEARCH METHODOLOGY

Many people have work on this topic. They sum up various finding. They found that loan
procedure of HDFC is easy than other Bank .According to survey in the paper shows that interest
rates on home loan of HDFC Bank are lower than other Bank. The study shows that HDFC bank
home loans has product portfolio for satisfying different consumer needs.. These are the finding of
various researchers.

Several articles have been published in different journals, magazines and newspaper such as
. These are used for studying credit appraisal system of HDFC bank with special reference to home
loan

 Research Design:-
This research is of exploratory research design. It has been used in Magazines, internet and
previous report collecting data.
.
 Analysis Pattern:-

 Data Sources:
 In the Preparation of this project this is necessity to collect the secondary
data.

 Secondary Data:
 Internet, Books, Company Website, Journal Annual Reports, Magazines,
etc.

 Sample Size:

 Cases of Home Loan proposal are to be studied for understanding of

Credit appraisal system.

10
 SCOPE
 The study covers a period of five years from 2003 to 2008. There are several reasons for
selecting this period.
 During the past 5 years the Bank has gone global as a result the company has witnessed
many economic and political changes.
 Company has undergone rapid changes in the past 5 years due to many policy decisions
relating to capital markets, banking sector & licensing policy.
 The study is limited to only Indian Banks This study is mainly related to the individuals
who are interested in taking home loans from banks to fulfill their dreams.
 The study is mainly related to all the loans provided by Indian bank only.

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 LIMITATIONS
Following are the limitations for carrying out this project work:
 As the project was restricted for the period of two months, hence the data obtained mat
not be sufficient for interpretation.

 The study was related to the financial services sector where financial Institution did not
give each & every information of their working procedure.

 The study was related credit apprise system specifically Home loan so other credit
appraisal system was not taken into consideration for the study.

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 THEROTICAL BACKGROUND OF THE STUDY

The HDFC Bank provides good and affordable facilities to their customers. Less paper
work is there and all functions or processes done in Legal manner. This report shows that the
How to apply for home loan & what exact processes. All things were done by Legal format.
Customer has known their policy which is provided by the bank. The credit policy and credit
facilities which are provided from banks. Disbursements in the Home Loan Policy and their
solutions for the Approval or Sanctioning the loan proposal.
HDFC Bank and ICICI Bank has different credit policies for Home Loan approval. All
segments and systems are relatively different. One thing is important in this many customers
selects long term home loan policies for EMI.Housing finance all over the world are undergoing
tremendous changes and have acquired great significance in the present day context of
liberalization, globalization and modernization of the society. A good number of research works
have been undertaken by individual researchers and institutions invariably dealing with different
aspects of housing finance. A brief review of the major studies which are particularly pertinent for
the present study is attempted here.
The credit risk is defined as the risk that the borrowing will fail to the satisfy the Terms of
obligation with respect to the timely payment of interest and repayment of amount borrowed. This
form of credit risk is also called default risk. The credit manager analysis the borrowers financial
information and specification of dept. instrument in order estimate the ability or eligibility of the
borrower to live of to its future contractual obligation. This activity knows as credit appraisal
system.
Credit appraisal system playing significant role in securing the then the risk of default
should be reduced and the credit will become secure. At the time of credit of the financial
institution. The loan eligibility appraisal on the basis of risk credit norms as per the credit policy
and then final eligibility borrower is calculated if the proposal is appraised properly appraisal
various internal & external factor are taken into consideration which may be affect the credit
appraisal system. The internal factor include Credit Scoring skill of the manager for efficiency of
the manager ,target completion which means manager has sanctions the loan to meet sanctions
targets. The external factors play the major role in rising the levels of the Bad loans; it includes the
Economic downturns, Plant Closure.; willful default of Borrower, Government Intervention, and
Political Intervention etc.
13
 If these factors taken into consideration while appraising. Then definitely the Risk of
Default should be reduced.

The Credit Appraisal System playing the significant role in securing the Credit of
reducing the Risk of Default.

