COMPARATIVE STUDY OF HOME LOANS OF PNB AND SBI BANK.

e. energy-related items (permanent in nature). Many improvements in landscape and even swimming pools are nowadays considered to be a part of home improvement. Luxury items and fireplaces are generally not eligible. though. and with all such conveniences. or some other type of lender. remodeling.        Home Purchase Loans Home Improvement Loans Home Construction Loans Home Extension Loans Home Equity Loans Land Purchase Loans Bridge Loans Home Purchase Loans These are the basic forms of home loans used for purchasing of a new home. Afterwards. we may be flummoxed to look so many attractive rates and offers in the market. Home Improvement Loans Home improvement loans are used to finance improvements and add on to the existing set of credentials of beauty on your owned house. With about a million home lenders and mortgage brokers it's becoming a tough challenge as the days are progressing. However. Home improvement loans are used to maintain or enhance the value of your house. recently purchased property or rented accommodation. Home Construction Loans . loans are simply specific money that we borrow from a bank. repairs. Owning a piece of land or property is a lifetime dream for every individual. we must repay our debts with interest. a new bathroom. at the same time though. But at the same time. However. That is. obtaining a home purchase loan or mortgage has become really pretty simple. an extension or general property improvements. a private lender. when the sites are coming up with all the latest tools and relevant information for us. In general it includes: repairs. There are many home loans provider in the market. There are different type of home loan i. not to forget the hidden costs associated with each of them.INTRODUCTION TO LOAN:Home loans work like any other debt. a new kitchen. terrace. unlike other types of loans. home loans are different in several respects.

besides calculating the construction costs. As work progresses you will need to make payments to the builder. tenure of the loan. Maximum Amount of Home Extension Loans: Banks generally offers about 70-85% of the total amount of home extension as loan. kitchens. we will be required to pay a deposit to your builder as well as paying a deposit for the land if we are buying land. or any other rooms for your growing family. Certain loans can be structured for progress payments to be made during construction. it's up to the bank's discretion to consider the market value of the property and accordingly decide . Then. So. Each site is unique requiring different expenditures so this specific rupee amount will vary from site location to site location. Payment: Before the house starts getting build.Home construction loans are used to finance for the construction of our newly acquired home or if we are planning to build a home. The amount of loan sanctioned also depends on a number of factors such as the age of the applicant at the time of loan. For example. or constructing a Puja ghar. It may also be used to enclose open balcony/terrace space. by adding more rooms. his/her credit history etc. repayment capacity of the borrower. terraces. we may also be required to consider the total expenditures to develop the site in order to build. wash rooms. Home equity loan: Home equity loans helps customer to en cash the market value of the commodity by taking a loan by mortgaging the property. The factors include in calculations for house building costs? Design of the house Construction cost Financing Cost Buildable site All the above mentioned costs will help us to determine the amount we may need to borrow. who wish to mortgage his/her property to the bank for taking some loan for some other purpose. Home extinction loan Home extension loans are used by customers to get loans from the banks to extend their houses. Home equity loans are availed by customers.

However it should not be used in any illegal or speculation purposes. Bridge loans are used by customers as an effective vehicle to capitalize on a purchase opportunity. Everyone has his/her dream perfectly sketched in his souls and so is his ambition to get his house erected on the exact location he dreamt that to be. and are used to cover the time between redemption of issuance of one bond and its replacement by a new issue. Citibank. Bridge loans in corporate finance are called gap financing. till the time the borrower gets more permanent and lower cost financing. bridge loans. land purchase loan: Land Purchase loans are used by customers who wish to purchase a plot of land for commercial or residential purpose. Now. If you have found and short listed the piece of land. retrieve real estate from foreclosure. It might also be used in marriage. Home equity loans don't restrict one to use the loan money in specific investments. The bridge loans help finance the new home. Loans that are strictly for land purchase can be as scarce as good residential plots. often used for commercial real estate purchases. you have come to the best place you could have arrived in the web. While many lending firms around the nation compete to provide mortgages for the purchase of a house on a lot. within the range of 6-36 months. It can be considered as a short term financing scheme which is generally expected to be paid back. higher education. They can also be . you will realize that a land purchase loan is one you will cherish. and have arrived here for finance. etc. ICICI etc. (or swing loans as they are otherwise said) is a short term loan provided by various banks like Bank of India. until a buyer is found for the home. provided the mortgager is a licensed title holder and the land is free form any kind of dispute. only local institutions typically will be interested in lending for an empty lot.how much to pay to the customer. Bridge loan: Bridge loans are designed for people who wish to sell the existing home and purchase another one. that you have decided to purchase a land as an investment or for your own dream home. medical expenses. So. Both the residential as well as non residential property can be considered for the approval of the loan.

