Executive Summary

Introduction:
The robust growth in the demand for housing finance in recent years has been remarkable because lower interest rates, tax incentives rates for home ownership, massive competition by providers of housing finance has helped consumers considerable. The primary market for housing finance has now matured. For taking the advantage of this emerging trend in the Home Loan sector, this project has been undertaken in the UTI BANK HUBLI. Home finance is the long term financial assistance specifically advanced to acquire/purchase/construct a dwelling unit against the security of first charge on the property to be founded. Apart from financial assistance home finance provides legal technical assistance to the customer in selecting a sound property. Due to the increase in the income level of the middle class in India. Their has been stiff competition among all the Banks to attract the customers & also the products have been designed in the same way.

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Topic: “Comparative analysis of Home Loan in UTI Bank” Objectives and sub-objectives:
Main objectives:
To make the comparative analysis of home loans among three organizations viz., ICICI Bank and LIC Housing Finance.

Sub-objectives:
 To study the overall process of Home loans (sanctioning and disbursement of the home loan);  The eligibility criteria for the customers;  To study the verification process of the documents;

 To study the rate of interest provided by UTI Bank and other housing finance
institutions;  To study the strength and weakness of UTI Bank (home loan).

 To find out the awareness level among the people of Hubli & Dharwad About
the loans being provided by UTI Bank.

Scope of study:
This study is exclusively done in the UTI Bank Ltd Hubli. The time frame of this study taken is for one month i.e. from May 10th to July 10th.

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Methodology:
The method adopted was Structured Interview method, where the information is collected by direct interaction with the staff of financial institutions/banks and my external guide and also from the manuals, broachers and from web sites. A questionnaire had been designed to find out the awareness level among the people of Hubli & Dharwad.

Geographical area:
Hubli & Dharwad

Source of data collection:
Primary source:
The method adopted was personal interview method to collect the required information. Personal interview and discussion was made with the manager. A questionnaire was designed to find out the awareness level among the people about UTI Bank loans.

Secondary source:
Manuals, Brochures and Websites. Company manuals, brochures have been referred to gather information. The websites of all the compared banks have been very useful source of information.

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FINDI NGS:  All the three Banks/Financial Institutions provide loan for Construction, Purchase of Land, and Extension/improvement. Apart from these ICICI Home Finance Co. Ltd, LIC Housing Finance Ltd provide loan against Property and also for Non Residential Premises.  UTI Bank provides Maximum amount of Housing Loan of up to Rs.5 Crores.  ICICI Home Finance Co. Ltd has fixed different percentages based on purpose whereas LIC HFL has fixed as 85% of cost of Project. UTI Bank has 74 % for plot purchase & 85 % for construction.  The documentation is required for sanctioning Home Loans is same for all banks. But LIC HFL is giving more importance for legal documents compared to other Banks.  All the above Housing Finance Institutions will have the same type of security but LIC also sometimes considers the security of the guarantor.  Processing fees charged by LIC is more compared to the other Banks.  All the Housing Financial Institutions are collecting their loan amount in EMI’s, UTI bank does not have ECS facility (electronic clearance service) but it does have auto debit facility available.  LIC HFL is charging fees for Part Pre payment resulting to a burden to customers.  The awareness level about the UTI Bank’s loans is 43%.

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RE COMMEDATIONS  Keeping in mind the competitiveness of the other banks & financial institutions UTI Bank should also provide loans for non-residential premises.  Based on the purpose UTI Bank should customize their percentage of funding for the project.  The documentation process should be made easy as most people feel it as it is very complex. They should specify all the legal documents required for the processing of the loan in advance.  UTI should implement the Electronic Clearance System [ECS] as it is a convenient way for the customers to pay their monthly EMI.  They should try to cut down the fees charged to switch on to the new interest rate as it is a burden for the customers.  As the awareness level about the loan products of UTI Bank is 43% in the twin cities. The Bank has to develop new strategis to create awareness about the different products of UTI Bank  Different segments of market have to be approached with different strategies and Medias.  Attending regular trade fairs.

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Conclusion
The bottom line of comparing loans from various Banks/ Housing Finance Institutions is almost always the interest rate; competition is narrowing down the cost differential between companies. This means that choosing a loan product has become even more difficult as prospective borrowers have to draw comparisons across the entire matrix of add-on benefits and services provided by lending institutions. The growth of Retail and Consumer lending in India must be seen as arising from a strong growth in incomes amongst the middle class and the more affluent segments, leading to changes in the consumer behavior. UTI Bank’s home loans, which traditionally concentrated most on the salaried class, are also widening its customer base. Its more customer oriented approach is yielding rich benefits for the organization. UTI Bank is expanding its network by adding new offices in new cities. UTI Bank is providing a very good service to the customer and it can be termed as satisfactory. But I feel that, it can improve its performance and service by being more flexible and alert in regard to the customer’s requirments. Executives in this organization are very good and co-operative. To conclude, the overall performance of the UTI Bank Is satisfactory. Though the study was done for a short period it was a very good experience and learning experience.

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INTRODUCTION TO BANKING:
A bank [bæŋk] is a business that provides financial services, usually for profit. Traditional banking services include receiving deposits of money, lending money and processing transactions. A commercial bank accepts deposits from customers and in turn makes loans based on those deposits. Some banks (called Banks of issue) issue banknotes as legal tender. Many banks offer ancillary financial services to make additional profit; for example: selling insurance products, investment products or stock broking Currently in most jurisdictions commercial banks are regulated and require permission to operate. Operational authority is granted by bank regulatory authorities and provide rights to conduct the most fundamental banking services such as accepting deposits and making loans. A commercial bank is usually defined as an institution that both accepts deposits and makes loans; there are also financial institutions that provide selected banking services without meeting the legal definition of a bank (see banking institutions). Banks have a long history, and have influenced economies and politics for centuries. In history, the primary purpose of a bank was to provide liquidity to trading companies. Banks advanced funds to allow businesses to purchase inventory, and collected those funds back with interest when the goods were sold. For centuries, the banking industry only dealt with businesses, not consumers. Commercial lending today is a very intense activity, with banks carefully analysing the financial condition of its business clients to determine the level of risk in each loan transaction. Banking services have expanded to include services directed at individuals and risk in these much smaller transactions are pooled. A bank generates a profit from the differential between what level of interest it pays for deposits and other sources of funds, and what level of interest it charges in its lending activities. 7

This difference is referred to as the spread between the cost of funds and the loan interest rate. Historically, profitability from lending activities has been cyclic and dependent on the needs and strengths of loan customers. In recent history, investors have demanded a more stable revenue stream and banks have therefore placed more emphasis on transaction fees, primarily loan fees but also including service charges on array of deposit activities and ancillary services (international banking,foreign exchange, insurance, investments, wire transfers, etc.). However, lending activities still provide the bulk of a commercial bank's income.

FUNCTION OF BANKS:
Although the basic type of services offered by a bank depends upon the type of bank and the country, services provided usually include:

Taking deposits from their customers and issuing checking and savings accounts to individuals and businesses Extending loans to individuals and businesses Cashing cheques Facilitating money transactions such as wire transfers and cashiers checks Issuing credit cards, ATM cards, and debit cards Storing valuables, particularly in a safe deposit box Cashing and distributing bank rolls Consumer & commercial financial advisory services Pension & retirement planning

• • • • • • • •

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TYPES OF BANKS:
Banks' activities can be divided into • • • • retail banking, dealing directly with individuals and small businesses; business banking, providing services to mid-market business; corporate banking, directed at large business entities; and investment banking, relating to activities on the financial markets. government, or are non-profits. Central banks are non-commercial bodies or government agencies often charged with controlling interest rates and money supply across the whole economy. They generally provide liquidity to the banking system and act as Lender of last resort in event of a crisis Most banks are profit-making, private enterprises. However, some are owned by

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BANKING IN INDIA:
Banking in India originated in the first decade of 18th century with The General Bank of India coming into existence in 1786. This was followed by Bank of Hindustan. Both these banks are now defunct. The oldest bank in existence in India is the State Bank of India being established as "The Bank of Bengal" in Calcutta in June 1806. A couple of decades later, foreign banks like Credit Lyonnais started their Calcutta operations in the 1850s. At that point of time, Calcutta was the most active trading port, mainly due to the trade of the British Empire, and due to which banking activity took roots there and prospered. The first fully Indian owned bank was the Allahabad Bank, which was established in 1865. By the 1900s, the market expanded with the establishment of banks such as Punjab National Bank, in 1895 in Lahore and Bank of India, in 1906, in Mumbai - both of which were founded under private ownership. TheReserve Bank of India formally took on the responsibility of regulating the Indian banking sector from 1935. After India's independence in 1947, the Reserve Bank was nationalized and given broader powers. Early history At the end of late-18th century, there were hardly any bank in India in the modern sense of the term. At the time of the American Civil War, a void was created as the supply of cotton to Lancashire stopped from the Americas. Some banks were opened at that time which functioned as entities to finance industry, including speculative trades in cotton. With large exposure to speculative ventures, most of the banks opened in India during that period could not survive and failed. The depositors lost money and lost interest in keeping deposits with banks. Subsequently, banking in India remained the exclusive domain of Europeans for next several decades until the beginning of the 20th century.

