A

DISSERTATION REPORT

ON

“TO STUDY THE HOME LOAN PROCEDURES PROVIDED BY SBI AND ICICI BANKS”

Submitted in partial fulfillment of the requirement

For the award of

MASTERS DEGREE IN BUSINESS ADMINISTRATION

(Session 2013-2015)

Under Supervision of: Submitted By:

DR.ANIL MITTAL ANUJ SHARMA(PROF.) ROLL NO:27

MBA (SFS)FINAL

UNIVERSITY SCHOOL OF MANAGEMENT

KURUKSHETRA UNIVERSITY, KURUKSHETRA

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ACKNOWLEDGEMENT

Working on this project has been a great learning experience for me. I would like to take this

opportunity to express my gratitude to the people who have helped me to bring out this

project.

I take this opportunity to express my profound gratitude and deep regards to my guide

DR.ANIL MITTAL, faculty guide for his guidance, monitoring and constant encouragement

throughout the course of this project. Their timely guidance, valuable knowledge and

experience helped a lot.

I express my gratitude to prof. DR ANIL MITTAL on the completion of my project.

ANUJ SHARMA

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DECLARATION

I hereby declare that this project entitled study on “To study the Home Loan procedures

provided by SBI AND ICICI banks.’ conducted is a record of independent work carried out

by me during the academic year 2013-15 under the guidance of my faculty guide DR ANIL

MITTAL

I also declare that this project is the result of my effort and has not been submitted to any

other university or institution for the award of any degree or personal favor whatsoever. All

the details and analysis provided in the report hold true to the best of my knowledge.

ANUJ SHARMA

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Serial

No.

Contents Page. No.

1. Chapter- 1 Introduction To

The Industry

The Company

Topic

1-9

10-19

20-32

2. Chapter -2 Literature Review 33-36

3. Chapter -3 Research Methodology 37-42

4. Chapter- 4 Analysis And Interpretation 43-67

5. Chapter- 5 Findings, Suggestions & Conclusion 68-71

6. Bibliography 72-74

INDEX

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LIST OF TABLES

TABLE NO

CONTENTS PAGE NO

1.1 Processing fees of loan 22

1.2 EMI plan Satisfaction 22

1.3 New Interest rates 23

4.1 Occupation of respondents 44

4.2 Time period of performance of SBI 45

4.3 Home loan schemes 46

4.4 Types of home loan 47

4.5 Terms & conditions 48

4.6 Interest rate charge 49

4.7 Types of services 50

4.8 Services of lending procedure 51

4.9 Satisfaction level 52

4.10 EMI plan 53

4.11 Grade for lending procedure in SBI 54

4.12 Occupation of respondents of ICICI 55

4.13 Time period of performance of ICICI 56

4.14 Home loan schemes 57

4.15 Types of home loan 58

4.16 Terms & conditions 59

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4.17 Interest rate charge 60

4.18 Types of services 61

4.19 Services of lending procedure 62

4.20 Satisfaction level 63

4.21 EMI plan 64

4.22 Grade for lending procedure in SBI 65

4.23 Chi – Square Test 66

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LIST OF FIGURES

FIGURE NO.

INDEX OF FIGURES PAGE NO.

1.1 ICICI Bank 17

3.1 Research Methodology 38

3.2 Process of Research 39

3.3 Data Collection 40

4.1 Occupation of respondents 44

4.2 Time period of performance of SBI 45

4.3 Home loan schemes 46

4.4 Types of home loan 47

4.5 Terms & conditions 48

4.6 Interest rate charge 49

4.7 Types of services 50

4.8 Services of lending procedure 51

4.9 Satisfaction level 52

4.10 EMI plan 53

4.11 Grade for lending procedure in SBI 54

4.12 Occupation of respondents of ICICI 55

4.13 Time period of performance of ICICI 56

4.14 Home loan schemes 57

4.15 Types of home loan 58

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4.16 Terms & conditions 59

4.17 Interest rate charge 60

4.18 Types of services 61

4.19 Services of lending procedure 62

4.20 Satisfaction level 63

4.21 EMI plan 64

4.22 Grade for lending procedure in SBI 65

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CHAPTER: 1

INTRODUCTION

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1.1 INTRODUCTION TO BANKING INDUSTRY:-

Indian banking is the lifeline of the nation and its people. Banking has helped in developing

the vital sectors of the economy and usher in a new dawn of progress on the Indian horizon.

The sector has translated the hopes and aspirations of millions of people into reality. But to

do so, it has had to control miles and miles of difficult terrain, suffer the indignities of foreign

rule and the pangs of partition. Today, Indian banks can confidently compete with modern

banks of the world.

Before the 20th century, usury, or lending money at a high rate of interest, was widely

prevalent in rural India. Entry of Joint stock banks and development of Cooperative

movement have taken over a good deal of business from the hands of the Indian money

lender, who although still exist, have lost his menacing teeth.

In the Indian Banking System, Cooperative banks exist side by side with commercial banks

and play a supplementary role in providing need-based finance, especially for agricultural

and agriculture-based operations including farming, cattle, milk, hatchery, personal finance

etc. along with some small industries and self-employment driven activities.

Generally, co-operative banks are governed by the respective co-operative acts of state

governments. But, since banks began to be regulated by the RBI after 1st March 1966, these

banks are also regulated by the RBI after amendment to the Banking Regulation Act 1949.

The Reserve Bank is responsible for licensing of banks and branches, and it also regulates

credit limits to state co-operative banks on behalf of primary co-operative banks for financing

SSI units.

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. After this, the Indian government established three presidency banks

in India. The first of three was the Bank of Bengal, which obtains charter in 1809, the other

two presidency bank, viz., the Bank of Bombay and the Bank of Madras, were established in

1840 and 1843, respectively. The three presidency banks were subsequently amalgamated

into the Imperial Bank of India (IBI) under the Imperial Bank of India Act, 1920 – which is

now known as the State Bank of India.

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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. The Reserve 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.

As the banking institutions expand and become increasingly complex under the impact of

deregulation, innovation and technological upgradation, it is crucial to maintain balance

between efficiency and stability. During the last 30 years since nationalization tremendous

changes have taken place in the financial markets as well as in the banking industry due to

financial sector reforms. The banks have shed their traditional functions and have been

innovating, improving and coming out with new types of services to cater emerging needs of

their customers. Banks have been given greater freedom to frame their own policies. Rapid

advancement of technology has contributed to significant reduction in transaction costs,

facilitated greater diversification of portfolio and improvements in credit delivery of banks.

Prudential norms, in line with international standards, have been put in place for promoting

and enhancing the efficiency of banks. The process of institution building has been

strengthened with several measures in the areas of debt recovery, asset reconstruction and

securitization, consolidation, convergence, mass banking etc.

Despite this commendable progress, serious problem have emerged reflecting in a decline in

productivity and efficiency, and erosion of the profitability of the banking sector. There has

been deterioration in the quality of loan portfolio which, in turn, has come in the way of

banks income generation and enhancement of their capital funds. Inadequacy of capital has

been accompanied by inadequacy of loan loss provisions resulting into the adverse impact on

the depositors and investors confidence. The Government, therefore, set up Narsimha

Committee to look into the problems and recommend measures to improve the health of the

financial system.

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The acceptance of the Narsimha Committee recommendations by the Government has

resulted in transformation of hitherto highly regimented and over bureaucratized banking

system into market driven and extremely competitive one.

The massive and speedy expansion and diversification of banking has not been without its

strains. The banking industry is entering a new phase in which it will be facing increasing

competition from non-banks not only in the domestic market but in the international markets

also. The operational structure of banking in India is expected to undergo a profound change

during the next decade. With the emergence of new private banks, the private bank sector has

become enriched and diversified with focus spread to the wholesale as well as retail banking.

The existing banks have wide branch network and geographic spread, whereas the new

private banks have the clout of massive capital, lean personnel component, the expertise in

developing sophisticated financial products and use of state-of-the-art technology.

