CHAPTER I INTRODUCTION

HOME LOAN
The section 5 (b) of the Banking Regulation Act 1949 defines Banking as," Accepting for
the purpose of lending or investment of deposits of money from the public, repayable on
demand or otherwise and withdrawable by cheque, draft or otherwise."
A "home loan" is a credit to a consumer for the purchase or transformation of the
private immovable property he owns or aims to acquire secured either by a mortgage on
immovable property or by a surety commonly used in a Member State for that purpose."

A home loan requires you to pledge your home as the lender's security for repayment of
your loan. The lender agrees to hold the title or deed to your property until you have paid
back your loan plus interest. In simple words a home loan is a fund or the loan which the
buyer has taken from any financial institution or bank to purchase a new home at an
agreed rate of interest specified during the contract.
Home loan is the finance borrowed from a bank or financial institution to buy or modify
a residential real estate property. Any Resident or Non-resident individual who is
planning to buy a house in India can apply for a Home loan. If you have decided
to buy a property in the near future you can even apply for a loan before you select your
property.

SCHEMES OF HOME LOANS:

1) Home loans for construction of new house / flat, purchase of old house/ flat, etc:
Initially, lenders approved a home loan for family/own residence only. After gaining
experience and more importantly to be competitive, lenders now approve loans even
when the applicant has more than one house or flat/apartment. Today there is no general
restriction on the number of houses owned by an individual. The only stipulation is that
the home loan funds should not be used for commercial purposes.
2) Home extension loan:
These loans are given for expanding or extending an existing home. These are some of
the instances for which you could take an Extension Loan.
• To construct an additional room or floor by getting additional FSI granted.
i. Using grills or sliding windows to enclose the balcony.
• Construction of a garden or garage in the building vicinity.

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• Home improvement loan:
Home improvement loans for repairs /renovation including waterproof, plumbing,
compound wall, digging of well/tube-well, flooring/tiling, additions like built-in
cupboards /shelves, internal repairs including replacing doors/windows, etc. A loan for
purchase of household furniture including space-saving furniture (kitchen racks,
cupboards, etc) may also be sanctioned as a home improvement loan.

 Home loan for purchase of housing site:

Here again, initially many banks did not approve such loans. However, market forces
have now made this a universal feature of the home loan market. However, care has been
taken in structuring the schemes for avoiding financing for purchase of land for
speculative lation purposes.
• Home equity loans:
A home equity loan (sometimes abbreviated HEL) is a type of loan in which the borrower
uses the equity in their home as collateral. These loans are sometimes useful to help
finance major home repairs, medical bills or college education. A home equity loan
creates a lien against the borrower's house, and reduces actual home equity.

Home loans
for
construction
of new house
/ flat

Home
Home equity
extension
loans
loan
SCHEMES
OF HOME
LOAN

Home loan
Home
for purchase
improvement
of housing
loan
site

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 Rate of Interest:
The lender decides the rate of interest chargeable on the home loan, taking the following
into consideration:
1. Cost of funds:
The cost of funds is different for each lender, depending upon the mix of liabilities,
liability-raising costs (based on the image of the bank in the market) and with different
costs in different maturity buckets.
2. Tenor of the loan:
Generally, banks have borrowed funds with maturities up to 5 years, and some capital
fund surpluses, which may be available for allocation to home loan assets.
3. Capital allocation costs:
Banks are required to allocate capital based on the risk weight of each class of asset taken
on to the balance sheet.
4. Costs of administering the specific scheme.
5. Swap costs, other funding costs
6. Profit margin
7. Tenure of the loan is an important factor in pricing the loan
8. Special considerations like group lending, which may bring down the
administration or monitoring costs.
9. Competition:
The lender may have to levy interest at market rates, even if his cost plus margin is
higher than competition.

SECURITY:
 A simple registered mortgage or equitable mortgage on the property acquired out of
the loan is taken as security. This is the primary security for the loan.
2) In case of flats of a group housing society, triparilite agreement shall be entered into.
3) In case of jointly owned properties, it should be ensured that all the co-owners and co -
Applicants execute the documents.
STEPS INVOLVED IN GETTING HOME LOAN:
STEP 1:
Submit an Application form along with relevant documents:
The finance company will process customer’s application to check the loan eligibility

3
based on the persons income and personal profile. Usually an up front (non –refundable
fee) of about 0.5-1% of the loan amount must be paid before processing begins.
STEP 2:
Verification of the property and supporting documents:
(Usually takes 5-7 working days after Step1)
A company representative may visit the property as well as the residence to vary
information submitted in the persons application form. Further, a property valuation
maybe carried out by the company to determine the maximum amount they are willing to
lend you. Any references submitted by the person in the Application Form may also be
contacted. The person may be personally interviewed and any further clarifications in the
documents submitted maybe sought.

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INTRODUCTION
A loan advanced to a person to assist in buying a house or flat. India has a well developed

banking system. Most of the banks in India were founded by Indian entrepreneurs and

visionaries in the pre-independence era to provide financial assistance to traders,

agriculturists and budding Indian industrialists. Indian banks have played a significant role in

the development of Indian economy by inculcating the habit of saving in Indians and by

lending finance to Indian industry.

NEED FOR THE STUDY

• To make comparative study of Disbursement of home loans by Commercial banks.

• To know the ideas of customers about home loan products and services.

The following are the objective of the present study:

• The main objective of doing this project is to study the corporate culture
• To analyze Indian home loan market and its growing trends
• To analyze various methods of operating a home loan
• To gain knowledge about various home loan products
• To know various rates available while providing home loan.

SCOPE OF THE STUDY

This study is considered the Indian housing finance industry has grown by leaps and bound in

few years. Total home loans disbursements by banks has risen which witnesses phenomenal

growth from last 5 years. There is greater number of borrowers oh home loans. So by this

study we can find out satisfaction level of customers and problems faced by them in

obtaining home.

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OBJECTIVES OF THE STUDY

• To study the satisfaction level of customers about home loans

• To study the problems faced by customers in obtaining the home loans

RESEARCH METHODOLOGY

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

understood as a science of studying how research is done scientifically. It is necessary for the

researcher to know not only the research method but also the methodology.

Primary Source

In survey approach we had selected a questionnaire method for taking a customer view

because it is feasible from the point of view of our subject and survey purpose.

Secondary Source

It was collected from internal sources. The secondary data was collected on the basis of

organizational file, official records, news papers, magazines, management books, preserved

information in the company’s database and website of the company..

 Data and Methodology:

For the purpose of the present study both primary and
Secondary data were used.
Primary data collected from bank visits, interviewing with
staff etc. secondary data collected from books, websites and newspaper.

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LIMITATIONS OF STUDY

 There was limitation of time to conduct such a big survey in limited available time.

 Lack of data was also the other limitation of the study as some of banks do not have

proper data on topic.

 To access such a large number of customers was difficult because of non-cooperative

attitude of respondents

The present study has got all the limitations of case study method of data collection.

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 CHAPTER 2
REVIEW OF LITERATURE

8
REVIEW OF LITERATURE
Housing finance all over the world are undergoing tremendous changes and have acquired
great significance in the present day context of liberalization, globalization and
modernization of the society. A good number of research works have been undertaken by
individual researchers and institutions invariably dealing with different aspects of housing
finance. A brief review of the major studies which are particularly pertinent for the present
study is attempted here.
In order to undertake the review of literature, detailed review was done in the following
manner: Review of year wise, author wise work done on Customer Satisfaction. Various
 definitions on customer satisfactions were also studied and the ones suiting this research
were taken up in this paper. Review of Studies undertaken on Customer Satisfaction in
general and Service.
Keith and John (1980) brought out a new picture of housing problems. They said that public
housing policy of one sort or another is obviously of great importance in advanced capitalist
systems.
Muthuram,P (1999) opined that housing finance, particularly retail housing finance is
acquiring great importance because of government’s incentives and stability in prices.
Housing finance offers safe, secured, profitable and diversified asset portfolio.
Krishna, R.R and V.V.Ganesh Murthy (1998) observed the views that there is a vast scope
for housing promotion in India and the banks and housing finance companies can play a vital
role in the promotion of housing. They suggested that reduction in the housing loan interest
and simplified procedure for sanctioning housing loan will boost the construction of houses.
Leelamma Kuruvilla (1999) throws light on National Housing Policy and new initiatives in
housing finance. She suggested that the change in the legal frame-work, simplifying the
procedure for housing finance and the active involvements of the Government in the housing
sector will definitely mitigate the housing problem.
 Sector in particular. International studies were also reviewed to understand the work done
so far. After having done this, research studies done on Customer Satisfaction in
 Telecommunication were review at three stages: a) International, b) National and c)
Specific to Assam and North East in India. Review of Regulatory guidelines and survey and
audit done by TRAI was also
 studied for Assam and North East from Customer Satisfaction perspective. (Agarwal, Jain,
2013)

9
Parimal.H.Vyas and Sandip.K.Bhat (1999) who analyse the major housing finance
institutions, critical issues of housing finance, interest rates and the repayment techniques
observed that the restructuring of housing finance institutions by developing appropriate
marketing orientation programmes are necessary to face the challenges in the present day
world of liberalisation and globalisation.
Mohinder Singh (1999) states the magnitude of the housing problem in the country and
various national housing policies of the Government. He reviewed the detailed statistical data
and suggested the following: a) sufficient loan amount free from corruption and a low rate of
interest, b) a country-wide survey to find out the real housing storage, c) standardization for
low cost housing and d) regular monitoring and follow-up action.
Nair,K.N.S and S.G. Jayachandra Raj (1994) observed that Kerala stands unique in the realm
of growth and development. But, even in the wake of state’s rapid expansion in the social
sector, it is to be observed that Kerala projects a dichotomy picture of development
comprising of feeble economic structure along with developed social culture.
Mathurn (1993) opined that the financial burden of investment in housing is generally very
heavy when the owner does not have sufficient funds available to pay for the site and the
entire cost of construction. Hence, he must make arrangements to obtain funds from some
other sources.
Usha Patel (1996) explained that at present housing through bank finance was a part of
bank’s priority sector lending. Besides, every nationalized bank is expected to allocate every
year a specified percentage of deposits and plan for its deployment for financing direct as
well as indirect housing programmes.
Parekh (1988) reported that the future of housing finance is to enhance the loan origination
process for housing throughout the country to develop an institutional network that would
facilitate the origination process, to identify the potential resource base for the system as a
whole and to simplify the legal system with respect to risk management of housing finance
institutions.
Customer Satisfaction Definition Oliver (1980) defines that “Customer satisfaction is a
summary psychological state when the emotions surrounding disconfirmed expectations are
coupled with the consumer‟s prior feelings about consumption experience”. According to
Churchill and Surprenant (1982), “Customer satisfaction is an output, resulting from the
customer‟s pre-purchase comparison of expected performance with perceived actual
performance and incurred cost”. (Agarwal, Singhal, 2013) Parasuraman et al. (1994) have put
further put forward the simple and clear definition for satisfaction. They suggest that