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The Bank of Bengal, which later became the State Bank of India. At the beginning of the 20th century, Indian economy was passing through a relative period of stability. Around five decades have elapsed since the India's First war of Independence, and the social, industrial and other infrastructure have developed. At that time there were very small banks operated by Indians, and most of them were owned and operated by particular communities. The banking in India was controlled and dominated by the presidency banks, namely, the Bank of Bombay the Bank of Bengal and the Bank of Madras - which later on merged to form the , and Imperial Bank of India, upon India's independence, was renamed the State Bank of India. There were also some exchange banks, as also a number of Indian joint stock banks. All these banks operated in different segments of the economy. The presidency banks were like the central banks and discharged most of the functions of central banks. They were established under charters from the British East India Company. The exchange banks, mostly owned by the Europeans, concentrated on financing of foreign trade. Indian joint stock banks were generally under capitalized and lacked the experience and maturity to compete with the presidency banks, and the exchange banks. There was potential for many new banks as the economy was growing. LordCurzon had observed then in the context of Indian banking: "In respect of banking it seems we are behind the times. We are like some old fashioned sailing ship, divided by solid wooden bulkheads into separate and cumbersome compartments." Under these circumstances, many Indians came forward to set up banks, and many banks were set up at that time, and a number of them set up around that time continued to survive and prosper even now like Bank of India and Corporation Bank, Indian Bank, Bank of Baroda, and Canara Bank. During the Wars The period during the First World War (1914-1918) through the end of the Second World War (1939-1945), and two years thereafter until the independence of India were 11

challenging for the Indian banking. The years of the First World War were turbulent, and it took toll of many banks which simply collapsed despite the Indian economy gaining indirect boost due to war-related economic activities. At least 94 banks in India failed during the years 1913 to 1918 as indicated in the following table: Number of banks Authorised capital Paid-up Capital that failed 12 42 11 13 9 7 (Rs. Lakhs) 274 710 56 231 76 209 (Rs. Lakhs) 35 109 5 4 25 1

Years 1913 1914 1915 1916 1917 1918

Post-independence The partition of India in 1947 had adversely impacted the economies of Punjab and West Bengal, and banking activities had remained paralyzed for months. India's independence marked the end of a regime of the Laissezfaire for the Indian banking. The Government of India initiated measures to play an active role in the economic life of the nation, and the Industrial Policy Resolution adopted by the government in 1948 envisaged a mixed economy. This resulted into greater involvement of the state in different segments of the economy including banking and finance. The major steps to regulate banking included: In 1948, the Reserve Bank of India, India's central banking authority, was nationalized, and it became an institution owned by the Government of India. In 1949, the Banking Regulation Act was enacted which empowered the Reserve Bank of India (RBI) "to regulate, control, and inspect the banks in India." The Banking Regulation Act also provided that no new bank or branch of an existing bank may be opened without a licence from the RBI, and no two banks could have common directors. 12

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

Liberalisation In the early 1990s the then Narasimha Rao government embarked on a policy of liberalisation and gave licences to a small number of private banks, 13

which came to be known as New Generation tech-savvy banks, which included banks such as UTI Bank (the first of such new generation banks to be set up), ICICI Bank and HDFC Bank. This move, along with the rapid growth in the economy of India, kickstarted the banking sector in India, which has seen rapid growth with strong contribution from all the three sectors of banks, namely, government banks, private banks and foreign banks. The next stage for the Indian banking has been setup with the proposed relaxation in the norms for Foreign Direct Investment, where all Foreign Investors in banks may be given voting rights which could exceed the present cap of 10%,at present it has gone up to 49% with some restrictions. The new policy shook the Banking sector in India completely. Bankers, till this time, were used to the 4-6-4 method (Borrow at 4%;Lend at 6%;Go home at 4) of functioning. The new wave ushered in a modern outlook and tech-savvy methods of working for traditional banks.All this led to the retail boom in India. People not just demanded more from their banks but also received more. Current scenario Currently (2007), overall, banking in India is considered as fairly mature in terms of supply, product range and reach-even though reach in rural India still remains a challenge for the private sector and foreign banks. Even in terms of quality of assets and capital adequacy, Indian banks are considered to have clean, strong and transparent balance sheets-as compared to other banks in comparable economies in its region. The Reserve Bank of India is an autonomous body, with minimal pressure from the government. The stated policy of the Bank on the Indian Rupee is to manage volatilitywithout any stated exchange rate-and this has mostly been true. With the growth in the Indian economy expected to be strong for quite some timeespecially in its services sector, the demand for banking services-especially retail banking, mortgages and investment services are expected to be strong. M&As, takeovers, asset sales and much more action (as it is unravelling in China) will happen on this front in India. 14

In March 2006, the Reserve Bank of India allowed Warburg Pincus to increase its stake in Kotak Mahindra Bank (a private sector bank) to 10%. This is the first time an investor has been allowed to hold more than 5% in a private sector bank since the RBI announced norms in 2005 that any stake exceeding 5% in the private sector banks would need to be vetted by them. Currently, India has 88 scheduled commercial banks (SCBs) - 28 public sector banks (that is with the Government of India holding a stake), 29 private banks (these do not have government stake; they may be publicly listed and traded on stock exchanges) and 31 foreign banks. They have a combined network of over 53,000 branches and 17,000 ATMs. According to a report by ICRA Limited, a rating agency, the public sector banks hold over 75 percent of total assets of the banking industry, with the private and foreign banks holding 18.2% and 6.5% respectively.

RETAIL BANKING:
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Retail banking is typical mass-market banking where individual customers use local branches of larger commercial banks. Services offered include: savings and checking accounts, mortgages, personal loans, debit cards, credit cards, and so forth.

TYPES OF RETAIL BANKING:
• Commercial bank has two possible meanings: o Commercial bank is the term used for a normal bank to distinguish it from an investment bank. o Commercial bank can also refer to a bank or a division of a bank that mostly deals with deposits and loans from corporations or large businesses, as opposed to normal individual members of the public (retail banking). • • • • • Community development bank are regulated banks that provide financial services and credit to underserved markets or populations. Private banks manage the assets of high net worth individuals. Offshore banks are banks located in jurisdictions with low taxation and regulation. Many offshore banks are essentially private banks. Savings bank accept saving deposits. Postal savings banks are savings banks associated with national postal systems.

CATEGORIZATION OF RETAIL BANK SERVICES:
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CORE SERVICES Payment services

FACILITATING SERVICES SUPPORTING SERVICES • Cash • Internet banking • Foreign currency • Telephone banking requirements • Making payment at • Traveler cheques doorstep. • DD/Banker’s cheques • TT • EFT Current account & • ATM card • Credit cards savings account • Inter branch/inter bank • Debit cards transfer of funds • Services to seniors • Safety vault • Telephone banking • Internet banking • Conversion of excess balance to bank deposits Loan Products: • Current account • Delivery of loan at Consumer loan promised time. • Savings account Personal loan • Interest rate option: • Time deposit account Housing loan fixed/floating. Educational loan • Flexibility in prepayment of loan. • Counseling on real estate markets. • Legal services for documentation. • ECS for payment of loan installments. Insurance products: • Current account • Additional insurance Life insurance facility for family • Savings account members. • Time deposit account • Counseling on post • Safety vault retirement savings.

BANKING ON RETAIL:
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With a jump in the Indian economy from a manufacturing sector, that never really took off, to a nascent service sector, Banking as a whole is undergoing a change. A larger option for the consumer is getting translated into a larger demand for financial products and customization of services is fast becoming the norm than a competitive advantage. With the Retail banking sector expected to grow at a rate of 30% [Chanda Kochhar, ED, ICICI Bank] players are focusing more and more on the Retail and are waking up to the potential of this sector of banking. At the same time, the banking sector as a whole is seeing structural changes in regulatory frameworks and securitization and stringent NPA norms expected to be in place by 2004 means the faster one adapts to these changing dynamics, the faster is one expected to gain the advantage. In this article, we try to study the reasons behind the euphemism regarding the Retailfocus of the Indian banks and try to assess how much of it is worth the attention that it is attracting. Potential for Retail in India: Is sky the limit? The Indian players are bullish on the Retail business and this is not totally unfounded. There are two main reasons behind this. Firstly, it is now undeniable that the face of the Indian consumer is changing. This is reflected in a change in the urban household income pattern. The direct fallout of such a change will be the consumption patterns and hence the banking habits of Indians, which will now be skewed towards Retail products. At the same time, India compares pretty poorly with the other economies of the world that are now becoming comparable in terms of spending patterns with the opening up of our economy. For instance, while the total outstanding Retail loans in Taiwan is around 41% of GDP, the figure in India stands at less than 5%. The comparison with the West is even more staggering. Another

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Comparison that is natural when comparing Retail sectors is the use of credit cards. Here also, the potential lies in the fact that of all the consumer expenditure in India in 2001, less than 1% was through plastic, the corresponding US figure standing at 18%. But how competitive are the players? The fact that the statistics reveal a huge potential also brings with it a threat that is true for any sector of a country that is opening up. Just how competitive are our banks? Is the threat of getting drubbed by foreign competition real? To analyze this, one needs to get into the shoes of the foreign banks. In other words, how do they see us? Are we good takeover targets? Going by international standards, a large portion of the Indian population is simply not “bankable” – taking profitability into consideration. On the other hand, the financial services market is highly over-leveraged in India. Competition is fierce, particularly from local private banks such as HDFC and ICICI, in the business of home, car and consumer loans. There, precisely lie the pitfalls of such explosive growth. All banks are targeting the fluffiest segment i.e. the upwardly mobile urban salaried class. Although the players are spreading their operations into segments like self- employed and the semi-urban rich, it is an open secret that the big city Indian yuppies form the Most profitable segment. Over-dependence on this segment is bound to bring in inflexibility in the business.

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Retail banking is the buzzword in the banking circles and the customers are in for a bonanza. Through retail banking, a set of products & services are designed for ultimate customers for personal & non business use. Although, the retail business takes a long period to build up volumes, banks are positioning on both retail assets & liabilities, as part of broad business strategy. Due to the shrinking in big-ticket credit, growing NPAs & deployable surplus arising out of deposit growth, banks are competing with one another to garner the market share by offering newer products & services. The prevailing situation in the economy has led to an increasing investor preference for bank deposits. With more volatility in the equity market, the Retail investors have put in more confidence, as they find no risk in the bank deposits, not withstanding the lower interest rate. Through various delivery channels coupled with technology, banks distribute the products & services via ATM, phone banking, Any-time banking, Electronic Data Capture Point-o-Sales [EDCPoS] & the internet banking, thereby reducing the necessity for maintaining large network of branches. On the product diversification facilities, as part of marketing efforts, the banks offer free ATM cards, free remittances, flexible deposit schemes, home loans with flexible EMIs, consumer durable loan facilities etc. Besides net banking, customers on the move can conduct their banking transactions using mobile phone & vast network of ATM’s spread across in the country, thereby providing adequate scope for increasing retail segment base. Banks offer personalized marketing services too through E-mail newsletters; Web- based services & personal letters. With advancement in technology, the banks have introduced wide range of customized products to customers. To quote on the deposit front, a number of banks have made their term deposits schemes more flexible to allow pre mature or partial withdrawal. Banks also increase the number of their highvalue customers, focusing on high net worth individuals by its preferred service & tapping non- resident accounts through tailor made products & services. Unlike in corporate banking, with the effective use of IT every individual account is tracked to know customer behavior, their potential defaults, deposit maturities etc.

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Although banks focus on the main areas in retail banking, currently banks are targeting more on retail lending products to deploy the surplus funds with them.

RETAIL LENDING: CHANGING DIMENSIONS
Large credit exposures are linked to bank’s capital. Limits have to be fixed for single exposure in relation to the Capital funds. Thereby, clearly defined exposure ceiling for a single counterparty or group of related counterparties is required to be fixed. In addition to internal ceiling, appropriate levels of prudential exposure levels are also fixed. Further the loan book containing a relatively high proportion of sizeable large credit exposure is more susceptible to potential credit risk compared to a more widely distributed/mixed portfolio. Thus, retail exposure, with strong dominance on local populace & established personal contact with costumers, facilitates risk spreading & quality assets. Credit portfolio of banking business is fast changing in India. Retail lending is becoming an important segment of bank credit. Its share in the aggregate outstanding credit of SCBs in India has increased from 9 percent in 1995-96 to over 10 percent in 2001-02. In the face of slowdown in industrial activity, banks have aggressively increased the share of credit towards to retail lending. The critical challenge for the banking industry is approachability & accessibility – the ability to make finance available to those who need it, when they need it & in a manner they want it. The industry must become more proactive & reach out to the customer, rather than expecting the customer to reach out to the industry.

