TABLE OF CONTENTS. No.ContentPage No.

1Overview3-4

2Objective and Methodology 5

3Product Loan Against Property6-7

4New Products & Polices (Tenor)8

5Basic Terms8

6Gross Turnover Scheme9

7Loan Against Property to Salaried Person10

8Banned Profile For LAP10

9Fixed Obligation To Income Ratio11

10Types of Property & General Details11

11Questionnaire 12-13

12References 14

OVERVIEWThe Kotak Mahindra Group was established in 1984 and is already considered one of Indias most reputable financial institutions. They were approved to carry out financial transactions when their flagship company Kotak Mahindra Finance ltd was licensed by the Reserve Bank of India. With the granting of this license to carry banking transactions, banking history was made as it is the first time in India that a company successfully converted into a bank. According to Section 22 of the Banking Regulation Act in 1949, this license gives them full ability to conduct banking business in India.The new banking institution was promoted to the public by Uday S. Kotak, A.A. Pinto, Mr Sidney, and Kotak and Company Ltd as Kotak Capital Management Finance Ltd. They began the promotion on 21st Nov 1985. Their Certificate of Commencement of Business was granted to them on 11th Feb 1986.Like most banks, each customer will have access to over 4500 Automated Teller Machines in India along with over 800000 ATM machines throughout the world. The visa cards issued by KMB can be used at over 50000 businesses across India and at any other place that accepts visa in the world which is over 10 million places. Key group companies and their businessesKotak Mahindra BankKotak Mahindra Finance limited, which is the flagship company of Kotak Mahindra Group, was created in 1985. This is what was then converted in the the Kotak Mahindra Bank in March of 2003. With Kotak Mahindra no a fully operational banking institution, it now can offer services for corporate banking, financing of housing loans, business banking, retail financing, commercial vehicle financing, and any other service that established and licensed banking institutions are able to offer. Kotak Mahindra Capital CompanyThe premier investment bank in India is presently Kotak Mahindra Capital Company Limited. Company mergers and acquisitions, financial advising, and equity service make up the main niche of this investment bank. Kotak SecuritiesOne of Indias largest brokerage and securities distributers is Kotak Securities Ltd. They have proven to be one of the leaders in India for investors of institutional and non-institutional services. Due to their size, the institution is now a huge part of the industry as they have franchises throughout the country. They offer tradition banking and modern services such as online banking and products that can cater to non-institutional investors.Kotak Mahindra PrimeThe former Kotak Mahindra Primus Limited, now known as Kotak Mahindra Prime Limited, was created with the intentions of financing trade of multi utility vehicles along with passenger vehicles in India. Through them, customers are able to obtain financing for both previously owned and brand new vehicles. They also offer wholesale financing options to commercial dealerships in the automobile sales industry.

Kotak Mahindra Asset Management CompanyKotak Mahindra Bank has a subsidiary known as Kotak Mahindra Asset Management Company that serves as an asset manager for Kotak Mahindra Mutual Fund. At any given time, the KMMF is managing funds of more that Rs 20,80 crore. They are also able to provide offers that cater to different levels of risk-return schemes for investors of all kinds. Investing in only government securities, it became the first institution of its kind in India.

Kotak Mahindra Old Mutual Life Insurance LimitedAnother product that is offered by Kotak is life insurance, which is a joint venture between the groups of Kotak Mahindra Bank and Old Mutual plc known as Kotak Mahindra Old Mutual Life Insurance Limited. They assist customers by offering a range of insurance products that are tailored to different stages of each customers life so that they may feel more financially independent.

OBJECTIVE To compare the features and benefits of the loan against property given by banks to the customers. To identify the differences in Eligibility requirements given by banks to the customer. To compare the interest rates on loan against property given by the banks. To understand which bank gives good benefits to the customer, so that the customer takes loan from there bank.

METHODOLOGY To achieve the stated objective, I have used secondary data from internet for the project. I have decided to conduct the survey on loan against property for the DSAs. For survey I have prepared a questionnaire for the DSAs I will be conducting survey and the respondents will be around 25-30.

PRODUCT - LOAN AGAINST PROPERTYCustomers who are self-employed are able to take advantage of taking out loans against their property. Whether the customers are involved in trading wholesale or retail goods, they are able to use this product of loans against property.In India, NBFCs and most other banks offers this product. The best option for customers though would be to use a regular bank as opposed to the NBFC due to the relatively lower interest rate charged compared to NBFC. The most common reason for taking out a loan against property is because a business may need more working capital. When this type of product is being done, the item used as collateral is secured for the duration of the loan which the company taking the loan will use for building new factories, purchasing machines, or capital to complete construction projects. The property used is generally secured by equitable mortgage for the duration. The loans can be taken by using property that is residential or commercial. The purpose of the loans being taken out is to help the customer use their existing assets to help them create more wealth for themselves or their own business. The value of the property that is used against the loan is determined by the lender. This then determines how much they are able to receive for whatever they are putting up as collateral. For whichever item is accepted to be used for this loan, the person receiving the loan can expect to receive up to 50-60% of their items value which again was determined by the lender. Of course, it will take more than just an item to put up as collateral to receive this loan. The institution given the loan will also need to assess your ability to pay back the loan and all interest on time. This is done by providing proof of income as well as a CIBIL report.If you or your business is planning on getting a loan, you will have to have specific documents available. This is to comply with the Know your customers norm, or KYC. You would need to provide your income proof in the copy of a return of your past 3 years, a bank statement, and proof of address. Another requirement is that you can submit a projected profit and loss account with a balance sheet so that the bank will be confident that they cash flow into your business will sufficiently cover the loan repayments.Since the loans are secured, the interest rate is much lower than that of a personal loan with no collateral given. It is also much easy to get loans when you have this property that you are willing to use as collateral. You must be working as either a government employee or with some other well-known and well regarded company in India.You are able to obtain these loans for up 15 years compared to only 5 years for a personal, non-collateral loan. They are easy a lot easier to obtain and easier to pay back due to the longer period of repayment.BANKS FOR COMPARISON Kotak Mahindra Bank HDFC Bank ICICI Bank HSBC Bank