Gradual deregulation that is being ushered in while stimulating the competition would also

facilitate forging mutually beneficial relationships, which would ultimately enhance the

quality and content of banking. In the final phase, the banking system in India will give a

good account of itself only with the combined efforts of cooperative banks, regional rural

banks and development banking institutions which are expected to provide an adequate

number of effective retail outlets to meet the emerging socio-economic challenges during the

next two decades. The electronic age has also affected the banking system, leading to very

fast electronic fund transfer. However, the development of electronic banking has also led to

new areas of risk such as data security and integrity requiring new techniques of risk

management.

Cooperative (mutual) banks are an important part of many financial systems. In a number of

countries, they are among the largest financial institutions when considered as a group.

Moreover, the share of cooperative banks has been increasing in recent years; in the sample

of banks in advanced economies and emerging markets analyzed in this paper, the market

share of cooperative banks in terms of total banking sector assets increased from about 9

percent in mid- 1990s to about 14 percent in 2004.

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Industry scenario of Indian Banking Industry:

The growth in the Indian Banking Industry has been more qualitative than quantitative and it

is expected to remain the same in the coming years. Based on the projections made in the

"India Vision 2020" prepared by the Planning Commission and the Draft 10th Plan, the report

forecasts that the pace of expansion in the balance-sheets of banks is likely to decelerate. The

total assets of all scheduled commercial banks by end-March 2010 are estimated at Rs 40,

90,000 crores. That will comprise about 65 per cent of GDP at current market prices as

compared to 67 per cent in 2002-03. Bank assets are expected to grow at an annual composite

rate of 13.4 per cent during the rest of the decade as against the growth rate of 16.7 per cent

that existed between 1994-95 and 2002-03. It is expected that there will be large additions to

the capital base and reserves on the liability side.

The Indian Banking industry, which is governed by the Banking Regulation Act of India,

1949 can be broadly classified into two major categories, non-scheduled banks and scheduled

banks. Scheduled banks comprise commercial banks and the co-operative banks. In terms of

ownership, commercial banks can be further grouped into nationalized banks, the State Bank

of India and its group banks, regional rural banks and private sector banks (the old/ new

domestic and foreign). These banks have over 67,000 branches spread across the country.

The Public Sector Banks (PSBs), which are the base of the Banking sector in India account

for more than 78 per cent of the total banking industry assets.

Unfortunately they are burdened with excessive Non Performing assets (NPAs), massive

manpower and lack of modern technology. On the other hand the Private Sector Banks are

making tremendous progress. They are leaders in Internet banking, mobile banking, phone

banking, ATMs. As far as foreign banks are concerned they are likely to succeed in the

Indian Banking Industry.

As far as the present scenario is concerned the Banking Industry in India is going through a

transitional phase. The first phase of financial reforms resulted in the nationalization of 14

major banks in 1969 and resulted in a shift from Class banking to Mass banking. This in turn

resulted in a significant growth in the geographical coverage of banks. Every bank had to

earmark a minimum percentage of their loan portfolio to sectors identified as “priority

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sectors”. The manufacturing sector also grew during the 1970s in protected environs and the

banking sector was a critical source. The next wave of reforms saw the nationalization of 6

more commercial banks in 1980. Since then the number of scheduled commercial banks

increased four-fold and the number of bank branches increased eight-fold.

After the second phase of financial sector reforms and liberalization of the sector in the early

nineties, the Public Sector Banks (PSB) s found it extremely difficult to compete with the

new private sector banks and the foreign banks. The new private sector banks first made their

appearance after the guidelines permitting them were issued in January 1993. Eight new

private sector banks are presently in operation. These banks due to their late start have access

to state-of-the-art technology, which in turn helps them to save on manpower costs and

provide better services.

During the year 2000, the State Bank of India (SBI) and its 7 associates accounted for a 25

percent share in deposits and 28.1 percent share in credit. The 20 nationalized banks

accounted for 53.2 percent of the deposits and 47.5 percent of credit during the same period.

The share of foreign banks (numbering 42), regional rural banks and other scheduled

commercial banks accounted for 5.7 percent, 3.9 percent and 12.2 percent respectively in

deposits and 8.41 percent, 3.14 percent and 12.85 percent respectively in credit during the

year 2000.

Current Scenario:

The industry is currently in a transition phase. On the one hand, the PSBs, which are the

mainstay of the Indian Banking system, are in the process of shedding their flab in terms of

excessive manpower, excessive non Performing Assets (Naps) and excessive governmental

equity, while on the other hand the private sector banks are consolidating themselves through

mergers and acquisitions.

PSBs, which currently account for more than 78 percent of total banking industry assets are

saddled with NPAs (a mind-boggling Rs 830 billion in 2000), falling revenues from

traditional sources, lack of modern technology and a massive workforce while the new

private sector banks are forging ahead and rewriting the traditional banking business model

by way of their sheer innovation and service. The PSBs are of course currently working out

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challenging strategies even as 20 percent of their massive employee strength has dwindled in

the wake of the successful Voluntary Retirement Schemes (VRS) schemes.

The private players however cannot match the PSB‟s great reach great size and access to low

cost deposits. Therefore one of the means for them to combat the PSBs has been through the

merger and acquisition (M& A) route. Over the last two years, the industry has witnessed

several such instances. For instance, HDFC Bank merger with Times Bank, ICICI Banks

acquisition of ITC Classic, Anagram Finance and Bank of Madura. Centurion Bank, Indusind

Bank, Bank of Punjab, Vysya Bank are said to be on the lookout. The UTI bank- Global

Trust Bank merger however opened a Pandora’s box and brought about the realization that all

was not well in the functioning of many of the private sector banks.

Private sector Banks have pioneered internet banking, phone banking, anywhere banking, and

mobile banking, debit cards, Automatic Teller Machines (ATMs) and combined various other

services and integrated them into the mainstream banking arena, while the PSBs are still

grappling with disgruntled employees in the aftermath of successful VRS schemes. Also,

following India commitment to the WTO agreement in respect of the services sector, foreign

banks, including both new and the existing ones, have been permitted to open up to 12

branches a year with effect from 1998-99 as against the earlier stipulation of 8 branches.

Talks of government dilute their equity from 51 percent to 33 percent in November 2000. It

has also opened up a new opportunity for the takeover of even the PSBs. The FDI rules being

more rationalized in Q1FY02 may also pave the way for foreign banks taking the M& A

route to acquire willing Indian partners. Meanwhile the economic and corporate sector

slowdown has led to an increasing number of banks focusing on the retail segment. Many of

them are also entering the new vistas of Insurance. Banks with their phenomenal reach and a

regular interface with the retail investor are the best placed to enter into the insurance sector.

Banks in India have been allowed to provide fee-based insurance services without risk

participation invest in an insurance company for providing infrastructure and services support

and set up of a separate joint venture insurance company with risk participation.

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Aggregate Performance of the Banking Industry:

Aggregate deposits of scheduled commercial banks increased at a compounded annual

average growth rate (CAGR) of 17.8 percent during 1969-99, while bank credit expanded at a

CAGR of 16.3 percent per annum. Banks‟ investments in government and other approved

securities recorded a CAGR of 18.8 percent per annum during the same period.

In FY01 the economic slowdown resulted in a Gross Domestic Product (GDP) growth of only

6.0 percent as against the previous year’s 6.4 percent. The WPI Index (a measure of inflation)

increased by 7.1 percent as against 3.3 percent in FY00. Similarly, money supply (M3) grew

by around 16.2 percent as against 14.6 percent a year ago.

The growth in aggregate deposits of the scheduled commercial banks at 15.4 percent in FY01

percent was lower than that of 19.3 percent in the previous year, while the growth in credit by

SCBs slowed down to 15.6 percent in FY01 against 23 percent a year ago.

The industrial slowdown also affected the earnings of listed banks. The net profits of 20 listed

banks dropped by 34.43 percent in the quarter ended March 2001. Net profits grew by 40.75

percent in the first quarter of 2000-2001, but dropped to 4.56 percent in the fourth quarter of

2000-2001.

On the Capital Adequacy Ratio (CAR) front while most banks managed to fulfil the norms, it

was a feat achieved with its own share of difficulties. The CAR, which at present is 9.0

percent, is likely to be hiked to 12.0 percent by the year 2004 based on the Basle Committee

recommendations. Any bank that wishes to grow its assets needs to also shore up its capital at

the same time so that its capital as a percentage of the risk-weighted assets is maintained at

the stipulated rate. While the IPO route was a much-fancied one in the early „90s, the current

scenario doesn’t look too attractive for bank majors. Consequently, banks have been forced to

explore other avenues to shore up their capital base. While some are wooing foreign partners

to add to the capital others are employing the M& A route. Many are also going in for right

issues at prices considerably lower than the market prices to woo the investors.

