idbi A PROJECT REPORT ON

Housing Loan: A Comparative Study

Submitted in partial fulfillment of the requirement of Bachelor of Business Administration

idbi Certificate
This is to certify that Mr.DEEPAK PARWANI has proceeded under my supervision his research project report on Housing Loan: A Comparative Study.

The work embodied in this report is original and is of the standard expected of an BBA student and has not been submitted in part or full to this or any other university for the award of any degree diploma he has completed all requirements of guidelines for project report and the work is fit for evaluation.

idbi

UNDERTAKING

I hereby declare that total work of this project entitled Housing Loan: A
Comparative Study.

. In Investmentpoint.com is an original work of mine is done during the month May-June as part of Summer training under the guidance of Mr VIRENDER GUJAR.

To the best of my knowledge and beliefs the facts mentioned in the report are true.

DEEPAK PARWANI BBA PART III

idbi

ACKNOWLEDGEMENT

I express my sincerest gratitude and thank to honble Mr. VIRENDER GUJAR for whose kindness I has the precious opportunity of attainting of allainting training at Investment point.Under his brilliant untiring guidance I could complete the project being undertaken on theHousing Loan: A Comparative Study. successfully in time. His meticulous attention and valuable suggestion have helped me in simplifying the problem involvem in the work.I would also like to thanks the overwhelming support of all the people who gave me an opportunity to learn and gain knowledge about the various aspects of the industy.

Last but not least I am thanking to the APEX FINANCE PVT. LTD.Faculty member for enhancing me theoretical as well as pratical knowledge in the field of marketing research.

For their constant encouragement and valuable suggestion without which this project would not been successfully completed.

idbi

PREFACE

To maintain and cope up with the growing competition from the various Online Trading Providers. Share needs to find potential clients, also the new investors to satisfy their needs. The broad objective of the project is to equip the trainees with all the qualities which are essential to face any circumstances which can arise while providing service to the clients. This project will accomplish to understand how people interact with technology Savy products and if they are ready for doing all the trading through internet. All these steps helped me to understand how to cope up with different types of people and their diversified needs and satisfaction level.

idbi

Content 1. Organisation:IDBI Bank 2. Objective Of The Project 3. Banking And Finance In India 4. Structure Of Indian Banking Sector 5. Credit Tree Of A Bank 6. Constituents of Indian Finance System 7. Categories of Bank 8. Introduction to finance 9. Loans 10.Constituents of the Barclays Group 11.Product of Housing loan of Barclays Bank 12.Research Methodology 13.Why take a Home Loan? 14.Eligibility 15.Tabulation Analysis Of Data 16.Procedure for getting Approval of Home Loan 17.Limitation Of Study 18.Suggestion 19.Conclusion 20.Bibliography 21.Questionnaire

idbi

Project Title: Organisation:

Housing Loan: A Comparative Study. IDBI Bank .

The successful development in the banking business has become a complex process in the world of competition today. The development of marketing og a new service, the complexity of a new and different product, their market and therefore their process through which they developed, dictates that a number of different people, each which there own role, work together to create the service. The project represents a information regarding companys/banks performance and the service for the home loans to the all sections of society.

The main objective of the project is to understand/study the different product of a housing loan, the rate of interest of housing loan the days for sanctioning of a housing loan. This will help us to select the appropriate bank of financial institution which will have less interest rate and maximum repayment period.

For the execution of the project, the methodology adopted is the collection of information through primary and secondary data collection method, questionnaire, processing and analyzing data.

The banks collected for comparison of a housing loan are the main stream banks in Jodhpur city i.e. state bank of India, bank of Maharashtra , one schedule and one cooperative bank. The above group represents the total population of Jodhpur city. The IDBI Bank is very good service provider in the banking sector. The bank has recently

completed 100 years, in its quest to become a world class bank with global best practice.
7

idbi
The area of project work is Jodhpur city as it is the fast developing city in Marathwada region and the city has very good prospect in future.

idbi
OBJECTIVE OF THE PROJECT:
The objective of the project on Home Loans is to compare the home loan schemes of different banks and financial institutions in the Jodhpur City only. This will help us to select the appropriate bank of financial institution, which will have less interest rate and maximum repayment of period with easy documentation. Main objectives include:

Comparison of interest rate of different banks for Home-Loans. Share of home loans in all loans disbursed by that particular bank. Profitability & Cost of a loan proposal from the customer point of view and lenders point of view.

Profitability and cost of the loan proposal decides the financial position of the bank and its survives. And it also helps to banks to decide which type of loans gives them more benefits for the long period.

idbi
BANKING AND FINANCE IN INDIA
The Indian money market is classified in to : the organized sector(comprising private, public and foreign owned commercial banks and cooperative banks, together known as scheduled banks); and the unorganized sector(comprising individual or family owned indigenous bankers or money lenders and non banking financial companies (NBFCs)). The unorganized sector and micro credit and still preferred over traditional banks in rural and sub-urban areas, especially for non-productive purposes, like ceremonies and short duration loans.

Early History
Banking in India originated in the first decade of 18th century. The first banks were The General Bank of India, which started in 1786, and Bank of Hindustan, both of which are now defunct. The oldest bank in existence in India is the State Bank of India, which originated in the "The Bank of Bengal" in Calcutta in June 1806. This was one of the three presidency banks, the other two being the Bank of Bombay and the Bank of Madras. The presidency banks were established under charters from the British East India Company. They merged in 1925 to form the Imperial Bank of India, which, upon India's independence, became the State Bank of India. For many years the Presidency banks acted as quasicentral banks, as did their successors. The Reserve Bank of India formally took on the responsibility of regulating the Indian banking sector from 1935. After India's independence in 1947, the Reserve Bank was nationalized and given broader powers.

Post-independence
The partition of India in 1947 adversely impacted the economies of Punjab and West Bengal, paralyzing banking activities for months. India's independence marked the end of a regime of the Laissez-faire for the Indian banking. The Government of India initiated measures to play an active role in the economic life of the nation, and the Industrial Policy Resolution adopted by the government in 1948 envisaged a mixed economy. This resulted

10

idbi
into greater involvement of the state in different segments of the economy including banking and finance. The major steps to regulate banking included: In 1948, the Reserve Bank of India, India's central banking authority, was nationalized, and it became an institution owned by the Government of India. In 1949, the Banking Regulation Act was enacted which empowered the Reserve Bank of India (RBI) "to regulate, control, and inspect the banks in India." The Banking Regulation Act also provided that no new bank or branch of an existing bank may be opened without a license from the RBI, and no two banks could have common directors. However, despite these provisions, control and regulations, banks in India except the State Bank of India, continued to be owned and operated by private persons. This changed with the nationalization of major banks in India on 19th July, 1969.

Nationalization
By the 1960s, the Indian banking industry has become an important tool to facilitate the development of the Indian economy. At the same time, it has emerged as a large employer, and a debate has ensued about the possibility to nationalize the banking industry. Indira Gandhi, the-then Prime Minister of India expressed the intention of the GOI in the annual conference of the All India Congress Meeting in a paper entitled "Stray thoughts on Bank Nationalization." The paper was received with positive enthusiasm. Thereafter, her move was swift and sudden, and the GOI issued an ordinance and nationalized the 14 largest commercial banks with effect from the midnight of July 19, 1969. Jayaprakash Narayan, a national leader of India, described the step as a "masterstroke of political sagacity." Within two weeks of the issue of the ordinance, the Parliament passed the Banking Companies (Acquisition and Transfer of Undertaking) Bill, and it received the presidential approval on 9th August, 1969. A second dose of nationalization of 6 more commercial banks followed in 1980. The stated reason for the nationalization was to give the government more control of credit delivery. With the second dose of nationalization, the GOI controlled around 91% of the banking business of India. After this, until the 1990s, the nationalized banks grew at a pace of around 4%, closer to the average growth rate of the Indian economy. Liberalisation
11

idbi
In the early 1990s the then Narsimha Rao government embarked on a policy of liberalisation and gave licenses to a small number of private banks, which came to be known as New Generation tech-savvy banks, which included banks such as Global Trust Bank (the first of such new generation banks to be set up) which later amalgamated with Oriental Bank of Commerce, UTI Bank (now re-named as Axis Bank), ICICI Bank and HDFC Bank. This move, along with the rapid growth in the economy of India, kick started the banking sector in India, which has seen rapid growth with strong contribution from all the three sectors of banks, namely, government banks, private banks and foreign banks. The next stage for the Indian banking has been setup with the proposed relaxation in the norms for Foreign Direct Investment, where all Foreign Investors in banks may be given voting rights which could exceed the present cap of 10%at present it has gone up to 49% with some restrictions. The new policy shook the Banking sector in India completely. Bankers, till this time, were used to the 4-6-4 method (Borrow at 4%; Lend at 6%;Go home at 4) of functioning. The new wave ushered in a modern outlook and tech-savvy methods of working for traditional banks. All this led to the retail boom in India. People not just demanded more from their banks but also received more. Current situation Currently (2007), banking in India is generally fairly mature in terms of supply, product range and reach-even though reach in rural India still remains a challenge for the private sector and foreign banks. In terms of quality of assets and capital adequacy, Indian banks are considered to have clean, strong and transparent balance sheets relative to other banks in comparable economies in its region. The Reserve Bank of India is an autonomous body, with minimal pressure from the government. The stated policy of the Bank on the Indian Rupee is to manage volatility but without any fixed exchange rate-and this has mostly been true. With the growth in the Indian economy expected to be strong for quite some time-especially in its services sector-the demand for banking services, especially retail banking, mortgages and investment services are expected to be strong. One may also expect M&As, takeovers, and asset sales. In March 2006, the Reserve Bank of India allowed Warburg Pincus to increase its stake in Kotak Mahindra Bank (a private sector bank) to 10%. This is the first time an investor has been allowed to hold more than 5% in a private sector bank since the RBI announced

12

idbi
norms in 2005 that any stake exceeding 5% in the private sector banks would need to be vetted by them. Currently, India has 88 scheduled commercial banks (SCBs) - 28 public sector banks (that is with the Government of India holding a stake), 29 private banks (these do not have government stake; they may be publicly listed and traded on stock exchanges) and 31 foreign banks. They have a combined network of over 53,000 branches and 17,000 ATMs. According to a report by ICRA Limited, a rating agency, the public sector banks hold over 75 percent of total assets of the banking industry, with the private and foreign banks holding 18.2% and 6.5% respectively. Since liberalization, the government has approved significant banking reforms. While

some of these relate to nationalized banks (like encouraging mergers, reducing government interference and increasing profitability and competitiveness) other reforms have opened up the banking and insurance sectors to private and foreign players.

