COMPARATIVE STUDY OF HOME LOANS OF PNB AND SBI BANK.

A dissertation submitted to Department of Management in partial fulfillment of t he requirement for the award of degree of BACHELOR OF BUSINESS ADMINISTRATION (H ONS.) Submitted by: KOMAL MARWAHA 7020070003 Supervisor: Miss Monika Kanali (lect,lpu) LOVELY PROFESSIONAL UNIVERSITY PHAGWARA 2010 1

TO WHOMSOEVER IT MAY CONCERN This is to certify that the project report titled Comparative study of home loans of PNB and SBI carried out by Miss KOMAL MARWAHA, D/o RAJESH MARWAHA has been accomplished under my guidance & supervision as a duly register ed BBA(Hons) student of the Department of Management, Lovely Professional University, Phagwara. This project is being submitted by him/her in the partial fulfillment of the requirements for the award of the BBA(Hons) from Lovely Professional University. Her dissertation represents her original work a nd is worthy of consideration for the award of the degree of BBA(Hons) ___________________________________ (Name & Signature of the Faculty Advisor) Ti tle: ______________________________ Dare: ______________________________ 2

DECLARATION I KOMAL MARWAHA, hereby declare that the work presented herein is genuine work d one originally by me and has not been published or submitted elsewhere for the r equirement of a degree programme. Any literature, data or works done by others a nd cited within this dissertation has been given due acknowledgement and listed in the reference section. _______________________ (Student's name & Signature) _______________________ (Re gistration No.) Date:__________________ 3

Acknowledgement First of all my sincere gratitude goes to my academic supervisor Miss Monika Kan ali, lecture, lovely professional university,phagwara,who helpd andguided me for this work. Her conversation and encouragement will always be remembered. In man y stages of project, her proudful expertise and professional knowledge provided crucial and key injection to the technical solution. I also would like to thanks all the staff members of the department, for their cooperation and support duri ng this work. Finally, I wish to thank my family and friends for their encourage ment and support that accomplishment me throughout the research work. 4

TABLE OF COTENTS Page no. 6-11 Chapter CHAPTER 1 Section 1.1 Introduction to Subject 1.2 Objective, Need, Scope & Methodology 12-28 CHAPTER 2 Section 2.1 Introduction to Company 2.2 Overview of the industry (Hist ory, Growth, Landmarks, major players and their market share) 2.3 Profile of the organization 2.4 Companys history 2.5 Recent achievements and milestones 2.6 Pro duct range of the company/industry 2.7 Performance of the company over the last few years(Statistical Profile) 2.8 Financial status of the organization 2.9 Futu re prospects/ plans 29-35 CHAPTER 3 Survey of Literature 36-65 CHAPTER 4 Interpretation 66 CHAPTER 5 Section 5.1 Conclusion 5.2 Limitations 67-69 70-72 CHAPTER 6 References CHAPTER 7 Questionnaire 5

CHAPTER 1 1.1 Section INTRODUCTION TO SUBJECT: Home loans work like any other debt. That is, loans are simply specific money th at we borrow from a bank, a private lender, or some other type of lender. Afterw ards, we must repay our debts with interest. However, unlike other types of loan s, home loans are different in several respects. Owning a piece of land or prope rty is a lifetime dream for every individual. There are many home loans provider in the market. There are different type of home loan i.e. Home Purchase Loans Home Improvement Loans Home Construction Loans Home Extensio n Loans Home Equity Loans Land Purchase Loans Bridge Loans Home purchase loans: These are the basic forms of home loans used for purchasing of a new home. With about a million home lenders and mortgage brokers it's becoming a tough challenge as the days are progressing. But at the same ti me, when the sites are coming up with all the latest tools and relevant informat ion for us, and with all such conveniences, obtaining a home purchase loan or mo rtgage has 6

become really pretty simple. However, at the same time though, we may be flummox ed to look so many attractive rates and offers in the market, not to forget the hidden costs associated with each of them. Home improvement loan: Home improvement loans are used to finance improvements and add on to the existing set of credentials of beauty on your own ed house, recently purchased property or rented accommodation. Home improvement loans are used to maintain or enhance the value of your house. In general it inc ludes: repairs, remodeling, energy-related items (permanent in nature), repairs, a new kitchen, a new bathroom, terrace, an extension or general property improv ements. Luxury items and fireplaces are generally not eligible, though. Many imp rovements in landscape and even swimming pools are nowadays considered to be a p art of home improvement. Home construction loan: Home construction loans are used to finance for the construction of our newly acquired home or if we are planning to build a home. T he factors include in calculations for house building costs? Design of the house Construction cost Financing Cost Buildable site All the above mentioned costs will help us to determine the amount we may need t o borrow. For example, besides calculating the construction costs, we may also b e required to consider the total expenditures to develop the site in order to bu ild. Each site is unique requiring different expenditures so this specific rupee amount will vary from site location to site location. Payment: Before the house starts getting build, we will be required to pay a deposit to your builder as w ell as paying a deposit for the land if we are buying land. As work progresses y ou will need to make payments to the builder. Certain loans can be structured fo r progress payments to be made during construction. Home extinction loan Home extension loans are used by customers to get loans from the banks to extend their houses, by adding more rooms, kitchens, wash rooms, terraces, or any othe r rooms for your growing family. It may also be used to enclose open balcony/ter race space, or constructing a Puja ghar. 7

Maximum Amount of Home Extension Loans: Banks generally offers about 70-85% of the total amount of home extension as loa n. The amount of loan sanctioned also depends on a number of factors such as the age of the applicant at the time of loan, tenure of the loan, repayment capacit y of the borrower; his/her credit history etc. Home equity loan: Home equity loans helps customer to encash the market value of the commodity by taking a loan by mortgaging the property. So, Home equity loans are availed by c ustomers, who wish to mortgage his/her property to the bank for taking some loan for some other purpose. Then, it's up to the bank's discretion to consider the market value of the property and accordingly decide how much to pay to the custo mer. Both the residential as well as non residential property can be considered for the approval of the loan, provided the mortgager is a licensed title holder and the land is free form any kind of dispute. Home equity loans don't restrict one to use the loan money in specific investments. It might also be used in marr iage, higher education, medical expenses, etc. However it should not be used in any illegal or speculation purposes. land purchase loan: Land Purchase loans are used by customers who wish to purchase a plot of land fo r commercial or residential purpose. Everyone has his/her dream perfectly sketch ed in his souls and so is his ambition to get his house erected on the exact loc ation he dreamt that to be. If you have found and shorlisted the piece of land, and have arrived here for finance, you have come to the best place you could hav e arrived in the web. Now, that you have decided to purchase a land as an invest ment or for your own dream home, you will realize that a land purchase loan is o ne you will cherish. Loans that are strictly for land purchase can be as scarce as good residential plots. While many lending firms around the nation compete to provide mortgages for the purchase of a house on a lot, only local institutions typically will be interested in lending for an empty lot. Bridge loan: Bridge loans are designed for people who wish to sell the existing home and purc hase another one. The bridge loans help finance the new home, until a buyer is f ound for the home. Bridge loans are used by customers as an effective vehicle to capitalize on a purchase opportunity. It can be considered as a short term fina ncing scheme which 8

is generally expected to be paid back, within the range of 6-36 months, till the time the borrower gets more permanent and lower cost financing. So, bridge loan s, (or swing loans as they are otherwise said) is a short term loan provided by various banks like Bank of India, Citibank, ICICI etc. often used for commercial real estate purchases, retrieve real estate from foreclosure. Bridge loans in c orporate finance are called gap financing, and are used to cover the time betwee n redemption of issuance of one bond and its replacement by a new issue. They ca n also be operating loans for periods between LOI and acquisition, or quiet peri od and IPO. Bridge loan may contain a decent proportion of prepaid interest, som etimes as much as six months. If the home gets sold before that time, you may re ceive interest payments back, but if it hasn't sold, you may be required to cont inue payments. 1.2 Section OBJECTIVES To study the cost of home loans provided by the bank. To know that which bank pr ovide batter loan schemes. To analyze the home loan scheme by PNB and SBI banks. To know the consumer perception about the home loan of PNB and SBI. SCOPE OF TH E STUDY: This study is analysis and comparison of home loans provided by the SBI and PNB banks. It is helpful in analysing the home loan service provided to the customer and their comparison. RESEARCH METHODOLOGY Design of Research: The research will be exploratory in nature. A population of peoples who take hom e loan from these banks will be considered for this study. I will try to explore about the home loans which would make a difference in the behavior of the consu mer. Effort will be made to throw light on most of the factors which have either indirect or direct effect on the behavior of the consumer. I will also explore the impact of home loans on the market share of the banks. 9

