SUMMER TRAINING PROJECT REPORT

ON

PROCESS OF HOSUING LOAN

AT

DENA BANK

(PANVEL, NAVI MUMBAI)

SUBMITED FOR PARTIAL FULFILLMENT OF

REQUIREMENT FOR THE AWARD OF DEGREE

MASTER OF MANAGEMENT STUDIES

SESSION 2014-2016

SHEILA RAHEJA SCHOOL OF BUSINESS MANAGEMENT

AND RESEARCH STUDIES

AFFILIATED TO UNIVERSITY OF MUMBAI

UNDER THE GUIDANCE OF MR. RANJAN KUMAR (CHIEF

MANAGER)

i
 Acknowledgement

The project Title ‘‘Process of Home Loan in Dena Bank” has been conducted by me during

2nd May 2015 to 30th June 2015 at Dena Bank, Branch Office, Panvel. I have completed this

project, based on the primary and secondary research under the guidance of my bank guide

Mr.Ranjan Kumar, Chief Manager.

He has helped me to learn about the process of giving home loans to customer by giving me

a valuable insight into the role played by Banks. My increased spectrum of knowledge in this

field is the result of their constant supervision and direction that have helped me to absorb

relevant and high quality information.

Last but not the least, I feel indebted to all those persons and organizations who have helped

me directly or indirectly in the successful completion of this study.

ii
 DECLARATION

I hereby declare that the project report entitled “Process of Home Loan at Dena

Bank’s” submitted for the Degree Of Master Of Management Studies, is the record of

authentic work carried by me during the period from 02.05.2015 to 30.06.2015 and the

project report has not formed the basis for the award of any degree, diploma, associate

ship, fellowship or similar other titles. It has not been submitted to any other university or

institution for the award of any degree or diploma.

Signature

Deshrajsingh Sengar

Date :- 30th June 2015

iii
 Sr no. Table Of Contents Pg. No
1 Executive Summary 2
2 Problem Statement & Research objective 3
3 Company profile
3.1 Overview of Bank 10-11
3.2 Milestones 12
3.3 Mission and Vision 13
3.4 Growth and Development of the Organization 14
3.5 DENA BANK’S Business Structure 15
3.6 Functional Departments of the Organization:- 16-22
3.7 Organization Structure and Organization Chart:- 23
3.8 Product and Service Profile of the Organization Competitors:- 24-26
3.9 Market Profile Of The Organization:- 27
4.0 Introduction 28-42
5.0 Research Methodology 43-45
6.0 Questionnaire & Data Analysis 46-52
7.0 Project Findings 53-54
8.0 Suggestions and Recommendations 55-56
9.0 Conclusion 57-58

Executive Summary

In the growing global competition, the productivity of any business concern depends upon the
behavioral aspect of consumers. This topic deals with the customer’s perception towards other Advance
Product from Dena Bank at Panvel. This project report contains 5 different chapters. The report begins
with the introduction to company, its organization structure, its achievements, etc.

The second chapter is the introduction to the Advance Product which gives a brief idea regarding
HOME LOAN PRODUCT OF DENA BANK, PANVEL BRANCH where the project is undertaken.
It also contains the objectives and limitations of the project.

1
The third chapter, methodology adopted in preparing this report is mentioned. It covers the sample
procedure, types of data used and the data collection method.

The fourth chapter comprehensive coverage of forecasting concepts and techniques which shows the
analysis of data through tabulation, computation and graphical representation of data collected from
survey.

The fifth chapter deals with the findings, suggestion & conclusion part which is very much important
after analysis is made.

As we know that only analysis and conclusion is not the end of a research, so in the sixth chapter the
recommendation part is covered which are made after a depth study of the analysis part of thesis.

In each of the five chapters as described above, every chapter has been scheduled in a manner so as to
enable the reader to appreciate the contents easily. The report is supported by figures and data wherever
necessary with a view to assist the reader in developing a clear cut understanding of the topic.

I hope this report will be extremely useful for those it is meant. Constructive and healthy suggestions for
improvements of the report will be great fully appreciated.

DeshrajSingh Sengar

PROBLEM STATEMENT:-
To Study the Dena Bank’s Home Loan Product.

RESEARCH OBJECTIVES:-
1. To Study the process of Home loans.
2. To Study the Effective management of Loan.
3. To Study the effect of Interest rates on Home loans.

2
3
COMPANY PROFILE-

DENA BANK

4
3.1 Overview of Dena Bank

Dena Bank is one of the earliest nationalized banks in India. Since its inception, the bank has

become a renowned name in the field of banking and financial solutions. It is trusted all over the

country by thousands of consumers. By being a customer of Dena Bank, one can easily enjoy

financial stability and also get good returns on the services and the financial solutions.

Dena Bank was founded on 26th May, 1938 by the family of Devkaran Nanjee under the name

Devkaran Nanjee Banking Company Ltd. It became a Public Ltd. Company in December 1939

and later the name was changed to Dena Bank Ltd.

In July 1969 Dena Bank Ltd. along with 13 other major banks was nationalized and is now a

Public Sector Bank constituted under the Banking Companies (Acquisition & Transfer of

Undertakings) Act, 1970. Under the provisions of the Banking Regulations Act 1949, in addition

to the business of banking, the Bank can undertake other business as specified in Section 6 of the

Banking Regulations Act, 1949.

10
 Competitors: Top three competitors of Dena Bank.

 Bank of Baroda

 Bank of India

 ICICI Bank Limited

 State Bank of India

Dena Bank has been the first Bank to introduce:

 Minor Savings Scheme.

 Credit card in rural India known as "DENA KRISHI SAKH PATRA" (DKSP).

 Drive-in ATM counter of Juhu, Mumbai.

 Smart card at selected branches in Mumbai.

