HOUSING FINANCE

Submitted To : Submitted By :
Ar. Ankit Kashmiri Gupta Aayush Koolwal
 INTRODUCTION

 In pursuance of National Housing Policy of Central

Government, Reserve Bank of India has been
facilitating the flow of credit to housing sector.
 During last three years, 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.
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
LOAN AMOUNT PER HOUSING UNIT

YEAR
 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 Superbrand 2009/10 Status” by
Superbrands 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
 AGENCIES FOR HOUSING

1) GOVERNMENT :
To provide housing on a large scale and even at subsidized rates, the
supreme agency would naturally be government and semi-government
bodies or departments. It thus includes State government, central
government, postal department, income tax department, railways, local
authorities etc. The government action as such is the only effective
measure for securing adequate supply of housing because of the very
nature of the housing market on the supply side. The government has
introduced The Urban Land (Ceiling and Regulation) Act, 1976 which
mainly aims at securing excess urban vacant lands in private hands for
the development of houses of acceptable standards for the weaker
sections of the society.

2) Co-operative housing societies :

A group of house-seeking persons combine and form a legal body,
known as the housing society. The society works within the rules and
regulations imposed and framed by its membersand its working is
examined and supervised by government department. The houses
constructed through this agency are generally good, decent and within
the financial reach of their members.
 AGENCIES FOR HOUSING

3) INDIVIDUALS :
The acute shortage of housing has also encouraged private enterprise
to enter this field. The houses and flats are constructed by the
individual with his own investment and later on, they are sold or
converted into society form. In a similar way, big employerscan provide
housing accommodation to their employees and workers.
 NATIONAL HOUSING BANK

National Housing Bank (NHB)

National Housing Bank was set up on July 9, 1988 under the National
Housing Bank Act, 1987 as a wholly-owned subsidiary of the Reserve Bank
to act as an apex level institution for housing. Objectives of National
Housing Bank
•To promote a sound, healthy, viable and cost effective housing finance
system to all segments of the population and to integrate the
•housing finance system with the overall financial system.
•To promote a network of dedicated housing finance institutions to
adequately serve various regions and different income groups.
•To augment resources for the sector and channelize them for housing.
•To make housing credit more affordable.
•To regulate the activities of housing finance companies based on
regulatory and supervisory authority derived under the Act.
•To encourage augmentation of supply of buildable land and also
building materials for housing and to upgrade the housing stock in the
country.
•To encourage public agencies to emerge as facilitators and suppliers of
serviced land for housing.
 CONCLUSION

 From the above study we conclude that the net

profit of HDFC is higher than SBI and LIC housing
finance.
 SBI provides more services and less interest rate
compare to HDFC and LIC housing finance.