To Study Credit Appraisal in Home Loan Fin - Final - Docx 1

A
DISSERTATION
ON
“TO STUDY CREDIT APPRAISAL IN HOME LOAN

FINANCE”
AT
Prerana Cooperative Bank, Shitolenagar,
JuniSangavi, Dapodi, Pune
SAVITRIBAI PHULE PUNE UNIVERSITY
IN THE PARTIAL FULLFILMENT OF

“MASTER OF BUSINESS ADMINISTRATION”
BY
Namrata Dhakate
MBA (Finance)
(2018-2020)
Under Guidance of
Prof. Praveen Suryawanshi
Padmashree. Dr. D.Y.PatilPrathisthan’s

Dr. D Y Patil Institute of MCA, MBA (2nd Shift),
Akurdi, Pune 411 044
1
ACKNOWLEDGEMENT
Working on dissertation was a memorable and learning experience for me. The sole efforts
of any Individual are not sufficient enough to complete the Dissertation. The completion of
a dissertation t involves the effort and interest of many people. I would like to extend my
gratitude and thanks to all those that gave up their time, and invaluable knowledge, to
make this dissertation successful.
I would like to thank our Dissertation guide Prof. Praveen Suryawanshi for providing me
an opportunity to undertake the dissertation.
I would like to take this opportunity as privilege to articulate my de sense of gratefulness to
Dr. Shalaka Parker, Dean of Padmashree. Dr. D.Y.PatilPrathisthan’s
Dr. D Y Patil Institute of MCA & MBA for her continuous encouragement and
invaluable guidance for the completion the dissertation.
I wish to express my special thanks to all Faculties for their continuous support.
Date:
Place: Pune Name: Namrata Dhakate
2
DECLARATION
I do hereby declare that this dissertation work entitled “to study credit appraisal in home
loan finance” submitted by me to the Savitribai Phule Pune University of for the partial
fulfillment of the requirement for the award of Master of Business Administration (MBA)
is a record of my own research work. The report embodies the finding based on my study
and observation and has not been submitted earlier for the award of any degree or diploma
to any Institute or University.
Date:
Place: Pune. Name: Namrata Dhakate
3
INDEX
CHAPTER CHAPTER NAME Page No.

NAME
1 INTRODUCTION 5-11
2 THEORITICAL BACKGROUND 12-31
3 COMPANY PROFILE 32-43
4 RESEARCH METHODOLOGY 44-46
5 DATA ANALYSIS AND INTERPRETATION 47-56
6 FINDINGS 57-58
7 SUGGESTIONS 59-60
8 CONCLUSION 61-62
9 BIBLIOGRAPHY 63-64
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INTRODUCTION
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1.1 Introduction of Dissertation
Credit appraisal means an investigation/assessment done by the bank prior before

providing any loans and advances/project finance and also checks the primary and
collateral security cover available for recovery of such funds. Credit appraisal is a process
to ascertain the risk associated with the extension of the credit facility. It is generally
carried by the financial institutions which are involved in providing financial funding to its
customers.
Basic Types of Credit
There are four basics types of credit. By understanding how each works.
1. Service credit is monthly payments for utilities such as telephone, gas, electricity,
and water. You often have to pay a deposit, and you may pay a late charge if your
payment is not on time.
2. Loan let you borrow cash. Loan can be for small or large amounts and for a few
days or several years. Money can be repaid in lump sum or in several regular
payments until the amount you borrowed and the finance charges are paid in full.
Loan can be secured or unsecured.
3. Installment credit may be described as buying on time, financing through the store
or the easy payment plan. The borrower takes the goods homes in exchange for a
promise to pay later. Cars, major appliances, and furniture are often purchased this
way. You usually sign a contract, make a down payment, and agree to pay the
balance with a specified number of equal payments called installments. The finance
charges are included in the payments. The item you purchase may be used as
security for the loan.
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4. Credit cards are issued by an individual retail stores, banks, or businesses. Using a
credit card can be the equivalent of an interest-free loan, if you pay for the use of it
in full at the end of each month.[ CITATION AJo13 \l 1033 ]
1.2 Dissertation title
The Credit Appraisal is a complete exercise which starts from the time a potential borrower
walks into the branch and concludes in credit delivery and monitoring with the objective of
certifying and maintaining the quality of lending and managing credit risk. Credit appraisal
is the assessment of the viability of proposed long term investments in terms of
shareholder wealth and the formal analysis of all project costs and benefits which is used to
justify the project proposal. The bank has over the years designed and adopted the Best
Practices Code. This in effect represents the bank's philosophy towards effective Corporate
Governance.
The starting point for appraisal: applicants should provide detailed description of the
project; identifying the local need it aims to meet. Appraisal helps to show if the project is
the right response, and highlights what the project would be doing and for whom.
CREDIT APPRAISAL PROCESS
A. Generation of leads/Sourcing of business:-
This is an important step in the housing finance cycle to keep the organization moving
successfully. It is essential to generate cases to credit bank uses methods to source
business & generate leads-
1. Mail.
2. Walk-in interview.
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3. Telephone enquiry.
4. Customer reference.
5. Approved project file.
B. Contact & collection of documents from customer:
Once the lead has been sourced the sales officer contacts him & gives him a list of
documents long with other corresponding information. When the documents are
handed over to sales officer, he submits documents along with the application form to
bank. Sales officer gives an idea about how much loan can customer avail as per his
income.
C. Completion of documents:
The document have been collected by the sales officer hand over to the back office
executive, executive then complete documents in special file provided for bank in
accordance with the requirement of bank.
D. Field investigation report:
After completing the documents the back office executive ties the field investigation
report with the data compiled from the file before moving it on the next stage.
E. Verification by sales manager :
After completion of documents and filing of it, the documents are handed over to the
Sales manager, who verifies the documents to check for loan analysis the strength and
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weakness of a case, the loan eligibility & the requirement of additional documents.
The sales manager act as a filter allowing good case to flow through for final approval
while do not fit, into the polices of bank. Sales manager make signature if the case fit
into policies of the bank.
F. Personal discussion:
Personal discussionis an important stage in sanction process. as per norms loan

amount is decided on the basis of documentation but the customer knowledge, his
behavior can be decided on the basis of with himPersonal discussion. It helps to judge
the credit worth ness of applicant which helps organization in future. Sales manager
make signature if the case fit into policies of the bank.
G. Final approval or rejection by the branch credit manager:
The file is send to the branch credit manager for final approval, after checking the file
branch credit manager take final decision of approval or rejection of the case. If the
case is rejected the documents are returned to the customer & if the case is approved
then it goes to the next step.
H. Sanction letter delivered to the customer:
This is the final step in sanction process after receiving the sanction letter it hand over
the sanction letter to customer along with a list of legal documents required for the
next stage i.e. disbursement stage.
Disbursement stage:
A. Collection of legal documents.
B. Completion of documents.
C. Legal appraisal.
D. Technical appraisal.
E. Final check by the BCM.
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A. Collection of legal documents:
This is the first step towards the disbursement of cheque after sanction of the case.
Already the sales officer collect the legal document from the customer in case of
self-construction& or collect it from the builder from whom the customer is
purchasing the property.
B. Completion of documents:
Once the documents are collected by the sales officer he hand it over to the back
office executive for compilation the executive complete the documents and process.
C. Legal Appraisal:
The legal appraisal of a case is an important step & it done by lawyer specially
appointed by bank. The lawyer verifies the documents to check if the title of the
property is free & marketable from all obligations; other legal aspect is free from
any fraud. Once the documents have been verified he submits a legal report to
bank. The lawyer report is very essential without his approval no case is clear. In
case of negative remark mentioned by the lawyer the case is being rejected.
D. Technical Appraisal:
The technical appraisal is a task in which an engineer specially appointed by bank.