14
 DATA ANALYSIS AND INTERPRETATION
DOCUMENT CRITERIA

Write all the documents of HDFC

1) Salaried:
 Photograph
 6 months Bank statements (3 months for worksite)
 KYC documentation
 Age Proof
 Latest Salary slip /certificate
 4 salary slip for variable salary
 Form 16 / PF Statement
 Administrative FeeCheque
 Signature Proof [In case if DD is given]

2) Self Employed Professionals:

 Photograph
 Age Proof
 KYC Documentation
 Income Documents
 Proof of Existence
 Partnership deed copy / MOA / article of association if applicable
 Office address Proof
 Shop & establish act certificate
 Processing Fee Cheque
 Signature Proof [In case if DD is given]
 Qualification Certificate

15
 3) Self Employed Non Professionals:
 Photograph
 Age Proof
 KYC Documentation
 Income Documentation

4) Salaried:
 Photograph
 6 months Bank Statement
 KYC Documentation
 Age Proof
 Last Two Months Salary slip /certificate
 Appointment Letter / Employment Contract Letter / Increment / CDC (in case of
Merchant Navy)
 General POA
 Work permit related documents like Labor card, Identity Card or Work Permit, if
applicable
 Form 16 / PF statement (if there is an Indian income)
 Processing Fee Cheque
 Signature Proof [In case if DD is given]

16
CASE NO.1

1) Applicant Name : Mr. Dhawane Atul Ramdas

2) Co-Applicant Name : Mrs Dhawane Pranita Atul

3) Loan Amount Applied : Rs.2000000

4) Tenor Requested : 18Yrs

5) Profile :

Applicant : Salaried

Organization : Geo Technology

Co-Applicant : Housewife

6) Monthly Salary:

Applicant : Rs 32131 p.m.

Co-Applicant : Nil

7) Strength of the Case:

 Bank Salary
 Qualified
 No Existing obligation
 Super Worksite Company
 Less no. of Dependents

8) Findings:

1) Field investigation report is Negative due to House found locked at the time of Visit.

2) FOIR is exceeding the limit of55.00%

9) Suggestions:

Field Investigation Report is Negative and FOIR is exceeding hence; Approval should be
taken from higher authority i.e. Regional Business Head (L3 Prime), As per Annexure.

17
CASE NO.2

1) Applicant Name : Mr. Pankaj Khairnar

2) Co-Applicant Name : Mrs. Hemangi Kahairnar

3) Loan Amount Applied : Rs.1500000

4) Tenor Requested : 15Years

5) Profile

Applicant : Self Employed non Professional

Organization : JHP Securities
Co-Applicant : Housewife

6) Monthly Salary:
Applicant : Rs. 74053p.m.

7) Strength of the Case:

 Good Bank Balance
 Low LTV
8) Good RTR of Existing Hsg.Loan

9) Findings
Application bank statement showing monthly deduction of Rs. 8500 as EMI of Hsg
loan.

10) Suggestions:
As per discussion with applicant he is not going to nil that Housing loan hence the Said
EMI should be considered as obligation in loan eligibility calculation.

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CASE NO.3

1) Applicant Name : Mr. Rahul kulkarni

2) Loan Amount Applied : Rs.2000000

3) Tenor Requested : 20Years

4) Profile

Applicant : Self Employed

Organization : JHPSecurities

5) Monthly income:
Applicant : Rs. 85000p.m.

6) Strength of the Case:

 Good Bank Balance
 Low LTV
 Good RTR of Existing Hsg.Loan

7) Findings
1)Application bank statement showing monthly deduction of Rs. 8900 as EMI of Hsg
loan.
2)Field investigation report is Negative due to House found locked at the time ofVisit

8) Suggestions:
As per discussion with applicant he is not going to nil that Housing loan hence the Said
EMI should be considered as obligation in loan eligibility calculation.

