MALWA INSTITUTE OF TECHNOLOGY

INDORE

MAJOR RESEARCH PROJECT

On

“A COMPARARTIVE STUDY ON HOUSING LOAN OF

PUBLIC SECTOR AND PRIVATE SECTOR BANKS”

Submitted towards partial fulfillment of for the award of Master of

Business Administration (Full Time)
(2021-2023)

Under Guidance of : Submitted By:

Ms. Madhuri Kriplani Aman jaiswal

Roll No.:- 212130098

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 MALWA INSTITUTE OF TECHNOLOGY, INDORE
(Affiliated to Devi Ahilya Vishwavidyalaya Indore).

CERTIFICATE

This is to certify that Aman jaiswal student of MBA III semester

specializing in Human Resource & Finance has undertaken a major
research project entitled “A COMPARARTIVE STUDY ON
HOUSING LOAN OF PUBLIC SECTOR AND PRIVATE
SECTOR BANKS” under my guidance & supervision for the partial
fulfillment of requirement of the degree MBA (Full Time) of Devi
Ahilya Vishwavidyalaya, Indore for year 2021-2023.

Dr. Kranti Pandey Dr. M.S Murthi

VICE PRINCIPAL DIRECTOR

Ms. Madhuri Kriplani

MRP GUIDE

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 DECLARATION

I, Aman jaiswal, hereby declare that the major research project work
which is being presented in the report entitled “A COMPARARTIVE
STUDY ON HOUSING LOAN OF PUBLIC SECTOR AND
PRIVATE SECTOR BANKS” is an original work done by me & is
submitted to the Devi Ahilya Vishwa Vidyalaya, Indore in partial
fulfillment of requirement for the award of Master of Business
Administration.
I further declare that no material of this report has been copied from
any source & this report has not been submitted to any other
University or institution for the award of any degree, diploma or
certificate. The materials obtained (& used) from other sources have
been duly acknowledged in the project.

Place: Indore Aman jaiswal

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 ACKNOWLEDGMENT

I am grateful to my MRP guide Ms Madhuri Kriplani, Malwa

Institute of Technology Indore for his precious guidance throughout
my major research project. He has devoted his valuable time &
motivated me at every step towards completing this project. The study
would not have been possible without his generous motivation.

I am deeply indebted to Dr. Kranti Pandey, Vice Principal, Malwa

Institute of Technology Indore for his continuous support & blessings.
His support has rendered me great help towards this project.

I also express my sincere gratitude to my family members, friends &

respondents for their extended support throughout the project. Finally,
I am thankful to all those who have directly or indirectly contributed
to this project.

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INDEX:

Chapter 01
• Introduction of Indian banking system
• Introduction of RBI.
• Role of RBI
• Function of RBI
• Introduction of NABARD
• Role of NABARD

Chapter 02
• About the HDFC bank
• About the home loan

Chapter 03
• Rationale of study

Chapter 04
• Literature review

Chapter 05
• Research methodology

Chapter 06
• Sample
• Result and interpretation

• Chapter 07
• Suggestions
• conclusion

Chapter 08
• References
• Questionnaire

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 INRTODUCTION

HISTORY OF INDIAN BANKING SYSTEM:-

The first western bank of a joint stock verity was Bank of Bombay,
establishing 1720 in Bombay. This was followed by bank of Hindustan in
Calcutta, which was established in 1770 by an agency house.4 this agency
house and banks were close down in 1932. The first “Presidency Bank” was
the Bank of Bengal established in Calcutta on June 2, 1806 with a capital of
Rs.50 Lakh. The Government subscribed to 20 per cent of its share capital
and shared the privilege of appointing directors with voting rights. The bank
had the task to discounting the treasury bills to provide accumulation to the
Government. The bank was given powers to issue notes in 1823. The Bank
of Bombay was the second presidency bank set up in 1840 with a capital of
52 Lakh, and the Bank of Madras the third Presidency bank established in
July 1843 with a capital of 30 Lakh. The presidency banks were governed by
Royal charters. The presidency banks issued currency notes until the passing
of the paper currency Act, 1861, when this right to issue currency notes by
the presidency banks was taken over and that function was given to the
Government. The presidency bank act, which came into existence in 1876,
brought the presidency banks were amalgamated into a single bank, the
Imperial Bank of India, in 1921. The Imperial Bank of India was further
reconstituted with the merger of a number of banks belonging to old princely
states such as Jaipur, Mysore, Patiala and Jodhpur. The Imperial Bank of
India also functioned as a central bank prior to the establishment of the
Reserve Bank in 1935. Thus, during this phase, the Imperial Bank of India
performed three set of functions via commercial banking, central banking
and the banker to the government.
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• INTRODUCTION OF RESERVE BANK OF INDIA

HISTORY
The genesis of Reserve Bank of India (RBI) started in 1926 when the Hilton-
Young Commission or the Royal Commission on Indian Currency and
Finance made recommendation to the British Government of India for
creation of a central bank.
The chief objective of such recommendation twofold:
• To separate the control of currency and credit from the government.
• To augment the banking facilities throughout the country.

To give effect to above recommendations, a bill was introduced in

Legislative Assembly in 1927 but this bill was withdrawn because various
sections of the people were not in agreement. The recommendation to create
a reserve bank was made by White Paper on Indian Constitutional Reforms.
Thus, a fresh bill was introduced and was enacted in 1935. Thus, Reserve
Bank of India was established via the RBI Act of 1934 as the banker to the
central government. RBI launched its operations from April 1, 1935. Its
headquarters were in Kolkata in the beginning, but it was shifted to
ShahidBhagat Singh Marg, Mumbai in 1937. Prior to establishment of RBI,
the functions of a central bank were virtually being done by the Imperial
Bank of India, which was established in 1921 by merging three Presidency
banks. It was mainly a commercial bank but also served as banker to the
government to some extent. It’s worth note that RBI started as a privately
owned bank. It started with a Share Capital of Rs. 5 Corer, divided into
shares of Rs. 100 each fully paid up. In the beginning, this entire capital was
owned by private shareholders. Out of this Rs. 5 Corer, the amount of Rs.
4,97,8000 was subscribed by the private shareholders while Rs. 2,20,000
was subscribed by central government. After independence, the government

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passed Reserve Bank (Transfer to Public Ownership) Act, 1948 and took
over RBI from private shareholders after paying appropriate compensation.
Thus, nationalisation of RBI took place in 1949 and from January 1, 1949,
RBI started working as a government owned central bank of India.