He visits the site and checks the property and prepares a report and submits it to the
bank. On the basis of the report the BCM takes his disbursement decision.
1. If the property is in accordance with the plans rules and regulations approved by
NMC.
2. If there are any legal and unauthorized construction on the site.
3. If the owner of the property is the same as mentioned on the legal Documents.
4. The extract or stage of constructions.
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5. The raw material etc. available on the site.
6. He checks to see the cost is being incurred on the property is equivalent to the
estimate shown by the customer.
7. He also provides an estimated date of compilation of the property.
8. Checking the age and conciliation of the property in case of resale Property.
E. Final check by the BCM:
The BCM makes a final check of the documents before taking his decision. If the
case is clear then BCM sends the file to operational manager.
F. Cheque disbursement:
This is final step in the disbursement stage. The operation manager prepare the cheque
along with the letter which is handed over to the sales officer who then five it to the
customer. Disbursement of cheque is done in accordance with the stage of construction
as reported by technical advisor.
The cheque is disbursed in two ways,
1. as a part disbursement.
2. fully disbursement.
1.3 OBJECTIVE OF DISSERTATION
 To get an opportunity of observing the business.

 To know how organization work.
 To get acquainted with real organizational problems, perceptions & Challenges
faced by business.
 To know & understand the career opportunities available in this sector.
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1.4 SELECTION OF TOPIC
We know three basic needs of human beings i.e. food, clothing & shelter. For all these
needs we want money? It involves large investment. Everyone does not have that much
money to invest at once. Borrowing and lending is the important function of the every
developing economy. It is in existence right from ancient time. Previously in barter era the
goods are exchange against goods. Now the scenario has changed to fulfill the need of
human beings the old concept which emerge as a new is nothing but “Loan”.
Co-operative banks are an integral part of the Indian financial system. They comprise
urban co-operative banks and rural co-operative credit institutions. Co-operative banks in
India are more than 100 years old. Urban Co-operative Banks (UCBs) also referred to as
primary cooperative banks? Play an important role in meeting the growing credit needs of
urban and semi-urban areas of the country. UCBs mobilize savings from the middle and
lower income groups and purvey credit to small borrowers, including weaker sections of
the society. Scheduled UCBs are under closer regulatory and supervisory framework of the
RBI. Rural co-operative banks operate mainly for the benefit of rural areas, particularly the
agricultural sector.
Though much smaller as compared to scheduled commercial banks, co-operative banks

constitute an important segment of the Indian banking system. They have an extensive
branch network and reach out to people in remote areas. They have traditionally played an
important role in creating banking habits among the lower and middle-income groups and
in strengthening the rural credit delivery system. (Basak, 2010)
The Prerana Co-operative Bank has been undergoing some fundamental changes in its
approach to Co-operative Banking. There has been a perceptible shift towards Customer
Relationship Management (CRM) mainly arising out of the element of intensive
competition infused into the industry by the arrival of private players. With the free
economic reforms government permitted private players to enter in banking business along
with existing nationalized banks.
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Credit Policy
“Credit has done a thousand times more to enrich mankind than all the gold mines in the
world. It has exalted labor, stimulated manufacture, and pushed commerce over every sea.”
Why Co-operative Bank Credit?

Credit provided by Co-operative Bank is an important driver of economy. In olden days
when commercial Bank had not taken the present shape, individuals or families
traditionally involved in money lending as source of finance. Present day’s economy is
different from old economy. Due to industrialization, need for finance change drastically.
With change in population as well as industrialization demand and supply increased more
over the sources of supply no longer confine to the area where the demand exists with the
improvement in transport and communication.
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THEORETICAL
BACKGROUND
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Topic under study
HOME LOAN
A new home brings with it new hopes, joys and emotions. At Prerana cooperative bank, we
have shared new hopes, joys and emotions with over 15000 customers. Every customer has
a specific and unique concern. Having earned an experience of 10 years in home loans, our
home loan product is customized to provide you solutions for your unique concern.
Features
 Maximum loan
85% of the cost of the property (including the cost of the land) and based on the
repayment capacity of the customer.
 Maximum Term
20 years subject to your retirement age.
 Applicant and Co- Applicant to the loan

Home Loans can be applied for either individually or jointly. Proposed owners of
the property will have to be co-applicants. However, the co-applicants need not
be co-owners.
 Adjustable Rate Home Loan

Loan under Adjustable Rate is linked to SAD's Retail Prime Lending Rate
(RPLR). The rate on your loan will be revised every three months from the date of
first disbursement, if there is a change in RPLR, the interest rate on your loan may
change. However, the EMI on the home loan disbursed will not change*. If the
interest rate increases, the interest component in an EMI will increase and the
principal component will reduce resulting in an extension of term of the loan, and
vice versa when the interest rate decreases.
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 2-in-1 Home Loans
2-in-1 Home Loan provides customers with a choice of breaking up the loan
requirement into Adjustable and Fixed Rate loans. Customers benefit both ways, as
it helps them hedge their interest rate risk against rising interest rates to the extent
of the fixed rate portion of the loan and take the advantage of falling interest rates,
with the Adjustable Rate portion. 2-in-1 Home Loans can be taken in any
proportion. With no prepayment charges* under the Adjustable Rate Home Loan,
customers planning to make part prepayments can take a portion of the loan
intended for prepayment under Adjustable Rate loan option; the rest can be taken
under Fixed Rate Loan option.
Purpose
 Purchase of
Flat, row house, bungalow from developers.
Existing freehold properties.
Properties in an existing or proposed co-operative housing society or apartment owner's

association.
 Self-Construction
Fees:1% of the loan amount applied plus applicable service taxes and cess.
 No Charges for:
1. Replacement of cheques
2. Income Tax Certificates
3. Accelerated Repayment Option
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 Redemption Charges
 Adjustable Rate Home Loan [ARHL]

If a prepayment is made within 3 years of the first disbursement*, under Adjustable
Rate Home Loan (ARHL) option early redemption charges of 2% of the amount
being prepaid is payable if the amount being repaid is more than 25% of the
opening balance.
 Fixed Rate Home Loan [FRHL]

