INDIAN BANKING SYSTEM

BANKS IN INDIA

India has a well developed banking system. Most of the banks in India
were founded by Indian entrepreneurs and visionaries in the pre-
independence era to provide financial assistance to traders, agriculturists and
budding Indian industrialists. Indian banks have played a significant role in
the development of Indian economy by inculcating the habit of saving in
Indians and by lending finance to Indian industry.

The commercial banking structure in India consists of: Scheduled

Commercial Banks and Unscheduled Banks. Scheduled commercial Banks
constitute those banks, which have been included in the Second Schedule of
Reserve Bank of India (RBI) Act, 1934.
RBI includes only those banks in this schedule, which satisfy the
criteria laid down vide section 42 (6) (a) of the Act.
Indian banks can be broadly classified into nationalized banks/public sector
banks, private banks and foreign banks.

FOREIGN BANKS IN INDIA

Foreign banks have brought latest technology and latest banking

practices in India. They have helped made Indian Banking system more
competitive and efficient. Government has come up with a road map for
expansion of foreign banks in India.

8
 The road map has two phases. During the first phase between March
2005 and March 2009, foreign banks may establish a presence by way of
setting up a wholly owned subsidiary (WOS) or conversion of existing
branches into a WOS. The second phase will commence in April 2009 after a
review of the experience gained after due consultation with all the stake
holders in the banking sector. The review would examine issues concerning
extension of national treatment to WOS, dilution of stake and permitting
mergers/acquisitions of any private sector banks in India by a foreignbank.

Major foreign banks in India are:

• ABN-AMRO Bank

• Abu Dhabi Commercial Bank Ltd.

• American Express Bank Ltd

• BNP Paribas

• Citibank

• DBS Bank Ltd

• Deutsche Bank

• HSBC Ltd

• Standard Chartered Bank

9
 Nationalized Banks in India

Banking System in India is dominated by nationalized banks. The

nationalization of banks in India took place in 1969 by Mrs. Indira Gandhi
the then prime minister. The major objective behind nationalization was to
spread banking infrastructure in rural areas and make available cheap
finance to Indian farmers. Fourteen banks were nationalized in 1969. These
Banks were
Before 1969, State Bank of India (SBI) was the only public sector bank in
India. SBI was nationalized in 1955 under the SBI Act of 1955.

The second phase of nationalization of Indian banks took place in the

year 1980. Seven more banks were nationalized with deposits over
200crores.

List of Public Sector Banks in India is as follows:

• Allahabad Bank

• Andhra Bank

• Bank of Baroda

• Bank of India

10
• Bank of Maharashtra

• Canara Bank

• Central Bank of India

• Corporation Bank

• Dena Bank

• Indian Bank

• Indian Overseas Bank

• Oriental Bank of Commerce

• Punjab and Sind Bank

• Punjab National Bank

• State Bank of Bikaner & Jaipur

• State Bank of Hyderabad

• State Bank of India (SBI)

• State Bank of Indore

• State Bank of Mysore

• State Bank of Patiala

• State Bank of Saurashtra

• State Bank of Travancore

• Syndicate Bank

11
 • UCO Bank

• Union Bank of India

• United Bank of India

• Vijaya Bank .

Private Banks in India

All the banks in India were earlier private banks. They were founded in
the pre-independence era to cater to the banking needs of the people. But
after nationalization of banks in 1969 public sector banks came to occupy
dominant role in the banking structure. Private sector banking in India
received a filip in 1994 when Reserve Bank of India encouraged setting up
of private banks as part of its policy of liberalization of the Indian Banking
Industry. Housing Development Finance Corporation Limited (HDFC) was
amongst the first to receive an 'in principle' approval from the Reserve Bank
of India (RBI) to set up a bank in the private sector.
Private banks have played a major role in the development of Indian
banking industry. They have made banking more efficient and customer
friendly. In the process they have jolted public sector banks out of
complacency and forced them to become more competitive.

Major private banks in India are:

• Bank of Rajasthan

12
• Bharat Overseas Bank

• Catholic Syrian Bank

• Centurion Bank of Punjab

• Dhanalakshmi Bank

• Federal Bank

• HDFC Bank

• ICICI Bank

• IDBI Bank

• IndusInd Bank

• ING Vysya Bank

• Jammu & Kashmir Bank

• Karnataka Bank

• Karur Vysya Bank

• Kotak Mahindra Bank

• SBI Commercial and International Bank

• South Indian Bank

• United Western Bank

• UTI Bank

• YES Bank

13
 If there is one industry that has the stigma of being old and boring, it
would have to be banking; however, a global trend of deregulation has
opened up many new businesses to the banks. Coupling that with
technological developments like Internet banking and ATMs, the banking
industry is obviously trying its hardest to shed its lackluster image.