STRUCTURE OF INDIAN BANKING SECTOR

The Reserve Bank of India act as a centralized body monitoring any discrepancies and shortcoming in the system. It is the foremost monitoring body in the Indian financial sector. The nationalized banks (i.e. government-owned banks) continue to dominate the Indian banking arena. Industry estimates indicate that out of 274 commercial banks operating in India, 223 banks are in the public sector and 51 are in the private sector. The private sector bank grid also includes 24 foreign banks that have started their operations here. Under the ambit of the nationalized banks come the specialized banking

institutions. These co-operatives, rural banks focus on areas of agriculture, rural development etc., The Reserve Bank of India is an autonomous body, with minimal pressure from the government. The stated policy of the Bank on the Indian Rupee is to manage volatilitywithout any stated exchange rate-and this has mostly been true. With the growth in the Indian economy expected to be strong for quite some time-especially in its services sector, the demand for banking services-especially retail banking, mortgages and investment services are expected to be strong. M&As, takeovers, asset sales and much more action (as it is unravelling in China) will happen on this front in India.
13

idbi
With the credibility of the Indian banking system on a high, a number of Indian banks are now leveraging it to expand overseas. State Bank of India, the countrys largest bank has acquired 76 per cent stake in a Kenyan bank, Giro Commercial Bank, for US$ 7 million. Canara Bank is helping Chinese banks recover their huge non-performing assets (NPA). To meet the challenges of going global, the Indian banking sector is implementing internationally followed prudential accounting norms for classification of assets, income recognition and loan loss provisioning. The scope of disclosure and transparency has also been raised in accordance with international practices. India has complied with almost all the Core Principles of Effective Banking Supervision of the Basel Committee. Some Indian banks are also presenting their accounts as per the U.S. GAAP. The roadmap for adoption of Basel II is under formulation.

14

idbi

Credit Tree Of A Bank

Bank

Corporate loans

Retail loans

Small & Medium Sector

lending

term loans working capital financing equipment financing

home loans car loans personal loans education loans

term loans

the retail segment of the bank forms a major part of its portfolio. All the banks try their best to penetrate further int o the market to enhance their profitability. With the rise in disposable incomes in the past few years, there is a huge scope for banks to actually give more credit to the people. Housing loans constitute a major part of the lending in the retail segment. Banks like ICICI and HDFC have two third of their retail segment in the housing loans.

Central bank

Reserve Bank of India Allahabad Bank Andhra Bank Barclays Bank Bank of India Bank of Maharashtra Canara Bank Central Bank of India

Nationalized banks

Corporation Bank Dena Bank Indian Bank Indian Overseas Bank Oriental Bank of Commerce Punjab & Sind Bank Punjab National Bank Syndicate Bank Union Bank of India United Bank of India UCO Bank Vijaya Bank IDBI Bank State Bank of India State Bank of Bikaner & Jaipur State Bank

State Bank Group

of Hyderabad State Bank of Indore State Bank of Mysore State Bank of Patiala State Bank of Saurashtra State Bank of
15

idbi
Travancore Axis Bank Bank of Rajasthan Bharat Overseas Bank Catholic Syrian Bank Centurion Bank of Punjab City Union Bank Development Credit Bank Dhanalakshmi Bank Federal Bank Ganesh Bank of Kurundwad HDFC Bank ICICI Bank IndusInd Private banks Bank ING Vysya Bank Jammu & Kashmir Bank Karnataka Bank Limited Karur Vysya Bank Kotak Mahindra Bank Lakshmi Vilas Bank Nainital Bank Ratnakar Bank SBI Commercial and International Bank South Indian Bank Amazing Mercantile Bank YES Bank Foreign banks Regional Rural banks ABN Amro Bank Barclays Bank Citibank HSBC Standard Chartered Deutsche Bank South Malabar Gramin Bank North Malabar Gramin Bank Pragathi Gramin Bank Shreyas Gramin Bank Real Time Gross Settlement(RTGS) National Electronic Fund Transfer (NEFT) Structured Financial Messaging System (SFMS) CashTree Cashnet Automated Teller Machine (ATM)

Financial Services

Constituents of Indian Finance System

The India Finance System is composed of different institutions and will see subsequent address to certain roles and have accordingly brought out a variety of instrumentation and helped create a healthy money market, which is fundamental requisite of good finance system.

16

idbi
Commercial Banks

Public Sector

Private Sector

State Bank of India

Foreign Banks in India

Associate Banks

Other Banks in India

Nationalized Banks 14 major banks nationalized on 19th July 2, 1969 Regional Rural Banks 6 Banks nationalized on 15th April 1980

Non-Scheduled Banks

Categories of Bank:
Banking in India falls mainly under two categories, viz. Commercial banks and Co-operative banks, while commercial banks cater to the needs of industry and trade largely; the cooperative banks play a major role in financing agriculture and allied activities in rural areas, and trade and services in urban areas. The commercial banks may be classified into four group in terms of ownership: 1) Public Sector Banks 2) Regional Rural 3) Indian Private Sector Banks and 4) Banks incorporated outside India. The commercial banks can be further classified into Scheduled banks and Non Scheduled Banks. Scheduled Banks are those listed in the second schedule to the Reserve Bank of India Act 1934 These banks satisfy the criteria laid down under section 42 (6) of the RBI Act that they should have capital and reserve of Rs. 5 lakhs and their activities should not be detrimental to the interests of depositors. The scheduled banks are required to maintain cash reserves equal to 5 % of DTL which can go up to 15 % under section 42 (1). Those, which are not included in the 2nd schedule, are called the non-scheduled banks. The number of takeoven/liquidation as also in some cases up gradation into scheduled banks category.

17

idbi
22.Introduction to finance : 23.
Finance is the handmaiden of economic growth Institutions like banks, which command huge financial resources, can play a crucial role in shaping the economy of a country by judiciously deploying their funds over such important activities as would lead to an overall economic growth. A banks offer compared to a dam and the money lying scattered with individuals and institutions in society to the water running its own course without any direction. Money is collected by banks by way of deposits, and from this fund money is turned back to the community in the form of loans. Thus, banks act as a vital link between the savers and the needy.

India is striving to transform herself into an industrially developed country based on a rural and agricultural economy which should not only be able to feed the millions of her populations but also to produce raw material for her mills. This can be done by bringing about the necessary change from an agrarian economy to a diversified one. Banks have crucial role to play not only in the achievement of this objective but more significantly in determining how speedily and efficiently it is achieved. Since the nationalization of the fourteen major banks, the banking industry has developed adequately enough to meet the changing needs, both corporate and personal. Banks now offer a wide range of financial services in an extensively varied environment. The complex task of managing these changes and their consequences requires that banker should be more professional than ever before.

The Business of Banking

Banking has been understood differently at different times and indifferent countries. In India, the earliest legislation that dealt with the business of banking was the Indian Companies Act 1913. The Banking Regulations Act came in 1936. Under this Act all companies having their principal business, accepting deposits from the public were classified as banks. Hence between 1936 and 1942 even trading and industrial concerns accepting deposits were classified as banks, if accepting such deposits was their principal business. The Government of India passed a compressive Banking Regulation Act in 1949. Accordingly a banking company was defined as a company which carries on the business of banking that is to say accepting for the purpose of lending or investing deposits of money
18

idbi
from the public, repayable on demand of otherwise, and withdrawal cheque, draft, order of otherwise. The study group reviewing legislation affecting banking is of the opinion that banking should be abroad based. The definition given by th e Banking Regulation Act 1949 is certainly not exhaustive, and it needs certain alterations for the sake of simplification. The purpose of accepting deposits is strictly not relevant for the definition of banking, through it is basic for banking regulation. There is no need to distinguish between loans deposits in the context of banking regulation. The definition of banking should cover all forms of deposits from the public, and banking regulation should take into its ambit all the different types of banking.

Functioning of a Bank:
Functioning of a Bank is among the more complicated of corporate operations. Since Banking involves dealing directly with money, governments in most countries regulate this sector rather stringently. In India, the regulation traditionally has been very strict and in the opinion of certain quarters, responsible for the present condition of banks, where NPAs are of a very high order. The process of financial reforms, which started in 1991, has cleared the cobwebs somewhat but a lot remains to be done. The multiplicity of policy and regulations that a Bank has to work with makes its operations even more complicated, sometimes bordering on illogical. This section, which is also intended for banking professional, attempts to give an overview of the functions in as simple manner as possible. Banking Regulation Act of India, 1949 defines Banking as "accepting, for the purpose of lending or investment of deposits of money from the public, repayable on demand or otherwise and withdrawal by cheques, draft, order or otherwise."

Deriving from this definition and viewed solely from the point of view of the customers, Banks essentially perform the following functions:

1. Accepting Deposits from public/others (Deposits) 2. Lending Money to public (Loans) 3. Transferring money from one place to another. 4. Acting as trustees. 5. Keeping valuables in safe custody. 6. Government business.
19

idbi
But do these functions constitute banking? The answer must be a no. There are so many intricacies involved in the activities that a bank performs today, that the above list must sound very simple to a seasoned banker. Please click on the activity to see what a Bank has to do to give the above services to its customers. These activities can also be described as back office banking. Banks are organized in a linear structure to perform these activities at the base of which lies a Branch. The corporate office of a bank is normally called Head Office

FORMS OF ADVANCES:
Advances by commercial banks are made in different forms such as loans, cash credit, overdrafts, bills purchased, bills discounted etc. These are generally short- term advances. Commercial banks do not sanction advances on a long-term basis beyond a small proportion of their demand and time liabilities. They cannot afford to lock up their funds for long period. Hence a considerable percentage of their advances is repayable on demand. Advances may be granted against tangible security or in special deserving cases on an unsecured/clean basis. 1. Loans 1. Overdrafts 2. Cash credits 3. Temporary Overdrafts 4. Clean advances 5. Term loans 6. Bridge loan 7. Participation loan 8. Loans to small borrowers 10. Hire purchase and leasing finance 11. Bills purchased 12. Bills discounted

LOANS:

20

idbi
Bank loans are called indirect agents of production. For achieving a sustained rate of economic growth over a long period, greater efforts have to be made to increase agricultural and industrial production, and in this increased production, bank credit plays a significant role. But banks in India are not free to employ their funds n an arbitrary manner, while lending, they will have to keep in mind factors like a desirable balance among liquidity, safely and profitability, legal and statutory requirements, socio-economic conditions of the country, priorities set by economic planners, and so on. Banks try to achieve this objective through maintaining a particular relationship between their assets and deposits. As such, between advances and deposits in the form of advances among as many different types of securities and over as wide an areas as possible, and they avoid granting too large a proportion of their advances to one party or to a single industry. While the se factors limit banks capability to lend, they are, nevertheless expected to grant credit according to the changing economic scene conditioned by the programs and priorities of different Five Year Plans.

In a loan account the entire amount is paid to the debtor at one time, either in cash or by transfer to his current account. No subsequent debit ordinarily allowed except by way of interest, incidental charges, insurance premiums, expenses incurred is provided for by installment without allowing the demand character of the loan to be affected in any way. There is usually a stipulation that in the event of installment remaining unpaid, the entire amount of the loan will become due. Interest is charged on the debit balance, usually with quarterly rests unless there is an arrangement to the contrary. No cheque book is issued. The security may be personal or in the form of shares, debentures. Government paper, immovable property, fixed deposit receipts, life insurance policies, goods etc.

