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TABLE OF CONTENTS
CHAPTER NO. 1 2 3 4 5 TITLE INTRODUCTION TO SUBJECT INTRODUCTION TO COMPANY OVERVIEW OF THE INDUSTRY INTERPRETATION CONCLUSION PAGE NO. 6 11 36 39 69
CHAPTER 1 INTRODUCTION TO SUBJECT
Home loans work like any other debt. That is, loans are simply specific money that we borrow from a bank, a private lender, or some other type of lender. Afterwards, we must repay our debts with interest. However, unlike other types of loans, home loans are different in several respects. Owning a piece of land or property is a lifetime dream for every individual. There are many home loans provider in the market. There are different types of home loan i.e.
• Home Purchase Loans • Home Improvement Loans • Home Construction Loans • Home Extension Loans • Home Equity Loans • Land Purchase Loans • Bridge Loans Home purchase loans: These are the basic forms of home loans used for purchasing of a
new home. With about a million home lenders and mortgage brokers it's becoming a tough challenge as the days are progressing. But at the same time, when the sites are coming up with all the latest tools and relevant information for us, and with all such conveniences, obtaining a home purchase loan or mortgage has become really pretty simple. However, at the same time though, we may be flummoxed to look so many attractive rates and offers in the market, not to forget the hidden costs associated with each of them.
Home improvement loan: Home improvement loans are used to finance improvements and
add on to the existing set of credentials of beauty on your owned house, recently purchased property or rented accommodation. Home improvement loans are used to maintain or enhance the value of your house. In general it includes: repairs, remodeling, energy-related items (permanent in nature), repairs, a new kitchen, a new bathroom, terrace, an extension or general property improvements. Luxury items and fireplaces are generally not eligible, though. Many improvements in landscape and even swimming pools are nowadays considered to be a part of home improvement.
Home construction loan: Home construction loans are used to finance for the construction
of our newly acquired home or if we are planning to build a home. The factors include in calculations for house building costs? • Design of the house • Construction cost • Financing Cost • Buildable site All the above mentioned costs will help us to determine the amount we may need to borrow. For example, besides calculating the construction costs, we may also be required to consider the total expenditures to develop the site in order to build. Each site is unique requiring different expenditures so this specific rupee amount will vary from site location to site location. Payment: Before the house starts getting build, we will be required to pay a deposit to your builder as well as paying a deposit for the land if we are buying land. As work progresses you will need to make payments to the builder. Certain loans can be structured for progress payments to be made during construction.
Home extinction loan: Home extension loans are used by customers to get loans from the
banks to extend their houses, by adding more rooms, kitchens, wash rooms, terraces, or any other rooms for your growing family. It may also be used to enclose open balcony/terrace space, or constructing a Pujaghar. Maximum Amount of Home Extension Loans: Banks generally offers about 70-85% of the total amount of home extension as loan. The amount of loan sanctioned also depends on a number of factors such as the age of the applicant at the time of loan, tenure of the loan, repayment capacity of the borrower; his/her credit history etc.
Home equity loan: Home equity loans helps customer to encash the market value of the
commodity by taking a loan by mortgaging the property. So, Home equity loans are availed by customers, who wish to mortgage his/her property to the bank for taking some loan for some other purpose. Then, it's up to the bank's discretion to consider the market value of the property and accordingly decide how much to pay to the customer. Both the residential as well as non residential property can be considered for the approval of the loan, provided the mortgager is a licensed title holder and the land is free form any kind of dispute. Home equity loans don't restrict one to use the loan money in specific investments. It might also be used in marriage, higher education, medical expenses, etc. However it should not be used in any illegal or speculation purposes.
Bridge loan: land purchase loan: Land Purchase loans are used by customers who wish to
purchase a plot of land for commercial or residential purpose. Everyone has his/her dream perfectly sketched in his souls and so is his ambition to get his house erected on the exact location he dreamt that to be. If you have found and shortlisted the piece of land, and have arrived here for finance, you have come to the best place you could have arrived in the web. 7|Page
Now, that you have decided to purchase a land as an investment or for your own dream home, you will realize that a land purchase loan is one you will cherish. Loans that are strictly for land purchase can be as scarce as good residential plots. While many lending firms around the nation compete to provide mortgages for the purchase of a house on a lot, only local institutions typically will be interested in lending for an empty lot. Bridge loans are designed for people who wish to sell the existing home and purchase another one. The bridge loans help finance the new home, until a buyer is found for the home. Bridge loans are used by customers as an effective vehicle to capitalize on a purchase opportunity. It can be considered as a short term financing scheme which is generally expected to be paid back, within the range of 6-36 months, till the time the borrower gets more permanent and lower cost financing. So, bridge loans, (or swing loans as they are otherwise said) is a short term loan provided by various banks like Bank of India, Citibank, ICICI etc. often used for commercial real estate purchases, retrieve real estate from foreclosure. Bridge loans in corporate finance are called gap financing, and are used to cover the time between redemption of issuance of one bond and its replacement by a new issue. They can also be operating loans for periods between LOI and acquisition, or quiet period and IPO. Bridge loan may contain a decent proportion of prepaid interest, sometimes as much as six months. If the home gets sold before that time, you may receive interest payments back, but if it hasn't sold, you may be required to continue payments.
To study the cost of home loans provided by the bank. To know that which bank provide batter loan schemes. To analyze the home loan scheme by ICICI and SBI banks. To know the consumer perception about the home loan of ICICI and SBI.
SCOPE OF THE STUDY:
This study is analysis and comparison of home loans provided by the SBI and ICICI banks. It is helpful in analyzing the home loan service provided to the customer and their comparison.
RESEARCH METHODOLOGY Design of Research:
The research will be exploratory in nature. A population of peoples who take home loan from these banks will be considered for this study. I will try to explore about the home loans which would make a difference in the behavior of the consumer. Effort will be made to throw light on most of the factors which have either indirect or direct effect on the behavior of the consumer. I will also explore the impact of home loans on the market share of the banks.
• Population: The study aimed to include the customers of SBI and ICICI in SHIMLA, to make a comparative analysis of home loan schemes of these two banks... • Sample Size: A Sample size of 100 respondents will be taken for the current study because it is not possible to cover the whole universe in the available time period. So it is necessary to take the sample size. In 100 respondents 50 respondents from ICICI and 50 from SBI. The samples will the peoples of age group lying between eighteen to thirty years. The sample will be taken in the form of strata based on age, sex, and income group.
• Sampling technique:
The sampling technique will be probabilistic sampling more specifically the random convenient and judgmental sampling will be used. As in probabilistic sampling the select unit for observation with known probabilities so that statistically sound assumptions are supported from the sample to entire population so that we had positive probability of being selected into the sample. I will go for stratified random sampling as we are interested to study the home loan by SBI and ICICI banks, so we will make the strata on the basis of age, occupation, income level, gender. And from each strata we will go for random sampling.
Sources of Data:
I will use primary source of data that is structured questionnaire. As these banks are established from so many years, so many researchers have done research on this topic, so we will find secondary data also and also use this data for the help of this research. So, this research data will collected from the primary source and secondary source. Our method of collecting the data is from the questionnaire that will be filled by the respondent from the sample, it will be structured questionnaire.
Tools and Techniques:
As no study could be successfully completed without proper tools & techniques, same with my project. For the better presentation and right explanation I used tools of statistics and computer very frequently and I am very thankful to all those tools for helping me a lot. Basic tools which I used for project are: -
BAR CHARTS PIE CHARTS TABLES
Bar charts and pie charts are very useful tools for every research to show the result in a clear, simple way. Because I used bar charts and pie charts in my project for showing data in a systematic way. So I need not necessary for any observer to read all the theoretical detail, simple on seeing the charts anybody that what is being said.