 Customer rating system for rating the Bank Services

11
3.2 MILESTONES

 One among six Public Sector Banks selected by the World Bank for sanctioning a loan of
Rs.72.3 crores for augmentation of Tier-II Capital under Financial Sector Developmental project
in the year 1995.
 One among the few Banks to receive the World Bank loan for technological up gradation and
training.
 Launched a Bond Issue of Rs.92.13 crores in November 1996.
 Maiden Public Issue of Rs.180 Crores in November 1996.
 Introduced Tele banking facility of selected metropolitan centers.
 Dena Bank has been the first bank to introduce-
o Minor Savings Scheme.
o Credit card in rural India known as "DENA KRISHI SAKH PATRA" (DKSP).
o Drive-in ATM counters of Juhu, Mumbai.
o Smart card at selected branches in Mumbai.

o Customer rating system for rating the Bank Services.

3.3 VISION & MISSION

 Mission Statement-

12
 DENA BANK will provide its

Customers - premier financial services of great value,

Staff - positive work environment and opportunity for growth and achievement, Shareholders -

superior financial returns,

Community - economic growth.

 Vision Statement -

DENA BANK will emerge as the most preferred Bank of customer choice in its area of

operations, by its reputation and performance.

Logo

The logo of Dena Bank represents Lakshmi, the Goddess of wealth, according to Hindu

mythology. It was the desire of the founding fathers of the Bank that the Bank should be a symbol of

prosperity for all its clients, and the logo represents this promise. The contemporary 'D' in the logo

reflects the dynamism, dedication and the drive towards customer satisfaction.

3.4 Growth and Development of the Organization

13
 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 segment of society especially the weaker section of the society:

committed to excellence in serving the public and also excelling in the corporate values. Corporate

excellence emanate from good corporate governance exercised by adopting standard of transparency,

accountability, professionalism, social responsiveness, and ethical business practices with this in

view, the has been making efforts for adopting the best practices. The bank commitment towards

corporate governance is to bestow greater transparency and openness in the management and to

ensure best performance by staff at all the levels to maximize the operational efficiency. Adopting

the corporate governance as a work ethos, the bank is committed to enhancing the stakeholder’s

value.

14
3.5 DENA BANK’S BUSINESS STRUCTURE

DENA BANK SERVICES

PERSONAL BANKING SERVICES

Deposit Scheme Loan Scheme

Premium Savings » Dena Niwas Housing Core Banking Solution

Account Scheme Finance Scheme
» Premium Current » Dena Vidya Laxmi Dena Connect Dena India Remit
Account Scheme Educational Loan
» Dena Jeevan SB Scheme Value Added Services
Account » Dena Suvidha
» Dena Maha Tax Bachat (Personal Loan) Scheme Dena ATM Services
Yojana » Dena Auto Finance
» Dena Super Premium Scheme Dena Bill Pay
Current Account » Dena Consumer
» Dena Laxmi Gold Durable Loan Dena m-Banking
Deposit Scheme » Dena Trade Finance
» Dena Savifix Deposit Scheme Telebanking
Scheme » Dena Mortgage Loan
» Dena Freedom Deposit Scheme Electronic Fund Transfer
Scheme » Dena Senior Citizen
» Dena Samruddhi Pensioners’ Loan Inbound Remittances
Deposit Scheme Scheme
» Dena Fixed Deposit » Dena Rent Scheme Direct tax collection
Scheme (Finance) 15
» Dena Senior Citizen Bank assurance Indirect Tax
Scheme
» Dena Recurring Deposit Distribution of Mutual Funds
Scheme
3.6 Functional Departments of the Organization:-

Dena Bank deals with the following functional departments:

1. Personal

In the Dena Bank Personal Banking section, the organization offer its services with a personal touch by

reaching out to all in various manners, one of them is through offering a basket of our Deposit Schemes which

delivers a strong return on all your personal savings and our Loan Schemes which provides the required financial

assistance in your times of need.

2. Corporate

16
Corporate Finance

Dena Bank provides financial assistance to the business entities engaged in various activities of manufacturing,

trading and service.

The Financial assistance is provided for setting up new projects, acquiring assets and also for meeting

day to day working capital requirements of the constituents. These assistances are termed as Long Term

Finance & Short Term Finance respectively.

Term Finance

Term Loan/Finance covers funds required for acquiring means of production such as land, building and

plant and machinery etc. These could be for setting up new projects or expanding the present activities.

Term finance is generally given for a longer period and is repayable in installments over the period with

or without Moratorium. The period and the installments are determined based on the repayment capacity

of the project / borrower.

 Working Capital Finance

Working Capital Finance (WCF) is extended for carrying out normal trading/ manufacturing activities.

The working capital finance is provided for a relatively shorter period generally for a period of 1 year

and renewed on yearly basis considering the performance of the borrower. The WCF is considered only

after project nearing completion and after full tie up of term loan requirement. The Working Capital

limits of the borrower are assessed by adopting various methods such as Projected Turnover Method

(Nayak Committee Recommendation), Permissible Bank Finance Method, Cash Budget Method etc.

depending upon the aggregate working capital limit required / enjoyed from the banking system, nature

17
of activity, production cycle etc. Working Capital finance is in the form of pre-sale and post-sale limits.

In Pre Sale Finance the advance is granted for acquiring Inventory for production / processing or

Trading purpose while the Post-Sale Finance is extended against the receivables. Dena Bank

encourages Post-sale finance in the form of purchase/discounting of bills etc.

 Pre Sales Finance: 

1. Cash Credit Hypothecation / Pledge against Stocks

2. Packing Credit Hypothecation / Pledge against Stocks

3. Clean Packing Credit Limit

4. Trust Receipts

5. Working Capital Loan (Demand / Term)

 Post Sales Finance:

6. Bills discounting / purchase – Inland / Foreign

7. Cash Credit Hypothecation against Book Debts

8. Advances against Export Incentives

9. Purchase of Cheques /Demand Draft

Non Fund Based Credit Assistance

The Business units also require Credit Assistance for procurement of Goods, where the funds are not

involved. Such facilities are available against the assured commitments / guarantee from the Lending

Institutions.

Dena Bank is extending such Non Fund Based assistance to the eligible units in the form of : 

18
 1. Issuance of Guarantee of various types like Performance, Financial, Bid Bond, Tender Deposit /

Earnest Money etc. and

2. Issuance of Letter of Credit

3. Deferred Payment Guarantee

Export Credit

Bank extends credit to Exporters at Competitive rates, at both Pre-shipment and Post-shipment

stages.Recently, Bank has introduced Gold Card Scheme which provides cheaper export credits to the

eligible borrowers. Selected Clients engaged in exports are also suitably rewarded in the form of Export

Credit Denominated in Foreign Currency viz. PCFC (Pre Shipment) / REBA (Post Shipment Credit).