Introduction
Central Background Information Banking is one of the most sensitive businesses all over the world. Banks play an important role in the economy and are considered as the backbone of an economy in every country and India is no exemption. Banks are custodian to the assets of the general masses. The banking sector plays a significant role in a contemporary world of money and economy. It influences and facilitates many different but integrated economic activities like resources mobilization, poverty elimination, production and distribution of public finance.
21

idbi
India has a well-developed banking system, which consists of a wide variety of institutions ranging from a central bank to commercial banks and to specialized agencies to cater for special requirements of specific sectors. The country started without any worthwhile banking network in 1947 but witnessed phenomenal growth in decades to come. By 1970, it had acquired a flourishing banking sector. Nationalization of banks in the seventies was a major upset to domestic banking industry of the country, which changed the whole complexion of the banking industry. With irrational decision at the top all the commercial banks were made subservient to the political leadership and the bureaucracy. The commercial banks thus lost their assets management equilibrium, initiative and growth momentum. They ceased to be a business concern and became big bureaucracies. The era of nineties was the climax of privatization, deregulation and restructuring in the domestic banking industry and financial institutions. The Muslim Commercial Bank was the first bank to privatize. Followed by Allied Bank limited, United Bank Limited and Habib Bank Limited have all been privatized. Today, the banking sector is providing financial solutions to the masses and is growing and becoming a solid partner in the development of the Indiai economy, this growth potential has seen different acquisitions in the banking sector, with the Standard Chartered and Union Bank being the most prominent. Standard Chartered acquired an 80.86% interest in Union Bank Limited for a cash consideration of US$413 million1. Other acquisitions include ABN AMRO acquiring 93.4% interest in Prime Bank for Rs. 13.8 billion 2 and Temasek Investment Holding of Singapore taking up a stake in PICIC Commercial Bank. Temasek also has its stake in NIB Bank. Recently, MCB Bank Ltd. (MCB.KA) has agreed to buy Royal Bank of Scotland Group PLC's (RBS) operations in India for PKR7.2 billion (US$87 million), people familiar with the situation said Monday, in the latest sale of Asian assets by the Scotland-based bank. Company Background This bank traces its origins back to 1690 when John Freame and Thomas Gould started trading as Goldsmith bankers in Lombard Street London. The name "Barclays" became associated with the business in 1736, when James Barclay, son-in-law of John Freame, one of the founders, became a partner in the business. In 1728, the bank moved to 54 Lombard Street, which was identified by the 'Sign of the Black Spread Eagle', over the years becoming a core part of the bank's identity.
1 2

Standard Chartered Bank website (Press Release) ABN AMRO Website (Press Release) 22

idbi
In 1776 the firm was styled "Barclay, Bevan and Bening" and so remained until 1785, when another partner, John Tritton, who had married a Barclay, was admitted, and the business then became "Barclay, Bevan, Barclay and Tritton". In 1896 several banks in London and the English provinces, notably Backhouse's Bank of Darlington and Gurney's Bank of Norwich, united under the banner of Barclays and Co., a joint-stock bank. Between 1905 and 1916 Barclays extended its branch network by making acquisitions of small English banks. Further expansion followed in 1918 when Barclays amalgamated with the London, Provincial and South Western Bank and in 1919 when the British Linen Bank was acquired by Barclays Bank, although the British Linen Bank retained a separate board of directors and continued to issue its own bank notes. Then in 1924 the planned takeover of National Bank of Kingston reached near-completion but was halted three days before finalization. Post War In 1965 Barclays established a US affiliate, Barclays Bank of California in San Francisco. Barclaycard, the first credit card in the UK, was launched in 1966 and in 1967 Barclays unveiled the first ATM cash machine at Enfield, north London. In 1969 the planned merger with Martins Bank and Lloyds Bank was blocked by the Mergers and Monopolies Commission but the acquisition of Martins Bank on its own was allowed. Also that year the British Linen Bank subsidiary was sold to the Bank of Scotland in exchange for a 25% stake, a transaction that became effective from March 1971. In 1980, Barclays Bank International expanded its business to include commercial credit and took over American Credit Corporation, renaming it Barclays American. Post War (continued) Barclays became the first bank to re-open branches on Saturday mornings in 1982, twenty years after the practice ended. Two years later, in 1984, Barclays posted record profits. The following year Barclays Bank and Barclays Bank International merged: as part of the corporate reorganization, the former Barclays Bank PLC became a group holding company, renamed as Barclays PLC and UK retail banking was integrated under the former BBI, and renamed Barclays Bank PLC. In 1985 Barclays introduced Connect, the first debit card in the United Kingdom. In 1986, Barclays sold its South African business operating under the Barclays National Bank named after protests against Barclays' involvement in South Africa and its apartheid government. Also that year Barclays bought de Zoete & Bevan and Wedd Durlacher to form

23

idbi
BZW and to take advantage of the Big Bang on the London Stock Exchange. And in 1988 Barclays sold Barclays Bank of California to Wells Fargo Bank, N.A. Edgar Pearce, the "Mardi Gras Bomber", began a terror campaign against the bank and the supermarket chain Sainsbury's in 1994. In 1996 Barclays bought Wells Fargo Nikko Investment Advisors (WFNIA) and merged it with BZW Investment Management to form Barclays Global Investors Two years later - in 1998 - the BZW business was broken up and parts were sold to Credit Suisse First Boston: Barclays retained the debt business which formed the foundation of what is now Barclays Capital. In 1999 in an unusual move as part of the trend at the time for free ISPs, Barclays launched an internet service called Barclays.net: this entity was acquired by British Telecom in 2001. The new millennium

Barclays on Queen Street in Morley, West Yorkshire

The year 2000 saw the acquisition of Woolwich plc (formerly the Woolwich Building Society).[10] Then in 2001 Barclays closed 171 branches in the UK, many of them in rural communities: Barclays called itself "THE BIG BANK" but this name was quickly given a low profile after a series of embarrassing PR stunts.[11] In 2003 Barclays bought the American credit card company Juniper Bank from CIBC, rebranding it as "Barclays Bank Delaware".[12] The same year saw the acquisition of Banco Zaragozano, the 11th Spanish bank.[13]. Barclays took over sponsorship of the Premier League from Barclaycard in 2004.[14] In 2005 Barclays sealed a 2.6bn takeover of Absa Group Limited, South Africa's largest retail bank, acquiring a 54% stake on 27 July 2005.[15] Then in 2006 Barclays purchased the HomEq Servicing Corporation for $469 million in cash from Wachovia Corp.[16] That year also saw the acquisition of the financial website Comparetheloan[17] and Barclays announcing plans to rebrand Woolwich branches as Barclays, migrating Woolwich customers onto Barclays accounts and migrating back-office processes onto Barclays systems - the Woolwich brand was to be used for Barclays mortgages.[18]
24

idbi
In January 2007 Barclays announced that it has purchased the naming rights to the Barclays Center, a proposed 18,000-seat arena in Brooklyn, New York, where the New Jersey Nets planned to relocate.[19] Planned merger with ABN AMRO In March 2007 Barclays announced plans to merge with ABN AMRO, the largest bank in the Netherlands.[20][21] However, on 5 October 2007 Barclays announced that it had abandoned its bid,[22] citing inadequate support by ABN shareholders. Fewer than 80% of shares had been tendered to Barclay's cash-and-shares offer.[23] Planned merger with ABN AMRO (continued) This left the consortium led by Royal Bank of Scotland free to proceed with its $99.9 cents counter-bid for ABN AMRO. To help finance its bid for ABN AMRO, Barclays sold a 3.1% stake to China Development Bank and a 3% stake to Temasek Holdings, the investment arm of the Singaporean government.[24] Also in 2007 Barclays agreed to purchase Equifirst Corporation from Regions Financial Corporation for $225 million.[25] That year also saw Barclays Personal Investment Management announcing the closure of their operation in Peterborough and its re-siting to Glasgow, lying off nearly 900 members of staff.[26] Financing On 30 August 2007, Barclays was forced to borrow 1.6bn ($3.2bn) from the Bank of England sterling standby facility. This is made available as a last-resort when banks are unable to settle their debts to other banks at the end of daily trading. [27] Despite rumours about liquidity at Barclays, the loan was necessary due to a technical problem with their computerized settlement network. A Barclays spokesman was quoted as saying "There are no liquidity issues in the U.K markets. Barclays itself is flush with liquidity." [28] On 9 November 2007, Barclays shares dropped 9% and were even temporarily suspended for a short period of time, due to rumours of a 4.8bn ($10bn) exposure to bad debts in the US. However, a Barclays spokesman denied the rumours.[29] Subsequent write-downs at the bank were announced to be 1 billion ($1.9 billion), much less than feared. In July 2008, Barclays attempted to raise 4.5bn through a non-traditional rights issue to shore up its weakened Tier 1 capital ratio, which involved a rights offer to existing shareholders and the sale of a stake to Sumitomo Mitsui Banking Corporation. Only 19% of shareholders took up their rights leaving investors China Development Bank and Qatar Investment Authority with increased holdings in the bank.[30]

25

idbi
In 2008 Barclays bought the credit card brand Goldfish for $70 million gaining 1.7 million customers, and $3.9 billion in receivables.[31] Barclays also bought a controlling stake in the Russian retail bank Expo bank for $745 million.[32] Later in the year Barclays commenced its India operations with initial funding of $100 million. Lehman Brothers acquisition On September 16, 2008, Barclays announced its agreement to purchase, subject to regulatory authority approval, the investment-banking and trading divisions of Lehman Brothers, a United States financial conglomerate that had filed for bankruptcy. In the deal, Barclays will also acquire the New York headquarters building of Lehman Brothers. On September 20, 2008, a revised version of the deal, a $1.35 billion (700 million) plan for the Barclays plc to acquire the core business of Lehman Brothers (mainly Lehman's $960 million Midtown Manhattan office skyscraper, with responsibility for 9,000 former employees), was approved. Manhattan court bankruptcy Judge James Peck, after a 7 hour hearing, ruled: "I have to approve this transaction because it is the only available transaction. Lehman Brothers became a victim, in effect the only true icon to fall in a tsunami that has befallen the credit markets. This is the most momentous bankruptcy hearing I've ever sat through. It can never be deemed precedent for future cases. It's hard for me to imagine a similar emergency."[34] Luc Despins, the creditors committee counsel, said: "The reason we 're not objecting is really based on the lack of a viable alternative. We did not support the transaction because there had not been enough time to properly review it." In the amended agreement, Barclays would absorb $47.4 billion in securities and assume $45.5 billion in trading liabilities. Lehman's attorney Harvey R. Miller of Weil, Gotshal & Manges, said "the purchase price for the real estate components of the deal would be $1.29 billion, including $960 million for Lehman's New York headquarters and $330 million for two New Jersey data centers. Lehman's original estimate valued its headquarters at $1.02 billion but an appraisal from CB Richard Ellis this week valued it at $900 million." Further, Barclays will not acquire Lehman's Eagle Energy unit, but will have entities known as Lehman Brothers Canada Inc, Lehman Brothers Sudamerica, Lehman Brothers Uruguay and its Private Investment Management business for high net-worth individuals. Finally, Lehman will retain $20 billion of securities assets in Lehman Brothers Inc that are not being transferred to Barclays. [35] Barclays had a potential liability of $2.5 billion to be paid as severance, if it chooses not to retain some Lehman employees beyond the guaranteed 90 days. [36][37]
[33]