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Challenges Facing by Banking Industry:

The bank marketing is than an approach to market the services profitability. It is a device to

maintain commercial viability. The changing perception of bank marketing has made it a

social process. The significant properties of the holistic concept of management and

marketing has made bank marketing a device to establish a balance between the commercial

and social considerations, often considered to be opposite of each other. A collaboration of

two words banks and marketing thus focuses our attention on the following:

Bank marketing is a managerial approach to survive in highly competitive

Market as well as reliable service delivery to target customers.

It is a social process to sub serve social interests.

It is a fair way of making profits

It is an art to make possible performance-orientation.

It is a professionally tested skill to excel competition.

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1.2 INTRODUCTION TO COMPANY:

SBI (STATE BANK OF INDIA)

State Bank of India (SBI) is India's largest commercial bank. 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 The State Bank

Group includes a network of eight banking subsidiaries and several non-banking subsidiaries

offering merchant banking services, fund management, factoring services, primary dealership

in government securities, credit cards and insurance.

The Eight Banking Subsidiaries are:

1- State Bank of Bikaner and Jaipur (SBBJ)

2- State Bank of Hyderabad (SBH)

3- State Bank of India (SBI)

4- State Bank of Indore (SBIR)

5- State Bank of Mysore (SBM)

6- State Bank of Patiala (SBP)

7- State Bank of Saurashtra (SBS)

8- State Bank of Travancore (SBT)

The origins of State Bank of India date back to 1806 when the Bank of Calcutta (later called

the Bank of Bengal) was established. In 1921, the Bank of Bengal and two other Presidency

banks (Bank of Madras and Bank of Bombay) were amalgamated to form the Imperial Bank

of India. In 1955, the controlling interest in the Imperial Bank of India was acquired by the

Reserve Bank of India and the State Bank of India (SBI) came into existence by an act of

Parliament as successor to the Imperial Bank of India.

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Today, State Bank of India (SBI) has spread its arms around the world and has a network of

branches spanning all time zones. SBI's International Banking Group delivers the full range

of cross-border finance solutions through its four wings - the Domestic division, the Foreign

Offices division, the Foreign Department and the International Services division.

State Bank of India (SBI) (LSE: SBID) is the largest bank in India. If one measures by the

number of branch offices and employees, SBI is the largest bank in the world. Established in

1806 as Bank of Calcutta, it is the oldest commercial bank in the Indian subcontinent. SBI

provides various domestic, international and NRI products and services, through its vast

network in India and overseas. With an asset base of $126 billion and its reach, it is a regional

banking behemoth. The government nationalized the bank in 1955, with the Reserve Bank of

India taking a 60% ownership stake. In recent years the bank has focused on

three priorities, 1), reducing its huge staff through Golden handshake schemes known as the

Voluntary Retirement Scheme, which saw many of its best and brightest defect to the private

sector, 2), computerizing its operations and 3), changing the attitude of its employees

(through an ambitious programme aptly named 'Parivartan' which means change) as a large

number of employees are very rude to customers.

Roots:

The State Bank of India traces its roots to the first decade of 19th century,

when the Bank of Calcutta, later renamed the Bank of Bengal, was established on 2 June

1806. The government amalgamated Bank of Bengal and two other Presidency

banks, namely, the Bank of Bombay (incorporated on 15 April 1840) and the Bank of Madras

on 27 January 1921, and named the reorganized banking entity the Imperial Bank of India.

All these Presidency banks had been incorporated as joint stock companies, and were the

result of the royal charters. The Imperial Bank of India continued as a joint stock company.

Until the establishment of a central bank in India the Imperial Bank and its early predecessors

served as India's central bank, at least in terms of issuing the currency. The State Bank of

India Act 1955, enacted by the Parliament of India, authorized the Reserve Bank of India,

which is the central banking organization of India, to acquire a controlling interest in the

Imperial Bank of India, which was renamed the State Bank of India on 30

April 1955.

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Associate Banks:

There are seven other associate banks that fall under SBI. They all use the "State Bank of"

name followed by the regional headquarters' name. These were originally banks belonging to

princely states before the government nationalized them in 1959. In tune with

the first Five Year Plan, emphasizing the development of rural India, the

government integrated these banks with the State Bank of India to expand its

rural outreach. The State Bank group refers to the seven associates and the parent bank. All

the banks use the same logo of a blue keyhole. Currently, the group is merging all the

associate banks into SBI, which will create a "mega bank", and one hopes, streamline

operations and unlock value.

Foreign Offices:

State Bank of India is present in 32 countries, where it has 84 offices serving

the international needs of the bank's foreign customers, and in some cases conducts retail

operations. The focus of these offices is India-related business.

Foreign Branches:

SBI has branches in these countries:

Australia

Bahrain

Bangladesh

Belgium

Canada

Dubai

France

Germany

Hongkong

Israel

Japan

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Subsidiaries and Joint Ventures:

In addition to the foreign branches above, SBI has these wholly owned subsidiaries and joint

ventures:

Nepal State Bank Limited

SBI Mauritius

Indian Ocean International Bank (Mauritius)

SBI Canada

SBI California

Growth:

State Bank of India has often acted as guarantor to the Indian Government,

most notably during Chandra Shekhar's tenure as Prime Minister of India. With more than

9400 branches and a further 4000+ associate bank branches, the SBI has extensive coverage.

Following its arch-rival ICICI Bank, State Bank of India has electronically

networked most of its metropolitan, urban and semi-urban branches under its Core Banking

System (CBS), with over 4500 branches being incorporated so far. The bank

has the largest ATM network in the country having more than 5600 ATMs [1]. The

State Bank of India has had steady growth over its history, though the Harshad

Mehta scam in 1992 marred its image. In recent years, the bank has sought to

expand its overseas operations by buying foreign banks. It is the only Indian bank to feature

in the top 100 world banks in the Fortune Global 500 rating and various other rankings.

According to the Forbes 2000 listing it tops all Indian companies.

Fortune Global 500 Ranking – 2007:

SBI debuted in the Fortune Global 500[2] at 498 in 2006. In 2007 it moved up to 495. As per

fortune 500-2007 following are the data for SBI in $ million. Revenues 15,119, Profits 1,407,

Assets 187,547, Stockholders' Equity 9,786.

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Group companies:

1. SBI Capital Markets Ltd

2. SBI Mutual Fund (A Trust)

3. SBI Factors and Commercial Services Ltd

4. SBI DFHI Ltd

5. SBI Cards and Payment Services Pvt Ltd

6. SBI Life Insurance Co. Ltd - Bancassurance (Life Insurance)

7. SBI Funds Management Pvt Ltd

8. SBI Canada

IT’S Initiatives:

According to PM Network (December 2006, Vol. 20, No. 12), State Bank of

India launched a project in 2002 to network more than 14,000 domestic and 70 foreign

offices and branches. The first and the second phases of the project have already been

completed and the third phase is still in progress. As of December 2006, over 10,000

branches have been covered. The new infrastructure serves as the bank's backbone, carrying

all applications, such as the IP telephone network, ATM network, Internet banking and

internal e-mail. The new infrastructure has enabled the bank to further grow its

ATM network with plans to add another 3,000 by the end of 2007 raising the total number to

8,600. As of September 20, 2007 SBI has 7236 ATMs.

Corporate Details:

This site provides comprehensive information on State Bank of India or SBI Bank, the

premier Nationalized Indian Bank. State Bank of India is actively involved since 1973 in

non-profit activity called Community Services Banking.

State Bank of India is India's largest bank amongst all public and private sector banks

operating in India. State Bank of India owns and operates the following subsidiaries and Joint

Ventures –

State Bank Of India Credit Card

State Bank Of India Online

State Bank Of India USA

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State Bank Of India Services

State Bank Of India Mutual Funds

State Bank Of India Branch

State Bank Of India NRI Account

Banking Subsidiaries:

State Bank of Bikaner and Jaipur (SBBJ)

State Bank of Hyderabad (SBH)

State Bank of Indore (SBI)

State Bank of Mysore (SBM)

State Bank of Patiala (SBP)

State Bank of Saurashtra (SBS)

State Bank of Travancore (SBT)

Foreign Subsidiaries:

State bank of India International (Mauritius) Ltd.