Sampling plan: Population: The study aimed to include the customers of SBI and PNB in nawanshahr, to make a comparative analysis of home loan schemes of these two banks.. Sample Size: A Sample size of 100 respondents will be taken for the current study because it is not possible to cover the whole universe in the available time period. So it is necessary to take the sample size. In 100 respondents 50 respondents from PNB and 50 from SBI. The sample will the peoples of age group lying between eightee n to thirty years. The sample will be taken in the form of strata based on age, sex, and income group. Sampling technique: The sampling technique will be probabilistic sampling more specifically the rand om convenient and judgemental sampling will be used. As in probabilistic samplin g the select unit for observation with known probabilities so that statistically sound assumptions are supported from the sample to entire population so that we had positive probability of being selected into the sample. I will go for strat ified random sampling as we are interested to study the home loan by SBI and PNB banks, so we will make the strata on the basis of age, occupation, income level , gender. And from each strata we will go for random sampling. Sources of Data: I will use primary source of data that is structured questionnaire. As these ban ks are established from so many years, so many researchers have done research on this topic, so we will find secondary data also and also use this data for the help of this research. So, this research data will collected from the primary so urce and secondary source. 10

Our method of collecting the data is from the questionnaire that will be filled by the respondent from the sample, it will be structured questionnaire. Tools and Techniques: As no study could be successfully completed without proper tools & techniques, s ame with my project. For the better presentation and right explanation I used to ols of statistics and computer very frequently and I am very thankful to all tho se tools for helping me a lot. Basic tools which I used for project are: - BAR CHARTS - PIE CHARTS - TABLES Bar charts and pie charts are very useful tools for every research to show the r esult in a clear, simple way. Because I used bar charts and pie charts in my pro ject for showing data in a systematic way. So I need not necessary for any obser ver to read all the theoretical detail, simple on seeing the charts anybody that what is being said. Technological Tools: MS -WORD MS-EXCEL 11

CHAPTER 2 2.1 Section INTRODUCTION TO COMPANY: PUNJAB NATIONAL BANK : PNB has over 4500 branches and offices bringing the Punja b National Bank to your doorstep. Around 2400 offices come under the network of Centralized Banking Solution or CBS. A need for centralized banking system promp ted PNB to go computerized and what followed was the establishment of CBS in Pun jab National Bank branches in all the leading cities like Delhi, Pune, Chennai, Mumbai, Ahmedabad, Chandigarh, Gurgaon, Hyderabad, Jalandhar, Kolkata, Ludhiana, Nodal and Bangalore. Internet Banking Services are provided to all customers in the CBS branches. A branch and ATM locator is also available on the official we bsite of Punjab National Bank. For an overview of the annual report or the bank profile, the site can be resourceful. The website also provides info on the care ers and recruitments at PNB and the exam results. The careers at nationalized ba nks like PNB are the most sought after one and candidates are selected on the ba sis of their exam result. PNB topped the Best Paying Commercial Bank category wi th an overall rating of 87.45% as evaluated by the SSS Retirement, Death & Funer al Benefits Program. STATE BANK OF INDIA: State Bank of India (SBI) is India's l argest commercial bank. SBI has a vast domestic network of over 9000 branches (a pproximately 14% of all bank branches) and commands one-fifth of deposits and lo ans of all scheduled commercial banks in India. The State Bank Group includes a network of eight banking subsidiaries and several non-banking subsidiaries offer ing merchant banking services, fund management, factoring services, primary deal ership in government securities, credit cards and insurance.The eight banking su bsidiaries are:State Bank of Bikaner and Jaipur (SBBJ),State Bank of Hyderabad ( SBH).State Bank of India (SBI),State Bank of 12

Indore (SBIR),State Bank of Mysore (SBM),State Bank of Patiala (SBP),State Bank of Saurashtra (SBS) and State Bank of Travancore (SBT). Today, State Bank of Ind ia (SBI) has spread its arms around the world and has a network of branches span ning all time zones. SBI's International Banking Group delivers the full range o f cross-border finance solutions through its four wings - the Domestic division, the Foreign Offices division, the Foreign Department and the International Serv ices division. 2.2 Section OVERVIEW OF THE INDUSTRY: HISTORY: Banking in India has a long and elaborate history of more than 200 years. The be ginning of this industry can be traced back to 1786, when the countrys first bank , Bank of Bengal, was established. But the industry changed rapidly and drastica lly, after the nationalization of banks in 1969. As a result, the public sector banks began experiencing numerous positive changes and enormous growth. Then cam e the muchtalked-about liberalization and economic reforms that allowed banks to explore new business opportunities and not just remain constrained to generatin g revenues from mere borrowing and lending. This provided the Indian banking sce nario a remarkable facelift that only continues to get better with time. However , even today, despite the foray of foreign banks in the country, nationalized ba nks continue to be biggest lenders in the country. This is primarily due to the size of the banks and the penetration of the networks. The Indian banking system can be classified into nationalized banks, private banks and specialized bankin g institutions. The industry is highly fragmented with 30 banking units contribu ting to almost 50% of deposits and 60% of advances. The Reserve Bank of India is the foremost monitoring body in the Indian Financial sector. It is a centralize d body that monitors discrepancies and shortcomings in the system. Industry esti mates indicate that out of 274 commercial banks operating in the country, 223 ba nks are in the public sector and 51 are in the private sector. These private sec tor banks include 24 foreign banks that have begub their operations here. The sp ecialized banking institutions that include cooperatives, rural banks, etc. form a part of the nationalized banks category. Opportunities The Banking sector is considered the most lucrative option in todays job market. In the industry, a pos ition in Treasury or Forex is considered right on top and this is followed by ca reers in Private Banking, Investment Banking and Retail Banking. One could work in a variety of areas in banking industry including Recurring Deposit 13

