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The Financial services industry includes firms that deal with the management, investment, transfer, and lending of money. Though every company handles money in the course of doing business, financial institutions actually make money their business; rather than selling a line of physical products, they offer customers their fiscal expertise. The industry itself is very large, encompassing everything from small, local banks to the multinational investment banks regularly featured in news headlines. Financial system and markets in India – Government of India, Ministry of Finance at the helm, statutes, statutory authorities, financial intermediaries, other financial institutions, agents who operate in the markets etc.
Financial Management is an integral part of Business Management. Finance is one of the key functions in an organisation. The other key functions in an organisation are: 1. Production 2. Human Resources 3. Marketing
Some of the key finance functions are: 1. Financial planning and estimation of finance required for the organisation 2. Mobilisation of financial resources required as above 3. Ensuring that the funds are available in adequate quantity at appropriate time and at an affordable cost 4. Management of cash in the organisation through cash flow statement 5. Management of investment outside the business enterprise in other organisations 6. Management of risk in dealing with foreign exchange for imports and export Short-term and long-term objectives of Financial Management Short-term objective The short-term objective of Financial Management is to procure financial resources at an affordable cost thereby increasing the return to the shareholders in the form of Earnings Per Share (EPS). EPS comprises two elements namely Dividend per share (DPS) and Retained Earnings per share (REPS or Reserves per share). This objective is often times referred to as “profit maximisation”. This is known as the
short-term objective as it is done on a continuous, year-to-year basis. One or more of the following measures can achieve this: 1. Monitoring of costs on a continuous basis through budgets 2. Suitable cost reduction techniques wherever the costs are high 3. Minimisation of cost of borrowed capital from outside through financial discipline 4. Proper mix of equity and debt (known as financial leverage Long-term objective The long-term objective of financial management is to increase the wealth of the shareholders. The term “wealth” refers to various business assets of the enterprise that are free of debt. This means that this wealth belongs to the equity shareholders. It is often reflected in the “book value” of the share as reflected in the balance sheet. Equity share capital + Reserves and Surplus
INDIAN BANKING SYSTEM:
Organized banking was active in India since the establishment of the general bank of India in 1786. After the independence, the reserve bank of India RBI was established as the central bank and in 1955, the imperial bank of India the biggest bank at the time ,was taken over by the government to from state owned state bank of India . RBI had undertaken an exercise to merge weak banks to strong banks and the total number of banks, thus reduced from 566in 1951 to 85 in 1969. With the objective of reaching out to masses and meeting the credit needs of all sections of people, the government nationalized 14 large banks in 1969 followed by another 6 banks in 1980. This period saw enormous growth in the number of the branches and the banks ‘branches network become wide enough to reach the weakest sections of the society in a vast country like India. SBI‘s network of 9033 domestic branches and 48 overseas offices is considered to be one of the largest for any banks in the world The economic reforms unleashed by the government in early nineties included banking sector too, to a significant extant. Entry of new private sector banks was permitted under specific guidelines issued by RBI. A number of liberalization and
deregulation measures aimed at consolidation, efficiency productivity, asset quality capital adequacy and profitability have been introduced by the RBI to bring Indian banks in line with international beat practices.
Banks are prone to crisis:
The traditional bank has an inherent tendency to crisis. This is because the bank borrows short terms and lends leveraged long term. The sum of deposits and the bank’s capital will never equal more than a modest percentage of the loans the bank has outstanding. Even if liquidity is not a concern, if there is no run on the bank, banks can simply choose a ban portfolio of loans, and lose more money than they have. The US Savings and Loan Crisis in the late 1980s and early 1990s is such an incident.
The first phase of financial reforms resulted in the nationalization of 14 major banks in 1969 and resulted in a shift from Class banking to Mass banking. After the second phase of financial sector reforms and liberalization of the sector in the early nineties. Eight new private sector banks are presently in operation. These banks due to their late start have access to state-of-the-art technology. Since then the number of scheduled commercial banks increased four-fold and the number of bank branches increased eight-fold. Scheduled banks comprise commercial banks and the co-operative banks. commercial banks can be further grouped into nationalized banks. This in turn resulted in a significant growth in the geographical coverage of banks. which in turn helps them to save on manpower costs and provide better services. In terms of ownership. The manufacturing sector also grew during the 1970s in protected environs and the banking sector was a critical source. 4 . The next wave of reforms saw the nationalization of 6 more commercial banks in 1980. which is governed by the Banking Regulation Act of India. 1949 can be broadly classified into two major categories Non-Scheduled Banks and Scheduled Banks. The new private sector banks first made their appearance after the guidelines permitting them were issued in January 1993. Every bank had to earmark a minimum percentage of their loan portfolio to sectors identified as “priority sectors”. the Public Sector Banks (PSB) s found it extremely difficult to compete with the new private sector banks and the foreign banks. regional rural banks and private sector banks these banks have over 67.STRUCTURE OF THE INDIAN BANKING INDUSTRY The Indian Banking industry. the Stat Bank of India and its group banks.000 branches spread across the country.
STRUCTURE OF THE INDIAN BANKING RESERVE BANK OF INDIA Central Bank and Supreme Monetary Authority Scheduled of Banking Sector COMMERICAL BANKS CO-OPERATIVE BANK Foreign Banks Regional Rural Banks Private Banks Urban cooperative Banks State cooperative Banks Public Banks OLD BANKS New Banks State Banks of India & Other Banks Other Nationalized Banks 5 .
Indira Gandhi the then Prime Minister. American Express Bank Ltd BNP Paribas Citibank HSBC Ltd PUBLIC BANKS IN INDIA: The Banking System in India is dominated by nationalized banks. State Bank of India (SBI) was the only public sector bank in India. The Nationalization of Banks in India took place in 1969 by Mrs. The second phase of nationalization of Indian banks took place in the year 1980. Fourteen banks were nationalized in 1969. The major objective Behind Nationalization Banks was to spread banking Infrastructure in Rural areas and make available cheap finance to Indian farmers. These Banks were Before 1969. LIST OF PUBLIC SECTOR BANKS IN INDIA IS AS FOLLOWS: Allahabad Bank Andhra Bank Bank of Baroda Bank of Maharashtra Canara Bank Central Bank of India Corporation Bank Dena Bank 6 . Some of the following public sector banks in India are listed below. SBI was nationalized in 1955 under the SBI Act of 1955. Seven more banks were nationalized with deposits over 200 crores.MAJOR FOREIGN BANKS IN INDIA ARE: ABN-AMRO Bank Abu Dhabi Commercial Bank Ltd.
In this arrangement. 7 . however. Secured A secured loan is a loan in which the borrower pledges some asset (e. Oriental Bank of Commerce Bank Of Baroda State Bank of Bikaner & Jaipur State Bank of India (SBI) MAJOR PRIVATE BANKS IN INDIA ARE: Bank of Rajasthan Centurion Bank of Punjab UTI Bank YES Bank Federal Bank HDFC Bank ICICI Bank IDBI Bank ING Vysya Bank Types of loans: A. the money is used to purchase the property. is given security — a lien on the title to the house — until the mortgage is paid off in full. used by many individuals to purchase housing. a car or property) as collateral for the loan .g. The financial institution. to recover sums owing to it. If the borrower defaults on the loan.A mortgage loan is a very common type of debt instrument.. the bank would have the legal right to repossess the house and sell it.
direct and indirect.A type of loan especially used in limited partnership agreements is the recourse note. it is very important to choose that home loan which offers the best deal of interest rate to you. This is considered a secured non-recourse debt due to the fact if the case reaches a verdict in favor of the defendant the loan is forgiven. A direct auto loan is where a bank gives the loan directly to a consumer. pick up a pen and a paper and choose the loan that will get you the home of your choice. Hence. The home loans market is one which one can enter very easily. A pre-settlement loan is a non-recourse debt this is when a monetary loan is given based on the merit and awardable amount in a lawsuit case. A stock hedge loan is a special type of securities lending whereby the stock of a borrower is hedged by the lender against loss. The duration of the loan period is considerably shorter — often corresponding to the useful life of the car. Home loan charges. a loan taken out to purchase a new or used car may be secured by the car in much the same way as a mortgage is secured by housing. 8 . As a last piece of advice. using options or other hedging strategies to reduce lender risk. So.In some instances. one must always remember to go through with all terms and conditions mentioned in the home loans document. However. Only certain types of lawsuit cases are eligible for a pre-settlement loan. These interest rates matter a lot and influence your monthly installment burden. a little amount of intelligence and awareness can help an individual get the best deal available in the market. The other related identification proofs vary from lender to lender. An indirect auto loan is where a car dealership acts as an intermediary between the bank or financial institution and the consumer. There are two types of auto loans. The process of approval of home loans in India is simple. The applicant can credit his/her property against the loan or if applicant is a salaried individual then he/she should enclose documents proving his/her earnings.
