A

PROJECT REPORT

ON

“A STUDY OF DIFFERENT TYPES OF HOME LOAN AND

THE PROCEDURE FOR THE HOME LOAN”
FOR
PNB Housing Finance Ltd
PUNE

BY

MR. SOMNATH DHANRAJ SURYAWANSHI

UNDER THE GUIDANCE OF

PROF. RACHANA PULGAM
SUBMITTED TO UNIVERSITY OF PUNE
FOR PARTIAL FULFILLMENT OF
MASTER OF BUSINESS ADMINISTRATION (M.B.A)
THROUGH

SHRI SHIVAJI MARATHA SOCIETY’S

INSTITUTE OF MANAGEMENT AND RESEARCH
ARANYESHWAR, PARVATI,
PUNE-411009
BATCH (2020-22)

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INSTITUTE CERTIFICATE
Collect it from your SIP Guide

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3
 DECLARATION

I SOMNATH DHANRAJ SURYAWANSHI hereby declare that the work done by me in

the report titled as “A STUDY OF DIFFERENT TYPES OF HOME LOAN AND THE
PROCEDURE FOR THE HOME LOAN” contain the primary work done by me and no
part of the report has been imitated or copied from any previous report. The report has been
prepared on the basis of the findings and the data collected during the survey that was carried
out for the purpose of completing the project. This report which is to be presented to the
University of Pune is true and genuine to the best of my knowledge and belief.

SOMNATH DHANRAJ SURYAWANSHI

…………….

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 ACKNOWLEDGEMENT

Perfect is the famous saying and when a person get practical experience under the
guidance of expert of the respective field, the knowledge gained is priceless.

With the sense of great pleasure and satisfaction, I present this project report entitled

“A STUDY OF DIFFERENT TYPES OF HOME LOAN AND THE

PROCEDURE FOR THE HOME LOAN” completing a task successfully is never a
man effort similarly completion of this report is the result of invaluable support and
contribution of number of the peoples in direct and indirect manner. In the light of
foregoing, first of all my heartfelt great fullness and thanks goes to MR. RAJEEV
RANJAN as a BRANCH MANAGER of PNB HOUSING FINANCE LTD for
giving opportunity to work for his highly esteemed organization and for being a
constant source of inspiration and guidance throughout the project. Without his
valuable support the project would not have seen the light of the day.

At this juncture, I would also like to thank all the other team members of
the PNB HOUSING FINANCE LTD. Without their indispensable cooperation, the
project won‟t have been completed within the stipulated time period. Finally I would
like to thank the staff of other home loan provider banks, without whose cooperation
in providing the data for the project would have been impossible.

MR. SOMNATH D. SURYAWANSHI

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 INDEX

Chapter Title Page No.

No.
Executive Summary 9-10

1 Introduction 11-24

2 Literature Review 25-25

3 Company Profile 26-28

4 Research Methodology 29-31

6 Data analysis & Interpretation 32-47

7 Findings and suggestions 48-48

8 Learning of Student 49-49

9 Contribution to host organization 50-50

10 Conclusion 51-51

11 Bibliography/Webliography 52-52

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 INDEX OF TABLE

Sr. No. Name of the table Page No.

1 Rate of Interest of HL Loan 15-15

2 Loan Amount 16-16

3 Rate of Interest of NHL Loan 18-18

4 List of Loan Document 18-19

5 Credit rating 27-27

6 Sample Design 29-29

7 Salary Breakup 32-32

8 Property Valuation 33-33

9 Proposal Structure 33-34

10 Customer Hygienic Checks 34-34

11 Financial Snapshot 35-35

12 Bank Highlight 35-35

13 Customer Running Loans 36-36

14 Financial 38-38

15 Assists 38-38

16 Credit Deviations 41-42

17 Applicant Details 43-43

18 Property Details 44-44

19 Rent Credits 44-45

20 Loan Details Deviations 45-46

21 Salary Breakup and Existing Loans 47-47

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 INDEX OF GRAPHS & IMAGES /CHARTS

Sr. No. Name of the GRAPHS & IMAGES /CHARTS Page No.
1 Flow chart of loan process 23-23

2 Company Logo 26-26

3 Research Process 31-31

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 EXECUTIVE SUMMARY

Earlier it was very difficult to take a loan from the financial institutions. Interest rates were
high and a lot of documentation was there. But today when there are a large number of
financial institutions in India, who are providing credit facility, it has become very easy to
take a loan.

Terms and conditions are liberal i.e. low interest rates, less documentation, time consuming
and the digital Application format (like ACE Software where customer can apply loan for
online also check the credit score) etc. Interest rates are becoming globally competitive and
declining continuously. Now a day just think of purchasing a car and car-financing
companies will start knowing at your door and ringing your phone.

Main objectives of the present study are:

 To study the satisfaction level of customers while dealing with the Finance.
 To study the problems faced by customers in obtaining the home loans.
Research Methodology
For the study we have collected both primary data as well as secondary data. The primary
data has been collected through the responses of the customers through structured
questionnaires to check the satisfaction level of customers about the home loan schemes and
their providers. In secondary data, the annual reports of RBI
Benefits

 Tax benefits of home loans

 Attractive interest rates
 Repayment schedule on the basis of Earning
 Facility of joint loan
Scope of the study:

 Can be used data base for potential customers

 Can be used for bettering the service provided by PNBHFL
Limitations of the study
 This research study was time bound and only certain criteria were taken up for study.
 This research study was taken in a limited area only (i.e. Pune city) and findings may vary
from place to place.
Findings and suggestions
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Main findings

1. Most of the people have lack of money in fulfilling their dreams and a few of them
reluctant to pay cash in one go and wanted to pay their home loan slowly in
installments.
2. The majority of the respondents want to take a loan for the construction of the new
house.
3. Home Loan availing procedure is very much difficult for the people who demanding
it. Some Customer‟s does not has proper knowledge about different home loan
schemes.

Suggestions

1. It should use easy / simple procedure for the sanctioning of home loans to the
customers.
2. It needs to improve on the customer satisfaction level due to stiff competition among
the banks.
3. Employees who deal with customers should have complete knowledge about the
home loans. More personal attention should be given to the customers and working
efficiency should be increased. .
4. Rate of interest should be competitive and free accident insurance cover for home
loan customers should be provided.

Conclusion
This project helps to understand the process of home loan and their types also provide the
basic knowledge to each of person who wants to take a home loan. From the overall analysis it
can be said that the satisfaction level in relation to the services provided by private sector banks
are very high as compared to public sector banks. Different banks offer same product but their
services differentiate and the bank has gone for in this direction. The customer can choose these
schemes which he feels is good for him and have the capacity to repay it on that specified time
period.

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 1. INTRODUCTION

Home loans are loans you have access to, depending on whether you want to buy or
build a house and can also be used to repair or extend an existing house.

Who can avail of these loans?

According to lending institutions, any Indian resident who is over 21 years of age at the
beginning of the loan and below 65at its maturity can avail of the loan. Salaried Employees
as well as Self- Employed citizens can apply. NRI Salaried under RBI guidelines, can
approach only nationalized banks and other NBFCs for loans.

Why should one option for a loan to buy a house?

Taking a loan seems like a good option when the money at hand is insufficient to buy the
house of your dreams. Consider couples in their twenties and thirties. They enjoy a good
income currently, buy their accumulated capital isn‟t enough to purchase a house. Whereas a
home loan can give them access to capital their current earnings.

Also, if you take a 10 years old loan when you are thirty, you could repay it by the time
you‟re forty. So you don‟t have to be burdened with the interest and are free to plan your
retirement savings.

Loan sanctioned depend on your repayment capacity which is based on your current income
and your future repayment capacity. You would include your spouse‟s name to enhance the
loan amount. The maximum loan can be sanctioned varies with each bank/institutions and
ranges from Rs.10 lakhs to Rs. 10 core.