14
 COMPANY PROFILE

ICICI Bank is India's second-largest bank with total assets of about

Rs.1,676.59 bn(US$ 38.5 bn) at March 31, 2005 and profit after tax of Rs.
20.05 bn(US$ 461 mn) for the year ended March 31, 2005 (Rs. 16.37
bn(US$ 376 mn) in fiscal 2004). ICICI Bank has a network of about 573
branches and extension counters and over 2,000 ATMs. 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 non-
life insurance, venture capital and asset management. 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. ICICI Bank currently has subsidiaries in the United
Kingdom, Canada and Russia, branches in Singapore and Bahrain and
representative offices in the United States, China, United Arab Emirates,
Bangladesh and South Africa.

ICICI Bank's equity shares are listed in India on the Bombay Stock
Exchange and the National Stock Exchange of India Limited and its
American Depositary Receipts (ADRs) are listed on the New York Stock
Exchange (NYSE).

15
 ICICI Bank was originally promoted in 1994 by ICICI Limited, an
Indian financial institution, and was its wholly-owned subsidiary. ICICI's
shareholding in ICICI Bank was reduced to 46% through a public offering of
shares in India in fiscal 1998, an equity offering in the form of ADRs listed
on the NYSE in fiscal 2000, ICICI Bank's acquisition of Bank of Madura
Limited in an all-stock amalgamation in fiscal 2001, and secondary market
sales by ICICI to institutional investors in fiscal 2001 and fiscal 2002.

ICICI was formed in 1955 at the initiative of the World Bank, the
Government of India and representatives of Indian industry. The principal
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.

After consideration of various corporate structuring alternatives in the

context of the emerging competitive scenario in the Indian banking industry,
and the move towards universal banking, the managements of ICICI and
ICICI Bank formed the view that the merger of ICICI with ICICI Bank
would be the optimal strategic alternative for both entities, and would create
the optimal legal structure for the ICICI group's universal banking strategy.

16
 The merger would enhance value for ICICI shareholders through the
merged entity's access to low-cost deposits, greater opportunities for earning
fee-based income and the ability to participate in the payments system and
provide transaction-banking services.

The merger would enhance value for ICICI Bank shareholders through
a large capital base and scale of operations, seamless access to ICICI's strong
corporate relationships built up over five decades, entry into new business
segments, higher market share in various business segments, particularly
fee-based services, and access to the vast talent pool of ICICI and its
subsidiaries. In October 2001, the Boards of Directors of ICICI and ICICI
Bank approved the merger of ICICI and two of its wholly-owned retail
finance subsidiaries, ICICI Personal Financial Services Limited and ICICI
Capital Services Limited, with ICICI Bank. The merger was approved by
shareholders of ICICI and ICICI Bank in January 2002, by the High Court of
Gujarat at Ahmedabad in March 2002, and by the High Court of Judicature
at Mumbai and the Reserve Bank of India in April 2002. Consequent to the
merger, the ICICI group's financing and banking operations, both wholesale
and retail, have been integrated in a single entity.

*Free float holding excludes all promoter holdings, strategic

investments and cross holdings among public sector entities.

17
Deposits

ICICI Bank offers wide variety of Deposit Products to suit your

requirements. Coupled with convenience of networked branches/ ATMs and
facility of E-channels like Internet and Mobile Banking, ICICI Bank brings
banking at your doorstep. Select any of our deposit products and provide
your details online and our representative will contact you for Account
Opening.

ICICI Bank offers you a power packed Savings Account with a host of
convenient features and banking channels to transact through. So now you
can bank at your convenience, without the stress of waiting in queues.

We understand that as you reach the age to retire, you do have certain
concerns … whether your hard earned money is safe and secure … whether
your investments give you the kind of returns that you need. That's why we
have an ideal Banking Service for those who are 60 years and above. The
Senior Citizen Services from ICICI Bank has several advantages that are
tailored to bring more convenience and enjoyment in your life.

It's really important to help children learn the value of finances and
money management at an early age. Banking is a serious business, but we
make banking a pleasure and at the same time children learn how to manage
their personal finances Safety, Flexibility, Liquidity and Returns! A
combination of unbeatable features of the Fixed Deposit from ICICI Bank.