Undoubtedly. Nowadays. However. The next important thing to consider after the tenure is the rate of interest. If the loan is taken for tenure of 15 years. Home loan rates have doubled over the past 4 years. The importance of this statement lies in the fact that today there are many banks offering different varieties of home loans to individuals. the home loan eligibility comes to Rs 22 lakh. After deducting a monthly expenditure of Rs 35.e.000. He decides to purchase a house. Given below are some ways which can help in this Endeavour : • Increasing the home loan tenure: The easiest method available to increase one’s home loan eligibility is by taking home loans for the Maximum Tenure.000. let us consider an individual who earns a monthly salary of Rs 60.000.50. he will use his savings for repaying the loan in the form of equated monthly installments (EMI).5%. it is important to understand how to enhance one’s home loan eligibility. For this data.A boom in the retail sector has seen an immense increase in the home loan interest rates over the past 4 years. • Don’t rush towards a home loan: Less information is as harmful as wrong information.136. Now. 12. the EMI turns out to be Rs 1.232. never to rush to purchase a home loan. 9 . almost every bank is offering a home loan with the repayment period of maximum 20 years. the individual is able to save Rs 25. the EMI calculated stands at Rs 1.5% and now 20 year tenure on Rs 1 lakh loan. let’s consider that the installments for a home loan of Rs 1 lakh come at an interest rate of 12. his home loan eligibility will be 20. The present problem of inflation has also had a negative effect on the consumers as the fixed and the floating rate of interests have soared to an alarming degree.At this time. Assuming the same rate of interest i. For that reason. Consequently. and for that he buys a home loan. it is possible for the same individual to increase his home loan eligibility by around Rs 2 lakh if he can extend his tenure to 20 years. As an example. it is always advised.3 lakh. This has also lead to loan borrowers re-evaluating their options to avail new eligibility criteria. This in turn has certainly affected the loan eligibility for home loans in India.
These may or may not be regulated by law. which is largely based on one’s personal preference and knowledge about the both. Hence. then several banks and HFCs have come up with a joint loan option. However.Also. This option guarantees a loan for both the husband and wife earning a combined income of Rs 1 lakh per month. The choice for a greater loan is available with either husband or wife earning Rs 60. B. In the United 10 . Unsecured: Unsecured loans are monetary loans that are not secured against the borrower's assets. always ask questions and enquire about the various schemes available with the bank.It is better to carry out a research regarding the available home loan schemes and to study the market meticulously to make the best use of what many banks and housing finance companies are willing to lend before making a choiceThe next decision that an individual needs to make is to choose between floating and fixed interest rate on home loan. the floating rate home loans are available for anywhere between 11.5-13%. it might not be necessary that the first scheme being presented by a bank employee would be the best for an individual.000 per month. These may be available from financial institutions under many different guises or marketing packages: • • • • • credit card debt personal loans bank overdrafts credit facilities or lines of credit corporate bonds The interest rates applicable to these different forms may vary depending on the lender and the borrower. • When in need go for a joint loan: If one spouse’s income comes short of the required amount set by the bank to issue a loan. and then make the final call.
these may come under the Consumer Credit Act 1974. when applied to individuals. BANKING SERVICES IN INDIA 11 .Kingdom.
KEY PRODUCT ANALYZED 12 .
Retail credit. Credit card. Internet banking. This diagram is showing the ‘Banking Key Products’ such as Deposits. Debit card.NOTE…. BRANCHES OF VARIOUS BANKING: 13 .
with its registered office in Mumbai. The Bank commenced operations as a Scheduled Commercial Bank in January 1995. The Bank also has a network of about over 1054 networked ATMs across these cities.000 ATMs. All branches are linked on an online real-time basis. Headquartered in Mumbai. HDFC Bank. In 1969. Bank Of Baroda was nation IMPACT OF GLOBALIZATION ON BANKING SERVICE IN INDIA 14 . as part of the RBI's liberalization of the Indian Banking Industry in 1994. ICICI Bank was originally promoted in 1994 by ICICI Limited. has a network of over 531 branches spread over 228 cities across India. and was its whollyowned subsidiary HDFC BANK BRANCHES: HDFC Was incorporated in August 1994 in the name of 'HDFC Bank Limited'. an Indian financial institution.STATE BANK OF INDIA BRANCHES: State Bank of India (SBI) is India's largest commercial bank. India. The Housing Development Finance Corporation Limited (HDFC) was amongst the first to receive an 'in principle' approval from the Reserve Bank of India (RBI) to set up a bank in the private sector. Customers in over 120 locations are serviced through Telephone Banking. HDFC Bank's ATM network can be accessed by all domestic and international Visas / MasterCard Bank Of Baroda was established in 1895 at Lahore. ICICI BANK BRANCHES: ICICI Bank is India's second-largest bank. BOB has the distinction of being the first Indian bank to have been started solely with Indian capital. The Bank has a network of about 573 branches and extension counters and over 2. 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.
tax. mortgage. Investing. annuities. Seeking to rapidly expand its portfolio. including: Lending. financial services industry in the late 1990s.S. This includes credit cards. Financial planning. individual retirement accounts. This includes certificates of deposit. This includes comprehensive financial planning services. including both future planning and plan execution services.BUSINESS ENVIRONMENT OF GLOBAL BANK: Global Bank has undergone a series of substantial changes in the last 10 years. and mutual funds. Global Bank now has over 200 branches across the western United States. consumer loans (such as. the bank undertook a series of mergers and acquisitions. auto and line of credit). and offers a complete line of integrated financial services. and home equity. starting with the deregulation of the U. and estate planning. education. trust services. brokerage services (including securities). 15 . including retirement.
” — John Murphy 16 .HOME LOAN INDUSTRY OUR FOUNDER and CEO “Home Loan is committed to helping our customers navigate through all of life's financial challenges.
Rhode Island Residential lending expands to mid-Atlantic Assets exceed $60 million. New Hampshire and New York Home Loan Investment Bank receives "outstanding" rating for Community Reinvestment for the 10th consecutive year Commercial lending expands into mid-Atlantic states. Home Loan Investment Bank opens corporate headquarters at 2 Altieri Way in Warwick. Rhode Island Home Loan Investment Bank receives Federal Savings Bank status Home Loan Investment Bank opens state-of-the-art call center Residential lending expands to the west coast Home Loan Investment Bank receives SBA "Preferred Lender" status in Rhode Island. Massachusetts. Home Loan Investment Bank becomes the first mortgage originator to sell a pool of home equity loans to Freddie Mac and the second to Fannie Mae Assets exceed $100 million FDIC deposit insurance granted Assets exceed $200 million Home Loan Investment Bank completes first loan securitization.IMPORTANT DATES IN HOME LOAN'S HISTORY John Murphy acquires Bank charter and begins building Home Loan Investment Bank Home Loan Investment Bank opens first headquarters in Providence. Bank begins offering USDA loans Home Loan Investment Bank surpasses $10 billion in mortgage originations Home Loan Investment Bank is recognized as one of Freddie Mac's top 150 lenders in the country Home Loan Investment Bank website revamped to better serve customer needs 17 . and also reactivates SBA Lending Program Assets exceed $250 million.
home improvement loans. The Home loan sector in India is the pivotal role player in the growth of the real estate scenario in India. transactions related to buying and selling of residential properties increased considerably and was much higher as compared to previous years. With tax incentives given to the housing finance sector in the annual budget of 2001. Once you decide the maximum amount that you can put into the property. Any Resident or Non-resident individual who is planning to buy a house in India can apply for a Home loan. • • For construction or buying a new home For home repairs and renovations 18 . . buyers are now more 'endusers' rather than investors.Since the new class of buyers are relatively younger set of customers who are more aware about legal documentation and approvals. Home loans are made available by financial institutions to both Indian and NRI customers at floating and fixed rate of interest and also at attractive EMI options. the property market in India undergoes transformation to align itself with global standards with an increased emphasis on quality & cost control and documentation methods. If you have decided to buy a property in the near future you can even apply for a loan before you select your property.Home Loans in India Housing loan is the finance taken for buying/modifying a real estate property. the real estate sector has the maximum propensity to generate income and demand for materials. In the current economy of India. all Housing Finance Institutions let you know how much you are eligible for and this helps you plan out your budget. equipment and services. Home Loans. It can be said that housing finance companies were formed for co-existing with buyer's requirements of housing loans for investing in properties. Home extension loans. NRI loans and home equity loans fall under the category of housing loans.