 Specific Schemes

The Bank has devised specific schemes for the following Sectors : 

1. Educational Institutions,

2. Builders & Developers,

3. Hospitals,

4. Hotels & Restaurants &

5. Entertainment Industry.

3. NRI Desk

19
With over 1100 branches spread across the country, Dena Bank is your ideal banking partner if you are

a Non-Resident Indian.

All transactions by NRIs in Indian Banks are governed by RBI Rules and Regulations .

 4. Priority & SME

These are the sectors where Dena Bank has taken special care to ensure instant sanctions and approvals

for all applicants.

Priority Sector Schemes:

1. Dena Rural Internet Kiosk Scheme

2. Dena Shakti Scheme

3. Dena Laghu Udyami Card Scheme

4. Dena Rural Artisan Credit Card Scheme

5. Dena Swarozgar Credit Card Scheme

5. Dena Billpay:-

20
AutoPay

Just give us your bill details, specify your bank account and we will pay your bill for you every month

from that account. You can specify an upper limit and bills above this limit will be paid only on your

specific instructions.

PhonePay

Get a SMS alert when bill is due and issue payment instructions in accordance.

Internet

If you have access to the internet, you can view and pay your bills online at www.denabank.com. You

will receive new bill notifications, due date reminders and payment confirmations via email.

6. Dena ATM Services

21
 

Dena Bank always stands in forefront in understanding it customer’s need. Dena Bank Debit cum ATM

Card offers you an easy and convenient way to do all your transactions and that too within a fraction of

seconds. Presently we have more than 380 ATMs all across India. Dena Debit cum ATM Card is your

Bank Account in your pocket. Get your Dena Bank Debit cum ATM Card today and avail round the

clock uninterrupted service. Below is the simple procedure to use this facility:

1. Contact your Branch.

2. If you don’t have Saving or Current Account, first open your account.

3. Get the Debit/ATM Card Application form from the Branch, fill it up and submit it to your

Branch.

4. Within 10 days, you will receive your Debit cum ATM Card along with PIN (Personal

Identification Number) and Debit cum ATM Card Booklet.

5. Activate your card immediately by withdrawing cash from from Dena Bank ATM. After that you

can use your card on POS Terminal ( Merchant Establishments)

7. Other Services:-

Dena Bank, your trusted family bank, now is proud to offer a range of sophisticated banking services by

way of Any-branch banking, Multi City cheque, Dena ATM's, Dena Cards, online remittance, Internet

Banking, Mobile banking, Tele banking, Online utility Bill Payment, Value added Service through

ATM, Kiosks, loans and many more. With over 1100 branches across the country, we are always ready

to serve our customers, and to offer them the  best of the technology-enabled banking products and

services.

22
3.7 Organization Structure and Organization Chart:-

Organization Structure:-

HEAD OFFICE

REGIONAL OFFICE

BRANCHES

Executive cards of the organization. They are Executive Director, General Manager (GM), Deputy

General Managers (DGM), assistant General Managers

(AGM), Chief Managers (CM), Managers and other officers are in the hierarchy at the head office level

functioning in various Departments. The regional Managers heads the Regional Officers who are

assisted by other down in the hierarchy. The Branch is headed by AGM\CM\ Senior

23
Managers\Managers depending upon the size of the Branch activities and rendering of satisfactory

customer service. The bank has a very good system of delegating power to the different functionaries in

the hierarchy to facilitate speedy decision- making process even up to the branch Level.

3.8 Product and Service Profile of the Organization Competitors:-

State Bank Of India:-

The Bank is actively involved since 1973 in non-profit activity called Community Services Banking. All

our branches and administrative offices throughout the country sponsor and participate in large number

of welfare activities and social causes. Our business is more than banking because we touch the lives of

people anywhere in many ways. Our commitment to nation-building is complete & comprehensive.

Punjab National Bank:-

Established in 1895 at Lahore, undivided India, Punjab National Bank (PNB) has the distinction of

being the first Indian bank to have been started solely with Indian capital. The bank was nationalized in

24
July 1969 along with 13 other banks. From its modest beginning, the bank has grown in size and stature

to become a front-line banking institution in India at present.

 A professionally managed bank with a successful track record of over 110 years.

 Largest branch network in India - 4525 Offices including 432 Extension Counters spread

throughout the country.

 Strategic business area covers the large Indo-Gangetic belt and the metropolitan centers.

 Ranked as 248th biggest bank in the world by Bankers Almanac , London.

 Strong correspondent banking relationships with more than 217 international banks of the world.

 More than 50 renowned international banks maintain their Rupee Accounts with PNB.

 Well equipped dealing rooms; 20 different foreign currency accounts are maintained at major

center’s all over the globe.

Bank of India:-

Bank of India was founded on 7th September, 1906 by a group of eminent businessmen from Mumbai.

The Bank was under private ownership and control till July 1969 when it was nationalized along with 13

other banks. 

Beginning with one office in Mumbai, with a paid-up capital of Rs.50 lakh and 50 employees, the Bank

has made a rapid growth over the years and blossomed into a mighty institution with a strong national

presence and sizable international operations. In business volume, the Bank occupies a premier position

among the nationalized banks. 

25
The Bank has 3021 branches in India spread over all states/ union territories including 136 specialized

branches. These branches are controlled through 48 Zonal Offices . There are 28 branches/ offices

(including three representative offices) abroad. 

The Bank came out with its maiden public issue in 1997 and follow on Qualified Institutions Placement

in February 2008. . Total number of shareholders as on 31/03/2009 is 2,35589. 

While firmly adhering to a policy of prudence and caution, the Bank has been in the forefront of

introducing various innovative services and systems. Business has been conducted with the successful

blend of traditional values and ethics and the most modern infrastructure. The Bank has been the first

among the nationalized banks to establish a fully computerized branch and ATM facility at the

Mahalaxmi Branch at Mumbai way back in 1989. The Bank is also a Founder Member of SWIFT in

India. It pioneered the introduction of the Health Code System in 1982, for evaluating/ rating its credit

portfolio.