Benefits of taking a home loan:

A home loan is very different form a personal loan like a car loan for instance. You can
utilize a home loan for financing an asset that will hold its value and even appreciate over the
period of the loan. Though its price could fluctuate in the short terms, Total Estate will show
capital appreciation over the years.

Tax benefits of taking a home loan:

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 The income tax authorities look with favour upon those servicing a housing loan from
specified financial institutions and it is up to you to be wise enough to take advantage of this.

Section 24 of the Income Tax:

Interest on loan till Rs.1.5 lakhs per annum is exempted form income tax (under section
23/24(1) of the Income tax act).

Section 88 of Income Tax Act:

You get a 20% rebate on repayment of principle during a financial year. Once again, over the
years, the principle repayment eligible for rebate has been enhanced from Rs.10,000 to the
current limit of Rs.20,000 Stamp duty, registration fee or transfer of such house property to
the assesses is also considered under this amount.

Financial Institutions, which give, home loans:

 Leading Banks
 Housing finance companies
 Cooperative Banks

Types ROI (Rate of Interest)

Broadly two types of ROI- fixed rate and variable rate loans; while the former deals
with a fixed rate of interest over the entire duration of the loan, the latter has the rate of
interest changing according to the fluctuations in the market.

Loan that one can avail

Up to75-90% of the total cost based primarily upon the individuals payback capacity.

General conditions that govern a home loan:

 These are likely to vary with respect to the different types of housing loans:
 The maximum period of the loan is normally fixed by HFIs. However, HFIs do
provide for different tenors with different terms and conditions. As generally max
tenure is 30 year subject to customer age. (age limit is 70 years)
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  The Installment that you pay is normally restricted to amount 45% to 68% of your
monthly gross income. Ratio varies according to the Applicant and co-applicant
incomes.
 You will be eligible for a loan amount, which is the lowest as per your eligibility. This
is calculated on the basis of your gross income and payback capabilities. Loan
eligibility is based on the property value as well as the income base whichever is
lower.
 Some HFIs insist on guarantees from other individuals for due repayment of your
loan. In such cases you have to arrange for the personal guarantee before the
disbursement of your loan tasks place.
 CIBIL score is also important in case of the loan, CIBIL stand for the Credit
Information Bureau (India) Limited.

A home loan is a long term commitment which is critical. The demand for home loans has
increased manifold in the last decade. The reason for this growth is not hard to see, changing
mindset with globalization and integration with the developed economies, where mortgages
rule the roost, income tax sops in the Union Budgets and substantial rise in the income-
generating capacity of Indian youth. So, the present scenario of home loans shows good
amount of growth and is heading for a bright future. There are number of banks and housing
finance companies offering cheap home loans at a low interest rate. The home loan schemes
offered by both public and private sector banks are very competitive. Mostly people prefers
public sector banks for home loans, especially because they believe that it is more secure
bank and interest rate is lower. On the other hand the private sector banks are coming daily in
our country and the preference of younger population is changing because of services &
facilities provided by them. And the most important thing is that the customer should know
about each and every term related with Home Loans before applying for a Loan. There are
different types of home loans tailored to meet customer needs like Home Purchase Loans,
Home Improvement Loans, Home Construction Loans, Home Extension Loans, Home
Conversion Loans, Land Purchase Loans; Bridge Loans &Mortgage Loans offered by public
and private sector banks.

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Home Loan

1. Home Purchase Loan

2. Home Construction loan

3. Home Extension Loan

4. Residential Plot loan

At PNB Housing, we provide loans for purchase, construction and extension of

dwelling units. We offer customized Home Loan solutions with best-in-class services,
full-fledged domain knowledge and simplified loan procedures.

PNB Housing excels in providing a complete bouquet of services to customers to

meet their Home Loan needs. Ease of applying for a loan with branches spread across
India, robust service delivery model and mark to market credit & financial policies
help customers build a long term relationship of trust and commitment.

Advantages of taking Home Loan from PNB Housing

 Provides an extensive range of home loan products like Home Purchase

Loans, Home Construction Loans, Home Extension Loans, Home Improvement
Loans and Plot Loans.

 Pan India branch network

 Robust service delivery model – door step services ensuring easy and fast
approval & disbursal of loans

 Excellent post disbursement services

 Facility of enhancement in loan amount in the event of escalations in cost

 Dedicated team of well-experienced employees who work on best-in-class

information systems & network to deliver and provide customer satisfaction

 High standards of ethics, integrity and transparency

 Various repayment options

Home Purchase Loan: This loan schemes is suitable for those who are looking to purchase a
flat, villa, apartment or an independent floor.

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Home loan interest rate

FLOATING RATE

PNB Housing Rate of Interest for Amount up to 35 Lakhs

(With Effect from 23rd November‟21)

Salaried / Self – employed

Credit Score Self – employed non – professional (SENP)
professional (SEP)
>= 800 6.99% 7.25%
> 750 to < 800 7.35% 7.50%
> 700 to < 750 7.45% 7.60%
> 650 to < 700 8.35% 8.55%
Up to 650 8.55% 8.75%
less than zero 8.55% 8.75%

PNB Housing Loan Interest Rate for Amount above 35 Lakh

Salaried / Self – employed Self – employed non – professional

Credit Score
professional (SEP) (SENP)
>= 800 7.15% 7.30%
> 750 to < 800 7.40% 7.55%
> 700 to < 750 7.70% 7.80%
> 650 to < 700 8.55% 8.75%

upto 650 8.70% 8.90%

less than zero 8.70% 8.90%

*Rates of interest are subject to change at the sole discretion of PNB Housing.

PNB Housing offers floating rate of interest, linked to its benchmark rate PNBHFR:

ELIGIBILITY CRITERIA

Your age should not be more than 70 years at the time of loan maturity.

INSURANCE / CUSTOMER SAFETY

PNB Housing, for the safety and extended comfort of its customers, suggests that
they should get their property and loan repayments insured to overcome an
unfortunate event during the re-payment term of the loan.
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For the convenience of customers, PNB housing has tied up with various insurance
companies to offer best-in-class products and services at their doorstep.

LOAN AMOUNT

Loan Amount Maximum Funding*

Up-to Rs. 30 lacs 90% of market value
30 lacs and above, up-to 75 lacs 80% of market value
Above 75 lacs 75% of market value

* Subject to market value of the property and repayment capacity of the individual, as
assessed by PNB Housing

 Loan eligibility shall be determined by PNB Housing taking into account

income, age, qualification and occupation etc.

 Income of borrower(s) / co-borrower(s) may be clubbed together for

calculation of loan eligibility.

LOAN DISBURSEMENT

 Disbursement will be made after the property has been technically appraised
and all legal documentation has been completed.

 For purchase of house/ flat from an individual on resale, the loan amount will
be paid in lump-sum to the seller at the time of transfer after confirming that the
customer has paid his own contribution.

 For houses/ flats under construction, the loan amount will be disbursed in
stages based on the progress of construction.

 A customer has to invest his proportionate share of the cost, prior to

disbursement of loan. The loan can be disbursed either in lump sum or instalments
according to the requirement of the development authority/ society/ private
builder.

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LOAN REPAYMENT

Loan repayment is in Equated Monthly Installments (EMI) comprising of principal

and interest through Post Dated Cheese / Electronic Clearance System over a
maximum period of 30 years.

OWN CONTRIBUTION

Minimum contribution required from a customer will be 10%* of the total cost of the
property (inclusive of stamp duty and registration charges in case of purchase of
property).

SECURITY

Security for the loan is a first charge by way of an equitable mortgage of the property
to be financed and/or such other collateral securities as may be deemed fit by PNB
Housing.

Additional/ interim security may be required as acceptable to PNB Housing.

NON HOME LOAN PRODUCTS

Non home loan products

1) Loan Against Property

2) Lease Rental Discounting
3) Top-up Loan
4) Commercial Loan

Top-up Loan:

Top-up loan is provided over and above the approved home loan or loan against property to
fulfill personal and business requirements.