MS -WORD MS-EXCEL
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CHAPTER 2 INTRODUCTION TO COMPANY:
1.2 Company Profile of SBI:
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:
1-State Bank of Bikaner and Jaipur (SBBJ) 2-State Bank of Hyderabad (SBH) 3-State Bank of India (SBI) 4-State Bank of Indore (SBIR) 5-State Bank of Mysore (SBM) 6-State Bank of Patiala (SBP) 7-State Bank of Saurashtra (SBS) 8-State Bank of Travancore (SBT)
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. 11 | P a g e
State Bank of India (SBI) (LSE: SBID) is the largest bank in India. If one measures by the number of branch offices and employees, SBI is the largest bank in the world. Established in 1806 as Bank of Calcutta, it is the oldest commercial bank in the Indian subcontinent. SBI provides various domestic, international and NRI products and services, through its vast network in India and overseas. With an asset base of $126 billion and its reach, it is a regional banking behemoth. The government nationalized the bank in 1955, with the Reserve Bank of India taking a 60% ownership stake. In recent years the bank has focused on three priorities, 1), reducing its huge staff through Golden handshake schemes known as the Voluntary Retirement Scheme, which saw many of its best and brightest defect to the private sector, 2), computerizing its operations and 3), changing the attitude of its employees (through an ambitious programme aptly named 'Parivartan' which means change) as a large number of employees are very rude to customers.
The State Bank of India traces its roots to the first decade of 19th century, when the Bank of Calcutta, later renamed the Bank of Bengal, was established on 2 June 1806. The government amalgamated Bank of Bengal and two other Presidency banks, namely, the Bank of Bombay (incorporated on 15 April 1840) and the Bank of Madras on 27 January 1921, and named the reorganized banking entity the Imperial Bank of India. All these Presidency banks had been incorporated as joint stock companies, and were the result of the royal charters. The Imperial Bank of India continued as a joint stock company. Until the establishment of a central bank in India the Imperial Bank and its early predecessors served as India's central bank, at least in terms of issuing the currency. The State Bank of India Act 1955, enacted by the Parliament of India, authorized the Reserve Bank of India, which is the central banking organization of India, to acquire a controlling interest in the Imperial Bank of India, which was renamed the State Bank of India on 30 April 1955.
• • • • • • • • •
June 2, 1806: The Bank of Calcutta established. January 2, 1809: This became the Bank of Bengal. April 15, 1840: Bank of Bombay established. July 1, 1843: Bank of Madras established. 1861: Paper Currency Act passed. January 27, 1921: all three banks amalgamated to form Imperial Bank of India. July 1, 1955: State Bank of India formed; becomes the first Indian bank to be nationalized. 1959: State Bank of India (Subsidiary Banks) Act passed, enabling the State Bank of India to take over eight former State-associated banks as its subsidiaries. 1980s When Bank of Cochin in Kerala faced a financial crisis, the government merged it with State Bank of India. 12 | P a g e
June 29, 2007: The Government of India today acquired the entire Reserve Bank of India (RBI) shareholding in State Bank of India (SBI), consisting of over 314 million equity shares at a total amount of over 355 billion rupees.
There are seven other associate banks that fall under SBI. They all use the "State Bank of" name followed by the regional headquarters' name. These were originally banks belonging to princely states before the government nationalized them in 1959. In tune with the first Five Year Plan, emphasizing the development of rural India, the government integrated these banks with the State Bank of India to expand its rural outreach. The State Bank group refers to the seven associates and the parent bank. All the banks use the same logo of a blue keyhole. Currently, the group is merging all the associate banks into SBI, which will create a "mega bank", and one hopes, streamline operations and unlock value.
• • • • • • • •
State Bank of Bikaner & Jaipur State Bank of Hyderabad State Bank of Indore State Bank of Mysore State Bank of Patiala State Bank of Saurashtra State Bank of Travancore
State Bank of India is present in 32 countries, where it has 84 offices serving the international needs of the bank's foreign customers, and in some cases conducts retail operations. The focus of these offices is India-related business.
SBI has branches in these countries:
• • • • • • • • • • •
Australia Bahrain Bangladesh Belgium Canada Dubai France Germany Hong Kong Israel Japan 13 | P a g e
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People's Republic of China Republic of Maldives Singapore South Africa Sri Lanka Sultanate of Oman The Bahamas U.K. U.S.A
SUBSIDIARIES AND JOINT VENTURES:
In addition to the foreign branches above, SBI has these wholly owned subsidiaries and joint ventures:
• • • • •
Nepal State Bank Limited SBI Mauritius Indian Ocean International Bank (Mauritius) SBI Canada SBI California
Mumbai, India location. State Bank of India has often acted as guarantor to the Indian Government, most notably during Chandra Shekhar's tenure as Prime Minister of India. With more than 9400 branches and a further 4000+ associate bank branches, the SBI has extensive coverage. Following its arch-rival ICICI Bank, State Bank of India has electronically networked most of its metropolitan, urban and semi-urban branches under its Core Banking System (CBS), with over 4500 branches being incorporated so far. The bank has the largest ATM network in the country having more than 5600 ATMs . The State Bank of India has had steady growth over its history, though the Harshad Mehta scam in 1992 marred its image. In recent years, the bank has sought to expand its overseas operations by buying foreign banks. It is the only Indian bank to feature in the top 100 world banks in the Fortune Global 500 rating and various other rankings. According to the Forbes 2000 listing it tops all Indian companies.
FORTUNE GLOBAL 500 RANKING – 2007:
SBI debuted in the Fortune Global 500 at 498 in 2006. In 2007 it moved up to 495. As per fortune 500-2007 following are the data for SBI in $ million. Revenues 15,119.4. Profits 1,407.3. Assets 187,547.1. Stockholders' Equity 9,786.2
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SBI Capital Markets Ltd SBI Mutual Fund (A Trust) SBI Factors and Commercial Services Ltd SBI DFHI Ltd SBI Cards and Payment Services Pvt Ltd SBI Life Insurance Co. Ltd - Banc assurance (Life Insurance) SBI Funds Management Pvt Ltd SBI Canada
According to PM Network (December 2006, Vol. 20, No. 12), State Bank of India launched a project in 2002 to network more than 14,000 domestic and 70 foreign offices and branches. The first and the second phases of the project have already been completed and the third phase is still in progress. As of December 2006, over 10,000 branches have been covered. The new infrastructure serves as the bank's backbone, carrying all applications, such as the IP telephone network, ATM network, Internet banking and internal e-mail. The new infrastructure has enabled the bank to further grow its ATM network with plans to add another 3,000 by the end of 2007 raising the total number to 8,600. As of September 20, 2007 SBI has 7236 ATMs.
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State Bank of India is actively involved since 1973 in non-profit activity called Community Services Banking. State Bank of India is India's largest bank amongst all public and private sector banks operating in India. State Bank of India owns and operates the following subsidiaries and Joint Ventures – State Bank Of India Credit Card State Bank Of India Online State Bank Of India USA State Bank Of India Services State Bank Of India Mutual Funds State Bank Of India Branch State Bank Of India NRI Account
• • • • • • •
State Bank of Bikaner and Jaipur (SBBJ) State Bank of Hyderabad (SBH) State Bank of Indore (SBI) State Bank of Mysore (SBM) State Bank of Patiala (SBP) State Bank of Saurashtra (SBS) State Bank of Travancore (SBT)
• • • •
State bank of India International (Mauritius) Ltd. State Bank of India (California). State Bank of India (Canada). INMB Bank Ltd, Lagos.