Bank of Baroda:-

Bank of Baroda believes in the strength and integrity of relationships built with its customers like you.

With over 101 years of experience in the banking industry and a wide network of over 3000 branches all

over the country, it has always been active in extending financial support and adapting to customer’s

changing needs.

Its Deposit Products, Retail Loans, Credit Cards and Debit Cards help the customers with their growing

financial needs. With facilities like Lockers it ensure that customer’s valuables are safe with it. Its

26
countrywide branches offer the customers convenience and ease in operating them account wherever

they are. Its 24-hour ATMs enable them to withdraw cash, check their account balance and request for a

new cheque book even after banking hours.

Faster technology for better service:-

Baroda Internet Banking / Baroda Mobile Banking, its latest Internet and Mobile banking initiatives

enable them to operate their account just as they would in any of its branches. The customers can

through the Internet check their balance, request for cheque books and print account details. Choose

from its various products and services, that the bank sincerely feel will put a smile on customers face; an

investment it would like to bank on forever. 

3.9 Market Profile Of The Organization:-

Dena Bank is an India-based company which is engaged in treasury, corporate/wholesale banking, retail

banking, and other banking operations. The deposit schemes offered by the Company include Premium

Savings Account Scheme, Premium Current Account Scheme, Dena Savifix Deposit Scheme, Dena

Freedom Deposit Scheme, Dena Samruddhi Deposit Scheme, Dena Fixed Deposit Scheme, Dena Senior

Citizen Scheme, Dena Recurring Deposit Scheme, Dena Loan Linked Recurring Deposit Scheme, Dena

Minor Savings Scheme, and Dena Alpa Bachat Khata. It offers services, such as any branch banking,

multi city cheque, automated teller machines (ATMs), Dena Cards, online remittance, Internet banking,

mobile banking, tele-banking, online utility bill payment, and value-added service. During the fiscal

year ended March 31, 2009, the total number of branches comprised of 1184.

Dena Bank. The Company's principal activity is to provide commercial banking and other related

services. The Company also provides in merchant banking, asset management and other related services.

27
The company's banking products and services are provided through 1184 branches offices, 387 ATMs

all over India. The Company operates only in India.

The Company's principal activity is to provide commercial banking and other related services. The

Company also provides in merchant banking, asset management and other related services. The

company's banking products and services are provided through 1184 branches offices, 387 ATMs all

over India. The Company operates only in India.

INTRODUCTION

28
INTRODUCTION:-

A loan is a debt provided by one entity (organization or individual) to another entity at an interest rate,
and evidenced by a note which specifies, among other things, the principal amount, interest rate, and
date of repayment. A loan entails the reallocation of the subject asset(s) for a period of time, between the
lender and the borrower.

In a loan, the borrower initially receives or borrows an amount of money, called the principal, from the
lender, and is obligated to pay back or repay an equal amount of money to the lender at a later time.

The loan is generally provided at a cost, referred to as interest on the debt, which provides an incentive
for the lender to engage in the loan. In a legal loan, each of these obligations and restrictions is enforced
by contract, which can also place the borrower under additional restrictions known as loan covenants

A loan covenant is a condition in a commercial loan or bond issue that requires the borrower to fulfill
certain conditions or which forbids the borrower from undertaking certain actions, or which possibly
restricts certain activities to circumstances when other conditions are met.

Covenants are undertakings given by a borrower as part of a term loan agreement. Their purpose is to
help the lender ensure that the risk attached to the loan does not unexpectedly deteriorate prior to
maturity. From the borrower's point of view covenants often appear to be an obstacle at the time of
negotiating a loan and burdensome restriction during its term.

Loans are of two types:-

 Secured Loan: - A secured loan is a loan in which the borrower pledges some asset (e.g. a car or
property) as collateral.

29
 E.g.:- Mortgage Loan, Car loan etc.

 Unsecured Loan: - Unsecured loans are monetary loans that are not secured against the
borrower's assets

E.g.:- Personal Loan etc.

Loans are provided by 2 types of Institution:-

 Banks
 Non-Banking Financial Company

COMPONENTS OF LOAN:-

Following are the basic elements of loan:-

 Loan Principal: - "Principal" is the amount of money you borrow from the Lender when you take
out a Home Loan, Mortgage, or other finance.

 Loan Interest: - "Interest" is the fee the Lender charges you for the use of their money. The
interest charge on your loan depends on the amount of money you borrow, the interest rate, and
the term of the loan.

 Loan Term: - "Term" is the agreed period you have to repay your loan. For some loans, this
could be a year or less, while for most Home Loans it is 25-30 year.

 Loan Repayment: - Over the term of the loan, you make repayments on a regular basis - typically
monthly. These repayments generally cover the interest charge and a portion of the Principal.

30
BPLR RATE?

The Benchmark Prime Lending Rate (BPLR), is the reference interest rate based on which a bank lends
to its credit worthy borrowers. Normally, loans are given out a little more or a little less that this
reference interest rate.

The Benchmark Prime Lending Rate was introduced by the Reserve Bank of India in the year 2003 with
the aim of introducing transparency and ensuring appropriate pricing of loans, wherein the lending rates
truly reflect the actual costs. It was envisaged as a reference rate and was to be computed taking into
consideration

1. Cost of Funds.
2. Operational expenses
3. A minimum margin to cover regulatory requirements of provisioning and capital charge, and
profit margin

According to the Reserve Bank of India (RBI), banks can fix the BPLR with the approval of their
Boards. However, the RBI stipulates the interest rates as BPLR is influenced by the Repo rate and Cash
Reserve Ratio (CRR) apart from individual bank's policy.

Although as per Reserve Bank of India rules, Banks were free to fix Benchmark Prime Lending Rate
(BPLR) for credit limits over Rs.2 lakh with the approval of their respective Boards yet BPLR was to be
declared and made uniformly applicable at all the branches. The Asset-Liability Management
Committee (ALCO) of respective bank fixed interest rates on Deposits and Advances, subject to their

31
reporting to the Board immediately thereafter. The banks were also to declare the maximum spread over
BPLR with the approval of the ALCO/Board for all advances.