10
satisfaction is influenced by service quality, product 3 quality and price. They researched
satisfaction on a transaction level, implying that the overall satisfaction is a function of
transactions. Yi (1991) opines that the customer satisfaction operates in two different ways:
transaction-specific and general overall. The transaction-specific concept concerns customer
satisfaction as the assessment made after a specific purchase. Overall satisfaction refers to the
customer‟s rating of the brand, based on all encounters and experiences (Johnson and
Fornell, 1991). Customer satisfaction is an important tool that can increase profits by
preventing customers from defecting (Reichheld and Sasser, 1990). Linking to Telecom
Sector; Bei and Chiao (2001) concluded that customer satisfaction has got a positive effect on
customer retention. Fornell (1992) concluded that customer satisfaction heightens customer
loyalty and prevents customer churn (a very important aspect for Telecom Service Providers),
lowers the customers‟ price sensitivity, reduces the costs of failed marketing and of new
customer creation, reduces operating costs due to the increase in the number of customers,
improves the effectiveness of advertising and enhances business reputation. (Agarwal, Jain,
2013)
Deepak.Razdam (1990) reported that the sources of informal savings are seen to be cash and
bank deposits, assets like jewellery, loans from friends and relatives and to a small portion of
funds from money lenders. The Government plan to bring about appropriate changes in the
16 approaches of the existing financial institutions so as to make them more responsible and
accessible to households.
Kurana, M.L (1998) analysed the magnitude of the housing problem, housing finance
companies, legal aspects of housing cooperatives and procedural simplification of housing
loans. He suggested the necessity for education and training for the members of the housing
co-operatives and also the legal aspects including the adoption of model law formed by the
Central Government.
Customer Satisfaction Studies- Overall Customer satisfaction has been a popular topic in
marketing practice and academic research since Cardozo's (1965) initial study of customer
effort, expectations and satisfaction. Customer satisfaction is typically defined as a post
consumption evaluative judgment concerning a specific product or service (Gundersen, Heide
and Olsson, 1996). It is the result of an evaluative process that contrasts pre-purchase
expectations with perceptions of performance during and after the consumption experience
(Oliver, 1980). The most widely accepted conceptualization of the customer satisfaction
concept is the expectancy disconfirmation theory (McQuitty, Finn and Wiley, 2000). The
theory was developed by Oliver, who proposed that satisfaction level is a result of the

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difference between expected and perceived performance.
A study conducted by Akan (1995) showed that the main determinants of hotel guest
satisfaction are the behavior of employees, cleanliness and timeliness. Choi and Chu (2001)
concluded that staff quality, room qualities and value are the top three hotel factors that
determine traveler‟s satisfaction. Customer service is a system of activities that comprises
customer support systems, complaint processing, speed of complaint processing, ease of
reporting complaint and friendliness when reporting complaint (Kim, Park and Jeong, 2004).
Customer services 5 are the opportunities for telecom service providers that are added to
mobile network other than voice services in which contents are either self produced by
service provider or provided through strategic compliance with service provider (Kuo, Wu
and Deng, 2009).
Berry et al., (1990) are of the view that the sole judge of service quality is the customer and
to get a positive feedback from him; the service companies should implement the five
imperatives of service quality viz. Reliability, Assurance, Tangibles, Empathy and
Responsiveness in their services. The authors have advocated knowing the expectations of
the customers on the said fronts and further measuring their actual perception. It becomes
imperative for service companies to improve themselves on whichever front expectations of
the customers outscores their perception.
Reichheld and Sasser (1990) have suggested “Zero Defection of Profitable Customers” as an
ideal approach to attain higher profitability in service sector. Their assertion is based on the
fact that it is less costly and hence more profitable for the service firms to retain existing
profitable customers than to attract new customers. The profitable customers not only add to
the profits of the companies but also bring new customers in their kitty by spreading positive
word of mouth.
Pyanne and Ballantyne (1991) have observed that satisfied banking customers initially
become friends of the bank, then they become supporters and finally advocates. Thus, the
starting point of any relationship marketing endeavour of any bank should be to leave no
stone unturned in satisfying customers to a desired extent. This, in turn, is possible if and
only if the bank is keeping a ‘service quality’ focus.
Rust and Zoharik (1993) have developed a mathematical model for assessing the value that
any bank could attach to different elements of customer satisfaction. They have suggested
that banks may adopt their model to get the best result of their endeavour leading to customer
satisfaction.
Keavency (1995) has noticed that factors such as core service failure, service encounter

12
failure and inappropriate pricing as most important factors contributing to ‘Customer Switch’
in banking industry. The author has recommended following ways to avoid customer churn:
Designing the service in the right earnest.
Ensuring that employees stick to the designed service while interacting with customers.
Involving customers while setting the price in banking industry so that the same may be
customer centric.
Herbig et al., (1996) have found that service quality in banks is better in developed countries
in comparison to developing and under-developed countries. The authors are of the view that
banks in underdeveloped and developing countries are still undermining the importance of
service quality in retaining customers on sustained basis. This may not, however, continue for
a long period as customers in such countries have started becoming more demanding on
account of intensifying competition in the banking industry of these countries.
Buttle (1996) has viewed that since its launch in 1985, SERVQUAL has become a widely
adopted technique for measuring service quality. However, there is a need to deliberate upon
the ‘expectations’ aspect of the model as the same is reflected in perception itself. The author
has opined that low perception score itself convey high customer expectations while high
perception score signify that expectations are met to a desired extent. Moreover, expectations
of modern day customers are always sky high and comparing it with perception does not
make too much of a sense.
Yavas et al., (1997) in their study have revealed a positive relationship between customers’
satisfaction through service quality and their long term commitment to the bank. Further, the
relationship between service quality and complaint behaviour of the customers, was found to
be negative. Better the quality, lower will be the number of complaints received from the
customers and vice-versa.

Sarkar and Das (1997) have compared the productivity of public, private and foreign banks
operating in Indian and have observed that public sector banks are lagging way behind the
other banks on this front. The prominent reasons behind poor performance of public sector
banks have been found to be:
 Overstaffing.
 Perusal of social banking.
 Undue interference of Government in their working.

Storbacka et al., (1994) had worked on Managing Customer Relationships for Profit: The

13
Dynamics of Relationship Quality. They observed customer-relationship economic issues,
more specifically the link between service quality and profitability from a relationship
marketing and management perspective. In this perspective the task of marketing is not only
to establish customer relationships, but also to maintain and enhance them in order to
improve customer profitability. Customer relationship economics and customer profitability.
The said linkages are the links between:
 Service quality and customer satisfaction.
 Customer satisfaction and relationship strength.
 Relationship strength and relationship longitivity; and
 Relationship longitivity and profitability.

Russell and Russell (1999) worked on Relationship marketing in private banking in South
Africa .This study establish which criteria people use in the selection of a private bank. It
aimed to establish whether relationship marketing was an appropriate framework within the
private banking environment. Price prevails as the most important criteria in the selection of a
private bank. This is moderated by trust, service quality and the bank being available at a
time of crisis. The results show that relationships are important criteria in the selection of a
private bank. It also shows that the Beatty et al. (1996) model, originally developed for the
retail industry, can be applied to the private banking environment. Relationship marketing is
working well in private banks because this study shows that clients are more likely to be
retained by the bank when they have a personal banker or consultant. Consistency of the bank
service, and trust the client has in the bank, need to be enhanced to ensure the relationship
develops to a level where there is friendship and confidence.
Parsuraman (2000) has concluded that conventional marketing will merely become a ticket to
enter in the competitive service industry. To stay and prosper, the service providers would
require a genuine commitment to serve customers well. This demands a through change in
their existing outlook. They need to come out with everything that can enhance the
satisfaction level of their customers.
Jamal and Naser (2002) they worked on Customer satisfaction and retail banking: an
assessment of some of the key antecedents of customer satisfaction in retail banking they
explained how Understanding of the antecedents to and outcomes of customer satisfaction is
a critical issue for both academics and bank marketers. Previous research has identified
service quality, expectations, disconfirmation, performance, desires, affect and equity as
important antecedents of customer satisfaction. The impact of service quality dimensions and

14
customer expertise on satisfaction.
Nakan and Weintraub (2005) have observed that privatization of some public banks in Brazil
has resulted in improving their productivity. Such banks have come out of the shackles of
Government control and on account of less bureaucratic hurdles; they are spreading their
wings in right direction.
Agarwal (2007) has concluded that productivity of commercial banks in India including
nationalized banks has improved substantially in the post reforms period. Advent of
competition, perhaps, has been a motivating force for them to change their thinking and
working. Indian banks have the potential to be world leaders provided they enjoy the freedom
and willingness to grow.
Walsh et al,. (2008) had worked on investigating the customer satisfaction-loyalty Link
Research on the relationship between customer satisfaction and customer loyalty has
advanced to a stage that requires a more thorough examination of moderator variables.
Limited research shows how moderators influence the relationship between customer
satisfaction and customer loyalty in a service context; this article aims to present empirical
evidence of the conditions in which the satisfaction-loyalty relationship becomes stronger or
weaker. The empirical results suggest that not all of the moderators considered influence the
satisfaction-loyalty link. Specifically, critical incidents and income are important moderators
of the relationship between customer satisfaction and customer loyalty.
Sharma (2008 and 2009), highlighted the role of technology and computerization in the
growth and development of Indian banks. Their prominent use in last few years has brought
Indian banks at par with best in the world. The way Indian banking industry has grown leaps
and bounds in last few years has something to do with technological advances in the same.
 Kirubaharan (2009) has found HSBC Bank wanting on following counts:
 Providing services to all groups of customers.
 Inadequate branches in India.
 Lack of coverage of Indian market.

HSBC Bank can improve its image provided it takes care of above factors.
Kumar et al., (2009) while evaluating the relative importance of different dimensions of
service quality in the mind of the customers of Indian commercial banks, came to the
conclusion that reliability is most sought by them while tangibility has least preference of
theirs.