18
 When expenses are high, you may not have adequate funds to make big
investments. But simply going ahead without saving for the future is not an
option for you. Through ICICI Bank Recurring Deposit you can invest small
amounts of money every month that ends up with a large saving on maturity.
So you enjoy twin advantages- affordability and higher earnings.

Investments

At ICICI Bank, we care about all your needs. Along with Deposit
products and Loan offerings, ICICI Bank assists you to manage your
finances by providing various investment options ranging from ICICI Bank
Tax Saving Bonds to Equity Investments through Initial Public Offers and
Investment in Pure Gold. ICICI Bank facilitates following investment
products:

• ICICI Bank Tax Saving Bonds

• Government of India Bonds

• Investment in Mutual Funds

• Initial Public Offers by Corporates

• Investment in "Pure Gold"

• Foreign Exchange Services

• Senior Citizens Savings Scheme, 2004

19
 You can invest in above products through any of our branches. For
select products ICICI Bank also provides the ease of investing through
electronic channels like ATMs and Internet (ICICIdirect.com).

Cards
ICICI Bank offers a varied range of cards to suit your requirements.
These cards having a wide acceptance, nationally and internationally,
coupled with benefits of channels like Internet and Mobile, will enhance
your experience.

ICICI Bank Credit Cards give you the facility of cash, convenience and
a range of benefits, anywhere in the world. These benefits range from life
time free cards, Insurance benefits, global emergency assistance service,
discounts, utility payments, travel discounts and much more.

The ICICI Bank Debit Card is a revolutionary form of cash that allows
customers to access their bank account around the clock, around the world.
The ICICI Bank Debit Card can be used for shopping at more than 100,000
merchants in India and 13 million merchants worldwide.

20
 DIFFERECT LOANS PROVIDED BY ICICI BANK

ICICI Bank offers wide variety of Loans Products to suit your

requirements.Coupled with convenience of networked branches/ ATMs and
facility of E-channels like Internet and Mobile Banking, ICICI Bank brings
banking at your doorstep. Select any of our loan product and provide your
details online and our representative will contact you for getting loans.

21
 PROJECT

A STUDY ON HOME LOANS WITH

REFFERENCE TO ICICIC BANK

22
 HOME LOAN PRODUCTS OF ICICI BANK

ICICI Bank home loan provide not just the most competitive interest
rates & best level of service, but also products designed to cater to the
specific needs of consumer. New products / New features in existing
products are introduced based on customer feedback. Choose the ICICI
Bank Home Loan that suits your needs.

Home Loans

Home Loans are provided to individuals to own a residential property.

ICICI Bank offers easy home loans for

• First Purchase in ready construction

• Under construction property

• Purchase in re-sale

• Self construction & extension of existing living space

The following are the features of ICICI Bank Home Loans

• Home loan amount can be chosen to suit specific needs

• One can avail of a loan up to 85% of Cost Of Property

• Conveniently pay off the loan over a period of upto 25 years

23
 • It can be availed at the Floating rate of Interest or at the Fixed
rate of Interest or at the combination of both Fixed & Floating
rates

• Faster repayment as principal repayment in on monthly rest.

Eligibility Norms for Home Loans.

Home Loans can be availed by Resident Indian whether Salaried or Self-

Employed and also by Non- Resident Indian who are Salaried. For resident
Indians the following are the eligibility norms

• You must be at least 21 years of age when the loan is

sanctioned.
• The loan must terminate before or when you turn 65 years of
age or before retirement, whichever is earlier.
• You must be employed or self-employed with a regular source
of income.

24
 Land Loan

Land loans give an opportunity for individual customer to purchase a

residential plot of land to do self- construction. Thus, customer can invest
now in a plot of land & build in future. The Land loan can be financed only
within municipal limits or in case of direct allotment outside municipal
limits by DA.

Land Loan can be availed by Resident Indian whether Salaried or Self-

Employed and also by Non- Resident Indian.

Home Improvement Loans

Home Improvement Loan is offered to facilitate improvement of a self

owned dwelling unit to existing or new customer. HIL considers a range of
facilities internal or external to the structure without increase in the living
pace. Thus, a customer can add or improve facilities to his dwelling unit
with a loan at Home Equity Loan rate of interest

Home Improvement Loan can be availed by Resident Indian whether

salaried or Self-Employed.