BASE RATE:

Base rate is the minimum interest rate of a bank, below which it cannot lend, except for DRI
allowances, loans to bank's own employees and loans to bank's depositors against their own deposits.

RBI does not fix the base rate. Individual banks fix their own base rates and so each bank has its own
base rate. The calculations of base rate involve elements which can be clearly identified and are
common across buyers. Banks have to declare their respective base rates in the website in order to make
lending more transparent.

According to RBI policies, banks have to revise their base rate at least once every quarter. However,
banks can review the base rates more than once a quarter.

The base rate was introduced because the BPLR system failed to bring transparency in the lending rates
of the banks. The calculations of BPLR is not that transparent and sometimes the banks under this
system could lend to customers below the BPLR.

The Base Rate System has replaced the BPLR from July 1, 2010. Since then the BPLR is gradually
losing its importance except for the loans taken before July 1, 2010. In such cases, RBI has allowed to
continue with BPLR at which the loans were approved. They were, however, given the option of
switching to the base rate before the expiry of their loans.’

BASE RATE CALCULATION:-

Following are the Steps to Calculate Base Rate

1. The card interest rate on retail deposit (deposits below Rs. 15 lakh) with one year
maturity (adjusted for CASA deposits)
2. Adjustment for the negative carry in respect of CRR and SLR
3. Un-allocable overhead cost for banks which would comprise a minimum set of
overhead cost elements
4. Average return on net

BASE RATE DEFINED BY RBI: - 9.75%- 10.25%

BASE RATE OF DENA BANK: - 10.25%

32
LOAN SCHEMES OF DENA BANK:-

There are 12 loan schemes of Dena Bank .They are as follows:-

 Dena Niwas Housing Finance Scheme (Home Loan)

 Dena Vidya Laxmi Educational Loan Scheme(Educational Loan)
 Dena Suvidha Scheme (Personal Loan)
 Dena Auto Finance Scheme
 Dena Consumer Durable Loan
 Dena Trade Finance Scheme
 Dena Mortgage Loan Scheme
 Dena Senior Citizen Pensioner’s Loan Scheme
 Dena Rent Scheme
 Dena Doctor+
 Dena Gold Scheme
 IBA Model Loan Scheme For Vocational Education and Training

HOUSING LOAN:-
Home loans, also known as mortgages, use the borrower's home for collateral. This home can be a
single-family house up to a four-unit property, as well as a condominium or cooperative unit. Lenders
fund home loans, but both the lenders themselves and brokers who act on behalf of the lenders originate,

33
Home loans came into widespread use in the United States in the boom years of the late 1800s. Since the
average person usually cannot afford to pay cash for something as expensive as a home, lenders began
offering loans for the difference between the purchase price of a home and the cash down payment
supplied by the buyer. These loans were interest only loans of between five and 10 years that were due
in full at the end of the loan term. Homeowners would refinance the loan at the end of each term or save
up enough cash to pay off the loan in the meantime. The Great Depression and its resulting foreclosures
demanded a move to the modern amortized mortgage, which configures payments into both principal
and interest portions. These 15- to 30-year loans pay off the home by the end of the loan term
Significance
Without home loans, most Americans could not afford to buy a home. The housing sector and related
industries are a large share of the U.S. gross domestic product (GDP). According to the National
Association of Home Builders, the housing industry as a whole contributes about 17 percent to 18
percent of the nation’s GDP. In fact, housing was largely responsible for the strong economic state of
the U.S. throughout the early to mid-2000s and disguised an essentially weak economy, according to an
article by MSN Money’s Bill Fleckenstein.

Function
The most common purpose of a home loan is to provide the funds a buyer needs to purchase a home.
Home equity loans allow a homeowner to borrow against the difference between the home’s value and
the current loan balance, or equity. Investor loans permit buyers to purchase homes as rental properties
or to fix up and sell at a profit.

Types
The two most widely used types of home loans are fixed-rate and adjustable-rate loans. A fixed-rate loan
keeps the same interest rate for the life of the loan, which means that the principal and interest portions
of the monthly payment stay the same.
Adjustable-rate mortgages begin with a lower interest rate for the first few years and then adjust to
market rates after the initial period is over. Caps are placed on how much the rate can adjust at any one
time, as well as on how much the rate can increase over the life of the loan. This means the principal and
interest portions of the monthly payment change repeatedly through the life of the loan.
Effects
Because home loans are a large share of the financial situation of the majority of Americans, taking the
time to determine the right type of loan and to investigate terms is essential for any home buyer or
owner. Federal law promotes the consumer’s ability to shop for the best loan by requiring lenders to give
prospective borrowers Good Faith Estimates and Truth In Lending (TIL) statements that disclose and
itemize the terms and costs associated with a loan.

34
HOME LOAN:-
A home loan is a type of loan in which the borrower uses the equity of his or her home as collateral. A
home equity loan creates a lien against the borrower's house and reduces actual home equity.
A Lien is a form of security interest granted over an item of property to secure the payment of a debt or
performance of some other obligation. The owner of the property, who grants the lien, is referred to as
the lienee and the person who has the benefit of the lien is referred to as the lienor or lien holder.
Dena bank avail home loan in the name of Dena Niwas Housing Loan Scheme. Dena bank avail Home
loan to purchase a plot, construct a house, buy a ready built house or buy one under construction. The
loan even helps you build an extension to your existing house or purchase a house that is up to 50 years
old provided the remaining life of the house is more than 25 years.
It also facilitate loan for Repairing and Up-gradation of Home which includes the cost of fixtures, POP
works, retiling, fittings etc.

Eligibility Criteria for availing home loan from Dena Bank:-

 You are a major individual, resident or non-resident, having a regular source of income.
 Your age on the maturity of the loan is less than retirement age if you are a salaried employee &
below 65 years, if you have a business
 The total deductions do not exceed 60% of your gross income, including the loan installment of
the proposed loan

Amount That can be sanctioned:-

1. Up to Rs 2 Crore can be sanctioned for the Purchase /Construction of a House
2. Up to Rs.10 lakhs for renovation / up gradation.