Bridge loan may contain a decent proportion of prepaid interest.operating loans for periods between LOI and acquisition. Kolkata. A need for centralized banking system prompted PNB to go computerized and what followed was the establishment of CBS in Punjab National Bank branches in all the leading cities like Delhi. the site can be resourceful. Hyderabad. OBJECTIVES To study the cost of home loans provided by the bank. but if it hasn't sold. A branch and ATM locator is also available on the official website of Punjab National Bank. Mumbai. SCOPE OF THE STUDY: This study is analysis and comparison of home loans provided by the SBI and PNB banks. If the home gets sold before that time. Pune. It is helpful in analysing the home loan service provided to the customer and their comparison. Around 2400 offices come under the network of Centralized Banking Solution or CBS. . you may receive interest payments back. Gurgaon. For an overview of the annual report or the bank profile. To know that which bank provide batter loan schemes. To analyze the home loan scheme by PNB and SBI banks. The website also provides info on the careers and recruitments at PNB and the exam results. Chandigarh. Nodal and Bangalore. sometimes as much as six months. you may be required to continue payments. Chennai. To know the consumer perception about the home loan of PNB and SBI. Jalandhar. INTRODUCTION TO COMPANY: PUNJAB NATIONAL BANK : PNB has over 4500 branches and offices bringing the Punjab National Bank to your doorstep. Ahmedabad. Ludhiana. Internet Banking Services are provided to all customers in the CBS branches. or quiet period and IPO.

State Bank of Saurashtra (SBS) and State Bank of Travancore (SBT).State Bank of Indore (SBIR).State Bank of Patiala (SBP). Today.State Bank of Mysore (SBM). the public sector banks began experiencing numerous positive changes and enormous growth. OVERVIEW OF THE INDUSTRY: HISTORY: Banking in India has a long and elaborate history of more than 200 years. the Foreign Offices division. STATE BANK OF INDIA: State Bank of India (SBI) is India's largest commercial bank.the Domestic division. As a result.45% as evaluated by the SSS Retirement.State Bank of Hyderabad (SBH). Death & Funeral Benefits Program. The eight banking subsidiaries are: State Bank of Bikaner and Jaipur (SBBJ). The beginning of this industry can be traced back to 1786. was established. the Foreign Department and the International Services division. Then came the much-talked-about liberalization and economic . SBI's International Banking Group delivers the full range of cross-border finance solutions through its four wings . State Bank of India (SBI) has spread its arms around the world and has a network of branches spanning all time zones. SBI has a vast domestic network of over 9000 branches (approximately 14% of all bank branches) and commands one-fifth of deposits and loans of all scheduled commercial banks in India. primary dealership in government securities. after the nationalization of banks in 1969.The careers at nationalized banks like PNB are the most sought after one and candidates are selected on the basis of their exam result. The State Bank Group includes a network of eight banking subsidiaries and several nonbanking subsidiaries offering merchant banking services. But the industry changed rapidly and drastically. Bank of Bengal. PNB topped the Best Paying Commercial Bank category with an overall rating of 87. fund management. factoring services.State Bank of India (SBI). credit cards and insurance. when the country’s first bank.