Construction Finance to Real Estate Developer (CF):

This product comes with customized offering to fulfill construction finance needs of real
estate developers, subject to PNB Housing‟s detailed evaluations of the project

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Commercial Property Loan:

PNBHFL offer a range of loans for purchase/construction of commercial property in

approved areas. This includes loans for office space, shop etc.

Loan against Property:

They offer loan against mortgage of your existing residential/commercial immovable

property for personal and business requirements.

Lease rental discounting

Under rent securitization scheme, they provide loan against rent receivables from a property
owned by you, which has been let out to a reputed company.

Loan Against Loan Against

Loan against Plot/ Loan against
Credit score Commercial Residential Property
Special Property*
Property (LAP)
>= 800 8.75% 8.75% 10.50%
> 750 to < 800 8.95% 8.95% 10.50%
> 700 to < 750 9.60% 9.60% 10.50%
> 650 to < 700 9.90% 9.90% 10.50%
Up to 650 10.15% 10.15% 10.50%
less than zero 10.15% 10.15% 10.50%

Home loan documents required

Salaried Employees Self Employed/Professionals

Duly filled Application Form with

Duly filled Application Form with Photograph Click here to
Photograph Click here to download the
download the application form
application form

Age Proof (PAN Card, Passport, Any other Age Proof (PAN Card, Passport, Any other Certificate from
Certificate from Statutory Authority) Statutory Authority)

Residence Proof (Passport, Driving License, Residence Proof (Passport, Driving License, Telephone
Telephone Bill, Ration Card, Election Card, Any Bill, Ration Card, Election Card, Any other Certificate from
other Certificate from Statutory Authority) Statutory Authority)

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 Education Qualifications – Latest Degree Education Qualifications – Latest Degree (for professionals)

Certificate & Proof of business existence along with

Latest Salary-slips for 3 months
Business Profile

Last 3 years Income Tax returns (self and business) with

Form 16 for last 2 years Profit & Loss Account & Balance Sheets duly
certified/audited by a Chartered Accountant

Last 6 months Bank Statements(salary

Last 12 months Bank Account Statements (self & business)
account)

Processing Fee Cheque in favour of „PNB Processing Fee Cheque in favour of „PNB Housing Finance
Housing Finance Ltd.‟ Ltd.‟
Photocopy of Title Documents of the Property, Photocopy of Title Documents of the Property, Approved
Approved Plan Plan etc.

All documents should be self-attested.

PROCESS OF LOAN SANCTIONING

Borrower has to visit bank & the procedure of the bank manager take the personal
interview of the borrower, where the manager see for what purpose the loan borrower wants,
is borrower has open any account in other bank or not.

Application form is given to the borrower; he fills his full information correctly if the
borrower writes any faculty information, bank can any take serious action.

Eligibility criteria is very important part for sanctioning loan banker has to see income
earning of the borrower. No loan taken from other bank permanent addresses how borrower
can repay the loan money.

Proposal is sanction by manager divisional manager, head office, the sanctioning they
scrutinized the loan application.

Name of the borrower, limit sanction period security offered, terms of repayment
installment, margin to be mention rate of interest.

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Procedure for sanctioning loan

1. Pre-sanctioning survey or inspection.

2. Pre-sanctioning of loan application.
3. Appraisal.
4. Sanctioning.
5. Preparation of sanction letter.
6. Acceptance of terms and conditions.
7. Preparation of loan document.

1. Pre-sanctioning survey or inspection :-

Loan facility is available to the borrower on the basis of security offered and on the
basis of the period for which it is required. Security offered may be fixed assets as land and
building, plant and machinery or equipment or it could be movable or immovable property.
The banker depending upon the purposes the banker conduct a pre-sanction survey and
inspection. During pre-sanction survey the banker would inspect the security offered. He
would see the location of the factory or a workshop or the business premises inspect the
documents and the title of the goods. See whether place has direct access from the road. Find
out the distance between the branch and the location. Such a survey or an inspection helps in
judging the property of customer and knowing the infrastructural facility available to him.
While preparing his report for recommendation for loan, such visit helps in details.
2. Pre-sanctioning of loan application :-
Loan application has to prepared and handed over to the banker by the borrower.
According to proposal of loan different from should be used.
Detail information for example loan for tractor, vehicle, taxi, crop loan etc. In the
loan application the following details are normally furnished:
-Name of borrowers.
-Occupation.
-Purpose of loan.
-Period of loan.
-How the borrower proposes to repay the loan.
-Projection of cash generation over a long period.
-Profit & Loss A/c, Balance sheet of period of loan in the form of Projection.

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 -Details of security offered.

3. Appraisal :-
Completed application submitted by borrower is normally is set of 3 or 4 copies. All
managers do not have power to sanction all type of applicant and for any amount. They can
sanction the application whether they can sanctioned or rejected and whether they can be
recommended for sanction to higher authorities. This work is done by higher officer in the
bank in appraisal the officer concern apply various method of security to find out whether the
detail given in the application are true and the project holds goods.
An appraisal is examination of details given by the borrower. Period taken for appraisal
least and various from a week to even six months depending upon the nature of proposal.
Amount involved and technique contains in a proposal. The authorities also have their
appraisal system.
4. Sanctioning :-
Sanctioning authority is given or vested in the hands at manager, the regional or
zonal manager and the head officer. They do not communicate sanction directly to the
borrower.
For sanctioning proposal there are two types of norms, it indicated by RBI and
norms by the bank itself on the basis of its experience in dealing with a particular type of
business.
5. Preparation of sanction letter :-
Sanction letter has following points:
-Name of borrowers.
-Limit sanctioned.
-Period.
-Security offered by borrower.
-Margin maintained.
-Term of repayable.
-Rate of repayable.
-Rate of interest.
-Stock statement to be submitted.
-Periodical interval.

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 6. Acceptance of terms and conditions by customers:
On many occasions the borrowers are too eager to receive finance from the bank.
They accept the term as laid down by the bank. This sanction letter indicates that the sanction
letter is acceptance by them.
7. Preparation of loan documents :-
1) Demand Promissory Note :-
This is the most important document relating loans and advances. It contains
following points:
Date of execution, pledge of execution, name of the payee bank, amount in words
and figures, rate of interest, periodical intervals co-signature, and signature of the
executants and address of the executants.
(a) Loan Agreement :-
These are standard pointed document running into a number of pages. They contains
all the legal aspects regarding the right of the both parties and the liability of the
borrower.
(b) Latter of Waiver :-
Some bank follows the practice of obtaining a document called letter waiver. In
case of dispute regarding the loan, if the bank desires to file a suit, it will have to present
the demand promissory note in the court to support its claim. A letter of waiver sign by
the borrower permits the banks not to present the promissory note.

Here is step by step procedure of procuring home loan.

1: Application form
2: Personal Discussion
3: Bank's Field Investigation
4: Credit appraisal by the bank and loan sanction
5: Offer Letter
6: Submission of legal documents & legal check
7: Technical / Valuation check
8: Registration of property documents
9: Signing of agreements and submitting post-dated cheques.
10: Disbursement

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23
ADVANTAGES OF HOME LOANS
The various benefits of home loans arising to the customers are:
 Help in owning a home
 Tax benefits of home loans
 Attractive interest rates
 Long term loan
 Repayment schedule on the basis of Earning Capacity of the borrower
 Facility of joint loan

DISADVANTAGES OF HOME LOANS

The main disadvantages of home loans are high lightened as below:
 High processing fee
 Delay in processing
 Fluctuating interest rate

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 2. LITERATURE REVIEW

Several studies have been done by various researchers in the context of home loans.
The details of reviews are below:
Berstain David (2009) examined in his study taken from 2001 to 2008 that in this period there
is increasing use of home loans as compared to private mortgage insurance (PMI).
Vandell, Kerry D (2008) analyses the sharp rise and then suddenly drop down home prices
from the period 1998- 2008. Changes in prices are for the reasons as such economic
fundamentals, the problem was not subprime lending per se, but the dramatic reductions and
subsequent increases in interest rates during the early- mid-2000 , the housing loan boom was
concentrated in those markets with significant supply-side restrictions, which tend to be more
price-volatile. The problem was not in the excess supply of credit in aggregate, or the
increase in subprime per se, but rather in the increased or reduced presence of certain other
mortgage products.
R.R.Krishna and V.S.Krishna Mouthy (1999) stress in their article entitled “Trend and policy
Issues of Housing finance in India”, that simplified procedures and speedy sanction of
housing loans will give a boost to the constructing houses.
The issue of housing and housing finance has been receiving increasing attention over the
recent decade in the extant literature. There have been many studies revised on various
observations on this area, few of these namely; housing is an essential element of life for
most human beings polarized by Naik (1981).
According to J.P. Sah (2011), "housing is not a static but a growing problem and it was cited
in Manorama Year Book (1997)as the modern concept of housing does not limit the idea of
housing merely to the provision of shelter and it is an in an integral part of overall policy
improvements of human settlements and economic development.