15
Housing is a primary human need next in importance only to food and clothing. A first
priority for a youngster who begins life is therefore to plan for a house. This takes precedence
over other household expenditure and creature needs. Housing, however, is a major
expenditure and cannot be funded out of a family's normal monthly income or savings. The
prospective homeowner must look for a loan substantial in size and so structured that he can
repay it over a longer period of time, in many cases almost one's entire working life.
Loan is offered to a borrower to purchase or build a new house on the basis of his/her
eligibility and the bank's lending rules. One of the important basic human needs is shelter.
House is the ultimate dream of every middle class family. Government gave encouragement
for house finance subsidiaries by offering number of tax concessions to individuals. With the
overall encouragement given to this sector, a number of players entered in housing finance.
One of the most important benefits of taking a home loan is the interest rate that is allowed
on the home loan. Fixed and variable interest rate options are also available for home loans.
Many financiers also offer home improvement loans at the same interest rate as they offer the
home loans.

STEP 3:
Sanction of the loan:
(Usually on the 7th working days after Step 1
A sanction letter is issued which the customer will have to sign. This letter will contain
the amount and the terms of the loan. Some companies specify the period for which the
loan sanction is valid. The person will have to pay a Commitment fee (normally 1% of
the unutilized loan amount) if you do not draw on the entire sanctioned amount before
that period.
STEP 4:
Submission of the original Property documents and signing the loan
Agreement
(Usually on the 8-10th working days after Step 1)
The customer will be required to leave the title deed of the property with the company as
a security for the loan. He will be required to go to the company’s office to execute the
legal loan papers.
STEP 5:
Disbursal of the Loan Cheque

16
 (Usually on the 10 –15 working days after Step 1)
The person can draw the loan in parts depending on the stage of construction of the
building. Until such time that the entire sanctioned amount is NOT drawn, you will pay a
simple interest on the Actual Amount drawn (without any principal repayments). The
EMI payments will commence only after the entire Sanctioned Loan Amount is drawn.

EQUATED MONTHLY INSTALLMENTS (EMI):

The monthly repayment by the applicant is related to his cash flow. There is an element
of interest and of principal in the monthly payments. The interest payable over the period
of the loan is calculated and added to the loan amount to arrive at the total payable
amount .this amount, divide by the total number of monthly installments is called equated
monthly installment (EMI).
CHARGES IN HOME LOAN:
Acquiring a Home Loan doesn’t only involve the cost of home loan interest rates but it
also includes other charges & fee accompanying at various stages of taking the Home
loan. You must consider all these charges while comparing the cost structure across
banks. Following is the detailed fee structure incurred by banks at different loan stages:
• Processing Charge:
It is a fee payable at the time of submitting the loan application to the bank which is
normally non-refundable. The fee ranges between 0.5 per cent and 1 per cent of the loan
amount.
• Administrative Fee:
It is a fee incurred by banks at the time of loan sanction; there are few banks who have
removed this fee so you must check it with all the banks.
• Prepayment Penalties:
When the borrower pre-pays the loan before the loan tenure, banks charge a penalty
which usually varies between 1 per cent and 2 per cent of the pre-paid amount.
• Legal Charges:
Banks also incur some charges from the customer for legal and technical verification of
the property.

• Delayed payment Charges:

When there is a delay in the payment of your EMI, banks charge a late payment fee from
the borrower which normally ranges from 2% to 3% of the EMI.

17
• Cheque bounce charges:
Banks charge between Rs. 250 and Rs. 500 for every bounced cheque towards the loan
payment because of lack of funds in your account.
POINTS CONSIDERED BY BANK WHILE GRANTING HOME LOAN:
The borrower’s eligibility of getting a home loan depend upon his/her repayment capacity
& the banks establish this repayment capacity by considering various factors such
income, spouse's income, age, number of dependants qualifications , assets, liabilities,
stability and continuity of occupation and savings history.
IMPORTANT POINTERS IN HOME LOAN:
• Increase your Loan eligibility
• Credit History:
Your chances of getting a home loan are increased if you have a good credit history
which is known by banks by checking the borrower’s Cibil score. Now it is very hard to
get a loan from another bank when you already have a bad debt with one bank.
• Clubbing of income:
Your eligibility to take a home loan will augment when you club your income with your
spouse’s income, bank in this case will calculate your eligibility on the basis of the
clubbed income of both the applicants. You can club incomes of spouse, children &
parents staying with you and having regular income.

• Enhance your loan tenure:

Longer is the loan tenure, lower will be the EMIs which further increases the repayment
capacity of the borrower & in turn enhances the loan eligibility.
• Step-up Loan:
In this type of loan EMI's remain low in the beginning & increase gradually as and when
the borrower’s spending power increases. Therefore lower EMI's in the initial years
enhances the borrower’s ability to pay & further increases the loan eligibility
• Increase the down payment:
You must know that in a home loan bank finances only 85 to 90% for the property & the
rest amount has to be funded by the borrower. You should increase the down payment if
you have more than required amount which will mitigate your debt considerably.
TAX BENEFITS IN HOME LOAN:
Past record:
The home loan borrower enjoys Tax Benefits on both Interest paid & the Principal re-

18
paid. Under Section 24(d) of Income Tax, the deduction of interest payable on the home
loan is up to a maximum of Rs. 1, 50,000.
Under Section 80(c) of Income Tax, Principal amount for the repayment of loan along
with other savings & investments is eligible for tax deduction up to a
Maximum limit of Rs. 1, 00,000.
Recent changes:
According to the new policy changes of the direct tax code bill introduced in the
parliament in the month of august 2010 only upto Rs 1.5 lakh deduction is allowed on the
interest paid on the housing loan and there is no deduction available on the principal
amount. So if your equated monthly installment is Rs 1.50 lakh, comprising interest and
principal outgo of RS 75000 each, you can avail deduction of only the interest.

ICICI Home Loan, India have been serving the people for around
three decades and providing various housing loan according to their
varied needs at attractive & reasonable interest rates.

Owing to their wide network of financing, ICICI Housing Loans

provides services at your doorstep and helps you find a home as per
your requirements.

Many banks are providing home loans at cheapest rate to attract

consumers towards them. The more customer friendly attitude of these
banks, currently offer to consumers cheapest loan over homes.

In view of acute housing shortage in the country, and keeping in mind the social –
economic

Role of commercial banks in the present times, the RBI advised banks to
encourage the flow of credit for housing finance.

With the RBI reducing bank rate, the home loan market rates nose-diving

by 50 basis points. The ICICI Bank and the Standard Chartered Bank has

become the first player in this sector

To announce a housing loan for a 20 years period. No doubt it will

enhance the end cost people to plan their house over longer duration

19
now; it has been made easy for a person to buy that dream house
which he dreamt of long ago.

ICIC also provides with Home Improvement Loan for internal and
external repairs and other structural improvements like painting,
waterproofing, plumbing and electric works, tiling and flooring, grills and
aluminum windows. ICICI finances up to 85% of the cost of renovation
(100% for existing customers). Current status is that ICICI reduced home
loan rates by 50 basis points for all its existing floating rate

20
 ORGANISATION OF THE STUDY

The study is arranged in a logical pattern First chapter is introduction and it

consists of Introduction of the study, need and importance of the study,
objectives, research methodology, and scope of the study. Second chapter is
Literature review and it consists of Meaning & Definition of loans, Types of
loans, Interest Rates, Disbursement of Loans, Advantages & Disadvantages
of Loans and Literature Surveys. Third chapter is Company Profile which
consists of information about the company where project has been
conducted and includes its history, Mission and Vision, Products and
Services Organizational Structure of ICICI Bank, Financial Performance
and Awards and Achievements.

21
DEFINITION OF LOAN

Loan from companies. Any amount received by a company from another company is not a
deposit as per the provisions of Companies (Acceptance of Deposit) Rules, 2014. It may be a
loan or deposit and generally termed as Inter-Corporate Deposits, yet they are not deposits
under the Companies Act 2013. By Public Company.

MEANING OF LOAN

Written or oral agreement for a temporary transfer of a property (usually cash) from its owner
(the lender) to a borrower who promises to return it according to the terms of the agreement,
usually with interest for its use. If the loan is repayable on the demand of the lender, it is called
a demand loan. If repayable in equal monthly payments, it is an installment loan. If repayable
in lump sum on the loan's maturity (expiration) date, it is a time loan. Banks further classify
their loans into other categories such as consumer, commercial, and industrial loans,
construction and mortgage loans, and secured and unsecured.

IMPORTANCE OF LOANS

Everyone needs money at every stage of their life. Sometimes it so happens that they have keen
desire to purchase their favorite stuff but they are incapable to purchase due to shortage of
money. Loans are provided to people for such critical circumstances which may occur at any
time. In anyone's life a situation may come when all of sudden you require cash. A moment
when you do not want to borrow cash from your relatives. There may occur any kind of
emergency when you need huge amount of money. There are various types of loans like home
loans, personal loans, student loan, business loan etc. You can take any type of loan you need.
For each and every kind of need, loans are available. Home loans are available for general
home purposes like buying a luxurious car, going for a holiday trip, educational purpose, home
improvement etc. Many of your desires can be fulfilled by this loan. Personal loans are
available for personal requirements like wedding ceremony, purchasing a home etc. Student
loan as it itself suggest is that it is provided basically to students for higher education.

22
Students who want to study more but cannot afford can get apply for such loans and continue
their studies.

INTEREST RATES

Interest rate is the amount charged, expressed as a percentage of principal, by a lender to a

borrower for the use of assets. Interest rates are typically noted on an annual basis, known as
the annual percentage rate (APR). The assets borrowed could include cash, consumer goods,
and large assets such as a vehicle or building.

TYPES OF INTEREST RATES FIXED INTEREST RATE

A fixed interest rate loan is a loan where the interest rate doesn't fluctuate during the fixed rate
period of the loan. This allows the borrower to accurately predict their future payments.
Variable rate loans, by contrast, are anchored to the prevailing discount rate. A fixed interest
rate is based on the lender's assumptions about the average discount rate over the fixed rate
period. For example, when the discount rate is historically low, fixed rates are normally higher
than variable rates because interest rates are more likely to rise during the fixed rate period.
Conversely, when interest rates are historically high, lenders normally offer a discount to
borrowers to fix their interest rate over time, as rates are more likely to fall during the fixed
rate period.

FLOATING INTEREST RATE

A floating interest rate, also known as a variable or adjustable rate, refers to any type of debt
instrument, such as a loan, bond, mortgage, or credit that does not have a fixed rate of interest
over the life of the instrument.

Floating interest rates typically change based on a reference rate (a benchmark of any financial
factor, such as the Consumer Price Index). One of the most common reference rates to use as
the basis for applying floating interest rates is the London Inter-bank Offered Rate, or LIBOR
(the rates at which large banks lend to each other)

23
TYPES OF LOANS

Loans can be utilized for various things in today’s world. It can be used for funding a start- up
to buying appliances for your newly purchased house. Let us talk about the different types of
loans available in the market and their specific characteristics that make these loans useful to
the customers.