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 DISBURSEMENT OF LOAN PROPOSAL

WRITE ALL THE DOCUMENTS OF HDFC BANK

Legal Verification

The borrower has to submit the original property documents as per the indicative list
given by HDFC along with the letter acknowledge by the register for pending documents if any
and NOC from the landowner as per HDFC standard format. The copies of the same are
forwarded to an empanelled lawyer who has to pursue the documents, provide a legal opinion
and a title clearance certificate to ensure a clear and marketable legal title. If there are any
documents pending as per the lawyer’s report, same have to be collected from borrower.

 Legal report should mention that the title borrower is clear and marketable and
acceptable to ICICI as security.
 Should be signed by the empanelled lawyer.
 Should mention the address of the property as detailed in the sale agreement / sale deed.
 Should list down documents to be collected for security.
 Should mention correct property type transaction.

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 LEGAL DOCUMENTATION FOR DISBURSEMENT

1) Direct From Builder Case:

Agreement of Sale

Sub Registrar Receipt

No objection certificate from builder

2) Direct from Registered Co-op Housing Society Ltd.:

Share Certificate

Allotment Letter

No objection Certificate from Society

Own contribution receipt from Society

Copy of Society by Laws

Registered Agreement if not Original member.

3) Own Construction Case:

Original Sale Deed with Registration Receipt

NA order copy

Latest Title Clearance Certificate

Original Architect Estimate

Commencement Certificate

4) Resale Case:

Sale Deed / Agreement with Registration Receipt

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Previous Customers Sale Deed/ Agreement with Registration Receipt

Own Contribution Receipt

NOC from Builder/ Society

Title Certificate

Share Certificate & Allotment Letter (if applicable)

7/12 &6-D Extract (Xerox)

Commencement Certificate & Completion Certificate (Xerox)

Society Registration Certificate & Bye-Laws (Xerox)

Title Certificate (Xerox)

Building Plan (Xerox)

Title Certificate

Society Registration Certificate

22
 TECHNICAL APPRISAL

Technical Appraisal is done prior disbursement in order to access the stage of completion
of the property financed and to determine the amount of loan to be disbursed. In addition ,
technical appraisal also serves the following exists

 It confirms that the property really exists.

 An assessment of available infrastructure is done.
 Check the quality & speed of the progress of construction.
 For resale cases, the site engineer has to confirm the external condition of the building
and the internal condition of the flat/property.
 For resale cases, the term of loan should not exceed residual age of the property as per the
site engineer’s report.
 All disbursement in self-construction cases are linked to stage of construction.
 Address of the property should be mentioned, should match with address on the legal
report.
 Stage of construction and recommended disbursement should be mentioned.
 Value of the property is cleared from Technical Report.
 Residual age of the property is cleared from Technical Report.

23
 TYPES OF DISBURSEMENT
 First & Part Disbursement
 Balance Transfer
 Top Up Disbursement (Balance Transfer & Top Up)

Accepted Sanction Letter should be collected.

 Accepted by all applicants and Co-Applicants

 Letter should be informant
 Check for post sanction conditions
 Check for rate validity

Disbursement Request Form should be collected.

 Why? To ensure that the amount to be released is in accordance with the request of the
customer.
 This is a part of the sequence to form a contract.
 To be filled by the customer.
 Details of cost of property as appearing in the agreement for sale/ sale deed.
 Details of cheque favoring and amount and mode of payment.
 Details of cheque favoring here is an option of changing communication addressing. and
amount and mode of payment.
 Cheque favoring should include Bank and no. of payee.
 There is an option of changing communication address.

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 ANALYSIS OF LEGAL DOCUMENTS

 All owners of the property should be applicants

 Check for cost of property and OCR’spaid
 Signature of the owners should match with application form
 Witness should sign the agreement
 Priority and Non Priority documents to be collected as per legal report
 NOC From builder / Society / development authority as the case maybe
 Own contribution receipts

1) Agreements:

 Current agreement must be registered

 Stamp Duty receipt required
 Registration receipt required
 Stamp duty receipt and registration receipt amount to be added to cost of property and
calculated as OSR’stoo.

2) NOC

 NOC should be on the letterhead of the Society / Builder / Development Authority.

 Should have the stamp of society / Builder /Development Authority
 Address should match as per the agreement , Flat No., Wing No.etc.
 Should be as per procedure and drafts for different transaction types.
 Must be dated.