State Bank of India (California).

State Bank of India (Canada).

INMB Bank Ltd, Lagos.

Non- Banking Subsidiaries:

SBI Capital Markets Ltd (SBICAP)

SBI Funds Management Pvt Ltd (SBI FUNDS)

SBI DFHI Ltd (SBI DFHI)

SBI Factors and Commercial Services Pvt Ltd (SBI FACTORS)

SBI Cards & Payments Services Pvt. Ltd. (SBICPSL)

Joint ventures:

SBI Life Insurance Company Ltd (SBI LIFE).

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Activities:

State Bank of India administrative structure is well equipped to oversee the large network of

branches in India and abroad. The State Bank of India 14 Local Head Offices and 57 Zonal

Offices are located at important cities spread throughout the country. State Bank of India has

52 foreign offices in 34 countries across the globe. The Corporate Accounts Group is a

Strategic Business Unit of the Bank set up exclusively to fulfil the specialized banking needs

of top corporate in the country.

The main activities of are into -

Personal Banking.

NRI Services.

Agriculture.

International.

Corporate.

SME.

Domestic Treasury

State Bank of India offers the following services to its customers -

Domestic Treasury.

SBI Vishwa Yatra Foreign Travel Card.

Broking Services

Revised Service Charge.

ATM Services.

Internet Banking.

E-Pay.

E-Rail.

Safe Deposit Lockers.

Gift Cheques.

MICR Codes.

Foreign Inward Remittances.

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Moreover, State Bank of India has Colleges/Institutes/Training Centres that are the seats of

learning and research and development. It caters not only to the employees of State Bank of

India but also other banks/establishments in India and abroad.

Performance:

SBI Bank India had Total Income of Rs 68376.83 crore for the financial year 2006 -07. State

Bank of India has posted Net Income to the tune of Rs 6364.38 crore or the financial year

2006 -07.

Organization:

State Bank of India is headed by Mr. Shri O. P. Bhatt, Chairman.

ICICI BANK:-

Figure No: 1.1

COMPANY PROFILE OF ICICI:

ICICI Bank is India's second-largest bank with total assets of Rs. 3,849.70 billion (US$ 82

billion) at September 30, 2008 and profit after tax Rs. 17.42 billion for the half year ended

September 30, 2008. The Bank has a network of about 1,400 branches and 4,530 ATMs in

India and presence in 18 countries. 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 specialized subsidiaries and affiliates in the areas of investment banking, life and

non-life insurance, venture capital and asset management. The Bank currently has

subsidiaries in the United Kingdom, Russia and Canada, branches in United States,

Singapore, Bahrain, Hong Kong, Sri Lanka, Qatar and Dubai International Finance Centre

and representative offices in United Arab Emirates, China, South Africa, Bangladesh,

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Thailand, Malaysia and Indonesia. Our UK subsidiary has established branches in Belgium

and Germany.

ICICI Bank's equity shares are listed in India on 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).

HISTORY:

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.

The merger would enhance value for ICICI shareholders through the merged entity's access

26 | P a g e

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 Ahmadabad 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. ICICI Bank has formulated a Code of Business Conduct and Ethics for its directors

and employees.

NRI BANKING:

Money Transfer

Bank accounts

Investments

Property Solutions

Insurance

Loans

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1.3 INTRODUCTION TO TOPIC:-

SBI HOME LOANS:

"The most preferred home loan provider" voted in AWAAZ Consumer Awards along with

the most preferred bank award in a survey conducted by TV 18 in association with AC

Nielsen-ORG Marg in 21 cities across India. SBI home loans now offers Interest Rates

concessions on green homes in accordance with SBI's commitment to Environment

protection. SBI Home Loans come to you on the solid foundation of trust and transparency

built in the tradition of State Bank of India.

The bank offers home loans for purchase and/or construction of house property as well as

plot loans. It offers loans for buying resale property and extension/ repair/ renovation/

alteration of an existing house. The bank offers loans schemes known as 'Prashasan Plus',

'Teacher Plus' and 'Oil Plus' to Government Employees, Teachers and employees of public

sector oil companies etc. at concessional rates.

FEATURES

Provision for on the spot “In principle" approval.

Loan sanctioned within 6 days of submission of required documents.

Option to avail Home Loan as a Term Loan or as an Overdraft facility to save on interest

and maximise gains.

Option to club income of your spouse and children to compute eligible loan amount

Provision to club depreciation, expected rent accruals from property proposed to compute

eligible loan amount

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Provision to finance cost of furnishing and consumer durables as part of project cost

Repayment permitted upto 70 years of age

Free personal accident insurance covers upto Rs.40 Lac.

Optional Group Insurance from SBI Life at concessional premium (as part of project cost)

Interest calculated on daily reducing balance basis, and starts from the date of

disbursement.

Special scheme to grant loans to finance Earnest Money Deposits to be paid to Urban

Development Authority/ Housing Board, etc.

Option to avail loan at the place of employment or at the place of construction.

Benefits:-

Complimentary international ATM-Debit card

Complimentary SBI Classic/ International Credit Card.

Option for internet-banking

Concessional package under Credit Khazana for prospective Auto Loan, Student Loan,

Personal Loan borrowers whose accounts are conducted satisfactorily

50% concession in charges in respect of all personal remittances/ collection of outstation

cheques.

Personal loan at attractive rates under SBI Home Plus scheme tailored exclusively for SBI

Home Loan customers.

Purpose:-

Purchase/ Construction of House/ Flat

Purchase of a plot of land for construction of House

Extension/ repair/ renovation/ alteration of an existing House/ Flat

Purchase of Furnishings and Consumer Durables as a part of the project cost.

Takeover of an existing loan from other Banks/ Housing Finance Companies.

Eligibility:-

Minimum age 18 years as on the date of sanction

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Maximum age limit for a Home Loan borrower is fixed at 70 years, i.e. the age by which

the loan should be fully repaid.

Margin:-

Purchase/ Construction of a new House/ Flat/ Plot of land.

20% for loans up to Rs.30 Lacs,

20% for loans above Rs.30 lacs and upto Rs.75 lacs.

25% for loans above Rs.75 lacs.

Processing Fee:-

The revised processing fee structure (including service tax) from 9th November 2009 is as

under:

Table 1.1

LOAN AMOUNT PROCESSING FEE(REVISED)

Up to Rs.5 Lac Rs.1000/-

Above Rs.5 Lac and up to Rs.10 Lac Rs.2000/-

Above Rs.10 Lac and up to Rs.20 Lac Rs.5000/-

Above Rs.20 Lac and up to Rs.50 Lac Rs.7,000/-

Loan amount:-

40 to 60 times of NMI, depending on repayment capacity as % of NMI as under:-

Table 1.2

Net Annual Income EMI/NMI Ratio

Up to 2 lac 40%

Above 2 lac and up to 5 lac 50%

Above 5 lac 55%

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Rate of Interest:-

- Float Interest Rate : 10.25

- Tenure : 20

- Processing Fee : 0.50% of loan amount or max Rs 10000

- Prepayment Charges : 2% on the amount prepaid only in case of takeover

- Statement Charge : NA

New rates:-

Table 1.3 Based on Actual Data

Loan Amt (Rs. Lac) Effective Rate % Per Annum

Up to 30 9.95%

Above 30 and up to 75 10.10%

Above 75 10.10%

Maximum Repayment Period:-

- For applicant’s upto 45 years of age: 25 years

- For applicants over 45 years of age: 15 years

Moratorium:-

Upto 18 months from the date of disbursement of first instalment or 2 months after final

disbursement in respect of loans for construction of new house/ flat (moratorium period will

be included in the maximum repayment period)

Documents:-

Completed application form

Passport size photograph

Proof of Identity PAN Card/ Voters ID/ Passport/ Driving License

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Proof of Residence Recent Telephone Bill/ Electricity Bill/ Property tax receipt/ Passport/

Voters ID

Proof of business address in respect of businessmen/ industrialists

Sale Deed, Agreement of Sale, Letter of Allotment, Non encumbrance certificate, Land/

Building Tax paid receipt etc. (as applicable and subject to satisfaction report from our

empanelled lawyer)

Copy of approved plan and approval from the Local Body

Statement of Bank Account/ Pass Book for last 6 months

SBI-Flexi Home Loans

A customized product designed to enable borrowers to hedge their Home Loan against

unfavourable movement in interest rates. The product gives you a onetime irrevocable

option to choose one of the three customized combinations of fixed and floating interest

rates and also to choose the order in which the fixed and floating rate will be availed.