account, banking officer, probationary officer, loan officer, assessor, personal loan officer, home loan officer, home loan agent, loan manager, mortgage loan u nderwriter, loan processing officer, accountant, product marketing and sales exe cutive, and customer service executive among others. In the Financial Services, some of the important jobs include that of a stockbroker who is essentially a pe rson who buys and sells securities on behalf of individuals and institutions for some commission. While some brokers like to practice with individual clients ot hers work for institutions. Brokers who work for institutional investors are oft en called securities traders. Many prefer to work as dealers, advisors and secur ities analysts. Security analysts are those who advise companies on floatations o f shares as they are expected to have sound knowledge of capital markets. Invest ment analysts are the backbone of the financial services sector. They study the financial reports of companies, assess various statistical information, profitab ility projections, compare financial results, survey the industry as a whole and on the basis of the available information, and finally conclude to a decision. Equity Analysts do jobs similar to investment analysts and research the equity m arkets and make predictions. Growth: The limit for foreign direct investment in private banks has been increased from 49% to 74%. In addition, the limit for foreign institutional investment in priv ate banks is 49%. Liberalization and globalization have created a more challengi ng environment in the banking sector as well as in the other segments of the fin ancial sector such as mutual funds, Non Banking Finance Companies, post offices, capital markets, venture capitalists, etc. Research and Markets has announced t he addition of 'Indian Retail Banking, 2006' to their offering. Indian Retail Ba nking continues to redefine the credit growth in the country. It grew by a whopp ing 44.4% in 2005-06 to touch Rs 3,538 billion. This leap was despite the increa se in risk weight by RBI for housing and real estate loans during August, 2005. Housing, which constitutes more than 52% of all retail loans, grew at a robust r ate of 44.35% during 2005-06. In order to help banks in India to understand the market and competition and plan future strategies, we have just come out with an Industry Insight on Indian Retail banking - 2006 edition. This report analyses the retail banking market and its segments in India and presents the key trends, along with issues and challenges. The report also paints a future outlook for t he market. Besides it profiles 21 major players in the retail banking space and their strategies. Finally, it seems Reserve Bank of India's (RBI) flurry of meas ures to restrain the home finance market is paying off. With tightening of inter est rates by the RBI and a simultaneous increase in real estate prices in a few markets, the banking sector is witnessing a decline in the growth of its home lo an portfolio. The home loan industry is experiencing a growth of 25% this year, as against 30% growth in home loans earlier. Rajiv Sabharwal, senior general man ager, ICICI Bank, 14

which has recorded the highest incremental growth in home finance segment in rec ent past, said, The real estate prices have become very high in few markets, whic h has resulted in the fall in growth rates for home loans for the banking indust ry. Home loan growth has reduced to 25% from its earlier growth rate at 30% and since we are an integral part of the industry, there will be some impact on us t oo. He added that the bigger impact had come from real estate prices, but obvious ly interest rates hikes will also have an impact. He, however, declined to discl ose the banks current home loan growth rate. Echoing a similar view, a senior off icial of State Bank of India (SBI) said the home loan market is showing some sig ns of slowing down. However, another major player, Housing Development Finance C orporation (HDFC) said the housing finance market for the middle class segment w as growing at a healthy pace. PNB Bank is a leading home loan lender of the coun try with about 30% market share. Retail lending comprises 70% of the total loan portfolio of the bank, of which the home loan lending is about 50%. In the first half of fiscal 2007, the bank experienced total home loan disbursements of Rs 1 3,400 crore. MAJOR PLAYERS: The financial sector in India has become stronger in terms of capital and the nu mber of customers. It has become globally competitive and diverse aiming, at hig her productivity and efficiency. Exposure to worldwide competition and deregulat ion in Indian financial sector has led to the emergence of better quality produc ts and services. Reforms have changed the face of Indian banking and finance. Th e banking sector has improved manifolds in terms of capital adequacy, asset clas sification, profitability, income recognition, provisioning, exposure limits, in vestment fluctuation reserve, risk management, etc. TOP 10 PLAYERS IN BANKING & FINANCE State Bank of India HDFC bank Citibank ICICI Bank Punjab National bank U TI Bank Hongkong & Shanghai Banking Corp. Kotak Mahindra Bank Sundaram Bank Orie ntal Bank of Commerce TOP 10 PLAYERS IN INSURANCE 15

Life Insurance corporation of India Bajaj Allianz General Insurance ICICI Pruden tial Life Insurance ICICI Lombard General Insurance Birla Sunlife Insurance Tata AIG General Insurance New India Assurance Co. Iffco Tokio General Insurance Ori ental Insurance Co. HDFC Standard Life Insurance 2.3 Section PROFILE OF THE ORGANISATION: PROFILE OF PNB: The profile of the PNB shows superior banking services in corpor ate, personal and international banking, industrial and agricultural finance and finance of trade. Punjab National Bank boasts of a varied clientele consisting of small and medium industrial units, exporters, multi-national companies, India n conglomerates and NRI. The Bank is changing outdated front and back end processe s to modern customer friendly processes to help improve the total customer exper ience. With about 8500 of its own 10000 branches and another 5100 branches of it s Associate Banks already networked, today it offers the largest banking network to the Indian customer. The Bank is also in the process of providing complete p ayment solution to its clientele with its over 8500 ATMs, and other electronic c hannels such as Internet banking, debit cards, mobile banking, etc.The objective s of the Company are in line with objectives laid down by RBI for the Primary De alers: Strengthen the infrastructure in the government securities market in order to ma ke it vibrant, liquid and broad based. Ensure the development of underwriting an d market making capabilities for Government Securities Improve secondary market trading system, which would contribute to price discovery, enhance liquidity and turnover and encourage voluntary holding of Government securities amongst a wid er investor base Become an effective conduit for conducting open market operatio ns. 16

PROFILE OF SBI: The SBIs powerful corporate banking formation deploys multiple ch annels to deliver integrated solutions for all financial challenges faced by the corporate universe. The Corporate Banking Group and the National Banking Group are the primary delivery channels for corporate banking products. The Corporate Banking Group consists of dedicated Strategic Business Units that cater exclusiv ely to specific client groups or specialize in particular product clusters. Fore most among these a specialized group is the Corporate Accounts Group (CAG), focu sing on the prime corporate and institutional clients of the countrys biggest bus iness centers. The others are the Project Finance unit and the Leasing unit.The National Banking Group also delivers the entire spectrum of corporate banking pr oducts to other corporate clients, on a nationwide platform. The bank is also lo oking at opportunities to grow in size in India as well as Internationally. It p resently has 82 foreign offices in 32 countries across the globe. It has also 7 Subsidiaries in India SBI Capital Markets, SBICAP Securities, SBI DFHI, SBI Fact ors, SBI Life and SBI Cards - forming a formidable group in the Indian Banking s cenario. It is in the process of raising capital for its growth and also consoli dating its various holdings. Throughout all this change, the Bank is also attemp ting to change old mindsets, attitudes and take all employees together on this e xciting road to Transformation. In a recently concluded mass internal communicat ion programme termed Parivartan the Bank rolled out over 3300 two day workshops ac ross the country and covered over 130,000 employees in a period of 100 days usin g about 400 Trainers, to drive home the message of Change and inclusiveness. The workshops fired the imagination of the employees with some other banks in India as well as other Public Sector Organizations seeking to emulate the programme. 2.4 section 17

COMPANY HISTORY: PNB HISTORY: Punjab National Bank of India was established by Lala Lajpat Rai in the preindep endence India in 1895 in Punjab, with Lahore as its head office. Today it is the second largest public sector bank in India. It was nationalized in 1969 along w ith 13 other major commercial banks. The privatization started in 1989 when 30 p er cent of its shares were offered to the public and it was listed on the stock exchange.In 1992, PNB became the first Philippine bank to reach P100 billion in assets. Later that year, privatization continued with a second public offering o f its shares. In August 2005, PNB was fully privatized. The joint sale by the Ph ilippine government and the Lucio Tan Group of the 67% stake in PNB was complete d within the third quarter of 2005. The Lucio Tan Group exercised its right to m atch the P 43.77 per share bid offered by a competitor and purchased the shares owned by the government. The completion of sale is expected to speed up the deve lopment of PNBs franchise and operational competitiveness. SBI HISTORY: The origi ns of State Bank of India date back to 1806 when the Bank of Calcutta (later cal led the Bank of Bengal) was established. In 1921, the Bank of Bengal and two oth er Presidency banks (Bank of Madras and Bank of Bombay) were amalgamated to form the Imperial Bank of India. In 1955, the controlling interest in the Imperial B ank of India was acquired by the Reserve Bank of India and the State Bank of Ind ia (SBI) came into existence by an act of Parliament as successor to the Imperia l Bank of India. Today, State Bank of India (SBI) has spread its arms around the world and has a network of branches spanning all time zones. SBI's International Banking Group d elivers the full range of cross-border finance solutions through its four wings - the Domestic division, the Foreign Offices division, the Foreign Department an d the International Services division. 18

