HOUSING FINANCE

K AU S HA L KU M A R
INTRODUCTION
In pursuance of National Housing Policy of Central Government, Reserve
Bank of India has been facilitating the flow of credit to housing sector.

The housing sector has emerged as one of the sectors attracting a large
quantum of bank finance. The current focus of RBI's regulation is to ensure
orderly growth of housing loan portfolio of banks.
Housing finance
“Housing finance brings together complex and multi-sector issues that are driven by
constantly changing local features, such as a country’s legal environment or culture,
economic makeup, regulatory environment, or political system

“The purpose of a housing finance system is to provide the funds which home-buyers need to
purchase their homes. This is a simple objective, and the number of ways in which it can be
achieved is limited.
OBJECTIVE OF STUDY

To get knowledge about “Indian Housing finance such as operation perform by banks,
Different type of bank product, Services”

To understand current scenario of the “Indian Housing Finance”

 To make comparative analysis of SBI, LIC (public sector) and HDFC (private sector)
banks.
DIRECT HOUSING FINANCE
 Direct Housing Finance refers to the finance provided to individuals or groups of individuals
including co-operative societies.

INDIRECT HOUSING FINANCE

Banks should ensure that their indirect housing finance is by way of term loans to housing
finance institutions, housing boards, other public housing agencies, etc.
HOUSING LOANS UNDER PRIORITY SECTOR
The following housing finance limits will be considered as Priority Sector Advances:
1. Direct Finance
(i) Loans up to Rs. 15 lakh in rural, semi-urban, urban and metropolitan areas for construction of
houses by individuals, with the approval of their Boards.

(ii) Loans up to Rs.1 lakh in rural and semi urban areas and Rs. 2 lakhs in urban areas for repairs
to damaged houses by individuals.
2 INDIRECT FINANCE
(i) Assistance given to any governmental agency for construction of houses, or for slum
clearance and rehabilitation of slum dwellers, subject to a ceiling of Rs. 5 lakh of loan amount
per housing unit.

(ii) Assistance given to a non-governmental agency approved by the National Housing Bank for
the purpose of refinance for reconstruction of houses or for slum clearance and rehabilitation of
slum dwellers, subject to a ceiling of Rs. 5 lakh of loan amount per housing unit.
GROWTH OF HOUSING FINANCE
Earlier marketing scenario
• Walk-in customers
• Passive marketing, belief that word of mouth from a satisfied customer was the best form of
advertising.
Current marketing scenario
• With increased competition, buyers’ became more demanding
• Customers want door-step service
• Use of direct selling agents (third party distribution channels)
• Captive distribution company
• Property fairs and exhibitions
• Cross selling products and services
STUDY ON HDFC, LIC HOUSING FINANCE AND SBI HOME
FINANCE
Housing Development Finance Corporation Limited (HDFC)

HDFC is one of the leaders in the Indian housing finance market with almost 17% market
share as on March 2010.
 Serving more than 38 lakh Indian customers as on March 2011
 In the FY 2010-11, it registered a net profit of `4528.41 crore. It also registered a net profit of
971 crore in the quarter ended September 30, 2011.
STATE BANK OF INDIA HOME FINANCE (SBI)

State Bank of India is another major player in the Indian housing finance market with 17% of
the market share, same as HDFC's share as on March 2010.
The SBI Housing Loan schemes are specifically designed to meet the varied requirements of
the customers.
SBI Home Finance registered a net profit of ` 24.63 crore in the year ended March 31, 2009
LIC HOUSING FINANCE LIMITED

LIC Housing Finance is another major player in housing finance sector in India with about 8% of
market share.
 Promoted by Life Insurance Corporation of India, LICHFL has an extensive distribution network
with a strong brand presence. Recently, the company has been awarded “Consumer Super brand
2009/10 Status” by Super brands Council. In the last financial year (ended on March 31, 2011),
 LICHFL earned a net profit of ` 974.49 crore, comparing to ` 662.18 in the previous FY.
 It also registered a net profit of ` 256.50 crore in April-June quarter of 2011.
HDFC HOUSING FINANCE SERVICES
Home Loan
Home Improvement Loan
Home Extension Loans
Land Purchase Loans
 Top – Up Loans
LIC HOUSING FINANCE SERVICES
 Purchase of flats/house
 Construction
 Extension of flats/house
 Plot purchase
 Repairs/renovation to existing flats/house
SBI HOUSING FINANCE SERVICES
SBI Surakshit Home Loan
SBI Yuva Home Loan
SBI Home Loan PAL ( Pre-Approved Limit )
SBI Maxgain (Home Loan as an overdraft)
SBI Realty
NRI Home Loans
Gram Niwas
Documents Required for Home Loan

Complete Home Loan Application Form with one passport size photograph.
Photo Identity Proof: Passport/ Driving License/ Voter ID/ PAN
Residence Address Proof: License/ Registered Rent Agreement/ Utility Bill
Residence Ownership Proof: Sale deed or rental agreement
Income Proof: salary slip, bank statement and Form 16
Job Continuity Proof: Appointment letter at employment and validation letter from HR
Bank Statement: Past 6 months’ document
Property Documents: Sale deed, Katha, transfer of ownership
Advance Processing Cheque: A cancelled cheque for validation of bank account
Investment Proof: LIC, mutual funds, property document etc.
Financial Documents:

a. For Salaried Individual: 3 month salary slip, Form 16 and bank statement.
b. For Self-Employed Individual: IT returns for last 2 years along with computation of income tax
for past 2 years certified by a Chartered accountant.
c. For Self-Employed Non- Professionals: IT returns for last 3 years along with computation of
income tax for past 2 years certified by a Chartered accountant.