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 3. COMPANY PROFILE

PNB Housing Finance Limited (PNBHFL) is a 27 years old public sector housing finance
company (HFC), headquartered in New Delhi with branches in major cities across India. The
company is a subsidiary of Punjab National Bank and is registered with state owned bank and
regulation authority of India - National Housing Bank (NHB) .The Company provides
housing loans & loan against property as a part of its product portfolio and also holds the
license to accept public deposits.

Company‟s deposit programmer is rated CRISIL FAAA with Negative outlook, CRISIL AA+
with Negative outlook for bank borrowings, CRISIL AA+, CARE AAA and ICRA AA+ for
non-convertible debentures (NCDs) and CRISIL A1+ for commercial papers.

Profile of PNB Housing Finance

Type : Public Sector Company

Industry: Housing Finance Company (HFC), financial services, BFSI
Founded: 11 November 1988
Headquarters: New Delhi, India

Key people: Mr. Hardayal Prasad (Managing Director)

Mr. Pankaj Jain (Business Head)
Mr. Sanjay Jain (Company Secretary & Compliance Head)
Mr. Kapish Jain (Chief Financial Officer)
Products Home Loan: Home Improvement Loans, Home Construction, Plot loan, Plot +
Construction Loan, Top-up Loan, Balance Transfer Loans, Home Extension Loans, Land
Loans, Loan against Property (LAP), Lease Rental Discounting (LRD), Fixed Deposits (FD).
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Number of employees: 1700 (2021)

Website www.pnbhousing.com

Company history

PNB Housing Finance was incorporated under the Companies Act, 1956 and
commenced its operations on November 11, 1988 as a wholly owned subsidiary of
Punjab National Bank (PNB). On December 9, 2009 PNB entered into a strategic
partnership with Destiny Enterprises Private Limited (DEPL) and sold its 26% stake
to DEPL. DEPL which held 49% shares in the company until February 2015 sold its
entire shareholding to Quality Investments Holdings, which is owned by Carlyle
Group, a global investment firm. The remaining 51% is owned by the parent bank i.e.
Punjab National Bank. The Company came out with a public issue of equity shares in
November 2016. Its equity shares are listed on National Stock Exchange (NSE) and
Bombay Stock Exchange (BSE) with effect from 7th November 2016.

With over three decades of specialized experience in housing finance, PNB Housing
has a robust network of branches spread across the country which help its customers
avail financial services (loans and deposits) seamlessly.

Credit Rating of PNB Housing Finance

FAA+/Negative by CRISIL
Fixed Deposits
CARE AA/Stable
CRISIL AA/Negative
IND AA/Negative by India Ratings
Bonds/NCDs
CARE AA/Stable
ICRA AA/Negative
Bank Loans Long CRISIL AA/Negative
Term Rating CARE AA/Stable
Commercial Paper CARE A1+
Program CRISIL A1+

PNB Housing provides housing loans to individuals and corporate bodies for
purchase, construction, and repair and up gradation of houses. It also provides loans
for commercial space, loan against property and loan for purchase of residential plots.

27
CIN: L65922DL1988PLC033856

Operations

The company has pan-Indian network of 94 branches across 64 cities and towns with a
cumulative 74,469Cr worth of assets under management. on June 30, 2018. Company‟s 16
hubs are located at New Delhi, Bengaluru, Chandigarh, Chennai, Noida, Jaipur, Dehradun,
Luck now, Kolkata, Cochin, Coimbatore, Mumbai, Pune, Ahmedabad, Indore and Hyderabad
which support branch operations The company provides doorstep service for its products via
Direct Sales Team (DST) channel. Other than the DST channel, company‟s Home Loan and
Loan against Property business is also sourced via Direct Marketing Associates (DMA) and
Digital Medium. Fixed Deposits, other than direct channel is also sourced via Broker
Network.

Products:

Home Loan: PNB Housing provides housing loans to individuals for construction, purchase,
repair, and upgrade of houses.

Non Home Loan: The Company also provides loan against property, commercial property
loan, and lease rental discounting loans for commercial property, loans for purchase of
residential plots and loan for real estate developers

Deposits: PNB HFL also offers Public Deposits of different maturities and various interest
payment options

28
 4. RESEARCH METHODOLOGY

Collection of data:
For the study we have collected both primary data as well as secondary data. The primary
data has been collected through the responses of the customers through structured
questionnaires to check the satisfaction level of customers about the home loan schemes and
their providers. In secondary data, the annual reports of RBI, commercial banks and
broachers of these banks, articles published in magazines, journals, and newspapers have
been studied. Sample design Instrument used Questionnaire Technique of survey Personal
interview sampling unit Customer Sampling area Nagpur Sampling Random Method used for
research Survey method Sampling size 240.

Sample Design
Instrument used Questionnaire
Technique of survey Personal interview
Sampling unit Customer
Sampling area Pune
Sampling Random
Method used for research Survey method
Sampling size 240

Collecting Primary Data: - Primary data are collected through the responses of the
customers through questionnaires which were specially prepared for this study. The
questionnaire contained questions regarding the general and socio-economic characteristics
of the respondents such as age, religion, educational qualification, etc. and also about their
reason for taking home loan, term, rate of interest, procedure etc. We conducted the pilot
study by selecting seven respondents each banks including HDFC, PNBHFL and LIC
Housing Finance Ltd. On the basis of their responses, some questions were modified and the
modified questionnaire was finally canvassed among the 240 selected respondents. A sample
size of 240 was used since 240 it was not possible to cover the whole universe consisting of
all the customers. Among these 240 respondents, 80 respondents were selected from HDFC

29
Bank and another 80-80 respondents were selected from PNBHFL AND LICHF Ltd. Primary
data also included information collected by personal interview with managers of HDFC,
PNBHFL and LIC Housing Finance Ltd.

Collecting Secondary Data:- There was extensive use of secondary information in the form
of books, articles published in magazines, journals, newspaper, reports of PNB Housing
Finance Ltd., websites, circulars, pamphlets of the banks, clippings etc. The sample was
selected using a convenient sampling. Statistical Techniques The collected data were
scrutinized and edited.

30
 Research Process

A STUDY OF DIFFERENT TYPES OF HOME LOAN AND THE PROCEDURE

FOR THE HOME LOAN

To study the satisfaction level To evaluate & compare the To study the problems
of customers while dealing Home Loan faced by customers in
with the finance Schemes with other banks obtaining the home
and NBFC loans

Books, articles Customer Annual

Response from published in reviews reports
the customers magazines, With other and other
Annual Personal
through journals, NBFC & research
reports Interviews
questionnaires newspaper Banks

Discussion Export Guidance Books Discussion Balance

files sheet

Organize the data

Analyze the data

Findings

Suggestions

31
 5. DATA ANALYSIS & INTERPRETATION
1) Home Purchase Loan

Mr. Anil is working as Assistant Professor with S.P. College, Pune since Nov 2009. Prior to
this, he had worked with Sinhgad Institute as for 14 years with total work experience of 20
years. He is qualified as a Ph.D in 2008 from Pune University.