• Role of RESERVE BANK OF INDIA

There are seven major functions of RBI in Indian banking system:

• Issue of bank notes
• Banker to Government
• Custodian of country’s foreign currency Reserve
• Custodian of cash reserve of commercial banks
• Lender of last resort
• Central clearance and accounts settlement
• Controller of credit

1. Organizational structure of RESERVE BANK OF

INDIA

GOVERNER
↓
DEPUTY GOVERNER
↓
EXCUTIVE DIRECTOR
↓
PRINCIPAL CHIEF GENERAL MANAGER
↓
CHIEF GENERAL MANAGER

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↓
GENERAL MANAGER
↓
DEPUTY GENERAL MANAGER
↓
ASST. GENERAL MANAGER
↓
MANAGER
↓
ASST. MANAGER AND SUPPORT STAFF

• INTRODUCTION OF NABARD

NABARD stands for National bank for agriculture and rural

development. Established on 12th July 1982, it is a development bank,

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headquartered in Mumbai and has its branches throughout the country.
The idea of NABARD was thought of by CRAFICARD (committee to
review arrangements for institutional credit for agriculture and rural
development). It was set up to help agriculture and rural India by lending
credit support, services and other such initiatives.
• ROLE OF NABARD

• It is an apex development bank in India and provides investment and

credit to help promote development in rural areas.
• Refinances financial institutions which finance the rural sector.
• It undertakes monitoring or projects refinanced by it.
• Gives training to institutions that work for rural upliftment.
• Regulates co-operative banks and RRBs and helps acquire talent.
• ABOUT REGIONAL RURAL BANK

The nationalization of the banks in 1969 boosted the confidence of the

public in the Banking system of the country. However, in the early 1970s,
there was a feeling that even after nationalization, there were cultural
issues which made it difficult for commercial banks, even under
government ownership, to lend to farmers. This issue was taken up by the
government and it set up Narasimham Working Group in 1975. On the
basis of this committee’s recommendations, a Regional Rural Banks
Ordinance was promulgated in September 1975, which was replaced by
the Regional Rural Banks Act 1976.
The RRB functions within the local limits as specified by government
notification. The Regional Rural Banks (RRBs) aimed at providing credit
and other facilities to the small and marginal farmers, agricultural
labourers, artisans and small entrepreneurs in rural areas.
Regional Rural Banks are regulated by National Bank for Agriculture and
RuralDevelopment (NABARD). Please note that currently seven states
viz. Tripura, Nagaland, Manipur, Mizoram, Arunachal Pradesh
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 Meghalaya and Pondicherry, have state-level RRBs. Gujarat and
Karnataka too have demanded formation of state level RRB. In case of
West Bengal, the state Assembly took unanimous resolution in favour of
State level RRB in the year 2004.
The RRBs were owned by three entities with their respective shares as:

• CENTRAL GOVERNMENT (50%)

• STATE GOVERNMENT (15%)
• SPONSOR BANK (35%)

ROLE OF REGIONAL RURAL BANK

The RBBs Act has made various provisions regarding the incorporation,
regulation and working of RRBs. According to this Act, the RRBs are to be set-
up mainly with a view to develop rural economy by providing credit facilities
for the purpose of development of agriculture, trade, commerce, industry and
other productive activities in the rural areas.

Such facility is provided particularly to the small and marginal farmers,

agricultural labourers, artisans, and small entrepreneurs and for other related
matter

The objectives of RRBs can be summarized as follows:

1. To provide cheap and liberal credit facilities to small and marginal

farmers, agriculture labourers, artisans, small entrepreneurs and other
weaker sections.
2. To save the rural poor from the moneylenders.
3. To act as a catalyst element and thereby accelerate the economic growth
in the particular region.

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 4. To cultivate the banking habits among the rural people and mobilize
savings for the economic development of rural areas.
5. To increase employment opportunities by encouraging trade and
commerce in rural areas.
6. To encourage entrepreneurship in rural areas.
7. To cater to the needs of the backward areas which are not covered by the
other efforts of the Government?
8. To develop underdeveloped regions and thereby strive to remove
economic disparity between regions.

TYPES OF BANK

• Public sector bank.

• Private sector bank.

PUBLIC SECTOR BANK

Public sector banks in India. Public Sector Banks (PSBs) are banks where a
majority stake (more than 50%) is held by a government. The shares of these
banks are listed on stock exchanges.

There is a total of 21 public sector banks India in India.

1. Allahabad bank.
2. Andhra bank.
3. Bank of India.
4. Bank of Baroda.
5. Bank of Maharashtra.
6. Canara bank of India.
7. Corporation bank of India.
8. Central bank of India.
9. Dena bank.

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10.Indian bank.
11.India overseas bank.
12.IDBI bank.
13.Oriental bank of commerce.
14.Punjab & Sindh bank.
15.Panjabi national bank.
16.State bank of India.
17.Syndicate bank.
18.UCO bank.
19.Union bank of India.
20.United bank of India.
21.Vijaya bank.

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PRIVATE SECTOR BANK

The private-sector banks inIndia represent part of the Indian banking sector that
is made up of both private and public sector banks. The "private-sector banks"
are banks where greater parts of state or equity are held by the private
shareholders and not by government.

There is a total of 19 private sector banks India in India.

1. Catholic Syrian Bank Ltd.

2. City Union Bank Ltd.
3. Dhanalakshmi Bank Ltd.
4. Federal Bank Ltd.
5. ING Vysya Bank Ltd
6. Jammu & Kashmir Bank Ltd.
7. Karnataka Bank Ltd.
8. KarurVysya Bank Ltd.
9. Lakshmi Vilas Bank Ltd.
10.Nainital Bank Ltd.
11.Ratnakar Bank Ltd.
12.South Indian Bank Ltd.
13.TamilnadMercantil Ltd.
14.Axis Bank Ltd.
15.Development Credit Bank Ltd
16.HDFC Bank Ltd.
17.ICICI Bank Ltd.
18.IndusInd Bank Ltd.
19.Kotak Mahindra Bank Ltd.
20.Yes Bank Ltd.

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INTRODUCTION OF HDFC BANK:

The HDFC Bank was incorporated on August 1994 by the name of 'HDFC
Bank Limited', with its registered office in Mumbai, India. HDFC Bank
commenced operations as a Scheduled Commercial Bank in January 1995. The
Housing Development Finance Corporation (HDFC) was amongst the first to
receive an 'in principle' approval from the Reserve Bank of India (RBI) to set up
a bank in the private sector, as part of the RBI's liberalization of the Indian
Banking Industry in 1994.