26

idbi
Recent developments Reuters later reported that the British government would inject 40 billion ($69 billion) into three banks including Barclays, which might seek over 7 billion.[38] Barclays later confirmed that it rejected the Governments offer and would instead raise 6.5 billion of new capital (2 billion by cancellation of dividend and 4.5 billion from private investors).[39] Recent developments (continued) In January 2009 the press reported that further capital may be required and that while the government might be willing to fund this, it may be unable to do so because the previous capital investment from the Qatari state was subject to a proviso that no third party might put in further money without the Qataris receiving compensation at the value the shares had commanded in October 2008.[40] In March 2009 it was reported that in 2008, Barclays received billions of dollars from its insurance arrangements with AIG, including $8.5bn from funds provided by the United States taxpayers to bail out AIG.[41][42] On 16 March 2009 Barclays confirmed that it was planning to sell its exchange traded fund business, iShares: the sale is expected to earn the bank up to 5 billion. [4 Constituents of the Barclays Group

A Barclays branch in Delhi

Barclays Bank PLC Mercers Debt Collection Agency Barclays Bank Delaware (formerly Barclaycard US, originally Juniper Bank, acquired 2003) Barclays Retail Bank UK clearing bank Barclays Commercial Bank dealing with medium and larger corporate UK business.UK banks Barclays Wealth Stockbrokers, Offshore and Private bank Barclays Private Clients International Ltd. subsidiary based in the Isle of Man with branches in the Channel Islands
27

idbi

Barclays Private Equity Barclaycard Global credit card business Barclaycard US separate from the Barclaycard global operation, this is the corporation's US credit card operation (formerly known as "Juniper Bank"). Issues branded credit cards such as US Airways, Midwest Airlines, Frontier Airlines MasterCard, Air Tran Airways Visa card, and Apple Store Visa and MasterCard accounts.

Barclays Capital Investment bank Barclays Global Investors Investment management company Woolwich plc UK mortgage brand Barclays Africa To be transferred to ABSA (South Africa) Barclays Spain (550 branches)[44] Barclays Portugal (162 branches)[44] Barclays France Barclays Morocco Barclays Bank LLC (Russia) Barclays India Absa Group Limited (South Africa) Firstplus Financial Group PLC Barclays Partner Finance (formerly Clydesdale Financial Services) Barclays India PT Bank Akita (due to be rebranded Barclays Bank Indonesia) [45] Barclays Croatia

Organizational structure Barclays is headed by Marcus Agius, the Group Chairman, who joined the Board on 1 September 2006 and succeeded Matthew Barrett as Chairman from 1 January 2007. Agius is also the senior executive Director of the BBC and was formerly Chairman of BAA PLC, Chairman of Lazard in London and a Deputy Chairman of Lazard LLC until 31 December 2006. Reporting directly to the Group Chairman is John Varley, the Group Chief Executive, who is responsible for the strategic direction and planning of all Barclays operations. Varley was appointed to the role in September 2004 prior to which he served as Deputy Chief Executive (January-September 2004) and Group Finance Director (2000-2003).
28

idbi
The operating units of Barclays are grouped under two umbrellas; Investment Banking and Investment Management (IB&IM) and Global Retail and Commercial Banking (GRCB). IB&IM oversees three core operating units: Barclays Capital, Barclays Global Investors (BGI) and Barclays Wealth.

Organizational structure (continued) GRCB oversees multiple operating units. Principally it has responsibility for UK Retail Banking (UKRB), Barclays Commercial Bank (formally UK Business Banking), Barclaycard and International Retail and Commercial Banking (IR&CB).

Branch of Barclays in Westminster

Board of Directors Barclays is headed by Group Chief Executive John Varley. Within the Group CEO's office are housed the central corporate functions of Human Resources, General Counsel, Corporate Affairs, Internal Audit and Group Chief of Staff. The company has no COO or CIO. Paul Idzik, the former COO, completed an organizational redesign that saw IT functions devolved to the core business divisions - Global Retail & Commercial Banking and Investment Banking - and, following completion Idzik resigned from his post. Serving alongside Mr. Varley on the Group's ExCo are:
Chris Lucas - Group Finance Director Bob Diamond - President, Barclays PLC; CEO, Investment Management & Investment Banking Frederik (Frits) Seegers - CEO, Global Retail & Commercial Banking

Also reporting to Mr. Varley and thus part of the senior management team:
Group HR Director - Cathy Turner (also responsible for Group Corporate Affairs) Group General Counsel - Mark Harding Group Chief of Staff - Matt Hammerstein Director of Internal Audit - Mark Carawan 29

idbi
The key business units and their CEOs are:
UK Retail Banking - Deanna Oppenheimer UK Commercial Banking - Eduardo Eguren Barclaycard - Antony Jenkins Western Europe - Leo Salom Emerging Markets - Ahmed Kahn Wealth Management - Tom Kalaris Capital - Jerry del Missier

The Board Members are:

Marcus Agius - Chairman David Booth - Non Executive Director Sir Richard Broadbent - Senior Independent Director Leigh Clifford - Non Executive Director Fulvio Conti - Non Executive Director Professor Sir Andrew Likierman - Non Executive Director Sir Michael Rake - Non Executive Director Stephen Russell - Non Executive Director Sir John Sunderland - Non Executive Director Patience Wheatcroft - Non Executive Director Simon Fraser - Non Executive Director

Barclays Bank India

Barclays Bank PLC has arrived in India. With 300 years of heritage and state the-art banking services bank is ready to Reinvent Banking in India. With dedicated banking services Barclays has touched 38 million hearts in 60 countries across the globe and now look forward to serve India with the same enthusiasm and dedication. The acquisition of a controlling stake in Absa, the development of Global Retail and Commercial Banking, and the continued rapid growth of Investment Banking and Investment Management are all designed to enable the Bank to grow faster.

30

idbi

31

idbi
VISION
We have a clear view of where growth will come from over the coming years. While there will be significant growth

opportunities in the UK, we see many more internationally. Barclays will become a leading global universal bank.

MISSION
To develop & deliver the most innovative products, manage customer experience, deliver quality services that contributes to brand strength, establishes a competitive advantage and enhances profitability, thus providing value to the stakeholders of the bank. Figure 1: Serving 15000 customers through 14 branches across 6 cities.

Source: Barclays Bank Website

Financing
On 30 August 2007, Barclays was forced to borrow 1.6bn ($3.2bn) from the Bank of England sterling standby facility. This is made available as a last-resort when banks are unable to settle their debts to other banks at the end of daily trading. [29] Despite rumours about liquidity at Barclays, the loan was necessary due to a technical problem with their computerised settlement network. A Barclays spokesman was quoted as saying "There are no liquidity issues in the U.K markets. Barclays itself is flush with liquidity."

32

idbi
On 9 November 2007, Barclays shares dropped 9% and were even temporarily suspended for a short period of time, due to rumours of a 4.8bn ($10bn) exposure to bad debts in the US. However, a Barclays spokesman denied the rumours. Subsequent write-downs at the bank were announced to be 1 billion ($1.9 billion), much less than feared. In July 2008, Barclays attempted to raise 4.5bn through a non-traditional rights issue to shore up its weakened Tier 1 capital ratio, which involved a rights offer to existing shareholders and the sale of a stake to Sumitomo Mitsui Banking Corporation. Only 19% of shareholders took up their rights leaving investors China Development Bank and Qatar Investment Authority with increased holdings in the bank. In 2008 Barclays bought the credit card brand Goldfish for $70 million gaining 1.7 million customers, and $3.9 billion in receivables.[33] Barclays also bought a controlling stake in the Russian retail bank Expobank for $745 million.[34] Later in the year Barclays commenced its India operations with initial funding of $100 million.

Constituents of the Barclays Group

Barclays Bank PLC Mercers Debt Collection Agency Barclays Bank Delaware (formerly Barclaycard US, originally Juniper Bank, acquired 2003) Barclays India Barclays Retail Bank UK clearing bank Barclays Commercial Bank Dealing with medium and larger corporate businesses worldwide. Barclays Wealth Stockbrokers, Offshore and Private bank Barclays Private Clients International Ltd. subsidiary based in the Isle of Man with branches in the Channel Islands Barclays Private Equity Barclaycard Global credit card business Barclaycard US Separate from the Barclaycard global operation, this is the corporation's US credit card operation (formerly known as "Juniper Bank"). Issues branded credit cards such as US Airways, Midwest Airlines, Frontier Airlines MasterCard, Airtran Airways Visa card, and Apple Store Visa and MasterCard accounts. Barclays Capital Investment bank Barclays Global Investors Investment management company Woolwich plc UK mortgage brand Barclays Africa To be transferred to ABSA (South Africa) Barclays Spain (550 branches) Barclays Portugal (162 branches) Barclays France Barclays Morocco
33

idbi

Barclays Bank LLC (Russia) Barclays India Absa Group Limited (South Africa) Firstplus Financial Group PLC Barclays Partner Finance (formerly Clydesdale Financial Services) Barclays Technologies Centre India PT Bank Barclays Indonesia, formerly known as PT Bank Akita (due to be rebranded Barclays Bank Indonesia)

Branches
Barclays has over 1800 UK high street branches (including former Woolwich branches) and it has also joined up with the Post Office Ltd to provide personal banking services to customers who live near a Post Office branch and those who need financial services such as secured or unsecured loans. Worldwide, Barclays has over 4,750 branches in over 50 countries. Most Barclays branches have 24/7 Cash machines. Barclays' customers and customers of many other banks can use Barclays ATMs free of charge. Barclays Capital is a strong investment arm owned by Barclays Bank PLC. Barclays Capital had created an investment funds business that handles billions of pounds daily, iShares. After much debate, Barclays president Bob Diamond, along with other Barclays bosses chose to sell the iShares business to further boost capital. The preliminary price for the business is 3billion, although Barclays has the flexibility to sell at a higher price, should a bidder show interest before the selling deadline. Barclays is a member of the Global ATM Alliance.

INDIA BARCLAYS
Barclays has had a presence in India for almost 30 years.