Salary break-up:
%
Particulars Type Amount Method Amount Considered
Considered
Basic Fixed 22810 100 Actual 22810
HRA Fixed 5762 100 Actual 5762
Grade Pay Fixed 6000 100 Actual 6000
DA Fixed 30827 100 Actual 30827
TA Fixed 240 100 Actual 240
Conveyance Fixed 2400 100 Actual 2400
Gross Income 68039
Net Pay 50524

Mrs. Archana (spouse) is also working as Teacher but her income documents are not
provided so her income is not considered. They are residing at self-owned flat on which LAP
from LICHFL is running which is not taken into obligation as marked for closure before
disbursal, he initially availed HL from LICHFL but same has been foreclosed. This loan is
running on SORP.

Proposed property is situated at proposed APF site Ganga Legend at Bavdhan, Pune.
PNBHFL has given builder subvention on this project for 2 years.

Interpretation: As the obligation from LAP is not considered, this loan can be sanctioned and
can proceed further with the given amount of remuneration.

2) Home Construction loan

Case summary:
32
The captioned case is primarily BT of running Residential Plot purchase loan of Rs. 42.99
Lacs (POS of Rs. 41.18 Lacs), this loan is having a seasoning of 34 months with clean track.
Additional funding of Rs. 49.24 Lacs for self-construction of the residential unit on the same
plot.

Property details:

The property offered as collateral is currently mortgaged with DHFL. The property was
purchased in September 2012 for Rs. 80.00 Lacs where customer has availed plot purchase
loan of Rs. 42.99 Lacs from DHFL during the same. Currently construction work is going on
and brick work is in progress. The property is currently 65% complete as per Tech report.
The property is estimated to undergo a construction cost of Rs. 64.00 Lacs (as per estimation
given by customer) but we have restricted construction funding to Rs. 49.24 Lacs (as per
construction cost of Tech report). The property is having a land area of 3003 Sq. Ft with
construction permission of G+1 with toal construction area of 2462 Sq. Ft.

Particulars Area Rate taken MV / Estimated Cost

Land 3003 5000 15015000
Construction Area 2462 2000 4924000
Total - - 19939000

Proposal Structure:

Particulars Details
Ref No HOU/PUN/0916/315157
Product Residential Plot plus Construction Loan (RPCL)
Customer Segment SENP
Customer Name Arun More & Vijaya More
Loan Amount applied Rs. 100.00 Lacs

33
 Loan Amount proposed Rs. 90.44 Lacs
Tenure Proposed 240 Months
EMI on proposed loan Rs. 96084 /-
Program Normal Income Program
BT of Plot purchase loan from DHFL for Rs. 41.20 Lacs and
End Use additional funding towards construction of residential unit
for Rs. 49.24 Lacs
FOIR 89.33%
LTV 45.36%
DW 134.69%

Customer Hygiene checks:

Name of Customer Relation DOB Current Age CIBIL score

Arun More Self 27-09-1971 45 801
Vijaya More Spouse 30-04-1978 38 782

About the customer & business brief:

Mr. Arun More is currently aged 45 years old and is running a proprietorship firm is the name
& style of Siddhigiri Engineering since last 8 years. Under this firm he is doing contractual
job for fabrication of windows, grills and channel manufacturing for window panels for
builders. He is having additional 20% sale on and above the filed results. These incomes are
from local job work done for residential end clients and majorly received in cash. Some of his
major clientele base is highlighted below:
 Parangjape Schemes Construction Limited.
 Matrix Developers Private Limited.
 Nyati Builders Private Limited.
 Nitin Dwarkadas Nyati.
Entire business is TDS backed and proof of the same is documented as per Form 26As of
Arun More for FY 2015-16 & 2014-15. He is having his owned fabrication site situated at

34
 Narhe, Pune. He is having a work force of approx. 10-15 labours. Payment terms are monthly
with credit period enjoyed and given ranging 30 days – 45 days.

Financial snapshot of the firm:

FY 2014- FY 2013- FY 2012-

Particulars FY 2015-16 (Tentative)
15 14 13
Sales 13715283 11745807 3715283 9069469
COGS 10920405 7262356 2689310 7457389
Direct Expenses 89420 1504215 64920 257958
Gross Profit 2705458 2979236 961053 1354122
Depreciation 180302 212836 134293 41725
Bank Interest 327131 1000470 146602 101161
PBT 1555685 1048384 521515 901770
Tax Paid 200000 109878 22190 92854
PAT 1355685 938506 499325 808916
Cash profits 1535987 1151342 633618 850641
Date of ITR filing NA 30-09-2015 13-02-2015 29-09-2013

Family details: family of Arun More consist of himself, spouse (Vijaya More) & kids. They
are currently residing at Phursungi, Pune at self-owned property. New property is constructed
for self-usage and current residential unit will be put on rent.

Banking highlights:

The firm is maintaining its business A/c with DCB Bank. The firm is enjoying a CC facility
with DCB bank for Rs. 25.00 Lacs and also a current A/c with DCB.
BANK A/C Sanction Peak OD Average Bank
A/C NO. A/C HOLDER Average Credits Average Debits Annualized Credits
NAME TYPE Limit (Rs) Usage Balance
Current SIDDHGIRI
DCB 08120100001113 NA NA 64,353.76 6,29,482.27 3,84,286.09 75,53,787.27
account ENGINEERING
OD/CC SIDDHGIRI
DCB 08141700000116 25,00,000 88.48% 18,58,750.27 6,00,703.00 6,09,426.45 72,08,436.00
account ENGINEERING

35
 Loan & repayment highlights:
Customers are running a number of loans. A detail of the same is highlighted below:

Borrower Financer Loan type Status Loan Amount EMI Obligated Remarks
ARUN
DHFL Home Loan Live 42,00,000.00 50,396.00 No BT to be done
MORE
ARUN Auto loan (Non
Axis Bank Live 8,50,000.00 18,354.00 Yes Clean track
MORE Commercial)
1 Bounce in May 2016
ARUN
DCB Business Loan Live 4,25,000.00 7,518.00 Yes observed but cleared in same
MORE
month
ARUN
MORE
DCB Business Loan Live 1,85,400.00 1,500.00 No To be closed

Interpretations of the case:

 Positive PD.
 Clean track of running loans.
 Co-applicant working as school teacher.
 Low LTV case with LTV of 46%

NON HOME LOAN PRODUCTS

About the Applicant:

Mr Vasant Virji Patel:- Mr Vasant Virji Patel is the proprietor of M/s. Deep Hardware since
1996. His educational qualification is B.Com. He is 46 years old. He resides in Jointly owned
flat premises at Flat No. B-10, B-11 & B-15, Amay Arked, Kothrud, Pune-411038 having an
area around 2450 sq. ft. and its current market value is Rs. 2 Cr. approx. His family consists
of himself, wife, father, mother, 2 brothers, 2 sister-in-law, his son, his daughter, his brother‟s
3 sons and 2 daughters.
About the Co-applicant:
Mrs Bharati Vasant Patel:- Mrs Bharati Vasant Patel is the wife of applicant. Her educational
qualification is SSC. She is 41 years old. She resides with the applicant. She is a house wife.

36
Mr Kantilal Veerji Patel:- Mr Kantilal Veerji Patel is the Brother of applicant. His
educational qualification is HSC. He is 44 years old. He resides with the applicant. He is
involving in this business.

Mrs Ramila Kantilal Patel:- Mrs Ramila Kantilal Patel is the sister-in-law of applicant. Her
educational qualification is SSC. She is 38 years old. She resides with the applicant. She is a
house wife.

Mr Satish Veerji Patel:- Mr Satish Veerji Patel is the Brother of applicant. His educational
qualification is HSC. He is 39 years old. He resides with the applicant. He is involving in this
business.