3) Own Contribution Receipts

 Must have a revenue stamp

 Cash payments cannot be more than Rs20000/-
 Should give details of the property like flat no.etc
 In case of refinance >Rs 1Lac.
o Builder case – Receipts from builder & debits in the bank account
o Resale- Agreement for sale / Sale deed to be registered before finance.

25
 o Property Norms
 Property should not be in negative area.
 Property should be in geographic limit
 Property should be self-contained
 Maximum age of property less than 35 years at loan application
 Loan tenor not to exceed residual age of the property
 Minimum Built up area > 400 sq.ft
 In case of row house of ground floor only
 Minimum Built up area 275sq. ft with unutilized FSI of first floor

26
 FINDINGS

1) Credit Appraisal plays the most significant role in funding the eligible person.

2) There is heavy risk involved in funding of any property like double funding.

3) In case of the borrower lost his job or meets with accident, which results into permanent
disability or the person died, in that situation the loan repayment responsibility comes on his
family. It is major problem.

27
 RECOMMENDATIONS

1) Risk of default should be reduced by funding the right customer, by using various toolsof
appraising like Deducing, CIBIL Report, Field Investigation, and RCU Verification.
2) The Bureau / Software like CIBIL should be formed and developed which records every
detail regarding the Property.
3) At present Insurance is optional but to secure the Loan the Insurance of the Borrower and
Property should be mandatory.
4) The cases should be rejected if the Customer Bounces the cheques intentionally it shows
the carelessness of the customer, and the case should be done which have technical
reason of cheque bounces and minimum balance charges.
5) The minimum income criteria should be increased up to Rs 8000 p.m. from Rs.
55000p.m. or Fixed Obligation to Income Ratio should restricted up to 40% from 50%
for the residual as well as other expenses after payment of the housing loan EMI.
6) On the basis of comparison between UBI and ICICI Home Finance Company Ltd., I
recommended that ICICI continue this strategy of Equitable Mortgage, Guarantor is not
mandatory and Door Step Service to attract more customers and capture the major share
in theMarket.

28
 CONCLUSION

The Project based on “An Analytical Study of Credit Appraisal System” which is a
Research project done with special reference to Home Loan. After overall study I observed that
what are the key issues in Sanction as well as Disbursement of the Loan Proposal, I studied the
Credit policy of the Financial Institution, I Observed that what are the General causes of the
Rejection of the Proposal. And also what are the restricted areas of Credit. And after the
Comparative study I understood that what are the Credit norms of the both institution and how it
differs from each other. The most important that I came to know what is the Importance of the
Credit Appraisal System and how the case is appraised for securing the Credit.

Credit Appraisal System playing most important Role in reducing the Risk of Default
And by adopting the said Recommendations the HDFC Home Finance Company Ltd should
function very smoothly and the Default bereduced.

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 BIBLIOGRAPHY

 Credit Policy of HDFC Finance CompanyLtd.

 Websites:
 www.google.com
 www.hdfcbank.com
 Books:
 Foundation of Financial Markets And Institution
 Research Methodology by Shilesh Kasande published by Nirali Prakashan
 Journal:
 Journal of Management Research, Volume 7, Number 1 . Issue 2007,
Article by Mr. Gimjan on Bankers’ Perceptions on Causes of Bad Loans
in Bank. Page numbers: 43, 44,45&46.

 Research Papers:

 Customer perception towards home loans in HDFC bank –

chennaiVol.1 Issue.10, April- June, 2015 by Dr. N. Chithra * Mrs. M.Selina
Muthurani**

 Comparative Study of Housing Loan of HDFC and Allahabad Bank Volume

19, Issue 5(May. 2017) by Anju Otwani

 A Study on Customer Perception towards HDFC Limited Volume 2, Issue 4

by Prof. V.Vanaja,)Sindhuja.J

 “Performance of Housing Finance Companies” Volume : 2 | Issue : 12 | Dec

2013) byMs. Soniya Mohil

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