25
 Office premises loans:

Office Premises Loan can be used for purchase, construction, extension

& also for improvement (at the time of acquisition of office premises). It
creates an opportunity to extend loans to self employed individuals to house
their profession or business giving a permanent address for generating
steady flow of income. The product can also include the estimate of
renovation at the time of purchase of the property. This loan is especially
meant for self-employed professionals like Doctors, Architects etc.

Home Loans can be availed by Resident Indian who are Self-Employed and
also by Non- Resident Indian who are Salaried.

EMI under construction:

EMI Under Construction is offered for structuring a home loan to enable

individuals to commence his EMI in a partly disbursed under construction
project. Commencement of EMI ensures re-payment towards principal
amount leading to savings in interest and faster repayment of the loan. The
EMI paid is as per the sanctioned loan amount and remains constant during
the tenure of the loan. The tenure of the loan keeps moving up with
additional amount being disbursed.

EMI under Construction can be availed by Resident Indian whether Salaried

or Self-Employed and also by Non- Resident Indian.

26
 Balance transfer:

Balance Transfer is a facility offering the customer a choice to transfer the

outstanding balance of the loan availed for better terms & conditions.
Balance Transfer helps to move from higher rate of interest to lower rate of
interest or increase in loan component as Top up. BT is possible only from
loans taken from HFCs approved by NHB for refinance, Banks or employer
Loans taken from Central or State Government.
Balance Transfer can be availed by Resident Indian whether Salaried or Self-
Employed

Money saver:

Money Saver account is a home loan account with transaction facility. The
account holder can deposit & withdraw to the extend of balance maintained.
On the commencement of EMI the interest will be calculated on the
outstanding debit balance. Thus, the home loan account holder maintaining
large balance in the Money Saver account can save on the interest paid by
faster repayment. This means one can pay less & repay loan faster.
This product can be offered only in case of first and final disbursement –
Part disbursement cases cannot be offered this product. MoneySaver would
be available at Floating Rates only & Fixed EMI per lac per month would be
applicable . IT certificate in the case of MoneySaver is not issued.
Money Saver can be availed by Resident Indian whether Salaried or Self-
Employed

27
 Topup loan:

Top Up Loan can be availed time and again for various personal requirement
based on value of the property. It offers the customer additional funds
against the security of the same property. To avail Top Up loan , the vintage
of atleast six months is required for the loan availed. The basic eligibility
emerges with good repayment track record. The end use letter is essential to
be collected.

The End use of Top Up Loans can be

• Furnishing of home

• Consumer durable

• Child’s education

• Daughter’s marriage

• Family holiday

• Vehicle

Any other personal requirement of the borrower provided it is not

speculative or illegal in nature
This product is applicable to fully disbursed cases with no post-
disbursement document pending
This product is priced more than base home loan rates but lower than any
personal loan rates .
Top Up Loan can be availed by Resident Indian whether Salaried or Self-
Employed.

28
 Loan on phone:

Loan On Phone is a pre sanctioned loan. Its is based on the existing

relationship of the customer with ICICI Bank. The biggest advantage is that
the customer can get the loan with minimum documentation. Good banking
transactions and repayment records becomes a strength for availing loans in
future.
Loan on Phone can be availed by Resident Indian whether Salaried or Self-
Employed

Home equity loan:

Loan against property gives the owner of residential or commercial premises

to leverage on the value of the property. It offers the ability to unlock funds
gives the advantage of looking at the asset as a source of security bringing
liquidity and retaining ownership.

In case of HEL the property should be self occupied by one of income

considered applicants. The security of the property ensures competitive rate
of interest . The interest component of the EMI paid by SEP / SENP can be
booked as expenses in their P & L

29
 Home Equity Loans are provided for many personal requirements of the
customer viz. –

• Marriage

• Child Education

• Business

• Purchase of Property (Where mortgage is not possible)

• Improvement of Property

• Medical Treatment

Home Equity Loans can be availed by Resident Indian who are Self-
Employed and also by Non- Resident Indian who are Salaried.

Property overdraft:

The overdraft facility from ICICI Bank allows you to borrow money against
your self occupied property. The overdraft facility comes with a multi-city
cheque book and phone banking facility. The customer is charged interest
only for the amount that he withdraws from the account. Whenever he
deposits funds into the account, they go towards reducing the outstanding
balance in the account.