About the Business:

M/s. Deep Hardware is the proprietor ship of Mr Vasant Virji Patel since 1996. He operates
his business activity from his brother‟s owned shop premises at Sr. No. 1018, Neelkanth,
Deep Bungalow Chowk, Model Colony, Shivaji Nagar, Pune-411016 having an area around
450 sq. ft. and its current market value is Rs. 1.5 Cr. approx.
Applicant Mr Vasanst has started the caption business in 1996. Applicant‟s father was
running saw mill at Humnabad, North Karnataka as per cm same is now given on rental basis
and his father is getting monthly rental income of Rs. 20K.
Under this business head, applicant is involved in the business of 60% wholesale and 40%
retail trading of Hardware & Plywood. It consist Furniture Hardware, Plywood, Laminate,
Timber, etc. Normally, his products price ranges are Rs. 10/- to Rs. 15000/-. His shop timing
is 9.30 AM to 8.00 PM. His daily sales receipts of Rs. 20,000/- to Rs. 30,000/- approx.
He purchase required material from his fixed suppliers, some of them are M/s. Godrej &
Boyce MFG, M/s. Jay Nanesh Plywood, M/s. Welmade Locking System, M/s. Casa
Enterprises and M/s. Omkar Marketing, etc. He makes his purchase payment 75% by cheques
& 25% by cash. He gets 30 days to 90 days credit period from his fixed suppliers.
He has fixed as well as walk-in customers in his business, some of them are M/s. Sapling
Nursery, M/s. Jadhav Enterprises, M/s. SNP Enterprises, M/s. Khiyaram Carpenter, M/s.
Ambhuj Enterprises and M/s. Shati Ply, etc. He receive his sales receipts 50% cheques, 5%
by card swap and remaining 45% by cash. He allows 30 days to 60 days credit period to his
customers.

37
As per information, he gets 8% to 10% profit margin from his business.
As per information applicant maintained stock of Hardware & Plywood of Rs. 35 lacs to Rs.
40 lacs approx.
Applicant is having second shop at Karve Nagar which is run by applicant‟s Uncle and as per
cm he received monthly rental income of RS 36 lacs.

Financials:-
AY 2015-16 AY 2015-16 AY 2014-15 AY 2013-14
(LIP income)
Sales 101.02 Lacs 75.67 Lacs 65.31 Lacs 60.92 Lacs
Depreciation 1.37 Lacs 1.37 Lacs 0.89 Lacs 0.43 Lacs
PBT 9.01 Lacs 5.68 Lacs 4.08 Lacs 3.83 Lacs

Assets:-
Proper Details Owner MV (As per Cm)
3 Resi Flat @ Mahatma Society (SORP) Family owned Rs 200 lacs

SOCP @ Deep banglow Chowk Family owned Rs 100 lacs

Rented 2 Shops @ Karve Nagar Family Owned Rs 150 lacs
Saw mill @ Humnabad Father of applicant Rs 50 lacs

Collateral:- Applicant is planning to purchase shop in project called Sai Square at Wakad of
1100 Sq. Ft (approx.) as per Cm COP is Rs 110 lacs and loan requested RS 62 lacs only.
As per applicant he will be starting the new business at his proposed new property with the
help of his brother.
Interpretations of the case:

Applicant‟s eligibility is derived under Liquid Income programme we have considered 100%
LIP income of M/s Deep Hardware and also we have considered Salary income and
commission income received by Applicant‟s 2 brothers and also we have considered Co –
applicant Mrs Ramila Kanilala Patel interest received income as all the above mention
income are reflected on latest 3 years ITR and we have considered EMI towards HL from
ICICI Bank of RS 18434/- as obligation we have not considered EMI towards AL of Rs.
38
 14966/- as applicant will close the same before disbursal and post that applicant is eligible for
loan amount of RS. 62 lacs @ 11.25% variable ROI for the tenure of 180 months for NRP
purchase with FOIR capped at 80% and LTV restricted to 70%.

Applicant is purchasing the commercial property at Wakad where in MV is Rs 130 Lacs and
COP shall be Rs 110 Lacs. Loan required is Rs 62 Lacs. Property is located on Pune Mumbai
Highway and is commercial shop facing road. Applicant is in Hardware business since long
and is having decent asset base in Pune

Loan against Property

Captioned case is approved for RS 50 Lacs as LACP – rented property for 120 months at ROI
at 12.25%, FOIR at 73.43% LTV at 38.40% and EMI at Rs 72460. Case appraised under
Rental income program. Rental income per month credited in bank is at Rs 98673. Still he
receives Rs 10K in cash which we have not considered in calculation.

Collateral property is Shop No. 2 & 3, Ground Floor, Wing-A, Narmada Heights,
Sr.No-. 51/1 A +2A, CTS No- 1615, Near Ashish Garden, Kothrud, Pune – 411038.
The property is in the name of Shubham Deepak Mokate transferred in his name in 2004.
The property is given on rent to Shamrao Vithal Sahakari Bank. LTV is with in Norms

The case is appraised with rental income program considering rent received from –
Agreements and Bank credits available in file.

1. Shop No 2 and 3 – let out to Shyamrao Bank

2. Flat No 203
3. Shop No 4
4. Flat No 6
5. Flat No 12
6. Room No 4

Sanction conditions –

39
 1. SVC Bank statement for last 6 months
2. Original Property papers of all the properties to be vetted by Credit Manager
3. Undertaking to be taken from customer that he has not availed any loan against any
property
4. Repayment to be taken from SVC Bank Account
5. Rental income for all the rental income considered to be vetted by TSG
6. Copy of death certificate to be taken for Mr Deepak Mokate
7. LTV to be at 40%

Interpretations of the case:

FOIR above Norms – FOIR considered at 73.43% instead of 65% - L4 and Above
FCU CNV – SVC Bank statement could not be verified. Original to be taken on record prior to
disbursement for last 6 months – L4 and Above
FI negative for Resi Cum Office – Case is appraised with rental income program, customer is not
having other business – L5 and Above

Lease Rental Discounting

Recommended approval for EMI to net rent ratio at 85.81% in LRD deal as against 80%
prescribed by policy. Tenure of 72 months.

Commercial property at Cerebrum IT Park valued at 3.87 Cr and our exposure of just 95 lacs
i.e LTV of 25%. The property was purchased by applicants on 26/09/2012 for Rs.216.57 Lacs
from Kumar Housing Corporation Ltd from self-owned funds.

Property is given on rent to software company viz. QED Enabled Services Pvt. Ltd. Net Rent
of Rs.220770 (same has been verified with rent agreement and Form No.26AS as well) has
been considered for eligibility calculation at discounting factor of 85.81% and proposed
monthly obligation with PNBHFL is Rs.189453. Rent agreement is executed for 3 years and
shall expire on 21/04/2016. The proposed tenure is 72 months basis LOI taken from the
lessee and taken on record for further 5 years after 2016.

40
 ROC search report of QED Enabled Services Pvt limited Company attached. It is 11 years old
Company with turnover level of 13 Cr and PBT of 1.64 Cr and net worth of 2.75 Cr.