The experience and financial standing of the builders is taken into account before the loan is granted which is to be returned with the minimum installments. Free accident insurance & property insurance Waiving of pre-payment penalty Waiving of processing fee • • • There are a few documents which the finance companies require for setting up criteria for eligibility of Home loans. HFCs are offering incentives to attract investors like • Some companies sanction the housing loan without requiring you to identify property as a pre-requisite for eligibility. Salaried Employee Self-employed The latest salary slip showing statutory deductions Form 16 (showing tax deducted at source by employer) Computation of income for the previous two years. Commercial property loans are also available and different financial institutions in India provide commercial loans at different rates and different upper limits. Today. certified by a Chartered Accountant 19 . the amount of money that a city dweller spends on rent is roughly the same.• • For purchase of plots Against mortgage of property No tax benefits are available for NRI customers unless you file returns and thereby become eligible to avail of the tax benefits. promoters and real estate developers. but the entry of public sector banks into the housing finance business marked the beginning of the first round of interest rate cuts. And this reduction in interest rates has enhanced the borrowing power of customers. certified by a Chartered Accountant Profit & Loss Account and Balance Sheet for the previous two years. Earlier the home loan sector in India was solely dependent on nationalized and public sector banks. Besides home loans. Real estate loans are available to builders. Moreover. or only slightly less than the amount he pays as an EMI on a housing loan.
Proof of age (birth certificate/voter Proof of age (birth certificate/voter identity card/passport/school-leaving identity card/passport/school-leaving certificate/valid driving license certificate/valid driving license) Proof of residence (phone bill/electricity bill/ration card).75% 11. Allahabad Bank. Can Fin Homes. Major Home Loan Providers Banks & Public Sector Housing Finance Companies State Bank of India. The interest on housing loans in India is usually calculated either on monthly reducing or yearly reducing balance basis. ICICI Ltd.25 % Processing Charges 0. Corporation Bank. This has resulted in 13 new institutions foraying into the housing finance business in the last three years.25% 12. LIC.50% of loan amount - 20 . Bank of Maharashtra. Dena Bank. Cent bank Home Finance.25 % Rate of Interest Floating 10. This has not only given a competitive edge to the finance companies to provide attractive options to customers but has also contributed to the increased investments in the real estate sector. etc. etc Financial Institutions Home Loan Interest Rates Interest Rates for Home Loans are undoubtedly the most important parameter to factor into your calculations. M&MFL. Standard CharteredGrindlays. Bank of Baroda Housing Finance. Central Bank. BOB Housing Finance. SBI Home Finance. HDFC. Proof of residence (phone bill/electricity bill/ration card). Bank Of Baroda. Comparative Chart on Home Loan Interest Rates Financial Institutions State Bank of India Tenure (in years) Up to 5 years 5-20 years Rate of Interest Fixed 12. IDBI Bank. LIC Housing Finance. HUDCO. HSBC. GIC Housing Finance. The realty boom in India has given a new dimension to the finance sector in India both in Home Loans and Home Insurance segments. And in most cases is the decisive factor for an investor to narrow down on a certain Housing Finance Company's home loan offer.
Banks and some HFCs.5 % of loan amount (Max. Rs. on the other hand follow the daily or monthly reducing-balance method. even if the rates of interest drop in the market while the floating rate interest fluctuates according to the market lending rate.25% of loan amount Standard Chartered Bank Canfin Homes Ltd IndusInd Bank 0-20 years 0-20 years 0-20 years Saraswat Bank HUDCO 0-20 years 11 0-20 years 10 % (< 10 lacs) 10. the EMI for the monthly reducing system is effectively lesser than the yearly reducing system of calculating interest.25% 9.5% (>10 lacs) 0.00% - 11. Some HFC's have fixed rate of interest which means that the interest rates remain unchanged for the entire duration the loan.25 % of loan amount 1. Thus.5% 9. Moreover.75% 10.7%.25% 11. Thereby.11% 9. Rs.5% (>10 lacs) Most HFCs follow the yearly reducing-balance method.5%.5% 10.5% 9.5% 1% of loan amount 0.25% HDFC Citibank Canara Bank 0-20 years 0-20 years Up to 5 years Above 5 yrs up to 10 yrs 10.75% 9. 21 .ICICI LIC Housing Finance Ltd.5 % (for <20 Lakhs) 13% (for >20 9.5 per cent of the amount (max. The effective interest rate is thus higher than the quoted interest rate by around 0. 5000) 1% of the loan amount +applicable service taxes and cess) 1% of loan amount 1% of loan amount - 0-20 years 13. which accounts for your principal repayments only at the end of their financial year. This basically means that you do not benefit. by which the principal on which you pay interest reduces every month as you pay your EMI resulting in a lower interest burden.250) 1. M&MFL 0-20 years 0-20 years 10.00% 10.Fixed rate and Floating rate interests. you pay interest on the principal that you have already returned to the HFC.75% 9.25 % (for <20 Lakhs) 12% (for >20 Lakhs) 10 9% (< 10 lacs) 9. there are two kinds of interest rates for housing finance in India .25%-12% 10.
longer the tenure. the more you pay in interest. with a few lenders offering tenure of 20 years or more (ICICI has recently launched a 30 year loan). Generally. 22 . Repayment is in the form of EMI's (equated monthly installments) so.The interest rates may vary from institutions to institutions and generally range from about 12. And the availability of Home Loans offered is as varied as their requirements. The Housing Finance Companies (HFCs) now offer individuals with various alternatives to choose from while buying a home loan. Types of Home Loans A person seeking investments for house or a property opts for Home Loans for a variety of purposes ranging from construction to renovation. but your monthly payment will be less. the maximum tenure of home loans is 15 years.5% to around 16%. • • • • • • • • • • • Home Purchase Loans Home Construction Loans Home Improvement Loans Home Extension Loans Home Conversion Loans Land Purchase Loans Stamp Duty Loans Bridge Loans Balance Transfer Loans Refinance Loans Loans to NRIs Home Purchase Loans: This is the basic home loan for the purchase of a new home.
The bridge loan helps finance the new home. eliminating the need for pre-payment of the previous loan. Through a home conversion loan. Balance-Transfer Loans: Balance Transfer is the transfer of the balance of an existing home loan that you availed at a higher rate of interest (ROI) to either the same HFC or another HFC at the current ROI a lower rate of interest. the existing loan is transferred to the new home including the extra amount required. Re-finance Loans: 23 .Home Conversion Loans: This is available for those who have financed the present home with a home loan and wish to purchase and move to another home for which some extra funds are required. Bridge Loans: Bridge Loans are designed for people who wish to sell the existing home and purchase another. until a buyer is found for the old home. Land Purchase Loans: This loan is available for purchase of land for both home construction or investment purposes Stamp Duty Loans: This loan is sanctioned to pay the stamp duty amount that needs to be paid on the purchase of property.
Refinance loans are taken in case when a loan for your house from a HFI at a particular ROI you have taken drops over the years and you stand to lose. In such cases you may opt to swap your loan. This could be done from either the same HFI or another HFI at the current rates of interest, which is lower.
NRI Home Loans:
This is tailored for the requirements of Non-Resident Indians who wish to build or buy a home or property in India. The HFCs offer attractive housing finance plans for NRI investors with suitable repayment options.
Tax Benefits on Home Loans
As the Indian real estate market makes an upward swing, and investors opt for housing finance or home loans, tax benefits obtained from them is a lucrative option. Customers availing of Home Loans can claim a certain portion of the interest and principal that they pay towards the loan installments for reducing tax liability. Resident Indians are eligible for certain tax benefits on principal and interest components of a loan under the Income Tax Act, 1961. Moreover, an added tax benefits under Sec 80 C on repayment of principal amount up to Rs. 1,00,000 p.a. can be availed that can further reduce your tax liability by about Rs. 30,000 p.a. Tax benefits can be claimed on both the principal and interest components of the home loan as per the Income Tax Act, 1961. These deductions are available to assesses, who have taken a loan to either buy or build a house, under Section 24(b). Interest on borrowed capital is deductible up to Rs 150,000 if the following conditions are satisfied:
Capital is borrowed on or after April 1, 1999 for acquiring or constructing a property. The acquisition/construction should be completed within 3 years from the end of the financial year in which capital was borrowed.