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RETAIL LENDING: REASON FOR RESURGENCE
• A paradigm shift from corporate lending The economic slowdown & poor industrial growth have reduced demand for the loans & there is stiff competition in the corporate loans market due to the continuous fall in interest rates. The corporate lending scene has also undergone a radical change in the recent years. There are few opportunities in the wholesale segment that is the corporate lending market. Competition has made it unviable to lend to blue chip corporates, since they are now able to borrow at a few basis points above the yield on government securities or at sub-PLR.Volatility has been very wide with corporates preferring to tap global markets for funds. This as left only second rung corporates available for lending by domestic banks. While it increases the threat to NPAs, the fact also remains that there are too many banks chasing too few corporates with good rating status. Eying on the mid corporates& retail finance market is more profitable than corporate banking business since retail customers are less credit averse & more open to acquire assets through the credit route. • Disintermediation While on the one hand, we have been talking on the need to reduce NPAs; on the other hand, disintermediation requires banking beyond its traditional contours. In times of excess liquidity, disintermediation is a blessing in disguise as it diverts deposits to other revenues. However it entails some negative effects too. It increase the cost of funds, as there is a flight of deposits bearing lower interest rates to other avenues, leaving banks with only high cost deposits. Already, the trend is seen on the deposit side, where PPF, NSCs, mutual funds & insurance products are being accepted as substitutes. On the lending side too, mutual funds are poaching on the best customers. What poses more threat to banks is the fact that mutual funds are becoming the preferred lenders to corporates. Having no provisioning requirement or priority sector lending obligation & carrying almost no risk[as risks are passed on the investors], mutual funds are able to 22

lend with a much finer spread. As a result spreads for banks in lending have steadily declined. • Differential Interest Rate Price is an important aspect. As the Indian market is getting commoditized, interest rate differential assumes a greater significance. For example even the lowest interest bearing product-say housing finance-earns an interest of 10 to 11 percent[for more than 10 year tenure] compared to sub-PLR lending at 8 to 9 percent interest rate to meet more risky corporate loan demand. More importantly, the corporates, on the one hand, expect highest returns & park deposits with the banks offering highest returns & on the other hand, they raise their resources with the banks offering lowest interest rates. While doing so, if a rival bank offers them better returns on deposits or lower interest on borrowings, they change their loyalties. With the falling interest rates, they retire highcost old debt & replace it with low-cost loan & add to the profitability. • Increased Middle Class Demand Despite slowdown in the economy, the purchasing power continued to be strong as consumerism among the middle class is on the increase. An increasing number of products & services on credit, & the rapidly growing middle class with a bias towards consumerism are the key drivers for the growth in the retail lending. Increased middleincome segment, opening up of the economy, awareness & sophistication in urban & semi-urban households for whom convenience, security & status are important, contributed to higher demand for retail banking. The consumers are sensitive to the impact of any purchase on the household budget & will postpone till they could save the actual money required. To counter this, banks should evolve soft lending schemes to be structured on the basis of repayment capacity of the household. • Volume orientation Retail business is focused with the sole aim of expanding the portfolio with more accounts, more customers & more balances, although the transaction cost is high across the banks. The dominant issue here is that by increasing the volume through retail lending, the cost could be brought down, which will eventually lead to more profit.

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ABOUT UTI BANK:
UTI Bank India, the first bank to begin operations as new private banks in 1994 after the Government of India allowed new private banks to be established. UTI Bank was jointly promoted by the Administrator of the specified undertaking of the Unit Trust of India (UTI-I), Life Insurance Corporation of India (LIC) and General Insurance Corporation Ltd. Also with associates viz. National Insurance Company Ltd., the New India Assurance Company, The Oriental Insurance Corporation and United Insurance Company. UTI Bank in India today is capitalized with Rs. 232.86 Crores with 47.50% public holding other than promoters. It has more than 200 branch offices and Extension Counters in the country with over 1250 UTI Bank ATM proving to be one of the largest ATM networks in the country. UTI Bank India commits to adopt the best industry practices internationally to achieve excellence. By the end of December 2004, UTI Bank in India had over 2.7 million debit cards. This is the first bank in India to offer the AT PAR Cheque facility, without any charges, to all its Savings Bank customers in all the places across the country where it has presence. With the AT PAR cheque facility, customers can name Cheques payments to any beneficiary at any of its existence place. The ceiling per instrument is Rs.50, 000/-. The latest offerings of the bank along with Dollar variant is the Euro and Pound Sterling variants of the International Travel Currency Card. The Travel Currency Card is a signature based pre-paid travel card which enables travelers’ global access to their money in local currency of the visiting country in a safe and convenient way.

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Mission
Customer Service and Product Innovation tuned to diverse needs of individual and corporate clientele. Continuous technology up gradation while maintaining human values. Progressive globalization and achieving international standards. Efficiency and effectiveness built on ethical practices.

Core Values
Customer Satisfaction through Providing quality service effectively and efficiently Smile, it enhances your face value" is a service quality stressed on Periodic Customer Service Audits Maximization of Stakeholder value Success through Teamwork, Integrity and People

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Organization
Basically an organization is a group of people intentionally organized to accomplish an overall, common goal or set of goals. Business organizations can range in size from two people to tens of thousands. There are several important aspects to consider about the goal of the business organization. These features are explicit (deliberate and recognized) or implicit (operating unrecognized, "behind the scenes"). Ideally, these features are carefully considered and established, usually during the strategic planning process. (Later, we'll consider dimensions and concepts that are common to organizations.) Types of organization a. Formal organization. b. Informal organization. a. Formal organization: The formal organization or group exist in all organization .it is a group of the people working together in all co-operation under the authority towards common goal, objectives for the mutual benefit of the participants. The formal groups are created to carry out some specific work to meet some goals of the organization b. Informal Organization: The informal organization refers to relationship between peoples in the organization based not on procedure and regulation laid down in the organization but on the personal attitude friendship or some common interest which may or may not be work related informal organization.

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Departmentation: Departmentation is the process of dividing and grouping the activities of an enterprise in the various units for the purpose of administration .the units for the purpose of administration .the units are designated as departments’ division sector or branches. Departmentation facilitates the benefits of specialization .it aims at achieving units of directing, co-operation, co-ordination, control and effective communication .it leads to effective performance of activities of the enterprise

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ORGANIZATION CHART OF UTI BANK
CHAIRMAN /CMD DIRECTOR CORPORATE BANKING CORPORATE RETAIL BANKING CORPORATE OPERATION BANKING CORPORATE PROJECT AND PLANNING BANKING CORPORATE FINANCE AND ACCOUNT BANKING CORPORATE INSPECTION AND AUDIT BANKING CORPORATE SUPPORT SERVICE BANKING CORPORATE INFORMATION TECHNOLOGY BANKING CORPORATE MARKETING BANKING

NORTH ZONE SENIOR VICE
PRESIDENT

SOUTH ZONE SENIOR VICE PRESIDENT VICE PRESIDENT ASSISTANT VICE - PRESIDENT
OPERATIONS, SALES MANAGERS AND CREDIT MANAGERS

EAST ZONE SENIOR VICE PRESIDENT VICE PRESIDENT ASSISTANT VICE - PRESIDENT
OPERATIONS, SALES MANAGERS AND CREDIT MANAGERS

WEST ZONE SENIOR VICE PRESIDENT VICE PRESIDENT ASSISTANT VICE - PRESIDENT
OPERATIONS, SALES MANAGERS AND CREDIT MANAGERS

VICE - PRESIDENT

ASSISTANT VICE PRESIDENT

OPERATIONS, SALES MANAGERS AND CREDIT MANAGERS

OPERATIONS, SALES & CREDIT DEPUTY MANAGERS

OPERATIONS, SALES MANAGERS AND CREDIT DEPUTY MANAGERS EXECUTIVES

OPERATIONS, SALES MANAGERS AND CREDIT DEPUTY MANAGERS EXECUTIVES

OPERATIONS, SALES MANAGERS AND CREDIT DEPUTY MANAGERS EXECUTIVES

EXECUTIVES

JUNIOR EXECUTIVES SALES OFFICERS SALES EXECUTIVES

JUNIOR EXECUTIVES SALES OFFICERS SALES EXECUTIVES

JUNIOR EXECUTIVES SALES OFFICERS SALES EXECUTIVES

JUNIOR EXECUTIVES SALES OFFICERS SALES EXECUTIVES

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BANK PROFILE UTI BANK BRANCH OFFICE HUBLI
UTI BANK branch office Hubli started on 10 October 2003 this bank contains has five departments this bank located in DESPANDE NAGAR. Branch manager . Address: 163/20A”kalburgi plaza”, Despande Nagar, HUBLI – 580029 Timings: 9.30 AM to 1.30 PM CONTACT NO: 0836 – 2356981/2 Organization chart of HUBLI branch
SOUTH ZONE SENIOR VICE
PRESIDENT

VICE - PRESIDENT

ASSISTANT VICE PRESIDENT

OPERATIONS, SALES MANAGERS AND CREDIT MANAGERS

OPERATIONS, SALES & CREDIT DEPUTY MANAGERS

EXECUTIVES

JUNIOR EXECUTIVES

SALES OFFICERS SALES EXECUTIVES

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UTI bank has 5 departments
1. Cash department 2. Credit department 3. Marketing department 4. Clearing department 5. Operation department

CASH DEPARTMENT:
It is mainly concerned with cash transactions of day to day activities these dept have playing very much important role because more number of people are coming to this dept. this dept has 50% to 80% decision making power this dept has fully co-operate with other dept performance of this dept will be appraised by the way of branch performance based. This dept would have any plans for reaching its targets. FUNCTIONS OF CASH DEPARTMENT: 1. Handling daily cash transactions. 2. balancing figure at the end of the day 3. maintaining cash levels of the branch

MARKETING DEPARTMENT:
It is concerned with achieving branch targets through creating new customers and provides better service to these customers these dept has 50% to 100% decision making power this dept has fully co-operate with other dept this dept performance can be appraised through branch performance this is having following plans for reaching its targets by a) By obtaining some new customers b) By generating new business through existing customers.