Barclays launched commercial banking services in India in November 2006, and retail banking followed in May 2007. Now customers there can benefit from a range of personal or business accounts, loans and other services developed to suit the local market, and a variety of Barclaycard options.

34

idbi
Barclays Wealth launched its business in India in 2008, offering asset management to the country's growing segment of high net-worth individuals. Barclays Wealth's international private banking business has offices in Mumbai, New Delhi, Bangalore, Chennai and Kolkata. In India, Barclays provides:

Retail banking: everyday personal banking including Hello Money, a service which allows customers to access their bank account through their mobile phone

Commercial banking: offers business banking services tailored to meet the needs of corporate clients

Barclaycard: a range of credit cards are available across the country Barclays Capital: provides large corporate, government and institutional clients with a full spectrum of solutions to their strategic advisory, financing and risk

management needs

Barclays Wealth: provides affluent, high net-worth and intermediary clients worldwide with private banking, investment management, fiduciary services and brokerage.

35

idbi

The above Diagram represents the distribution Barcleys Microfinance could follow for remittance as well as collection of funds.

36

idbi

The diagram above shows how the services would be provided by Barclay Microfinance at various levels of distribution of different types of loans.

Future of Barclays Microfinance

37

idbi

Barclays Microfinance

In future we as Barclay see ourselves providing financial help to various microfinance institutions, rural banks, small and medium enterprises at a cost which is affordable to all. The help will be extended through direct investments in MFIs or by buying bonds issued by such institutions as well as directly to those entrepreneurs who come up with brilliant and feasible ideas.

Model used for partnering with MFIs would be:

38

idbi
Customers

Purchasing of Loans MFIs, Rural Banks Purchasing of Bonds

Barclays Microfinance

Future Profits and Projections

Book1.xls

Competitors: Strength

HDFC, ICICI, Standard Chartered, HSBC

It has diversified customer profile, including Blue chip companies, small and medium sized companies, retail customers, self-help groups, and high net worth individuals. It has strong brand equity and a wide customer base of over 5 million. Barclays Bank agencies. A strong capital base ensures that it is well placed for growth of business. The bank, which has consistently earned profit since its inception, has committed and competent human capital to power its aggressive growth plan. s financial strength has been recognized by international credit rating

Future of the bank: Barclays Bank looks confidently into future to face & thrive in intense competitive

environment that is emerging in global era. the Bank has now gained experience and has in place the strategies required for gaining a leadership position.
39

idbi
The values of the bank: Management Team- The core strength of Bank. Technology and Tech Initiatives Strategic Initiatives Corporate Banking and Credit The Barclays Bank bank family

SWOT Analysis

Strengths

Weaknesses

Brand strategy through different brands like

Integration of operations worldwide Lack of well trained staff and high attrition problems

various football leagues Distribution channels Various sources of income Diversification

Opportunities
Emerging markets in Asia

Threats
High exposure to risks in the financial market Increasing competition and threats to the banking industry from other

New Central and Eastern European EU members Focus on improvements in European and US operations

companies Difference in the government

regulations in all the countries.

40

idbi

Product profile
Wholesale Banking SME Banking Retail Banking Rural/Agri Banking Wealth Management Demat Deposit Products Loan Products ATM / Debit Cards Internet Banking Rapid Funds2India Barclays e-Trading

Retail Loans
A wide range of solutions for your financial needs.

Barclays Bank

offers a wide range of retail loans to meet your diverse needs. Whether

the need is for a new house, child's education, purchase of a new car or home appliances, our unique and need specific loans will enable you to convert your dreams to realities.

Key products Housing Loan Housing Loans to NRIs / Personal Loan PIOs Vaibhav Lakshmi Loan (For Working Women) Home Improvement Loan Desh Videsh Yatra Loan

Loan Against Future Rent Receivables

Marriage Loan

Advance Against Property Advance Against Property to NRI Education Loan Car Loan

Advance Against Securities Loan to Pensioners Loan to Defence Pensioners Professional Loan
41

idbi
Two Wheeler Loan Loan to Doctors

Consumer

Durables

Loan Traders

Loan

Barclays Loan for Laptop & Personal Loan Computer

for

financing

Individuals

for

subscription to Public Issues /IPO

Barclays Loan)

Ashray (Reverse Mortgage Barclays

Career Development Loan

Product of Housing loan of Barclays Bank

1) Housing LoanBe a proud home ownerBarclays Bank invites you to be a proud owner of your own home and offers easy Home Loan with a number of conveniences to suit your budget.

Home Loan is available for:

Purchase of new / old dwelling unit. Construction of house. Purchase of plot of land for construction of a house. Repaying a loan already taken from other Housing Finance Company / Bank.

Repayment period up to 25 years (floating rate option).

2) Barclays Home Improvement LoanBarclays Bank brings to you a unique loan product. A loan for Repairs / Renovations /

Improvement / Extension of Home and for Furniture, Fittings & Fixtures. Key Benefits

Loan available for repairs / renovation / improvement / extension of the existing house.
42

idbi

Loan available for purchase of furniture / fixtures / furnishing / other gadgets such as fans, geysers, air conditioners etc. required, to:
o o

Our existing housing loan borrowers New borrowers

Free Credit Card: Free Credit Card (complementary for first year) will be issued to borrowers with loan limit above Rs.2/-lacs.

43

idbi
RESEARCH METHODOLOGY
Research forms the foundation of any project that is undertaken: Research in common parlance refers to the search of knowledge. One can also define research as a scientific and systematic search of pertinent information on a specific topic. Redman and Moray define research as systematized effort to gain new knowledge. Humans are generally very inquisitive in nature and this inquisitiveness is the mother of knowledge and the method employed by humans to gain knowledge of the unknown is research. Research thus is an original contribution to the existing stock of knowledge making for its advancement. It is the pursuit of the truth with the help of study, observation, comparison and experiment. Research methodology is a way of systematically solving the research problems. It may be understood as a science of how research is done. The purpose of research is to discover answer to the question through application of scientific procedures. All this means that the researcher has to design a separate mythology for the problem undertaken by him which may differ from problem to problem. Research carried out in their project is based on theoretical and field study.

RESEARCH OBJECTIVE

The Objective of this study is to compare housing product of different banks in Jodhpur city. This will help us to identify and select appropriate bank which will have less interest rate and maximum repayment of period with easy documentation.

44

idbi
Steps In Research Methodology

Defining the problem & Research objective

Develop Research plan

Collect the information

Analysis the information

Present the findings

Make the decision

SOURCES OF DATA

A. Primary Data:

This data can be collected through experiment or through survey. The various method of primary data collection is: 1. Observation method 2. Interview method 3. Questionnaire method

The methods adopted in this study are:

45

idbi
Personal interview through structured questionnaire of Finance head of SMEs, Brokers etc. Sample of questionnaire is attached as an annexure.

B. Secondary Data:

Secondary data refers to the data which have already been collected and analyzed by some one else usually published data are available in form of: 1. Various publication of central, state and local government. 2. Books Magazine and Newspapers. 3. Accounting records, sales force reports etc. 4. Websites of banks.

DIGRAMATIC APPROACH
Data analysis involves converting a series of recorded observation (data) into descriptive statements (information). The Analysis will be showed with the help of a) Chart b) Graphs

Steps in Research Methodology:

Step 1: Objective of Study of Home-Loans

The first step in this study is the defining the objectives of the study and according to that develop the further plan.

Step 2:

Developing plan for gathering information

The second stage calls for developing the most efficient plan for gathering the need information. Decide the methods of data collection and the data sources, sampling method and contact method. Decide the primary and secondary sources for collecting the data.

Primary Data: Primary data is a data, which is gathered by the researcher himself. Primary data of this project is collected by the personal visit to the banks.
46

idbi

Secondary Data: Secondary data is a data is data which is gathered from the available sources i.e. newspaper, magazine, Internet, financial books. Etc . Step 3: Collect the Information This is the most important step in the study. This is up to the individuals ability to gather the information from the selected samples.

Step 4:

Analyze the Information

Step 5:

Present the Findings

SAMPLING PLAN:
This plan calls for the main three decisions for selecting the sample of banks from whole population of banks in the city.

1.

Sampling Unit: Here we define the target population that will be sampled. Total numbers of units of banks working in Jodhpur are approximately 35.

2.

Sample size:

How many banks and financial institution should be surveyed?

Large samples give more reliable results than small samples. Here 14% of he population of study i.e. 5 units (branches) are undertaken for study.

3.Data collection procedure:

Here I took all the information needed for this study, by

means of personal visits to the banks and by interview. This is the most versatile method. The interviewer can ask more number of questions, can record additional observations about the respondents.

Home Loans in India

47

idbi
You'll soon realize that home loan companies do exist, and they continue to exist to provide Basic Home Insurance as well as Home Loan Information including Home Loan Resources because of the very people who desire to own a house the soonest possible time - like you! It is definitely one of the major things that you can board on in your lifetime. The bad news is: however is that not everyone in this globe is like you, loaded enough (financially, of course) to be able to build a house as soon as he wants to. Whether you are Non Resident Indian or Resident of India, and you are thinking to start your journey of buying a new house, looking to move to a new house, investing in property or are looking forward to refinance, Consider answering these questions to yourself:

Which type of home loan should I prefer? Will it be the best scheme that will be fitting my budget? Can any insurance plan cover for an unpaid monthly due? Is there a fine or penalty or even some reward as well if the whole amount of loan is paid ahead of the due date?

These are just a dash of the questions to be answered when considering taking the plungeinto the loan journey. The different home loan types are hereby presented to you to make your journey that more smoother or step by step, safer and comfortable. Yet, Got a fix on fixed rate or variable rates, offset accounts, lines of credit or bridging loans!! With so many real estates sites coming up in Indian market, finding an ideal house isn't that big a issue nowadays, when you can virtually see all across the home you need to purchase by the various real estate simulation programs and videos available, but you still need to purchase it, right? - To really say "own" it. A home loan, also popularly identified as a mortgage, is an easier financial option to own a house. Once you've decided to endeavor on a home loan, there are so many things that you need to be informed with. Not only is it going to be an emotional experience, it is also going to be a very informative monetary journey, as you will be dealing with the whole caboodle of the mortgage process along the way.

48

idbi
There are thousands of home loan companies waiting to provide you with your financial needs. Part of the success of this whole financial move is partly in your hands, the greater part relies on the efficiency of your chosen mortgage company.

Home Loan Types

Owning a piece of land or property is a lifetime dream for every individual. There are many home loans provider in the market to make your dream come true. But before you opt for any home loan provider, you need to consider certain factors related to property that you are interested in buying and also about the salient features offered by a home loan provider and also study some Home Loans and Home Insurance FAQs which helps in applying a Home Loan in India. And the most important thing is you should know about each and every term related with Home Loans before applying for a Loan. It is always advisable to consult a home loan expert or consultant before applying for a home loan or purchasing a property. You can take different types of home loans like Bridge Loans, Home construction Loans, Home Equity Loans, Home Extension Loans, Home Improvement Loans, Land Purchase Loans etc for different schemes available in the market. There are different types of home loans tailored to meet your needs.