2.5 Section RECENT ACHIVEMENTS AND MILESTONES: PNB Recent achievements and milestones Punjab National Bank (PNB), has announced that it has completed 100% core banking implementation at all its 4604 branches and extension counters through the Finacle Universal Banking Solution from Info sys, on Sun infrastructure and the Oracle Database setting a significant milesto ne for themselves and a new benchmark for the Indian banking industry. Completed in November 2008, 4 months ahead of schedule, the bank implemented industry-lea ding Finacle core banking solution from Infosys across its operations running a flexible, and scalable database platform from Oracle and innovative servers from Sun Microsystems With an increasingly dynamic business and regulatory environme nt, PNB sought to not only achieve automation, but also centralize operations, s tandardize branch processes, achieve high scalability for future business growth , provide flexibility of creating innovative banking products to its lines of bu siness, and at the same time, reduce overall costs. The visionary zeal and the f uturistic view of the Banks top management in the year 2007-2008 incubated the id ea of introduction of a Centralised Banking solution. The bold and innovative th ought culminated into the CBS architecture with Finacle application on Oracle Da tabase and Sun hardware platform with Solaris Operating System. With Finacles agi le and future proof technology, the bank today has over 22,500 concurrent users. The solutions scalability has also enabled the banks scalability to be the best i n the country with the number of peak transactions at 3.5 million. Finacle core banking platform also provides the bank with exceptional agility for product inn ovation and improved flexibility of operations. With seamless integration of del ivery channels such as ATM and internet banking solutions, PNB is able to provid e 24X7 services to customers at a reduced transaction cost. PNBs choice of the Or acle Database has provided the banks IT infrastructure with robustness, managemen t features, security and scalability as well as performance requirements to serv ice 3.5 million transactions and 22500 concurrent users a significant achievemen t in the Indian banking industry. In addition, the Oracle Database will help PNB take control of its enterprise information, gain better business insight, and q uickly and confidently adapt to an increasingly changing competitive environment . 19

With secure, highly available and scalable grids of low-cost servers and storage , Oracle customers can tackle the most demanding transaction processing, data wa rehousing, business intelligence and content management applications. The 100% i mplementation of Finacle Core Banking Solution shall enable PNB to further reduc e operational costs and revenue leakage while improving productivity of branches , introduction of new and innovative products and visibility of business. The an ywhere anytime banking facility will enable the bank to offer products for every segment of the customer. PNB long-standing and progressive partnership also hig hlights Finacles leadership in large scale banking transformation, the solutions f uture proof technology and powerful capabilities. India is a strategic market fo r Finacle and we look forward to closely collaborating with Punjab National Bank for their future growth plans. SBI RECENT ACHIVEMENTS AND MILESTONES: AWARDS:SBI has been the proud recipient of the ICRA Online Award - 8 times, CNBC TV 18, Crisil Award 2006 - 4 Awards, The Lipper Award (Year 2005-2006) and most recently with the CNBC TV - 18 Crisil Mutual Fund of the Year Award 2007 and 5 Awards for our schemes. SBI Card reaches three million milestone: SBI Card, a jo int venture between State Bank of India and GE Money, announced yet another landmark achievement of crossing the t hree million cardholders-mark. Roopam Asthana, CEO-SBI Card, said, "This milesto ne is even more remarkable as we have added one million cardholders in just ten months. Our objective is to accelerate the pace of growth by extending the benef its to a broader range of consumers in Tier II cities, along with improved value propositions for the urban affluent customers." SBI Card recently signed up Ind ian cricketer Yuvraj Singh as its brand ambassador. SBI joins Chinese bank to touch 10,000 branches: Public sector State Bank of Ind ia on Sunday became only the second bank in the world to have 10,000 branches wh en Union Finance Minister P Chidambaram inaugurated its latest branch here. Spea king on the occasion, Chidambaram said China's ICBC Bank was the other bank to h ave 10,000 branches. Opening 10,000 branches was a great feat. "It is not an eas y milestone though the SBI was the bank of the government and Indian people even before other banks were nationalised," he said. People all over the world, incl uding the Chinese, would now know about this small village where the 10000th bra nch of the SBI had been opened, he said adding they would be amazed by the bank' s growth. The bank should be proud of the achievement he said and wished that th e bank opened one lakh branches. The Minister said out of the over 100 crore peo ple, seventy 75 per cent did not have any type of insurance. Similarly, 50 per c ent of the 11 crore farmers did not have bank account. Banks should go to the pe ople and enroll them as account holders. 'That is what economists say is financi al inclusion,' he said. 20

2.6 Section PRODUCT RANGE OF COMPANY/INDUSTRY: The products and services provided by the SBI and PNB are in various fields, suc h as: Banking services NRI services International banking Corporate banking Agri cultural banking International banking 2.7 Section PERFORMANCE OF COMPANTY IN LAST FIVE YEARS: PNB performance in last five years: 1st Quarter Net Income UP 48% Year-on-Year T aking-off from a breakthrough performance in 2007 with a registered net income o f P1.5 billion, PNB continues to reap the benefits from its efforts to strengthe n core businesses, reduce non-performing assets and manage costs. Net Income for the 1st Quarter of 2008 registered P457 million, up 48% from P308 million of th e same period last year. This performance bucks industry trends for the 1st quar ter of 2008 based on published income reports. Even as the operating environment proved volatile where negative trends are expected, PNB still managed to reflec t a 136% growth in foreign exchange gains year-on-year, from P242 million to P57 1 million. A relentless focus in generating low-cost funds from deposits and oth er funding sources led to a reduction in total interest expense by as much as 27 %. Total deposits closed firm at P180 billion. Operating expenses were down 23% despite investments made in systems enhancement and upgrading of facilities. The Bank has recently implemented a new generation core banking system: Flexcube an end-to-end solution designed to automate both corporate and retail banking busi nesses; and effectively in-source core overseas operations to its global data ce nter in the Philippines. PNBs Japan, Singapore, Hongkong and United States branch es as well as the London subsidiary have already been converted and the rest of the Bank is expected to go live soon. As of March 31, 2008, PNBs consolidated tot al asset size remained strong at P242 Billion, up P2.7 billion versus end-2007. With the significant strengthening of its balance sheet over the past few years, PNB has been able to concentrate on generating new client relationships in the corporate segment, both in the large and SME categories. The contribution from t he consumer finance business has likewise continued to register accelerated grow th. Total consumer loans portfolio stood at P3.3 21