Personal Loans

Most banks offer personal loans to their customers and the money can be used for any expense
like paying a bill or purchasing a new television. Generally, these loans are unsecured loans.
The lender or the bank needs certain documents like proof of assets, proof on income, etc.
before approving the personal loan amount. The borrower must have enough assets or income
to repay the loan. In case of personal loans, the application is 1 or 2 pages in length. The
borrower gets to know about the denial or approval of the loan within a couple of days. You
must remember that the rate of interest associated with these loans can be on the higher side.
The tenure of these loans is not that long. So, if you borrow a big amount, it can be difficult for
you to repay without planning your finances properly. Personal loans can prove to be of great
help when you wish to take a small loan and repay it as soon as possible.

Credit Card Loans

When you are using a credit card, you must understand that you will have to repay for all the
purchases you make at the end of the billing cycle. Credit cards are accepted almost
everywhere, even when you are travelling abroad. As it is one of the most convenient ways to
pay for the things you buy, it has become a popular loan type. 12 In order to apply and avail a
credit card, all you need to do is fill out a simple application form provided by the card issuer.
You can also choose to apply for a credit card online. These plastic cards come with great
rewards and benefits. It’s the loan where you need to repay on time but you are also
handsomely rewarded for using it. Obviously, there are pitfalls associated with this type of
loan. You must understand that there is a high amount of interest on the amounts you borrow
on your credit card. If you do not pay your credit card bills on time, the interests will keep
piling and might be difficult for you to manage your finances with the rising outstanding
balance. But if you use a credit card wisely and clear all your debts on time, it can definitely
prove to your best friend in your pocket.

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Home Loans

When you wish to purchase a house, a home loan can help you to a great extent. It provides
you the financial support and helps you buy the house for yourself and your loved ones.
These loans generally come with longer tenures (20 years to 30 years). The rate offered by
some of the top banks in India with their home loans start at 8.30%. Your credit score is
checked before the loan request is approved by the lender. If you have a good credit score,
there is a fair chance that you will be able to enjoy lower rates of interest with your home loan.
Home loans are primarily taken for buying new homes. However, this loan can also be used for
home renovations, home extensions, purchasing land property, under-construction houses, etc.
Some of the types of home loan that are available in the market include home loans for repair
and extension, top-up loans, land purchase loan, loan against property, etc.

Car Loans

Buying a car can definitely instill a great sense of joy and happiness in you. A car will remain
as your asset and it is going to be one of the biggest investments that you make. A car loan
helps you to pave the path between your dream of owning a car and actually buying your car.
Since credit reports are crucial for judging your eligibility towards any loan, it is good to have
a high credit score when you apply for a car loan. The loan application will get approved easily
and you might get a lower rate of interest associated with the loan. Car loans are secured loans.
If you fail to pay your installments, the lender will take back your car and recover the
outstanding debt.

Two-Wheeler Loans

A two-wheeler is pretty essential in today’s world. May it be going for a long ride or a busy
road in a city – bikes and scooters help you to commute conveniently. A two-wheeler loan is
easy to apply for. This amount you borrow under this loan type helps you to purchase a two- 13
wheeler. But if you do not pay the installments on time and clear your debt, the insurer will
take your two-wheeler to recover the loan amount.

Education Loans

If you wish to get higher education in a reputed university in a different country, education
loans can help you a lot. These loans are opted by students who wish to study further but need

25
financial support for pursuing the courses. An education loan covers expenses like

college/university fees, library charges, travel costs related to their course, etc. In order to be
eligible for an education loan, you must submit all the required documents including invitation
letter from the university, educational qualification certificates, etc.

Loan against the Insurance Schemes

If your insurance scheme is eligible for a loan, you can avail the loan amount from your
insurer. You may also use the investment for insurance as collateral. Generally, loans cannot be
availed right from the commencement of the insurance policy. After 3 years into the scheme,
you can apply for a loan.

Loan against Fixed Deposit

This is a type of loan where your fixed deposit is the collateral. For example, if you have a
fixed deposit of Rs.10 lakh in the bank, you can avail a loan of up to Rs.8 laky. . However, the
rate of interest associated with this kind of a loan is usually higher than the fixed deposit rate.

Loan against Mutual Funds and Shares

Certain lenders provide loan against your mutual fund value and share value. However, you
will not be able to borrow huge amounts under this type of loans.

DISBURSEMENT OF HOME LOANS

The every bank has its own procedure to disburse the loan amount among customers. After
choosing your right home, the next step is disbursement of home loans. The loan amount is
disbursed after identifying and selecting the property or home that are purchased and submit
the requisite legal documents. In the disbursement of home loans a clear title and full
verification to ensure that a person has full rights on his house. The 230A clearance of seller
and /or 371 clearances from the appropriate authority of income tax are also needed.

(I) Eligibility criteria

However, if one is a resident or non-resident individual who is planning to buy a house in
India, one can apply for a home loan. If a person has decided to buy a property in the near
future, he/she can apply for a loan before even selecting the property. Once the maximum

26
amount to put into the property has been decided, the Housing Finance Institutions or Banks
will let the customer know that how much he/she is eligible for and this helps to plan out the
budget.

(ii) Conditions regarding co-applicants

All Housing Finance Institutions lay down conditions on who can be co-applicants. All co
owners to the property. Need to be co-applicants to the loan necessarily. These institutions do
not permit minors to join in as either co-owner or as co-applicants because a minor is not
eligible to enter into a contact as per law. They do not permit even friends or relatives who are
not blood relatives to take a property jointly. However, Income of co-applicants can be clubbed
together to get higher loan eligibility. Given below is a Table that throws light on acceptable
relationship of a co-applicant for clubbing of income.

(iii) General Terms and Conditions

The following are the terms and conditions applicable to the basic home loan product only.
These are likely to change on the basis of the variations of the home loan product. Typically, in
general home loans, the following conditions are applicable. The loan to value ratio (LTV)
cannot exceed a particular percentage. This differs from product to product and from one
Housing Finance Institutional Bank (HFI/B) to another. The components of the value of the
Property calculated here are covered under cost of property. The maximum tenure of the bank
is nominally fixed by HFI/Bs. However, HFI/Bs do provide for different tenures with different
terms and conditions.

3) The installment that one pay is normally restricted to about-50-per cent of the monthly
gross income of the candidate.

4) The total monthly outflow towards all the loans that have been availed of, including the
current loan is normally restricted to 50% of the gross monthly income.

5) One will be eligible for a loan amount which is the lowest as per one's eligibility. This
is calculated as per the LTV norms, the HR, norms and the FOIR norms as mentioned above.

6) The disbursement in most cases will be favoring the builder or the seller or the society
or the development authority as the case may be. The disbursement will come in the customer's
favor under special circumstances only.

27
7) The repayment of loan can be made either through deduction against salary, post-dated
cheques, standing instructions or Auto debit instructions to bank.

The above terms and conditions are generally true for most Housing finance Institutions/Banks
with respect to the general Home Loans. However, the specific terms and conditions vary with
respect to special Housing Finance Institutions or Banks.

(IV) Charges applicable to home loans

The different kinds of charges applicable to home loans are discussed below

a) Processing fees
This is a charge that is levied by most HFI/Bs. This has to be paid at the time of submission of
the application form. It's normally charged as a percentage of the loan amount sanctioned.
Some HFls also charge a flat fee based on the loan amount instead of a percentage. When a
lower amount is sanctioned the excess fees paid at the time of submission of the application is
adjusted with the charges, which one make to the HFI/B subsequently. Most HFI/Bs refund the
processing fee if the loan application is rejected.

b) Administrative fees
This charge is again, normally, a percentage of the loan amount sanctioned. It is collected by
the HFI/B for the maintenance of customer's records, issuing interest certificates, legal charges,
technical charges, etc. though the tenure of the loan. It is payable by the customer when he/she
accepts the offer letter given by the HFI/B. This payment has to be made before the availment
of the disbursement. The mode of collection of these fees varies from one HFI/B to another.

c) Rate of interest
This is the rate of interest applicable on the loan amount through the tenure of the loan. It is
charged on the principal monthly reducing method. Most HFIs/Bs gives an option to select
either a fixed rate of interest or a variable rate of interest.

28
d) Legal Charge
s Some HFIs/Bs mainly Public Sector Banks levy legal charges that they incur on getting the
property documents vetted by their panel of lawyers.

e) Technical Charges
These charges are also levied by certain Housing Finance Institutions/Banks (HFIs/Bs) to meet
their expenses on the technical site visits to the customer's property. This ensures quality of
construction and construction within the norms as stipulated by the respective approval
authority.

f) Stamp duty and registration charges

HFIs that go in for a registered mortgage pass these charges on to the customer. These are
rather heavy in certain states depending on the laws laid down by the state where one buys a
property.

g) Personal Guarantee from Charges

Since the personal guarantee provided by the customer need to be stamped, these charges are
also recovered from the customer. They are charged to him by HFIs who demand for
Guarantees.

h) Cheque Bounce
Charges In case the cheques through which one makes a payment to HFL get dishonored, some
minimum charges are levied by the HFI. The same are recovered from the customer.

i) Delayed payments
HFL/Bs charge delayed payment charges from the customer if he/she delays the payment of
installments beyond the due date.

(j) Additional charges

These are levied as a percentage on the delayed payment charges by most HFL. They are
levied if one fails to pay the dues within the stipulated time after a delay has taken place.

29
(k) Incidental charge

This is payable in case the HFI/B sends a representative from their organization to collect their
outstanding dues. It is normally charged at a flat rate per visit. These charges are levied by
most HFIS/Bs.

(v) Judgment regarding repayment capacity on the basis of income

To understand how the income of a customer is considered to arrive at his repayment capacity,
it is first necessary to classify customers into salaried and self employed individuals.