Redemption charges of 2% of the amount being prepaid is payable if the amount
being repaid is more than 25% of the opening balance In case of commercial
refinance under both the FRHL and ARHL an early redemption charge of 2% is
payable. You may be required to submit copies of your banks Statements or any
other documents that PCB deems necessary to verify the source of prepayment.
Repayment Option:
Step Up Repayment Facility
Helps young executives take a much bigger loan today based on an increase in
their future income, this helps executives buy a bigger home today!
 Flexible Loan installments Plan
Often customers, parents and their children, wish to purchase properties together.
The parent is nearing retirement and their children have just started working. This
option helps such customers combine the incomes and take a long term home loan
where in the installment reduces upon retirement of the earning parent.
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 Tranche Based EMI
Customers purchasing an under construction property need to pay interest ( on the

loan amount drawn based on level of construction) till the property is ready. To
help customer save this interest, we have introduced a special facility of Tranche
Based EMI. Customers can fix the installments they wish to pay till the time the
property is ready for possession. The minimum amount payable is the interest on
the loan amount drawn. Anything over and above the interest paid by the customer
goes towards Principal repayment. The customer benefits by starting EMI and
hence repays the loan faster.
 Accelerated Repayment Scheme
Accelerated Repayment Scheme offers you a great opportunity to repay the loan
faster by increasing the EMI. Whenever you get an increment, increase in your
disposable income or have lump sum funds for loan prepayment, you can benefit
by, Increase in EMI means faster loan repayment saving of interest because of
faster loan repayment you can invest lump sum funds rather than use it for loan
prepayment. The return from investments also gives you the comfort of paying the
increased EMI..
 Security
Security for the loan is a first mortgage of the property to be financed, normally by
way of deposit of title deeds and/or such other collateral security as may be
necessary. Interim security may be required, if the property is under construction.
DOCUMENTS OF HOUSING LOAN
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Documents forms integrate part of any legal or financial transaction. The documents
which are necessary for appraisal of home loan are divided into two stage documents as
follows.
A. Pre- sanction / Credit documents.
B. Post-sanction / Legal documents.
A. Pre- sanction / Credit documents
These documents are submitted for an approval or sanction of housing loan. The
credit documents all collected to analyze the credit worth need of client. They help to
understand the financial strength & weakness of a case that how much loan can he/she
get, calculation of installment is done on the basis of these documents.
Pre sanction documents
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Self Employed Self Employed
Salaried (Professionals) (Businessman)
Application form with Application form with Application form with

Photograph &
Photograph Photograph
Identity and Residence Identity and Residence Identity and Residence

Proof Identity.
Proof Identity. Proof Identity.
Latest Salary-slip. Education Qualifications Education Qualifications
Certificate and Proof of Certificate and Proof of
Business existence. Business existence.
Form 16. Last 3 years Income Tax Business profile.
returns (self and
Business).
Last 3 years Profit /Loss Last 3 years Profit /Loss Last 3 years Income Tax
and Balance Sheet.
And Balance Sheet. returns (self and business)
Processing fees by cheque. Processing fees bycheque. Processing fees by cheque.
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Customer – Basic Eligibility Criteria.
Customers: Borrowers
 Resident Indians
 Salaried
 Self Employed Professionals
 Self Employed Non Professionals
Resident Indian – Salaried:
 Minimum Gross Income : 8000 per month
 Age Norm: a.Minimum 21 years at Loan Application.

b. 65 or Age of Retirement, whichever is less at Loan Maturity.
 Minimum Qualification: SSC (Xth Standard)
 Minimum no. of years in total employment: 1 Year
 No. of Dependents: Not to exceed 5
 No. of Co – Borrowers: Maximum 3
 Customer Residence / Property should not be in Negative Area.
 Customer should not belong to Negative Profile Category.
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Self-Employed - Professionals
 Who are all considered as SEP?
1. CA/ICWA/ CS.
2. Architects.
3. Lawyers (only advocates practicing with Supreme Court/ District Court or
4. Working with Solicitors/ practicing tax consultants).
5. Consultants like Engineers / MBAs etc.
6. Doctors / Pathologist
7. Chemist with B. Pharm
 Minimum Income as per the P&L A/c

 For Home Loan Products
1. For lawyers Net profit should be Rs.20000 p.a
2. For Consultants like Engineers, MBAs etc.Net profit should be Rs.15000 p.a
3. For others Net Profit should be Rs. 40,000
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 Age Norm:
1. Minimum 21 years at Loan Application
2. Maximum 65 or Age of Retirement, whichever is less at Loan Maturity.
 Minimum years of Experience.
1. Years as Practicing Professional
2. Or 1 Year as Practicing Professional, if employed previously for 2 Years
 Professional Qualification Certificate.
a. Required.
b. In lieu of certificate, surrogates viz. membership certificate can be accepted.
 No. of Dependents: Not to exceed 5
 No. of Co – Borrowers: Maximum 3
Self Employed – Non-Professionals
 Eligible entities:
 Individuals
a. Proprietors
b. Partners
c. Directors of Pt. Ltd. Cos.
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Minimum Income to be ascertained as follows:
a. Proprietors - Net profit as per P/L a/c

b. Partners - Total of share of net profits as per P/L a/c
c. Private Limited Company – Net Profit as per P/L a/c
d. Remuneration / Salary from the firm as per P/L a/c or ITR
e. Directors – Salary as per latest Form 16 and ITR
Minimum Income Norm for SENP Customers –
a. Retail: Rs. 10,000 p.a.

b. Non Retail:Rs. 20,000 p.a.
For fulfilling minimum income norms adding nominal expenses like depreciation,
interest on capital to partners / directors etc. to net profit shall not be considered.
Age Norm
a. Minimum 21 years at Loan Application.
b. Maximum 65 or Age of Retirement, whichever is less at Loan Maturity.
Business Continuity: Minimum 3 Years
No. of Dependents: Not to exceed 5
No. of Co – Borrowers: Maximum 3
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How we treat income from other sources?
Source %Eligibility Proof

Agricultural income (As 50 % of average of last 2 3 years ITR’s and 7/12
stated in ITR) years extract or ownership
document copy.
Rental Income 100% of average of last 2 03 ITR
years
Rental Income 100% of current rental Lease Agreement for 3 years
income as per lease
Agreement
Rental Income 50 % of current rental Leave & License agreement
income as per leave & copy of current period
License Agreement
LIC /Broker commission i.e. 50 % of new business & Certificate / original
NSC, KVP, IVP postal 100% of renewal business commission slip of Cos.
Interest / Dividend Income 50 % of average of last 2 03 years ITR’s
years
The agreement of the eligibility from other sources of income must not be more than 100
% of the agreement of the main salary income.
1) Resident Indian – Salaried:-

ITEM CONSIDERATION
REG.ITEMS (PAYSLIP) 100%
HRA 100%
PENSION INCOME 100%
BONUS 100%
ANNUAL BENEFITS 50%
FIXED REIMBURSEMENTS 50%
VARIABLE ITEM 50%
2)Self-Employed – Professional:-
For calculation purpose SEPs can be classified as per following pattern –
I. Doctors
a. Allopathic (MBBS plus)
b. Other (BHMS, BUMS, etc.)
c. Others (CA, CWA, CS, Lawyer, Consultant etc.)
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II. Methods Used:
a. GPR Multiplier Method
b. Eligibility based on Net Profit
3) Resident Indian – SENP:

Business Income
Av. Net Profit (PAT) for last two years Net Profit
Add: Depreciation* Depreciation

-------------
Business Income
Personal Income (Salary / Remuneration)
(Av. For last two years) Personal Income
Total Appraised Income = BI + PI
Income from other sources

Type Eligibility Proof
Agricultural Income 50%* ITRs
Rental Income 100%* ITRs
Interest/Dividend Income 50%* ITRs
*Average of the last two years amount