NEW PRODUCTS & POLICESTENOR15 Years tenor can now be given only for Loan against Property: FOIR will be restricted to 100%. Only Residential Property and Commercial Property allowed. LTV in case of Residential Property / Commercial Property = 60% LTV in case of Commercial Property / Residential Property = 55% Commercial Property purchase is also doable, customer to give declaration that he will occupy the property, Maximum LTV shall be 80%. For other products, tenure cannot exceed 10 years.

BASIC TERMSLTV / LCR:LTV stands for the Loan to Value ratio. LCR stands for the Loan to Cost ratio. Banks use these ratios to calculate the loan amount that a person is eligible for on the total cost of the property.FOIR:This stands for Fixed Obligation to Income Ratio. In FOIR calculation, the Bank takes into account the instalments of all other loans previously availed of by the customer, including the home loan applied for. In other words, this ratio includes all the fixed obligations that the customer is supposed to pay regularly on a monthly basis.

GROSS TURNOVER SCHEMECRITERIATarget ProfileManufacturers, Traders, Stockiest and Service industry

Eligible borrowerProprietorship firms, Partnership firms, Private Limited Companies, Closely held limited companies.

Loan AmountMinimum = Rs. 10 LakhsMaximum = Rs. 400 lakhs

TenureLAP 3 years to 15 years

Type of PropertyResidential and Commercial (Not Industrial)

LTVResidential = 65%Commercial = 60%Vacant Property = 55%

Business VintageMinimum 5 Years (3 Years in the same line)

FinancialsMinimum Turnover Rs. 50 LakhsMinimum cash profits Rs. 5 lakhsThere should be increasing trend in turnover and cash profits.In case of multiple entities. One of the entities should comply with minimum business vintage. Eligibility will be calculated on the basis of clubbed income.

CIBILAll applicant>= 650, -1

Additional PointsPositive Net profit for latest 2 years is mandatory.Average banking of last 6 months should be >= 1 times of proposed EMI.

LOAN AGAINST PROPERTY TO SALARIED PERSON Loan against property will be given to the employees who are working with preferred list of companies. Eligibility will be calculated on the bases of Net Income.Net SalaryFOIR

Rs. 55,001 to Rs. 70,00065%

More than Rs. 70,00170%

CAT A Cities

Net SalaryFOIR

Rs. 55,001 to Rs. 70,00065%

More than Rs. 70,00170%

CAT B Cities

BANNED PROFILE FOR LAP Mining Power Iron and Steel Manufacturing Transporter/LogisticsCautious profile also to be kept in mind while sourcing-Auto Ancillary.

FIXED OBLIGATION TO INCOME RATIO (All Existing EMI + Proposed EMI)FOIR = ------------------------------------------------------------------------------------------- (Net Monthly Income after tax prior deduction of obligations)

Obligations - Any other fixed liabilities excluding monthly obligations where EMIs is to be serviced for less than 12 months.

TYPES OF PROPERTY1) Purchase of a plot of land and Construction of a house thereon 2) Construction of a house on plot of land already owned3) Purchase of a new house / flat 4) Purchase of old house / flat. 5) Extend /Renovate/Repair of a house or flat already owned by self 6) Take-over of existing Housing Loan 7) Under construction properties - Approved projects only The property which is legally and technically clear. Loan Tenure - 1 year to 15 years. Acceptable Property Residential Property put to residential use, rented, vacant. Commercial Property put to residential use, commercial use.Questionnaire for DSAs1. Which Bank do you prefer most for Loan against Property?Option: a. Kotak Mahindra Bankb. HDFC Loansc. ICICI Bankd. HSBC Banke. Others:..

2. Reason for choosing Kotak Mahindra BankOption:a. Low Interest Rate b. Quick Approval c. Greater Flexibilityd. Brand Namee. Easy to applyf. Customer of the bankg. Good Relations with the bankh. Others:.

3. The level of satisfaction of LAP provided by Kotak Mahindra Bank:(1 --- 5: bad --- good)a. 1b. 2c. 3d. 4e. 5

4. Loans from banks or other financial institutions were (only one answer for the most substantial loan): From a local bank where personal contacts existed From a local bank where no personal contacts existed

5. Which NBFCs do you prefer most for Loan against Property? 6. Do you trust NBFCs that provide loans?Completely

Somewhat

Dubious

Not at all

7. Which of the following facilities is given more importance in your organisation?(a)Loanfacilities(b)O/Dfacilities(c)Both

8. Which bank or NBFC offers competitive interest rate?.9. Name - ..10. Organisation Name - .11. Gender - O Male O Female12. Phone No. - .13. Email - .

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