(vi) Credit Documentation

Given below is the exhaustive list of credit documents- that need to be submitted for a general
home loan product. The documents vary from one HFI/B to another based on one's employer,
qualifications experience etc. The general requirements are as follows

a) Income Documents

For salaried slips for the last three months appointments letter-salary certificate-retainer ship
agreement, if appointed as a consultant-Form 16 issued by the employer in customer's name
income document for self employee - last three years profit and loss account statement duly
attested by Chartered Accountants. Last three years Balance Sheets duly attested by Chartered
Accountant, last three years Income Tax Returns with computation chart duly filed and
certified by the Income Tax authorities.

b) Proof of employment

Identify card issued by the employer- Visiting card.

c) Employer’s details (In case of private limited companies)

Profile of employer on employers letterhead (to be signed by a senior person in the

organization) comprising

• Name of promoter/directors

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• Background of promoters/directors

• Nature of business activity of your employer

• Number of employees

• List of branches/factories

• List of supplier

• Turnover of employer

• Annual reports of the employer for the last two to three years.

d) Proof of age (Anyone of the following)

Passport - Voter's ID card-PAN card-Ration card-Employer's identity card-School leaving

certificate-Birth certificate.

e) Proof of residence (Anyone of the following)

Ration card-Passport- PAN card-Rent agreement, if the customer is staying currently on rent
Bank Pass book-Allotment letter from the company if he/she is residing in company quarters.

f) Proof of name change (If applicable)

A copy of the official gazette –A copy of a newspaper advertisement publicizing the name
change Marriage certificates.

g) Proof if investment (If required)

Bank statement for the last six months of all operating and salary accounts - Bank statements for the last
six months of all current accounts, if self-employed-any other photocopies of investments held, if
required by the HFC.

(vii) Legal documentation

Legal Documentation the typical legal documents that need to be submitted to the HFC arc discussed
here. Given below is a list of legal property documents that need to be submitted to the HFC for

31
mortgage of the property. The name and the list of documents vary from state to state and also depend
on the type of property being financed. A broad outline of the documents required is given below.

a) Acceptance copy of the offer letter issued by the HFC/B.

b) Title documents of the property that include -sale agreement duly Registered-Own contribution
receipts - Allotment letter-Registration receipt-Land documents indicating ownership, if applicable-
Possession letter-Lease agreement, if applicable (Property bought from a development authority) -
Mortgage deed if the HFC opts for a registered mortgage.

c) No Objection Certificate from the developer, society or development authority as applicable.

d) Personal Guarantees, if applicable.

e) In case of alternator additional security, documents for the same depending upon the security
details.

f) Post dated cheques for the EMls. The above documents are only indicative in nature and do not
cover the entire list. It may, also be noted that in a resale case, the previous chain of agreement also
need to be taken.

(viii) The tax benefits that are applicable to housing loans for
individuals
Currently Tax Benefits to individuals are available only for the Home Loans and Home Extension
Loans products. The benefits available are covered under these sections.

Property Insurance

Is it compulsory to insure the property? Some HFls insist on a mortgage redemption life
insurance policy. In this case the customer gets a benefit of an interest rate reduction. Though
the HFI may not insist, it is better to go in for property insurance to safeguard the asset against
any sort of damage or loss. The customer can select the tenure for the property insurance. The
insurance premium is changed up front. Most insurance companies provide for huge discounts
20 on the rate of premium for larger tenures. The premium charged currently is seventy-seven
for every lakh of property for a year. So a customer has to fulfill various conditions to be
eligible for availing home loan from a Housing Finance Institution/Bank After fulfilling these
conditions, a customer can avail loan at low interest rate i.e. fixed rate floating rate. A decision
on whether one should go in for a fixed-rate loan or a floating-rate loan now is a function of
two factors i.e. One's perception of where interest rates in the economy are headed and one'

32
capacity to ride the interest rate changes. A

floating-rate loan let one take advantage of further falls in interest rates but one stand to lose if
interest rate, rise again. However this decision is based on the perception of the consumer.

ADVANTAGES OF HOME LOANS

The various benefits of home loans arising to the customers are

(i) Attractive interest rates

The various banks offer attractive interest rates to boost and help their customers. Many banks
provide loans on fixed or floating rates to facilitate consumers as per their needs.

(ii) Help in owning a home

The home availed by a person with the help of banks, because they provide technical and
financial assistance to customers for owning their dream home.

(iii) No requirement of guarantor

The commercial banks now a day liberalize their laws regarding home loans. Some of banks
don’t even require the guarantor to grant loan to their consumers. They also make consumers
free by reliving him to find a guarantor to complete the proceedings of availing loan.

(iv) Door-Step Services

These doors to step services are provided from enquiry stage to the final disbursement takes
place such services are beneficial for customers in present busy life. Banks like ICICI bank and
standard chartered bank provide door to step services to customers to borrow loan.

(v) Loan period

There are many banks which provide maximum loan tenures up to 15-20 years based on the
loan amount and the credibility of customers. This relieves the customers to repay loan amount
till a long period.

33
(vi) For accidental death insurance

Some banks provide free accidental death insurance with housing loan which is also beneficial
for the customers. These benefits or advantages of home loans are responsible for making than
so popular among customer that a person who doesn’t have their home and want to buy, they
do it with home loan. Home loans help such persons in making their dream homes

DISADVANTAGES OF HOME LOANS

The main disadvantages of home loans are high lightened as below

(i) Delays in processing

Many times, there are huge delays in processing of providing home loans because various
formulations to be fulfilled in this process. Due to these delays customers feel mentally as well
as financially weak.

(ii) Fluctuating interest rates

Some banks give home loans at floating rates, which fluctuate at Different intervals due to
some reasons. These changes sometimes, may lead to increase in interest rate which will
increase the cost of home loans to the customers

(iii) High Cost

The public sector banks charge high processing cost for home loan’s sanctioning. They are
forced to pay serious charges at various stages to fulfill the requirements. Some consumers are
not able to pay such charges so such people could not avail the benefits of home loan schemes.

(iv) Problems in disbursement

There are many problems in disbursement of home loan amount. There is some delay in
disbursement of loan amount to the customers due to legal formalities. This causes problems to
the customers. These are limitations or disadvantages of home loans. But sometimes some
banks charges high installments to repay loan amount. Such also causes problem to

34
customers. These limitations can be removed by providing good and promote services to the
customers.

LITERATURE SURVEYS

LITERATURE SURVEY I Boyd (1994)

the study concludes on rate of interest charged on loans, interest on savings accounts,
reputation. All these interest have played a 57 important role for customers and financial
performance of a bank in market. But customers also care other criteria such as how much
friendliness of employees, product, online facilities, paper work and follow-up.

SOURCE - http://shodhganga.inflibnet.ac.in

LITERATURE SURVEY II

Goyal and Joshi (2011) have concluded in their study on Social and Ethical Aspects of
Banking Industry that banks can project themselves as a social and ethical oriented
organization by simply disbursing loans to those social, ethical and environmental concern
organizations.

SOURCE - http://shodhganga.inflibnet.ac.in

LITERATURE SURVEY III

Subbaiah & Jeyakumar (2009), customer service is a series of activities planned to increase
customer’s satisfaction level that a product or service has met the customer outlook. The bank
strongly believes the customers service will be the most important factor in maintaining and
improving the leadership in India‘s Banking Industry. ATMs are important in the customer
service so as to enhance market share and business growth.

SOURCE - http://shodhganga.inflibnet.ac.in

LITERATURE SURVEY IV

Naveen K.Shetty and Dr.Veerashekharappa (2009), studies the importance of microfinance

in bringing about financial inclusion. The paper studies impact of the increasing gap in
demand and supply of financial services in India which has led to the increasing

35
population of the country to be excluded from the formal financial credit system on housing
loan

SOURCE - http://shodhganga.inflibnet.ac.in

LITERATURE SURVEY V Kerry D (2008)

Analyzed, during the period 1998-2008, there was a sharp rise and then there was an
unexpected drop in the home prices. Economic 36 fundamentals were the main reasons for
these changes in home prices. As such the problem was not because of sub prime lending, but
dramatic reductions in the Fed, afterward during the early mid-2000 there was an increases in
the rates of interest, the growth of housing was focused in the markets where there were
significant supply-side restrictions, that apt to be more price-volatile. Also the problems lied
because of increase and decrease of certain mortgage products, rather than credit shortage.
SOURCE - http://shodhganga.inflibnet.ac.in

36
CHAPTER III

INDUSTRY PROFILE / COMPANY PROFILE

INDUSTRY PROFILE

THE HISTORY OF INDIAN HOME LOANS

Home loans in India have made people Buy Property in India in spite of the
skyrocketing prices. Today, we find considerable Real Estate Investment in India,
either in the field of Residential Property in India or Commercial Properties in
India. Home Loans in India are disbursed by many Banks as Loan Banking is one
of the most important functions of the Financial Services in India. Property
Dealers and Real Estate Consultants in India usually recommend that we
undertake appropriate Home Loan or Mortgage Loan counseling so that we can
Buy Apartment in India at an affordable Mortgage Rate. Purchasing the home of
your dreams is not an easy task. Especially when you plan to buy a home on loan.
Home loan means that you buy a house on installments. In simpler terms when
you want to own a home and can’t afford to pay the amount in lump sum, you
can pay it in monthly installments with an interest rate.

The interest rates of home loans are expected to go down even further
according to analysts who foresee a cut down in the rates by the RBI in the wake
of the decision taken by US Federal Reserve to cut its rates by a significant
margin.

There are number of companies offer cheap home loans at a low interest rate.
You can avail loan against existing house for renovation or expansion etc. There
are many nationalized banks that offer finance for affordable housing. India
Housing has put together a comprehensive data to provide you with the cheapest

37
Home Loans available in the market. We have listed all the important housing
finance institutes and some of the top home finance banks providing lowest
interest rates.

In the last few years, housing loan scenario in India has changed drastically. It
has taken a front seat and people are looking forward to owning their own
houses. It is no more a dream that required lifetime saving and a difficult decision
to make. Today the new home purchase loan is much easily available and is
much cheaper than what was available earlier. Banks are now everywhere and the
schemes are implemented even in villages and smaller towns. The housing loans
are popular there too, however, the activity of building flats is little slow. It
would not be wrong to say that there has been a boom in the home loan market
and with this boom; there is also a boom in the Number of home loans mortgage
brokers in India.

The main reason for this boom in home loan market is the change in
government policies. It is our government’s motivation that the home loan
interest rates in India have fallen considerably. Lot many banks are offering
home loans and this is available at low EMIs (Equated monthly Installments).
High EMIs are now a thing of past. Today lending rate is in the range of 7.5 to 15
%.

Again, there are different types of home loans available today. The interest rate
available is also of two different types. One is the fixed rate loan and the other is
the floating rate loan. In the fixed rate loan, whatever interest is fixed on the start
of loan is carried on for the complete period. However, in the other one, the
interest rate is not fixed and as the interest rate goes up or low the effect is
directly transferred to the person who is taking the loan. In the last few years the
floating interest rate has been a favorite among most of the people taking home
loans.

38
There is also a trend to opt for home construction loan. This loan is available to
those who want to design their homes according to their requirement and taste. In
other words, this loan is meant for those who themselves want to construct their
new home.