billion, up 25% from end-2007. Combined new bookings for the 1st quarter 2008 al ready reached the half-billion mark. PNBs Net Loans and Receivables closed P77 bi llion. As of March 31, 2008, PNBs Capital Adequacy Ratio under Basel II remained formidable at 18.51%, still way above the 10% ratio required by the Bangko Sentr al ng Pilipinas. Subject to appropriate approvals and clearances, PNB is going t o the capital markets to raise a minimum of P3 billion of Tier 2 Capital in prep aration for its maturing subordinated notes in February 2009. PNB will emerge as the 4th largest domestic bank in the country in terms of asset size once its pl anned merger with Allied Banking Corporation (ABC) is completed. The respective Board of Directors of PNB and ABC passed resolutions last April 30, 2008 approvi ng the plan to merge the two banks. This transaction is subject to the approval of shareholders and regulatory authorities and is expected to be completed by th e 3rd quarter of 2008. SBI performance in last five years: State Bank of India ( SBI) is all geared up to increase its business per employee and profit per emplo yee as it thinks that for SBI, these two parameters are among the lowest in the industry. On one hand, the bank is trying to reduce its staff strength which wou ld eventually improve the ratios; but on the other, the bank is also going flat out to increase its customer base. "Our business per employee and profit per emp loyee is one of the lowest in the industry," SBI had recently said in a joint st atement issued by the management and unions.SBI's generates Rs 2.99 crore of bus iness per employee, while its profit per employee is just about Rs 2.17 lakh. By contrast, majority of the large public sector banks are better in terms of both these parameters. For instance, Canara Bank has a business per employee (BPE) o f Rs 4.42 crore, while Union Bank of India's BPE is at Rs 4.36 crore and Bank of Baroda's (BoB) Rs 3.51 crore. These are according to their respective annual re ports for 2005-06. On the other hand, Canara Bank's profit per employee (PPE) is also on the higher side at Rs 3.02 lakh. The PPEs of Union Bank and BoB are at Rs 2.66 lakh and Rs 2.13 lakh, respectively. "Over the years, we have been stead ily losing our marketshare from about 35% in 1970s to around 16% in 2006. Our va st network is failing to attract the new and demanding young customers," SBI sai d in that statement, which is addressed to all SBI officers and employees and ai med at changing their attitude towards customers. 22

The statement was jointly signed by chairman OP Bhatt, managing directors TS Bha ttacharya and Yogesh Agarwal and top office bearers of its officers and employee s associations. To address these issues, both the management and unions have agr eed to work hand in hand. They have appealed to the bank's staffs to go flat out to increase its customer base."Let us be conscious of the customer's overall ne eds rather than only the transaction at hand. Let us expand our customer base," the statement read. The bank has nearly 37 lakh savings bank accounts in the Ben gal circle itself.Meanwhile, the country's largest and oldest bank has offered a n exit option scheme (EOS) to its employees. The bank has some 2.1 lakh staffs, out of which nearly 1.4 lakh are clerical and subordinate employees. 2.8 Section FINANCIAL STATUS OF THE ORGANISATION: PNB financial status for last five years: Annual results Mar ' 08 Sales Operating profit Interest Gross profit EPS (Rs) Mar ' 07 Mar ' 06 Mar ' 05 Mar ' 04 14,265.02 11,537.48 9,584.15 8,459.85 7,778.94 10,029.21 8,73 0.86 4,006.24 64.98 7,149.74 5,721.06 4,683.04 4,056.84 6,022.91 4,917.39 4,453. 11 4,154.99 3,230.64 2,874.77 2,707.21 3,120.86 48.84 45.65 44.72 41 Balance sheet Mar ' 08 Sources of funds Owner's fund Equity share capital Share application mo ney Preference share capital Reserves & surplus Loan funds 315.30 10,467.35 315. 30 9,826.31 315.30 8,758.68 315.30 265.30 Mar ' 07 Mar ' 06 Mar ' 05 Mar ' 04 7,533.50 4,425.47 23

Secured loans Unsecured loans Total Uses of funds Fixed assets Gross block Less : revaluation reserve Less : accumulated depreciation Net block Capital work-inprogress Investments Net current assets Current assets, loans & advances Less : current liabilities & provisions Total net current assets Miscellaneous expenses not written Total Notes: Book value of unquoted investments Market value of quo ted investments Contingent liabilities Number of equity sharesoutstanding (Lacs) 1,66,457.23 1,39,859.67 1,19,684.92 1,03,166.89 87,916.40 1,77,239.88 1,50,001.2 8 1,28,758.90 1,11,015.69 92,607.16 3,699.64 1,535.70 1,384.12 779.83 53,991.71 2,247.74 293.85 1,237.92 715.98 45,189.84 2,106.92 302.38 1,076.69 727.84 41,055.31 1,875.65 1,645.93 312.49 910.42 652.74 321.04 746.08 578.81 50,672.83 42,125.49 4,380.84 14,798.23 -10,417.38 44,354.15 3,980.80 10,178.51 -6,197.71 39,708.10 3,762.79 9,518.93 -5,756.14 36,027.01 3,101.44 3,261.18 12,194.80 8,114.48 -9,093.36 -4,853.30 42,232.20 37,850.99 1,04,055.87 3153.03 74,700.48 3153.03 58,739.31 3153.03 47,047.19 32,229.85 3153.03 2653.03 Profit loss account Mar ' 08 Income: Operating income Expenses Material consumed Manufacturing expen ses Personnel expenses Selling expenses 2,461.54 23.31 2,352.45 18.03 2,114.97 2 0.15 2,121.23 19.16 1,654.06 10.85 15,925.65 12,104.24 9,791.12 9,712.63 9,617.3 4 Mar ' 07 Mar ' 06 Mar ' 05 Mar ' 04 24

Adminstrative expenses Expenses capitalised Cost of sales Operating profit Other recurring income Adjusted PBDIT Financial expenses Depreciation Other write off s Adjusted PBT Tax charges Adjusted PAT Non recurring items Other non cash adjus tments Reported net profit Earnigs before appropriation Equity dividend Preferen ce dividend Dividend tax Retained earnings 1,247.47 3,732.33 3,462.46 231.62 3,694.08 8,730.86 170.23 3,523.85 1,247.15 2,0 47.63 1.13 2,048.76 2,064.28 409.89 69.66 1,584.73 1,360.77 3,731.25 2,350.09 186.67 2,536.76 6,022.91 194.80 2,341.96 629.05 1,539 .33 0.76 1,540.08 1,723.57 409.89 63.11 1,250.57 941.38 3,076.51 1,797.23 131.54 1,928.77 4,917.39 186.65 1,742.12 412.83 1,436.6 6 2.65 1,439.31 1,439.31 189.18 26.53 1,223.60 933.60 3,073.99 2,185.53 470.69 2,656.22 4,453.11 183.28 2,472.94 495.49 1,409.5 0 0.62 1,410.12 1,410.12 174.18 23.48 1,212.46 1,764.91 3,429.82 2,032.53 59.85 2,092.38 4,154.99 181.45 1,910.93 660.79 1,108. 45 0.24 1,108.69 1,108.69 106.12 13.60 988.97 Cash flow Mar ' 08 Profit before tax Net cashflow-operating activity Net cash used in inve sting activity Netcash used in fin. activity Net inc/dec in cash and equivlnt Ca sh and equivalnt begin of year Cash and equivalnt end of year 3,295.91 Mar ' 07 2,169.13 Mar ' 06 2,033.87 Mar ' 05 Mar ' 04 1,904.74 1,768.68 1,073.53 -349.83 1,544.81 2,268.51 529.29 -176.20 390.24 743.33 1,756.13 -10,144.34 14,961.44 -444.46 1,873.54 3,185.21 -159.41 1,157.57 -465.64 -793.13 -9,146.17 13,702.66 15,645.52 24,791.69 11,089.03 8,820.51 8,077.19 18,830.72 15,645.52 24,791.69 11,089.03 8,820.51 SBI financial status for last five years: Annual results Mar ' 09 Sales Operating profit Mar ' 08 Mar ' 07 0.90 0.35 Mar ' 06 0.44 -0.06 Mar ' 05 0.66 -0.03 25