The person, extending the loan, certifies that such interest is payable in respect of the amount advanced for acquisition or construction of the house.
A loan for refinance of the principle amount outstanding under an earlier loan
taken for such acquisition or construction. If the conditions stated above are not fulfilled, then the interest on borrowed capital is deductible up to Rs 30,000 though the following conditions have to be satisfied:•
Capital is borrowed before April 1, 1999 for purchase, construction, reconstruction repairs or renewal of a house property. Capital should be borrowed on or after April 1, 1999 for reconstruction, repairs or renewals of a house property.
If the capital is borrowed on or after April 1, 1999, but construction is not completed within 3 years from the end of the year, in which capital is borrowed.
In addition to the above, principal repayment of the loan/capital borrowed is eligible for a deduction of up to Rs 100,000 under Section 80C from assessment year 2006-07.
Home Loan Providers in India
Real estate in India is currently one of the hottest investments options in Asia. A recent survey of the real estate scenario acknowledge the Indian metropolis of Mumbai, Bangalore and New Delhi as the top three investors' choices for real estate investment in Asia. But there were concerns mainly related to the availability of necessary funds for investment and in the more recent times, the boom in the real estate market opened the doors for a host of realty funds from financial institutions. Prior to five years, the real estate segment in India was neither organized nor were there too many large institutions in the construction industry. But now with an organized finance sector and with the increase in transparency levels, it has become easier to create financing vehicles. The decrease in housing loan interest rates and an increase of disposable income has contributed largely to an increased demand in the residential segment. In spite of a rise in home loans interest rates and qualitative sanctions being levied by the RBI on banks, buying interest has not waned because home loans are still cheaper than ten years ago. The retail markets are also undergoing a defining change with the introduction of larger retailing formats. The financial institutions also wasted no opportunity in tapping the fund requirement catering to the inflow of potential buyers in the retail sector. While most
funds were initially floated by financial Institutions or banks such as HDFC, ICICI Bank and IDBI Bank to name a few, real estate developers like DLF Universal and even retailers such as Pantaloons Retails (India) have now entered the real estate sector for creating more retail facilities and have been hugely successful. As the realty prices in India skyrockets, housing complexes mushrooming and city landscapes becoming unrecognizable, the growth across all real estate segments and experts estimate that demand will remain steady at the currently high levels because of the improving economic environment and the real estate sector is expected to grow 30% every year. This rising property prices encourage banks and financial institutions to lend more with the increase in collateral values. Although the home loan providers have hiked their rates twice in less than three months, home loans continue to be nearly 45 per cent cheaper than what they were in early 2001. Because if statistics are referred to, the interest rates which now range between 9-10 per cent, are still much lower than what they were ten years ago, at 16-17 per cent.
Cars by Price Range
Maruti 800, Maruti Alto, Omni Reva Tata Nano Ambassador Chevrolet Aveo U-VA, Chevrolet Spark, Chevrolet Opel Corsa Fiat Palio, Fiesta, Ford Icon Hyundai Santro, Hyundai i10, Hyundai Getz Maruti Zen, Maruti Wagon R, Maruti Versa, Maruti
Under Rs. 3Lakhs
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Maruti Suzuki Swift. Mitsubishi Cedia. Mercedes C Class New Skoda Superb New Opel Vectra Skoda Laura 27 Rs. Honda Accord Maruti Suzuki Grand Vitara. Toyota Qualis. Hyundai i20. Fiat Adventure. Honda Civic Hybrid. Hyundai Verna. Mahindra Bolero Toyota Innova. 5-10Lakhs • • • • • Rs. Maruti Suzuki Swift Dzire. Tata Safari Skoda Fabia Chevrolet Forester Ford Mondeo & Ford Endeavour. Honda Jazz New Maruti Baleno. 10-15Lakhs • • • • • • • Rs. Honda CRV 2008. Maruti Suzuki A-Star. Tata Indigo CS Chevrolet Swing. Ford Fusion Hyundai Accent. Honda City ZX. Mitsubishi Pajero. Mitsubishi Lancer. Chevrolet Optra Magnum Fiat Linea. Hyundai Sonata Embera. Hyundai Elantra. Toyota Corolla Altis Volkswagen Jetta Audi A4 Chevrolet Captiva Honda CR-V. Mahindra Scorpio. Fiat Grande Punto. Tata Sumo Grande. Tata Sumo Victa.Esteem. Indigo Marina Tata Indica. Maruti Suzuki Ritz New. 15-30Lakh • • • • . Chevrolet Aveo. Chevrolet Tavera. Maruti Gypsy. Maruti Suzuki Zen Estilo. Maruti Suzuki Sx4. Mahindra Logan • • • • • Indigo XL. Ford Focus Honda Civic Skoda Octavia & Combi Toyota Corolla.
28 . Volvo S80 AUDI R8 Bentley Arnage. AUDI Q7 BMW X5. Ford Endeavour Thunder Plus. Bentley Azure Maybach Rolls Royce Phantom • • • • Rs. Auto Finance Auto Finance Companies are aggressively marketing their product by offering innovative and alluring offers to the customers. Volkswagen Jetta Audi A6. SL & CLS-Class Porsche Boxster. SLK. 1 Crore • • . A8 & Audi TT. Cayenne. 911 Carrera & Cayman S Toyota Prado Volvo Xc90. Toyota Fortuner New Volkswagen Passat . S Class. 30-90Lakhs • • • • • Above Rs. Mercedes Benz S-Class.• Toyota Camry. Mercedes E Class. Bentley Continental GT & Flying Spur. Terracan & Tucson. 5 Series & 7 Series Mitsubishi Montero.
Features of Auto Finance Upton 90% is financed. In India leading banks and nonbanking finance companies (NBFCs) offers auto finance.Buoyant & robust economy and huge disposable incomes of youths have made way to easy auto finance by banks and non-banking finance companies. Getting auto loans has become quite easy. All these financial agencies together has created purchasing power of customers. Most NBFCs have also arranged tie-ups with dealers and manufacturers. parallel to other auto loan companies. Multi-national companies (MNCs) have also entered the finance market. The finance agencies has come of age and companies are aggressively marketing different auto loan schemes by offering innovative and alluring offers to the customers. • • • • • • • • ICICI Bank Bank of Baroda HDFC Bank State Bank of India Bank of India Mahindra Finance Union Bank of India Standard Chartered Auto finance is now available from both. The following are the names of leading banks and other institutions that provide auto finance. The growing auto market of India has opened doors for number of Auto Finance Companies to provide hassle free auto finance. The market is very competitive and these finance institutions has come out with innovative offers for customers. A large number of financing agencies are entering the Indian auto finance market. banks and non-banking finance companies (NBFCs). to grab their share. 29 .
Documents Required • • • • Bank statement for the last 6 months Two passport size photographs For salaried. In case of used vehicles. For self employed individuals and professionals. Financing a dream car has become very simple and easy method. • Generally public sector banks offer lower rate of interest than the non-banking finance companies. latest salary slip and Form 16. The interest is calculated on the basis of compound interest. IT returns for the last two financial years. Features of Car Finance • • Banks pay up to 90% of the cost of the new vehicle. Equated Monthly Installment (EMI) is worked out for repayment. A wide range of flexible and customized financing options for the purchase of both new and second hand cars are available throughout the country. Thanks to multinational companies (MNCs) and other private sector banks. Early settlement of the full amount charges a penalty. The finance period is between 1 to 5 years. CAR FINANCE Research say that 75% of the total vehicles purchased in the last decade were financed/ purchased through auto loans. banks finance up to a maximum of 85% of the value of the car. 30 . All banks and financial institutions are aggressively marketing their products with innovative service offerings and incentives.
Documents Required • • • • • Application Form Photographs Proof of income of last two years Proof of Residence Proof of identity Take Note • • The income of spouse can be clubbed to increase the loan amount. A salaried person can borrow up to 3 times of the annual salary.• • • • • Usually the interest is calculated on a monthly reducing balance. Self employed individuals can borrow up to 6 times of the annual income. The banks offer repayment tenure of 12 to 60 months. Few institutions even offer 7 years repayment period. List of Companies offering Car Finance • • • • • Mahindra Finance Bajaj Auto Finance Kotak Mahindra Primus Sundaram Finance KTDFC 31 . Terms and conditions for prepayment of the amount need to be clarified before agreement • Try to consider taking loan where there is no penalty of prepayment.