accountant. a position in Treasury or Forex is considered right on top and this is followed by careers in Private Banking. rural banks. and customer service executive among others. While some brokers like to practice with individual clients others work for institutions. form a part of the nationalized banks category. However. These private sector banks include 24 foreign banks that have begub their operations here. One could work in a variety of areas in banking industry including Recurring Deposit account.reforms that allowed banks to explore new business opportunities and not just remain constrained to generating revenues from mere borrowing and lending. probationary officer. nationalized banks continue to be biggest lenders in the country. In the Financial Services. some of the important jobs include that of a stockbroker who is essentially a person who buys and sells securities on behalf of individuals and institutions for some commission. personal loan officer. The Reserve Bank of India is the foremost monitoring body in the Indian Financial sector. Investment analysts are the backbone of . loan processing officer. Industry estimates indicate that out of 274 commercial banks operating in the country. In the industry. home loan agent. This provided the Indian banking scenario a remarkable facelift that only continues to get better with time. private banks and specialized banking institutions. Security analysts are those who advise companies on floatation’s of shares as they are expected to have sound knowledge of capital markets. 223 banks are in the public sector and 51 are in the private sector. assessor. banking officer. Investment Banking and Retail Banking. It is a centralized body that monitors discrepancies and shortcomings in the system. Many prefer to work as dealers. etc. despite the foray of foreign banks in the country. even today. The specialized banking institutions that include cooperatives. loan officer. Opportunities:The Banking sector is considered the most lucrative option in today’s job market. loan manager. product marketing and sales executive. The industry is highly fragmented with 30 banking units contributing to almost 50% of deposits and 60% of advances. advisors and securities analysts. Brokers who work for institutional investors are often called securities traders. mortgage loan underwriter. home loan officer. The Indian banking system can be classified into nationalized banks. This is primarily due to the size of the banks and the penetration of the networks.

. senior general manager. Indian Retail Banking continues to redefine the credit growth in the country. Finally. Housing. 2005. the banking sector is witnessing a decline in the growth of its home loan portfolio The home loan industry is experiencing a growth of 25% this year. Research and Markets has announced the addition of 'Indian Retail Banking. assess various statistical information. as against 30% growth in home loans earlier. Equity Analysts do jobs similar to investment analysts and research the equity markets and make predictions. compare financial results. the limit for foreign institutional investment in private banks is 49%. This report analyses the retail banking market and its segments in India and presents the key trends. we have just come out with an Industry Insight on Indian Retail banking .35% during 2005-06. Liberalization and globalization have created a more challenging environment in the banking sector as well as in the other segments of the financial sector such as mutual funds. said. which constitutes more than 52% of all retail loans.4% in 2005-06 to touch Rs 3. 2006' to their offering. capital markets.the financial services sector. which has resulted in the fall in growth rates for home loans for the banking industry. profitability projections. post offices. In order to help banks in India to understand the market and competition and plan future strategies. ICICI Bank which has recorded the highest incremental growth in home finance segment in recent past. along with issues and challenges. survey the industry as a whole and on the basis of the available information. Growth: The limit for foreign direct investment in private banks has been increased from 49% to 74%.538 billion. They study the financial reports of companies. With tightening of interest rates by the RBI and a simultaneous increase in real estate prices in a few markets. Rajiv Sabharwal.2006 edition. it seems Reserve Bank of India's (RBI) flurry of measures to restrain the home finance market is paying off. The report also paints a future outlook for the market. venture capitalists. Non Banking Finance Companies. “The real estate prices have become very high in few markets. Besides it profiles 21 major players in the retail banking space and their strategies. and finally conclude to a decision. It grew by a whopping 44. This leap was despite the increase in risk weight by RBI for housing and real estate loans during August. grew at a robust rate of 44. In addition. etc.