HDFC Bank is headquartered in Mumbai. The Bank at present has an enviable

network of over 1416 branches spread over 550 cities across India. All branches
are linked on an online real–time basis. Customers in over 500 locations are also
serviced through Telephone Banking. The Bank also has a network of about
over 3382 networked ATMs across these cities.

The promoter of the company HDFC was incepted in 1977 is India's premier
housing finance company and enjoys an impeccable track record in India as
well as in international markets. HDFC has developed significant expertise in
retail mortgage loans to different market segments and also has a large
corporate client base for its housing related credit facilities. With its experience
in the financial markets, a strong market reputation, large shareholder base and
unique consumer franchise, HDFC was ideally positioned to promote a bank in
the Indian environment.

The shares are listed on the Bombay Stock Exchange Limited and the National
Stock Exchange of India Limited. The Bank's American Depository Shares
(ADS) are listed on the New York Stock Exchange (NYSE) under the symbol
'HDB' and the Bank's Global Depository Receipts (GDRs) are listed on
Luxembourg Stock Exchange.

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On May 23, 2008, the amalgamation of Centurion Bank of Punjab with HDFC
Bank was formally approved by Reserve Bank of India to complete the statutory
and regulatory approval process. As per the scheme of amalgamation,
shareholders of CBoP received 1 share of HDFC Bank for every 29 shares of
CBoP.

The merged entity now holds a strong deposit base of around Rs. 1, 22,000crore
and net advances of around Rs. 89,000 crore. The balance sheet size of the
combined entity would be over Rs. 1, 63,000crore. The amalgamation added
significant value to HDFC Bank in terms of increased branch network,
geographic reach, and customer base, and a bigger pool of skilled manpower.

In a milestone transaction in the Indian banking industry, Times Bank Limited

(another new private sector bank promoted by Bennett, Coleman & Co. / Times
Group) was merged with HDFC Bank Ltd., effective February 26, 2000. This
was the first merger of two private banks in the New Generation Private Sector
Banks. As per the scheme of amalgamation approved by the shareholders of
both banks and the Reserve Bank of India, shareholders of Times Bank received
1 share of HDFC Bank for every 5.75 shares of Times Bank.

HDFC Bank offers a wide range of commercial and transactional banking

services and treasury products to wholesale and retail customers. The bank has
three key business segments:

Wholesale Banking Services – The Bank's target market ranges from large,
blue–chip manufacturing companies in the Indian corporate to small & mid–
sized corporates and agri–based businesses.

Retail Banking Services – The objective of the Retail Bank is to provide its
target market customers a full range of financial products and banking services,
giving the customer a one–stop window for all his/her banking requirements.

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Treasury – Within this business, the bank has three main product areas –
Foreign Exchange and Derivatives, Local Currency Money Market & Debt
Securities, and Equities. The Treasury business is responsible for managing the
returns and market risk on this investment portfolio.

HDFC Securities (HSL) and HDB Financial Services (HDBFSL) are its
subsidiaries.

Achievement/ recognition:–

HDFC Bank was the first bank in India to launch an International Debit Card in
association with VISA (VISA Electron) and issues the MasterCard Maestro
debit card as well.

Services offered by HDFC BANK:

Personal Banking

• Accounts & Deposits

• Loans
• Cards
• Forex
• Investments & Insurance

NRI Banking

• Accounts & Deposits

• Remittances
• Investments & Insurance Loans Payment Services

Wholesale Banking

• Corporate
• Small & Medium Enterprises

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 • Financial Institutions & Trusts
• Government Sector

HERE I AM TAKING HDFC’s RETAIL BANKING PRODUCT HOME

LOAN TO KNOW THE CUSTOMER BEHVIOUR AND FACTOR WHICH
AFFECT THE CUSTOMER DECISION IN TAKING HOME LOAN.

Here I am giving the brief introduction of home loan.

HOME LOAN: Home Loan is offered to individuals who wish to purchase or

construct a house. The property is mortgaged to the lender as a security till the
repayment of the loan. The bank or financial institution will hold the title or
deed to the property till the loan has been paid back with the interest due for it.

The section 5 (b) of the Banking Regulation Act 1949 defines Banking
as," Accepting for the purpose of lending or investmentof deposits of money
from the public, repayable on demand or otherwise and withdraw able by
cheque, draft or otherwise.

A "home loan" is a credit to a consumer for the purchase or t r a n s f o r m a t i o n

of the private immovable property he owns or aims to acquire
s e c u r e d e i t h e r b y a m o r t g a g e o n i m m o v a b l e property or by a
surety commonly used in a Member State for that purpose."
A home loan requires you to pledge your home as the lender’s security
for repayment of your loan. The lender agrees to hold the title or deed
to your property until you have paid back your loan plus interest. In
simple words a home loan is a fund or the loan which the buyer has
taken from any financial institution or b a n k t o p u r c h a s e a n e w
h o m e a t a n a g r e e d r a t e o f i n t e r e s t specified during the contract.
Home loan is the finance borrowed from a bank or financial
i n s t i t u t i o n t o b uy o r m o d i f y a r e s i d e n t i a l r e a l e s ta t e p r o p e r t y .

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Any Resident or Non-resident individual who is planning to buya house in India
can apply for a Home loan. If you have decided t o b u y a p r o p e r t y i n t h e
n e a r f u t u r e y o u c a n e v e n a p p l y f o r a loan before you select your
property.

SCHEMES OF HOME LOANS:

Home loans for construction of new house /

f l a t , purchase of old house/ flat, etc.:

Initially, lenders approved a home loan for family/own residence o n l y .

After gaining experience and more importantly to be
competitive, lenders now approve loans even
when the applicant has more than o ne house or
f l a t / a p a r t m e n t . To d a y there is no general restriction on the number
of houses owned b y a n i n d i v i d u a l . T h e o n l y s t i p u l a t i o n i s
t h a t t h e h o m e l o a n funds should not be used for commercial purposes.

Home extension loan:

These loans are given for expanding or extending an existing h o m e .

T h e s e a r e s o m e o f t h e i n s t a n c e s f o r w h i c h y o u c o u l d take an
Extension Loan.

• To construct an additional room or floor by getting additional FSI

granted.
• Using grills or sliding windows to enclose the balcony.
• Construction of a garden or garage in the building vicinity.

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HOME IMPROMENT LOAN:

Home improvement loans for repairs /renovation

i n c l u d i n g waterproof, plumbing, compound wall, digging of well/tube-well,
flooring/tiling, additions like built-in cupboards /shelves, internal r e p a i r s
including replacing doors/windows, etc. A loan
for p u r c h a s e o f h o u s e h o l d f u r n i t u re i n c l u d i n g s p a c e -
s a v i n g furniture (kitchen racks, cupboards, etc.) may also be sanctioned as a
home improvement loan.