HDFC Bank began operations in 1995 with a simple mission: to be a “World Class Indian Bank. large shareholder base and unique Consumer franchise. HDFC has developed significant expertise in retail mortgage loans to different market segments and also has a large corporate client base for its housing related credit facilities. Its outstanding loan portfolio covers well over a million dwelling units. the Corporation has maintained a consistent and healthy growth in its operations to remain the market leader in mortgages. a strong market reputation. as part of the RBI's liberalization of the Indian Banking Industry in 1994. HDFC Bank commenced operations as a Scheduled Commercial Bank in January 1995. with its registered office in Mumbai. HDFC was ideally positioned to promote a bank in the Indian environment. 32 . we are proud to say that we are well on our way towards that goal. HDFC is India’s premier housing finance company and enjoys an impeccable track record in India as well as in international markets.WE UNDERSTAND YOUR WORLD The Housing Development Finance Corporation Limited (HDFC) was amongst the first to receive an 'in principle' approval from the Reserve Bank of India (RBI) to set up a bank in the private sector. Today. With its experience in the financial markets.” We realized that only a single minded focus on product quality and service excellence would help us get there. Since its inception in 1977. The bank was incorporated in August 1994 in the name of 'HDFC Bank Limited'. India.
Jagdish Capoor took over as the bank's Chairman in July 2001. Aditya Puri.MANAGEMENT Mr. Senior banking professionals with substantial experience in India and abroad head various businesses and functions and report to the Managing Director. 2008. has been a professional banker for over 25 years and before joining HDFC Bank in 1994 was heading Citibank's operations in Malaysia. 2007. Mr. March 2006 Citied Branches ATMs 228 535 1323 March 2007 316 684 1605 March 2008 327 761 1977 33 . administration. BRANCHES As of March 31. the bank believes that its people are a significant competitive strength. Senior executives representing HDFC are also on the Board.605 ATMs in 320 cities as of March 31. Given the professional expertise of the management team and the overall focus on recruiting and retaining the best talent in the industry. The Bank's Board of Directors is composed of eminent individuals with a wealth of experience in public policy. industry and commercial banking. Capoor was a Deputy Governor of the Reserve Bank of India. Mr. Prior to this. the Bank’s distribution network was at 761Branches and 1977 ATMs in 327 cities as against 684 branches and 1. The Managing Director.
PERSONAL BANKING Loan Product • • • • • • • • • • • • • • • Auto Loan Loan Against Security Loan Against Property Personal loan Credit card 2-wheeler loan Commercial vehicles finance Home loans Retail business banking Tractor loan Working Capital Finance Construction Equipment Finance Health Care Finance Education Loan Gold Loan Cards • • • • • Deposit Product Saving a/c Current a/c Fixed deposit Demat a/c Safe Deposit Lockers Investment & Insurance • • • • • • • Mutual Fund Bonds Knowledge Centre Insurance General and Health Insurance Equity and Derivatives Mudra Gold Bar Payment Services Access To Bank • Net Banking • One View • InstaAlert Mobile Banking • ATM • Phone Banking • Email Statements • Branch Network • • • Credit Card Debit Card Prepaid Card -------------------------------Forex Services -------------------------------• Product & Services • Trade Services • Forex service Branch Locater • RBI Guidelines • • • • • • • • • • Net Safe Merchant Prepaid Refill Bill pay Visa Bill pay InstaPay Direct Pay Visa Money Transfer e–Monies Electronic Funds Transfer Online Payment of Direct Tax 34 .
WHOLESALE BANKING Corporate • • • • Funded Services Non Funded Services Value Added Services Internet Banking • • • • • Small and Medium Enterprises Funded Services Non Funded Services Specialized Services Value added services Internet Banking Financial Institutions and Trusts BANKS • Clearing Sub-Membership • RTGS – sub membership • Fund Transfer • ATM Tie-ups • Corporate Salary a/c • Tax Collection Financial Institutions Mutual Funds Stock Brokers Insurance Companies Commodities Business Trusts Investment & Insurances • • • • Mutual Funds Insurance Private Banking Portfolio Investment Scheme • • • • Loans Home Loans Loans Against Securities Loans Against Deposits Gold Credit Card 35 .
trucks. Tempos. The choice is entirely yours. Company provides funding for all models of Telco. Ashok Leyland. tippers). Volvo etc.Loans are extended for the purchase of: Commercial Vehicles . Bajaj Tempo. TYPES OF LOAN New Vehicles Used Vehicle / Refinance Balance Transfer 36 .Loans for commercial vehicles (this includes buses. Eicher. HCVs (heavy commercial vehicles). Swaraj Mazda. LCVs (light commercial vehicles. MCVs (medium commercial vehicles) and three wheelers.
What's more. o Up to 48 months tenor. o Simpler documentation. Single owner Good average and within your budget HDFC Bank's Used Car Loan will put you in the driver's seat. HDFC Bank also helps you select good quality used cars and even value them. o Customized EMI structure. o Quick processing. Features & Benefits 37 .ADVANTAGES o Up to 100% financing.
then you can get an additional loan to the extent of your existing loan amount at attractive rate of interest. If you have had a Preferred Account or a Corporate Salary Account with HDFC Bank for more than six months. Borrow up to 80% of the value of the car. Flexible repayment options. * Age of Car at loan maturity should not cross 10 years subject to maximum loan tenure of 60 months.To Fastrack your loan. Additional loan on existing loan . Available for almost all car models at attractive interest rates. Attractive car loan plans .Choose any car manufactured in India within a certain age*. you can get fast approvals on your loans with minimal documentation. Customer Privileges Special benefits for HDFC Bank account holders. **This would also vary with higher loan value 38 . ranging from 12 to 60 months. Repay with easy EMIs. Borrow up to 3 times your annual salary (for salaried professionals) and 6 times your annual income (for self employed professionals). just choose the plan that is right for you.If you are a existing HDFC Bank Auto loan customer with a clear track record of 12 months or more.
Small car Family car or sheer luxury on wheels Features & Benefits • • • • Covers the widest range of cars and multi-utility vehicles in India. Borrow up to 3 times your annual salary (for salaried professionals) and 6 times your annual income (for self employed professionals). Repay with easy EMIs.within 48 hours. just choose the plan that is right for you. Avail 100% finance on your favorite car. 39 . Flexible repayment options. ranging from 12 to 84 months. Attractive car loan plans .To Fastrack your loan. • • • • • Speedy processing . Attractive Interest rates Hassle-free documentation.
you can get fast approvals on your loans with minimal documentation. Fee & Charges for New Car loans • • Description of charges Cheque bouncing charges • • • New Car Loans Rs. we have special rates for you.• Customer Privileges • If you are an HDFC Bank account holder. 450 6 % of POS for preclosures within 1 year from 1st EMI 5% of POS for preclosures within 13-24 months from 1st EMI 3% of POS for preclosures post 24 months from 1st EMI No foreclosure allowed within 6 months from date of availing the car loan At actual 2% per month • FC Charges • • Stamp Duty Late Payment Penalty • • 40 . • If you have had a Preferred Account or a Corporate Salary Account with HDFC Bank for more than six months.
14 billion for the nine months ended December 31.3000/> 4Lakhs :Rs. ICICI Bank offers a 41 .5Lakhs : Rs.10 billion (US$ 77 billion) at December 31.per case • • • • • • • • • Overview ICICI Bank is India's second-largest bank with total assets of Rs.2000/2. 3500/Rs 2000 Rs 500/Rs 1000/Rs 450/Rs 500/Rs 500/At actual Rs 500/Rs 500/. 30. 2008. 3. Repossession & Incidental charges Duplicate no due certificate / NOC Transaction fees • Up to 2.644 ATMs in India and presence in 18 countries.744. 2008 and profit after tax Rs.438 branches and about 4. The Bank has a network of 1.• • • • • • • • • • Processing fees Agri /PSL Charges Cheque swapping charges Loan cancellation / rebooking charges Bounce Cheque Charges Statement Charges (per statement) Duplicate Repayment Schedule charges Legal.51 to 4Lakhs : Rs.
China. ICICI Bank's stock was listed on both BSE and NSE. 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). both directly and through a number of subsidiaries and affiliates like ICICI Bank. Bahrain. life and non-life insurance. The Bank currently has subsidiaries in the United Kingdom. 480. The principal objective was to create a development financial institution for providing medium-term and long-term project financing to Indian businesses. the Government of India and representatives of Indian industry. 2002. Our UK subsidiary has established branches in Belgium and Germany. Sri Lanka.ICICI was formed in 1955 at the initiative of the World Bank. The bank is offering various services in: • • • Personal banking NRI banking Corporate banking 42 . 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. Hong Kong. Bangladesh. Russia and Canada. venture capital and asset management.00 billion (US$ 10. Qatar and Dubai International Finance Centre and representative offices in United Arab Emirates. Singapore. Malaysia and Indonesia.8 billion). with market capitalization of about Rs. Thailand. branches in United States. South Africa. In the 1990s. In 1999. ranked third amongst all the companies listed on the Indian stock exchanges in June 2006. ICICI ICICI Bank.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.