Interest Gross profit EPS (Rs) 24.67 -24.63 -16.42 21.36 -18.24 -12.17 21.29 -4.79 -3.19 21.30 -21.17 -14.13 21.30 -20.35 -13.58 Balance sheet Mar ' 08 Sources of funds Owner's fund Equity share capital Share application mo ney Preference share capital Reserves & surplus Loan funds Secured loans Unsecur ed loans Total Uses of funds Fixed assets Gross block Less : revaluation reserve Less : accumulated depreciation Net block Capital work-in-progress Investments Net current assets Current assets, loans & advances Less : current liabilities & provisions Total net current assets Miscellaneous expenses not written Total No tes: Book value of unquoted investments Market value of quoted investments Conti ngent liabilities Number of equity sharesoutstanding 0.22 150.00 0.21 150.00 0.2 2 150.00 10.40 150.00 10.40 150.00 11.44 306.47 -295.04 -294.56 16.30 293.09 -27 6.79 -276.32 23.98 296.10 -272.12 -271.64 24.38 275.52 -251.14 -250.66 32.15 263 .77 -231.62 -230.35 0.57 0.10 0.48 0.57 0.10 0.48 0.72 0.24 0.48 0.72 0.24 0.48 2.86 1.59 1.27 -294.56 -276.32 -271.64 -250.66 -230.35 15.00 -309.56 15.00 -291. 32 15.00 -286.64 15.00 -265.66 15.00 -245.35 Mar ' 07 Mar ' 06 Mar ' 05 Mar ' 04 26

(Lacs) Profit loss account Mar ' 08 Income: Operating income Expenses Material consumed Manufacturing expen ses Personnel expenses Selling expenses Adminstrative expenses Expenses capitali sed Cost of sales Operating profit Other recurring income Adjusted PBDIT Financi al expenses Depreciation Other write offs Adjusted PBT Tax charges Adjusted PAT Non recurring items Other non cash adjustments Reported net profit Earnigs befor e appropriation Equity dividend Preference dividend Dividend tax Retained earnin gs 0.03 0.12 0.29 0.44 0.58 2.53 3.11 21.36 -18.24 -18.25 -18.25 -312.32 -312.32 0.09 0.41 0.51 0.39 12.16 12.55 21.35 -8.80 0.01 -8.81 4.13 -4.67 -294.08 -294. 08 0.14 0.29 0.44 0.01 0.10 0.11 21.36 0.01 -21.26 0.01 -21.27 0.01 0.27 -20.99 -289.40 -289.40 0.20 0.48 0.68 -0.03 0.79 0.76 21.30 0.02 -20.56 -20.56 0.08 0.1 7 -20.31 -268.42 -268.42 0.72 0.03 12.45 13.20 -2.30 -2.30 28.66 1.02 -31.98 -31 .98 -2.95 9.65 -25.29 -248.11 -248.11 1.02 0.90 0.44 0.66 10.90 Mar ' 07 Mar ' 0 6 Mar ' 05 Mar ' 04 Cash flow Mar ' 08 Profit before tax -18.24 Mar ' 07 -4.67 Mar ' 06 -20.98 Mar ' 05 -21.06 Mar ' 04 -25.29 27

Net cashflow-operating activity Net cash used in investing activity Netcash used in fin. activity Net inc/dec in cash and equivlnt Cash and equivalnt begin of y ear Cash and equivalnt end of year -4.89 -4.89 16.16 11.27 5.65 5.65 10.51 16.16 0.08 0.01 0.09 10.42 10.51 -7.02 0.85 -0.46 -6.64 17.06 10.42 88.19 29.46 -131.50 -13.85 30.91 17.06 2.9 Section FUTURE PLANS: PNB future plans: PNB has initiated various steps in a bid to expand its operati ons in the state of Kerala. These include opening new branches and increasing th e number of its core banking solutions branches. PNB currently has 71 CBS branch es in Kerala and has registered good growth from this region. PNB in looking at increasing its international presence and in line with this, the company is plan ning to set up offices in UK, Singapore, Hong Kong and Canada. The Canada office is likely to open very soon, while the other locations are likely to commence o perations by end of this fiscal year. PNB unvieled its plans to raise additional capital of Rs. 21,000 million to fund its business expansion plans for this cur rent fiscal. SBI future plans: SBI has set for itself an ambitious target of cre dit linking 1 million SHGs up to March 2008.The Bank has started to leverage our vast SHG network for various services beyond credit delivery. The State Bank of India (SBI) has formulated a home-grown strategy to merge its six associated bank s with it within this fiscal. SBI drawn up a home-grown strategy to carry out th e merger programme and we may take up such mergers one by one, or two at a time or in a phased manner. SBI want the future mergers to be as smooth as the merger .Post-merger, the size of SBIs balance sheet will cr-oss Rs 12,00,000 crore and i ts profitablity will increased. 28

CHAPTER 3 REVIEW OF LITERATURE: 1) In august 2001 James B. Thomson and Ben R. Craig had studied about the Federa l Home Loan Bank Lending to Community Banks,are Targeted Subsidies Necessary? Th e Gramm-Leach-Bliley Act of 1999 amended the lending authority of the Federal Ho me Loan Banks to include advances secured by small enterprise loans of community financial institutions. Three possible reasons for the extension of this select ive credit subsidy to community banks and thrifts are examined, including the ne ed to: subsidize community depository institutions, stabilize the Federal Home L oan Banks, and address a market failure in rural markets for small enterprise lo ans. They empirically investigate whether funding constraints impact the smallbu siness lending decision by rural community banks. Specifically, they estimate tw o empirical models of small-business lending by community banks. The data reject the hypothesis that access to increased funds will increase the amount of small -business loans made by community banks. 2) In December 2006 Fulbag Singh and Reema Sharma had studied about the housing Finance in India. Housing, as one of the three basic needs of life, always remai ns on the top priority of any person, economy, government and society at large. In India, majority of the population lives in slums and shabby shelters in rural areas. From the last decade, the Government of India has been continuously tryi ng to strengthen the housing sector by introducing various housing loan schemes for rural and urban population. The first attempt in this regard was the Nationa l Housing Policy (NHP), which was introduced in 1988. The National Housing Bank (NHB) was set up in 1988 as an apex institution for housing finance and a wholly -owned subsidiary of Reserve Bank of India (RBI). The main objective of the bank is to promote and establish the housing financial institutions in the country a s well as to provide refinance facilities to housing finance corporations and sc heduled commercial banks. Moreover, for the salaried section, the tax rebates on housing loans have been introduced. The paper is based on the case study of LIC Housing Finance Ltd., which analyzes region-wise disbursements of individual ho use loans, their portfolio amounts and the defaults for the last ten years, i.e. , from 1995-96 to 2004-05 by working out relevant ratios in terms of percentages and the compound annual growth rates. A relevant chart has also been prepared t o highlight the results. 3) In May 18, 2007 Michael LaCour-Little had studied about the Economic Factors Affecting Home Mortgage Disclosure Act Reporting. The public release of the 2004 2005 Home Mortgage Disclosure Act data raised a number of questions given the in crease in the number and percentage of higher-priced home mortgage loans and con tinued differentials across demographic groups. Here we assess three possible ex planations for the observed increase in 2005 over 2004: (1) changes in lender bu siness practices; (2) changes in the risk profile of borrowers; and (3) changes in the yield curve environment. Results suggest that after controlling for the m ix of loan types, credit risk factors, and the yield curve, there was no statist ically significant 29