As shared earlier, taking a loan is not a difficult task. However, before taking a
loan, one must realize that the relationship with the bank will be for a longer
period usually 15 to 20 years so one must ensure faith and integrity in bank.
Apart from low rate of interest, the bank should also provide some value added
services. The other thing is to look into is the property that is to be brought.
Making sure that the builder has all sanctions and facility to build a good building
is very important.

Taking home loans these days has become simpler. With the RBI regularly bring
down interest rates; taking home loans have become extremely easy. Housing
loans which were 16.5% to 18% a few years ago fell by 11.5% to 13%. With
interest rates going down, people increasingly number apply to take these loans.
Some of the leading banks offering home loans in India, including ICICI Bank,
IDBI Bank, HDFC Bank , Bank of Baroda, SBI, Standard Chartered Bank and
Axis Bank .

Home Loan Procedure in India Submission of Application Form

After choosing a particular home loan, the customer submits the application form
to the housing finance company (HFC) along with other relevant documents as
required by the HFC. They comprise documents to establish income, age,
residence, employment, investments, etc. The customer also needs

39
to hand over a cheque for payment of an up front (non -refundable) processing
fee of about 0.5-1% of the loan amount to the HFC.

Validation of the Information

In the next stage, HFCs validate the information provided by the customer on the
application form. They usually conduct checks on the residential address of the
customer, the place of employment of the customer, and credentials of the
employer. Some HFCs may insist on a personal interview with the customer and
perform a reference check on the references provided by the customer on the
application form.

Issue of Sanction Letter

After due appraisal of customer profile, a sanction letter is issued which contains
details such as loan amount, rate of interest, annual / monthly reducing balance,
tenor of the loan, mode of repayment and general terms and conditions of the
loan. This is the actually the approval of the money lending procedure by the
company. However, the money is sanctioned only after the documents and the
property on behalf of which the loan is being granted is thoroughly verified.

Submission of Documents

Once the sanction letter is passed, the customer is required to leave the entire set
of original documents pertaining to the property being purchased with the HFC as
security for the loan amount sanctioned. These documents remain in the custody
of the HFC till the time the loan is fully repaid. Once the documents are handed
over to the HFC, they send all the documents for a thorough legal scrutiny.

40
Validation of Property

Prior to disbursement, the HFC also conducts a site visit to the customer's
property to ensure that all construction norms have been adhered to properly.
Once the HFC is satisfied that the property is legally and technically clear, they
disburse the loan amount. The disbursement from the HFI is on the basis of the
stage of construction of the property.

Payment Procedure

Once all the above mentioned process, the borrower is entitled to take the money
from the lender party. Until such time that the entire sanctioned amount is not
drawn, the customer is supposed to pay a simple interest on the Actual Amount
drawn (without any principal repayments). The EMI payments commences only
after the entire sanctioned loan amount is drawn.

41
INTEREST RATES PROVIDED BY VARIOUS BANKS

Loan Period EMI / Lakh EMI / Lakh

Finance Institution Fixed Floating
(in years) (INR) (INR)

Up to 5 9.00 2086 8.00 2028

6 to 10 9.25 1230 8.25 1227

Bank of Baroda
11 to 15 9.50 1054 8.25 970

16 to 20 9.50 932 8.50 868

Up to 5 9.50 2100 8.75 2074

6 to 10 9.75 1300 9.25 1280

State Bank Of
India
11 to 15 - - 9.25 1029

16 to 20 - - 9.75 949

Up to 5 11 2175 9.50 2101

HDFC 6 to 10 11 1375 9.50 1294

11 to 15 11 1137 9.50 1055

42
 16 to 20 11 1033 9.50 933

Up to 5 10.75 2162 9.50 2101

6 to 10 10.75 1364 9.50 1294

ICICI Bank
11 to 15 10.75 721 9.50 1055

16 to 20 10.75 1016 9.50 933

Up to 5 10.50 2149 9.50 2100

LIC 6 to 10 11 1373 9.50 1294

Housing Finance 11 to 15 11 1137 9.50 1054

16 to 20 11 1032 9.50 932

Up to 5 9.00 2086 10.50 2150

PNB 6 to 10 9.00 1267 10.50 1350

Housing Finance 11 to 15 9.25 1030 10.50 1107

16 to 20 9.50 933 10.50 999

43
The above table illustrates the comparison between the interest rates from various
Housing Finance Companies and banks. It can be seen that if one wishes to go for
floating loans, the bank which gives the best deal as far as the interest rate is
concerned is ICICI followed by PNB Housing Finance with the lower rates.

COMPANY PROFILE

History of ICICI

ICICI Bank started as a wholly owned subsidiary of ICICI Limited, an Indian financial
institution, in 1994. Four years later, when the company offered ICICI Bank's shares to the
public, ICICI's shareholding was reduced to 46%. In the year 2000, ICICI Bank offered made
an equity offering in the form of ADRs on the New York Stock Exchange (NYSE), thereby
becoming the first Indian company and the first bank or financial institution from non-Japan
Asia to be listed on the NYSE. In the next year, it acquired the Bank of Madura Limited in an
all-stock amalgamation. Later in the year and the next fiscal year, the bank made secondary
market sales to institutional investors. With a change in the corporate structure and the budding
competition in the Indian Banking industry, the management of both ICICI and ICICI Bank
were of the opinion that a merger between the two entities would prove to be an essential step.
It was in 2001 that the Boards of Directors of ICICI and ICICI Bank sanctioned the
amalgamation of ICICI and two of its wholly-owned retail finance subsidiaries, ICICI Personal
Financial Services Limited and ICICI Capital Services Limited, with ICICI Bank. In the
following year, the merger was approved by its shareholders, the High Court of Gujarat at
Ahmadabad as well as the High Court of Judicature at Mumbai and the Reserve Bank of India.

44
Vision, Mission and Objectives

Vision

To be the leading provider of financial services in India and a major global bank.

Mission

We will leverage our people, technology, speed and financial capital to:

 Be the banker of first choice for our customers by delivering high quality, world-
class products and services.
 Expand the frontiers of our business globally.
 Play a proactive role in the full realization of India's potential.
 Maintain a healthy financial profile and diversify our earnings across businesses
and geographies.
 Maintain high standards of governance and ethics.
 Contribute positively to the various countries and markets in which we operate.
 Create value for our stakeholders.

Objectives

 The main objective of the company is to attain maximum profit with minimum
cost.

 The company provides our customer with quality products that helps them to live
healthy life.

 The company tries to increase the market share.

45
 To enhance the annual turnover of the company.

 To stimulate consumer to make purchase.

 To introduce new products.

 To encourage the existing customer to buy more.

 To be more competitive in the market.

 To create more sale in the off seasons.

 To promote export business.

 To introduce quality control techniques for improving the quality of the products.

Products and services

Products

ICICI Group has always been at the forefront of developing innovative financial products, which
caters to various needs of people from all walks of life. Over the years, it has launched several
financial products that offer financial support, security and more to not just individuals, but too big
and small organizations too.

46
Funds Transfer

Transfer funds to own ICICI Bank account, other ICICI Bank account and non-ICICI Bank
account using NEFT service from anywhere using m.icicibank.com. Fund transfer can be
done, 24 x7, even on holiday, using IMPS service of m.icicibank.com.

Transfer funds from anywhere, on the go using m.icicibank.com.

It is a secure and easy way to transfer funds to own ICICI Bank account, other ICICI Bank
account and non-ICICI Bank account using NEFT mode of fund transfer

Card less Cash Withdrawal

Card less Cash Withdrawal service is a simple and safe mode for you to send cash, 24x7, to
any mobile number in India.

All you need to do is login to m.icicibank.com with your Internet Banking user ID and
password and initiate a Card less Cash Withdrawal transaction. The recipient need not

47
have any bank account or an ATM card, and can withdraw cash from over
10,000 ICICI Bank ATMs across India, using the details received through
SMS.

Recharge Prepaid Mobile/DTH Connection

Say good bye to running out of talk time or missing your favorite shows
by recharging your prepaid mobile and DTH connection on the go and at
your own comfort
with m.icicibank.com.

Pay Utility Bills

With the convenience of ICICI Bank Internet Banking on your mobile, you
can pay your bills anytime, from anywhere. Avoid long queues by

48
registering your billers and pay all your utility bills - electricity, gas,
phone/mobile etc, on time with m.icicibank.com.

You can also schedule your payments and experience hassle free
bill payments with m.icicibank.com

Credit Card Payments

ICICI Bank Credit Card bring to you convenience coupled with absolute safety and
unparalleled discounts. In addition, we have taken a step further to provide you
convenience on the go. You can now pay your credit card bills by logging
into m.icicibank.com.

ICICI Bank Fixed Deposits/Recurring Deposits

Now you can open an ICICI Bank Fixed Deposit or Recurring Deposit using
m.icicibank.com

Save money using just your mobile phone, from the comfort of your home!

Fixed Deposits

49
Be it saving for 7 days or a decade, you can trust ICICI Bank Fixed Deposits for attractive
interest rates. Additionally, you have the freedom to make premature withdrawals, get a

loan or overdraft of up to 90% of your FD amount; and choose monthly

or quarterly payouts. Just login to m.icicibank.com and open a fixed
deposit on the go!

ICICI Bank Recurring Deposits

Recurring deposits are a way to manage regular payments smoothly. With

a deposit of minimum Rs. 500 per month, you can begin with tenure of 6
months and thereafter, in multiples of 3 months. Just login to
m.icicibank.com and start your recurring deposit now!

ORGANISATIONAL STRUCTURE OF ICICI BANK

 CEO

Chanda Kochhar

Chairman of the Board

M. K. Sharma Director Uday Chitale

50
Director @ ICICI Lombard

Director

Dileep Choksi

Director @ ICICI Prudential...

Director

1. Neelam Dhawan

Director

Radhakrishnan Nair

Director @ ICICI

Prudential... Director @

ICICI Securities...

Director Lok Ranjan Director

V. K. Sharma

 CFO

N.S. Kannan

Director @ ICICI Prudential... Director @ ICICI Bank Canada

 COO

Sandeep Bakhshi

51
Director @ ICICI Prudential...

 Executive Director

V... C...

Director @ ICICI Bank UK Director @ ICICI Bank Canada

 Executive Director

V... M...