Chanda Kochhar. Crore) 515 18029 880 11 50487 Financial Highlights Fiscal Year End: Revenue (2008): Revenue Growth (1 yr): Employees (2008): Employee Growth (1 yr): March 15073. Lakhs) Profit per Employee( in Rs. Anupam Puri 43 .ICICI Bank Rank .4 2004-05 2005-06 563 25479 905 10 71547 No. Narendra Murkumbi Mr. Lakhs) Investments( in Rs.10% 84. Deputy Managing Director Mr.40% COMPANY INFORMATION BOARD OF DIRECTORS Ms. Mittal Mr. of Offices No.134 36. Sridar Iyengar Mr. of Employees Business per Employee(in Rs. Lakshmi N.30 M 54.
S. Sinha Prof. Prem Watsa CHAIRMAN Narayanan vaghul CFO AND TREASURER N. Marti G.M. Kannan MAJOR COMPITITORS HSBC Holding Standard Charted State Bank Of India HDFC Bank 44 .S. Sharma Mr. V. Subramanian Mr. P. T. Vijayan Mr.K. Mr. Vinod Rai Mr. M.
ICICI AMC ICICI Securities ICICI Lombard ICICI Venture Capital 45 .ICICI GROUP ICICI Bank ICICI Home Finance ICICI Infotech ICICI Pru Life Insurance Pru .
• Faster repayment as principal repayment in on monthly rest. For resident Indians the following are the eligibility norms:• • You must be at least 21 years of age when the loan is sanctioned. It can be availed at the Floating rate of Interest or at the fixed rate of Interest or at the combination of both Fixed & Floating rates. The loan must terminate before or when you turn 65 years of age or before retirement. One can avail of a loan up to 80% of Cost of Property.Resident Indian who are Salaried. Conveniently pay off the loan over a period of up to 25 years. • You must be employed or self-employed with a regular source of income. 46 . whichever is earlier. ICICI Bank offers easy home • • • • loans for First Purchase in ready construction Under construction property Purchase in re-sale Self construction .extension of existing living space The following are the features of ICICI Bank Home Loans • • • • Home loan amount can be chosen to suit specific needs.HOME LOAN Home Loans are provided to individuals to own a residential property. Eligibility Norms for Home Loans Home Loans can be availed by Resident Indian whether Salaried or Self-Employed and also by Non.
1.5 Lakhs per annum Firm should have a minimum PAT (profit after tax) of Rs. 1. Car Loans Salaried Individual The applicant should be at least 21 years old at time of application. and below 59 years of age at time of maturity of the loan Private / SelfPartnership Public Ltd Employed Co Firm Individual Any Proprietor. 1.25 Lakhs Minimum PAT (profit after tax) of Rs. professional or director above 21 years of age but below 64 at the time of the loan's maturity Gross annual income of at least Rs. 1. partner.25 Lakhs 47 . you can avail of car loans as per your needs.25 Lakhs per annum Limited companies should have been in existence for at least 2 years Particulars Age Criteria - Income Criteria Gross annual salary of at least Rs.AUTO LOANS ICICI AUTO LOANS Eligibility Terms for Your Car Loan With ICICI Bank Car Loans.
Self-Employed individuals: Income Tax Returns of 2 previous financial years. Other documents: Partnership Firms: Partnership deed and Letter signed by all partners authorizing one partner to execute the required Car Loan. Signature Proof and Address Proofs as per ICICI Bank norms (Our representative will help you choose suitable documents). Our representative will help you with the formats of documents and the information required. 48 . Form 16 of the previous Financial Year or latest Income Tax Returns. Societies and Companies: Resolution by Board of Directors (or such managing body) & Memorandum & Articles of Association (or Society/Trust deed).Documents required for Income proof: Salaried individuals – Latest Salary slip or salary certificate. Partnership Firms. Societies & Companies : Income Tax Returns of 2 previous financial years along with Profit & Loss Account Statements and Balance Sheets of both years. Documents supporting customer information : Identity Proof.
Payments through cash or credit cards are not accepted. • • •• • • • • You can make the Payments through post-dated cheques (PDCs) Repayment option through Direct Debit Mandates is also available or all ICICI Bank account holders. • • The repayment due dates for the loan are 1 st and 15thof every month and would depend on the date of disbursement.1.Car Loans • • • Repayment tenure ranges from 1 year to 6 years for new car loans. We charge Rs. You may change the PDC's in case your Bank Account is changed. • • • • • Note: All charges are subject to Service Tax as applicable Rs. Payment due dates cannot be changed.500/.200/-per bounced cheque. Option of repaying through ECS is also available in select cities.350/. However. Part pre-payment is not allowed. You may change the tenure of the loan before the loan is disbursed. • • • A full pre-payment of the loan is accepted. we would require verification of signatures by new banker. The interest rate & EMI would change accordingly.(Swap Charges) would be charged for exchange of cheques. • A nominal fee of Rs.+ Service Tax & Education Cess • 49 .
including the green shoe option. In October 1996. assets.261504 crore (US59. It has a branch network of over 9000 branches and holds 30 percent of the market share in banking with an aggregate deposit base of about Rs 19. The bank has a network of 66 offices/branches in 29 countries spanning all time zones. and three other business units. SBI has eight business units.6821 crore. the bank successfully floated the first GDR issue of any commercial bank in the country and raised USD 369 million. credit division to monitor the overall credit. State Bank of India was constituted through an act of Parliament in 1955. branches and employees. namely finance. associate banks division for looking after the working of these banks. The SBI`s international presence is supplemented by a group of overseas 50 .121mm) and a total balance sheet size of Rs. State Bank of India (SBI) is the largest commercial bank in India in terms of profits. deposits. international banking and domestic banking for concentrating on core areas. an aggregate deposit base of nearly Rs196821 crore (US$45. Today. namely corporate banking. Together with its 7 Associate Banks.OVERVIEW The State Bank of India was established in 1806. SBI is the only bank in India to be ranked among the top 100 banks in the world and among the top 20 banks in Asia in the annual survey by The Banker.950 mm). corporate development. it has a branch network of over 9000 branches. and inspection for inhouse work. SBI commands about 30% of the market share in banking.
559. Keeping in view the exponential growth achieved in self help group (SHG) financing in the recent past and good repayments (over 90%) under the scheme. when compared with the prior year period.784. while total income for the quarter rose 38.000 SHGs by the end of March 2008. SBI HOME LOANS now offers Interest Rates concessions on GREEN HOMES in accordance with SBI's commitment to Environment protection.04 a share during the quarter. Best Practices followed in SBI mentioned below will tell you why it makes sense to do business with State Bank of India.and NRI branches in India and correspondent links with over 522 leading banks of the world.35% to Rs 212. Place SBI branch of your choice will service your loan account. registering 13.00 million.34% to Rs 180. During the quarter.086.59% growth over previous year period.20 million from Rs 18. the profit of the company rose 37. the bank has decided to credit link 1. HOME LOAN THE MOST PREFERRED HOME LOAN PROVIDER" voted in AWAAZ Consumer Awards along with the MOST PREFERRED BANK AWARD in a survey conducted by TV 18 in association with AC Nielsen-ORG Marg in 21 cities across India. SBI`s offshore joint ventures and subsidiaries enhance its global stature.303. It reported earnings of Rs 39. Best practices followed in SBI People dealing with End to End service by Permanent employees of SBI who are you accountable to you. You 51 .40 million.40 million in the same quarter last year. Financials The bank reported a substantial rise in standalone net profit for the quarter ended December 2008.000. Interest earned for the quarter jumped 42.03% to Rs 24. SBI Home Loans come to you on the solid foundation of trust and transparency built in the tradition of State Bank of India.