Minimum Loan Amount: Rs.5 lacs

‘SBI-Maxgain ' Home Loans

An innovative and customer-friendly product to enable you to earn optimal yield on your

savings and minimize interest burden on Home Loans, with no extra cost.

The loan is granted as an Overdraft facility with the added flexibility for you to operate

your Home Loan Account like your SB or Current Account.

The product serves to minimize your interest cost by enabling you to park your surplus

funds in SBI-Maxgain (with the benefit to withdraw the surplus funds whenever you

require), specially in the wake of low yields from other deposit/ investment avenues.

Minimum Loan Amount: Rs.5 lacs

(Other terms and conditions - as applicable to regular Home Loans)

SBI-Realty Home Loans

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A unique product if you are on the lookout for a loan to purchase a plot of land for house

construction. The loan is available for a maximum amount of Rs.1 crore and with a

comfortable repayment period of upto 25 years.

You are also eligible to avail another Housing Loan for construction of house on the plot

financed above with the benefit of running both the loans concurrently.

(House construction should commence within 2 years from the date of availment of SBI-

Realty Housing Loan)

Other terms and conditions are applicable to regular Home Loans.

SBI-Freedom Home Loans

A revolutionary product designed for customers who are on the lookout for a source of

finance for a property they want to invest in without mortgaging the same. All you have

to do is pledge any financial security that you have and you will get a Home Loan for

your dream home.

A must-take for those who do not want to pay stamp duty for mortgage of their property

or go through the hassles of creation of mortgage.

You also have an option to take the loan by way of mortgage of the property and pledge

financial securities in lieu of margin money.

Repayment is highly customized, giving you the option to repay through regular EMIs or

through maturity proceeds of the securities pledged.

(Other terms and conditions as applicable to regular Home Loans)

Other Salient Features:-

Inbuilt provision for a ailment of the loans on the expiry of each bloc of 5 years, the first

bloc commencing on the expiry of 5 years from the date of sanction of original Home

Loan.

Original Home Loan and all SBI-Optima Home Loans/SBI-Home Line Personal Loans

can run concurrently

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Comfortable repayment obligations Tenure of the loans equal to the residual maturity of

the original Home Loans -

ICICI HOME LOANS PRODUCT REVIEW:-

Eligibility

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

Loan Amount

With ICICI Bank Home Loans, 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 80% of the

cost of the property or the cost of construction as applicable. A number of factors are taken

into account when assessing your repayment capacity. 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.

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

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If your spouse is earning, put him/her as a co-applicant. The additional income shall be

included to enhance your loan amount. In case of any co-owners they must necessarily be

co-applicants.

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.

Documents required for the Sanctioning of Home Loan

ICICI Bank 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 Loan against Property. We require

the following documents to sanction your Loan against Property:

Duly Completed Application Form

Photograph

Fee cheque

Photo Identity Proof

Signature Verification Proof

Residence Address Proof

Property documents as required

Document specific for Salaried

Last 3 months' salary slips

Form 16

Bank Statement for last 6 months from salary account

Repayment details on any existing loans or loan closure letter

Document specific for Self Employed

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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 months from operating account

Repayment details on existing loans or loan closure letter

Board Resolution in case of a company

Proof of existence of the business entity

Proof of Office Address

Photo Identity Proof, Residence Address Proof, Signature Verification must be provided

for all the main partners / directors

Disbursement of ICICI Bank Home Loan

ICICI Bank Home Loans disburses the loan amount after you identify and select the property

or home that you are purchasing and submit the requisite legal documents.

While one may be under the impression that the list of documents asked for is rather

extensive, please note that it is for customer’s good. Each and every single document asked

for will be verified and checked to ensure your safety.

This may take some time but will complete all the legal and technical verifications to ensure

that one has full rights to his 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.

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.

Property documents (as per P&D for respective states and has asked by empanelled

lawyers for individual cases).

Facility Agreement.

Disbursal Request Form.

Cheque Submission Form - for Pre EMI and EMI cheques.

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ECS or Auto Debit for ICICI Bank account holders or Post Dated Cheques for EMI / Pre

EMI.

Personal Guarantor's Documents (PG Form, Photograph, Identity Proof, Address Proof,

Signature Verification and Income documents, if applicable).

Repayment Terms of Home Loan

In order to make taking a home loan an easy process for you, ICICI Bank Home Loans

address all your queries about the repayment terms of Home Loans with respect to tenure,

home loan EMIs, methods of home loans EMI payments and pre-EMI interest.

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 20 years provided you do not reach the age of 65 years or retire within that period.

Repayment of loan

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

EMI

An EMI refers to an equated monthly instalment. It is a fixed amount which you pay every

month towards your loan. It comprises of both, principal repayment and interest payment.

Start – up of repayment period

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

been made.

Payment of EMI

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

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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.

Consequence of bouncing of PDC’S

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.

Pre-EMI interest

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.

Payment of 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 Home Loan

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 Loans operations in both the cities.

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 bank is always ready to assist its customers in the event of legitimate problems.

And, we might reconsider this if we find that there are satisfactory reasons for the delay.

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If it is refinancing you are interested in, it is possible within 6 months from the date of

purchase of property.

Insurance Plans for Home Loan

Introducing exclusive Home Insurance plans, 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.

ICICI Bank Home Loans presents "HomeSafePlus" & "Home Assure/Health Assure" two

exclusive and innovative insurance plans to insure your Home Loan.

HOME SAFE PLUS:-

Key Benefits of Home Safe Plus:

No medical checkups

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

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

Home Assure/Health Assure:-

Key Benefits of Home Assure/Health Assure:

Life Cover from Home Assure 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

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Dual benefit to customers, Life Cover from Home Assure and Critical Illness Cover from

Health Assure

Dual tax benefits, Section 80C benefits under Home Assure, Section 80D benefits under

Health Assure

Simplified claim procedure

Home loan Schemes

As one of the leading home loan provider, ICICI Bank understands how special building a

new home is for you and our Home Loan help you laid the foundation for your dream home.

ICICI offers you the most convenient home loan plans to suit your needs.

With so many attractive features in every type of home loan we offer, creating the home you

always wanted is no longer a distant dream. Some of our key benefits are:

Guidance throughout the process

Home loan amounts suited to your needs

Home Loan tenure up to 20 years

Simplified documentation

Doorstep delivery of home loan papers

Sanction approval without having selected a property.

Free Personal Accident Insurance (Terms & Conditions)

Insurance options for your home loan at attractive premium

No matter what the requirement, we have an appropriate plan for you. Get the best deals, and

finance your perfect home, only from ICICI Bank.

Changes in Floating Reference Rate (FRR)

Interest rate on ICICI Bank Home Loans is linked to the ICICI Bank Floating Reference Rate

(FRR/PLR). ICICI Bank FRR has been reduced by 50 basis points (i.e. 0.50%) with effect

from June 04, 2009. Thus the FRR has been reduced from 13.25% to 12.75%. ICICI Bank

PLR has also been reduced by 50 basis points (i.e. 0.50%) with effect from June 04, 2009.

Thus the PLR has changed from15.25% to 14.75%.

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Accordingly, the Home Loan floating rate of interest has been reduced by 0.5% (50 basis

points)

CHAPTER -2

LITERATURE REVIEW

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2.1 REVIEW OF LITERATURE

Home loans provided by SBI and ICICI banks and the consumer’s perception regarding it.

This literature was obtained from textbooks, and publication, periodicals research reports, the

company financial documents and Internet among others.