NON- BANKING SUBSIDIARIES.
• • • • •
SBI Capital Markets Ltd (SBICAP) SBI Funds Management Pvt Ltd (SBI FUNDS) SBI DFHI Ltd (SBI DFHI) SBI Factors and Commercial Services Pvt Ltd (SBI FACTORS) SBI Cards & Payments Services Pvt. Ltd. (SBICPSL)
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SBI Life Insurance Company Ltd (SBI LIFE).
State Bank of India administrative structure is well equipped to oversee the large network of branches in India and abroad. The State Bank of India 14 Local Head Offices and 57 Zonal Offices are located at important cities spread throughout the country. State Bank of India has 52 foreign offices in 34 countries across the globe. The Corporate Accounts Group is a Strategic Business Unit of the Bank set up exclusively to fulfill the specialized banking needs of top corporate in the country. THE MAIN ACTIVITIES OF ARE INTO • • • • • • •
Personal Banking. NRI Services. Agriculture. International. Corporate. SME. Domestic Treasury.
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STATE BANK OF INDIA OFFERS THE FOLLOWING SERVICES TO ITS CUSTOMERS
• • • • • • • • • • • • •
Domestic Treasury. SBI Vishwa Yatra Foreign Travel Card. Broking Services Revised Service Charge. ATM Services. Internet Banking. E-Pay. E-Rail. RBIEFT. Safe Deposit Lockers. Gift Cheques. MICR Codes. Foreign Inward Remittances.
Moreover, State Bank of India has Colleges/Institutes/Training Centers that are the seats of learning and research and development. It caters not only to the employees of State Bank of India but also other banks/establishments in India and abroad.
SBI Bank India had Total Income of Rs 68376.83 crore for the financial year 2006 -07. State Bank of India has posted Net Income to the tune of Rs 6364.38 crore or the financial year 2006 -07.
State Bank of India is headed by Mr. Shri O. P. Bhatt, Chairman.
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COMPANY PROFILE OF ICICI:
ICICI Bank is India's second-largest bank with total assets of Rs. 3,849.70 billion (US$ 82 billion) at September 30, 2008 and profit after tax Rs. 17.42 billion for the half year ended September 30, 2008. The Bank has a network of about 1,400 branches and 4,530 ATMs in India and presence in 18 countries. ICICI Bank offers a wide range of banking products and financial services to corporate and retail customers through a variety of delivery channels and through its specialized subsidiaries and affiliates in the areas of investment banking, life and non-life insurance, venture capital and asset management. The Bank currently has subsidiaries in the United Kingdom, Russia and Canada, branches in United States, Singapore, Bahrain, Hong Kong, Sri Lanka, Qatar and Dubai International Finance Centre and representative offices in United Arab Emirates, China, South Africa, Bangladesh, Thailand, Malaysia and Indonesia. Our UK subsidiary has established branches in Belgium and Germany. ICICI Bank's equity shares are listed in India on Bombay Stock Exchange and the National Stock Exchange of India Limited and its American Depositary Receipts (ADRs) are listed on the New York Stock Exchange (NYSE).
ICICI Bank was originally promoted in 1994 by ICICI Limited, an Indian financial institution, and was its wholly-owned subsidiary. ICICI's shareholding in ICICI Bank was reduced to 46% through a public offering of shares in India in fiscal 1998, an equity offering in the form of ADRs listed on the NYSE in fiscal 2000, ICICI Bank's acquisition of Bank of Madura Limited in an all-stock amalgamation in fiscal 2001, and secondary market sales by ICICI to institutional investors in fiscal 2001 and fiscal 2002. ICICI was formed in 1955 at the initiative of the World Bank, the Government of India and representatives of Indian industry. The principal objective was to create a development financial institution for providing medium-term and long-term project financing to Indian businesses. In the 1990s, ICICI transformed its business from a development financial institution offering only project finance to a diversified financial services group offering a wide variety of products and services, both directly and through a number of subsidiaries and affiliates like ICICI Bank. In 1999, ICICI become the first Indian company and the first bank or financial institution from non-Japan Asia to be listed on the NYSE. After consideration of various corporate structuring alternatives in the context of the emerging competitive scenario in the Indian banking industry, and the move towards universal banking, the managements of ICICI and ICICI Bank formed the view that the merger of ICICI with ICICI 19 | P a g e
Bank would be the optimal strategic alternative for both entities, and would create the optimal legal structure for the ICICI group's universal banking strategy. The merger would enhance value for ICICI shareholders through the merged entity's access to low-cost deposits, greater opportunities for earning fee-based income and the ability to participate in the payments system and provide transaction-banking services. The merger would enhance value for ICICI Bank shareholders through a large capital base and scale of operations, seamless access to ICICI's strong corporate relationships built up over five decades, entry into new business segments, higher market share in various business segments, particularly fee-based services, and access to the vast talent pool of ICICI and its subsidiaries. In October 2001, the Boards of Directors of ICICI and ICICI Bank approved the merger of ICICI and two of its wholly-owned retail finance subsidiaries, ICICI Personal Financial Services Limited and ICICI Capital Services Limited, with ICICI Bank. The merger was approved by shareholders of ICICI and ICICI Bank in January 2002, by the High Court of Gujarat at Ahmadabad in March 2002, and by the High Court of Judicature at Mumbai and the Reserve Bank of India in April 2002. Consequent to the merger, the ICICI group's financing and banking operations, both wholesale and retail, have been integrated in a single entity. ICICI Bank has formulated a Code of Business Conduct and Ethics for its directors and employees. ICICI Bank (BSE: ICICI) (formerly Industrial Credit and Investment Corporation of India) is India's largest private sector bank in market capitalization and second largest overall in terms of assets. Bank has total assets of about USD 100 billion (at the end of March 2008), a network of over 1,399 branches, 22 regional offices and 49 regional processing centres, about 4,485 ATMs (at the end of September 2008), and 24 million customers (at the end of July 2007). ICICI Bank offers a wide range of banking products and financial services to corporate and retail customers through a variety of delivery channels and specialised subsidiaries and affiliates in the areas of investment banking, life and non-life insurance, venture capital and asset management. (These data are dynamic.) ICICI Bank is also the largest issuer of credit cards in India. . ICICI Bank has got its equity shares listed on the stock exchanges at Kolkata and Vadodara, Mumbai and the National Stock Exchange of India Limited, and its ADRs on the New York Stock Exchange (NYSE). The Bank is expanding in overseas markets and has the largest international balance sheet among Indian banks. ICICI Bank now has wholly-owned subsidiaries, branches and representatives offices in 18 countries, including an offshore unit in Mumbai. This includes wholly owned subsidiaries in Canada, Russia and the UK, offshore banking units in Bahrain and Singapore, an advisory branch in Dubai, branches in Belgium, Hong Kong and Sri Lanka, and representative offices in Bangladesh, China, Malaysia, Indonesia, South Africa, Thailand, the United Arab Emirates and USA. Overseas, the Bank is targeting the NRI (Non-Resident Indian) population in particular. ICICI reported a 1.15% rise in net profit to Rs. 1,014.21 crore on a 1.29% increase in total income to Rs. 9,712.31 crore in Q2 September 2008 over Q2 September 2007. 20 | P a g e