Director @ ICICI Securities

52
53
Financial performance

Performance Review: Quarter ended

March 31, 2018
May 07, 2018

Strong balance sheet growth

 Total domestic loan growth at 15% year-on-year at March 31,

2018 driven by retail
 Retail loans grew by 21% year-on-year and constituted 57% of the total loan
portfolio at March 31, 2018
 17% year-on-year growth in current and savings account (CASA) deposits;
CASA ratio at 51.7% at March 31, 2018

Continued to perform on core operating parameters

 The core operating profit (profit before provisions and tax, excluding
treasury income) was ₹ 18,940 crore (US$ 2.9 billion) in FY2018
 Net interest margin increased from 3.14% in the quarter
ended December 31, 2017 (Q3-2018) to 3.24% in the quarter ended March 31,
2018 (Q4- 2018)
 Retail fee income grew by 16% in Q4-2018 and constituted
75% of total fee income
 Operating expenses grew by 8% year-on-year in Q4-2018 and
6% year-on- year in the year ended March 31, 2018 (FY2018)

54
Asset quality

 Gross NPA additions of ₹ 15,737 crore (US$ 2.4 billion) in Q4-2018. This
includes ₹ 9,968 crore (US$ 1.5 billion) of loans which were under RBI schemes and were
classified as standard at December 31, 2017
 Recoveries and upgrades of ₹ 4,234 crore (US$ 650 million) from non-
performing loans in Q4-2018 compared to ₹ 1,108 crore (US$ 170 million) in Q3-2018 and ₹
1,413 crore (US$ 217 million) in Q4-2017
 Provision coverage (including cumulative prudential/ technical write-offs)
ratio increased by 690 bps from 53.6% at March 31, 2017 to 60.5% at March 31, 2018, further
strengthening the balance sheet

Total capital adequacy of 18.42% and Tier-1 capital adequacy of 15.92% on standalone basis
at March 31, 2018

The Board of Directors has recommended a dividend of ₹ 1.50 per equity share of face value of
₹ 2.00 each (equivalent to dividend of US$ 0.046 per ADS)

The Board of Directors of ICICI Bank Limited (NYSE: IBN) at its meeting held at Mumbai today,
approved the audited accounts of the Bank for the year ended March 31, 2018.

Profit & loss account

 Net interest income was ₹ 6,022 crore (US$ 924 million) in the
quarter ended March 31, 2018 (Q4-2018) compared to ₹ 5,962 crore (US$ 915
million) in the quarter ended March 31, 2017 (Q4-2017).
 The domestic net interest margin was 3.67% and the overall net
interest margin was 3.24% in Q4-2018.
 Non-interest income was ₹ 5,678 crore (US$ 871 million) in Q4-2018 compared to
₹ 3,017 crore (US$ 463 million) in Q4-2017. Non-interest income in Q4-2018
included gains of ₹ 3,320 crore (US$ 509 million) on sale of shareholding in ICICI
Securities.

55
 Fee income grew by 13% year-on-year to ₹ 2,755 crore (US$ 423
million) in Q4- 2018 from ₹ 2,446 crore (US$ 375 million) in Q4-2017. Retail fee
income grew by 16% in Q4-2018 and constituted 75% of total fees.
 The core operating profit (profit before provisions and tax,
excluding treasury income) was ₹ 4,829 crore (US$ 741 million) in Q4-2018
compared to ₹ 4,609 crore (US$ 707 million) in Q4-2017.
 Standalone profit after tax was ₹ 1,020 crore (US$ 157 million)
for Q4-2018 compared to ₹ 2,025 crore (US$ 311 million) for Q4-2017.
 The core operating profit (profit before provisions and tax,
excluding treasury income) was ₹ 18,940 crore (US$ 2.9 billion) in FY2018
compared to ₹ 17,910 crore (US$ 2.75 billion) in FY2017.
 Standalone profit after tax was ₹ 6,777 crore (US$ 1.0 billion) for the
year ended March 31, 2018 (FY2018) compared to ₹ 9,801 crore (US$ 1.5 billion) for
the year ended March 31, 2017 (FY2017).

Operating review Credit growth

The year-on-year growth in domestic advances was 15% at March 31, 2018. The Bank has continued
to leverage its strong retail franchise, resulting in a year-on-year growth of 21% in the retail portfolio
at March 31, 2018. The retail portfolio constituted about 57% of the loan portfolio of the Bank at
March 31, 2018. Total advances increased by 10% year-on-year to ₹ 512,395 crore (US$ 78.6
billion) at March 31, 2018 from ₹ 464,232 crore (US$ 71.2 billion)
at March 31, 2017.

Deposit growth

CASA deposits increased by 17% year-on-year to ₹ 289,925 crore (US$ 44.5 billion) at March 31,
2018. The Bank’s CASA ratio was 51.7% at March 31, 2018 compared to 50.4%
at December 31, 2017 and 50.4% March 31, 2017. The average CASA ratio increased to 45.9% in
Q4-2018 from 45.7% in Q3-2018. Total deposits increased by 14% year-on-year to

56
₹ 560,975 crore (US$ 86.1 billion) at March 31, 2018. The Bank had a network of 4,867
branches and 14,367 ATMs at March 31, 2018

Awards and achievements

Awards - 2017
 ICICI Bank received a citation at the fifth edition of The Financial Inclusion Agenda
organized by CNBC-TV18 in the ‘Impactful Financial Inclusion Initiatives’ category

 Ms. Chanda Kochhar emerged 5th on Forbes list of ‘The World's Most Powerful
Women in Finance 2017’ and is the only Indian leader to be featured in this list

 ICICI Bank won two awards at The Asset Triple a Private Banking, Wealth
Management, Investment and ETF Awards 2017. The Bank has won these awards in the
‘Derivatives House of the Year, India’ and ‘Best Structured Products House, India’ categories

 ICICI Bank recognized as the ‘Best Foreign Exchange Provider in India’, by Global
Finance magazine as part of their list of ‘The World’s Best Foreign Exchange Providers 2017’

57
 ICICI Bank was declared winner in three categories at the BFSI Digital Innovation
Awards 2017 organized by the Indian Express Group, on October 7, 2017. The Bank has won
these awards in 'Data Centers’, 'Internet of Things (IoT)' and 'Storage' categories

 Ms. Chanda Kochhar ranked 32nd in Forbes list of ‘The World’s 100 Most Powerful
Women 2017’. She is the highest ranked Indian woman business leader and the only Indian
woman to feature in the top 50

 Ms. Chanda Kochhar was featured on Fortune India’s list of ‘The 50 Most Powerful
Women 2017’. She was ranked as the second most powerful woman Indian leader

 ICICI Bank won four awards across multiple categories among ‘Large Banks’ at the
Infosys Finacle Client Innovation Awards 2017 for its 10 projects. The Bank was declared
winner in the categories of - ‘Emerging technologies led innovation’, ‘API based
innovation’ and ‘Channels innovation’. The Bank was also highly commended in the category
of ‘Product Innovation’ for three of its projects
 ICICI Bank won an award in the ‘Mobile Advertising Excellence in Use of Video’ in
the Silver category at the MOBEXX Awards 2017 for its Advantage Woman Savings Account
#FundYourOwnWorth video campaign.

 Ms. Chanda Kochhar became the highest ranked Indian leader in Fortune magazine’s
'Most Powerful Women' in business list of 2017. Her overall rank was fifth and she was the
only Indian business leader to be featured in the top 20.

 Ms. Chanda Kochhar won the ‘CEO of the Year’ award at the 2017 Asia-Pacific
SABRE Awards.

58
 Ms. Chanda Kochhar was conferred with the ‘Most Powerful Business Women of the
Year – Banking’ award at the Kausal Bharat awards organized by Kaushal Bharat Vyavasayik
Sammelan.

 ICICI Bank won the Gold Award in the prestigious 2017 Asia – Pacific SABRE
Awards in the ‘Corporate Image’ category.

 ICICI Bank won an award in the ‘Best Use of Video in a Digital Campaign’ category at
the Digital Industry Awards hosted by Kamikaze B2B Media.

 ICICI Bank won the DMA Asia CREATEFFECT award for leveraging video ad
formats to build interest for ICICI Bank Home Loans.

 ICICI Bank received the award in the ‘Best POP-All Citizen Subscriber Registration’
category during the conference on National Pension System organized by Pension Fund
Regulatory and Development Authority (PFRDA).

 ICICI Bank won the award in the ‘Best Commercial Bank’ category in Self Help
Group (SHG) Bank linkages segment in Rajasthan for the second year in a row. The Bank also
received the fourth prize in the ‘Best Branch’ category for its Shahpura Branch. The awards
were presented by National Bank for Agricultural and Rural Development (NABARD).

59
 ICICI Bank won a total of eight awards at the National Award for Excellence in Energy
Management 2017 organized by Confederation of Indian Industry (CII).

 Ms. Chanda Kochhar was conferred with the Nirbhaya Puraskar, part of a nationwide
movement founded by the women’s rights activist Manasi Pradhan

 ICICI Bank won the third prize in the ‘Service Sector-Mega: Banking, Financial
Services and Insurance’ category at the National Awards for Excellence in Cost Management.

 ICICI Bank was felicitated as one of the winners of the Best Performance Award from
NABARD for initiatives implemented under its Self Help Group (SHG) Bank Linkages
Program in Tamil Nadu for financial year 2017. The bank has won this award for three years in
a row.

ICICI Bank won the award in the ‘Best Private Sector Bank - Rural Reach’ category at the
‘Dun & Bradstreet Banking Awards 2017.

 ICICI Bank won all five awards in ‘Commercial Building’ category at the State Level
Energy Conservation Award, organized by Maharashtra Energy Development Agency
(MEDA).

 Ms. Chanda Kochhar received the Dr. K.C.G. Verghese Excellence Award in the
‘Women Achievers’ category. She received the award in recognition of her contribution
towards the progressive growth and development in the banking sector for more than two
decades.

60
 CICI Bank won the award in the ‘Analytics & Big Data’ category at the IDRBT
Banking Technology Excellence Award for 2016 - 2017. The awards are organized by the
Institute for Development & Research in Banking Technology (IDRBT), an institute
established by the Reserve Bank of India (RBI).

 Ms. Chanda Kochhar became the first leader to receive the Woodrow Wilson Award
for Global Corporate Citizenship by the Woodrow Wilson Centre located in Washington,
U.S.A.

 ICICI Bank was declared runner-up in the 'Best Large Bank' category, according to the
Business world Best Bank Survey 2016.

 ICICI Bank was recognized by the Ministry of Rural Development, Government of

India, for the funding provided to Self Help Groups across rural India. This funding supported
the growth of the National Rural Livelihood Mission programmed initiated by the Government.

61
62
63
 CHAPTER IV

DATA ANAYSIS & INTERPRETATION

The analysis is based on the responses given by customers through questionnaires.