Home Purchase Loans: These are the basic forms of home loans used for purchasing of a new home.

Home Improvement Loans: These loans are given for implementing repair works, healing and renovations in a home that has already been purchased.

Home Construction Loans: These loans are available for the construction of a new home.

Home Extension Loans: These loans are given for expanding or extending an existing home. For eg: addition of an extra room etc.

Home Conversion Loans: These loans are 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. Through home conversion loan, the existing loan is transferred to the new home including the extra amount required, eliminating the need of pre-payment of the previous loan.
49

idbi

Land Purchase Loans: These loans are available for purchasing land for both construction and investment purposes.

Bridge Loans: 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.

Why take a Home Loan? What's an average middle class Indian's most cherished dream? Purchasing and moving into a dream house would generally rank among the top three things on the wish list of most people. After all its what been proved by Maslows Law of Hierarchy as well. That entire house hunting every few years, grumpy landlords, killing rents would be a thing of the past. Hey, you even get to use nails to hang your favorite paintings and pictures. Dont you??? Taking a home loan nowadays has become very simpler. The RBI has been regularly slashing interest rates, with the result that housing finance loans that came at an interest rate of 16.5% to 18% four years ago are now available at 11.5% to 13% or lower. Each year the Finance Minister's generosity during the Budget seems to be solely concentrated for the housing sector and construction sector. The Budget 2000's allowed interest payment up to Rs1lakh and principal payment of Rs20, 000 to be exempted from income tax. To top it all, the Housing Finance Companies (HFCs) are aggressively wooing customers. Now, when the sun shines, its the best time to make hay. Isnt it?

RBI directive for home loans

The Reserve Bank of India (RBI) has in the latest directive asked the Indian banks to be more "fair and transparent" while signing their agreements with the consumers. This has come following complaints from various consumer sections regarding home loans.

50

idbi
It has emphasized on the fact that while giving a home loan, the banks should not tie their loans with their own prime lending rates (PLR) which often results in pro-bank and against consumer interest.

Households should get credit counseling before signing any loan agreement. In such case, banks should give credit counseling to customer before giving a loan. Any nongovernmental organization can also give independent credit counseling to small borrowers.

Consumers often complain of not receiving benefits of falling interest rates as banks tie their floating rate loans with its PLR and even when rates fall, the banks kept the PLR unchanged. But when interest rates are hiked, the banks increase the benchmark rate, thus making customers pay a higher rate and consequently increase the number of EMIs too. The RBI has asked the banks to mend rules for the same.

Individual borrowers should ask for the exact tenure and EMI while taking a fixed rate loan. The RBI has also resolved to look into all consumer complaints if it is bought to the regulator's notice.

The IRDA (insurance regulator) has powers to take action against banks if a customer feels cheated while buying an insurance product. On its regulatory role, the RBI is trying to maintain a balance between the extent of freedom granted to the banks and the objectives of governance.

RBI has made it mandatory for all banks - including private and foreign banks - to offer a passbook to their customers with the address and telephone number of the nearest branch.

Customers have often been harassed by banks' call centers where there is no accountability of the query made. The "do not call" registry has also been flouted by banks as customers are bombarded with unnecessary product offerings. The RBI has directed the Indian Banks' Association to come out with a single "do not call" registry or when a customer adds his name to a single bank registry it should then stop unsolicited calls from all banks.

On rising credit card frauds and wrong statements given by the banks, the RBI has asked the customers to approach the ombudsman to redress their problems. This way the RBI feels would inculcate more consumer friendly practices among Indian banks.
51

idbi
Tax benefits
There are certain tax benefits for the resident Indians based on the principal and interest component of a loan under the Income Tax Act, 1961. It may help one get tax benefit up to Rs.50, 490 p.a. (approx). if interest repayment of Rs.1,50,000 p.a. is paid. In addition to this, one also is eligible for getting tax benefits under section 80C on repayment of Rs.1, 00,000 p.a. that further reduces the tax liability by Rs.33.660 p.a. These deductions are available to assesses, who have taken a loan to either buy or build a house, under Section 24(b). However, interest on borrowed capital is deductible up to Rs150, 000 if the following conditions are fulfilled:

Capital is borrowed for acquiring or constructing a property on or after April 1, 1999. The acquisition and 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 Rs30, 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 Rs1,00,000 under Section 80C from assessment year 2006-07.

Terms and conditions for availing Tax benefits on Home Loans

52

idbi
1. Tax deductions can be claimed on housing loan interest payments, subject to an upper limit of Rs1, 50, 000 for a financial year. 2. An additional loan for extension/improvement to the same house and the individual's deductions on the existing loan are less than Rs1, 50,000; he can claim further benefits from the additional loan taken, subject to the upper limit of Rs 150,000 for a financial year. 3. Tax benefits under Section 24 and deduction under section 80C of the Income Tax Act can be claimed only when the payment is made. If an individual fails to make EMI payments, he cannot claim tax benefits for the same. 4. According to the Income Tax Act, tax rebates can only be claimed by the loan applicant. 5. The interest on home loans taken for repairs, renewals or reconstruction, also qualifies for the deduction of Rs 150,000. 6. A husband and wife, both of whom are tax-payers with independent income sources, get tax deduction benefits, with respect to the same housing loan; to the extent of the amount of loan taken in their own respective name. 7. If an individual buys a house and sells it within the same year or after 3 years, and if any profit is made, then a capital gains tax liability arises on the same for which the individual is liable to pay short-term capital gains tax since the sale took place in the same year. But in case, if the sale had taken place after 3 years, then a long-term capital gains tax liability would have arisen. 8. On being proved that the home loan is simply an arrangement between the loanseeker and the builder or with a third party for the purpose of claiming tax benefits, then tax benefits will not be allowed and benefits, previously claimed, will be clubbed to the income and taxed accordingly. 9. Tax benefits on interest on housing loans are allowable only for the original loan and according to Section 24 (1), tax benefits can also be availed for a second loan taken to repay the first loan but not for subsequent loans. This means that if you have already availed of one loan to refinance the original loan and want to now avail a third loan to refinance the second loan, tax rebate on interest payments will not be permissible. Home Loan Tips

53

idbi
The home buying process can seem complicated, but if you take things step-by-step and you know how to choose the right home loan, you will soon be holding the keys to your own home! Ten steps to buying a home Step 1: Figure out how much you can afford. What you can afford depends on your income, credit rating, current monthly expenses, down payment and the interest rate. The calculators can help, but it is best to visit a lender to find out for sure. A housing counselor can help you figure out how to manage and pay off your debt, and start saving for that down payment! Step 2: Know your rights Step 3: Shop for a loan. Save money by doing your homework. Talk to several lenders, compare costs and interest rates, and negotiate to get a better deal. Consider getting preapproved for a loan. Step 4: Learn about home buying programs Step 5: Shop for a home. Choose a real estate agent, Wish list - what features do you want, Home-shopping checklist - take this list with you when comparing homes. Step 6: Make an offer. Discuss the process with your real estate agent. If the seller counters your offer, you may need to negotiate until you both agree to the terms of the sale. Step 7: Get a home inspection. Make your offer contingent on a home inspection. An inspection will tell you about the condition of the home, and can help you avoid buying a home that needs major repairs. Step 8: Shop for homeowners insurance Lenders require that you have homeowners insurance. Be sure to shop around. Step 9: Sign papers. You're finally ready to go to "settlement" or "closing." Be sure to read everything before you sign! Step 10: The House is yours now. Have Puja or hawan.
54

idbi
Terms used in Housing Finance

EMI: Equated Monthly Installment till the loan is paid back. It consists of a portion of interest and the principal

Floating Rate of interest: Rate of interest which varies with the market lending rate. This means that there is an element of risk of paying more than budgeted amount in case the lending rates goes up

Monthly Reducing balance: In this system interest reduces monthly with repayment of Principal amount

Annual Reducing Balance: In this system principal is reduced annually at the end of the year so you end up paying interest even for the portion of principal you have actually paid back

Fixed rate of interest: Rate of interest remains unchanged throughout the period of the loan

Processing charge: It's a fee payable to the on applying for the loan Prepayment Penalties: When loan is paid back before the agreed term of the loan, then banks/ institutions charge penalty for the prepayment

Commitment Fee: Some institution charge commitment fee in case the loan is not availed within a stipulated period, after it is processed and sanctioned.

Miscellaneous Cost: It is quite possible that some lenders may charge documentation or consultant charges.

Eligibility
Home loan eligibility for Resident Indians depends upon the repayment capacity of the loan applicant. The maximum loan that can be sanctioned varies with the banks and other housing finance companies (HFC) and generally, the maximum loan amount granted is 80 to 85% of the cost of your home. Home loan eligibility corresponding to repayment option is based on the following factors. Even though, the eligibility criteria may vary according to the HFCs regulations.
55

idbi
Home loan Eligibility Criteria
Age (Minimum) Age (Maximum) 21 Years 58(salaried) 60(Public Employees) 65 (self employed) Qualification Income Graduation Stable source of income and saving history Dependents Number liabilities Other income sources Spouse's income of dependents, assets, limited/Government

About the Home loans in Jodhpur city:

As far as the Jodhpur City is concerned it has the population of about ten lacks. And it has developed due to the strong industrial area and political background. Jodhpur is the second fast developing city in Jaipur. There are number banks e.g. co-operative, commercial, scheduled, and nationalized.

Total number of banks in Jodhpur, which denotes the whole population

1. ADARSH CO. BANK 2. STATE BANK OF INDIA 3. BANK OF MAHARASHTRA 4. JODHPUR MERCHANTS CO-OPERATIVE BANK 5. ICICI LOANS 6. STATE BANK OF HYDERABAD 7. BARCLAYS BANK 8. BANK OF PATIYALA 9. CENTRAL BANK OF INDIA 10. BOMBAY MERCANTILE CO-OPERATIVE BANK 11. CANARA BANK
56

idbi
12. ING VYSYA BANK 13. HDFC LOANS 14. JODHPUR DISTRICT CO-OPERATIVE BANK 15. HINGOLI PEOPLES CO-OPERATIVE BANK 16. AKOLA URBAN BANK 17. DENA BANK 18. BHAGYALAXMI MAHILA BANK 19. PUNJAB NATIONAL BANK 20. SANGLI BANK 21. ANDHRA BANK 22. CENTURIAN BANK LOANS 23. UNITED WESTERN BANK 24. SHANKAR NAGARI BANK 25. JAI SHIVRAI CO-OPERATIVE BANK 26. GODAVARI URBAN CO-OPERATIVE BANK 27. ALAHABAD BANK 28. MAHARASHTRA STATE CO-OPERATIVE BANK 29. MARKANDEYA NAGARI SAHAKARI BANK 30. DEVELOPMENT CREDIT BANK 31. PEOPLES CO-OPERATIVE BANK 32. PUNJAB SINDH BANK 33. UNION BANK OF INDIA 34. VIJAYA BANK 35. BANK OF INDIA

SAMPLE BANKS THAT REPRESENT WHOLE POPULATION:

36. STATE BANK OF INDIA 37. BANK OF MAHARASHTRA 38. BARCLAYS BANK 39. ADARSH CO. BANK 40. JODHPUR MERCHANTS CO-OPERATIVE BANK

57

idbi
By using the sampling technique these five banks are selected i.e. Nationalize, state, schedule and co-operatives, which REPRESENT the characteristics of whole population of banks present in Jodhpur City.