MARGIN:-
Dena Bank keep certain margin while approving Loan against Purchasing House/ Up gradation of
existing of House i.e. If a customer is taking Housing loan for buying new house and House cost Rs 40
lacs then Bank will Approve only 80% of cost of House which will be Rs 32 lacs.
Following are Margins of Dena Bank on Housing loan:-
1. Loans up to Rs.20 lakhs - 10% of cost of house property (excluding stamp  duty,
registration charges, etc.)

35
 2. Loans above Rs.20 lakh & up to Rs. 75 lakhs - 20% of cost of the house property
(excluding stamp duty, registration charges, etc.)
3. Loans above Rs.75 lakhs - 25% of cost of the house property (excluding stamp duty,
registration charges, etc.)

DEFAULTING: - Dena Bank defaults borrower if he/she failed consecutively 3 times to pay EMI.
If the Customer is Defaulted Following Actions are taken:-
1. Follow up is done
2. Legal Action is taken
3. In Some Special cases Time is given to pay EMI.

HOME LOAN PROCESS & VARIOUS STEPS INVOLVED

There are various steps involved in getting a Home Loan from selecting your property to filling up the
loan application. Following are the various stages in Home Loan:
 The first step involved in the process is to find your property which is followed by the
verification of property documents, post that the documents are examined & simultaneously you
can start searching for the lender who can offer the BEST Home Loan Deal after checking your
eligibility criteria.
 Know the Home Loan Eligibility: Banks offer the loan amount only after checking your profile
& based on various eligibility criteria’s like age, income & salary banks lend you the money.
 Select the Best Home Loan after evaluation: Comparing home loan interest rates is the
primary feature in the home loan selection, however other fees & charges like Application fees,
processing fees, legal charges should not be neglected when comparing various loan offers. To
check the interest rates & other charges incurred by various banks, Deal4Loans has brought in a
Home Loan Comparison Chart across various Banks.
 Applying for the Loan: After you have selected your lender, you have to fill in the application
form wherein the lender requires complete information about your financial assets & liabilities;
other personal & professional details together with the property details & its costs.
 Documentation & Verification Process: You are required to submit the necessary documents to
the bank which will be verified together with the details in the application.
 Credit & Default check: Bank checks out the borrower’s loan eligibility (through repayment
capacity) & the amount of loan is confirmed. The borrower’s repayment capacity is reached
which is based on the income, salary, age, experience & nature of business etc. Bank also checks
credit history through the CIBIL Score which plays a critical role in deciding & approving your
36
 loan application. Low Credit Score implies that the bank upfront rejects your application on the
basis of earlier credit defaults; on the other hand high credit score gives a green signal to your
application.
 Valuation and Legal Clearance: - Dena bank has Panel of Valuer and Legal Advisor which
perform job of Valuation of Property and Title Clearance respectively. Both The panel Submits
report and According to their advices bank perform further process
 Bank sanctions Loan & Offer letter to the borrower: After the credit appraisal of the
borrower bank decides the final amount & sanctions the loan, the bank further sends an offer
letter to the borrower which constitutes the details like rate of interest, loan tenure & repayment
options etc.
 Acceptance Copy to the Bank: The borrower needs to send an acceptance copy to the bank
after the borrower agrees with the terms & conditions in the offer letter.
 Bank checks the legal documents: The bank further asks the legal documents of property from
the borrower to check its authenticity so as to keep them as a security for the loan amount given.
The next step involved is the valuation of the property by the bank which determines the loan
amount sanctioned by the bank.
 Signing of agreement & the loan disbursal: The borrower signs the loan agreement & the bank
disburses the loan amount.

Example of Loan Approved on 19.05.2015 of Mr. XYZ and Mrs. ABC.

Personal Details

Name of the Applicant Mr. XYZ

Name of the Co-Applicant Mrs. ABC
Occupation Service
Organization Name ESP Asia ltd
Designation GM(Operations)
Reason For Loan Purchase of Flat
Gross Salary (per month) Rs. 100000/-

Guarantor Details

Name of the Applicant Mr. PQR

Occupation Service
Organization Name ESP Asia ltd
Designation AM (CONSTRUCTION)

37
LOAN DETAILS (before Sanctioning):-

Loan Amount Requested 30 lacs

Tenure 240 months

Rate of Interest 10.25 %

Property Details

Property Type Flat

Age of Property 32 years

Remaining Life of Property 35 yrs.

Address of Property Gat No. 26, Plot no 245 ,C6 Type Association

Locality of Property Panvel

DOCUMENTS SUBMITTED:-
1. 2 Passport size photos of Applicant ,Co Applicant and Guarantor
2. For Age Proof - Photocopy of PAN Card of Applicant ,Co Applicant and Guarantor
3. Residence Proof - Photocopy of Passport of Applicant ,Co Applicant and Guarantor
4. Bank Statement of Salary Account of 6 months.
5. Latest 3 months Salary Slips showing all Deductions.
6. Last two years Form 16 Photocopy.
7. Brief Profile of the company where employed.

38
 8. Processing fee Cheque from Salary Account in favor of Dena Bank.

Credit Score (By Dena bank):-

Credit Rating is done by Dena bank personally for every Borrower to check its credit worthiness. This
Credit rating is done independently of CIBIL rating. Officer at Loan Department rates the customer
credit worthiness with respect to:-
1. Age of the Applicant
2. Type of Organization
3. Working years in the Organization
4. Annual Income of the Applicant
5. Total income of the Applicant (Clubbing Spouse’s Income, Children Incomes, Property
Rent etc.)
6. Collateral security Worth
7. Guarantor’s Income
8. Age of the Building
9. Condition of Building and Its remaining life
10. Location of Building etc.;
All these Factors is Clubbed together and it is mentioned under following Heads :-

SUMMARY MAX APPLIED SCORE

SCORE SCORE OBTAINED
1. Rating of the Property 30 30
2 Rating of The Applicant 30 30
3 Net Worth of Applicant 25 25
and Family
4 Earnings 20 20
5 Value of relationship 15 15
(A) Borrower rating (Total) 120 120
6 Security Aspects 15 15
7 Banking Discipline 15 15
(B) Facility rating 30 30
(C) Overall rating (A+B) 150 150

Here Mr. XYZ’s Credit Rating Score was 76%.