H o m e l o a n f o r p u r c h a s e o f h o u s in g s i t e :

Here again, initially many banks did not approve such loans.
However, market forces have now made this a universal feature o f t h e
home loan market. However, care has been taken in
structuring the schemes for avoiding financing for purchase of land for
speculative lotion purposes.

HOME EQUITY LOAN:

A home equity loan (sometimes abbreviated HEL) is a type of l o a n in

which the borrower uses the equity in their home as collateral.
T h e s e l o a n s a r e s o m e t i m e s u s e f u l t o h e l p f i n a nc e major home
repairs, medical bills or college education. A home e q u i t y l o a n c r e a t e s a
l i e n a g a i n s t t h e b o r r o w e r ' s h o u s e , a n d reduces actual home equity.

RATE OF INTEREST:

The lender decides the rate of interest chargeable on the homeloan, taking the
following into consideration:

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COST OF FUND:

The cost of funds is different for each lender, depending upon the mix of
liabilities, liability-raising costs (based on the image of t h e b a n k i n t h e
m a r k e t ) a n d w i t h d i f f e r e n t c o s t s i n d i f f e r e n t maturity buckets.

Tenor of the loan:

Generally, banks have borrowed funds with maturities up to 5 years, and

some capital fund surpluses, which may be available for allocation to home loan
assets.

Capital allocation costs:

Banks are required to allocate capital based on the risk weight of each
class of asset taken on to the balance sheet.

Costs of administering the specific scheme.

Swap costs, other funding costs.
PROFIT MARGINE.

T e n u r e o f t h e l o a n i s a n i m p o r t a n t f a c t o r i n p r i c i n g the
loan.

Special considerations like group lending, which maybring down the

administration or monitoring costs.

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Competition:

The lender may have to levy interest at market rates, even if his cost
plus margin is higher than competition.

SECURITY:

• A s i m p l e r e g i s t e r e d m o r t g a g e o r e q u i t a b l e m o r t g a g e o n the
property acquired out of the loan is taken as security. This is the primary
security for the loan.
• In case of a flat of group housing property, triparilite agreement shall be
entered into.
• In case of jointly owned properties, it should be ensured that all the co-
owners and co-applicants execute the documents.

STEPS INVOLVED IN GETTING HOME LOAN:

STEP 1:

Submit an Application form along with relevant documents the finance

company will process customer’s application to check the loan eligibility based
on the persons income and personal profile. Usually an upfront of about 0.5-1%
of the loan amount must be paid before processing begins.

STEP 2:

Verification of the property and supporting documents.

(Usually takes 5-7 working days after Step1)

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A company representative may visit the property as well as the
residence to vary information submitted in the
p e r s o n s application form. Further, a property valuation maybe
carried out by the company to determine the maximum amount they are
willing to lend you. Any references submitted by the person in the
Application Form may also be contacted. The person maybe personally
interviewed and any further clarifications in the documents submitted
maybe sought.

STEP 3:

Sanction of the loan.Usually on the 7th working days after Step 1.

A sanction letter is issued which the customer will have to sign. T h i s l e t t e r
w i l l c o n t a i n t h e a m o u n t a n d t h e t e r m s o f t he l o a n . Some
companies specify the period for which the loan sanction is valid. A person will
have to pay commitment fee.
(Normally 1% of the unutilized loan amount) if you do not draw n the
entire sanctioned amount before that period.

STEP4:

Submission of the original Property documents and signing the loan

Agreement.
(Usually on the 8-10th working days after Step 1)
The customer will be required to leave the title deed of
t h e property with the company as a security for the loan. He will be required to
go to the company’s office to execute the legal loan papers.

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STEP5:

Disbursal of the Loan Cheque.

(Usually on the 10 –15 working days after Step 1).
The person can draw the loan in parts depending on the stage o f
c o n s t r u c t i o n o f t h e b u i l d i n g . U n t i l s u c h t i m e t h a t t h e e n t i re
sanctioned amount is NOT drawn, you will pay a simple interest on the Actual
Amount drawn (without any principal repayments).T h e EMI
payments will commence only after the entire
Sanctioned Loan Amount is drawn.
EQUATED MONTHLY INSTALLMENTS (EMI):

The monthly repayment by the applicant is related to his cash f l o w .

There is an element of interest and of principal in the
monthly payments. The interest payable over the period of the loan is
calculated and added to the loan amount to arrive at the total payable amount
.this amount, divide by the total number of m o n t h l y i n s t a l m e n t s i s
c a l l e d e q u a t e d m o n t h l y i n s t a l m e n t (EMI).

CHARGES IN HOME LOAN:

Acquiring a Home Loan doesn’t only involve the cost of home l o a n

interest rates but it also includes other ch arges & fee
accompanying at various stages of taking the Home loan. You m u s t
consider all these charges while comparing the cost
structure across banks. Following is the detailed fee structure incurred
by banks at different loan stages:

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 • Processing Charge:

It is a fee payable at the time of submitting the loan application to the bank
which is normally non-refundable. The fee ranges between 0.5 per cent
and 1 per cent of the loan amount.

• Administrative Fee:

It is a fee incurred by banks at the time of loan sanction; there are few
banks who have removed this fee so you must check it with all the banks.
• Prepayment Penalties:

Wh e n t h e b o r r o w e r p r e - p a y s t h e l o a n b e f o r e t h e l o a n t e n u r e ,
banks charge a penalty which usually varies between 1 per centand 2 per cent of
the pre-paid amount.

• Legal Charges:

Banks also incur some charges from the customer for legal and technical
verification of the property.

2. Delayed payment Charges:

When there is a delay in the payment of your EMI,

b a n k s c h a r g e a l a t e p a y m e n t f e e f r o m t h e b o r r o w e r w h i ch
n o r m a l l y ranges from2% to 3% of the EMI.

• Cheque bounce charges:

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Banks charge between Rs. 250 and Rs. 500 for every bounced cheque towards
the loan payment because of lack of funds in your account.

POINTS CONSIDERED BY BANK WHILE GRANTING

HOMELOAN:

The borrower’s eligibility of getting a home loan depend

uponh i s / h e r repayment capacity & the banks
e s t a b l i s h t h i s repayment capacity by considering various factors such
income, spouse’s income, age, number of dependants qualifications ,a s s e t s ,
l i a b i l i t i e s , s t a b i li t y a n d c o n t i n u it y o f o c c u p a t i o n a n d savings
history.