AGE GROUP OF SURVEYED

RESPONDENTS TABLE 4.1

Age group No. of Respondents

18 - 25 years 127

26 - 35 years 67

36 - 49 years 46

50 - 60 years 24

More than 60 years 6

CHART 4.1

Interpretation

From the above chart we find that 47% of the respondents fall in the age
group of 18 – 25 years, 25% fall in the age group of 26 – 35 years and 17%
fall in the age group of 36 –

64
49years.Therefore most of the respondents are relatively young (below 26 years
of age). And 6% respondent’s age are 50-60 years and 2% respondent’s age are
60 to above years

Analysis

We can observe that the majority number of respondents are from the age group
of more than 60 years.

65
GENDER CLASSIFICATION OF SURVEYED

RESPONDENTS TABLE 4.2

Sr. No. Category No. of Respondents Percentage

1 Married 140 70%

2 Unmarried 60 30%

Total 200 100%

Base 200 respondents

CHART 4.2

Marital Status

30%

Married
Unmarried

70%

Interpretation

From the above table and graph above it can be seen that 70%

respondents are married. 30% respondents are unmarried.

Analysis

We can observe that 70% of the respondents are married

66
EDUCATIONAL QUALIFICATION OF

RESPONDENTS TABLE 4.3

Sr. No. Category No. of Respondents Percentage

1 Under graduate 50 25%

2 Graduate 80 40%

3 Post graduate 70 35%

Total 200 100%

Base 200 respondents

CHART 4.3

Educational Qualification of Respondents

25%
35%

Under graduate
Graduate
Post graduate

40%

Interpretation

From the above table and graph it can be seen that 25% respondents

are under graduate. 40% respondents are Graduate. 35% respondents

are Post graduate.

Analysis

We can observe that 40% of the respondents are graduate.

67
ARE YOU SATISFIED WITH THE SERVICES
PROVIDED BY ICICI BANK?

TABLE 4.4

Agreeableness No. of Respondents

Strongly Agree 90

Agree 75

Neither Agree Nor Disagree 20

Disagree 10

Strongly Disagree 5

CHART 4.4

No. of Respondents
Depositing & Withdrawing
4 Money
28 32 Query Handling

New Account Process

36 Friendliness of Bank
48 Personnel
Mininum Account Limit is
not high

Interpretation From the above graph it is clear that 165 of the

respondents are satisfied with the dealing of the ICICI bank. 15 are not
fully satisfied and 20 are satisfied to some extent.

Analysis The majority no. of respondents strongly agree that they

are satisfied with the services provided by ICICI bank.

68
ACCORDING TO YOU WHICH SERVICE
PROVIDED BY ICICI BANK IS BEST?

TABLE 4.5

Services No. of Respondents

Depositing & Withdrawing Money 32

Query Handling 48

New Account Process 36

Friendliness of Bank Personnel 28

Minimum Account Limit is not high 4

Easy maintenance of accounts 8

Parking Facility & Accessibility 8

Convenience of Location 4

Online Services 32

69
 CHART 4.5

No. of Respondents
50
45
40
35
30
25
20
15
10 No. of Respond
5
0

Interpretation From the above graph it is clear that majority of the

respondents would feel that new account process, inquiry facility,
depositing and withdrawing process & online services are the best
services provided by ICICI bank.

Analysis Majority no. of respondents like Query Handling which is 48.

70
WHAT ARE THE PROBLEMS FACED BY THE
BORROWERS IN OBTAINING HOME LOANS?

TABLE 4.6

Problems No. of Respondents

Disbursement of Home Loan 10

High Interest Rate 30

Taking Lot of Time 66

More Documentation 35

Lack of Promise 19

Verification Process 40

CHART 4.6

No. of Respondents
70
60
50
40
30
20
10
0 No. of Respondents

71
Interpretation From the above graph we can see that Disbursement
problem is faced by 10 respondents, 30 respondents have faced the
problem with high interest rate, 35 have faced problem with more
documentation, 19 with lack of promise and 40 have faced the problem of
verification process.

Analysis Majority no .of respondents have problem with time taken

by the bank to allot home loan.

72
CUSTOMER PROFILE OF SURVEYED

RESPONDENTS TABLE 4.7

Customer profile No. of respondents

Student 7

Housewife 5

Working Professional 116

Business 49

Self Employed 24

Government service employee 24

CHART-4.7

2%
3%
11%

Student
11%
House Wife
Working Professional
Business
51% Self-Employed
22%
Government Service

Interpretation

From the above table and graph it can be seen that 51% of the
respondents are working professionals, 22% are into business and 11%
are self-employed, 11% of the respondents are

73
government service employee and 3% of the respondents are
student and 2% of the respondents are house-wife.

Analysis

We can observe that majority of the respondents are working professionally.

74
 ANNUAL HOUSE HOLDS INCOME?

TABLE 4.8

Sr. No. Category No. of Respondents Percentage

1 Less than 2 lakhs 98 49%

2 Between 2 to 5 lakhs 62 31%

3 Between 5to 8lakhs 30 15%

4 More than 8 lakhs 10 5%

Total 200 100%

Base 200 respondents

CHART-4.8

Annual Household Income

5%
15%

Less than 2 lacs

49%
Between 2 to 5 lacs
Between 5to 8lacs

31% More than 8 lacs

Interpretation

From the above table and graph it can be seen that 49% respondent’s annual household
income is less than 2 lakhs.31% respondent’s annual household income is between 2 to 5
lakhs 15% respondent’s annual household income is between 5 to 8
lakhs.5% respondent’s annual household income is more than 8 lakhs.

Analysis - We can observe that majority of the respondent`s annual

household income is less than 2 lak

75
 DO YOU KNOW ABOUT ICICI?

TABLE 4.9

Category No. of Respondents

Yes 164

No 16

CHART 4.9

Awareness about ICICI

9%

YES
NO

91%

Interpretation

From the above table and graph it can be seen that 91% respondents are
known about ICICI 9% respondents are not known about ICICI.

Analysis

We can observe that majority of the respondents knew about ICICI.

76
 REASONS FOR GETTING HOME FINANCED?

Table 4.10

Sr.No. Number of Reasons Percentage

a. Non-availability of funds 36

b. Reluctancy to pay cash in one go 35

c. Tax benefit 24

d. Any other 5

GRAPH 4.10

40
35
30
25
percentage of customers 20
15
10
5
0
non-availability of funds reluctancy tax benefit

Interpretation

To interpret the response of the questions, the figures shows that

most of the customers find the problem in availability of funds i.e. 36%
and very less number of customers found problem in paying cash in one
go is 35%, customers get housing loan for tax benefits is 24%. This was
the expected response because a large number of people find a problem of
availability of funds which works as an obstacle in owning a dream home.

77
 In today's life, people hardly earn both means and ends of life and
they don't have much of money to buy a home or a land to construct
house because of cost of property. So, they take the advantage of home
loans provided by different banks at different terms feasible customers.
There are very less number of people, who don't own home even when
they have sufficient funds and they take the advantage of home loans
because they don't want to pay huge cash in one go.

Analysis

On the basis of study, it is concluded that most of people lack of

money in fulfilling their dreams and few of them were reluctant to pay
cash in one go and wanted to pay their home loans slowly in
installments.

78
 FROM WHERE YOU HAVE GOT YOUR HOME FINANCED?

Table 4.11

Name of Banks / Percentage of customers

company

ICICI 55

Punjab National Bank 15

Standard Chartered 08
Bank

ICICI BANK 20

Any other 03

To understand the response more effective and closely, it has been

showed diagrammatically as follows

CHART 4.11

3%

20%
ICICI
Punjab National Bank
Standard Chartered Bank
8%
55% ICICI Bank
Any Other
15%

79
Interpretation

From the above table and graph it can be observed that 15% of the
respondents have chosen Punjab National Bank.8% of the respondents
have chosen Standard Chartered Bank.20% of the respondents have
chosen ICICI Bank.3% of the respondents have chosen any other bank

Analysis

Here we can conclude by saying that the people prefer ICICI for
home loan because of their services and excessive feat compared to other
banks.

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 CHAPTER V
FINDINGS, SUGGESTIONS &
CONCLUSION

FINDINGS

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

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

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 SUGGESTIONS

These suggestions have been discussed as follows

1) To increase their customers, the ICICI should provide

specialized services in this sector. These services can be such as proper
guidance to the customer regarding the processing of loans, especially
for the customers who are illiterate.

2) To satisfy their customers and for good dealings in future, the

ICICI should make prompt disbursement of loan amount to the
customers so that they can buy or construct their dream home as early as
possible.

3) The ICICI should use easy procedure, or say, less lengthy

procedure for the sanctioning of loan to the customer. There should be
less number of legal formalities, in case this exists, then, these should be
completed in less time. This will be helpful in attracting more customers.

4) Although the interest rates on specific norms, yet customers

seek less interest rate which can lower their cost of house. So banks
should try to lower their interest rates. Needles to say, that the bank which
is having lower interest rates, have the maximum clients for loans.

5) ICICI provide loan according to the repaying capacity of the

customer and his/her eligibility. Due to which, some customers are not
able to get amount of loan needed by them. So, the ICICI should soften
their norms regarding the loan amount.

6) Create awareness: The Company has to take care of

awareness creation about the products and services among the
customers.

7) Charges: The Company has to reduce the mortality and administration charges.

8) The company has to reduce their interest rates on home loan products and

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 services.

9) The company has to identify the potential customers.

10) Company should consider the present competition and should

act according to the customer needs.

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 11) The ICICI should try to provide proper knowledge regarding
their home loan schemes, even to people who don't know about such
schemes and their benefits especially in rural areas. So they should
provide knowledge to the ignorant customers, especially in rural areas and
backward urban area . So, above are the main suggestions provided to the
ICICI. By considering these suggestions, the ICICI can strengthen their
customer base in home loans sector. They should improve their services
and reduce legal proceedings and should be friendly to their customers.
All this will be helpful to satisfy their customers.

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 CONCLUSION

It is concluded that people are interested to take a home loan from ICICI.
Home loans have long period when compare to other loans. Even though
the interest rates are high people are willing to take a loan from ICICI due
to their less interest rates and best services they provide them. The
Processing fee and disbursement time is also less when compare to other
banks.

Finally the whole study was carried out in a systematic way to

reach at exact results. The whole research and findings were based on the
objectives. However, the study had some limitations also such as lack of
time, lack of data, non-response, reluctant attitude and illiteracy of
respondents, which posed problems in carrying out the research. But
proper attention was made to carry out the study in a proper way and to
make accurate conclusion for the ICICI which is beneficial for customers
to enhance their customer base.

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