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FUNCTIONS OF MARKETING DEPARTMENT 1. Achieving branch targets. 2. co-operating with sales executives 3. customer service 4. Opening of new accounts. 5. building new relations

OPERATION DEPARTMENT:
It is heart of the UTI bank this department has control the overall operations of the UTI bank .This department has handling customer queries and giving proper information to needy customers this department having 30% to 80% decision making power. This dept is fully co-operate with other dept this dept performance can be appraised branch performance and self appraised based .this dept also having plans to achieve its targets They are gross selling plan, marketing and contribution to the branch target plans to reach its objectives. FUNCTIONS OF OPERATION DEPARTMENT 1. DD drafting 2. Out station cheques realigning 3. Attending customers query regarding day to day transactions. 4. Handling government business. 5. Handling RTGS (Real time gross settlements system). 6. Transfers 7. Remittances.

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CREDIT DEPARTMENT:
Credit department has mainly concern with credit transactions of the bank like giving loans, recovers loans etc are included in these department this department performance can be appraised through giving targets. This department having 50% to 80% decision making power and this department has co-operated with other department whenever other departments needed. This department different plans for reaching its targets they are, credit appraised of balance sheet, financial strength and ratio analysis. FUNCTIONS OF CREDIT DEPARTMENT 1. Screening of proposals. 2. Documentations. 3. Disbursements of loans.

CLEARING DEPARTMENT:
Clearing has mainly concerned with clearing cheques of the customers this department having 20% to 30% decision making power this department performance can be appraised through branch performance ,this department does not have any plans for reaching targets

FUNCTIONS OF CLEARING DEPARTMENT 1. Out stations of cheques. 2. Local’s cheques. 3. CBSS (software name used for giving information to the current account holders).

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1. Basic services: basic services include
a) saving account b) term deposit c) recurring deposits d) demat account e) ATM’s f) En cash - 24 g) Special savings account h) Residence and foreign currency account i) Easy access through channels j) I connect k) corporate I connect l) 24 - hr tele banking

TYPES OF ACCOUNTS:
1. Easy access account. 2. Salary account 3. Women’s savings account 4. Senior privilege account 5. Defense Salary account 6. Trust/NGO savings account 7. Azadi-no frills 8. RFC(D)

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1. Easy access account
The Easy access Savings Bank account is an endeavor by the bank to understand the customers needs & redefine banking to suit the customers requirements for a truly anywhere anytime banking experience.  A-Accessibility Wide network of branches & one of the largest ATM networks in India giving the customers easy access to their account. The anywhere banking concept allows the customers to access/transact their account from any branch of the bank.  C-Convenience An International Photo-signature Debit Card with withdrawal limit of Rs.40, 000 per day, facilitating transfer funds, deposits of cash/cheques & payment of insurance premium [LIC]. The Debit Card also comes with a comprehensive insurance cover inclusive of zero lost card liability, purchase protection & personal accident Insurance up to Rs.2 lacks.  C-Comfort Internet Banking/ Telebanking- the ease of banking from home or office. Providing the customer with the facility of online funds transfer, requests for the customers new cheque book, Financial Advisory Services[FAS], shopping online & information on mutual funds.  E-Earnings Maximize returns on the account by availing the dual benefit of Flexi deposit. Any balance in the customers account is in excess of Rs.10,000 or any higher limit specified by the customer will be transferred automatically to high interest earning fixed deposit account in multiplies of Rs.10,000.  S-Speed ‘At-Par’ cheque gives the customer the unique power to encash their cheque as a local cheque at more than 143 centers where the bank has a presence at no extra cost.  S-Service

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Service of the highest quality is rendered by an affable endearing & enthusiastic staff at the branch.

2. Salary Account:
The complete financial solution Seeking a convenient way to pay your employees? Salary Savings Account from UTI Bank will do the job for you. We know how important employee satisfaction is for an organization to grow to its full potential. Which is why we have tailored our Salary Savings Account not only to be a convenient way for you to manage salaries (across various centers, through our centralized database), but also provide your employees with a range of value added benefits. Salary Savings Account comes with a host of facilities that give your employees access to the complete gamut of banking services (including overdrafts, loans and zero-balance requirements) on a preferential basis. Making it the perfect incentive for your employees. Features  No minimum balance.  Banking available across the country.  Multi-city at par Cheque book.  Personal & accidental insurance cover up to Rs.2 lacs.  Joint account facility available.

2. Women’s Savings Account :
Features: Savings account designed for special needs for women.  Anywhere banking facility with Priority Debit card.  Enhanced cash withdrawal limit of Rs.40, 000 per day through ATM.  FREE Zero Balance Minor Account.  FREE financial advisory services.  FREE Demand Drafts & Pay orders.  FREE At Par cheque books.  FREE delivery of computerized statement of account. 35

 FREE collection of outstation cheques only postage will be collected.  Critical illness benefit.  Dual benefit of Encash 24 scheme.  Children education bonus.  Specially designed International Debit Card.  Discounts on retail purchases.  Concessional rates for Personal & consumer loans.  All will come with Average Quarterly balance of Rs.10, 000 only. Special feature: Zero Balance Account  No maintenance charges.  Debit card offered to the minor above the age of 12 years, who can sign uniformly.  Daily withdrawal limit of Rs.1500 at ATM’s  Daily spend limits of Rs.1000 at merchant outlets.  Free monthly Statement clubbed with the statement of the smart privilege account of the mother.  At- par cheque book at a nominal cost. This account is a special feature to imbibe the significance of savings in your child. The zero balance minor savings account is a unique feature that all account holders can open for their children.

4. Senior Privilege Account:
Features: [For citizen above 60 years]  Free financial advisory services.  Free payable At-par cheques book.  Free Cash & cheque pick up facility.  Free demand drafts & pay orders.  Free collection of outstation Cheques only postage will be collected. 36

 Free delivery of computerized statement of account. Free home banking facility.  Critical illness insurance cover All will come with average quarterly balance of Rs.10, 000 only.

5. Defense Salary Account:
Defense Salary account is a product designed keeping in mind how tough a life in the Defense forces is. Not only does it come to you absolutely free, no minimum balance is required either. The defense personnel can also access the entire UTI bank network, including more than 2300 ATM’s & 550 branch offices no matter where they are posted. Banking Privileges:  At-par cheques Facility As a Defense personnel’s job involves transfers across the country. With the at-par cheque facility it will no longer be necessary to set up new bank accounts with each transfer.  Additional Debit Card Along with a free International Debit Card, They also get a free card for the joint account holder. This means that their child or spouse also enjoy the same benefits of banking with UTI.  Financial Advisory Services The solutions provide by the UTI bank meet the twin goal of meeting their requirements& to diversify & spread the risk of their investment portfolio, so that they can look forward to an comfortable & worry-free life. The investment plan may include: 37

• • •

Mutual Funds: Debt and equity Bonds UTI Bank Fixed Deposits

6. Trust/NGO Savings Account:
UTI Bank’s Trust Account is an effort to offer thoughtful banking for people who spend their lives thinking of others. It is a complete solution for Trusts, Associations, Societies, Government Bodies, Section 25 companies & NGO’s, so that the organizations can devote all of their time to their noble cause. Features:  A Savings Account for their Trust with no minimum balance requirement.  A multi-city at-par cheque facility with no limit on clearing payments at centers across the country wherever the is present.  Free Anywhere Banking across all the UTI branches & extension counters & over all the UTI ATM’s.  Free Demand Drafts or Pay Orders as & when required by the Trust’s to remit funds.  Free collection of cheques at outstation locations.  Monthly statement of account delivered at their doorstep.  Facility for collecting donations in the Trust’s account through the UTI Bank’s network of branches & extension counters across the country, as well as through iConnect-UTI’s Internet Banking facility.  Foreign Contribution Regulation Act[FCRA] Account: the FCRA account enables approved organizations to receive foreign contributions for utilization in their activities in India. The Bank will provide assistance in the process of documentation & obtaining necessary approvals from the Ministry of Home Affairs in New Delhi. 38

 Free investment advice  Free Demat account.  Constituent Subsidiary General Ledger [SGL] account through which investments in Government securities are carried out, it comes with a host of value added services like concession in transaction & service charges.

 An UTI Bank customer can donate funds to the Trust through the iConnect internet facility. In such cases the Bank provides the details of the amount donated & the donor’s name to the Trust so that they can issue the receipt to the donor.

7. Azadi- No Frills Account:
It is a Savings Account that doesn’t require a minimum balance. The specifications required for qualifying for an Azaadi account are:  The sum total of all credit in the customer’s account does not exceed Rs.1 lacc during the financial year.  The customers do not intend to maintain an account balance higher than Rs.50, 000 at any given instant.  The customer is unable to furnish full documentation as required ordinarily for fulfilling of account opening norms. Features:  Zero balance savings account: No need to maintain a fixed, mandatory amount in the account.  Instant Welcome Kit: Handed over to the customer at the time of account opening, the kit will consist of their account number, debit card, debit card PIN, internet banking Pin & phone banking PIN.

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 International Debit Card: Which gives the customer access to over 1800 ATM’s across the country, enabling the customer to make deposits or withdraw cash at any time of day or night.  Phone banking & Internet banking: the customer’s can conveniently check their balance, transaction details etc.anytime from anywhere over phone or using the Internet, for no extra charge.

8. Resident Foreign Currency (Domestic) RFC (D) Account:
This account is specially designed keeping in mind the customer’s requirements when they deal with foreign currency. The unnecessary worries that plague the customers every time they travel abroad, worrying how to keep their foreign currency safe, if the frequent fluctuations in forex market would affect them. This account also helps those customers who regularly issue cheques 7 drafts for payment abroad. Holding foreign currency is no longer restricted to the NRI’s. For the first time Reserve Bank of India has allowed Resident Indians to maintain foreign currency accounts without any ceiling to it. This step is considered as a contribution of RBI’s gradual endeavor towards achieving “Full Capital Convertibility”. PRODUCT FEATURES:  A Resident Foreign Currency (Domestic) Account, RFC (D), with UTI Bank entitles the customer to maintain non-interest bearing account in four major currencies (USD, EURO, and GBP & Japanese Yen).  There will be no ceiling on the balances held in the account.  Cheque books denominated in USD or GBP or EURO or YEN will be issued on these accounts with 25 leaves. The cheques thereby branded as RFC (Domestic)

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Account will not be presented in clearing & will be payable only at the issuing branch.  The minimum balance for such a current account will be USD 100 or GBP 60 or EURO 100 or YEN 20,000. There will be a penal charge of USD 5 or GBP 3 or EURO 5 or YEN 1000 per quarter in case of failure to maintain the minimum balance requirement.