IMPORTANT POINTERS IN HOME LOAN:

Credit History:

Your chances of getting a home loan are increased if you have a good
credit history which is known by banks by checking the b o r r o w e r ’ s
C i b i l s c o r e . N o w i t i s v e r y h a r d t o g e t a l o a n f r o m another bank
when you already have a bad debt with one bank.

Clubbing of income:

Your eligibility to take a home loan will augment when you club your income
with your spouse’s income, bank in this case will calculate your
eligibility on the basis of the clubbed income of both the applicants.

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You can club incomes of spouse, children& parents staying with you and
having regular income.

Enhance your loan tenure:

Longer is the loan tenure, lower will be the EMIs which

further i n c r e a s e t h e r e p a y m e n t c a p a c i t y o f t h e b o r r o w e r &
i n t u r n enhances the loan eligibility.

Step-up Loan:

In this type of loan EMI's remain low in the

b e g i n n i n g & increase gradually as and when the borrower’s spending
power increases. Therefore lower EMI's in the initial years
enhancest h e borrower’s ability to pay & further
i n c r e a s e s t h e l o a n eligibility.

Increase the down payment:

You must know that in a home loan bank finances only 85

t o 90% for the property & the rest amount has to be funded by the borrower.
You should increase the down payment if you have m o r e t h a n
required amount which will mitigate your debt
considerably.

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TAX BENEFITS IN HOME LOAN:

The home loan borrower enjoys Tax Benefits on both Interest p a i d &
t h e P r i n c i p a l r e - p a i d . U n d e r S e c t i o n 2 4 ( d ) o f I n c o m e Tax, the
deduction of interest payable on the home loan is up to a maximum of Rs. 1,
50,000.U n d e r S e c t i o n 8 0 ( c ) o f I n c o m e T a x , P r i n c i p a l a m o u n t f o r
the repayment of loan along with other savings & investments
i s eligible for tax deduction up to a Maximum limit of Rs.1, 00,000.

RATIONALE OF STUDY:

The purpose of this research is to find out the exactly what are the aspects that
affect the decision of customers while taking home loan.
There are various parameters on which an individual decide that how he is
going to take the loan.
The survey was to find out –
1. Whether the person is aware of the loan procedure of the banks.
2. How many individual prefer to take the home loan.
3. Dose interest rate affects the tenure to selection home loan.
4. Do poor service creates a downfall in the demand of home loan.
5. To know the perception of people over interest rate with respect to their
income.

By using the percentile method we will find that which aspects are affect the
customer decision in taking home loan.

REVIEW OF LITERATURE

Housing finance all over the world are undergoing tremendous

changes and have acquired great significance in the present day context
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of liberalization, globalization and modernization of the society. A good
number of research works have been undertaken by individual
researchers and institutions invariably dealing with different aspects of
housing finance. A brief review of the major studies which are
particularly pertinent for the present study is attempted here.

1. Kurana, M.L (1998) analysed the magnitude of the housing

problem, housing finance companies, legal aspects of housing
cooperatives and procedural simplification of housing loans. He
suggested
the necessity for education and training for the members of the housing
co-operatives and also the legal aspects including the adoption of model
law formed by the Central Government.

2. Krishna, R.R and V.V.Ganesh Murthy (1998) observed the views

that there is a vast scope for housing promotion in India and the banks
and housing finance companies can play a vital role in the promotion of
housing. They suggested that reduction in the housing loan interest and
simplified procedure for sanctioning housing loan will boost the
construction of houses.

3. LeelammaKuruvilla (1999) throws light on National Housing

Policy and new initiatives in housing finance. She suggested that the
change in the legal frame-work, simplifying the procedure for housing
finance and the active involvements of the Government in the housing
sector will definitely mitigate the housing problem.

4. Mohinder Singh (1999) states the magnitude of the housing

problem in the country and various national housing policies of the
Government. He reviewed the detailed statistical data and suggested the
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 following: a) sufficient loan amount free from corruption and a low rate
of interest, b) a country-wide survey to find out the real housing storage,
c) standardization for low cost housing and d) regular monitoring and
follow-up action.

5. Parimal.H.Vyas and Sandip.K.Bhat (1999) who analyse the major

housing finance institutions, critical issues of housing finance, interest
rates and the repayment techniques observed that the restructuring of
housing finance institutions by developing appropriate marketing
orientation programmes are necessary to face the challenges in the
present day world of liberalisation and globalisation.

6. Sharma, A.K. (1996) highlights the fact that the challenges of

homelessness and urban slums are largely the spill over problems of
inadequate rural habitat. He stated that the housing is closely connected
with growth of population, modernisation, poverty, development and
information and the poor people of India, lack all basic facilities as they
are incapable of meeting the rising cost of building materials. He also
opined that Indians cannot solve the housing problem without a strong
political will and properly designed strategies.

7. Mathurn (1993) opined that the financial burden of investment in

housing is generally very heavy when the owner does not have sufficient
funds available to pay for the site and the entire cost of construction.
Hence, he must make arrangements to obtain funds from some other
sources.
8. Helen, A.P (2006), in her study, has made a comparative analysis
of the schemes of HDFC and KSHB and tried to see how far the
economically weaker section in the three metro cities in Kerala
(Trivandrum, Kochi, Kozhikode) benefited the services rendered by these
37 | P a g e
 two institutions. She also made an evaluation of the cost effective and
conventional housing examined the awareness of the low cost housing
technology and recommended the need for cost effective eco-friendly
housing. She opined that in Kochi low cost housing means low quality
housing meant for the poor and hence there is urgent need to popularize
low cost housing so as to change the mind set of people.

9. Hasanbanu, S and Jeya Shree (2006) studied the various factors

which influence the people for availing housing loan from public and
private sector banks. They concluded that there is vital scope for housing
promotion in India, and banks can play a vital role in promoting house
building activities in villages by introducing more dynamic and
innovative housing loan schemes..

10.As we find in Economic Review, Government of Kerala (1995)

Kerala State Co-operative Housing Federation is an apex financing
agency in the co-operative sector. It extends financial assistance for the
construction of houses through its 207 affiliated primary societies. Kerala
State Nirmithi Kendra has been established with the objective of
promoting low cost housing and habitat development.

11.Sivalingam, T (1999) in his study titled “A Study of the

Performance of Multi-Agency Housing Finance Institutions with
Particular Reference to HDFC, LIC and Housing Co-operatives” analysed
the different loan schemes of HDFC, LIC and Housing co-operatives. He
observed that the proportion of investment in public sector housing has
declined while the same in the private sector has increased. He also
observed that the borrowers of all the three housing finance institutions
were not satisfied with regard to the rate of interest charged by them.