58

idbi
TABULATION ANALYSIS OF DATA
Home loan Schemes of different Banks

1.

BANK OF MAHARASHTRA
(Branch 2nd Pulia market, Jodhpur only)

Bank of Maharashtra is a nationalized bank in which is involved in number of sectors for the disbursement of funds.

BANK OF MAHARASHTRA LOAN SCHEMES:

Total Disbursement in previous year = 1.5 crore Payment delayed = 7.5 lakhs (5 %) Total Home loans = 60 lakhs (40% of all loans disbursed) Interest Rate of Housing Loan = 12% (Fixed rate)

Type Of Loan

No. A/C

of Amount

Housing Loan Car Loan Salary Loan Educational Loan Agriculture Loan Cash Credit TOTAL

20 8 15 5 65 5 118

60,00,000 24,30,000 29,50,000 7,20,000 10,25,000 18,75,000 1,50,00,000

59

idbi
2. NAGRIK SAHKARI BANK:
(Scheduled commercial bank) (Data related to Main Branch only)

This bank is as per name Nagrik is involved more in disbursement of loans in Gramin sector including Agriculture. This Branch is located at Sojati Gate Jodhpur.

INTEREST RATES = TOTAL LOANS HOME LOANS

13% p.a. = = 2,04,71,075/1271075 (6.5%)

Nagrik Bank loan schemes: Agriculture SectorInterest Rate Loan disbursed No. Of customer 11% Rs. 58,78,000 359

Home loans: Interest Rate = 13% Loan disbursed Number of customer = Rs. 12,75,000 = 11

Education Loan: Interest Rate = 11.75% Loan disbursed Loans for businessman: Interest rate = 11% Loan disbursed = Rs.2, 02, 20, 00 = Rs. 2,00,000

For salaried People Interest Rate = 13% & 14% Loan disbursed Number of customer = Rs. 1, 11, 00,000 = 309

60

idbi
Type Of Loan No. A/C Housing Loan Salary Loan Educational Loan Agriculture Loan Loan to Traders TOTAL 11 309 3 359 7 689 12,71,075 1,11,00,000 2,00,000 58,78,000 20,22,000 2,04,71,075 of Amount

3. Barclays Bank :
(Mahaveer Chowk, Jaipur) Total Loan disbursement

219 A/C

Rs.6, 03, 69,500

Type Of Loan

No. A/C

of Amount

Housing Loan Car Loan Salary Loan Educational Loan

23 11 40 7

92,10,000 43,49,000 32,49,000 29,50,000 3,26,500 1,27,25,000 6,50,000 2,19,21,000 20,89,000 29,00,000 6,03,69,500

Consumer Durable Loan 8 Overdraft Marriage Loan Agriculture Loan PMRY (Govt. Scheme) Cash Credit TOTAL 21 3 51 48 7 219

Housing Loan Interest Rate 11.50% (Fixed)

61

idbi
Loan Disbursed No. Of Customer Floating Rate of Interest Rs.92, 10,000 23

Upto 20 lakhs Up to 5 year 5 yr. to 15 yr. 15 yr. to 25 above 10% 10.25% 10.50%

Above 20 lakhs 10.25% 10.50% 10.75%

Fixed Rate of Interest

Upto 20 lakhs
5 year to

Above 20 lakhs 10.25%

11.50% 11.75%

10 year

10%
11.25% 11.50%

10year to 15year. 15year to 20 above

4.

STATE BANK OF INDIA:

(Branch: Doctor Lane Jodhpur)

State Bank of India is a nationalized bank under-taking of Govt. of India, engaged in development of society.

SBI loan schemes: Total disbursement in previous year = 3 crore Home loan = 18000000

Type Of Loan

No. A/C

of Amount

Housing Loan Car Loan Salary Loan Educational Loan Agriculture Loan Cash Credit

40 2 55 8 42 11
62

1,80,00,000 4,30,000 20,55,000 24,50,000 20,38,000 45,49,000

idbi
Marriage Loan TOTAL 2 160 4,78,000 3,00,00,000

HOUSING LOANS TO INDIVIDUALS STATE BANK ADVANCE RATE (SBAR): 11.75%

Floating rate of interest: Period Upto 5 years Above 5 years and upto 15 years Above 15 years and upto 20 years Interest 10.00% 11.50% 11.75%

Fixed Rate of Interest: Period Upto 5 years Above 5 years and upto 15 years Above 15 years and upto 20 years Interest 11.25% 11.50% 11.75%

5.

ADARSH CO-OPERATIVE BANK:

(Main branch only)

This ADARSH CO-OPERATIVE BANK is a non-scheduled co-operative bank situated at old Jodhpur. This bank is engaged in more service to businessman and contractors.

Total Disbursement Net Profit (Previous Year) Home Loan : : Rs 2, 75, 00,000

Rs

2, 72, 82,173

Rs.4, 63,796

Interest rate: 14% (Fixed rate)

63

idbi
Loan Distribution:

Type of Loan Housing Loan Gold Loan Hire Purchase Loan Fixed loan FDR Loan Total

No. of A/C 2 94 15 23 228 362

Amount 4,60,000 33,37,700 8,33,000 24,34,000 1,13,89,473 1,84,54,173

64

idbi
GRAPHICAL REPRESENTATION OF DATA 24.A. JODHPUR NAGRIK CO-OP BANK :
14% p.a.(Fixed). 27282173 = 463796 (1.7%)

Interest Rate = Total Loans = Home Loans

Percentage of Home Loan

1.70% 98.30%
Other loans

Interpretation:-

The above chart shows that percentage of home loans is just 1.70%

and the other loans contribution is 98.30%. It means that JODHPUR MERCHANTS CO-OP BANK is more involved in the giving funds in business enterprises. Because of the high interest rates i.e. 14% p.a. for home loans the customers are not attracted. Bank enjoying the more benefits from the other loans than Home Loan.

65

idbi
B. ADARSH CO. BANK:
Interest Rate Total Loans Home Loans = 13% p.a. = 19555000 = 1271075 (6.5%)

Percentage of Home Loan

6.50%
Other loans

93.50%
Home loans

Interpretation:-The above chart shows that percentage of home loans is just 6.50% and the other loans contribution is 93.50%. It means that ADARSH CO. BANK is more involved in the giving funds in AGRICULTURAL SECTORS & less involved in Home Loans to employees. Because of the high interest rates i.e. 13% p.a. for home loans the customers are not attracted. With respect to nationalize banks and private banks. One of the reasons of the less distribution of Home Loan is the location of the branch i.e. at Vishnupuri, Jodhpur. It is a agricultural area and the Major customers of the banks are farmers and the employees of the S.R.T.M.University.

66

idbi
C. Barclays Bank
Interest Rate Total Loans Home Loans =

:
= 11.50% = 5.41 CRORE

92, 10,000(70%)

Percentage of Home Loan

70%

30%
Other loans

Interpretation:-

The above chart shows that percentage of home loans is very high i.e. is more

70% and the other loans contribution is 30%. It means that Barclays Bank

involved in the giving funds Home loans. Because of the low interest rates i.e. 11.5% p.a. for home loans and easy processing for getting the loan the customers are quickly attracted. With compare to the other banks i.e. nationalize and the co-operative banks it is having lowest rate of interest. The main feature of the bank is sanctioning of the home loan proposal is very fast.

67

idbi
D. BANK OF MAHARASHTRA
Interest Rate Total Loans Home Loans = = 11.75% p.a. = 6000000(40%) 1.5 CRORE

Percentage of Home Loan

40.00% 60.00%
Other loans

Interpretation:-The above chart shows that percentage of home loans is 40% and the other loans contribution is 60. It means that BANK OF MAHARASHTRA is more involved in the giving funds in home loans. Because of the low interest rates i.e. 11.75% p.a. for home loans the customers are attracted. Bank is having the number of schemes and even then it disbursed 40% of the funds in the Home Loan sector. It is enjoying the maximum interest rates from the other loans 11% and above.

68

idbi
E. STATE BANK OF INDIA
Interest Rate Total Loans Home Loans = = 11.75% = 3 CRORE

18000000 (60%)

Percentage of Home Loan

40.00%
Other loans

60.00%

Interpretation:-The above chart shows that percentage of home loans is 60% and the other loans contribution is 40%. It means that STATE BANK OF INDIA is more involved in the giving funds in home loans. Because of the low interest rates i.e. 11.75% p.a. for home loans and the some special scheme for the professional such 0.25% discount on loan and 0% processing fee for some customers the customers are attracted. Bank is having the number of schemes and even then it disbursed 60% of the funds in the Home Loan sector.

69

idbi
25.COMPARISON OF RATE OF INTEREST(Fixed) Name of bank
Bank of Maharashtra Adarsh Bank Barclays Bank State Bank of India Jodhpur Nagrik Co. Bank

Rate of interest
12 % 13% 11.50% 11.75% 14%

26.
Comparison of Rate of Interest
16 14 14 12 12 Rate of Interest 10 8 6 4 2 0 BOM ACB BOB Name of Bank SBI JNSB 13 11.5 11.75

Interpretation:-The above graph shows that, in terms of rate of interest (Fixed Rate) Jodhpur Nagrik Co-operative Banks (NMC) rate is high i.e. 14%. Barclays Bank (BOB) is lending with lowest rate i.e. 11.5%. Bank of Maharashtra(BOM) and State

Bank of India(SBI) is having rate 12% and 11.75% respectively which is more than Barclays Bank .

70

idbi
B. Percentage of housing loan to total disbursement

Percentage Name of bank housing loan

of to

total disbursement
Bank of Maharashtra Adarsh CO. Bank Barclays Bank State Bank of India Jodhpur Nagrik Co-op. Bank 40% 6.5% 30% 40% 1.7%

%age of Housing loan to Total Disbursment

120 100 Percentage 80 60 60 40 20 0 BOM 40 6.5 Aco. Bank BB SBI 30 40 1.7 NSCB 93.5 70 60 98.3
Other Housing

Name of Bank

Interpretation:-As per the above Graph, State Bank of India (SBI) and Bank of Maharashtra (BOM) are having greater percentage of Home Loan i.e 40% to the Total disbursement of loan. Barclays Bank is quite good percentage of Home Loan-30% to the
71

total disbursement, which is lower than State Bank of India and Bank Of Maharashtra. But,

idbi
Adarsh Co. Bank(MGB) and Jodhpur Nagrik co-operative bank(NMC) is having very low percentage of Home Loan to the Total disbursement.