Income from above sources should not exceed
50% of the Total Appraised Income
5) Eligibility calculation
Particulars Amt. Amt.
Total Appraised Income xxxxx ------
Add: Income from other xxxxx ------
sources
Total Income ------ Xxxxx
Total Income p.m. xxxxx ------
(TI/12)
Less: Obligations xxxxx ------
Maximum Payable EMI ------ Xxxxx
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Understanding Income Documents:
1) Salary Slip Analysis
a. Name of the Applicant – whether matches with the salary slip or not?
b. Designation
c. Name of the Employer
d. Is the latest salary credit as per the salary slip
e. Are the salary credits in the PCB statements as per the salary slip
f. Is the salary fixed or variable
g. Any regular deductions reflecting in the salary slip.
2) Understanding PCB Statements

a. In case of Salaried, number of credits to be checked – Fixed & Variable.
b. In case of Self Employed check the average balance for liquidity
c. Large credit or debit entries
d. Recurring debits on account of loan repayment
e. Inward Cheque bounces
f. Outward Cheque bounces
g. Stop Payment / Minimum Balance charges
3) Form 16 – Salaried / Form 16A – Other than salaried

a. Name & address of the employer
b. Name and designation of the employee.
c. Details of the salary paid / other income
d. Details of the tax deducted
e. Information of Housing loan availed
f. Information on Medi-claim, pension policy etc.
g. Information on other savings like PPF, NSC, Mutual funds etc.
4) Understanding Profit & Loss Account

a. Expense heads
b. Trend in Profitability & Sales over the years
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c. Depreciation charged
d. Any unusual expenditure
5) Why do we require a Balance Sheet?

To understand the business of the customer in terms of –
a. Owner’s involvement
b. Profitability of the business
c. Asset base
d. His Customer Base & Liquidity
e. His Suppliers
6) What to read out of Schedules?

a. Understanding the list of his Customers
b. Understanding the list of his Suppliers
c. Understanding the value of assets as on date
d. Understanding various loans availed by the loan applicant
B) Post sanction/Legal documents
Post sanction is legal documents on the basis of which a cheque is disbursed to the
customer. The only security that bank has against a loan in this legal documents & no
deviation is usually allowed in legal document. These documents are sent to the lawyer
who verifies before being accepted by bank. These are as follows:
1) Direct From Builder Case:

a. Agreement of Sale
b. Sub Registrar Receipt
c. No objection certificate from builder
d. Own contribution receipt from builder
2) Direct from Registered Co-op Housing Society Ltd.:
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a. Share Certificate
b. Allotment Letter
c. No Objection Certificate from Society
d. Own contribution receipt from Society
e. Copy of Society Bye Laws
f. Society Registration Certificate
g. Registered Agreement if not Original member
3) Own Construction Case:

a. Original Sale Deed with Registration Receipt.
b. 7/12 Extract
c. 6 D Extract
d. NA Order Copy
e. ULC Order Copy
f. Latest Title Clearance Certificate
g. Original Architect Estimate
h. Commencement Certificate
i. Prior Sale Deed with Original Reg.Receipt.
4) Resale Case:
a. Sale Deed/Agreement with Registration Receipt
b. Previous Customers Sale Deed/ Agreement with Registration Receipt
c. Own Contribution Receipt
d. NOC from Builder/Society
e. Title Certificate
f. Share Certificate & Allotment Letter (if applicable)
g. NA Order & NA Tax Receipt (Xerox)
h. ULC (Xerox)
i. 7/12 & 6-D Extract (Xerox)
j. Commencement Certificate & Completion Certificate (Xerox)
k. Society Registration Certificate & Bye-Laws (Xerox)
l. Title Certificate (Xerox)
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m. Building Plan (Xerox)
5)MASTER FILE/LEGAL FILE:

a. Sale Deed/lease Deed/Gift Deed or Development Agreement/Power of
Attorney/Partnership Deed
b. NA order & ULC
c. Commencement Certificate & Completion
d. Building plan
e. 7/12 Extract & 6-D Extract
f. Title Certificate
g. Society Registration Certificate
h. Bye Laws Copy.
6) Analysis of Legal Documents

a. All owners of the property should be applicants
b. Signature of the owners should match with the application form
c. Witness should sign the agreement
d. Priority and Non Priority documents to be collected as per legal report
e. NOC From builder/ society / development authority as the case may be
f. Own contribution receipts
7) Agreements
a. Current agreement must be registered
b. Stamp Duty receipt required
c. Registration receipt required.
d. Stamp duty receipt and registration receipt amount to be added to cost of
property and calculated as OLakhs too.
8) NOC
a. NOC should be on the letterhead of the Society/ Builder / Development
Authority
b. Should have the stamp of the society / Builder / Development Authority
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c. Address should match as per the agreement, Flat No., Wing No. etc.
d. Should be as per the procedures and drafts for different transaction types.
e. Must be dated
9) Own Contribution Receipts

a. Must have a revenue stamp
b. Cash payments cannot be more than Rs.20000/-
c. Should give details of the property like flat No. etc.
d. In case of refinance > Rs.1 lac
 Builder case – Receipts from builder & debits in bank account
 Resale – Agreement for sale / Sale deed to be registered before
refinance
10) Property Norms:

a. Property should not be in negative area
b. Property should be within geographic limits
c. Property should be self-contained
d. Maximum age of property less than 35 years at loan application
e. Loan tenor not to exceed residual age of the property
f. Minimum Built up area > 400 sq. ft.
g. In case of row house of ground floor only.
HOUSING LOAN PROCEDURE
The housing finance cycle at PCB is of two stages; both are important and play a vital role
in fulfilling the requirements of housing finance institution.
The two stages are as under-

1. Sanction stage.
2. Disbursement stage.
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1. Sanction stage.
It is a stage where the customer gets sanction or approval that he is eligible to take
a loan of specific amount calculated on the basis of his income from Prerana co-
operative bank.
2. Disbursement stage.
It is a stage where the cheque of sanctioned amount is handover to the customer or
concerned person.
Sanction stage.
A. Generation of leads/Sourcing of business.
B. Contact & collection of documents from customer.
C. Completion of documents.
D. Field investigation report.
E. Check for CIBIL data
F. Verification of relationship officer.
G. Personal discussion.
H. Final approval or rejection by the branch credit manager.
I. Sanction letter delivered to the customer.
32
A) Generation of leads/Sourcing of business:-
This is an important step in the housing finance cycle to keep the organization moving
successfully. It is essential to generate cases to credit bank uses methods to source
business & generate leads.
 Mail.
 Walk-in interview.
 Telephone enquiry.
 Customer reference.
 Approved project file.
B) Contact & collection of documents from customer:-
Once the lead has been sourced the sales officer contacts him & gives him a list of
documents long with other corresponding information. When the documents are
handed over to sales officer, he submits documents along with the application form to
bank. Sales officer gives an idea about how much loan customer avail as per his
income can.
C) Completion of documents:-
The document have been collected by the sales officer hand over to the back office
executive, executive then complete documents in special file provided for bank in
accordance with the requirement of bank
33
D) Field investigation report:-
After completing the documents the back office executive ties the field investigation
report with the data compiled from the file before moving it on the next stage.
E) Check for CIBIL data:
The CIBIL score of the applicant should be more than 750, if in case the score is
less than 750 then the chances of getting loan are less.
F) Verification by sales manager :-
After completion of documents and filing of it, the documents are handed over to the
Sales manager, who verifies the documents to check for loan analysis the strength and
weakness of a case, the loan eligibility & the requirement of additional documents.
The sales manager act as a filter allowing good case to flow through for final approval
while do not fit, into the polices of bank. Sales manager make signature if the case fit
into policies of the bank.
G) Personal discussion:-
PD is an important stage in sanction process. as per norms loan amount is decided