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12.Krishnamurthy, K.V (2002) in his article titled “Housing Finance:
A Safer Avenue” raise a question- why banks are keen on housing
finance sector today? He highlighted the reasons for this changed
phenomenon as the present market condition which forces the banks to
park this surplus resources profitably; housing finance is relatively safe
and secure gives better average yield; to tap the potential as a result of
change in life style wide publicity by banks and financial institutions,
demand from wider reach (smaller towns) all have resulted in attracting
banks to enter into this sector. He feels that there is small hope for
business for the banks in housing segment. Further, the mortgage-backed
nature of housing finance helps the bank to look for securitisation, which
generate cash flow and thereby improve capital adequacy.

13.Mistry, K.M (2002) Managing Director, HDFC, in his article,

“Future Perfect”, emphasizes the importance of housing sector in the
economy by stating that it has backward and forward linkages with as
many as 269 industries and is the second largest employment generator in
the country. He affirmed that HDFC is superior to Banks in terms of its
ability to render expert counseling and legal advisory services. He also
stated that HDFC has an effective risk management technique so that its
spread remains protected. Though banks have access to low cost funds, it
is totally unstable and over a period of time it will face an issue of
mismatch by borrowing short and lending long.

14.In the article, “Housing Loans – Choose the Best Deal”, Kumar
(2004) discussed the option (fixed, floating or mixed) that may be
considered as the best for the borrower. He opined that mixed option
might be the best in the present scenario as the market is highly uncertain
so far as change in interest rate is concerned. So borrowers should plan

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 their financial needs in an effective manner to get the best deal and to
decide the proportion depending upon the risk bearing capacity.

15.Manoj, P.K. (2004) in his article, “Dynamics of Housing Finance

in India”, made an attempt to study the growth and development of
housing finance system in India. He also emphasized the importance of
housing to the economy and prospects of housing finance industry. He
examined the risk factors and issues involved in aggressive lending to
housing due to cut throat competition and the peculiar features of the
existing regulatory and legal system. He concluded that measures should
be taken to promote active mortgage backed securitization market in
India which can further strengthen our Housing Finance System and
make it more competitive.

16.Varghese, K.V (2004) in his article entitled “The Existing Housing

Finance System”, viewed that as a result of mal-allocation of funds, the
finance is inadequate. This is mainly due to the absence of country wide
institutions to combine savings with the provision of housing finance. He
opined that housing is a costly commodity which requires huge
investment. The present housing finance system lacks facilities of
mortgage loan and insurance for housing credit. Poor people (pavement
dwellers) are outside the purview of all financial institutions and hence
some sort of financial arrangement may be made to meet their financial
requirement of housing.

17.In the article “Bank funds flow to rural housing”, Gupta, P.K
(2005) made an estimate of housing requirement in rural areas as 24
million units as compared to 7.1 million units in urban areas (taking into
account replacement, new units and damages of houses due to vagaries of
nature). He advocated that banks are expected to bring about a
40 | P a g e
 qualitative change in the lives of rural individuals by giving effect to
‘Bharat Nirman’ plan, envisaged in the Union Budget 2005-06. He also
emphasized the importance of taking appropriate policy measures for
accelerating rural housing through public institutions participation. He
opined that a healthy development of housing finance system is an
essential ingredient to fuel growth in a market-based economy, like ours.

18.Avtar Singh Sahota (2005) in his article, “Schemes on Rural

Housing”, narrates the new demand for dwelling units as a result of rapid
growth of population and deterioration of old housing stock and the
Government’s commitment to provide shelter to all. He also made an
evaluation of the various housing schemes for the rural poor and the
initiatives taken by the state Governments. He suggested that while
searching for technology option in rural housing, certain predominant
aspects should be kept in view, such as, using locally available materials
in abundance, using traditional though validated construction practices
and technologies, using improved construction systems, and adopting
options, which are least energy consuming and environment – sensitive.

19.The Research Study entitled “Housing in the New Millennium: A

Home Without
Equity is Just a Rental with Debt” by Joshua Rosner (2001)

He studied the prospects of the U.S. housing / mortgage sector over the
next several years. Based on his analysis, he believes that, there are
elements in place for the housing sector to continue to experience growth
well above GDP. However, he believes that there are risks that can
materially distort the growth prospects of the sector. Specifically, it
appears that a large portion of the housing sector’s growth in the 1990’s

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 came from the easing of the credit underwriting process. Such easing
includes:
• The drastic reduction of minimum down payment levels from 20% to 0%.
• A focused effort to target the “low income” borrower.
• The reduction in private mortgage insurance requirements on high loan to
value mortgages.
• The increasing use of software to streamline the origination process and
modify / recast delinquent loans in order to keep them classified as
“current”.
• Changes in the appraisal process which has led to widespread
overappraisal / overvaluation problems.

Past decade will continue unabated. Despite the increasingly more difficult
economic environment, it may be possible for lenders to further ease credit
standards and more fully exploit less penetrated markets. Recently, targeted
populations that have historically been denied homeownership opportunities
have offered the mortgage industry novel hurdles to overcome. Industry
participants in combination with eased regulatory standards and the support of
the GSEs (Government Sponsored Enterprises) have overcome many of them. If
there is an economic disruption that causes a marked rise in unemployment, the
negative impact on the housing market could be quite large. These impacts
come in several forms. They include a reduction in the demand for
homeownership, a decline in real estate prices and increased foreclosure
expenses. These impacts would be exacerbated by the increasing debt burden of
the U.S. consumer and the reduction of home equity available in the home.
Although we have yet to see any materially negative consequences of the
relaxation of credit standards, we believe the risk of credit relaxation and
leverage can’t be ignored. Importantly, a relatively new method of loan
forgiveness can temporarily alter the perception of credit health in the housing
sector. In an effort to keep homeowners in the home and reduce foreclosure

42 | P a g e
expenses, holders of mortgage assets are currently recasting or modifying
troubled loans. Such policy initiatives may for a time distort the relevancy of
delinquency and foreclosure statistics. However, a protracted housing slowdown
could eventually cause modifications to become uneconomic and, thus, credit
quality statistics would likely become relevant once again. The virtuous circle
of increasing homeownership due to greater leverage has the potential to
become a vicious cycle of lower home prices due to an accelerating rate of
foreclosures.

A Paper entitled “Housing Finance – A Global Perspective” by Rao K.N.