1955: The Industrial Credit and Investment Corporation of India Limited (ICICI) was incorporated at the initiative of World Bank, the Government of India and representatives of Indian industry, with the objective of creating a development financial institution for providing medium-term and long-term project financing to Indian businesses. Mr.A.Ramaswami Mudaliar is elected as the first Chairman of ICICI Limited. ICICI emerges as the major source of foreign currency loans to Indian industry. Besides funding from World Bank and other multi-lateral agencies, ICICI was also among the first Indian companies to raise funds from international markets. 1956: ICICI declared its first dividend, of 3.5%. 1977: ICICI sponsored the formation of Housing Development Finance Corporation and manages its first equity public issue. 1982: ICICI became the first ever Indian borrower to raise European Currency Units. ICICI commences leasing business. 1984: Mr. S. Nadkarni appointed the sixth Chairman of ICICI. 1985: Mr. N.Vaghul appointed the seventh Chairman and Managing Director of ICICI. 1986: ICICI became the first Indian institution to receive ADB Loans. ICICI, along with UTI, set up Credit Rating Information Services of India Limited, India's first professional credit rating agency. ICICI promotes Shipping Credit and Investment Company of India Limited. The Corporation made a public issue of Swiss Franc 75 million in Switzerland, the first public issue by any Indian entity in the Swiss Capital Market. 1987: ICICI signed a loan agreement for Sterling Pound 10 million with Commonwealth Development Corporation (CDC), the first loan by CDC for financing projects in India. 1988: Promoted TDICI - India's first venture capital company. 1993: ICICI Securities and Finance Company Limited in joint venture with J. P. Morgan set up. ICICI Asset Management Company set up. 1994: ICICI Bank set up. 1996: ICICI Ltd became the first company in the Indian financial sector to raise GDR. SCICI merged with ICICI Ltd. Mr. K.V.Kamath appointed the Managing Director and CEO of ICICI Ltd 1997 : ICICI Ltd was the first intermediary to move away from a single prime rate structure to a three-tier prime rates structure and introduced yield-curve-based pricing. The name "The Industrial Credit and Investment Corporation of India Ltd" changed to "ICICI Ltd." ICICI Ltd. announced the takeover of ITC Classic Finance. 21 | P a g e
1998: A new logo symbolizing the common corporate identity for the ICICI Group was introduced. ICICI announced takeover of Anagram Finance. 1999 : ICICI launched retail finance - car loans, home loans and loans for consumer durables. ICICI becomes the first Indian company to get listed on the NYSE through an issue of American Depositary Shares. 2000 : ICICI Bank became the first commercial bank from India to get its stock listed on the NYSE. ICICI Bank announces merger with Bank of Madura. 2001: The Boards of ICICI Ltd and ICICI Bank approved the merger of ICICI Ltd. with ICICI Bank. 2002: ICICI Ltd merged with ICICI Bank Ltd to create India’s second-largest bank in terms of assets. ICICI assigned higher than "Sovereign" rating by Moody’s. ICICI Bank launched India’s first CDO (Collateralized Debt Obligation) Fund named Indian Corporate Collateralized Debt Obligation Fund (ICCDO Fund). "E-Lobby", a self-service banking centre and a first of its kind in India, is inaugurated in Pune. ICICI Bank launched Private Banking. A 1,100-seat Call Centre for Customer Care by phone and e-mail was set up in Hyderabad. ICICI Bank Home Shoppe, the first-ever permanent aggregation and display of housing projects in the county, launched in Pune. ATM-on-Wheels, India’s first mobile ATM, launched in Mumbai. 2003: Representative office set up in China. ICICI Bank’s UK subsidiary launched. India’s first ever "Visa Mini Credit Card", a credit card 43% smaller in dimensions was launched. A subsidiary of ICICI Bank was set up in Canada. Temasek Holdings acquired 5.2% stake in ICICI Bank. ICICI Bank became the market leader in retail credit in India. 2004: Max Money, a home loan product that offers the dual benefit of higher eligibility and affordability to a customer, introduced. Mobile banking service in India launched in association with Reliance Infocomm. India’s first multi-branded credit card with HPCL and Airtel launched. Kisan Loan Card and innovative, low-cost ATMs were launched in rural India.
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ICICI Bank and CNBC TV 18 announced India’s first ever awards recognizing the achievements of SMEs, a pioneering initiative to encourage the contribution of Small and Medium Enterprises to the growth of the Indian economy. ICICI Bank opened its 500th branch in India. ICICI Bank introduced partnership model wherein ICICI Bank would forge an alliance with existing micro finance institutions (MFIs). The MFI would undertake the promotional role of identifying, training and promoting the micro-finance clients and ICICI Bank would finance the clients directly on the recommendation of the MFI. ICICI Bank introduced 8 to 8 Banking wherein all the branches of the Bank would remain open from 8a.m. to 8 p.m. from Monday to Saturday. ICICI Bank introduced the concept of floating rate for home loans in India. 2007: ICICI Bank makes a USD 2 billion three-tranche international bond offering, which becomes the largest bond offering by an Indian bank. Sangli Bank was amalgamated with ICICI Bank. ICICI Bank raised Rs 20,000 crore (approx $5 billion) from domestic and international markets through a follow-on public offer. ICICI Bank’s GBP 350 million international bond offering marked the inaugural deal in the sterling market from an Indian issuer and also the largest deal in the sterling market from Asia. Launched India’s first ever jewellery card in association with jewellery major Gitanjali Group. ICICI Bank became the first bank in India to launch a premium credit card -- The Visa Signature Credit Card. . ICICI Bank signed a multi-tranche dual currency US$ 1.5 billion syndication loan agreement in Singapore. ICICI Bank became the first private bank in India to offer both floating and fixed rate on car loans, commercial vehicles loans, construction equipment loans and professional equipment loans. In a first-of-its-kind, nationwide initiative to attract bright graduate students to pursue a careers in banking, ICICI Bank launched the "Probationary Officer Programme". Launched Bank@Home services for all savings and current account customers residing inIndia ICICI Bank Eurasia LLC inaugurated its first branch at St Petersburg, Russia. 2008: ICICI Bank enters USA, launches its first branch in New York ICICI Bank enters Germany, opens its first branch in Frankfurt ICICI Bank launched iMobile, a breakthrough innovation in banking where practically all Internet banking transactions can now be done easily on the mobile phone. ICICI Bank concluded India's largest ever securitization transaction of a pool of retail loan assets aggregating to Rs. 48.96 billion (equivalent of USD 1.21 billion) in a multitranche issue backed by four different asset categories. It is also the largest deal in Asia (ex-Japan) in 2008 till date and the second largest deal in Asia (ex-Japan and Australia) since the beginning of 2007. 23 | P a g e
ICICI Bank launches ICICIACTIVE-Banking Interactive Service - along with DISH TV, which will allow viewers to see information about the Bank's products and services and contact details on their DISH TV screens. 2009: Chanda Kochhar was appointed CEO and MD of ICICI Bank from May 2009 for a period of five years. She succeeds K. V. Kamath, who was CEO of the bank since 1996
Deposits Loans Cards Investments Insurance Demat services Wealth management
• • • • • • Money Transfer Bank accounts Investments Property Solutions Insurance Loans Corporate net banking Cash Management Trade services FXonline SME services Online taxes Custodial services
SBI HOME LOAN PRODUCT REVIEW
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SBI HI-FIVE LOAN
Maximum Rs.5 Lacs Maximum 120 months (i.e. 10 years) including moratorium period. 8% p.a. Fixed interest rate during first 60 months. 61st month Onwards - floating at 2.75% below SBAR Or Fixed interest at 1.25% below SBAR
Amount Term Interest Rates
Processing Fee The revised processing fee structure (including service tax) from 9th November 2009 is as under : Loan Amount Up to Rs.5 Lac Processing Fee(Revised) Rs.1000/-
I. SBI EASY HOME LOAN – FOR LOAN AMOUNT UPTO Rs. 50 Lacs Getting your dream home has become easier with SBI Easy Home Loan. With low interest rates for home loan under Rs. 50 lakhs category, SBI Easy ensures that you are not burdened with high interest for your home loan. Plus with over 12000 SBI branches nationwide you can get your Home Loan account parked at a branch nearest to your present or proposed residence.