 Profile:- Ganesh Kadu Patil is agriculturist at Muktainagar Dist Jalgaon. He is having

farm land and agriculture crops of bananas. Arun Patil is proprietor of Mahalaxmi
Kela Group at Burhanpur Madhya Pradhesh . He is commission agent. He also
receives pension income from Govt of Madhya Pradesh. Both the applicants are first
cousins of each other‟s. They are residing at Jalgaon and Burhanpur respectively.
Vaibhav Patil is working with Thermax Ltd since 5 years and he is residing at Pune.
His gross monthly salary is Rs.43910 and net salary is Rs.39972. They had purchased
the property in joints name at Pune for investment purpose. Individual financials of
Arun Patil shows the commission income from banana business. The individual ITR
of Ganesh Patil shows agricultural income and godown rent. . ITR are documented in
file for AY 14/15 and AY 13/14 for both the applicants.
 The lease, property details and rent credit reflected in banking in tabulated format is
mentioned in trail mail below.
 CIBIL Score of Applicant Ganesh Patil is 702, Co Applicants Arun Patil 747 and
Vaibhav Patil is 735 with a deviation raised below . Clean RTR w.r.t. existing loans
with details as below:-

Description of the Deviation taken
Borrower-co-borrower relationship
and Ownership and Income
aggregation norms not met
Workplace/Residence outside geo
limits
Mitigates for the deviations from policy Deviation Code
Property is owned by cousin brothers, Ganesh
Kadu Patil and Arun Narayan Patil. The
property was purchased with intention for rental
income and purely as investment. The property
is let out to Pvt Ltd company and rent is getting
credited regularly. We are taking both the
property owners on loan structure and OWN – L3 and
repayment shall be taken from Rental escrow. Above
Ganesh Patil resides at Muktainagar Dist
Jalgaon and Arun Patil resides at Burhanpur.
Both are OGL locations for Pune. We are GEO – L3 and
directing repayment from escrow of rental Above
41

FOIR deviation In LRD cases with
remaining lease tenure above 5 years
CIBIL 3
income. Property is located at Pune at prime
commercial location and LTV is 20%. We
have taken son of Mr.Arun patil as co-applicant
who is residing at Pune and is employed with
Thermax.
FOIR considered at 85.81% instead of 80%
Balance tenure for rent agreement is 18
months. We have considered the tenure of 72
months basis LOI attached in file up to 2024.
Applicants are having decent income from
agriculture business. No other financial LRD1 – L2 and
obligation. LTV is low at 20% Above
CIBIL of Arun Patil shows the business loan
settled. This was a crop loan as discussed with
applicant. Amount is not mentioned in CIBIL.
Loan was taken in 2006 and closed in 2008. As
per applicant in crop loans the payments are
made as bullet payments. The loan is more than CIBIL 3 – L4
3 years old. and Above

Property Snaps:- Commercial Property is situated at Office No.4B, 3rd Floor, Building
Cerebrum IT Park, Sr. No. 13B, 14 (Part), H.No.1+2+3, Wadgaon Sheri, Pune admeasuring
3790 sq. ft. valued at Rs.387 lacs. Property is jointly owned by Ganesh Patil and Arun Patil
and rent is credited equally in their bank statements. The property was purchased by
applicants on 26/09/2012 for Rs.216.57 Lacs from Kumar Housing Corporation Ltd from
self-owned funds.

Sent for Approval of following deviations:-

Additional Sanction Condition:-

RTR of BL of Rs.3 lacs availed as on 24.2.2014 appearing in CIBIL of Arun Patil be
updated in CAM prior to disbursement.

42
 Recommending the captioned case as LRD proposal of Rs. 95 Lacs including insurance
against rented commercial property. The property is located at prime commercial property at
Kumar Cerebrum at Kalyani Nagar.

Loan Amount Rs 95 Lacs (including insurance)

Tenor – 72 Months
ROI - 12.75% Floating
EMI - Rs 189453
Net rent – Rs 220770
EMI to Net rent – 85.81%
LTV – 24.55%

End Use – Applicants wants to purchase the agriculture land at Madhya Pradesh. Hence
requires the funds.

Applicant details –

APPLICANTS / APPLICANT RELATION TO THE

NAME AGE (Years)
GUARANTOR TYPE MAIN APPLICANT
GANESH KADU
Main applicant 55.8 SENP Self
PATIL
ARUN NARAYAN
Co-applicant no 1 57.09589041 SENP BROTHER
PATIL
VAIBHAV ARUN
Co-applicant no 2 31.27123288 SENP NEPHEW
PATIL

Proposal Details -
1. Ganesh Kadu Patil is agriculturist at Muktainagar Dist Jalgaon. He is having farm land
and agriculture crops of bananas. Arun Patil is proprietor of Mahalaxmi Kela Group at
Burhanpur Madhya Pradhesh . He is commission agent. He also receives pension income
from Govt of Madhya Pradesh. Both the applicants are first cousins of each other‟s.
2. They are residing at Jalgaon and Burhanpur respectively.
3. Vaibhav Patil is working with Thermax Ltd since 5 years and he is residing at Pune. His
gross monthly salary is Rs 43910 and net salary is Rs 39972.
43
 4. They had purchased the property in joints name at Pune for investment purpose
5. We have calculated the eligibility under LRD norms considering the rental income from
lessee QED ENABLED SERVICES PVT LTD. Arun Patil and Ganesh patil are co-
owners of the property, hence receive 50% rental income in their accounts.
6. The property was purchased by applicants on 26/09/2012 for Rs 216.57 Lacs from Kumar
Housing Corporation Ltd from self-owned funds.
7. Individual financials of Arun Patil shows the commission income from banana business.
The individual ITR of Ganesh Patil shows agricultural income and godown rent. . ITR are
documented in file for AY 14/15 and AY 13/14 for both the applicants.
8. The lease details are mentioned in table below. Rent agreement is executed for 3 years
and shall expire on 21/04/2016. The proposed tenure is 72 months basis LOI taken from
the lessee and taken on record for further 5 years after 2016.

Office No.4B, 3rd Floor, Building No. B-3, Cerebrum IT Park, Sr.No. 13B, 14
Property Address
(Part), H.No.1+2+3, Wadgaon Sheri, Pune
Carpet area - 264.70 Sq Mtrs / 2849.70 Sq fts
Super Built-up Area
Super Built up area – 3790 Sq fts

Technical Value considered
(Lower of I & II)
Property Usage
Property locality
Property structure
(1) Valued at Rs 387 lacs by Shilp Consultants dated 27/12/2014
(2) Valued at Rs 387 lacs by Datar Valuers 27/12/2014
Commercial Rented
Kumar Cerebrum, Kalyani Nagar
RCC Framed

Property is occupied by tenant QED ENABLED SERVICES PVT LTD

Occupant

Legal Pending

Rent Credits –

Rent Received by Arun Narayan Patil Rent Received by Ganesh Kadu Patil
QED ENABLED QED ENABLED SERVICES PVT
Rent received From SERVICES PVT LTD Rent received From LTD
Rent reflected in STATE BANK OF
Bank INDIA Rent reflected in Bank STATE BANK OF INDIA

44
Account No 32112213041 Account No 3236000100091790
Amt Credited Date Amt Credited Date
1,10,178 31-12-2013
1,09,038 25-01-2014 1,08,000 23-01-2014
1,08,000 26-02-2014 1,08,000 26-02-2014
MAR MAR
1,08,000 04-04-2014 1,08,000 04-04-2014
1,08,000 21-05-2014 1,08,000 22-05-2014
1,67,760 24-06-2014 1,67,760 27-06-2014
JULY JULY
1,15,155 04-08-2014 1,15,155 04-08-2014
2,23,155 23-09-2014 2,23,155 23-09-2014
1,10,385 27-10-2014 1,10,385 07-10-2014
1,10,385 28-11-2014 1,10,385 28-11-2014

1. The amount is backed by the Form No 26 AS as taken on records

2. In March 2014 the rent was not credited , which is paid in June 2014
3. In July 2014 the rent was not paid, which is paid on Sept 2014.