(2006)
According to Rao, housing finance is a long term proposition involving many
risks for the lenders, borrowers and even for the economy in general. As
housing finance is a long term game, it requires proper asset-liability
management strategy, the borrowers also face interest rate risk, especially when
they are locked in fixed rates when interest rates are falling and floating rates
are rising. The author mentions in this article that home loans have been
registering exponential growth in India during the last six years. Easy liquidity
conditions, low interest rates, availability of tax shelters on repayment of
principal and interest surging demand from middle income group borrowers,
lower regulatory capital, the comfort of tangible security have all collectively
contributed to the spurt in home loans. HDFC, ICICI and SBI are the major
players in disbursement of home loans. These banks sanction up to 85% of the
cost of the property as home loan for a maximum period of 20 to 30 years. In
US, GSE that are instrumental in the high percentage of home ownership. These
two enterprises enjoy implicit government guarantee and consequently raise
long term funds globally at low interest. Consequently, the interest rates on
home mortgage loans have become relatively cheaper and affordable for middle
and low income groups. Europe has a very advanced mortgage market. In Italy
foreclosure will fructify in 120 months whereas it takes just 6 months in
43 | P a g e
Sweden and 9 months in the Netherland. Securitization route is employed by
banks essentially to raise finance securitization process have given tremendous
thrust to housing finance in countries like the US and Europe. It is a process of
selling homogeneous loans for cash by the financing banks, to a special purpose
vehicle. The SPV in turn collects money by selling bonds, which have the
security backing in the form of home mortgages. Chinese banks do not have any
significant exposure to housing loans. The Latin American countries do not
have an efficient institutional mechanism for disbursing housing loans.

A Paper entitled “Is Housing Finance Safe as House? Or Delinquency in

Housing
Finance” Authored by Srinivas S.P. (2006)
The study revealed that disbursement of home loan increased at increasing
growth rate during the growth rate of disbursement in 2000-01 compared to the
earlier year was 13.7% which increased up to 76% in 2002-03. The reasons
behind the growth in housing loans are,
1. Easy availability of housing loans
2. Growing population
3. Nuclear family system
4. Newer segments for finance
5. Urbanization of Indian economy
6. Shortage of dwelling units
7. Declining of cost of house to income ratio etc. and,
8. Tax benefits.

The study revealed that banks have also concentrated on housing loans because
the housing loans are totally secured as the mortgage on the property securities
the loan. Also the capital adequacy requirement for general lending is at 100%
for housing loans. The processing and documentation of housing loan is very
easy due to extensive utilization of technology. But there are also some

44 | P a g e
common frauds occurring in housing finance like an individual’s inflate their
income statement, manipulate the income tax returns, inflate the value property,
lack of appraisal & follow up etc. The researcher has also explained the new
concept of NPL (Non-performing loan). The housing finance has been
associated very low risk. But empirical evidence suggest that non-performing
loan in the Indian housing finance sector are much higher than in a developed
market. NPL rise in India because of willing defaulters and an emerging
population of fraudsters. This is also a reflection of industry’s aggressive
marketing and some inadequacies in appraisal standards and system. Such high
NPL have two-fold impact i.e. they depress yield and entail a credit cost in the
form of provisioning and write-off. The researcher also found that the NPL of
housing finance companies are higher than the banks. The suggestion given by
researcher is that if the banks have not taken the prudential norms for housing
loans they have to conduct recovery mela instead of present loan mela.

A Paper entitled “Housing Finance Sector in India – An Overview” by

Sreelaxmi P.(2007)

The author stated that housing has always been an important agenda for the
Government of India. It generates national income by creating employment and
helps the individuals in their socio – economic development. It gives impetus to
the economy by enhancing capacity utilization of related industries such as
steel, cement, transportation, etc. The home loan sector in India is on a boom.
The new class of young buyers, whose affordability is high, is spending a little
more on paying EMI rather than spending huge amounts on the rents, thereby
owning a house. The government is also encouraging this sector by allowing tax
benefits. The housing finance sector shows an exponential growth as compared
to the other areas of credit. The annual growth rates (in %) of direct housing
finance disbursals by the Primary Lending Institution during 2001 -02, 2002-03,
2003-04 and 2004-05 were 25,76,29 and 32 respectively. While housing finance
45 | P a g e
is experiencing exponential growths, the menace of bad loans cannot be
ignored. These loans required better monitoring, fair assessment of property and
compliance with end – use principles and because of the Securitizations Act,
banks are now able to overcome the problem of non- performing Assets e.g. In
2004-05, percentage of NPA in housing finance was only 1.4 compared to
2.80% in case of banks’ total retail credit. Once the loan is sanctioned the job of
the lender is not over. He has to exercise vigilance and monitor the payments of
instalments by the borrowers. It is advisable to make periodical review of the
borrower’s financial position to ensure his capabilities of prompt payments of
instalments. The researchers suggest that the industry has been constructing
stories on a safe foundation. It will continue to thrive so long as it plays safe
averting NPAs. Necessary measures like takeover of bad loans, fair assessment
of property and employee morale may be taken by the financial institution by
improving their performance and avoiding NPAs.

RESEARCH METHODOLOGY

A research design is a type of blue print prepared depending on various types of

blueprints available for the collection, measurement and analysis of data. A
research design calls for developing the most efficient plan of gathering the
needed information. The design of research study is based on the purpose of the
study.
A research design is the specification of methods and procedures for acquiring
the information needed. It is overall operational pattern or framework of the
project that stipulated what information is to be collected fromwhgich source by
what procedure.
Primary research techniques

1. Conducting survey to create market data or using research

instruments such as questionnaires, focus groups, interviews, etc.
46 | P a g e
 2. Nothing first-hand observations
Conducting experiments.

Secondary research methods

Because secondary research already exists, no specific scientific method or

technique is needed to collect information. Instead, your efforts are spent
locating and gathering market information from reliable sources. Don’t forget
the internet. Many of the resources listed below, such as magazines, trade
associates and govt. resources now have material available online.

Some sources for gathering secondary research information include:

1. Libraries.

2. Books and business publication.

3. Magazines and news paper

4. Trade associates.

SAMPLE
A sample is a set of observations obtained from experimental unit that were
selected from a large group (the population). By studying the sample it is hoped
to draw valid conclusion about the large group. If the conclusion draw from a
sample is to be meaningful the sample must be obtained in a random fashion.
This means that each member of the population has an equal chance of being
included in the sample. This ensures that the sample is unbiased. Unfortunately,
it is not always easy to obtain a truly random sample from sampling units that
are widely dispersed.
47 | P a g e
A representative sample is only possible if, before collecting the sample the
researcher has carefully and completely defined the population, including a
description of the members to be included.
Types of samples
Although there are a number of different methods that might be used to create a
sample, they generally can be grouped into one of two categories:
• Probability samples

• Stratified random sampling.