Dena Bank Provides Loan to only those Borrower who has score 60% or more in Credit Rating
Analysis.

39
CIBIL (CREDIT INFORAMTION BUREAU INDIA LTD):-
Credit Information Bureau (India) Limited is India’s first Credit Information Company
(CIC) founded in August 2000. CIBIL collects and maintains records of an individual’s payments
pertaining to loans and credit cards. These records are submitted to CIBIL by member banks and credit
institutions, on a monthly basis. This information is then used to create Credit Information Reports
(CIR) and credit scores which are provided to credit institutions in order to help evaluate and approve
loan applications. CIBIL was created to play a critical role in India’s financial system, helping loan
providers manage their business and helping consumers secure credit quicker and on better terms.
CIBIL ranges credit score 300 (low) - 900 (High).CIBIL score above 700 is considered good. This
Rating is done with Borrowers Historical Data or Loan Taken earlier.
CIBIL also rates customer -1 if the information of that customer is unavailable in their databases. It
means Customer has never taken/Applied for Loan before.
In case of Mr. XYZ CIBIL Score was -1.

LOAN DETAILS (After Sanctioning):-

Loan Amount Requested 30 lacs.

Tenure 144 months

Rate of Interest 10.25 %

EMI Rs. 36700/-

Penalty 2% on delayed Interest

OTHER CAHRGES: - Processing Fee: - 0.5 % on the loan Amount

40
COMPARATIVE STUDY OF HOME LOANS IN INDIA

BANK NAME INTEREST RATE PROCESSING PRE-PAYMENT CHARGES

FEE
State Bank of 9.70 % p.a. (For Women) 1.01% of the Loan
India 9.75% p.a. (For Others) amount ; Max Rs
50933/-
ICICI Bank 9.90% (For others) 0.50% - 1.00% of Nil - Floating Interest rate Loan
9.85 % p.a ( for women) the loan amount 2%+ tax – Fixed rate of Interest

HDFC Bank 9.85% (For Women) 0.5% on loan Not Allowed For First 6 months
9.90 (For Others) amount or Rs 1.5 % of Original Amt (Loan period
2000/- whichever 6 mnths - 5 yrs)
is higher 0.75% of Original Amount (Loan
Peroid 5 yrs – 10 yrs)
Axis Bank Floating ROI:- 1 % + Service Nil- For Floating rate of Interest Loan
10.20% (upto 75 lacs) Tax on loan
10.45% (Above 75 lacs) amount 2% on Outstanding Amount

Fixed ROI:-
11.75%
IDBI 10.15% Upto 1 % + tax 2 % + tax on the outstanding amount

PNB Housing Floating ROI:- Upto 1 % + tax 2 % + tax on the outstanding amount
Finance 9.95 %
Fixed ROI :-
9.95% (3 yrs and 5 yrs)
10.15 % (for 10 yr )

41
Standard 9.75% Rs 2500/- (upto 2.5% of the principal Outstanding
Chartered 25 lacs)
Upto 1% on loan
amt (more than
25 lacs)

Point of Differentiation
 Provision for on the spot "In principle" approval.
 Loan sanctioned within 8 days of submission of required documents.
 Option to club income of your spouse and children to compute eligible loan amount
 Provision to finance cost of furnishing and consumer durables as part of project cost
 Repayment permitted up to 25 years of Home loan Tenure
 Free personal accident insurance cover up to Rs.40 Lac.
 No Prepayment Charges
 Less Processing Fess as compared to other Public sector and Private Banks.
 ROI for Dena bank is 10% (upto 75 lacs loan) and 10.25% (more than 75 lacs – 2 crore)
 Interest calculated on daily reducing balance basis, and starts from the date of disbursement.
 ‘Plus’ schemes which offer attractive packages with concessional interest rates to Govt.
Employees, Teachers, Employees of Dena bank
 Dena Bank is available at a very close distant in Mumbai and Mumbai Suburbs.
 Facility to pay EMI by Cheques or Deducted At Employer side.
 Option for internet-banking .

42
 RESEARCH
METHODOLOGY

43
 RESEARCH METHODOLOGY

Research methodology is a methodology for collecting all sorts of information & data pertaining
to the subject in question. The objective is to examine all the issues involved & conduct
situational analysis. The methodology includes the overall research design, sampling procedure
& fieldwork done & finally the analysis procedure. The methodology used in the study
consistent of sample survey using both primary & secondary data. The primary data has been
collected with the help of questionnaire as well as personal observation book, magazine; journals
have been referred for secondary data. The questionnaire has been drafted & presented by the
researcher himself.

 Sample Size:
Sample of 200 people was taken into study, and their data was collected

 Sampling Technique:
To study the Project, a Simple Random Sampling technique is used.

 Data Collection:
Data collection is mainly dealt with the way data is collected. We have Collected data mainly
through two ways-
1. Primary data collection –Collected primary data by visiting individual
Houses and meeting with individual persons. I visited some apartments in Panvel and Airoli
Here we meet with societies. Managers and try to convince them to arrange a meeting with
society persons.
I gave information to them and filled survey sheet by them.

44
 2. Secondary data collection – It is collected through secondary sources like data of
sells of the flat from some of my friends and senior’s company, Data from LDA etc. After that
we make call to them and make survey. And visited them if required.

3. Data Analysis: After data collection, I’m able to analyze customer’s views,ideas and
opinions related to Advance Product and about SBI Advance Product and from this, SBI will come to
know the customer requirements.
4. Data Interpretation:
For easy interpretation of data table chart, pie chart, line and bar chart used with some
Quantitative technique. The total no. of respondent is taken as 100% and their response is
denoted in percentage. It is very conspicuous for a person to understand it.

Classification & tabulation of data:

 The data thus collected were classified according to the categories, counting sheets & the
summary tables were prepared. The resultant tables were one dimensional, two
dimensional.
 Statistical tools used for analysis:
 Out of the total respondents, the respondents who responded logically were taken into
account while going into statistical details & analysis of data. The tools that have been
used for analyzing data & inference drawing are mainly statistical tools like percentage,
ranking, averages, etc.