” 11. Option to avail Home Loan as a Term Loan or as an Overdraft facility to save on interest and maximize gains (see SBI MaxGain in the following sections) 4.Provision to club depreciation. 3. 12. Teachers. 9. All the features of our product. Special scheme to grant loans to finance Earnest Money Deposits to be paid to Urban Development Authority/ Housing Board. including interest rates. 2. 7. Loan sanctioned within 6 days of submission of required documents. and starts from the date of disbursement. out of bonafide savings or windfall gains for which evidence is produced.can always meet our employees face to face. Optional Group Insurance from SBI Life at concessional premium (Upfront premium financed as part of project cost) 10. etc. Provision to finance cost of furnishing and consumer durables as part of project cost. in respect of allotment of sites/ house/ flat 52 . Repayment permitted up to 70 years of age 8. Employees.Option to club income of your spouse and children to compute eligible loan amount 5. Interest charged on the daily reducing balance. 6. are in the public domain. Employees in Public Sector Oil Companies. “Plus’ schemes which offer attractive packages with concessional Interest rates to Govt. Costs hidden in fine No hidden costs print Transparency Complete transparency.Interest calculated on daily reducing balance basis. Provision for on the spot "In principle" approval.40 Lac. expected rent accruals from property proposed to compute eligible loan amount. No penalty for prepayments made. Price Prepayment charges Complete transparency.Free personal accident insurance cover up to Rs. Unique features: 1.
provided they have a steady income and his/ her salary account is maintained with SBI. Takeover of an existing loan from other Banks/ Housing Finance Companies. Availability of sufficient. 5 lacks 50% To enhance loan eligibility you have option to add: 1. i. Income of your spouse/ your son/ daughter living with you. depending on repayment capacity as % of NMI as under – Net Annual Income Up to Rs.2 lacks Above Rs. 53 .13.2 lacks to Rs.e. Eligibility Minimum age 18 years as on the date of sanction Maximum age limit for a Home Loan borrower is fixed at 70 years. Loan Amount 40 to 60 times of NMI. regular and continuous source of income for servicing the loan repayment. the age by which the loan should be fully repaid. 5 lacks EMI/NMI Ratio 40% 55% Above Rs.Option to avail loan at the place of employment or at the place of construction Purpose Purchase/ Construction of House/ Flat Purchase of a plot of land for construction of House Extension/ repair/ renovation/ alteration of an existing House/ Flat Purchase of Furnishings and Consumer Durables as a part of the project cost.
a.30 lacks and up to Rs.30 Lacks. 01.75 lacks.30 Lacks Loan amount Loan Tenure -> Up to 5 Yrs Loans up to Linkage with SBAR in the Rs.25% p.00% below 1. Regular income from all sources.f.01. 0.75% below SBAR 0.25% Above 5 Yrs & up to 15 Yrs 2.00 below SBAR 0.75% p.01.75% below 1.30 lacks for loan document new loans sanctioned on or Special product level after 01.25% Above 15 Yrs & up to 25 Yrs 1.f.2009) INTEREST Interest Rates w.00% p.2009 a) Floating Rates linked to SBAR SBAR w. Loans (i. 01.e. 20% for loans above Rs. 01.01.30 lacks Linkage with 2. 3. 4. Expected rent accruals (less taxes. subject to some conditions.2009 discount which may be withdrawn/revised solely at the discretion of the Bank.a.2. 10. Margin Purchase/ Construction of a new House/ Flat/ Plot of land: 20% for loans up to Rs.25% 9.e.75 lacks.75 Lacks Loan Up to 5 Yrs Above 5 Yrs Above 15 Yrs Tenure -> & up to 15 & up to 25 Yrs Yrs Above Rs.25 % p.e.a.25% below SBAR. Effective Rate 2. Sanctioned limits) above Rs. 25% for loans above Rs.) if the house/ flat being purchased is proposed to be rented out.e. Loans (i. 10. Sanctioned limits) up to Rs.e.a. Depreciation.f.30 Lacks and up to Rs.01. cess.2009 = 12. etc.50% below 54 . (w.
a. 11. Above Rs. 01.e.01. 01.75 Lac Margin 20% 20% 25% Processing Fee 0.e.Re-payment Up to 10 Years (w. 30 Lakhs 11.01.2009 SBAR Effective rate SBAR 10.W.a. Loan amount Up to Rs.01.50% of Loan amount with a cap of Rs. 10.2009): Fixed rates (subject to ‘force majeure’ clause and interest rate reset at the end of every two years on the basis of fixed interest rates prevailing at that time) Up to Rs.E.and up to Rs.10.01.25%p.30 Lakhs and up to Rs.75 Lakhs Linkage with 2. 01. In case.a.00% below 1.2009 . such proof is not produced by the borrower.2009 SBAR SBAR SBAR SBAR Effective rate 10.a.000/-(including Service Tax) Pre-closure Penalty No penalty if the loan is preclosed from own savings/windfall gains for which documentary evidence is produced by the customer.75 Lacks w.25% p.F. Loans (i. 13.75 Lakhs Above Rs.50% p. 01.a.75% below 1.00% p.f. Min. c) Loans for deposit of earnest money for allotment of a plot / house / flat (Floating rates only).e. penalty @2% on the amount prepaid in excess of normal EMI dues shall be levied if the loan is preclosed within 3 years from the date of commencement of repayment.25% below w.30 Lakhs Above Rs.75% p.1% above SBAR. 30 Lakhs 12.25% p.a.50% p. SBAR 10.75 Lac Above Rs. 55 .e.a. Sanctioned limits) above Rs.25% p.25% p.a. b) Fixed rates .f.f. SBAR 10.a.
if the property cannot be mortgaged Maximum Repayment Period • • For applicants up to 45 years of age: 25 years For applicants over 45 years of age: 15 years Moratorium Up to 18 months from the date of disbursement of first installment or 2 months after final disbursement in respect of loans for construction of new house/ flat (moratorium period will be included in the maximum repayment period).Security Equitable mortgage of the property Other tangible security of adequate value like NSCs. Documents • • • Completed application form Passport size photograph Proof of Identity – PAN Card/ Voters ID/ Passport/ Driving License 56 . Life Insurance policies etc. Disbursement • • In lump sum direct in favour of the builder/ seller in respect of outright purchase In stages depending upon the actual progress of work in respect of construction of house/ flat etc..
Non encumbrance certificate. A must-take for those who do not want to pay stamp duty for mortgage of their property or go through the hassles of creation of mortgage. 57 . Letter of Allotment.Repayment is highly customized. Agreement of Sale. All you have to do is pledge any financial security that you have and you will get a Home Loan for your dream home.• Proof of Residence – Recent Telephone Bill/ Electricity Bill/ Property tax receipt/ Passport/Voters ID Proof of business address in respect of businessmen/ industrialists Sale Deed. Land/building Tax paid receipt etc. You also have an option to take the loan by way of mortgage of the property and pledge financial securities in lieu of margin money. (as applicable and subject to satisfaction report from our empanelled lawyer) • • • • Copy of approved plan and approval from the Local Body Statement of Bank Account/ Pass Book for last 6 months ‘SBI-Freedom’ Home Loans A revolutionary product designed for customers who are on the lock out for a source of finance for a property they want to invest in without mortgaging the same. giving you the option to repay through regular EMIs or through maturity proceeds of the securities pledged.
there are 295 branches in 25 states and two Union Territories in India and has entered into 430.079 to 336.106. 58 . 36. so too have Loan Assets. It seeks to position itself between the organized banking sector and local money lenders. 2005.310.300 customer contracts. 2005. a leading tractor and UV manufacturer with over 60 years experience in the Indian market. tractors. November 2005). In the three years ended March 31. 2003 to Rs.3 million as of March 31. It is a subsidiary of M&M. During the same period. The strategy is to provide a range of financial products and services to customers through nationwide distribution network. 2004. offering our customers competitive. the cumulative number of customer contracts entered into grew from 161.home and cars with largest network of branches covering these areas (Source: Association of Leasing and Financial Services Companies. 26. to Rs. As of December 31. The Goal of Mahindra Finance is to be the preferred provider of retail financing services in the rural and semi-urban areas of India. which grew from Rs.819. branch network has been expanded from 195 to 255 branches providing services to customers in 25 states and two Union Territories across India.1 million as of March 31.628.7% of Total Assets. 2005 and to Rs.MAHINDRA FINANCE LTD Overview It is India’s leading non-banking finance companies focused on the rural and semiurban sector providing finance for utility vehicles.6 million as of March 31. The geographical reach and market penetration have expanded. 2005. flexible and speedy lending services. 2005. our net NPA constituted 3. As of December 31. 11. 17.7 million as of December 31.702.