72

idbi
27.DURATION FOR SANCTION OF HOUSING LOAN

Name of bank

Duration for Sanctioning of home loan

Bank of Maharashtra Adarsh Co. Bank Barclays Bank State Bank of India Jodhpur Nagrik Co-op. Bank

15 25 7 10 30

Duration for Sanction of Housing Loan

35 30 30 25 Duration in Days 25 20 15 15 10 10 5 0 BOM ACoB BB Name of Bank SBI JNSB 7

Interpretation:-The above graph shows that, Jodhpur Nagrik Co-operative Bank (NMC) take nearly about 30 days for sanctioning of Housing Loan and Marthwada Gramin Bank(MGB) also takes 25-30 days for sanctioning. But, Barclays Bank (BOB) sanctions

within a week. State Bank of India (SBI) and Bank of Maharashtra (BOM) take 10 and 15 days respectively. so, Barclays Bank Housing Loan. is having Good performance in sanctioning of

73

idbi
28.NUMBER OF A/C OF HOUSING LOAN Name of bank Number of customers of

housing loan
Bank of Maharashtra Adarsh Co. Bank Barclays Bank State Bank of India Jodhpur Nagrik Co-op. Bank 20 11 23 40 2

Number of A/c of Housing Loan

45 40 35 30 25 20 15 10 5 0 BOM MGB BOB Name of Banks
Interpretation:-From the above graph, it is clear that State Bank of India is having 40 A/C of Housing Loan which is Good performance in housing sector. Barclays Bank and Bank

No. of A/c

SBI

NMC

of Maharashtra is having quite good performance. Jodhpur Nagrik Co-operative bank (NMC) and Adarsh Co. Bank (MGB) should is their customers.

74

idbi

Procedure for getting Approval of Home Loan :

First of all the applicants have to make an application to the Concerned bank in which he/she wants to get loan.

The next step is identification and selection of the property. Bank or financial institutions will verify the all documents and the customers i.e. Income and ability to repayment.

Documents required at the disbursement stage as per the procedure & draft booklet for the location in which the property is located.

Additional documents may be required as per the nature of the application.

Disbursement of loan will be in stages as the construction is progressing.

Documents required for sanctioning of the Home Loan:

For General Applicant: Passport size Photograph Age verification (school/college/leaving certificate or mark sheet, PAN card. Election Identity card, Passport, Driving License, Ration Card, Birth Certificate.) Bank statement for past 36 months or salary Account and any other operating A/C.

For salaried people Additional: Latest salary certificate/sleep showing all the deduction of the employer. Four months salary statements required in case of variable salary. Latest form 16/ I.T. Returns Appointment/Increment letter from the employer for annual benefit to be considered.

For self employed:

75

idbi
Computation of Income, Balance sheet, the Profit and Loss A/C along with schedules of company and individuals for past 3 ears duly certified by C.A. Memorandum/Article of Association or partnership as applicable. Brief profits of the company. A/C continuity proof for the last one year. Office address proof. Residence address proof. Qualification certificate for self employed professionals. Sale deed/ Agreement of sale Letter of allotment of Housing Board or society. Copy of approval plan if applicable. Permission for construction if applicable. Valuation of property which is to be financed. In case of agricultural land conversion into copy of relative order. NOC under the provision of ULC Regulation Act,1976 in original (* More or less documents may be required as per the banks rules.

A. COMPARISON OF BANK LOANS :

With compare to all the five banks i.e. State Bank of India, Bank of Maharashtra, Adarsh Co. Bank, Barclays Bank in which Barclays Bank Sector. & Jodhpur Marchants Co-Operative Bank,

And SBI Bank having very good performance in Loan

In terms of Interest rate comparison also Barclays Bank loan is leading with having lowest interest rate of 10.5% p.a. (floating rate) only.

But banks like SBI & Maharashtra bank and Adarsh Co. bank & Jodhpur merchants co-operative bank are having more number of schemes for loan rather than home loan.

76

idbi
The interest rates of co-operative banks such JODHPUR MERCHANTS CO-OP. BANK & ADARSH CO. BANK is not in the race and behind in Home loans

disbursement due to the high rate of interest.

In comparison SBI & Barclays Bank

are in with competition and provided several

schemes like. Barclays Bank gave free insurance & SBI given 0.25% discounts for selected professional customers.

B.

BANKING POINT OF VIEW: In the bank point of view the main businesses of bank is accepting deposits with low interest rates & lend it on high interest rate and enjoy the variation for long period of time. Maximum interest rate will help the bank but it will not attract customer to earn the interest for long period. And home loans are more reliable to gain constant interest for long period of time. And the recovery will be more. Maximum fund will be disbursed and will have less risk rather than other loans, which are in short term and high interest rate schemes. That is why the in these five banks Barclays Bank & SBI will enjoy long term benefit & other may have problem in future course. The number customers that banks are chosen for home loans are salaried employ in which it reduces the risk involved in recoveries.

C.

CUSTOMERS POINT OF VIEW: In customers point of view: -

i. ii.

Barclays Bank Barclays Bank

is better because it have lowest rate of interest. bank sanction loan within short time period with respect to

Nationalize banks. iii. iv. Nationalize banks takes maximum time for selecting application. In co-op. Banks loan will be sanctioned but it depends upon the relation with banking personnel & member of the banks.
77

idbi
v. The very important benefit that the customer getting is getting tax benefit. Home loans is the only loan which Government Of India have given relief & tax deduction upto 1,50,000 p.a. for the income tax payee. That is the reason customer paying less interest that he actual is having.

LIMITATION OF STUDY

I was unaware of their operation. The banking activities are very large in number. I wish to know the whole gamut of policy and operations. Financial terminology was new to me and that was a limitation to understand the whole process. I had no work experience earlier, so I had a hesitation in approaching my colleagues. Soon I overcame this problem. Time Constraint was one of the limitations. Document verification requires more time and concentration. A minute mistake in the exercise could be costly.

Financial terminologies were new. Felt the deficiency within myself to understand them in their perspectives.

78

idbi

SUGGESTIONS:

1.

In this era of Globalization it is very difficult to the banks to keep the high rate of

interest for facing the competitor -

i.

To reduce the interest

ii.

To launches the new attractive schemes

iii.

To choose the new methodology for recovering balances

iv.

To select the sectors in which the large number of funds are invested for long time period such as Home Loan.

v.

To attract not only salaried people but also attract the businessmen and contractors in which more money will be disbursed and may enjoy large rate of interest.

79

idbi

Conclusion

With compare to all fire banks. performance in home loan sector.

Barclays Bank

and SBI have a very good

Max. interest rate will help the bank but it will not attract thee customers to earn long term interest and home loans are more reliable to gain constant interest so, interest rate of housing loan should be minimum.

The days for sanctioning loan also affect the loan proposal because in the era of competition thee bank should keep thee sanctioning period minimum.

80

idbi

BIBLIOGRAPHY:

Practical Banking Advances By: Bedi & Haldikar

Financial management By: Arun Kumar & Rachana

Fund management in commercial bank By: Malhotra & Verma

INTERNET : www Barclays Bank.com www.googlesearch.com www.sbi.co.in www.mahabank.com www.bankrate.com www.apnaloan.com

81

idbi

Questionnaire

Name of the Bank Address E-mail

1) What are your housing loan products?

1) What is the rate of interest for housing loan? Floating rate of interest Fixed rate of interest

2) What are the documents required for housing loan?

3) What is the amount of total disbursement loan in one year ?

82

idbi
4) What is the amount of housing loan in the total disbursement of loan ? a) 0-20% b) 20-40% c) 40-60% d) 60-80% e) 80% and above f) 5) How many customers/A/Cs of housing loan ? a) 0-15A/c b) 15-30A/c c) 30-45A/c d) 40A/c and above

6) What is the repayment period? a) 0-5 years b) 5-10 years c) 10-15 years d) 15-20 years e) 20 years and above

7) How many days are required for sanctioning of a housing loan? a) 0-10 days b) 10-20 days c) 20-30 days d) 30-40 days e) 40 days and above

83

idbi

84

idbi
BALANCE SHEET
( As on 31st march,2010)

Balance Sheet as on 31st March, 2009 Amount (000's Omitted) in Schedules As 31.3.2009 Capital & Liabilities Capital Reserves & Surplus Deposits Borrowings Other Liabilities & Provisions Total Assets Cash and balances with Reserve Bank of 6 India Balances with Banks and Money at Call and 7 Short Notice Investments Advances Fixed Assets Other Assets Total Contingent Liabilities Bills for Collection Significant Accounting Policies Notes on Accounts 17 18 12 8 9 10 11 9369,72,34 12929,56,33 43870,06,78 106701,32,41 2427,00,81 4301,82,95 179599,51,62 82362,32,83 8315,01,73 6413,52,02 11866,84,51 34943,62,75 83620,86,98 1088,80,75 5212,50,45 143146,17,46 61375,31,76 6627,59,33 1 2 3 4 5 365,52,77 10678,39,91 152034,12,72 3927,04,80 12594,41,42 179599,51,62 365,52,76 8284,41,00 124915,97,93 1142,56,16 8437,69,61 143146,17,46 Rupees on As 31.3.2008 on

85

idbi
PROFIT AND LOSS ACCOUNT
For the Year ended 31st March, 2010

Profit & Loss Account for the Year ended 31st March, 2009 Amount (000's Omitted) in Rupees

Schedules Year ended 31st March, Year ended 31st March, 2010 2009 I. Income Interest Earned Other Income Total II. Expenditure Interest Expended 15 Operating Expenses Provisions and Contingencies Total III. Profit Net. Profit for the year Available Appropriation Appropriation Transfer to : a) Statutory Reserve b) Capital Reserve c) Revenue Other Reserves and 358,88,04 84,64,85 651,05,38 256,61,61 14,31,65 65,503,07,35 for 1435,52,15 1435,52,15 1026,46,45 1026,46,45 16 7901,67,06 2934,29,21 1593,02,86 12428,99,13 5426,55,70 2544,31,34 1388,54,33 9359,41,37 13 14 11813,47,67 2051,03,61 13864,51,28 9004,08,55 1381,79,27 10385,87,82

I) General Reserve II) Statutory Reserve (Foreign) d) Dividend (including Dividend

650,35,08 70,30 340,93,88

86

502,50,35 57,00 252,45,84

idbi
Tax) I) Interim Dividend II) Proposed Dividend TOTAL Basic & Diluted Earnings per Share Significant 17 Accounting Policies Notes on Accounts 18 0 340,93,88 1435,52,15 39.41 124,60,65 127,85,19 1026,46,45 28.18

87