As per questionnaire and market surveys I have find out different responses from different
people. According to their responses I analyze the findings and draw certain remarks.

45
QUESTIONAIRE & DATA
ANALYSIS

46
Q.1 On which bank you depend for your regular transaction?

DENA BANK 35 %

SBI 45 %

OTHERS 20 %

47
 38%

63%

Interest Rate Low Processing Fee

It has been observed that approximately 35% correspondents are using the service of Dena Bank for
their daily transaction, around 45% of people are using the services of SBI and 20% other banks
(Mainly Bank of Baroda, PNB, Vijaya Bank, Corporation Bank) for their transaction. It shows that SBI
have the highest market position in Panvel as per my sample But After SBI, Customers opt for Dena
Bank Services.

Q.2 Are you aware of products & services provided by Dena Bank?

YES 85%
NO 15%

48
 38%

63%

Interest Rate Low Processing Fee

We can say that customers (around 85%) in PANVEL have the idea about the Home loan of
DENA BANK they know about the all current offers of in HOME LOANs, the rest 15 % have
the idea about the product they are using. In this 18% most of the people are from typically small
shopkeeper, some govt. employee, new residents, farmers etc.

Q.3 If yes are you aware of the Home loans of Dena Bank?

YES 80%
NO 25%

49
 38%

63%

Interest Rate Low Processing Fee

It is clear that most of the people have the idea about the advance product of Dena Bank. Almost
all the 80% people who have the idea about the advance product are the user of Dena Bank
product & service.

Q.4 Which bank you prefer for taking loans?

SBI 50 %

50
 DENA BANK 30 %

OTHER 20 %

Chart Title
90%

80%

70%

60%

50%

40%

30%

20%

10%

0%
1

Interest Rate Low Processing Fee No prepayment Charges

According to my sample size 30 % of people prefer Dena Bank for loan product because it has low
processing fee and no prepayment charges whereas 50% prefer SBI because it has low interest rate and
more tenure for repayment but some people prefer OTHER Bank for loan because they are working
with that bank & it is easier for them to get loan from their bank.

Q5. What do you feel about the services providing by Dena Bank in Home
Loan product?

51
 Excellent 75 %

Satisfactory 20 %

Dissatisfactory 5%

Chart Title
90%

80%

70%

60%

50%

40%

30%

20%

10%

0%
1

Interest Rate Low Processing Fee No prepayment Charges

From this it is clear that the service provide by Dena Bank in its advance product is good in
between the customer. All of them satisfy with the product provide by Dena Bank. 75% of
people said that the service provide by Dena Bank is Excellent & 20% % said it is excellent &
just 5% of people said that it is dissatisfactory.

Q6. Which features you like most in Loan segments of Dena Bank?

52
 Interest Rate 45%

Low Processing Fee 75 %

No prepayment Charges 85%

Employees Behavior 90%

Fast Processing 85%

Chart Title
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
Interest Rate Low Processing Fee No prepayment Employees Behavior Fast Processing
Charges

Most of the people like the Fast processing, No prepayment Charges and low Processing Fee. It is easier
for Borrower to avail loan within short period of time.

53
 PROJECT FINDINGS

Project Findings:-

54
 1. From this project it is found that Dena Bank’s Home Loans having the 2nd place in the market at
Panvel, but HDFC ,ICICI, other banks also working hard for for improving their market share in
home loan segment so they are the main threat or competitor.
2. It has been observed that a person comes to Dena Bank because of low Processing Fee and No
Prepayment Charges.
3. All of Dena Bank customers are satisfied with the services provided by the bank.
4. Many of these customers are well aware of Dena bank and their home loan product and satisfied
with the Fast Processing and Employee’s Behavior.
5. Approximately 75% of advance product users said that the service of SBI in advance product is
excellent.
6. A response from customer care and Employees is so clear & good.
7. Many customers have no time to call customer care so that they are not able to know about the
service & features of Dena Bank advance product.
8. Government employees are more concern than private employees for advance product.

REASONS FOR HIGHLY USE OF DENA BANK HOME LOAN PRODUCT:

 Lower Interest Rate as Compared to Private Banking Institutions
 Repayment Year is Up to 25 yrs.
 Lowest EMI for home loans
 Interest charged upon remaining of balance.
 Employee’s Behavior and Response towards Customer/Borrower
 Fast Processing.
 No Prepayment Charges
 Low Penalty Cost if Interest is delayed.

55
 SUGGESTION &
RECOMMENDATION

SUGGESTION & RECOMMENDATION

56
1. Customer awareness program is required so that more people should attract towards advance
product.
2. If there are any kind of hidden charges than that must disclose to customer before giving loan to
them.
3. Advance product selling agents must not give any type of wrong information regarding advance
product.
4. For the better service new offers would be require.
5. Dena bank customer care should more concern about the fastest settlement of customer
problems.
6. Before deducting or charging any monetary charge Dena Bank must consult with customer.
7. Agents should be trained, well educated & proper trained to convince the people about different
advance product.
8. It is the duty of the bank to disclose all the material facts regarding advance product, like
interest charged, repayment period, other types of charges, etc.
9. Special scheme should be implemented to encourage both customer and agents.
10. The bank should increase the period for repayment of loan.
11. Dena Bank should more focus on Retaining existing customers.
12. Dena Bank must focus on Segmentation based on customer knowledge Product offering based
on customer demand.
13. Dena Bank must take feedbacks of customers regarding features & services.

57
CONCLUSION

CONCLUSION

58
From the analysis part it can be conclude that customers have a good respond towards Dena
Bank advance products in Panvel. Dena Bank having large number of customers & providing
good services to them. The bank has a wide customer base, so the bank should concentrate on
this to retain these customers.
In present scenario Dena Bank is the not largest advance product issuer in India. Within a very
short period of time the achievement made by Dena bank is excellent, what a normal bank
cannot expect, but it is being done by Dena Bank. It happens due to employee dedication
towards the organization, fastest growing Indian economy, & brand image.
To be the largest advance product issuer, Dena Bank should focus on-
 Launch Innovative product
 Customized advance products
 More Better customer services
 Fastest customers problem solving techniques
 Customer retention

59