LOANS:
A loan is a kind of advances made by a bank to its customer with or without security .in the case of loan the bank makes a lump sum payment to the borrower under a separate account or credits his existing account with the amount of loan sanctioned. Such a loan is given for fixed period at an agreed rate if interest .the loan is required to be repaid either in a lump sum at the end of the period or installment as per agreement. SRAC (SETLITE RETAIL ASSET CENTER) UTI BANK newly launched this center 8th June 2006, in this center bank is providing different kind of loans to the customers like; Retail Loans OF UTI BANK: Power Drive Power Home Asset power Personal Power Study Power 41

But in Hubli branch they are providing mainly three kinds of loans they are a) Personal power b) Power home c) Mortgage loan. This center located in PIZZA HUT near Desai cross, in this center six member are working one is for personal loan another one is for housing loan and mortgage loan. Another two members are working for document verification. This branch outsourced one work that is generating leads for SRAC and it is also having recovery agency. In this bank they are all using modern technology like internet, Xerox machine, printer etc which is helpful for their work.

1. HOME LOANS
Power homes: UTI Bank home loan information UTI Bank home loans have made it extremely easy to purchase a house or plot in India Home loans have never been so easy after India's license-permit Raj went for a toss. Now the roles have been reversed with banks queuing up in front of potential customers with a variety of offerings. The customer definitely is the king here. UTI Bank offers loans for purchase of plot as well as construction of a house on it. Loans are also offered for building a plot on land already owned. For purchasing old houses or flat, the condition is that it shouldn’t be not more than 15 years old. Under the improvement / extension plan loans are also extended to conduct renovation or repair works. The bank also takes up existing loans. Loans are also allotted against property. The bank stipulates that the property should be situated with a radius of 50 km from a UTI Bank branch.

Eligibility for home loan
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The applicant should be 24 years of age when the loan commences. The loan period should end with superannuation. For salaried employees, any permanent employee who is in permanent government service or in any reputed firm having an UTI Bank is eligible provided the net minimum salary is Rs 7,500. The net minimum salary should be Rs 8,000 for those who don’t have an account with UTI Bank. For availing the loan, the UTI Bank allows clubbing of income of husband and wife. For this the minimum aggregate net salary should be Rs 12,000, but the housing loan would be provided only to one of the spouses.

For professionals, the minimum net annual income should be Rs 1.50 lakhs for eligibility to avail loans. Doctors, engineers, dentists, architects, CAs, cost accountants, company secretaries and management consultants are eligible. Clubbing the spouse’s income is permissible, but the net aggregate income should be more than Rs 12,000 per month. Here also, loan would be granted only to one person. The minimum age of the applicant should be 24 years on commencement of loan and when the loan tenure ends, the applicant should be less than 65 years. For self-employed persons, clubbing of income of spouses is not permitted. The net annual income should be Rs 1.50 lakhs. The age criteria are the same. The repayment period should not exceed 20 years, including moratorium period, for home acquisition plan/takeover of existing housing loan/takeover of existing housing loan with additional refinance. For pre-allotment bookings, repayment period should not be above 1 ½ years. In case of renovation and extension of existing property or loan against existing property, repayment period should not exceed ten years. The bank would not insist on collateral in case of flats or apartments being constructed by reputed builders, provided the project is on the pre-approved list of any two of the following housing finance firms: HDFC, SBI, LICHF, ICICIHF, HSBC and Citibank. If the building is being constructed on a property already charged to the bank also no collateral is required. For loan amounts of Rs 10 lakh and above, the bank would 43

conduct personal interviews of prospective customers. The property would have to be fully insured against all possible hazards during the loan period in favor of the bank and the cost of this should be borne by the borrower.

Disbursement of home loan
The loan would be directly disbursed to the builder, seller or the local authority or supplier of materials. For takeover of loans, the pay order/DD would be credited to account of the applicant. The processing charge would be 1% of the loan amount. This would be collected along with the loan application. For early closure of loan, like takeover of the loan by another housing finance firm or bank, a charge of 2% of the principal outstanding amount is charged. For takeover of housing loans with additional refinance, the total exposure should not exceed 85% of the loan. The stipulated maximum tenure is 20 years. Preallotment booking is offered only in case of properties being offered by state-run agencies like housing boards. Private firms or promoters are barred. Loans for renovation or extension of existing property and loans against existing property are only offered to owners of existing property. In case of renovation or extension of existing property maximum tenure is 120 months. For loans against property, tenure is 10 years, with a diminishing interest of 12% per annum.

Documents required for home loan application
The Bank seeks Indian passport or voter identity card or driving license & a photograph as proof of identity from customers. Salaried employees should submit income proof like latest salary slip with all deductions or Form 16 with recent salary certificate. For others, income tax returns of last 2 years and income computation certificate by a chartered account are needed.

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For both salaried customers as well as others, ration card, latest electricity bill, latest telephone bill, passport/latest credit card bill should be submitted for residence proof, apart from guarantor form. The UTI Power Home loan can be applied online

EMI CALCULATIONS:
FORMULA: EMI= (L*I)*(1+I) ^n / [(1+I) ^n-1] Where L= Principal loan amount, I= interest rate, n = Loan period in months. 1. Amount: Rs.100000 Fixed interest rate: 11% Tenure: 5 years. EMI= (100000*0.009166)*(1+0.009166) ^60 [(1+0.009166) ^60)-1] = Rs.2174.25 EMI =Rs.2174.25 2. Amount: Rs.100000 Floating Interest Rate: 13% 45 = 916.66*1.7289 0.7289

Tenure: 5 years EMI = (100000*0.0108)*(1+0.0108)^60 [(1+0.0108) ^60 -1] = 1083.33 * 1.90508 0.905083 = Rs.2280.26 EMI=Rs.2280.26

2. POWER DRIVE
Our Offering
Today, some of the world’s finest cars are available in India. But as expected, they come with a price tag that put them beyond the reach of most people. Our Power Drive scheme attempts to bridge that distance, by financing a major part of the cost of your new car. So that you don’t have to put the brakes on your ambition.

Terms
The maximum you can apply for is 85% of the cost of the vehicle, plus registration and insurance costs, or 20 times your net monthly salary (or equivalent of net annual income for self-employed persons), whichever is lower. You are charged a competitive interest rate, and you can choose to repay your loan in 12, 24, 36, 48 or 60 Equated Monthly Installments, which will be collected directly from your employer under the check-off facility. For companies and self-employed persons, post-dated cheques will be collected.

Loan Amount
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Cost of the vehicle plus registration and insurance OR 20 times of net monthly salary in case of salaried persons / equivalent of net annual income as per latest IT Assessment Order in case of others, whichever is less.

Margin
• •

15% for Salaried Individuals 15% for self employed customers who have a previous banking relationship and/or combined deposit of at least Rs. 50000/-, for period of six months 25% for self employed customers who do not have a previous banking relationship

Parameters Proof of Identity

Salaried Passport identity Driving Photograph / Card Licence

Others Voter's Passport / identity Photograph / Card

Firms Voter's Passport / Voter's / identity Card / Driving (For Partner signing the documents) Partnership Deed & Financial of

& Driving Licence & Licence & Photograph

Proof of Income

Latest showing

salary

slip IT Returns for the Audited all last 2 years of &

and Statements, IT Returns Computation

deductions or Form Computation salary certificate.

16 along with recent income for the last 2 Income for last 2 years years certified by a certified by CA. CA Proof Residence of Ration Card/ Ration Bill/ 47 Card/ Municipal Registration / Latest Electricity Bill /

Latest Electricity Bill/ Latest

Electricity Certificate

Latest Telephone Bill/ Latest Bill/ Passport/Latest Credit Passport/ Card Bill Bank Statement / Last 6 months Pass Book where salary/income credited Invoice Guarantor Form Yes Yes Yes Yes is

Telephone Latest Telephone Bill

Latest Credit Card Bill Last 6 months Last 6 months

Yes Yes

Eligibility
A) Salaried Individuals i) Any individual who is in permanent service in Government / reputed companies and having his / her salary account with our branch with a net minimum salary of Rs. 7500/OR

ii) Any individual with a minimum net monthly salary of Rs.10000/- p.m. B) Self Employed Individuals In case of self employed individuals, minimum net annual income should be Rs.2 lakhs. The applicant in both cases should be above 24 years of age at the time of loan commencement and 55 years or less at the time of loan maturity.

Interest Rates
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The Bank offers very competitive Interest Rates on the Loan Amount. The current rate of interest is 12.5%p.a. on a monthly reducing basis
• • •

Service Charges: 1% of loan sanctioned, payable upfront. Pre-payment charges : No Pre-payment charges Insurance: The vehicle will be comprehensively insured for the full amount favoring the Bank.

Security

Hypothecation of the vehicle with Bank's charge being noted on the Registration Certificate 3rd party guarantee of a person of satisfactory means not belonging to the immediate family of the applicant The branch will obtain collateral security such as units of UTI, NSCs, demat shares, Bank deposits, Life Insurance policy and such other investments that are acceptable to the Bank as under : For salaried persons 25% of the loan amount. For others 50% of the loan amount.

EMI CALCULATIONS:
EMI= (L*I)*(1+I) ^n [(1+I) ^n -1] Amount= Rs.200000 Interest rate= 12.5% Term= 4years. EMI= (200000*0.0104)*(1+0.0104) ^48 [(1+0.0104) ^28 -1)] = 2080*1.641 49

0.6431 = Rs.5314.33 EMI= RS.5314.33

3. LOAN AGAINST PROPERTY
The consumers can apply for this type of loan if they need funds to acquire new property. A take over of their existing loan with refinancing is also possible.

Features:
Attractive interest rates Balance transfer available with additional finance. Door step service There are four types of products • • • • Loan against property- Residential Loan against property- Commercial Loan for purchase of commercial property Take over of existing loan with additional refinance(balance transfer)

Eligibility:
The following are the eligibility criteria depending upon the income profile Salaried individuals • company. •  Professionals • Professionals (i.e. Doctors, engineers, dentists, architects, chartered accountants, company secretary & management consultants only) can apply. 50 The applicant in all the cases should be above 24 years of age at the time of loan commencement & up to the age of superannuation Any individual who is in permanent service in government or e reputed

The applicant in all the cases should be above 24 years of age at the time of loan

commencement & up to 65 years or less at the time of loan maturity.  Self employed individuals • • Any individual filling income tax returns can apply. the time of

The applicant in all the cases should be above 24 years of age at

loan commencement & up to 65 years or less at the time of loan maturity,  Lease Rental Discounting (LRD) • All resident individuals can apply. The lessee must however be a company as defined under the Companies Act, 1956. Funding will be done only against ready commercial property. The same will be restricted to 85% of the net present value of the future rentals or 50% of the value of the property whichever is lower.

Loan Amount:
Limits for Asset power Minimum-Rs 2 lacs Maximum- Rs 150 lacs

Margin
20-30% in case of purchase of commercial property 40-55% in case of loan against residential/commercial property.