It offers the following benefits:-

30
 • Generating capital against property (R ) or ( C) for business or
personal use

• Convenience of Pre - Sanctioned limit and draw as you need

• Pay interest on the amount drawn and for days utilized

• Convenience of depositing & withdrawing like any Current

Account

• Benefit of Cheque Book & Phone banking

• Fast Processing and door-step service

• Multi-city cheque book and phone banking facility

Property Overdraft can be availed by Resident Indian who are Self-

Employed

Lease rental discounting:

Lease Rental Discounting helps to raise funds against the future expected
rentals of self owned commercial property. The property should be occupied
by the Lessee. Similar to Home Equity Loans, LRD can be provided for any
personal requirements of the customer viz. –

• Marriage

31
 • Child Education

• Business

• Purchase of Property (Where mortgage is not possible)

• Improvement of Property

• Medical Treatment

Lease Rental Discounting can be availed by Resident Indian whether

Salaried or Self-Employed

Loan amount:
Factors affecting your Loan Amount
ICICI home loans bring to you a home loan power-packed with
numerous facilities making it the perfect home finance option for you.
You can get a home loan suited to your needs. The home loan amount
depends on your repayment capability and is restricted to a maximum of
85% of the cost of the property or the cost of construction as applicable.
Repayment capacity takes into consideration factors such as income, age,
qualifications, number of dependants, spouse's income, assets, liabilities,
stability, continuity of occupation and savings history.

A number of factors are taken into account when assessing your

repayment capacity. Your income, age, number of dependants, qualifications,
assets and liabilities, stability/ continuity of your employment / business are
some of them.

However, there are ways by which you can enhance your eligibility.

32
 • If your spouse is earning, put him/her as a co-applicant. The
additional income shall be included to enhance your loan
amount. Incidentally, if there are any co-owners they must
necessarily be co-applicants.

• Did you know that your blood relater income can also be
considered for sanctioning the loan on your combined
income? The disbursement of the loan, however, will be done
only after you submit proof of your marriage.

• Providing additional security like bonds, fixed deposits and

LIC policies may also help to enhance eligibility.

While there is no need for a guarantor, it could be that having one might
enhance your credibility with us. If so, our loan officer would provide you
with the necessary details.

The final amount to be sanctioned will depend on your repayment capacity.

However, what you ultimately are entitled to will have to conform within the
limits fixed for each loan.

Also, when the company looks at the total cost, registration charges, transfer
charges and stamp duty costs are included.

33
 Documents required for loan sanction

The leading home loan provider offers attractive interest rates and
unbeatable benefits to ensure that you get the best deal without any hassles.
Keeping your convenience in consideration, we ask you for minimal
mandatory documents for the sanctioning of your home loan.
At ICICI Bank we require the following documents to sanction your
home loan:

Sanction Documents
• Duly Completed Application Form

• Photograph

• Fee cheque

• Photo identity proof

• Age proof

• Signature verification proof

• Residence address proof

34
 Documents for salaried people
• Last three months salary slips

• Form 16

• Bank statements for last 6 months from salary account

• Repayment track record of existing loans

Documents specific for Self Employed

• Income Tax Return / Computation of Total Income / Auditors
Report / Balance Sheet / Profit & Loss Account certified by
Chartered Accountant for last 2 years (3 years for Home Equity)
(both for business and personal of partners/directors)
• Bank Statement for last 6 month from operating account

• Repayment Track record of existing loans / Loan closure letter

• Board Resolution in case of a company

• Proof of existence

• Office Address Proof

• Photo Identity Proof, Residence Address Proof, Signature

Verification is required to be provided for all the main partners /
directors.

These are the documents required for sanctioning a loan. You may be
asked to submit further legal documents if required by ICICI Bank or its
approved lawyers. Do retain photocopies of all documents being submitted
by you.

35
 Disbursement of your ICICI bank home loan

We disburse the loan amount after you identify and select the property
or home that you are purchasing and submit the requisite legal documents.
While you may be under the impression that the list of documents asked
for is rather extensive, please note that it is for your own good. Each and
every single document asked for will be verified and checked to ensure your
safety.
This may take some time but we want to ensure a clear title and will
complete all the legal and technical verifications to ensure that you have full
rights to your home.

Your loan will be disbursed after you identify and select the property or
home that you are purchasing and on your submission of the requisite legal
documents.

The 230 A Clearance of the seller and / or 37I clearance from the appropriate
income tax authorities (if applicable) is also needed.