• • •
Interest rate during the first year (i.e. till first anniversary date from the date of first disbursement) is fixed at 8% p.a. Interest rate during next two years is fixed at 9% p. a Interest rate after three years may be Fixed or Floating as per the borrower’s choice made at the time of sanction. If floating rate option is chosen, then the rate will be 2.5% below SBAR. If fixed rate option is chosen, then the rate will be .75% below SBAR prevailing on the third anniversary date from the date of first disbursement, and shall have a reset frequency of 5 years from the third anniversary date of the loan. Fixed interest rate shall be subject to force-majeure clause. (SBAR = 11.75%
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Processing Fee The revised processing fee structure (including service tax) from 9th November 2009 is as under: Loan Amount Up to Rs.5 Lac Above Rs.5 Lac and up to Rs.10 Lac Above Rs.10 Lac and up to Rs.20 Lac Above Rs.20 Lac and up to Rs.50 Lac Processing Fee(Revised) Rs.1000/Rs.2000/Rs.5000/Rs.7,000/-
SBI ADVANTAGE HOME LOAN – FOR LOAN AMOUNT ABOVE Rs. 50 Lacs
SBI Advantage Home Loan with competitive rates of interest is available for home loans above Rs.50 lakhs. Plus with over 12000 SBI branches nationwide you can get your Home Loan account parked at a branch nearest to your present or proposed residence. Interest Rate • • • Interest rate during the first year (i.e. till first anniversary date from the date of first disbursement) is fixed at 8% p.a. Interest rate during next two years is fixed at 9% p. a Interest rate after three years may be Fixed or Floating as per the borrower’s choice made at the time of sanction. If floating rate option is chosen, then the rate will be 1.75% below SBAR. If fixed rate option is chosen, then the rate will be 0.75% below SBAR prevailing on the third anniversary date from the date of first disbursement, and shall have a reset frequency of 5 years from the third anniversary date of the loan. Fixed interest rate shall be subject to force-majeure clause.
Processing Fee The revised processing fee structure (including service tax) from 9th November 2009 is as under: Loan Amount
Above Rs.50 Lac and up to Rs.1 Cr Above Rs.1 Cr and up to Rs.5 Cr
Above Rs.5 Cr
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INTEREST RATES • • • Interest will be charged at the rates prescribed by the Bank from time to time. Borrowers availing loans up to Rs. 75 lacs can opt for paying interest either at fixed rate or floating rate. Interest on individual loans for over Rs. 75 lacs must be charged only at the floating rate interest linked to SBAR.
HOME LOANS - INTEREST RATES
(Revised SBAR w.e.f from 29.06.2009 = 11.75% p.a.) 1. SBI HI-FIVE LOAN - FOR LOAN AMOUNT UPTO Rs. 5 Lacs (available up to 31st March 2010) Interest Rates 8% p.a. Fixed interest rate during first 60 months. 61st month Onwards - floating at 2.75% below SBAR (OR) Fixed interest at 1.25% below SBAR SBI EASY HOME LOAN – FOR LOAN AMOUNT UPTO Rs. 50 Lacs (AVAILABLE UP TO 30th June 2010 ) Interest Rates Interest rate during the first year (i.e. till first anniversary date from the date of first disbursement) is fixed at 8% p.a. Interest rate during next two years is fixed at 9% p. a Interest rate after three years may be Fixed or Floating as per the borrower’s choice made at the time of sanction. If floating rate option is chosen, then the rate will be 2.5% below SBAR. If fixed rate option is chosen, then the rate will be .75% below SBAR prevailing on the third anniversary date from the date of first disbursement, and shall have a reset frequency of 5 years from the third anniversary date of the loan. Fixed interest rate shall be subject to force-majeure clause.(SBAR = 11.75%p.a.) SBI ADVANTAGE HOME LOAN – FOR LOAN AMOUNT ABOVE Rs. 50 Lacs available up to 31st March 2010) Interest Rates Interest rate during the first year (i.e. till first anniversary date from the date of first disbursement) is fixed at 8% p.a. Interest rate during next two years is fixed at 9% p. a Interest rate after three years may be Fixed or Floating as per the borrower’s choice made at the time of sanction. If floating rate option is chosen, then the rate will be 1.75% below SBAR. If fixed rate option is chosen, then the rate will be 0.75% below SBAR prevailing on the third anniversary date from the date of first disbursement, and shall have a reset frequency of 5 years from the third anniversary date of the loan. Fixed interest rate shall be subject to force-majeure clause.
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List of papers/ documents applicable to all applicants: Completed loan application 3 Passport size photographs Proof of identify (photo copies of Voters ID card/ Passport/ Driving license/ IT PAN card) Proof of residence (photo copies of recent Telephone Bills/ Electricity Bill/ Property tax receipt/ Passport/ Voters ID card) Proof of business address for non-salaried individuals Statement of Bank Account/ Pass Book for last six months Signature identification from present bankers Personal Assets and Liabilities statement For guarantor (wherever applicable): Personal Assets and Liabilities Statement 2 passport size photographs Proof of identification as above Proof of residence as above Proof of business address as above Signature identification from his/her present bankers Additional documents required for salaried persons : Original Salary Certificate from employer TDS certificate on Form 16 or copy of IT Returns for last two financial years, duly acknowledged by IT Deptt. Additional documents required for Professionals/self- employed/ other IT assesses: Acknowledged copies of three years I.T. returns/ Assessment Orders. Photocopies of challans evidencing payment of Advance Income Tax
SBI Home Loans Unique Advantage 28 | P a g e
• • • • •
• • • • • •
Package of exclusive benefits. Lowest interest rates. Further, we charge interest on a daily reducing balance!! Low processing charges. No hidden costs or administrative charges. No prepayment penalties. Reduce your interest burden and optimally utilize your surplus funds by prepaying the loan. Over 12000 branches nationwide, you can get your Home Loan account parked at a branch nearest to your present or proposed residence.
ICICI HOME LOANS PRODUCT REVIEW:29 | P a g e
Home Loans can be availed by Resident Indian whether salaried or Self-Employed and also by Non- Resident Indian who are Salaried. For resident Indians the following are the eligibility norms:
• • •
You must be at least 21 years of age when the loan is sanctioned. The loan must terminate before or when you turn 65 years of age or before retirement, whichever is earlier. You must be employed or self-employed with a regular source of income
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 loan. Also, when the company looks at the total cost, registration charges, transfer charges and stamp duty costs are included
Documents required for the Sanctioning of Home Loan
ICICI Bank offers attractive interest rates and unbeatable benefits to ensure that you get the best deal without any hassles. Keeping your convenience in consideration, we ask you for minimal mandatory documents for the sanctioning of your Loan against Property. We require the following documents to sanction your Loan Against Property:
• • • • • • •
Duly Completed Application Form Photograph Fee cheque Photo Identity Proof Signature Verification Proof Residence Address Proof Property documents as required 30 | P a g e
Document specific for Salaried
• • • •
Last 3 months' salary slips Form 16 Bank Statement for last 6 months from salary account Repayment details on any existing loans or loan closure letter
Document specific for 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 last 6 months from operating account Repayment details on existing loans or loan closure letter Board Resolution in case of a company Proof of existence of the business entity Proof of Office Address Photo Identity Proof, Residence Address Proof, Signature Verification must be provided for all the main partners / directors
Disbursement of ICICI Bank Home Loan
ICICI Bank Home Loans disburses the loan amount after you identify and select the property or home that you are purchasing and submit the requisite legal documents. While one may be under the impression that the list of documents asked for is rather extensive, please note that it is for customer’s good. Each and every single document asked for will be verified and checked to ensure your safety. This may take some time but will complete all the legal and technical verifications to ensure that one has full rights to his 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. 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.