on the basis of documentation but the customer knowledge, his behavior can be
decided on the basis of PD with him. It helps to judge the credit worth ness of
applicant which helps organization in future. Sales manager make signature if the
case fit into policies of the bank.
H) Final approval or rejection by the branch credit manager:-
The file is send to the branch credit manager for final approval, after checking the
file branch credit manager take final decision of approval or rejection of the case.
34
If the case is rejected the documents are returned to the customer & if the case is
approved then it goes to the next step.
I) Sanction letter delivered to the customer:-
This is the final step in sanction process after receiving the sanction letter it hand
over the sanction letter to customer along with a list of legal documents required for
the next stage i.e. disbursement stage.
DISBURSEMENT STAGE
A. Collection of legal documents:-
This is the first step towards the disbursement of cheque after sanction of the case.
Already the sales officer collect the legal document from the customer in case of
self-construction& or collect it from the builder from whom the customer is
purchasing the property.
B. Completion of documents:-
Once the documents are collected by the sales officer he hand it over to the back
office executive for compilation the executive complete the documents and process.
C. Legal Appraisal:-
The legal appraisal of a case is an important step & it done by lawyer specially
appointed by Bank. The lawyer verifies the documents to check if the title of the
property is free & marketable from all obligations; other legal aspect is free from
any fraud. Once the documents have been verified he submits a legal report to
bank. The lawyer report is very essential without his approval no case is clear. In
case of negative remark mentioned by the lawyer the case is being rejected.
35
D. Technical Appraisal:-
The technical appraisal is a task in which an engineer specially appointed by Bank.

He visit the site and check the property and prepare a report And submit it to the
Bank,On the basis of the report the BCM takes his disbursement decision.
1. If the property is in accordance with the plans rules and regulations approved by
NMC.
2. If there are any legal and unauthorized construction on the site.
3. If the owner of the property is the same as mentioned on the legal Documents.
4. The extract or stage of constructions.
5. The raw material etc. available on the site.
6. He checks to see the cost is being incurred on the property is equivalent to the
estimate shown by the customer.
7. He also provides an estimated date of compilation of the property.
8. Checking the age and conciliation of the property in case of resale Property.
E. Final cheque by the BCM:-
The BCM makes a final check of the documents before taking his decision. If the
case is clear then BCM send s the file to operational manager.
F. Cheque disbursement:-
This is final step in the disbursement stage. The operation manager prepare the
cheque along with the letter which is handed over to the sales officer who then five
it to the customer. Disbursement of cheque is done in accordance with the stage of
construction as reported by technical advisor.
The cheque is disbursed in two ways,
1. As a part disbursement.
2. Fully disbursement.
36
General Causes of Rejection of the Proposal
Not every case that comes into SAD can be approved for a loan. Certain cases get
rejected there are various causes which lead to the rejection of a case. Some important
causes of rejection are follows.
1) Documentation / Property:
1.1 Credit Documentation not as per Policy.
1.2 Technical Norms not met
1.3 Legal Documentation not as per Policy.
1.4 Fraud Document Submitted
2) Financial Reasons:
2.1 AF Cheque Bounce
2.2 Negative RCU
2.3 Unsatisfactory RTR / Credit history
2.4 Income Norms not met
2.5 Employment norms not met
2.6 Poor Financial (SE Case)
2.7 High Outstanding of Debtors
2.8 Too many existing Obligations
3) Geographical Reasons:
3.1 Outside Geo Limits
3.2 Property in Negative Area
3.3 Residence in Negative Area
4) Personal Profile:
4.1 Negative Profile
4.2 Debut match found
4.3 Income Ownership norms not met
4.4 Poor Saving Habits’
4.5 Dependents > 5
4.6 Undisclosed/Manipulated material facts
4.7 Internal Family Transaction of the Property
4.8 Age norms not met
4.9 Customer withdrawing
4.10 Negative references.
37
COMPANY
PROFILE
38
3.1 Profile of the Organization
Birth:
Registered with an authorized capital of Rs.10.00 lakh and commenced business on 24th
January 1999.
Our Philosophy:
Technology with personal touch. The Bank has also launched aggressively the concept of
“Our Inspiration Your Progress”
OUR AIM:
The bank wishes to cater to all types of needs of the entire family, in the whole country. Its
dream is "One Family, One Bank.
Our Emblem
Our Social Aspect

The bank excels in Social Banking, overlooking the profit aspect; it has a good share of
Priority sector lending having all of its branches in rural areas.
Our Future Plans - Vision 2020.
 To cross the Business Level of Rs.20/- Corers by March 2020.

 Currently bank has 10 branches, and wants to expand it more and more to serve the
society.
 Financial Inclusion to the unbanked section of the population.
 Providing technologically advanced banking services like mobile banking.
39
Vision
To evolve and position the bank as a world class progressive, cost effective and
customer friendly institution providing comprehensive financial and related services;
integrating frontiers of technology and serving various segments of society especially the
weaker sections; committed to excellence in serving the public and also excelling in
corporate values.
Mission
To provide excellent professional services and improve its position as a leader in

the field of financial and related services; build and maintain a team of motivated and
committed workforce with high work those use latest technology aimed at customer
satisfaction and act as a an effective catalyst for socio-economic development.
40
3.2 Organization Chart
Board of Director.
Business Head.
Sales Manager.
(Channel Head)
Zonal Sales Manager.
Area Sales Manager.
Cluster Sales Manager.
V Territory Sales Manager.
Financial Planners.
Co-Executive.
41
3.3 PRODUCT RANGE
1. Home Loan:-
A new home brings with it new hopes, joys and emotions. At Prerana co-operative Bank,
we have shared new hopes, joys and emotions with over 2000 customers. Every customer
has a specific and unique concern. Having earned an experience of 10 years in home loans,
our home loan product is customized to provide you solutions for your unique concern.
Features :
Purpose
 Purchase of
1 Flat, row house, bungalow from developers.
2 Existing freehold properties.
3 Properties in an existing or proposed co-operative housing society
or apartment owner's association.
 Maximum loan
 Maximum Term
 Fees:1% of the loan amount applied plus applicable service taxes and cess.
No Charges for :
1) Replacement of cheques.
2) Income Tax Certificates.
3) Accelerated Repayment Option.
 Security
Security for the loan is a first mortgage of the property to be financed, normally by way of
deposit of title deeds and/or such other collateral security as may be necessary. Interim
security may be required, if the property is under construction.
42
 Self-Construction
 Maximum loan
 Maximum Term
 Fees
1% of the loan amount applied plus applicable service taxes and cess.
 No Charges for :
4) Replacement of cheques.
5) Income Tax Certificates.
6) Accelerated Repayment Option.
 Security
Security for the loan is a first mortgage of the property to be financed, normally by way of
deposit of title deeds and/or such other collateral security as may be necessary. Interim
security may be required, if the property is under construction.
2. Home Improvement Loan:-
 Features
 Purpose
1. External repairs.
2. Tiling and flooring.
3. Internal and external painting.
4. Waterproofing and roofing.
5. Waterproofing on terrace.
6. Paving of compound wall (with stone/tile/etc.).
7. Bore well
43
 Maximum loan
 ForExisting Customer: 100% of the cost of improvement.
 New Customer:80% of the cost of improvement subject to market value of the
property.
 Maximum Term-20 years subject to your retirement age.
Security
 Existing customer: Extension of the mortgage already created on the property

financed and/or other security as may be required by Prerana Co-operative Bank.
 New Customer:For others, security for the loan is a mortgage on the entire
property being improved and /or other security as may be required by Bank.
3. Home Extension Loan.