A home buyer or builder can obtain financing either to purchase or secure against the

property from a financial institution, such as a bank or credit union, either directly or

indirectly through intermediaries. Features of mortgage loans such as the size of the loan,

maturity of the loan, interest rate, method of paying off the loan, and other characteristics can

vary considerably. Therefore, not only that the volume of saving and investments should

increase but also larger volumes of capital should flow into housing. Also, accessibility and

terms and condition of housing credit will determine the long term redistribution performance

in housing (Lall Vinay, 2011).

“Housing in the New Millennium: A Home without Equity is Just a Rental with Debt”. The

prospects of the U.S. housing sector over the next several years was studied is based on his

analysis, he believes that, there are elements in place for the housing sector to continue to

experience growth well above GDP. However, he believes that there are risks that can

materially distort the growth prospects of the sector .Specifically, it appears that a large

portion of the housing sector’s growth in the 1990’scame from the easing of the credit

underwriting process” (Joshua Rosner, 2009).

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Public investment in and promotion of homeownership and the home mortgage market often

relies on three justifications to supplement shelter goals to build household wealth and

economic self-sufficiency, to generate positive social psychological states, and to develop

stable neighbourhoods and communities. Homeownership and mortgage obligations do not

inherently further these objectives, however and sometimes undermine them. The most

visible triggers of the recent surge in subprime delinquency have produced calls for

emergency foreclosure avoidance interventions (Jaco Melissa B., 2008).

HDFC comes at the top among all the institutions as far as loan sanctioned, disbursements

and the loan outstanding are concerned, PNB has the last rank for both loans sanctioned and

disbursed. However, the compound growth rate for the loan sanctioned, disbursement and

outstanding has been highest in the case of LICHF. It stood at 26.49%, 30.89%, 36.16%.

Against PNB showed the lowest compound growth rates of 18.62% and 19.90%, for the loan

sanctioned (Jasmindeep, 2006).

There is strong growth in housing loans by financial situations in India; we are still behind

the developed countries in terms of housing loans to GDP ratio. In India it is around

2.5%compared to 57% in the UK and 54% in the US. It shows that there is a vast scope for

housing loans in India. One economist has argued that every rupee spent on the housing

sector will increase the GDP by more than 75 paisa. It also creates a labour intensive. Despite

the immense growth in housing loans there are certain challenges that the banks might face in

the time to come, e.g. falling rate of interest, rising mismatch in the assets and liabilities of

the bank, rising NPA in the housing loan portfolio, etc. ”(Rao, 2005).

The precautions may be taken at the bank level to avoid the assurance of fraud i.e. .KYC

norms be followed, main salary A/c should be verified, loan should be granted against the flat

/ houses built by reputed builders only. An undertaking from the builders for not been sold to

any other person, search report of property to be conducted by the advocate, original title

deeds, property tax, electricity bill, kept on records (Phogat, 2004).

Home loans have been registering exponential growth in India during the last six years. Easy

liquidity conditions, low interest rates, availability of tax shelters on repayment of principal

and interest surging demand from middle income group borrowers, lower regulatory capital,

and the comfort of tangible security have all collectively contributed to the spurt in home

loans. HDFC, ICICI and SBI are the major players in disbursement of home loans. These

43 | P a g e

banks sanction up to 85% of the cost of the property as home loan for a maximum period of

20 to 30 years. (Rao K, 2003).

Commercial banks are grouped into four categories. The study revealed that there is no

significant difference in the growth rate of housing advances by different bank groups in

state. Kruskal Wallis (H-Test) was applied to arrive at this conclusion. The amount of

housing loan disbursed by RRB which was ` 6.09 crore in 1999-2000 rose to 236.35 crore in

2005-06 showing a CGR of 85% which was the highest amount of all categories (Vimala P.

2007).

The home loan sector in India is on a boom. The new class of young buyers, whose

affordability is high, is spending a little more on paying EMI rather than spending huge

amounts on the rents, thereby owning a house. The government is also encouraging this

sector by allowing tax benefits. The housing finance sector shows an exponential growth as

compared to the other areas of credit. The annual growth rates (in %) of direct housing

finance disbursals by the Primary Lending Institution during 2001-02, 2002-03, 2003-04and

2004-05 were 25,76,29 and 32 respectively (Bagchi S, 2008).

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CHAPTER – 3

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RESEARCH

METHODOLOGY

3.1 RESEARCH METHODOLOGY:-

Figure No: 3.1

“If you don’t know where you want to go, any road will get you there”

Every project work is based on certain methodology, which is a way to systematically solve

the problem or attain its objectives. It is very important guideline and lead to completion of

any project work through observation, data collection and data analysis.

3.2 RESEARCH

According to advanced learner’s dictionary of current English

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“Research is search for knowledge” or “Research is systematic efforts to gain knowledge.”

“A careful investigation or inquiry through search for new facts in any branch of knowledge

is called Research.”

Research refers to the systematic method consisting of:

Enunciating the problem,

Formulating a hypothesis,

Collecting the fact or data,

Analyzing the facts and reaching certain conclusions either in the form of solutions

Towards the concerned problem or in certain generals for some theoretical formulation.

Research methodology is a way to systematically solve the research problem. It may be

understood as the science of studying how research is done. Research in the common

parlance refers to a search for knowledge.

Figure No: 3.2

3.3 RESEARCH DESIGN:-

Descriptive research design:

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Descriptive research design has been used in the project because we are well aware about the

problem which is told to us. Only our work is to carry out the research or information on the

specific topic.

3.4 OBJECTIVES OF THE STUDY:-

Main Objective:-

The main objective is “To study the Home Loan procedures provided by SBI AND ICICI

banks”.

Sub objectives:-

Comparative analysis of ICICI and SBI home loan procedures.

To study which bank provides better loan schemes.

3.5 DATA COLLECTION

Figure No: 3.3

To determine the appropriate data for research mainly two kinds of data was collected namely

primary & secondary data as explained below:-

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Methods of Data Collection

PRIMARY

Observation

SECONDARY

Primary data

Primary data are those, which were collected afresh & for the first time and thus happen to be

original in character. However, there are many methods of collecting the primary data

project. The one that have been used is:-

Questionnaire

Secondary data

Secondary data is collected from previous researchers and literature to fill in the respective

project. The secondary data was collected through:-

Annual Reports

Magazines &

Internet

3.6 SAMPLING

Selection of Sample Design:-

Sample size: A Sample size of 100 respondents will be taken for the current study. Out of 100

respondents 50 respondents are taken from ICICI and rest of 50 respondents are taken from

SBI. The samples will be the peoples of age group lying between eighteen to thirty years. The

sample will be taken in the form of strata based on age, sex and income group.

Sampling area: KURUKSHETRA

Sampling technique used:-

The sampling technique will be probabilistic sampling more specifically the judgmental

sampling will be used. I will go for stratified random sampling as we are interested to study

the home loan by SBI and ICICI banks, so we will make the strata on the basis of age,

occupation, income level, and gender and from each stratum we will go for random sampling.

Statistical tools used:-

The main statistical tools used for the collection and analyses of data in this project are:-

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Chi- square test

HYPOTHESIS:

In this research hypothesis is used. According to chi-square test,

H0: There is no significant relationship between satisfaction level of customer & bank

chosen i.e. SBI& ICICI.

H1: There is a significant relationship between satisfaction level of customers &bank

chosen i.e. SBI AND ICICI.

If, Calculated value < Tabulated value

Then, hypothesis is accepted else it’s rejected.

(O-E) 2

χ2= ——— where,

E

O = Observed frequency

E = Expected frequency

3.7 SCOPE OF THE STUDY:-

This study is analysis and comparison of home loans provided by the SBI and ICICI banks. It

is helpful in analyzing the home loan service provided to the customer and their cost

comparison.

3.8 LIMITATIONS OF THE STUDY:-

Efforts had been made to collect the relevant information through the sources available; still

some relevant information could not be gathered

The study is limited to a particular branch of SBI and ICICI bank.

Since the time is less the researcher has taken a sample of 100 people and it will not

reveal the whole population of a country.

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CHAPTER – 4

ANALYSIS &

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INTERPRETATION

4.0 DATA ANALYSIS AND INTERPRETATION

The following information contains the data interpretation of the questionnaires. The

respondent’s responses for the questions have been interpreted and a finding has been made

based on the respondents responses.

Analysis of SBI Respondent’s:

Q1: What is your occupation?