• • • • • •
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 Guarantor's Documents (PG Form, Photograph, Identity Proof, Address Proof, Signature Verification and Income documents, if applicable) 31 | P a g e
Repayment Terms of Home Loan
In order to make taking a home loan an easy process for you, ICICI Bank Home Loans address all your queries about the repayment terms of Home Loans with respect to tenure, home loan EMIs, methods of home loans EMI payments and pre-EMI interest. What is the repayment tenure? Repayment tenure is the tenure for the number of year for which the loan gets sanctioned. We offer you a wide range of options for the tenure of the loan. You can take a home loan for up to 20 years provided you do not reach the age of 65 years or retire within that period. How is the loan repaid? All loan repayments are done via equated monthly installments (EMI). What is an EMI? An EMI refers to an equated monthly installment. It is a fixed amount which you pay every month towards your loan. It comprises of both, principal repayment and interest payment. When does the repayment start? EMI payments start from the month following the month in which the full disbursement has been made. How is the EMI paid? The EMI is to be paid every month through post-dated cheques (PDCs) or Electronic Clearing System (ECS)*. If you are opting for PDCs, then you will have to provide 36 PDCs upfront. The PDCs are to be dated on the 1st of every month. However, if you receive your salary a few days later, we provide the flexibility of dating the cheques for the 10th of the month. In case you have an ICICI Savings account you can also go in for the facility of Auto Debit. What if a PDC bounces? In the case of a bounced cheque or delayed payment, charges and outstanding dues will be charged as per the prevailing company policy. You can replace old PDCs with new ones within 5 - 7 working days.
What is pre-EMI interest? In the case of part disbursement of the loan, monthly interest is payable only on the disbursed amount. This interest is called pre-EMI interest (PEMI) and is payable monthly till the final disbursement is made, after which the EMIs would commence. When do I pay PEMIs? 32 | P a g e
The first PEMI is payable by cheque by the end of the month in which the disbursement is made and each subsequent PEMI at the end of every month till the commencement of EMI. In case you have an ICICI Savings account you can also go in for the facility of Auto Debit
Application Process of Home Loan
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 bank is always ready to assist its customers in the event of legitimate problems. And, we might reconsider this if we find that there are satisfactory reasons for the delay. If it is refinancing you are interested in, it is possible within 6 months from the date of purchase of property.
Insurance Plans for Home Loan
Introducing exclusive Home Insurance plans, that can provide cover to your Home loan in the face of any unforeseen event happening to your life. In case of any of these happenings, your family will have the support of the insurance cover to pay for the outstanding Home loan, without being burdened by the loan EMI's. ICICI Bank Home Loans presents "HomeSafePlus" & "Home Assure/Health Assure" two exclusive and innovative insurance plans to insure your Home Loan.
HomeSafePlus Key Benefits of HomeSafePlus:
• • • •
No medical checkup Comprehensive insurance plan for individual, home and its contents Single premium long-term insurance plan Premium paid for the Critical Illness cover is eligible for tax benefits u/s 80D of the Income Tax Act 33 | P a g e
• • •
Sum Insured remains constant throughout the policy period (loan O/S amount to come to bank, rest goes to individual) Multiple applicants can be covered under the same loan Simple application form
Home Assure/Health Assure Key Benefits of Home Assure/Health Assure:
• • • • • •
Life Cover from Home Assure for the entire home loan tenure Critical Illness cover from life threatening illnesses like cancer, coronary artery bypass, heart attack, kidney failure, stroke, major organ transplant Special non-medical limits only for ICICI Bank Home Loans customers Dual benefit to customers, Life Cover from Home Assure and Critical Illness Cover from Health Assure Dual tax benefits, Section 80C benefits under Home Assure, Section 80D benefits under Health Assure Simplified claim procedure
Home loan Schemes
As one of the leading home loan provider, ICICI Bank understands how special building a new home is for you and our Home Loan help you lay the foundation for your dream home. ICICI offers you the most convenient home loan plans to suit your needs. With so many attractive features in every type of home loan we offer, creating the home you always wanted is no longer a distant dream. Some of our key benefits are:
• • • • • • • •
Guidance throughout the process Home loan amounts suited to your needs Home Loan tenure up to 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
No matter what the requirement, we have an appropriate plan for you.Get the best deals, and finance your perfect home, only from ICICI Bank. Changes in Floating Reference Rate (FRR) Interest rate on ICICI Bank Home Loans is linked to the ICICI Bank Floating Reference Rate (FRR/PLR). ICICI Bank FRR has been reduced by 50 basis points (i.e. 0.50%) with effect from June 04, 2009. Thus the FRR has been reduced from 13.25% to 12.75%. ICICI Bank PLR has also been reduced by 50 basis points (i.e. 0.50%) with effect from June 04, 2009. Thus the PLR has changed from15.25% to 14.75%. Accordingly, the Home Loan floating rate of interest has been reduced by 0.5% (50 basis points 34 | P a g e
CHAPTER- 3 OVERVIEW OF THE INDUSTRY:
The Banking sector is considered the most lucrative option in today’s job market. In the industry, a position in Treasury or Forex is considered right on top and this is followed by careers in Private Banking, Investment Banking and Retail Banking. One could work in a variety of areas in banking industry including Recurring Deposit
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Banking in India has a long and elaborate history of more than 200 years. The beginning of this industry can be traced back to 1786, when the country’s first bank, Bank of Bengal, was established. But the industry changed rapidly and drastically, after the nationalization of banks in 1969. As a result, the public sector banks began experiencing numerous positive changes and enormous growth. Then came the much-talked-about liberalization and economic reforms that allowed banks to explore new business opportunities and not just remain constrained to generating revenues from mere borrowing and lending. This provided the Indian banking scenario a remarkable facelift that only continues to get better with time. However, even today, despite the foray of foreign banks in the country, nationalized banks continue to be biggest lenders in the country. This is primarily due to the size of the banks and the penetration of the networks. The Indian banking system can be classified into nationalized banks, private banks and specialized banking institutions. The industry is highly fragmented with 30 banking units contributing to almost 50% of deposits and 60% of advances. The Reserve Bank of India is the foremost monitoring body in the Indian Financial sector. It is a centralized body that monitors discrepancies and shortcomings in the system. Industry estimates indicate that out of 274 commercial banks operating in the country, 223 banks are in the public sector and 51 are in the private sector. These private sector banks include 24 foreign banks that have begun their operations here. The specialized banking institutions that include cooperatives, rural banks, etc. form a part of the nationalized banks category. Opportunities account, banking officer, probationary officer, loan officer, assessor, personal loan officer, home loan officer, home loan agent, loan manager, mortgage loan underwriter, loan processing officer, accountant, product marketing and sales executive, and customer service executive among others. In the Financial Services, some of the important jobs include that of a stockbroker who is essentially a person who buys and sells securities on behalf of individuals and institutions for some commission. While some brokers like to practice with individual clients others work for institutions. Brokers who work for institutional investors are often called securities traders. Many prefer to work as dealers, advisors and securities analysts. Security analysts are those who advise companies on floatation’s of shares as they are expected to have sound knowledge of capital markets. Investment analysts are the backbone of the financial services sector. They study the financial reports of companies, assess various statistical information, profitability projections, compare financial results, survey the industry as a whole and on the basis of the available information, and finally conclude to a decision. Equity Analysts do jobs similar to investment analysts and research the equity markets and make predictions. The home loan industry is experiencing a growth of 25% this year, as against 30% growth in home loans earlier. Rajiv Sabharwal, senior general manager, ICICI Bank,