On satisfactory completion of the above, on registration of the

conveyance deed and on the investment of your own contribution, the loan
amount (as warranted by the stage of construction) will be disbursed by
ICICI Bank.

36
 Disbursement Documents
Property documents (as per P&D for respective states and as asked by
empanelled lawyers for individual cases)

• Facility Agreement

• Disbursal Request Form

• Cheque Submission

• ECS or Auto Debit for ICICI Bank account holders or Post

Dated Cheques for EMI
• ECS or Auto Debit for ICICI Bank account holders or Post
Dated Cheques for EMI
• Personal Guarantor’s Documents (PG Form, Photograph,
Identity Proof, Address Proof, Signature Verification and
Income documents, if applicable)

In case of property is owned by a company

• Memorandum of Entry

• Form 8

• NOC

37
 Home Loan Interest Rates for Resident Indians
In your quest of the perfect home loan, ICICI Bank ensures that you
get the best deal, in terms of interest rate and other facilities also, in the most
convenient way. With our varied offering of house loans and home finance,
we give you an opportunity to select the perfect home loan as per your
needs. You can choose from:

• Adjustable Rate Home Loan

• Fixed Rate Home Loan

Combination of the above two

Step Up Repayment Facility (SURF)

SURF is a variant to enhance the eligibility of a young professionally
qualified home loan customer with out increasing monthly outflow as EMI.
The structuring consider a notional percentage increase in income & offers
options of graded increase in EMI over the tenure of the loan contracted.

The tenure is divided in three parts

• Primary being lowest EMI

• Secondary

• Tertiary being highest EMI

38
 The following are the features of SURF

Higher eligibility of loan amount with lower EMI

Graded increase in EMI considering future increase in Income
Suited for young professionals.

SURF can be availed by Resident Indian whether Salaried or Self-

Employed Professionals.

Flexible Installment Plan (FLIP)

FLIP is a variant for structuring enhanced eligibility of home loan

applicants with varying tenure of income source. This repayment facility is
given when income is going to reduce after certain time during the loan
tenure due to one of the borrowers retiring before loan maturity. The EMI
payable becomes affordable based on individual income source and also
matching the family cash flow. This variant is offered typically to family
members joining as applicants like husband & wife or father & son with
varying tenure of service Period / Age norm.

39
 FLIP has the following features

• FLIP considers income of two applicants and offers step down

repayment facility

• One of the applicants should have service period till the end
of the tenure of the loan

• FLIP would have two different EMIs during the tenure of the
loan

• Normally the first EMI would be based on the combined

income

• The second EMI would be smaller & based on the lower

income with longer tenure of the applicant

FLIP can be availed by Resident Indian whether Salaried or Self-

Employed and also by Non- Resident Indian who is Salaried.

40
 Part Fixed, Part Floating

A product that offers the dual benefit of fixed rate loans as well as floating
rate loans. With this product, a customer can book part of his loan under a
fixed rate plan and the other part under a floating rate plan. Thus, he can
minimize the impact of any adverse changes in the interest rate regimes and
at the same time, avail of any benefits that may come by way of favorable
changes.

Part Fixed, Part Floating can be availed by Resident Indian whether Salaried
or Self-Employed and also by Non- Resident Indian who is Salaried.

SmartFix Home Loans

3 years fixed and floating rate thereafter. A product that offers the safety
of fixed rates plus the advantages of floating rates. The Smart Fix enables
the customer to lock at fixed rate of interest today with the contract to move
to a floating rate on a subsequent date. For the first 3 years you get a fixed
interest rate. From the fourth year, your loan gets switched to the prevailing
floating interest rate. Thus, a customer gets an opportunity to observe the
interest rate movement over a period of time and expects to benefit in the
bargain

41
 Smart Fix can be availed by Resident Indian whether Salaried or Self-
Employed.

The interest rate on ICICI Bank Home Loans is linked to the ICICI
Bank Floating Reference Rate (FRR)/PLR. As per earlier communication,
FRR/PLR was increased by 1% on Feb 9th 2007. Consequently interest rate
for all existing customers under Adjustable Rate Home Loans (ARHL) also
went up by 1%. Subsequent to this change, as per recent announcement, the
FRR/PLR has been further increased by 1% effective from March 31st
2007.The FRR has gone up from 11.75% to 12.75%& PLR has gone up
from 13.75% to 14.75%. For all the Adjustable Rate Home Loan customers,
both the above changes will be effective from 1st April 2007.

