Synopsis for the Summer Project

Comparative Study on Financial performance of Selected Banks

& Non-Banking Financial Companies with special reference
To Housing Finance Loans.
BY
SHIRISH UPADHYA
USN: 1RX18MBA79
Submitted to
VISVESVARAYA TECHNOLOGICAL UNIVERSITY, BELAGAVI

In partial Fulfilment of the requirements for the award of the degree of

MASTER OF BUSINESS ADMINISTRATION
Under the guidance of

Internal guide
Dr. U Bhojanna
Head of Department
Department of MBA & Research Centre
RNSIT, Bengaluru

RNS Institute of Technology

Department of MBA & RESEARCH CENTRE
Dr.Vishnuvardhan Road, Channasandra, R. R. Nagar Post,
Bengaluru, Karnataka – 560098
2018 – 2020
Name of the Student
Address of the Student
University Seat Number
Branch
College
Name of the Internal Guide
Name of the External Guide
Name of the Company (if
applicable)
Address of the Company (if
applicable)
Area of Research/Specialisation
Title of the Study
Signature of the Guide
: SHIRISH UPADHYA
FF004, Global Naveen Swastik Apartments,
:
Kenchenahalli Road, RR Nagar , Bangalore-98
: 1RX18MBA79
: MBA
: R N S Institute of Technology, Bengaluru.
: Dr. U BHOJANNA
:
:
:
: Finance
Comparative Study on Financial performance of
: Selected Banks & Non-Banking Financial Companies
with special reference to Housing Finance Loans
Signature of the Student
HOD, Dept. of MBA & Research Centre
Sl. No Topics Page No

1 Introduction 4

2 Review of Literature (Minimum 10) 5

3 Research Gap 5

4 Statement of the Problem 6

5 Research Methodology

5.1 Research Objectives 6

5.2 Research Design (it Includes Research Type) 6

5.3 Sample Design (it includes Population, Sample
6
Unit, Sample Size, Type of Sample, Scope of the study)
5.4 Data Sources 6

5.5 Research Hypothesis

5.6 Research Instrument (Tools used for the study)

5.7 Expected Research Outcomes 6

5.8 Limitations of the Study 7

6 Time Activity Chart/Weekly report

7 References/Bibliography 7
 Housing finance is a broad topic, the concept of which can vary across continents,
regions and countries, particularly in terms of the areas it covers. For example, what is
understood by the term “housing finance “in a developed country may be very different to
what is understood by the term in a developing country. “The purpose of a housing finance
system is to provide the funds which home-buyers need to purchase their homes. This is a
simple objective, and the number of ways in which it can be achieved is limited.
Notwithstanding this basic simplicity, in a number of countries, largely as a result of
government action, very complicated housing finance systems have been developed.
However, the essential feature of any system, that is, the ability to channel the funds of
investors to those purchasing their homes, must remain." Construction management remains a
great constraint to construction growth and transformation and to the achievement of
sufficient housing for all. On the one hand, the total quantity of housing business available is
small. On the other, formal business institutions be unwilling to give to the urban poor. As a
matter of fact, the good volume of construction business typically comes from sources
besides technical financial institutions. Some of these references are community-based
enterprises.

Introduction

Real estate and construction together, is the second largest employment provider in
the country, next to agriculture. It employed over 40 million workforces in 2013, and as per
projections is slated to employ over 67 million workforces by 2022. The sector is expected to
generate about three million jobs annually. Nearly 90% of the workforce employed in the real
estate and construction sector are engaged in construction of buildings. The remaining 10%
workforce is involved in building completion, finishing, electrical, plumbing, other
installation services, demolition and site preparation.

The housing finance sector growth has slowed down in the last one year due to
liquidity crunch. Housing finance companies (HFC) lowered their disbursements and raised
portfolio sale through securitization for repayment of debt obligations. Banks increased their
retail home loan portfolio by 19 per cent while HFCs grew by 9 per cent last financial year,
as banks used this opportunity to expand in the retail segment.

The Topic Compares the housing finance related performance of 2 leading sectors
which are commercial banks and non-banking financial companies.

Review of Literature

Key words : Housing Finance, Cooperative banks, NBFC, NPA, Public sector Banks,
Institutional Performance of housing finance in India, CAMEL, Profitability,

Garg, Dr. Shiv Kumar and Kumar, Dr. Gajendra (2014)1, reported in their paper that due to
bank reforms, government encouraged banking sectors to identify housing finance sector and
its importance in lending. They stated that Housing finance sector is the fastest growing
segment of the retail financing sector. The paper resulted out that agencies of Public sector
housing finance companies, Private sector housing companies and banks are competitors in
housing finance market.
Gupta and Kaur (2008)2 examined the performance of Indian private Sector banks by using
CAMEL model and by assigning rating to the top five and bottom five banks. The CAMEL
model revealed that HDFC was at its higher position of all private sectors banks in India
succeeded by the Karur Vysya and the Tamilnad Mercantile Bank.

(Srujanlal, 2017)3 clearly explained about the policies and procedure for sanctioning housing
loans in India.

Bindu Roy and Preeti gupta (2016)4 Concluded in their report that The HFCs have an
advantage of selling a single product with better customized service in comparison to the
SCBs who offered a variety of products in retail finance. The HFCs business model focusing
on a single product needs to be strengthened so as to enable the HFCs to be more efficient in
asset sourcing, servicing and collections.