000. During the same period the profit after tax increased from Rs. [•]million.7 and had Rs. 2. the “Company” or the “Issuer”) and an Offer for Sale of 10.026.4 million and achieved a profit after tax of Rs. Public Issue of 20. 1992). 10 each for cash at a price of Rs.000 Equity Shares of Rs.7 million at a compound annual growth rate of 36. [•] per Equity Share aggregating Rs. the profit after tax was Rs. As of December 31.000 Major Industry: Financial Sub Industry: Commercial Finance Companies Country: INDIA Employees: 6972 Business Description MAHINDRA FINANCIAL SERVICES LIMITED (Originally incorporated as Maxi Motors Financial Services Limited on January 1. 2005 the total income was Rs.459.000. 610.000 Equity Shares of Rs.8 million to Rs.983. in its first year of operations.0 million. Mahindra Insurance Brokers Limited. In May 2004. 3.000 Equity Shares of Rs.3%. as a supplement to the lending business it started an insurance broking business through our wholly owned subsidiary.Company Profile Snapshot Company Mahindra & Mahindra Financial Services Ltd Profile: Ticker: M&MFIN Exchanges: BOM 2010 Sales: 15. comprising a Fresh Issue of 10. 10 each by Mahindra & Mahindra Financial ServicesLimited (“Mahindra Finance”.963.000. 17.000. 1991 under the Companies Act. MIBL earned an income of Rs 34.5%. 441.3 million. 822. 4. 1956 as a publiclimited company and the name was changed to Mahindra & Mahindra Financial Services Limited on November 3.6 million for Fiscal 2003 to Rs.6 million for Fiscal 2005 at a compound annual growth rate of 28. During Fiscal 2005.047. 10 eachby Mahindra & Mahindra 59 .The total income increased from Rs. Mahindra & Mahindra Financial Services Ltd .1 million of share capital and reserves. 4.
our loans to over 900.26% of the fully diluted post issue paid-up capital of the Company. Mahindra Finance – About MMFSL Mahindra and Mahindra Financial Services Limited is one of India’s leading nonbanking finance companies. Ltd. [•] PER EQUITY SHARE OF FACE VALUE Rs. Mahindra Rural Housing Finance Ltd. Through a vast network of branches. MMFSL’s rural financing is considered as the cornerstone of poverty reduction.000 customers 60 . The Company provides loans for utility vehicles. commercial vehicles and tractors.Limited (“M&M”) and certain other shareholders of the Company (together with M&M the “SellingShareholders”).. tractors. The Issue willconstitute 23. if a customer has a four wheeler that is not more than 10 years old nor mortgaged/hypothecated to any bank or financier. rural development and inclusive growth in many parts of the country. and Mahindra Business & Consulting Services Pvt. commercial vehicles as well as construction equipments. twowheelers. With a majority of our county’s population living in rural India. Also. Its subsidiaries include Mahindra Insurance Brokers Ltd. The Company is a subsidiary of Mahindra & Mahindra Limited (M&M). utility vehicles. Mahindra Finance provides loans against such four wheelers. PRICE BAND: RS. tractors and cars. 10 Mahindra & Mahindra Financial Services Limited (MMFSL) is an India-based. we provide personalized finance for the widest range of utility vehicles. The Fresh Issue and the Offer for Sale are jointly referred to herein as the Issue (“the Issue”). [•] TO RS. cars. three wheelers. The Company also provides loans for the purchase of used cars. focusing on the rural and semi-urban sector. nonbanking finance company. The Company also offers fixed deposit schemes to clients.
61 . we. Our goal is to be the preferred provider of retail financing services in the rural and semi-urban areas of India. trying to understand the financial needs of rural India and tapping into this vast market of unbounded opportunities. at the Mahindra Group. through both growth and turbulence. We salute the spirit of every Indian living off the land and move ahead. We currently provide employment to over 6200 people who belong to the areas in which we serve. make sure that there’s something that suits everyone’s needs. ensuring that our employees truly understand their customers. Our unique business model is socially inclusive as we help customers who are at the bottom of the income or social pyramids to grow by providing them loans based on their future earning capacities. Vision * Legal Entity – Mahindra & Mahindra Financial Services Limited With an extensive range of products and services. Since 1945. we at Mahindra Finance. while our strategy is o provide a range of financial products and services to our customers through our nationwide distribution network. have remained and will continue to remain partners in the progress of rural India. It is also our continuous endeavor to develop skill sets at the local level.belonging to the low income groups have proved to be a catalyst in helping rural India surge ahead in a big way. Our products and services are considered instrumental in the rapid development of rural as well as semi-urban India.
It has entered into more than 600. a subsidiary of MMFSL. Together. Mahindra Insurance Brokers. we make sure that our customers’ basic need of shelter is met for expediently. we will finance the construction cost of the house or the construction cost plus the purchase value of the land. provides cost-effective and flexible home loans to a wide base of customers in rural and semi-urban India. tractors and cars in the rural and semi-urban sector. Commercial. Personal. purchase. extension and improvement. Mahindra Finance currently has the largest network of over 436 branches . a wholly owned subsidiary of Mahindra Finance. Home Loans available for: Home Construction: Upon a land you have purchased or are planning to purchase.Finance is a major impetus for the growth of automotive products and this led to the Group’s foray into financial services through Mahindra Finance and its subsidiary. 62 . Under the Non-life Insurance category. Industrial. a cluster of these companies forms the Trade and Financial Services Sector of the Mahindra Group. 21000crore since inception. Providing loans for home construction. Social and Liability products are available.000 customer contracts and has disbursements of around Rs. It provides direct insurance broking for retail and corporate customers with a wide and comprehensive range of plans for Life and Non-life Insurance segments. is one of the few insurance broking companies in to receive the ISO 9001:2000 Certification for Quality Management Systems. Mahindra & Mahindra Financial Services Ltd (Mahindra Finance) is one of 's leading non-banking finance companies focused on providing finance for utility vehicles. Mahindra Rural Housing Finance.
Home Improvement: For all expenditures related to the refurbishment of your house. our home loans will be made available. tourism. etc. or even a flat.. What will NOT be financed: • • • Temporary structures or any structure not having the requisite approvals Loans for commercial properties Loans against property i. Mahindra embarked on its journey in 1945 by assembling the Willys Jeep in India and is now a US $7.1 billion Indian multinational.000 people across the globe and enjoys a leadership position in utility vehicles.e. This could be a bungalow. tractors and information technology. infrastructure development. with valid building approvals. It has been recently set up with an objective of meeting the housing finance needs of the rural/semi urban customers across the country. with a significant and growing presence in financial services. wherein a person owns a house and is mortgaging it to raise finance for some other use Home Extension: If you’re planning to increase the floor or ceiling space or are planning to add rooms to your house. The property being financed could be ready for occupation. 63 .Home Purchase: Our finances are also available for the purchase of your permanent house. Mahindra Rural Housing Finance Ltd (MRHFL) is a wholly owned subsidiary of Mahindra & Mahindra Financial Services (MMFSL). It employs over 1. The Mahindra Group today is an embodiment of global excellence and enjoys a strong corporate brand image. trade and logistics.00. our home loans will be made available. such as changing the flooring. row house etc. under construction or could even be a second sale.
Mahindra is also one of the few Indian companies to receive an A+ GRI checked rating for its first Sustainability Report for the year 2007-08 and has also received the A+ GRI rating for the year 2008. Satyam Computer Services. The company is now known as Mahindra Satyam.Our Vision: The Mahindra Group expanded its IT portfolio when Tech Mahindra acquired the leading global business and information technology services company. 64 .09.
Rao Designation Chairman Vice Chairman Managing Director Director Director Director Director Director Director Products 65 STRENGTHS . G. Board of Directors Mr. Bharat N. Piyush Mankad Mrs. provides cost effective and flexible home loans to a wide base of customers and semi-urban India. Doshi Mr. Loans are provided for home construction. a subsidiary of MMFSL. M. Ramesh Iyer Mr. Dhananjay Mungale Dr. N. U. Bhide Mr. M. Y. Phadke Mr. Pawan Kumar Goenka Mr. Rama Bijapurkar Mr.Home Loans: Mahindra Rural Housing Finance. purchase. B. extension and improvement.
Loan Documentation Loan Application Form duly filled by the applicant. With CC Copy Banker’s Verification Employer Certificate/ID School/College Leaving Certificate Copy of IP paid to Bank which cleared Age Address Property Identity Signaturetity Ownership 66 . The following is the list of acceptable proofs of documents : Document Passport Copy Photo Driving License with DOB Voters ID Card PAN Card Photo Ration Card With DOB Electricity Bill Telephone Bill Credit Card St.All documents satisfying the KYC Norms to be taken on record mentioned here under Signature Verification. Agreement for Loan and other relevant legal documents.
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