Features
 Purpose: Prerana Co-operative Bank’s Home Extension Loan makes it convenient
for you to extend or add space to your home. Be it an additional room, a larger
bathroom, or even enclosing an open balcony.
 Maximum loan: 80% of the cost of extension.
 Maximum Term: 20 years subject to your retirement age.
Security

property being improved and/or other security as may be required by Prerana Co-
operative Bank.
4. Land Purchase Loan.
Features
44
 Maximum loan: 80% of cost of the land and based on the repayment capacity of
the customer.
 Maximum Term -15 years subject to your retirement age.
Security: Security for the loan is a first mortgage of the property to be financed, normally
by way of deposit of title deeds and/or such other collateral security as may be necessary.
Non Residential Loans to Professionals for Premises Loan.

Features
 Purpose: Purchase, Construction, Improvement of Office, Clinic
 Eligible
1. Doctors.
2. Chartered Accountants.
3. Lawyers.
4. Other self-employed professional.
 Maximum loan: 80% of cost of the property.

 Maximum Term:10 years Improvement 5 years. Non-residential premises
maximum term is 15 years, NRP improvement remains 5 years
 Security :Security for the loan is a first mortgage of property to be financed,
normally by way of deposit of title deeds and/or such other collateral security as
may be necessary. Interim security may be required, if the property is under
construction.
1. Home Loan:-
A new home brings with it new hopes, joys and emotions. At Prerana co-operative
Bank, we have shared new hopes, joys and emotions with over 2000 customers. Every
customer has a specific and unique concern. Having earned an experience of 10 years
in home loans, our home loan product is customized to provide you solutions for your
unique concern.
Features
 Purpose
45
 Purchase of
1. Flat, row house, bungalow from developers.
2. Existing freehold properties.
3. Properties in an existing or proposed co-operative housing society or apartment
owner's association.
 Maximum loan: 80% of the cost of the property (including the cost of the land)
and based on the repayment capacity of the customer.
 Fees :1% of the loan amount applied plus applicable service taxes and cess.
 No Charges for
1. Replacement of cheques.
2. Income Tax Certificates.
3. Accelerated Repayment Option.
Security:Security for the loan is a first mortgage of the property to be financed, normally
by way of deposit of title deeds and/or such other collateral security as may be necessary.
Interim security may be required, if the property is under construction.
 Self-Construction
 Maximum loan: 85% of the cost of the property (including the cost of the land)
and based on the repayment capacity of the customer.
 Fees :1% of the loan amount applied plus applicable service taxes and cess.
 No Charges for
1. Replacement of cheques.
2. Income Tax Certificates.
3. Accelerated Repayment Option.
46
 Security: Security for the loan is a first mortgage of the property to be financed,
construction.
2)Home Improvement Loan:-
 Purpose
 External repairs.
 Tiling and flooring.
 Internal and external painting.
 Waterproofing and roofing.
 Waterproofing on terrace.
 Paving of compound wall (with stone/tile/etc.).
 Bore well.
 Maximum loanfor
 New Customer:85% of the cost of improvement subject to market value of the
property.
 Maximum Term-20 years subject to your retirement age.
Security For:
 New Customer :For others, security for the loan is a mortgage on the entire
property beingimproved and /or other security as may be required by Bank.
3. Home Extension Loan.

Features
 Purpose: Prerana Co-operative Bank’s Home Extension Loan makes it convenient
for you to extend or add space to your home. Be it an additional room, a larger
bathroom, or even enclosing an open balcony.
 Maximum loan: 85% of the cost of extension.
47
Security For:

property being improved and/or other security as may be required by Prerana Co-
operative Bank.
4. Land Purchase Loan.
Features :
 Maximum loan: 85% of cost of the land and based on the repayment capacity of
the customer.
 Maximum Term:15 years subject to your retirement age.
Security: Security for the loan is a first mortgage of the property to be financed,
may be necessary.
5. Non Residential Loans to Professionals for Premises Loan.
 Purpose: Purchase, Construction, Improvement of Office, Clinic

 Eligible
1. Doctors.
2. Chartered Accountants.
3. Lawyers.
4. Other self-employed professional.
 Maximum loan: 85% of cost of the property.

 Maximum Term:10 years Improvement 5 years. Non-residential premises
maximum term is 15 years, NRP improvement remains 5 years.
 Security :Security for the loan is a first mortgage of property to be financed,

48
construction.
3.4 Competitors
Prerana cooperative bank is competitor for other banks in the market and it also has
competition from other banks like:
1.State Bank of India
2.Punjab National Bank
3.PawnaCooperative Bank
4. The Thane JanataSahakari Bank
5.JanataSahakari Bank
3.5 Branches & Offices:

Head office: DangeChowk, Laxkman Nagar - Thergaon, Pune
Other Branches:
1. Chikli, Dist. Pune
2. Chakan, Dist. Pune
3. Alandi, Dist. Pune
4. Bhosari, Dist. Pune
5. Ravet, Dist. Pune
6. KasarAmboli, Dist. Pune
7. Sangavi, Dist. Pune
8. Nsarapur, Dist. Pune
9. PernePhata, Dist. Pune
49
RESEARCH
METHODOLOGY
50
4.1 Research Methodology
Research in common parlance refers to a search for knowledge. One can also define
research as a scientific and systematic search for pertinent information on a specific topic.
In fact research is an art of scientific investigation. Another meaning of research as “a
careful investigation or inquiry specially through for new facts in any branch of
knowledge.”
Redman and Mory define research as a “systemized effort to gain new knowledge.” Some
people consider as movement a movement from the known to the unknown it is actually a
voyage of discovery.
 Data Sources:
In the Preparation of this project it is necessity to collect the Secondary data
 Secondary Data:
The Secondary Data on the other hand, are based on second-hand information. The
data which have been already been collected, compiled & presented easier by any
agency may be used for the purpose of investigated such data may be called
“Secondary Data”. Collecting the information with the help of Annual Reports,
Magazines, Internet, and Reference Book. The Secondary data provide by
organization. The needed information is collected from Journals Annual Reports,
Magazines, etc.
4.2 SCOPE OF THE STUDY
Indian Banking has witnessed tremendous changes in the wake of the new economic
reforms in the year 1992. The reforms have positively impacted on the banking system,
which have become more resilient competitive and efficient, with the better productivity.
It’s a role of primacy in financial intermediation and has not been challenged by other
financial entities. On the contrary, it has become more entrenched and diversified having
mode forays into insurance and investment banking. Some of the banks have acquired the
status of universal banks.
From the mass banking of yester years, Indian banks have travelled a long distance
in the past economic reforms era. Now they are profitable, strong and stable with
impressive performance indices. They have become tech–savvy and competitive as well.
The winning strategies for them could be clear customer segmentation and product offering
focus on cost efficiencies and entrepreneurial ability to face stiff competition. Perhaps
banks should not charge high interest rates but manage cost and builds up quality credit.
51
In its recent policy statement it explains that it is committed to maintain adequate
liquidity in the market with the preference for soft interest rates.
The Loans are important functions that are providing as fund based Loans and non-
fund based Loans. In last years before the globalization the only traditional Institutions
providing finance.
In providing Loans the Credit Appraisal System playing very important role.
Recently RBI interrelated the interest rates on Loans and Deposits. Even today all banks
Increase rate on Deposits when they increase the interest rate on loans. There is perfect
correlation between interest’s rates on loans and interest rates on Deposits.
Construction of house needs large amount of investment, it is always difficult
on the part of person to invest surcharge amount out of his small saving. Hence, need of
housing arises people to take loan, purchase or construct their & own house stay their &
can repay the housing loan within the period of 15 to 20 years &can have their own house
in this way there is always demand for all the people whether rich or poor person hence,
house can develop by the supply of housing loan to the community, country can develop
their proper accommodates provided to each & every person.
4.3 UTILITY OF DISSERTATION
The project study helped me to get the practical exposure to the banking world. It
also gave an opportunity & experience to collect data, analyze it and interpret it, which
helped to develop my analytical skills. It helped me to gain knowledge about the loan
facilities of the bank. This knowledge will be helpful to me for my career or even in other
way. The project will help the bank to analyze its performance and to make necessary
improvements.
52
DATA ANALYSIS AND
INTERPRETATION
53
CASE STUDY
Case study 1
Applicant:Mr. Rajesh Ninawe

Co-Applicant: Mrs. SmitaNinawe
Loan Type: Housing loan
Amount Applied: 10, 000, 00
Tenure requested: 10 years
Rate of Interest (ROI): 12%
1. Details of the applicants & co-applicants
Applicant Co-applicant
Date of birth 15/6/1976 3/05/1976
Membership No. Applied Applied
PAN No. A0mpp6087B Afzpp6527k
Residential status Ownership Ownership
Area sq ft. 1250 1250
Address NaviSangavi NaviSangavi
Name and address of Navami Enterprises, Sadguru oil depo.
organization NaviSangavi NaviSangavi
Gross Salary P.M 80,000 20000
Net Salary P.M 75,000 19000
Auto loan: 1000 p/m Nil
Other deductions 500 p/m 200p/m
Qualification B.E B.Com
No. of dependents 2
Age at the time of 39 Years 39 Years
application
2. Securities : A. Prime (Purchase of flat/house)mortgage of immovable property:
Particulars of property A-1823,Garden Estate, NaviSangavi,

Dapodi, Pune
Area sq. ft. (955)-653 Sq. carpet
Purchase on 6/10/2010
Agreement Value 70,000
Builder Name M/s. Vicky Joshi & Co.
Present Value Market Value : 90,000,00lakh
Distress Value: 88,66,000 lakh
3. Details of the project cost/Budget:
54
Purchase of flat (Total Amt): 50 lakh
Advance paid: 30.5 lakh
Amtapplied: 10 lakh
Balance in account : 10,000
Deficit : Nil
Interpretation:
Eligibility criterion for the customer in the case
Criterion Eligibility
Residential Indian YES NO
:Salaried
Minimum salary: 8000 p/m

Minimum age: 21 years 
Minimum qualification: 
SSC
Minimum number of years 
in total employment: 1
Year
Number of dependents not 
to exceed 5
Property should not be in 
negative area, E.g. Red
zone area, agricultural
Non-Negative profile 
category
CIBIL Rating(above 750) 
Documentation of 
property(Positive)
Calculation of EMI:
EMI p/m: Rs. 14,347.09
Debt to income ratio: Monthly debt payments (14,347.09 + 1000+ 500) = 15847.09
Gross monthly income: 80,000
Therefore: Debt to income ratio is 19.8%
 Strength of the Case:

Salary of the applicant
Less number of dependents
CIBIL rating is above 750.
55
Tenure Requested is 10 Years; In this case applicant’s age is 39 years, so the
requested tenure is granted.
Case study 2
Applicant: Mr. Rajesh Kulkarni

Co-Applicant: Mrs. Sheetal Kulkarni
Amount Applied: 20, 000 , 00
1. Details of the applicants & co-applicants
Date of birth 14/2/1978 08/02/1979
PAN No. Apnqq7198D Agyqq7618L
Area sq ft. 800 800
Address Pimple Gurav, Dapodi Pimple Gurav, Dapodi
Name and address of S.P Auto Parts, Bhosri B.R GholapVidylaya,
organization Pimple Gurav
Gross Salary P.M 75000 25,000
Net Salary P.M 68000 24000
Other Deductions 1500 p/m 500 p/m
Qualification B.E B.A.Ed.
No. of dependents 1
application
Particulars of property A-207 MayurNagri, Pimple Gurav,

Dapodi, Pune
Builder Name M/s. Laxmankate& Co.
Present Value Market Value : 95000,00lakh
Purchase of flat (Total Amt) : 40 lakh
56
Advance paid : 20 lakh
Amt applied : 20 lakh
Deficit : Nil
Interpretation
:Salaried

SSC
Year
to exceed 5
category
property(Positive)
Calculation of EMI:
EMI p/m: Rs. 22021
Debt to income ratio: Monthly debt payments (22021 + 1500) = 23521

Gross monthly income: 75000
 Strength of the case:

57
Case study 3
Applicant: Mr. Rahul Kale

Co-Applicant: Mrs. Rita Kale
Amount Applied: 12, 00,000
Rate of Interest(ROI): 12%
Details of the applicants & co-applicants:
Date of birth 06/3/1978 9/05/1980
PAN No. Apnqq7198C Afzqq7418l
Area sq ft. 1200 1200
Address Kalewadi Kalewadi
Name and address of Honey Well software Systech Solutions
organization solutions
Gross Salary P.M 58000 35000
Other Deductions 800 300
Qualification B.Com, M.B.A B.C.S
No. of dependents 2
application
Particulars of property A-604,Royal casa, Ravet, Pune

Builder Name M/s. Kumar& Co.
Present Value Market Value : 70,000,00lakh
Distress Value: 6500000 lakh

58
Deficit : Nil
Interpretation:
:Salaried

SSC
Year
to exceed 5
category
property(Positive)
 Calculation of EMI:
EMI p/m: Rs. 15761

Gross monthly income: 58000

59
Case study 4
Applicant: Mr. ShubhamGaikwad

Co-Applicant: Mrs. AashtaGaikwad
Amount Applied: 18000, 00
Details of the applicants & co-applicants

Date of birth 27/9/1982 9/01/1982
PAN No. Aqorr8209E Agxss8529N
Area sq ft. 990 990
Address Akurdi Akurdi
Name and address of TATA motors Force motors
organization
Gross Salary P.M 80,000 60000
Other Deductions 1800p/m 1000
Qualification B.Com, M.B.A B.Com, M.B.A
No. of dependents 2
application
Particulars of property C-407,Prathemesh Heights,Talegaon

Builder Name M/s. Bhegde& Co.
Present Value Market Value :60,000,00lakh

60
Deficit : Nil
Interpretation:
:Salaried

SSC
Year
to exceed 5
category
property(Positive)
 Calculation of EMI:
EMI p/m: Rs. 21603.