Table 4.1

RESPONDENTS FREQUENCY

Business Man 15

Student 2

Govt employees 22

Other 2

Housewife’s 9

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TOTAL 50

Fig.4.1

Interpretation:-From the above table and the graph it is quite clear that most of the

respondents are either government employees or businessmen thus they will prove to be the

good source of required information.

Q2. From how many years you are associated with SBI bank?

Table 4.2

TIME PERIOD FREQUENCY

Less Than 1 Year 10

1-5 Years 24

More Than 5 Years 16

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Business ManStudent

Govt emplioyeesother

Housewifes

0

5

10

15

20

25

15

2

22

2

9

frequencyoccupation

20%

48%

32%

FREQUENCYLESS THAN 1 YEAR 1 YEAR- 5 YEAR MORE THAAN 5 YEAR

Fig.4.2

Interpretation:-

From the above chart it can be interpreted that 48% of the people are associated with the bank

from more than 1 year while 32% of the people are associated for more than 5 years. Thus it

can be concluded with people have long term relationship with the bank.

Q3. How did you come to know about the home loan schemes provided by SBI bank?

Table 4.3

SOURCES FREQUENCY

Newspaper 20

Television 16

Internet 10

Other sources 4

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newspaper telivision internet Other sources0

2

4

6

8

10

12

14

16

18

20

20

16

10

4

frequency

Fig.4.3

Interpretation:-

From the above information it can be concluded that 40% of the people come to know about

the schemes from newspapers following the television viewers which about 32% . Internet is

also used by people as a source to becomeaware of these things.

Q4. Are you aware about the different home loans which are given below by SBI Bank?

Table 4.4

TYPE OF LOAN FREQUENCY

Home purchase loan 11

Home equity loan 20

Loan constructive loan 6

Home improvement loan 4

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Land purchase loan 9

Home purch

ase lo

an

Home equity

loan

Loan

constr

uctive

loan

Home impro

vemen

t loan

Land purch

ase lo

an02468

101214161820

11

20

64

9

frequency

Fig.4.4

Interpretation:-

From the above chart and table it can be interpreted that most of the people are attracted

towards home equity loan and home purchase loan. 40% of the respondents are attracted

towards home equity loan.

Q5. Are you aware about all terms and conditions for home loans provided by SBI

Bank?

Table 4.5

RESPONSES FREQUENCY

YES 42

NO 8

56 | P a g e

YES NO0

5

10

15

20

25

30

35

40

45

42

8

Fig.4.5

Interpretation:-

From the above data analysis it can be interpreted that 84% of the respondents are aware of

all the terms regarding the loan schemes. Thus it can be concluded that the awareness level of

people in our country is high.

Q6. Are you satisfied with the interest rate charged by SBI bank?

Table 4.6

RESPONSES FREQUENCY

Strongly agree 12

Agree 32

Disagree 4

Strongly disagree 2

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strongly agree agree Disagree strongly disagree0

5

10

15

20

25

30

35

12

32

4 2

frequency

Fig.4.6

Interpretation:-

From the above data it can be concluded that most of the people are satisfied with the interest

rates charged on the loans. They constitute 64% of the total respondents.

Only 4% of the respondents are there who are highly dissatisfied with the prevailing interest

rates.

Q7. Which type of services SBI bank provides?

Table 4.7

RESPONSES FREQUENCY

Internet banking 26

Forex banking 15

Mobile banking 9

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26

15

9

Internet bankingforex bankingmobile banking

Fig.4.7

Interpretation:

From the above data analysis it can be interpreted that internet banking is common among

that people. 52% of the respondent is opting for internet banking. Thus it can be said that

people are shifting from manual banking to internet banking.

Q8. Are you agree that SBI provides quick services for lending procedure of home loans

then other banks?

Table 4.8

RESPONSES FREQUENCY

Strongly agree 8

Agree 28

Disagree 11

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Strongly disagree 3

Strongly agreeAgree

DisagreeStrongly disagree

0

5

10

15

20

25

30

frequency

Series2

Series3

8

28

11

3

frequency

Fig.4.8

Interpretation:-

From the above data it can be interpreted that 56% of the people agree that the processing in

the banks is being done at a very high speed. They are satisfied with the prevailing processing

speed.

Q9. Are you satisfied with the home loan services provided by SBI bank as compared to

other banks?

Table 4.9

RESPONSES FREQUENCY

Strongly agree 12

Agree 30

60 | P a g e

Disagree 4

Strongly disagree 4

Strongly agreeAgree

disagreeStrongly disagree

0

5

10

15

20

25

30

12

30

44

Fig.4.9

Interpretation:-

From the above chart it can be interpreted that 60% that people are satisfied with the loan

schemes of their existing banks as compared to other banks. Even 24% of the people are

highly satisfied with their banks. Only 8% of the people highly oppose it.

Q10. Are you satisfied with the EMI plan of home loan taken by SBI Bank?

Table 4.10

RESPONSES FREQUENCY

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Yes 40

No 10

66%

34%

FREQUENCYYes No

Fig 4.10

Interpretation:-

From the above data it can be interpreted that 80% of the respondents are satisfied with the

cost of the home loans charged by the banks. Thus they are satisfied with the present

framework of the loan schemes.

Q11. Which grade you want to recommend after analyzing all the services provided by

SBI Bank for lending procedure of Home Loan?

Table 4.11

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RESPONSES FREQUENCY

Excellent 24

Good 20

Average 6

Below average 0

FREQUENCY

ExcellentGood AverageBelow average

Fig.4.11

Interpretation:-

From the above data analysis it can be interpreted that 48% of the people excellent grades to

the home loan schemes of the banks and 40% of the people gave good grade to the existing

home loan schemes. It can be concluded that none of the respondent graded the schemes as

below average.

Analysis of ICICI Respondents:-

Q1. What is your occupation?

Table4.12

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RESPONDENTS FREQUENCY

Business Man 17

Student 3

Govt employees 23

other 0

Housewife’s 7

TOTAL 50

Business ManStudent

Govt emplioyeesother

Housewifes

0

5

10

15

20

25

17

3

23

77

Fig.4.12

Interpretation:-

From the above data it can be interpreted that among ICICI respondent also most of them are

either businessmen or government employees.

Q2. From how many years you are associated with ICICI bank?

Table 4.13

RESPONSES FREQUENCY

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Less Than 1 Year 18

1-5 Years 22

More Than 5 Years 10

22

18

16

LESS THAN 1 YEAR1 YEAR- 5 YEARMORE THAAN 5 YEAR

Fig.4.13

Interpretation:-

From the above data it can be interpreted that 44% of the people are associated with the bank

for less than one year while 36% of the respondents are associated for 1-5 years.

Q3. How did you come to know about the home loan schemes provided by ICICI bank?

Table 4 .14

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SOURCES FREQUENCY

Newspaper 14

Television 22

Internet 10

Other sources 4

Newspaper Telivision Internet Other sources0

5

10

15

20

25

14

22

10

4

frequency

Fig.4.14

Interpretation:-

From the above data it can be interpreted that 44% of the respondents got information from

television and 28% of the respondents are getting information by newspaper.

Q4. Are you aware about the different home loans which are given below by ICICI

Bank?

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Table 4.15

TYPE OF LOAN FREQUENCY

Home purchase loan 19

Home equity loan 9

Loan constructive loan 11

Home improvement loan 4

Land purchase loan 7

Home purch

ase lo

an

Home equity

loan

Loan

constr

uctive

loan

Home impro

vemen

t loan

Land purch

ase lo

an02468

101214161820

19

911

4

7

frequency

Fig.4.15

Interpretation:-

From the above chart it can be interpreted that most of the respondents are attracted towards

the home purchase scheme of ICICI bank and 22% of the respondents are attracted towards

loan constructive scheme.

Q5. Are you aware about all terms and conditions for home loans provided by ICICI

Bank?

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Table 4.16

RESPONSES FREQUENCY

YES 42

NO 8

YES NO0

5

10

15

20

25

30

35

40

45

42

8

Fig.4.16

Interpretation:-

From the above data analysis it can be interpreted that most of the people are aware of the

terms and conditions of the loan schemes. They constitute 84% of the total number of

respondents.