42
 What is the repayment tenure?

Repayment tenure is the tenure for the number of year for which the
loan gets sanctioned. We offer you a wide range of options for the tenure of
the loan. You can take a home loan for up to 25 years provided you do not
reach the age of 65 years or retire within that period

How is the loan repaid?

All loan repayments are done via equated monthly installments (EMI).

What is an EMI?
An EMI refers to an equated monthly installment. It is a fixed amount
which you pay every month towards your loan. It comprises of both,
principal repayment and interest payment.

When does the repayment start?

EMI payments start from the month following the month in which the
full disbursement has been made.

How is the EMI paid?

43
 The EMI is to be paid every month through post-dated cheques (PDCs)
or Electronic Clearing System (ECS)*. If you are opting for PDCs, then
you will have to provide 36 PDCs upfront. The PDCs are to be dated on the
1st of every month. However, if you receive your salary a few days later, we
provide the flexibility of dating the cheques for the 10th of the month. In
case you have an ICICI Savings account you can also go in for the facility of
Auto Debit.

* ECS facility is available in selected cities only.

What if a PDC bounces?

In the case of a bounced cheque or delayed payment, charges and

outstanding dues will be charged as per the prevailing company policy. You
can replace old PDCs with new ones within 5 - 7 working days.

What is pre-EMI interest?

44
 In the case of part disbursement of the loan, monthly interest is payable
only on the disbursed amount. This interest is called pre-EMI interest
(PEMI) and is payable monthly till the final disbursement is made, after
which the EMIs would commence.

When do I pay PEMIs?

The first PEMI is payable by cheque by the end of the month in which the
disbursement is made and each subsequent PEMI at the end of every month
till the commencement of EMI. In case you have an ICICI Savings account
you can also go in for the facility of Auto Debit.

Application Process of your Home Loan

Your search for the perfect home loan ends here at ICICI bank
home loan, even before your have found the perfect property.
The moment you decide to buy a home, you can put in your application
for a home loan. Yes, you can apply for a home loan even before you have
selected the property.
The property need not even be in the same city where you are residing.
The only condition being that ICICI Bank has home loan operations in both
the cities.

45
 Should there be a change in your financial status or plans, you can
withdraw your sanction within 6 months of approval of your home loan.
However, we are always ready to assist our customers in the event of
legitimate problems. And, we might reconsider this if we find that there are
satisfactory reasons for the delay.
And, neither would we charge you extra for this delay.
If it is refinancing you are interested in, it is possible within 6 months
from the date of purchase of property.

Insurance Plans for your Home Loan

Introducing exclusive home loan insurance that can provide cover to

your Home loan in the face of any unforeseen event happening to your life.
In case of any of these happenings, your family will have the support of the
insurance cover to pay for the outstanding Home loan, without being
burdened by the loan EMI's.

Key Benefits of HomeSafePlus

• No medical checkup

• Comprehensive insurance plan for individual, home and its

contents

• Single premium long-term insurance plan

• Premium paid for the Critical Illness cover is eligible for tax
benefits u/s 80D of the Income Tax Act

46
 • Sum Insured remains constant throughout the policy period
(loan O/S amount to come to bank, rest goes to individual)

• Multiple applicants can be covered under the same loan

• Simple application form

Key Benefits of HomeAssure/HealthAssure

• Life Cover from HomeAssure for the entire home loan tenure

• Critical Illness cover from life threatening illnesses like

cancer, coronary artery bypass, heart attack, kidney failure,
stroke, major organ transplant

• Special non-medical limits only for ICICI Bank Home Loans

customers

• Dual benefit to customers, Life Cover from HomeAssure and

Critical Illness Cover from HealthAssure

• Dual tax benefits, Section 80C benefits under HomeAssure,

Section 80D benefits under HealthAssure

• Simplified claim procedure

47
 FINDINGS

1. ICICI Bank having good brand image in the minds of customers.

2. Majority of the people got loans from ICICI Bank only
3. Most of the customers are not aware of the products of ICICI home
loans
4. Some of the customer’s felt that the interest rates are some what high
5. Some of the customer not having good faith on private banks
6. Most of the people are directly go to bank to apply a home loan
7. Some of the customer of ICICI already benefited through ICICI home
loan products and services
8. Customer awareness is medium about ICICI products.
9. ICICI providing good services to their customers.

48
 RECOMMENDATIONS

 Create awareness: The Company has to take care of awareness

creation about the products and services among the customers.