Documentation:
DOCUMENTS Proof of identity SALAREID APPLICANTS OTHER APPLICANTS Voters ID card or driving Voters ID card or driving license or PAN card or license or PAN card or photo credit card or photo credit card. employee’s ID or defense or 51

police Proof of income

or

government

department ID card. Latest salary slip showing IT returns for the last 2 all deductions recent or Form years & computations of salary the income for the last 2 16with

Proof of Residence

certificate. years certified by an CA Bank account statement or Bank account statement latest electricity bill or latest or latest electricity bill or mobile or telephone bill or latest insurance premium receipt credit mobile card bill or or latest credit card bill or telephone bill or latest or latest LIC policy or insurance the current mailing address policy or latest NSC or other letter similar indicating existing agreement. the house or premium Employers the

Employers letter certifying receipt or latest LIC certifying

instruments current mailing address addressor or latest NSC or other lease similar existing instruments house lease indicating the addressor agreement. Last 6 months

Bank statement or pass Last 6 months book where salary or income is credited Guanranteetor Form Lease agreement

Optional Optional Copy of lease agreement Copy of lease agreement required for all lease rental required for all lease discounting cases rental discounting cases

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EMI CALCULATIONS:
EMI= (L*I)*(1+I) ^n [(1+I) ^n-1] Amount= Rs.200000 Interest rate= 13% Tenure=6 years. EMI= (200000*0.0108)*(1+0.0108) ^72 [(1+0.0108) ^72-1] = 2160*2.1671 1.1672 = Rs.4010.7 EMI= Rs.4010.7

4. LOAN AGAINST SECURITY
 Overdraft against shares Only individuals are permitted to apply HUFs, limited companies, partnerships & sole proprietors are not eligible. Facility available against more than 500 approved scrips. Shares can be pledged from any Depository Participant across the country.  Overdraft against mutual funds Only individuals are permitted to apply. Maximum limit up to 50% of valuation. Overdraft possible against more than 250 schemes.  Loan or Overdraft against NSC or KVP or LIC policy. Option to either borrow lump sum or withdraw as & when required.  Loan or Overdraft against RBI Bonds Or US 64 Bonds Option to either borrow lump sum or withdraw as & when required.

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5. PERSONAL POWER
Features:
 Loans for salaried & self employed individuals.  Special loans for Doctors, chartered accountants, engineers, architects, CS & ICWA.  Loans are available from Rs.20000 to Rs. 20 lacs.  Repayment tenures from 12 to 60 months.  Attractive interest rates from 14.5% to 20%.  Free personal accident insurance cover with personal loan.  Loans can be used for any purpose with no questions asked regarding the end use of the loan.  A balance transfer facility available for those who want to retire any higher cost debt.  Loans available against repayment track record of any existing auto, personal or home loan.  Loans available against proof of life insurance policy or premium receipts.  Zero balance SB account facility for personal loan customers  Simple procedure, minimal documentation & quick approval.

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Documentation:
DOCUMENTS Identity Proof Income Proof SALARIED INDIVIDUALS Passport or voter’s card or driving license or PAN card & photograph Latest salary slip showing all deductions or Form 16 along with current dated salary certificate(for salaried) or ITR(last 2 years) certified by a CA,balance sheet, profit & loss Residence Proof statement(for self employed) Ration Card or passport or latest electricity bill or latest telephone bill or latest credit card bill, bank statements, last 6 Proof telephone months bank statements. of Latest bill or landline or mobile or WLL stating name of borrower or address of borrower employment proof or business continuity proof.

Eligibility:
 Salaried Employees: Salaried doctors, CAs, Employees of select MNCs, public & private limited companies, government sector employees including public sector undertakings & central & local bodies. • • • • • • Minimum age of applicant-21 years Maximum age of applicant at loan maturity- 60 years. Minimum employment- 2 years cumulative experience or 6 months for salaried professional. Minimum net monthly income- Rs.7000 per month. Maximum loan available-Rs.10 lacs. Special offer for salaried professional applicant.

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 Self- employed Doctors: that include self-employed MBBS or BDS & doctors with higher qualification. • • • • Minimum age of applicant- 24 years to 65 years at the time of loan maturity. Experience (doctor) - 2 years continuous employment. Minimum annual income- Rs.2.40 lacs per annum gross receipts (Rs.1.80 lacs per annum for select locations). Maximum loan available- Rs. 20 lacs for self employed doctors.

 Self employed Professionals: They include self employed chartered accountants, engineers, MBA consultants, architects, company secretaries, cost accountants. • • • • Age of the applicant-From 24 years to 65 years at the time of loan maturity. Minimum employment- 3 years continuous employment. Minimum annual income-Rs 75000 per annum (RS 60000 for select locations). Maximum loan available-Rs 15 lacs for self employed.

 Self employed normal: they include self employed sole proprietors, Partner & directors in the business of manufacturing, trading 7 services. • • • • Age of applicant- From 24 years to 65 years at the time of loan maturity. Minimum employment- 3 years continuous employment Minimum annual income-Rs.100000 per annum. Maximum loan available-Rs. 10 lacs for self employed applicant.

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EMI CALCULATIONS:
EMI= (L*I)*(1+I) ^n [(1+I) ^n-1] Amount=Rs.50000 Interest Rate=14.55 Tenure=12 months EMI= (50000*0.01208)*(1+0.01208) ^12 [(1+0.01208) ^12-1] = 604.166*1.1549 0.1549 = Rs.4504.5 EMI= Rs.4505.5

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6. CONSUMER LOAN:
UTI Bank’s Consumer Power scheme will help the consumers to acquire consumer durables at attractive interest rates.

Terms:
The consumers can apply for as less as Rs.25000 or as much as Rs2 lacs. The maximum loan amount cannot exceed 85% of the cost of the durable, or 12 times their net monthly salary(or equivalent of net annual income for self-employed persons),whichever is lower. They are charged a competitive interest rate, & they can choose to repay their loan in 12,24 or 36 equated monthly installments. If they are a salaried employee, their equated monthly installments will be collected directly from their employer under the check-off facility. For others, post dated cheques will be collected.

Eligibility:
A) Salaried Individuals who is in permanent service in government or reputed companies with a net minimum salary of Rs.7500. B) Self Employed Individuals In case of self employed individuals, minimum net annual income of Rs 1 lacs. The applicant in both cases should be above 24 years of age at the time of loan commencement & 55 years or less at the time of loan maturity.

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Documentation:
PURPOSE SALARIED OTHERS Proof of Passport or voter’s Identity card or Passport or voter’s Identity Identity Proof income diving license & photograph. card or diving license & photograph. of Latest salary slips showing all IT Returns for the last 2 years deductions or Form 16 along with & computation of income for recent salary certificate. Proof the last 2 years certified by a CA. of Ration card or Passport or latest Ration card or Passport or electricity bill or latest telephone latest electricity bill or latest bill or latest credit card bill. Bank statement or book where salary income or is Yes Yes Yes yes Pass Last 6 months telephone bill or latest credit card bill. Last 6 months.

Residence

credited Invoice Guarantor Form

Loan Amount:
Minimum loan amount: Rs.25000 Maximum loan amount: Rs.200000

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85% of the cost of the item or 12 times of the net monthly salary in case of salaried persons or equivalent of net annual income as per latest IT Assessment order in case of others, whichever is less.

Margin:
• • • 15% for salaried individuals 15% for self employed customers who have a previous banking relationship &/or combined deposit of at least Rs.50000, for a period of six months. 25% for self employed customers who do not have a previous banking relationship.

Interest rates:
A reasonable interest rate of 14.75% per annum is charged. Service charges: 1% of the loan sanctioned payable upfront. Prepayment charges: No prepayment charges.

Security:
• • • Hypothecation of the article purchased. 3rd party guarantee of a person of satisfactory means not belonging to the immediate family of the applicant. Incase of non-salaried, the branch will obtain collateral security such as units of UTI, NSCs, Demet shares, bank deposits, LIC policy & such other investments that are acceptable to the bank for 25% of the loan amount.

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7. EDUCATION LOAN:
Nature of loan:
The purpose of the product is to provide financial support to deserving students for pursuing higher professional/technical education in India and abroad. The loan would be provided to students who have obtained admission to career-oriented courses e.g. medicine, engineering, management etc., either at the graduate or post-graduate level.

Quantum of Loan:
The quantum of finance under the scheme is capped at Rs. 7.5 lakhs for studies in India and Rs. 15 lakhs for studies abroad, which would cover tuition fees, hostel charges (if any), cost of books, etc. The minimum amount of loan would be Rs. 50,000/-.

Margin:
No margin for loans up to Rs. 4 lakhs. For loans above Rs. 4 lakhs, 5% margin for studies within India and 15% for higher studies overseas.

Rate of interest:
At PLR, currently not exceeding 12% p.a.

Role of the Guardian:
The parent(s)/guardian of the student would be treated as a co-applicant of the loan. His/her role would be, necessarily, like the primary debtor. He/she would be responsible for the payment of the interest accrued on the loan account, prior to the commencement of the EMIs.

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Security:
Third Party Guarantee: It is necessary to have a 3rd party guarantee agreement in place, especially in cases where the loan would be not be secured by liquid collaterals (e.g. Units, FDs, NSCs, paid-up LIC policies, etc.). The guarantor should not be a close relation of the student (i.e. parents/siblings/spouse, etc.) and should be good for 100% of the loan amount. No 3rd party guarantee need be insisted upon for loan up to Rs. 4 lakhs. Computers and other related hardware financed under the scheme would have to be, necessarily, charged to the Bank as primary security. Collateral Security: Educational Loans sanctioned would need to be secured by collateral securities, to the minimum extent of 100% of the loan amount. Additional Security: In educational loans, since the ultimate exposure is on the earning capacity of the student, post-completion of the course, it is essential to organize a LIC policy assuring the life of the student, the sum assured being at least 100% of the loan amount.

Repayment:
The loan would be repayable in a maximum of 84 installments from the commencement of repayment. The 1st installment would be due 1 year after the completion of the course or 6 months after getting a job, whichever is earlier. However the total tenure of the scheme, i.e. from the date of the 1st disbursement to the date of the last installment, should not exceed 12 years. The periodical interest applied on the loan account, prior to the commencement of the actual repayment, should be recovered from the account of the co-applicant, as and when due.

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8. TWO WHEELER LOAN:
Features:
 Loans for salaried & self-employed individuals.  Attractive interest rates.  No income proof schemes available.  Loans available for UTI Bank Salary & Priority account holders.  Loans available from Rs.20000 to Rs.70000.  Loans tenure from 1 year to 3 years.

Eligibility:
 Salaried Individuals. • • • • Age (commencement & Termination) - Between 18 years to retirement age. Minimum Income- Rs.60000 to Rs.75000 per annum depending on the two wheeler model. Income eligibility-As per latest salary slip or Form 16. Margin-15% to 20% depending on the two wheeler model.