Pratibha P.K and C. Krishnan (2018)5 explained that Though the number of institutions of
commercial banks reduced in numerical terms, in respect of housing market shares the
commercial banks have outstripped Housing Finance Companies. They thrive well in the
housing finance sector. Presently housing finance is in the ascendant, the competition
between these two players and their subsequent growth augur well for the growth in the
housing finance sector.

The regulatory aspects pertaining to housing finance companies in the light of various
directions and guidelines issued by National Housing Bank National Housing Bank (NHB)
were examined by (Jasmin et.al, 2012)6

Ravindra, Dr. P.S. (2013)7, has evaluated the operational performance of LIC Housing
finance Limited and HDFC. Top housing finance companies such as HDFC, LIC Housing
Finance witnessed loan book growth of 22-37 per cent during the year ended March 2012,
thereby increasing their market share. It was concluded that the success of the LICHFL and
HDFC in the housing finance industry is in its marketing network. They have a greater
number of marketing personnel than the regular office staff.

Chaudhary, Kajal and Sharma, Monika (2011)8, has made a comparative analysis of services
of Public sector Banks and Private Sector banks as major changes took place in the
functioning of banks in India only after liberalization, globalization and privatization. They
stated that increased competition, new information technologies, declining processing costs,
the erosion of product and geographic boundaries, and less restrictive governmental
regulations have all played a major role for Public Sector Banks in India to forcefully
compete with Private and Foreign Banks.

Role of commercial banks in tackling the housing problem in India are analyzed by (Shankar,
2014; Manoj, 2016)9

Research Gap

Earlier literature brings out the fact that there are so many studies held on housing finance by
Commercial Banks and Non-Banking Finance Companies in India, but very few of them
were on the comparative analysis of performance of Commercial Banks and Non-Banking
Finance Companies on housing finance. So, the present study will help to fill this research
gap.

Statement of the Problem

“Comparative Study on Financial performance of Selected Banks & Non-Banking Financial

Companies with special reference to Housing Finance Loans”.

Research Methodology
Research Objectives
1. To analyze the operational performance of Commercial banks.
2. To analyze the operational performance of NBFC’s.
3. To compare the operational performance of commercial Banks and NBFC’s.

Research Design
1. Selection of Institutions: As mentioned in the need of the study, Commercial Banks
and Non-Banking Finance Companies will be selected for the purpose of the study.
2. Secondary data collection of commercial banks through their websites using CAMEL
model.
3. Secondary data collection of NBFC’S through their official websites (Analysis of
CAMEL)
4. Using statistical tools to measure and compare them.

Sample Design
Samples are selected based on their earning per share. 10 commercial banks and 10 NBFC’s
are selected. Commercial banks include 5 public sector banks and 5 private sector banks.

Data Sources
Secondary data is collected through official websites and Secondary data are analysed in
order to compare commercial banks and NBFC’s.

Expected Research Outcomes

1. Better understanding about which is the sector contributing in larger sense to the
housing finance.
2. level of competition between commercial banks and NBFC’s.
3. Suggestion for the individuals to choose while taking home loan.

Limitations of The Study

1. Duration available is less (i.e. 6 weeks)
 2. Sample selected is less since more samples cannot be evaluated during the prescribed
period.
3. The paper compares only the operational performance of HFCs and SCBs. It doesn’t
cover the financial performance of these two institutions within its scope

References
1. Garg, Dr. Shiv Kumar and Kumar, Dr. Gajendra, Housing Finance in India: A
Comparative Study of Public and Private Sector Banks, Journal of Commerce &
Trade , ISSN: 09734503, October 2014, Vol. IX No. 2
2. Gupta, R. (2008), A CAMEL Model Analysis of Private Sector Banks in India,
Journal of Gyan Management, 2(1), pp.3-8
3. Srujanlal Banoth, (2017). Polices and Procedure for Sanctioninrg Housing Loans In India,
International Journal of Research, 4(9), 2498-2502.
4. Roy,B and Gupta,P, (2016). A Critical and Comparative Analysis of Scheduled Commercial
Banks and Housing Finance Companies (A Study regarding Housing Finance), International
Journal of Research in Finance and Market, 6(2),125-138.
5. Prabitha, P. & Krishnan, C.. (2018). A Comparative Study of Growth and
Performance of Housing Finance Companies and Scheduled Commercial Banks on
Housing Finance in India. International Journal of Management Studies. V. 88.
10.18843/ijms/v5i4(9)/12.
6. Tiwana, Jasmine and Singh, Jagpal, Regulatory Framework of Housing Finance
Companies in India, VSRDInternational Journal of Business and Management
Research, 2 (9), 488-495, 2012.
7. Ravindra, Dr. P.S., Viswanadham, Dr. P. and Rao, Ch. Trinadha, Operational and
Financial Performance Evaluation of Housing Finance Companies in India (A Case
Study of LIC Housing Finance Limited and HDFC), International Journal of
Management and Social Sciences Research (IJMSSR), ISSN: 2319-4421, July 2013,
Volume 2, No.
8. Chaudhary, Kajal and Sharma, Monika, Performance of Indian Public Sector Banks
and Private Sector Banks: A Comparative Study, International Journal of Innovation,
Management and Technology, June 2011, Vol. 2, No. 3
9. Shankar, E. (2014). Role of Scheduled Commercial Bank In Housing Finance,
International Journal of Research in Management, Economics & Commerce, 4 (12).