increase in reportable volume for loans originated directly by lenders during 20 05, though indirect, wholesale originations did significantly increase. Finally, given a model of the factors affecting results for 2004-2005, we predict that 2 006 results will continue to show an increase in the percentage of loans that ar e higher priced when final numbers are released in September 2007. 4) In may 1991 Stephen F. Borde had studied about the Is the Savings and Loan Ind ustry Facing Extinction? This article tells about the Saving and loan crisis. Pro posed solutions are discussed in the context of the industry as it currently sta nds. With a somewhat similar liability structure to that of banks (mainly shortterm deposits), the asset structure of S&Ls is quite different. Whereas banks as sets consist of short-term loans, S&L assets consist largely of long-term loans, such as home ownership mortgages. Therefore, in the absence of adequate hedging measures, S&Ls are more vulnerable to interest rate risk, which can lead to low er profits when interest rates rise. 5) In June 29, 2001 Joshua Rosner had studied about the Housing in the New Mille nnium: A Home Without Equity is Just a Rental with Debt. They studied about the prospects of the U.S. housing/mortgage sector over the next several years. Based on our analysis, we believe there are elements in place for the housing sector to continue to experience growth well above GDP. However, we believe there are r isks that can materially distort the growth prospects of the sector. Specificall y, it appears that a large portion of the housing sector's growth in the 1990's came from the easing of the credit underwriting process. Such easing includes: * The drastic reduction of minimum down payment levels from 20% to 0% * A focused effort to target the "low income" borrower * The reduction in private mortgage insurance requirements on high loan to value mortgages * The increasing use of s oftware to streamline the origination process and modify/recast delinquent loans in order to keep them classified as "current" * Changes in the appraisal proces s which has led to widespread overappraisal/overvaluation problems If these tren ds remain in place, it is likely that the home purchase boom of the past decade will continue unabated. Despite the increasingly more difficult economic environ ment, it may be possible for lenders to further ease credit standards and more f ully exploit less penetrated markets. Recently targeted populations that have hi storically been denied homeownership opportunities have offered the mortgage ind ustry novel hurdles to overcome. Industry participants in combination with eased regulatory standards and the support of the GSEs (Government Sponsored Enterpri ses) have overcome many of them. If there is an economic disruption that causes a marked rise in unemployment, the negative impact on the housing market could b e quite large. These impacts come in several forms. They include a reduction in the demand for homeownership, a decline in real estate prices and increased fore closure expenses. These impacts would be exacerbated by the increasing debt burd en of the U.S. consumer and the reduction of home equity available in the home. Although we have yet to see any materially negative consequences of the relaxati on of credit standards, we believe the risk of credit relaxation and leverage ca n't be ignored. Importantly, a relatively new method of loan forgiveness can tem porarily alter the perception of credit health in the housing sector. In an effo rt to keep homeowners in the home and reduce foreclosure expenses, holders of mo rtgage assets are currently recasting or modifying troubled loans. Such policy i nitiatives may for a time distort the relevancy of delinquency and foreclosure s tatistics. However, a protracted housing slowdown could eventually cause modific ations to become uneconomic and, thus, credit quality 30

statistics would likely become relevant once again. The virtuous circle of incre asing homeownership due to greater leverage has the potential to become a viciou s cycle of lower home prices due to an accelerating rate of foreclosures. 6) In dec 2002 Melissa B. Jacoby had studied about the Home Ownership Risk Beyond a Su bprime Crisis: The Role of Delinquency Management. They studied that Public inve stment in and promotion of homeownership and the home mortgage market often reli es on three justifications to supplement shelter goals: to build household wealt h and economic self-sufficiency, to generate positive social-psychological state s, and to develop stable neighborhoods and communities. Homeownership and mortga ge obligations do not inherently further these objectives, however, and sometime s undermine them. The most visible triggers of the recent surge in subprime deli nquency have produced calls for emergency foreclosure avoidance interventions (a s well as front-end regulatory fixes). Whatever their merit, I contend that a sy stem of mortgage delinquency management should be an enduring component of housi ng policy. Furtherance of housing and household policy objectives hinges in part on the conditions under which homeownership is obtained, maintained, leveraged, and - in some situations - exited. Given that high leverage or trigger events s uch as job loss and medical problems play significant roles in mortgage delinque ncy independent of loan terms, better origination practices cannot eliminate the need for delinquency management. One function of this brief essay is to identif y an existing rough framework for managing delinquency. Legal scholarship should no longer discuss mortgage enforcement primarily in terms of foreclosure law an d instead should include other debtor-creditor laws such as bankruptcy, industry loss mitigation efforts, and thirdparty interventions such as delinquency housi ng counseling. In terms of analyzing this framework, it is tempting to focus on its impact on mortgage credit cost and access or on the absolute number of homes temporarily saved, but my proposed analysis is based on whether the system hono rs and furthers the goals of wealth building, positive social psychological stat es, and community development. Because those ends are not inexorably linked to o wnership generally or owning a particular home, a system of delinquency manageme nt that honors these objectives should strive to provide fair, transparent, huma ne, and predictable strategies for home exit as well as for home retention. Alth ough more empirical research is needed, this essay starts the process of analyzi ng mortgage delinquency management tools in the proposed fashion. 7) In 1999 Yoko Moriizumi had studied about the Current Wealth, Housing Purchase an d Private Housing Loan Demand in Japan. Japanese households accumulate wealth fo r downpayments at a high rate. Therefore, current wealth plays an important role in home acquisition as public loans whose direct mortgage lending is a strong s upport for home purchasers. We estimate the wealth effect on private mortgage de bt as well as housing consumption by applying a model where mortgage debt demand is derived from house purchase decisions and is determined jointly with housing consumption. We use a simultaneous equation Tobit estimation method. Wealth eff ects on private mortgage debt, likelihood of borrowing, and housing consumption are not elastic. On the other hand, a change in housing consumption affects the likelihood of borrowing elastically much more than the private mortgage amount o f borrowers. Housing and private mortgage markets fluctuate very closely with th e number of participants in the mortgage market. Therefore, the number of housin g starts is linked strongly to the private mortgage market. 8) Robert B. Avery and Allen N. Berger had studied about the Loan commitments an d bank risk exposure. They studied about the Loan commitments increase a bank's risk by obligating it to issue future loans under terms that it might oth erwise refuse. However, moral hazard and adverse selection problems 31

potentially may result in these contracts being rationed or sorted. Depending on the relative risks of the borrowers who do and do not receive commitments, comm itment loans could be safer or riskier on average than other loans. the empirica l results indicate that commitment loans tend to have slightly better than avera ge performance, suggesting that commitments generate little risk or that this ri sk is offset by the selection of safer borrowers. 9) Sumit Agarwal,Souphala Chomsisengphet and John C. Driscoll had studied about the Loan commitments and private firms. They studied that, Most loans are in the form of credit lines. Empirical studies of line demand have been comp licated by their use of data on publicly traded firms, which have a wide menu of financing options. We avoid this problem by using a unique proprietary data set from a large financial institution of loan commitments made to 712 privately-he ld firms. We test Martin and Santomero's (1997) model, in which lines give firms the speed and flexibility to pursue investment opportunities. Our findings are consistent with their predictions. Firms facing higher rates and fees have small er credit lines. Firms with higher growth commit to larger lines of credit and h ave a higher rate of line utilization. Firms experiencing more uncertainty in th eir funding needs commit to smaller credit lines. Almost all firms convert unuse d credit line portions into spot loans and take out new lines. 10) Faik Koray and Eric T. Hillebrand had studied about the Interest Rate Volati lity and Home Mortgage Loans . they studied that The U.S. economy has experience d substantial fluctuations in real and nominal interest rates since the 1970s. T his paper investigates empirically the relationship between home mortgage loans and volatility in mortgage rates for the period 1971:02 through 2003:03. Contrar y to common wisdom, we find a positive relationship between mortgage rate volati lity and home mortgage loans. Further investigation indicates that this is due t o volatility in the bond market. In times of high interest volatility, household s disinvest in government securities and invest in real assets, which yield a po sitive relationship between mortgage rate volatility and home mortgage loans. 11) In nov 2000 Michelle J. White and Emily Y. Lin had studied about the Bankrup tcy and the Market for Mortgage and Home Improvement Loans. They studied that Th is paper investigates the relationship between bankruptcy exemptions and the ava ilability of credit for mortgage and home improvement loans. We develop a combin ed model of debtors' decisions to file for bankruptcy and to default on their mo rtgages and show that the theory predicts positive relationships between both th e homestead and personal property exemption levels and the probability of borrow ers being denied mortgage (secured) and home improvement loans. We test these pr edictions empirically and find strong and statistically significant support when evidence from crossstate variation in bankruptcy exemption levels is used. Appl icants for mortgages are 2 percentage points more likely to be turned down for m ortgages and 5 percentage points more likely to be turned down for home improvem ent loans if they live in states with unlimited rather than low homestead exempt ions. These relationships also hold when we introduce state fixed effects into t he model. 12) In October 14, 2008 David P. Bernstein had studied about the Home Equity Loans and Private Mortgage Insurance: Recent Trends & Potential Implicati ons. They studied about the the impact of increased use of home equity lines and decreased 32