The limit for foreign direct investment in private banks has been increased from 49% to 74%. In addition, the limit for foreign institutional investment in private banks is 49%. Liberalization and globalization have created a more challenging environment in the banking sector as well as in the other segments of the financial sector such as mutual funds, Non Banking Finance Companies, post offices, capital markets, venture capitalists, etc. Research and Markets has announced the addition of 'Indian Retail Banking, 2006' to their offering. Indian Retail Banking continues to redefine the credit growth in the country. It grew by a whopping 44.4% in 2005-06 to touch Rs 36 | P a g e
3,538 billion. This leap was despite the increase in risk weight by RBI for housing and real estate loans during August, 2005. Housing, which constitutes more than 52% of all retail loans, grew at a robust rate of 44.35% during 2005-06. In order to help banks in India to understand the market and competition and plan future strategies, we have just come out with an Industry Insight on Indian Retail banking - 2006 edition. This report analyses the retail banking market and its segments in India and presents the key trends, along with issues and challenges. The report also paints a future outlook for the market. Besides it profiles 21 major players in the retail banking space and their strategies. Finally, it seems Reserve Bank of India's (RBI) flurry of measures to restrain the home finance market is paying off. With tightening of interest rates by the RBI and a simultaneous increase in real estate prices in a few markets, the banking sector is witnessing a decline in the growth of its home loan portfolio which has recorded the highest incremental growth in home finance segment in recent past, said, “The real estate prices have become very high in few markets, which has resulted in the fall in growth rates for home loans for the banking industry. Home loan growth has reduced to 25% from its earlier growth rate at 30% and since we are an integral part of the industry, there will be some impact on us too.” He added that the bigger impact had come from real estate prices, but obviously interest rates hikes will also have an impact. He, however, declined to disclose the bank’s current home loan growth rate. Echoing a similar view, a senior official of State Bank of India (SBI) said the home loan market is showing some signs of slowing down. However, another major player, Housing Development Finance Corporation (HDFC) said the housing finance market for the middle class segment was growing at a healthy pace. ICICI Bank is a leading home loan lender of the country with about 30% market share. Retail lending comprises 70% of the total loan portfolio of the bank, of which the home loan lending is about 50%. In the first half of fiscal 2007, the bank experienced total home loan disbursements of Rs 13,400 crore.
The financial sector in India has become stronger in terms of capital and the number of customers. It has become globally competitive and diverse aiming, at higher productivity and efficiency. Exposure to worldwide competition and deregulation in Indian financial sector has led to the emergence of better quality products and services. Reforms have changed the face of Indian banking and finance. The banking sector has improved manifolds in terms of capital adequacy, asset classification, profitability, income recognition, provisioning, exposure limits, investment fluctuation reserve, risk management, etc.
TOP 10 PLAYERS IN BANKING & FINANCE 37 | P a g e
State Bank of India HDFC bank Citibank ICICI Bank Punjab National bank UTI Bank Hongkong & Shanghai Banking Corp. Kotak Mahindra Bank Sundaram Bank Oriental Bank of Commerce
CHAPTER 4 INTERPRETATION: SBI: NO.50 1) What is your occupation? Business Man Student Government Employees Other House Wife 15 0 22 0 9
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Total Number of Respondents was 46. :-
o 0 of our Respondents was Students. o 22 of the Respondents were into government employees o 15 of our Respondents were Businessman. o 9 of our Respondents were Housewives. o None of our Respondent belonged to the category of others. o 4 respondents did not answer.
2) From how many years you are associated with this bank?
Less than 1year 1-5 years More than 5 years 10 24 12
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o o o o
Total Number of Respondents was 46 10 persons are associated less than 1 year 24 persons are associated from 1-5 years. 12 persons are associated from more than 5 years.
3) How do you come to know about the home loan schemes of that bank? Newspaper Television Internet Other sources 18 14 10 4
40 | P a g e
o o o o o
Total Number of Respondents was 46 18 persons came to know from newspaper 14 persons came to know from television 10 persons came to know from internet 4 persons came to know from other resources
4) Are you aware of these type of home loans? Home purchase loan Home construction loan Home improvement loan Home equity loan Land purchase loan 9 18 6 4 9
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o o o o o
Total Number of Respondents was 46 Only 4 persons know home equity loan. Many of peoples know home construction loan. 9 peoples know home purchase loan. 6 peoples know home improvement loans.
5) Are you aware all terms and conditions of home loans? Yes NO 40 6
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o o o
Total Number of Respondents was 46. Many of persons know all terms and conditions of home loan i.e. 40. 6 persons had not know properly about all terms and conditions.
6) Are you satisfied with the interest rate charges by your bank? Strongly agree Agree Disagree Strongly disagree 12 30 4 0
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o o o o o
Total Number of Respondents was 46 12 among all consumers are strongly agreed by interest rate of the bank. 30 among all consumers are agreed by interest rate of the bank 4 among all consumers are disagreed by interest rate of the bank 0 among all consumers are strongly disagreed by interest rate of the bank
7) Your bank offers which type of services? Mobile Banking Net Banking Forex Banking 24 15 7
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o Total Number of Respondents was 46. o 24 persons said that bank offer mobile banking services. o 15 said that bank offer net banking services. o Only 7 persons said that bank offer Forex banking services.
8) Do you agree that your bank loan processing is fast? Strongly Agree Agree Disagree Strongly Disagree 8 26 9 3
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Interpretation:o Total Number of Respondents was 46. o 8 persons strongly agree that bank home loan processing is fast. o 26 persons agree that bank home loan processing is fast. o 9 persons disagree that bank processing is fast. o 3 persons strongly disagree that bank processing is fast.
9) Are you satisfied with the after home loan services provided by your bank as compared to other banks? Strongly Agree Agree Disagree Strongly Disagree 12 30 4 0
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o Total Number of Respondents was 46 o 12 among all consumers are strongly agreed by after sale services of the bank. o 30 among all consumers are agreed by after sale services of the bank o 4 among all consumers are disagreed by after sale services of the bank o 0 among all consumers are strongly disagreed by after sale services of the bank
10) Does the cost of home loan is appropriate, according to your demand? Yes No 33 13
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o Total Number of Respondents was 46. o 33 persons said that home loan is appropriate according to their demand. o 13 persons said that home loan is not appropriate according to their demand.
11) Are you satisfied with the employee behavior at the bank?
Strongly Agree Agree Disagree Strongly Disagree
19 23 4 0
48 | P a g e
o o o o o
Total Number of Respondents was 46. 19 persons very satisfied with the employee behavior of the bank. 23 persons satisfied with the employee behavior of the bank. 4 persons disagree with the employee behavior of the bank. No one disagrees with the employee behavior of the bank.
12) Does the bank give any discount upon loan services? Yes No 40 6
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o Total Number of Respondents was 46. o 40 persons said that bank give discount upon loan services. o Only 6 persons said that bank does not give any discount upon loan services.
13) Are you satisfied by the time taken in sanctioning the loan?
50 | P a g e
Interpretation:O Total Number of Respondents was 46. o 34 persons are satisfied by the time taken o 12 persons are not satisfied by the time taken
14) Have you faced any difficulty during taking the loan?
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o o o
Total Number of Respondents was 46. 39 persons face difficulty during taking the loan. Only 7 persons does not face any difficulty during taking the loan.