Asset Base of Mr. Ganesh Patil : - The agriculture land base approximately value at market
at Rs 550 Lacs
1. Agricultural Land at Karki
2. Agricultural Land at Loharkheda
3. Agricultural Land at Dabhe pimpri
4. Agricultural at G No 38
5. Agricultural Land at Nayagaon
6. Godown

Loan Details (Not considered under obligation as LRD case)

Deviations –

45
Description of the Deviation taken Mitigants for the deviations from policy Deviation Code

Borrower-co-borrower relationship
and Ownership and Income
aggregation norms not met
Property is owned by cousin brothers, Ganesh Kadu Patil and Arun Narayan
Patil. The property was purchased with intention for rental income and purely
as investment. The property is let out to Pvt Ltd company and rent is getting
credited regularly. We are taking both the property owners on loan structure
and repayment shall be taken from Rental escrow. OWN – L3 and Above

Ganesh Patil resides at Muktainagar Dist Jalgaon and Arun Patil resides at
Burhanpur. Both are OGL locations for Pune. We are directing repayment from
escrow of rental income. Property is located at Pune at prime commercial
Workplace/Residence outside geo location and LTV is 20%. We have taken son of MR Arun patil as co-
limits applicant who is residing at Pune and is employed with Thermax. GEO – L3 and Above

FOIR considered at 85.81% instead of 80% Balance tenure for rent agreement
is 18 months. We have considered the tenure of 72 months basis LOI attached
FOIR deviation In LRD cases with in file up to 2024. Applicants are having decent income from agriculture
remaining lease tenure above 5 years business. No other financial obligation. LTV is low at 20% LRD1 – L3 and Above

CIBIL of Arun Patil shows the business loan settled. This was a crop loan as
discussed with applicant. Amount is not mentioned in CIBIL. Loan was taken
in 2006 and closed in 2008. As per applicant in crop loans the payments are
CIBIL 3 made as bulltet payments. The loan is more than 3 years old. CIBIL 3 – L4 and Above

Interpretations

Internal conditions –

1. Case is subject to clear legal and Technical reports

2. Case is subject to positive internal and external verifications
3. LTV to be restricted to 25% w.r.t. MV of lower of two technical reports.
4. Property insurance is mandatory

External Conditions –
5. EMI repayment to be taken from Rental Escrow account to be opened with PNB
for rental credits from QED ENABLED SERVICES PVT LTD.
6. All Escrow formalities as per PNBHFL norms to be complied with prior to
disbursement.
7. 3 EMI to be kept as deposit in Escrow account prior to disbursement
8. 24 SPDC to be taken each from Account of Arun Patil and Ganesh Patil
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 Top-up Loan
Mr. Vinay is working as Area Manager-Key Accounts with Hicare Services Pvt Ltd since
Feb 2016. Prior to this, he had worked with Labournet Services (I) Pvt Ltd for around 1 year
with total work experience of 13 years. He is qualified as MBA.

Salary break-up:
%
Particulars Type Amount Method Amount Considered
Considered
Basic Fixed 38000 100 Actual 38000
HRA Fixed 19000 100 Actual 19000
Conveyance Fixed 1600 100 Actual 1600
Education
Fixed 200 100 Actual 200
Allowance
Other Allowance Fixed 42000 100 Actual 42000
Gross Income 100800
Net Pay 88044

Existing Loans:
Sr. Tenure Expired Tenure O/s
Loan Type Institution POS EMI Considered for FOIR
No (Months) (Months)
1 Personal Loan HDFC Bank 398241 27 57 8834 Yes
2 Personal Loan HDFC Bank 394317 12 48 10354 No
3 Home Loan PNBHFL 3309956 27 214 33116 Yes
Home Equity
4 PNBHFL 472282 26 141 6280 Yes
Loan

We have taken over HL & HE from Reliance Home Finance & offered top up at that time.
Mrs. Seema (spouse) is housewife with 2 kids. They are residing at self-owned property.

Interpretations:

End use of funds is for closure HDFC Bank PL & some interior work at home.

Our combined exposure would be Rs 44.32 lacs with combined LTV of 61%.

Customer has also applied for PL but now approached PNBHFL & not availing PL now.

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 6. FINDINGS AND SUGGESTIONS
MAIN FINDINGS

4. Most of the people have lack of money in fulfilling their dreams and a few of them
reluctant to pay cash in one go and wanted to pay their home loan slowly in
installments.
5. The majority of the respondents want to take a loan for the construction of the new
house.
6. Home Loan availing procedure is very much difficult for the people who demanding
it. Some Customer‟s does not has proper knowledge about different home loan
schemes.
7. Public Sector Banks require large formalities to be fulfilled.
8. Respondents are agreeing on the statement that easy availability is an important factor
for taking the home loan from the particular bank.
9. According to the respondents miscellaneous expenses affect their selection for home
loans.
10. People get knowledge about home loans from television, internet, families and friends

SUGGESTIONS

5. It should use easy / simple procedure for the sanctioning of home loans to the
customers.
6. It needs to improve on the customer satisfaction level due to stiff competition among
the banks.
7. Employees who deal with customers should have complete knowledge about the
home loans. More personal attention should be given to the customers and working
efficiency should be increased.
8. Improve their customer service. The services provided by banks need to be
automated.
9. Rate of interest should be competitive and free accident insurance cover for home
loan customers should be provided.
10. Many booklets and attractive advertisement should be provided to the customer for
awareness about different housing loan schemes of public sector banks like private
sector banks.

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 11. LEARNING OF THE STUDENT

Company provide the training program for every new employee, during the period of training
I learn the many things such as ….
 What exactly Legal and technical of property
 Credit policies
 FCU training
 How digitalization process help to critical situation(Pandemic) like COVID 19
 How operation team work
 Audit process
 Field work training with the help of real time support
 How to build and maintain the relations with business providers
 It helps to understand the corporate work and culture.
 How to handle team and morning team meeting
 Learning a basic communication skill, how to grow business towards the allocated
targeted.
 Code of conduct
 Handling the customer with their needs.

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 12. CONTRIBUTION TO HOST ORGANIZATION

As a part of host organization, my contributions are in following way

 To stop fraud transaction, do the FCU re-verification of Builder NOC, Demand Letter
and cheque favoring letter at the time of loan amount disbursement.
 At the time of file login PF cheque intimation to customer is mandatory, it overcome
to reduce the cheque bounce ratio.
 FTE (Full time employee) visit is to mandatory on customer business place as well as
residential place.
 Give the all the transference information about loan before and after the disbursement.
 Need to educate customer about loan process and clear the all doubts, start to end
support to customer for completing the loan process.
 Must be care of original property papers.
 Don‟t do the fault commitments, wrong information, cash transactions with the
customer.
 We should try complete customer satisfaction level.
 Try to achieve the business goal and business targets on every month.
 To generate maximum revenue for the company with applying different schemes.

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 13. CONCLUSION

The study of the project reveals that PNB Housing Finance Limited were in the analysis and
interpretation of the project states that the housing finance provides various types of loans
and advances to the customers. The housing finance makes various steps in reducing loss
against the loans and advances provided to the customers.
As compare to the private financial organization the PNB Housing Finance Limited had
made more efficient and valuable changes in the facilities which are to be provided to the
common people with less of charges.
The overall study reveals that the customer connected to the PNB Housing Finance Limited
are made over satisfied with the finance company.
It was found that private sector finance is very popular among the customers these days. The
satisfaction level that customer have with these finances is very high in comparison to public
sector banks. Customer are associated with finance for many services that they require on
regular basis and people tend to prefer banks which provide better facilities and convenient
banking. From the overall analysis it can be said that the satisfaction level in relation to the
services provided by private sector are very high as compared to public sector banks.
Different banks offer same product but their services differentiate and the finance has gone
for in this direction. The customer can choose these schemes which he feels is good for him
and have the capacity to repay it on that specified time period.
An enabling strategy for the poor has more potential than encouraging the private sector to
serve the small man. Reform of the housing finance schemes for middle- and low-income
households should take place simultaneously. If emphasis is put on the development of
housing finance schemes for the poor and schemes for the middle-income households are
neglected, middle-class groups will probably appropriate the schemes meant for the poor.
Instead of interest subsidies on housing loans for the poor, one-time grants for households
may be a better way to help them

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 14. BIBLIOGRAPHY/ WEBLIOGRAPHY

 Books used for this project:

1) Direct sales team kit provided by the company.
2) Sales Kit
.
 Website Used This Project‟s

PNB housing finance limited. (2014, December 9). Wikipedia, the free encyclopedia.
Retrieved May 10, 2022,
from https://en.wikipedia.org/wiki/PNB_Housing_Finance_Limited

 Research papers and Articles

1. Berstain David (2009), “Home equity loans and private mortgage insurance :
Recent Trends &Potential Implications”, Vol. 3
2. Vandell, Kerry D (2008), “Subprime Lending and Housing Bubble : tall wag
dog?”, International Journal of BankMarketing”, Vol. 21, No. 2, Pg. 53 - 7.

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