Gross monthly income: 80,000

61
FINDINGS
62
Findings:
1. Credit appraisal is done to check the commercial, financial and technical viability
of the project proposed and its funding pattern and further checks the primary or
collateral security cover available for the recovery of such funds.
2. Credit is core activity of bank and important source of their earnings which go to
pay interest to depositors, salaries to the employees and dividend to shareholders.
3. Credit and risk go hand in hand.
4. It has been found that the key issues in disbursement of loan process are truly hard.
5. It is found that appraisal process of home loan is very lengthy.
6. Documentation/property is the main causes for the rejection of loan.
7. Credit processing and disbursement procedure is comparatively delayed due to non-

utilization of modern technology which is followed by multinational bank.
8. The rate of interest charged by the bank is comparatively higher than State Bank of
India which may become a reason for shifts in customer preference.
9. CIBIL score is one of the important aspect which is considered by all the banks
before lending loan.
63
SUGGESTIONS
64
Suggestions:
1. Investment is the major income generating source of the bank. Though the bank is
making tremendous growth in the investment, there are some problems in the credit
appraisal system. By evaluation the credit appraisal practice of the bank
recommendations have suggested for the improvement of the credit appraisal
system which is as following:
2. An integrated planning should be made to reduce time taken by credit appraisal

procedure of Prerana Cooperative Bank. The officers of the branch level should
make plan for the sequence of activities.
3. There is no shortage of skilled officers in the department but if the HR department

arranges training for the investment officers that will make them up to date.
4. One proper standard procedure should be developed for all type of clients and no
interpersonal relationship should be involved approval of loan.
5. The time period taken by the bank to sanction the limits should be significantly
reduced to allow the borrower to make use of credit when the need is most felt.
6. Risk of default should be reduced by funding the right customer, by using various
tools of appraising like personal interviews, Field Investigation, document
verification etc.
7. Employee should get training so that time required for file lock in should get
reduced.
8. Faster dispersion of credit it is of paramount importance. A proposal has to pass

through different channels which lead to delay in dispersal of credit. There is a
need of drastic reduction in these channels for faster dispersal of credit. This will
curtail avoidable delays, improved efficiency besides reducing appraisal time as
well as cost.
65
CONCLUSION
66
Conclusion:
1. Banking sector no more depends only on a traditional method of banking. In this

competitive world now a day’s banking sector is wide enough to cover any kind of
financial services, not only from the local banks but also from the foreign banks.
The major task of bank is to survive the services in this competitive environment
by managing its assets and liabilities in an efficient way. To make the asset
especially loan and advances bank must have to be more careful and otherwise this
assets will become a burden for bank.
2. Prerana Cooperative Bank has made a continuous growth in all the areas of
operation from the starting of its operation in 1999. Within a span of 16 years bank
has become a competitor for other banks in the banking sector.
3. Credit Appraisal plays the most significant role in funding the right and eligible
person.
4. There is heavy risk involved in funding of any property like, double funding.
5. The customers who want to access credits must meet certain conditions in terms of
purpose of loan, amount, tenure and the provision of security in order to enhance
access to loans.
6. Here in this study an assessment of the credit appraisal procedure system of the
bank was made and critically evaluated. Some problems were found such as time
consuming procedure, lack of skilled officers etc.
67
BIBLIOGRAPHY
68
Bibliography
( 2013). Arth Praband, Vol 2.

A Journal of Economics and Management. (2013). Arthprabandh.
Basak, A. (2010, july). cooperative banks in india. Retrieved july 2016, from Research and
Markets:
http://www.researchandmarkets.com/reports/1716433/cooperative_banks_in_india
_functioning_and.pdf
Sharma, S., & Kalra, P. (2013). Arth Praband.
Prerana cooperative Bank Annual Report.
BOOKS:
Management of Indian Financial Institutions; Shrivastava R.M & Nigam Divya, 10th
Edition 2010, Himalaya Publishing House
Financial Institutions and Markets: Bhole L.M, 5th Edition 2009, TATA McGraw Hills 7
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A

“TO STUDY CREDIT APPRAISAL IN HOME LOAN

IN THE PARTIAL FULLFILMENT OF

Padmashree. Dr. D.Y.PatilPrathisthan’s

Place: Pune. Name: Namrata Dhakate

CHAPTER CHAPTER NAME Page No.

2 THEORITICAL BACKGROUND 12-31

3 COMPANY PROFILE 32-43

4 RESEARCH METHODOLOGY 44-46

5 DATA ANALYSIS AND INTERPRETATION 47-56

Credit appraisal means an investigation/assessment done by the bank prior before

Basic Types of Credit

1.2 Dissertation title

CREDIT APPRAISAL PROCESS

A. Generation of leads/Sourcing of business:-

5. Approved project file.

B. Contact & collection of documents from customer:

D. Field investigation report:

E. Verification by sales manager :

Personal discussionis an important stage in sanction process. as per norms loan

G. Final approval or rejection by the branch credit manager:

H. Sanction letter delivered to the customer:

The technical appraisal is a task in which an engineer specially appointed by bank.

E. Final check by the BCM:

1.3 OBJECTIVE OF DISSERTATION

 To get an opportunity of observing the business.

Though much smaller as compared to scheduled commercial banks, co-operative banks

Why Co-operative Bank Credit?

 Applicant and Co- Applicant to the loan

 Adjustable Rate Home Loan

Flat, row house, bungalow from developers.

Existing freehold properties.

Properties in an existing or proposed co-operative housing society or apartment owner's

 Adjustable Rate Home Loan [ARHL]

 Fixed Rate Home Loan [FRHL]

Step Up Repayment Facility

 Flexible Loan installments Plan

Customers purchasing an under construction property need to pay interest ( on the

 Accelerated Repayment Scheme

DOCUMENTS OF HOUSING LOAN

A. Pre- sanction / Credit documents.

B. Post-sanction / Legal documents.

A. Pre- sanction / Credit documents

Pre sanction documents

Application form with Application form with Application form with

Identity and Residence Identity and Residence Identity and Residence

Latest Salary-slip. Education Qualifications Education Qualifications

Certificate and Proof of Certificate and Proof of

Business existence. Business existence.

Form 16. Last 3 years Income Tax Business profile.

returns (self and

Processing fees by cheque. Processing fees bycheque. Processing fees by cheque.

Resident Indian – Salaried:

 Minimum Gross Income : 8000 per month

 Age Norm: a.Minimum 21 years at Loan Application.

 Minimum Qualification: SSC (Xth Standard)

 Minimum no. of years in total employment: 1 Year