15) Which grade you want to give of home loan schemes of the bank? Excellent Good Average Below average 24 18 4 0
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o Total Number of Respondents was 46. o 24 persons give excellent grade of the bank. o 18 persons gave good grade to the bank. o Only 4 persons give average grade to the bank. o No none give below average grade to the bank.
ICICI: NO.50 1) What is your occupation? Business Man Student Housewife Government Employee Other 17 0 7 23 0
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Interpretation:o Total Number of Respondents was 47. o 0 of our Respondents was Students. o 23 of the Respondents were into government employees o 17 of our Respondents were Businessman. o 7 of our Respondents were Housewives. o None of our Respondent belonged to the category of others. o 3 respondents did not answer.
2) From how many years you are associated with this bank? Less than 1 year 1-5 years More than 5 years 17 19 11
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Interpretation:o Total Number of Respondents was 47 o 17 persons are associated less than 1 year o 19 persons are associated from 1-5 years. o 11 persons are associated from more than 5 years.
3) How do you come to know about the home loan schemes of that bank? News Paper Television Internet Other 12 22 9 4
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Interpretation:o Total Number of Respondents was 47 o 12 persons came to know from newspaper o 22 persons came to know from television o 9 persons came to know from internet. o 4 persons came to know from other resources.
4) Are you aware of these types of home loans? Home Purchase Loan Home Construction Loan Home Improvement Loan Home Equity Loan Land Purchase Loan 9 19 9 2 8
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Interpretation o Total Number of Respondents was 47. o Only 2 persons know home equity loan. o Many of peoples know home construction loan. o 9 peoples know home purchase loan. o 9 peoples know home improvement loans.
5) Are you aware all terms and conditions of home loans? Yes NO 34 13
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o Total Number of Respondents was 47. o Many of persons know all terms and conditions of home loan i.e. 34. o 13 persons had not know properly about all terms and conditions
6) Are you satisfied with the interest rate charges by your bank?
Strongly agree Agree Disagree Strongly disagree
11 34 2 0
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Interpretation o Total Number of Respondents was 47. o 11 among all consumers are strongly agreed by interest rate of the bank. o 34 among all consumers are agreed by interest rate of the bank o 2 among all consumers are disagreed by interest rate of the bank o 0 among all consumers are strongly disagree by interest rate of the bank
7) Your bank offers which type of services? Mobile Banking Net Banking Forex Banking 26 13 8
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o Total Number of Respondents was 47. o 26 persons said that bank offer mobile banking services. o 13 said that bank offer net banking services. o Only 8 persons said that bank offer Forex banking services.
8) Do you agree that your bank loan processing is fast? Strongly Agree Agree Disagree Strongly Disagree 4 21 13 9
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o Total Number of Respondents was 47. o 4 persons strongly agree that bank home loan processing is fast. o 21 persons agree that bank home loan processing is fast. o 13 persons disagree that bank processing is fast. o 9 persons strongly disagree that bank processing is fast.
9) Are you satisfied with the after home loan services provided by your bank are best as compare to other bank? Strongly Agree Agree Disagree Strongly Disagree 14 29 4 0
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o Total Number of Respondents was 47. o 14 among all consumers are strongly agreed by after sale services of the bank. o 29 among all consumers are agreed by after sale services of the bank o 4 among all consumers are disagreed by after sale services of the bank o 0 among all consumers are strongly disagreed by after sale services of the bank
10) Is the cost of home loan is appropriate, according to your demand? Yes No 29 18
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o Total Number of Respondents was 47. o 29 persons said that home loan is appropriate according to their demand. o 18 persons said that home loan is not appropriate according to their demand.
11) Are you satisfied with the employee’s behavior of the bank? Strongly Agree Agree Disagree Strongly Disagree 16 25 4 0
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o Total Number of Respondents was 47. o 16 persons very satisfied with the employee behavior of the bank. o 25 persons satisfied with the employee behavior of the bank. o 6 persons disagree with the employee behavior of the bank. o No one is disagree with the employee behavior of the bank.
12) Does the bank give any discount upon loan services? Yes No 35 12
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o Total Number of Respondents was 47. o 35 persons said that bank give discount upon loan services. o Only 12 persons said that bank does not give any discount upon loan services.
13) Are you satisfied by the time taken in sanctioning the loan?
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o Total Number of Respondents was 47. o 30 persons are satisfied by the time taken o 17 persons are not satisfied by the time taken
14) Have you faced any difficulty during taking the loan? Yes No 43 4
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o Total Number of Respondents was 47. o 43 persons face difficulty during taking the loan. o Only 4 persons does not face any difficulty during taking the loan.
15) Which grade you want to give of home loan schemes of the bank? Excellent Good Average Below average 18 20 8 1
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o Total Number of Respondents was 47. o 18 persons give excellent grade of the bank. o 20 persons gave good grade to the bank. o Only 8 persons give average grade to the bank. o 1 person give below average grade to the bank
CHAPTER 5 CONCLUSION:
All the people are availing loan facility from both the banks. No. of respondents of SBI were 46 and 47 of ICICI Bank. People related with SBI are more satisfied with the interest rate as compared to ICICI. SBI people much know about home loans then ICICI. Both ICICI and SBI mostly offer mobile banking services. Processing of SBI is fast then ICICI. After home loan services of ICICI is good as compare to SBI. Peoples related with SBI is more satisfy with the employee behavior as
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compared to ICICI. People are more satisfied by SBI for time taken for sanctioning the loan. From all this I conclude that SBI bank provide good home loan services as compared to ICICI and many people are very much satisfied with SBI.
Although best of the efforts were made to conduct a prefect survey but still it faces certain limitation. Following were certain limitation of this project. 1. The survey was conducted only on 100 respondents. 2. Some of the respondents did not answer all the questions, which could hamper the final results to a certain extent. 3. The study confines itself to the respondents of SHIMLA region only. Hence findings would not be relevant to other cities.
CHAPTER 6 BIBLIOGRAPHY: Books: Research Methodology CR Kothari Statistical Methods. S.P.Gupta Websites:
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firstname.lastname@example.org www.googlesearch.com www.icici.com
ANNEXURE COMPARITIVE STUDY OF HIME LOANS OF SBI & ICICI IN SHIMLA
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QUESTIONNAIRE: Name____________ Qualification_________ Age 18-25 25-35 35-40 above Gender_________ 1) What is your occupation? Business man Government employee House wife Student Other
2) From how many years you are associated with this bank? Less than 1 year 1-5 More than 5 year 3) How do you come to know about the home loan schemes of this bank? News paper Television Internet Other resources
4) Are you aware of these types of home loans? Home purchase loan Home extension loan Home construction loan Home equity loan Home improvement loan Land purchase loan
5) Are you aware all terms and conditions of home loans? Yes No
6) Are you satisfied with the interest rate charges by your bank? Strongly agree Strongly disagree 7) Your bank offers which type of services? Mobile banking Net banking Forex banking Agree Disagree
8) Do you agree that your bank loan processing is fast? Strongly agree Agree
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9) Do you satisfy with the after home loan services provided by your bank are best as compare to other bank? Strongly agree Agree Strongly disagree Disagree
10) Does the cost of home loan is appropriate, according to your demand? Yes No
11) Are you satisfied with the employees behavior at the bank? Strongly agree Agree Strongly disagree Disagree
12) Does the bank give any discount upon loan services? Yes No
13) Are you satisfy by the time taken in sanctioning the loan? Yes No
14)Have you face any difficulty during taking the loan? Yes No If yes then specify___________________________ 15) Which grade you want to give of home loan schemes of your bank? Excellent Average Good Below average
16) Any suggestions that you want to give_________________________________ Thank You Alok Thakur MBA 4th Sem.( Student) HPIMS, SHIMLA
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