 Charges: The Company has to reduce the mortality and administration

charges.

 The process is some what late to sanction a loan.

 The company has to reduce their interest rates on home loan products
and services.

 The company has to identify the potential customers.

 Production promotion strategies should be improved.

 Company should consider the present competition and should act

according to the customer needs.

49
 CONCLUSION

• In my study we came to know that many peoples are

interested to take a home loan from ICICI bank to construct
their homes.
• Home loans have long period when compare to other personal
loans and other loans. So peoples are confused to take a home
loan.
• The interest rates also some what high when compare to other
banks.
• Even though the interest rates are high peoples are willing to
take a loan from ICICI bank due to some reasons.
• The loan sanction process is low when compare to other
banks.
• For disbursement process is also it will take low time when
compare to other banks

50
 ON THE JOB TRAINING

INTODUCTION

My OJT is promoting ICICI home loan products and services I have

to promote the ICICI bank products and create awareness in the minds of
customers.

And I have to identify the potential customers, who are showing

interest to take home loan.

I have to convert them as ICICI customers. I have to collect all the

required documents to get a home loan from the customers.

I have submit all the documents to our technical team, these are the
people evaluate the property value.

I have to inform to the customers about their loan status.

51
 OBJECTIVES

The main objective of doing this project is to study the corporate culture
and creating awareness among the customers about home loan products of
ICICI bank. During this student internship program period I have to achieve
some thing which is helpful to the development of myself and some value
addition to the company. Generating business to the company is the main
objective. It gives me good exposure of myself and creating good impression
of corporate mind.

 The main objective of this study is to know the Customers perceptions

about home loans of ICICI bank.
 Generating good business to the company by promoting and selling
the products of ICICI.
.
 To know the ideas of customers about home loan products and
services.
 To get the knowledge about different loan products of ICICI Bank.
 Creating awareness of ICICI Bank products in the minds of Walk-in
customers in the bank.
 Fixing the appointments with the customers.
 Visiting the customers and closing the deal.

52
 TARGETS/ TASKS

I have to approach the customer with in the bank and out side of the
bank also to promoting the products and services of ICICI. If he gets the
information about the product I have to take his mobile number and
appointment. After getting the leads I have to submit to the financial
consultants. With the guidance of financial consultants I have to generate
the business.

STRATEGIES

Followed strategies to achieve my Targets

1. Direct marketing
My OJT is promoting the home loan products of ICICI.By adopting
this strategy I can understand the ideas of customers and their investment
habits. If I know the ideas I can create better idea of our products. Direct
approach creates great awareness about the product and we can easily clarify
the doubts of customers.

2. Tele-marketing
This is the one of the strategy I am following to promote the product.
If once I got the phone number of the customer I can easily grab the
customer. Through Tele marketing I can convince the customer.

53
3. Relationship marketing
It is also one of the best marketing strategy. Direct approach is only
belongs one customer. Through relationship marketing we can pinch the
product to many persons. If one customer got good faith on us. Then he will
promote the products to his friends and colleagues. It is also one of the best
strategies I am following.

ACHIEVEMENTS

I promoted ICICI Bank home loan products during my SIP period.

I have showing them as monthly wise as follows,

In The Month Of MAY

1st week Training class, for different home loan
products of ICICI
nd
2 week Training class on documents and
disbursement part
rd
3 week 4 leads
4th week 3 leads

54
 In The Month Of JUNE
st
1 week 6 leads
2nd week 3 leads
3rd week 4 leads
4th week 5 leads

In The Month Of JULY

1st week 5 leads
2nd week 7 leads
3rd week 1 lead
4th week 6 leads

In The Month Of August

st
1 week 5 leads
2nd week 2 leads
3rd week 3 leads
4th week 6 leads

LIMITATIONS

55
1. The survey was confined to only certain parts of twin cities, which
Included walk-in customers of ICICI Bank and outsiders.

2. We don’t have sufficient knowledge to close all the deals.

3. Getting the prospective customers are very time consuming.

4. Time to explain the customer about the product inside branch is less.

5. Time Period of my OJT is one of the Limitation.

LEARNINGS

56
Learning’s in the on the job training

1) Product knowledge of ICICI home loan products and services

2) The way to improve my communication skills.

3) The way to convince the customers.

4) The way to behave people in corporate world.

5) The way to adopt new strategies to attract customers.

6) The way to convince the people who do not trust private

organizations.

7) How people invest their money in different investment schemes.

.

57