However. however. which would contribute to price discovery. industrial and agricultural finance and finance of trade. multi-national companies. Punjab National Bank boasts of a varied clientele consisting of small and medium industrial units. PNB Bank is a leading home loan lender of the country with about 30% market share. He. but obviously interest rates hikes will also have an impact. exporters. a senior official of State Bank of India (SBI) said the home loan market is showing some signs of slowing down. Housing Development Finance Corporation (HDFC) said the housing finance market for the middle class segment was growing at a healthy pace. The Bank is changing outdated front and back end processes to modern customer friendly processes to help improve the total customer experience.400 crore. personal and international banking. enhance liquidity and turnover and encourage voluntary holding of Government securities amongst a wider investor base Become an effective conduit for conducting open market operations. Echoing a similar view. Indian conglomerates and NRI. The objectives of the Company are in line with objectives laid down by RBI for the Primary Dealers: Strengthen the infrastructure in the government securities market in order to make it vibrant. debit cards. The Bank is also in the process of providing complete payment solution to its clientele with its over 8500 ATMs. In the first half of fiscal 2007. mobile banking. etc. . of which the home loan lending is about 50%. the bank experienced total home loan disbursements of Rs 13. there will be some impact on us too.Home loan growth has reduced to 25% from its earlier growth rate at 30% and since we are an integral part of the industry. PROFILE OF THE ORGANISATION: PROFILE OF PNB: The profile of the PNB shows superior banking services in corporate. today it offers the largest banking network to the Indian customer.” He added that the bigger impact had come from real estate prices. With about 8500 of its own 10000 branches and another 5100 branches of its Associate Banks already networked. and other electronic channels such as Internet banking. declined to disclose the bank’s current home loan growth rate. another major player. liquid and broad based. Ensure the development of underwriting and market making capabilities for Government Securities Improve secondary market trading system. Retail lending comprises 70% of the total loan portfolio of the bank.

The bank is also looking at opportunities to grow in size in India as well as Internationally. The National Banking Group also delivers the entire spectrum of corporate banking products to other corporate clients. In a recently concluded mass internal communication programme termed ‘Parivartan’ the Bank rolled out over 3300 two day workshops across the country and covered over 130. The Corporate Banking Group consists of dedicated Strategic Business Units that cater exclusively to specific client groups or specialize in particular product clusters. attitudes and take all employees together on this exciting road to Transformation. It is in the process of raising capital for its growth and also consolidating its various holdings. PRODUCT RANGE OF COMPANY/INDUSTRY The products and services provided by the SBI and PNB are in various fields. It has also 7 Subsidiaries in India – SBI Capital Markets. SBI DFHI. It presently has 82 foreign offices in 32 countries across the globe. The workshops fired the imagination of the employees with some other banks in India as well as other Public Sector Organizations seeking to emulate the programme. Throughout all this change.PROFILE OF SBI: The SBI’s powerful corporate banking formation deploys multiple channels to deliver integrated solutions for all financial challenges faced by the corporate universe. focusing on the prime corporate and institutional clients of the country’s biggest business centers. The others are the Project Finance unit and the Leasing unit. SBI Life and SBI Cards . on a nationwide platform.000 employees in a period of 100 days using about 400 Trainers. SBICAP Securities.forming a formidable group in the Indian Banking scenario. to drive home the message of Change and inclusiveness. the Bank is also attempting to change old mindsets. Foremost among these a specialized group is the Corporate Accounts Group (CAG). SBI Factors. such as:  Banking services NRI services International banking Corporate banking Agricultural banking . The Corporate Banking Group and the National Banking Group are the primary delivery channels for corporate banking products.

Effort will be made to throw light on most of the factors which have either indirect or direct effect on the behavior of the consumer. RESEARCH METHODOLOGY Design of Research: The research will be exploratory in nature. A population of peoples who take home loan from these banks will be considered for this study. .International banking . I will also explore the impact of home loans on the market share of the banks. I will try to explore about the home loans which would make a difference in the behavior of the consumer.

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