 Self-Employed Individuals • • • • Age (commencement & Termination) - Between 21 years to 60 years. Minimum Income- Rs.60000 to Rs.75000 per annum depending on the two wheeler model. Income eligibility-As per latest ITR. Margin-15% to 20% depending on the two wheeler model.

63

Documentation:
 ID Proof.  Photograph.  Income Proof.  Legal documents & Application form.  Residence Proof.  Dealer invoice.  Bank statement for last 3 months.  RTO forms.

Interest Rate:
The current rate of interest is 17% per annum on a monthly reducing basis. • • • Processing Fee: 2% of loan amount. Pre-payment charges: 4% of the balance outstanding Insurance: The vehicle will be comprehensively insured for the full amount favoring the Bank.

Additional Features:
1. For loans with margin of 30% or above. 2. Income Proof documents need not be provided. 3. Clubbed income of 2 individuals to be a minimum of Rs.7000. 4. Clubbed income in the following relationships. Father & son or daughter Mother & son or daughter. 64

Husband & wife. Salary account scheme: This scheme is only for salary account customers of UTI Bank only. • • • • For salary account with credit of Rs.10000 & above. For loans with income margin of 10% or above. Identity, income & residence proof need not be provided. Last 3 months Bank statement.

Priority Account Scheme Features: this scheme is only for Priority Accounts customers of UTI Bank only. • • • 100% of the on road price is financed. Identity, income & residence proof need not be provided. Last 3 months Bank statement.

65

ABOUT THE COMPETITORS:
ICICI BANK
ICICI Bank is India's second-largest bank. The Bank has a network of about 573 branches and extension counters and over 2,000 ATMs. ICICI Bank was originally promoted in 1994 by ICICI Limited, an Indian financial institution, and was its whollyowned subsidiary. ICICI was formed in 1955 at the initiative of the World Bank, the Government of India and representatives of Indian industry. The objective was to create a development financial institution for providing medium-term and long-term project financing to Indian businesses. In the 1990s, ICICI transformed its business from a development financial institution offering only project finance to a diversified financial services group offering a wide variety of products and services, both directly and through a number of subsidiaries and affiliates like ICICI Bank. In 1999, ICICI become the first Indian company and the first bank or financial institution from non-Japan Asia to be listed on the NYSE. In 2001, ICICI bank acquired Bank of Madura Limited. ICICI Bank set up its international banking group in fiscal 2002 to cater to the cross border needs of clients and leverage on its domestic banking strengths to offer products internationally. Today, ICICI Bank offers a wide range of banking products and financial services to corporate and retail customers through a variety of delivery channels and through its specialised subsidiaries and affiliates in the areas of investment banking, life and nonlife insurance, venture capital and asset management.

66

LIC HOUSING FINANCE LTD: LIC Housing Finance Ltd. is one of the largest Housing Finance companies in India. Incorporated on 19th June 1989 under the Companies Act, 1956, the company was promoted by LIC of India and went public in the year 1994. The Company launched its maiden GDR issue in 2004. The Authorized Capital of the Company is Rs.1000 Million (Rs.100 Crores) and its paid up Capital is Rs.850 Millions (Rs.85 Crores). The Company is recognized by National Housing Bank and listed in the NSE & BSE and its shares are traded only in Demat format. The GDR's are listed on the Luxembourg Stock Exchange. The main objective of the Company is providing long term finance to individuals for purchase / construction / repair and renovation of new / existing flats / houses. The Company also provides finance on existing property for business / personal needs and gives loans to professionals for purchase / construction of Clinics / Nursing Homes / Diagnostic Centres / Office Space. The Company possesses one of the industry's most extensive marketing network in India : 6 regional offices and 115 area offices backed by chain of camp offices nationwide, an offshore office in Dubai and Registered and Corporate Office at Mumbai. It has a team of 875 dedicated employees. Today the Company has a proud group of over 8,00,000 prudent house owners who have enjoyed the Company's financial assistance. The Company has so far disbursed Rs.250 Billion (Rs.25000 Crores). The Company also lends to Corporate Bodies and Companies under different schemes for purchase / construction of office premises for their own use, construction of staff quarters and also for onward lending to meet the requirements of employees, and also to Builders and Developers for residential and commercial projects. In 2005-06, for the fifth year in a row, the Company received the 'AAA' credit rating from CRISIL, indicating the highest level of safety. The Company has been growing steadily since inception both in terms of business & profits. 67

COMPARISON OF UTI BANK’S HOME LOANS WITH OTHER TWO BANKS/FINANCIAL INSTITUTIONS.
 PURPOSE:
UTI BANK

ICICI BANK

LIC HOUSING FINANCE
• Purchase of Land. Construction. • Purchase of Ready Built House/Flat. • Repairs and Renovations. Purchase Consumer Durables. • Loan against Property. • Purchase/constructio n of Non Residential Premises. • Take over of existing loans.

Purchase of a plot & Purchase of Land. construction of the property of a house thereon. • Construction.

Composite Loan. of a • Purchase of Ready Built House/Flat. • Loan against Property. • Construction of Non Residential Premise (for Professionals). To extend/improve existing Home. • Lease Rental Discount. Take over of existing loans.

Construction already owned.

house on plot of land

Purchase of a new house or flat.

Residual age of the property should not be less than 30 years old. • Extension or renovation or repair of a house already owned by self. • Take over of existing housing loan(balance transfer)

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Pre allotment booking finance.

Loans take over with additional refinance.

Loan to NRI for purchase of ready residential property only.

Purchase of residential plots only.

Inference: All the above Banks/Financial Institutions provide loan for Construction, Purchase of Land, and Extension/improvement. Apart from these ICICI Home Finance Co. Ltd, LIC Housing Finance Ltd provide loan against Property and also for Non Residential Premises

 MINIMUM LOAN AMOUNT:
UTI BANK
Rs.1 lakh

ICICI BANK
Rs.2 lakhs

LIC HOUSING FINANCE
Rs.50000

Inference:
LIC HFL has fixed least Minimum Amount of Loan of Rs.50000 followed by UTI Bank with Rs.1 lakh. 69

 MAXIMUM LOAN AMOUNT:
UTI BANK Upto Rs.5 crores ICICI BANK Rs. 3 crores LIC HOUSING FINANCE. Rs. 1 crore.

Comparision of Maximum amount of loan
5
RS In Crores

4 3 2 1 0
UTI bank ICICI Home Finanace Co Ltd LIC HFL

Banks/Financial Institutions

Inference:
UTI Bank provides Maximum amount of Housing Loan of up to Rs.5 Crores.

 COMPARISON OF RATE OF INTEREST:
UTI Bank
Fixed: 13% Floating: 11%

ICICI Bank
Fixed: 14% Floating:11.5%

LIC housing finance
Fixed: 12% Floating: 11.5%

Inference:
All the banks maintain a fixed rate of interest.

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 FACTORS CONSIDERED WHILE ACCESING THE REPAYMENT CAPACITY:
UTI Bank
Age Bank statement Salary 3 years IT returns Income papers Occupation

ICICI Bank
Age  Professionals

LIC housing finance
Income Age Net salary IT returns

and Non ProfessionalsUp to 65 years.  Salaried

class-58 years.  Central

Government Employees-60 years. Income Occupation

Inference:
All the above Banks/Financial Institutions consider the same factors like Age, Income and Occupation. ICICI bank considers 65 years for Professional & Non professionals, 58 years for salaried class & 60 years for central government employees.

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 COMPARISON OF MAXIMUM PERIOD:
UTI Bank
20 years

ICICI Bank
20 years

LIC housing finance
25 years If the applicant is nearing 60 years of age then a 5 year term is given to him.

Inference:
Both UTI & ICICI bank have a 20 years period but LIC HFL has 25 years period with specifications for the applicant i.e if he is nearing 60 years of age then a 5 year term is given to him.

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 PERCENTAGE OF FUNDING:
UTI Bank
75% for plot purchase 85% for construction.

ICICI Bank
i. ii. Plot purchase-75% No Income Proof and Lease Rental Discount50% iii. Construction/Purchase of Ready Built House/Flat85% iv. Non Residential Premises Doctors-85%

LIC housing finance
85% of cost of project i.e plot purchase & construction.

CA’s/Engineers/ MBA consultants-50%.

Inference:
ICICI Home Finance Co. Ltd has fixed different percentages based on purpose whereas LIC HFL has fixed as 85% of cost of Project. UTI Bank has 74 % for plot purchase & 85 % for construction.

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 DOCUMENTATION:
UTI Bank
• • • Voters identity Photograph For salaried: income proof like latest salary slip with all deductions or Form 16. • For others: IT returns of last 3 years & income computation by a CA. • • Ration card. Latest electricity bill. • Latest telephone bill. • Passport/ latest credit card bill. • • Residence proof. Guarantor Form. •

ICICI Bank
All Legal documents. Photograph. Age proof. Address proof. Last six month Banks statements. Processing Fee cheque. Salaried class:  Latest

LIC housing finance
• Application with photographs. • • • • • Sale deed Records of rights. Mutation entries. Site map. Encumbrance certificate. • • • Estimate. Approved plan Building permission.

Salary-slip.  Form 16.

Business class:  Last 3 years

• •

Valuers report Salary certificate/proof of income.

Income Tax returns (self and business).  Last 3 years Profit /Loss and Balance Sheet.

Inference:
74

The documentation is required for sanctioning Home Loans is same for all banks. But LIC HFL is giving more importance for legal documents compared to other Banks.

 SECURITY OF LOAN:
UTI Bank
Collateral security

ICICI Bank
Collateral security

LIC housing finance
Equitable Mortgage. Guarantor (if necessary).

Inference:
All the above Housing Finance Institutions will have the same type of security but LIC also sometimes considers the security of the guarantor.

 PROCESSING FEES:
UTI Bank
1% of the loan amount

ICICI Bank
No processing fees only administration fees are collected i.e. 0.5618% of the loan amount.

LIC housing finance
0.5% to 1% of the loan.

Inference:
Processing fees charged by LIC is more compared to the other Banks.

 REPAYMENT METHOD:
UTI Bank ICICI Bank
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LIC housing finance

PDC Auto debit EMI

PDC ECS EMI

EMI PDC ECS

Inference:
All the Housing Financial Institutions are collecting their loan amount in EMI’s, so it goes very easy for the customer who is taking loan. And again EMI is calculated on the basis of loan amount, service left of the employees, tenure. UTI bank does not have ECS facility (electronic clearance service) but it does have auto debit facility available.

 MODE OF REPAYMENT:
UTI Bank
Post Dated Cheques. Standing Instruction

ICICI Bank
Post Dated Cheques. Standing Instruction

LIC housing finance
Post Dated Cheques. Deduction at source

Inference:
LIC HFL has an additional repayment mode i.e. Deduction at Source (DAS), thus making the customer to repay his loan more conveniently.