Q6. Are you satisfied with the interest rate charged by ICICI bank?

Table 4.17

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RESPONSES FREQUENCY

Strongly agree 12

Agree 32

Disagree 4

Strongly disagree 2

strongly agree agree Disagree strongly disagree0

5

10

15

20

25

30

35

12

32

4 2

frequency

Fig4.17

Interpretation:-

From the above data it can be interpreted that out of 100 respondents 64% of the respondents

are satisfied with the prevailing loan interest rate structures.

Q7. Which type of services ICICI bank provides?

Table 4.18

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RESPONSES FREQUENCY

Internet banking 26

Forex banking 10

Mobile banking 14

26

10

14

Internet bankingforex bankingmobile banking

Fig.4.18

Interpretation:-

From the above data analysis it can be interpreted that out of the total number of respondents

52% of the respondents are fond of internet banking while 20% of the respondents are doing

forex banking.

Q8. Do you agree that ICICI loan providing services is fast?

Table 4.19

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RESPONSES FREQUENCY

Strongly agree 4

Agree 21

Disagree 15

Strongly disagree 10

Strongly agreeAgree

DisagreeStrongly disagree

0

5

10

15

20

25

frequency

Series2

Series3

4

21

15

3

Fig.4.19

Interpretation:-

From the above chart and table it can be concluded that 42% of the respondents are satisfied

with the present processing scheme of loan in ICICI banks while 30% of the respondents are

not satisfied with it.

Q9. Are you satisfied with the home loan services provided by ICICI bank as compared to other banks?

Table 4.20

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RESPONSES FREQUENCY

Strongly agree 14

Agree 31

Disagree 4

Strongly disagree 1

Strongly agreeAgree

disagreeStrongly disagree

0

5

10

15

20

25

30

35

14

31

44

frequency

Fig.4.20

Interpretation:-

From the above data analysis it can be interpreted that 62% of the respondents agree with the

loan services provided by ICICI banks. Only 8% of the respondents are not satisfied.

Q10. Are you satisfied with the EMI amount of home loan taken by ICICI?

Table 4.21

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RESPONSES FREQUENCY

Yes 32

No 18

32

17

YesNo

Fig.4.21

Interpretation:-

From the above data it can be interpreted that 64% of the respondents are of the view that the

cost of the home loans are fair enough. Thus it can be interpreted that the loan schemes of the

bank are perceived positively by the respondents.

Q11. Which grade you want to suggest after analyzing all the services provided by ICICI Bank.

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Table 4.22

RESPONSES FREQUENCY

Excellent 19

Good 22

Average 8

Below average 1

Excellent Good Average Below average0

5

10

15

20

25

19

22

8

0

Fig4.22

Interpretation:-

From the above data analysis it can be concluded that out of 50 respondents 38% of the

respondents gave excellent grade while 40% of them gave good grade. Thus it can be said

that people are highly satisfied with bank loan services.

STATISTICAL TOOLS:-

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Here we have used chi square test as a statistical tool to find out that whether there is any

relation between satisfaction of customers and EMI of home loan.

In this project hypothesis is taken as:

H0: There is no significant relationship between satisfaction level of customer & bank chosen

i.e. SBI& ICICI.

H1: There is a significant relationship between satisfaction level of customers &bank chosen

i.e. SBI AND ICICI.

Data Applying

Table: - 4.23

PARAMETER SBI ICICI TOTAL

Satisfied 42 45 87

Dissatisfied 8 5 13

Total 50 50 100

Table: - 4.24

O E O-E (O-E)2/E

42 43.5 1.5 1.0689

8 6.5 1.5 2.461

45 43.5 1.5 1.0689

5 6.5 1.5 2.461

7.05

LEVEL OF SIGNIFICANCE = 5%

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DEGREES OF FREEDOM = V = (C-1) (R-1) = (3-1) (2-1) =2

CALCULATED VALUE = 7.05

TABULATED VALUE = 3.87

Here calculated values > tabulated value

INFERENCES:-

Since the calculated value is greater than the tabulated value the null hypothesis will be rejected &

thus it can be inferred that there is significant relationship between satisfaction level of customers and

bank chosen.

76 | P a g e

CHAPTER- 5

FINDINGS,

SUGGESTIONS &

CONCLUSION

FINDINGS:

Most of the respondents choose the SBI bank for home loan because the lending

procedure of SBI bank is fast.

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Many of the respondents are saying, the reason to choose the services of the SBI bank is

because they are good in efficient customer service.

The income level of the respondents who are having an account in SBI bank falling under

the income level of Rs. 5,000 – Rs.15.000.

The age group of 25yrs – 35yrs respondents mostly is having an account in SBI bank.

The both gender are equally having an account in SBI bank.

And many of the respondents are not aware of the many services rendered by the SBI

bank. The few are deposit of cash in ATM, request for cheque book in ATM, end of the

day balance in mobile, etc.

Sum Of the respondents choose the ICICI bank is because the bank is more reliable to the

customers.

Many of the respondents are saying the reason to choose the services of the ICICI bank is

because they are good in efficient customer service and efficient complaint handling.

The income level of the respondents who are having an account in ICICI bank falling

under the income level of Rs. 5,000 - Rs.15.000.

The age group of 25yrs - 35yrs respondents mostly is having an account in ICICI bank.

The male gender is mostly having an account in ICICI bank.

Many of the respondents are not aware of the many services rendered by the ICICI bank.

SUGGESTIONS:

Since many of the respondents are not aware of their key services. The bank has to take

some initiatives.

78 | P a g e

The bank can post a list of services that they are rendered to the customers inside the bank

Premises.

They can post demo of all these services in their bank website.

They can concentrate more on the respondents are falling under the age group 25yrs –

35yrs.

The SBI bank can concentrate on customer complaints handling.

The ICICI bank can concentrate on the female gender.

The bank can also send a post to their customers by informing there services and how to

proceed with that and all details they can mention it in the post.

CONCLUSION:

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Since both the banks are competing equally with each other. But SBI bank is little bit below

the line in customer complaints handling when compared to ICICI bank.80% of the

respondents are satisfied with the cost of the home loans charged by the SBI banks. Thus they

are satisfied with the present framework of the loan schemes. 65% of the respondents are

satisfied with the cost of the home loans charged by the ICICI banks.

Thus they are satisfied with the present framework of the loan schemes. Analysis of ICICI

and SBI home loan procedures makes easy to know that SBI bank provides better loan

schemes. The State Bank Group includes a network of eight banking subsidiaries and several

non-banking subsidiaries offering merchant banking services, fund management, factoring

services, primary dealership in government securities, credit cards and insurance. 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 specialized subsidiaries and

affiliates in the areas of investment banking, life and non-life insurance, venture capital and

asset management.

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BIBLIOGRAPHY

REFERENCES

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Following are the referrals used for the collection of data:

IBA Bulletins published by Indian Banks Association (various issues).

Statistical tables relating to banks in India available at the website of Reserve Bank of

India (www.rbi.org.in)

Various journals and magazines issued by the banks from time to time.

Trends and Progress Reports of Reserve Bank of India, RBI Bulletin (various issues).

Reports on Currency and Finance, annual publication of RBI (various issues).

Various speeches delivered by RBI governor from time to time on E-payment system.

Other sources to have an updating of electronic banking transactions and services:

Professional Banker, The Management Accountant and other banking update journals.

Journal of Internet Banking and Commerce, Indian Journals and other publications.

BOOKS:-

Ahmed, Khan Masood, (1992): Banking in India, Anmol publications, New Delhi.

Bilgrami.S.A.R (1982): Growth of Public Sector Banks – A Regional Growth Analysis,

Deep and Deep publication, New Delhi.

Chakrabarthy.K.C (1990): Banking in 1990, Himalaya Publishing House, Bombay.

Dep, Kalpada (1998): “Indian Banking since Independence”. Ashish Publishing House,

New Delhi.

Gupta.S.P (2000): Statistical Methods, Sultan Chand & Sons, New Delhi.

Kothari.C.R (1991): “Investment Banking an\d Customer Service”, Vol. II, Arihant

publishers, Jaipur.

WEBSITES:-

www.businessstandard.com

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www.financialexpress.com

www.rbi.org.in

www.internationalconference.com

www.ijimt.com

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