• Cluster sample
• Non probability sampling

• Availability sampling

• Quota sampling.

• Purposive sampling.

RESEARCH METHODLOGY ADOPTED

• Type of Research: - Qualitative research.

• Element :- Customer

• Sampling unit: - each element acts as an independent unit.

• Sampling Type: - Area sampling.

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 • Sampling size: - 50 customers.

• Data sources:-
1. Primary data directly collecting from respondents.

2. Secondary data is collected by magazines, newspaper, and websites.

• Research instruments:- Questionnaire

• Questions were:-
1. Close ended
2. Open ended

• Method of sampling:- Random

RESULT& INTERPRETATION:

1. Strongly Disagree 2. Disagree 3. Neutral 4. Agree 5. Strongly Agree

Q.1 the Application form of home loan is easy to understand.

Responses Respondent
1 20
2 06.67
3 -
4 26.67
5 46.66
Total % 100

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Interpretation: - As per result in this statement people are usually say that
application form of home loan easy now days.

Q.2 The mortgage process has been explained thoroughly

Responses Respondent
1 6.67
2 20
3 13.33
4 33.33
5 26.67
Total % 100

Interpretation: - As per the result of this statement, mortgage process of bank

has been explained thoroughly.

Q.3 you like prefer EMI fixed by bank.

Responses Respondent
1 20
2 -
3 6.67
4 40
5 33.33
Total % 100

Interpretation:-Here 33.33% people saying that EMI fixed by bank is suitable

for them.
Q.4Rate the service received by bank.

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Responses Respondent
1 6.67
2 13.33
3 20
4 33.33
5 26.67
Total % 100

Interpretation: - 33.33% respondents are saying that they are happy with
service which they are receiving from bank.

Q.5 Rate the interest rates charged by bank.

Responses Respondent
1 20
2 13.33
3 20
4 26.67
5 20
Total % 100

Interpretation: - Here 26.67% individuals are saying that they are strongly
agreed with the interest rate which is charged by bank.

Q.6Rate how much you are favour in home loan.

Responses Respondent
1 6.67
2 6.67

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3 26.66
4 40
5 20
Total % 100

Interpretation:-Here I got a little bit change in the response that 26.66%

people are neutral about that statement.

Q.7 Rate the documentation procedure of bank.

Responses Respondent
1 6.67
2 20
3 20
4 13.33
5 40
Total % 100

Interpretation:- 40% people are in support to the documentation procedure of

the bank.

Q.8 Rate the processing fee of bank.

Responses Respondent
1 6.67
2 20
3 13.33
4 33.33
5 26.67
Total % 100

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Interpretation: - 33.33% people are agreeing with the processing fee of the
bank for home loan.
Q.9 Rate the sanctioning procedure of bank.
Responses Respondent
1 6.67
2 13.33
3 6.67
4 53.33
5 20
Total % 100

Interpretation:-53.33% people are happy with the sanctioning procedure of

bank.
Q.10 Rate the loan sanctioning time of bank.

Responses Respondent
1 13.33
2 -
3 20
4 40
5 26.67
Total % 100

Interpretation: - Here 40% people are agreeing with the sanctioning time of their loan.

Q.11 Rate the fore closure charges of bank.

Responses Respondent
1 6.67

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2 20
3 20
4 20
5 33.33
Total % 100

Interpretation: - 33.33% people doing strongly agree with the fore closer charges of loan.
Q.12 Rate when loan sanctioning is going online.

Responses Respondent
1 20
2 40
3 20
4 13.33
5 6.67
Total % 100

Interpretation: -40% peoples are not agreeing to make this procedure online.

Q.13 Interest rate charged by bank should be different on the basis of income

level.

Responses Respondent
1 6.67
2 26.67
3 20
4 20
5 26.66
Total % 100

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Interpretation: - It was a controversial statement because people are choosing
both the option (2 & 5) in the same per cent.

Q.14 Seize of asset facility by bank is the right step, In case of non-payment of

EMI.

Responses Respondent
1 46.67
2 20
3 20
4 -
5 13.33
Total % 100

Interpretation: - 46.67 %people are strongly disagreeing with the bank’s this
action.

Q.15 Rate the facility provide by the bank.

Responses Respondent
1 6.67
2 6.67
3 13.33
4 40
5 33.33
Total % 100

Interpretation: - Here also 40% of people are agreeing that what all the
facilities are bank providing them which is good.

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SUGGESTION: -

• I got 20% that type of people who are unable to understand the loan
application. Bank should make it easy or try to explain the application
form to customer.

• In my research I got 13.33 % those types of people who are not aware
about the bank mortgage process. Bank should explain the mortgage
process of the property to their customer.

• I got bank is lacking somewhere because 13 % people are not satisfied

with bank’s services. And 13% is the huge number of people.

• 13% people are also not agreeing with the rate of interest charged by
bank. Because it is 1.05% more than the public sector bank.

• 13 % people are not aware about the processing fee of loan. But bank
should explain the fee to the customer that why they are charging that
much amount to them for loan processing.

• Loan sanctioning process in slow plenty of customers are complaining

about that.so bank should make their process fast.

• Bank should make their customer understand that if loan application and
related procedure will go to online than it will helpful for both bank
employee and customer.

• Bank should satisfy their each and every customer. By which bank gain
more and profit.

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 CONCLUSION:-

As we all know that the banking is a very successful and growing industry in
India. Now everyone wants their own house and by the home loan every
individual can make their dream come true.
Banks are providing the home loan every easily. In my this research I evaluate
some major aspect which affect the customer decision to take home loan I
focused on private bank (HDFC).I take that particular customer who took the
home loan from the (HDFC) bank. Here I am evaluating the both pre and post
aspect which affect the customer decision to take the home loan and services
which they avail after the taking the home loan.
There are some major aspects are like that trust on bank, interest rate, EMI
options, processing fee, pre-payment charges and the facilities of bank.
Actually that all are the aspect which influence an individual to take home loan.
I analysed that customers of HDFC bank are 90% satisfied all the major aspects.
They are happy with the facilities and of bank and interest rate and the EMI
option.
At the end I can conclude that if a particular bank is providing an impressive
service to their customers and make them glad by that they can retain their
customer for long time.

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REFERENCES

➢ www.rbi.co.in
➢ www.shodhsagar.com
➢ www.wikipedia.com
➢ www.research.co.in
➢ www.investopedia.com
➢ my collage library
➢ books
➢ somearticles.
➢ www.shodhganga.inflibnet.ac.in
➢ www.gktoday.in

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