 FEES CHARGED TO SWITCH ON TO NEW INTEREST RATE:
76

UTI Bank
Rs.5000 is charged.

ICICI Bank
2.25% is charged

LIC housing finance
2% of the outstanding loan amount.

Inference:
ICICI Bank is charging more fees to switch on to new Rate of Interest compared to other institutes, while UTI Bank is charging Rs.5000 fees for the new interest rate.

 FEES CHARGED FOR PART PRE PAYMENT:
UTI Bank
No fees is collected

ICICI Bank
2% on the principal outstanding on full prepayment.

LIC housing finance
3% of the outstanding loan as on the date of repayment.

Inference:
LIC HFL is charging fees for Part Pre payment resulting to a burden to customers.

 INSURANCE OF PROPERTY:
UTI Bank ICICI Bank
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LIC housing finance

Insurance is providing free for both accidental as well as for property up to Rs.5 lakhs.

Only accidental is provided

Not mandatory. General insurance is provided premium is paid by the owner.

Inference:
UTI Bank provides insurance for both accidental as well as property where as ICICI bank provides for only accidental.

Methodology:
The method adopted was Structured Interview method, where the information is collected by direct interaction with the staff of financial

78

institutions/banks and my external guide and also from the manuals, broachers and from web sites. A questionnaire had been designed to find out the awareness level among the people of Hubli & Dharwad.

Source of data collection:
Primary source:
The method adopted was personal interview method to collect the required information. Personal interview and discussion was made with the manager. A questionnaire was designed to find out the awareness level among the people about UTI Bank loans.

Secondary source:
Manuals, Brochures and Websites. a. Geographical Area: The areas selected for the study are the twin cities of Hubli & Dharwad. The UTI Bank’s Satellite Retail Asset Centre was launched in Hubli in 2006, so we can say it is fairly young in this aspect. So it was relevant to find out the awareness among the people of the twin cities about the loans which are being provided by UTI Bank in Hubli. b. about the company chosen for the study: UTI bank has carved a niche for itself in Hubli in a very short period of time. It is doing very well in the deposits as well as in the assets part of its banking but as the loans section was recently introduced in Hubli it still needs time to device proper plans to create awareness among the people about its products.

c. Sampling population:

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Our sampling Population includes the salaried class, the professionals & the self employed. We are specially targeting these class of people because they are the one’s who go in for the retail loans in a big way. d. Data collection: A questionnaire was designed to find out the awareness among the people about the UTI Banks Loans. e. Mode of data collection: Personal interview was conducted with the officials of the organization, to gather the information about regarding the various parameters involved in accessing the home loans. A questionnaire was also designed to find out the awareness level about the loan products of UTI Bank. f. Sample Size: The sample size is 100. Convenient sampling method has been used while collecting the data.

80

FINDINGS:
 All the three Banks/Financial Institutions provide loan for Construction, Purchase of Land, and Extension/improvement. Apart from these ICICI Home Finance Co. Ltd, LIC Housing Finance Ltd provide loan against Property and also for Non Residential Premises.  LIC HFL has fixed least Minimum Amount of Loan of Rs.50000 followed by UTI Bank with Rs.1 lakh.  UTI Bank provides Maximum amount of Housing Loan of up to Rs.5 Crores.  All the banks maintain a fixed rate of interest.  All the three Banks/Financial Institutions consider the same factors like Age, Income and Occupation. ICICI bank considers 65 years for Professional & Non professionals, 58 years for salaried class & 60 years for central government employees.  Both UTI & ICICI bank have a 20 years period but LIC HFL has 25 years period with specifications for the applicant i.e if he is nearing 60 years of age then a 5 year term is given to him.  ICICI Home Finance Co. Ltd has fixed different percentages based on purpose whereas LIC HFL has fixed as 85% of cost of Project. UTI Bank has 74 % for plot purchase & 85 % for construction.  The documentation is required for sanctioning Home Loans is same for all banks. But LIC HFL is giving more importance for legal documents compared to other Banks.  All the above Housing Finance Institutions will have the same type of security but LIC also sometimes considers the security of the guarantor.  Processing fees charged by LIC is more compared to the other Banks.

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 All the Housing Financial Institutions are collecting their loan amount in EMI’s, so it goes very easy for the customer who is taking loan. And again EMI is calculated on the basis of loan amount, service left of the employees, tenure. UTI bank does not have ECS facility (electronic clearance service) but it does have auto debit facility available.  LIC HFL has an additional repayment mode i.e. Deduction at Source (DAS), thus making the customer to repay his loan more conveniently.  ICICI Bank is charging more fees to switch on to new Rate of Interest compared to other institutes, while UTI Bank is charging Rs.5000 fees for the new interest rate.  LIC HFL is charging fees for Part Pre payment resulting to a burden to customers.  UTI Bank provides insurance for both accidental as well as property where as ICICI bank provides for only accidental.  The awareness level about the UTI Bank’s loans is 43%.

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CONCLUSION
The bottom line of comparing loans from various Banks/ Housing Finance Institutions is almost always the interest rate; competition is narrowing down the cost differential between companies. This means that choosing a loan product has become even more difficult as prospective borrowers have to draw comparisons across the entire matrix of add-on benefits and services provided by lending institutions. The growth of Retail and Consumer lending in India must be seen as arising from a strong growth in incomes amongst the middle class and the more affluent segments, leading to changes in the consumer behavior. The increase in the income of the middle class in India has made a significant impact on the Home Loan Products as well. Many banks are competing hard to capture the market. While smaller institutions are giving a run for its money by branching out to the hinterland, big players like ICICI & LIC HFL are capturing the major market share. UTI Bank’s home loans, which traditionally concentrated most on the salaried class, are also widening its customer base. Its more customer oriented approach is yielding rich benefits for the organization. UTI Bank is expanding its network by adding new offices in new cities. UTI Bank is providing a very good service to the customer and it can be termed as satisfactory. But I feel that, it can improve its performance and service by being more flexible and alert in regard to the customers requirments. Executives in this organization are very good and co-operative. To conclude, the overall performance of the UTI Bank Is satisfactory. Though the study was done for a short period it was a very good experience and learning experience. 83

RECOMMENDATIONS:
 Keeping in mind the competitiveness of the other banks & financial institutions UTI Bank should also provide loans for non-residential premises.  Based on the purpose UTI Bank should customize their percentage of funding for the project.  UTI Bank should try to cut down the processing fees as several Banks & financial institutes have slashed their processing fees.  The documentation process should be made easy as most people feel it as it is very complex. They should specify all the legal documents required for the processing of the loan in advance.  UTI should implement the Electronic Clearance System [ECS] as it is a convenient way for the customers to pay their monthly EMI.  They should try to cut down the fees charged to switch on to the new interest rate as it is a burden for the customers.  As the awareness level about the loan products of UTI Bank is 43% in the twin cities. The Bank has to develop new strategies to create awareness about the different products of UTI Bank  Different segments of market have to be approached with different strategies and Medias.  Building good relationship and rapport with existing customer.  Attending regular trade fairs.

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LIMITATIONS:
 The study is concentrated on Home loans only.  Constraints to get access to the employees for information due to their busy schedule. Many of the employees were being transferred to other branches so it was a really very tough getting the relevant information from them.  The comparison is limited to just three banks/ financial institutions.i.e. UTI Bank, ICICI Bank & LIC Housing Finance corporation Limited because it was very hard to get the relevant data from them.

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Questionnaire
I, Miss. Pooja Sadhani, a student of 2nd semester of KLES’s IMSR is making a thorough study on UTI BANK’S Satellite Retail Asset Centre for loans. I request you to please co-operate & fill in your opinion to facilitate our study. Your response is crucial & is used only for study purpose. 1. Name of the bank that you most frequently deal with.

       

SBI Canara Bank Syndicate Bank ICICI bank UTI Bank HDFC Bank LICO Bank Others please specify____________

2. What was the driving factor that made you to become a part of the bank?

   

Convenience Service Interest Rate Loan Facilities 3. Are you satisfied with the existing bank?

 Yes  No
4. Do you have any existing loan?

 

Yes No 5. If yes, Name the type of loan________________ Name of the bank________________ The interest rate _______________ 6. Are you aware of UTI Bank’s Satellite retail Asset Centre for Loans?

 Yes

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 No 7. If yes, how did you come to know about this centre?    
Newspaper & magazines Hoardings Friends & Family Internet

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8. What are the services that you are aware of UTI bank’s Satellite Retail Asset Center?

      

Personal loans Housing loans Car loans Top up Take Over All the above None of these

9. Are you aware that UTI Bank is giving certain attractive packages in personal loan such as cash back offer & free personal insurance cover?

 

Yes No 10. Are you interested in availing the services of UTI Bank?

 

Yes No

Personal Information
Name: Age:

   
Gender:

20-35 years 36-45 years 46-55 years 56 & above

 Male  Female
Profession: Income per month:

   

Rs.10000-Rs.20000 Rs.21000-Rs.30000 Rs.31000-Rs.40000 Rs.41000 & above

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Valuable time.

Thank You for your

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HYPOTHESIS:
1. Awareness about the loans is directly dependant with the place.

Inference: As the Pearson Chi- Square test value is less than 0.05 both the variables are dependent on each other. So we can say that the place is directly dependent with the awareness about the loans.

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2. The profession of the respondent is dependent on the awareness about the loans

Inference: The Pearson Chi-square value is less than 0.05 so we can say that the profession of the respondent is dependent on the awareness of the loans. Professionals & self employed are more aware about the loan products as compared to the service people.

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3. <= 45% of the respondents are aware about the Loan products available in UTI Bank.

Inference: We can conclude that 43% respondents are aware about the loan products of UTI Bank. So this hypothesis is accepted.

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4. How did you come to know about this centre? News paper & magazines
15

Hoardings
1

Friends & family
24

Internet
3

25 20 15 10 5 1 0 News paper Hoardings 15

24

3 Friends Internet

Inference: Of the 43 respondents who are aware of the loans, majority of them have got the information from their family & friends.About 15 respondents are aware through the medium of newspapers & magazines & the remaining 3 as well as 1 respondents are aware through internet & hoardings respectively.

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5. What are the services you are aware of UTI Bank’s loan products. I Per loan
5

Housing loan
3

Car loan
1

Top up
0

Take over
0

All the loans
34

None
57

60 50 40 30 20 10 0 Per loan Housing loan car 5 3 1 0 top 0 take all 34

57

none

Inference: Of the 43 respondents who know about the UTI loans, 34 respondents are aware of all the loan products. 5 respondents are aware of the personal loans, 3 & 1 respondents are aware of the housing & car loans respectively.

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BIBLOGRAPHY:
BOOKS:  Commercial Banking Published by ICFAI.

WEBSITES:  www.google.com  www.utibank.co.in  www.icici.co.in  www.lichfl.co.in  www.wikipedia.co.in

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