private mortgage insurance (PMI) on mortgage markets. The data confirms that in the years leading up to the mortgage crisis home buyers and lenders have aggress ively used piggyback loans to avoid taking out PMI on first mortgages. Multiplemortgage financing packages as a percent of newly originated mortgages (mortgage s originated within the previous five years) went from 14.8% in survey year 2001 to 21.5% in survey year 2007. The multiple-mortgage percentage for seasoned mor tgages (mortgages originated more than five years prior to the origination date) also increased by a modest amount. Further comparisons reveal a large decrease in the proportion of mortgages with PMI with the largest decreases in PMI covera ge occurring among newly originated multiple-lien packages. Data from the SCF wa s used to compare five financial characteristics (credit card debt, installment loans, consumer credit, home-owners equity, and liquid assets) for multiple-lien versus single-lien households. The comparisons suggest single-lien households t end to have slightly stronger financial variables than multiple-lien households. The data does not support the view that homeowners with multiple liens are less risky and should therefore be allowed to avoid PMI. The reduced use of PMI and the increased use of home equity loans increased mortgage holder risk in several different ways and was a contributing factor to the 2008 mortgage and financial crisis. This change in lending and borrowing behavior is not a subprime market problem. 13) In aug 2007 Michael LaCour-Little had studied about the The Home Purchase Mo rtgage Preferences of Low- and Moderate-Income Households. Housing policy in the United States has long supported homeownership, yet variation persists across i ncome groups. This article employs recent mortgage origination data to focus on the revealed preferences of low- and moderateincome (LMI) households in home pur chase mortgage choice. I identify the factors associated with conventional confo rming, FHA, nonprime and specially targeted programs. Empirical results show tha t individual credit characteristics and financial factors, including pricing, ge nerally drive product choice, with some variation evident when loans are origina ted through brokers. Results also indicate that targeted conventional programs e ffectively compete with government-insured products in the LMI segment. 14) In 24 oct 2008 David C. Wheelock had studied about the Government Response t o Home Mortgage Distress: Lessons from the Great. They studied about the The Gre at Depression was the worst macroeconomic collapse in U.S. history. Sharp declin es in household income and real estate values resulted in soaring mortgage delin quency rates. According to one estimate, as of January 1, 1934, fully one-half o f U.S. home mortgages were delinquent and, on average, some 1000 home loans were foreclosed every business day. This paper documents the increase in residential mortgage distress during the Depression, and discusses actions taken by state g overnments and the federal government to reduce mortgage foreclosures and restor e the functioning of the mortgage market. Many states imposed moratoria on both farm and nonfarm residential mortgage foreclosures. Although moratoria reduced f arm foreclosure rates in the short run, they appear to have also reduced the sup ply of loans and made credit more expensive for subsequent borrowers. The federa l government took a number of steps to relieve residential mortgage distress and to promote the recovery and growth of the national mortgage market. The Home Ow ners Loan Corporation (HOLC) was created in 1933 to purchase and refinance delin quent home loans as long-term, amortizing mortgages. Between 1933 and 1936, the HOLC acquired and refinanced one million delinquent loans totaling $3.1 billion. The HOLC refinanced loans on some 10 percent of all nonfarm, owner-occupied dwe llings in the United States, and about 20 percent of those with an outstanding m ortgage. The Great Depression experience suggests how foreclosures might be redu ced during the present crisis. 33

15) In march 2001 Tullio Jappelli and Maria Concetta Chiuri had studied about th e Financial Market Imperfections and Home Ownership: A Comparative Study. They e xplore the determinants of the international pattern of home ownership using the Luxembourg Income Study (LIS), a collection of microeconomic data on fourteen O ECD countries. In most, the cross-section is repeated over time and includes sev eral demographic variables carefully matched between the different surveys. This allows us to construct a truly unique international dataset, merging data on mo re than 400,000 households with aggregate panel data on mortgage loans and down payment ratios. After controlling for demographic characteristics, country effec ts, cohort effects and calendar time effects, we find strong evidence that the a vailability of mortgage finance - as measured by outstanding mortgage loans and down payment ratios - affects the age-profile of home ownership, especially at t he young end. The results have important implications for the debate on the rela tionship between saving and growth. 16) In 10 dec 2007 Irina Paley and Chau Do had studied about the Explaining the Growth of Higher-Priced Loans in HMDA: A Decomposition Approach. The period 2004 -2005 showed a significant increase in Home Mortgage Disclosure Act (HMDA) rate spread reporting. Following the Oaxaca (1973), Blinder (1973), and Fairlie (2005 ) decomposition techniques, this study identifies the fraction of the increase d ue to the flattening of the yield curve. Even after controlling for changes in b orrower risk characteristics, the findings reveal that during 20042006, the flat tening of the yield curve explains a significant amount of the increase in rate spread reportable loans. This is the case for both prime and subprime originatio ns. 17) In feb 1 2009 Vincent W. Yao and Eric Rosenblatt and Michael LaCour-Little h ad studied about the unique paired loan dataset containing information on multip le conventional conforming mortgage loans of households to examine home equity e xtraction decisions over the period 2000-2006. The main question addressed is ho w much households borrow when refinancing their current mortgage debt in a cashout transaction. We also provide estimates of the marginal effect of certain bor rower characteristics. Results contribute both to the literature on refinancing behavior and the role of house price appreciation in providing funds that may be used for consumer spending or other purposes. 18) In aug 2004 Mark Carey and Greg Nini had studied about the Is the Corporate Loan Market Globally Integrated? A Pricing Puzzle. We offer evidence that intere st rate spreads on syndicated loans to corporate borrowers are economically sign ificantly smaller in Europe than in the U.S., other things equal. Differences in borrower, loan and lender characteristics associated with equilibrium mechanism s suggested in the literature do not appear to explain the phenomenon. Borrowers overwhelmingly issue in their natural home market and bank portfolios display s ignificant home "bias." This may explain why pricing discrepancies are not compe ted away, but the fundamental causes of the discrepancies remain a puzzle. Thus, important determinants of loan origination market outcomes remain to be identif ied, home "bias" appears to be material for pricing, and corporate financing cos ts differ in Europe and the U.S. 19) In july 2005 Gwilym B.J. Pryce and Patric H. Hendershott had studied abot th e The Sensitivity of Homeowner Leverage to the Deductibility of Home Mortgage In terest.Mortgage interest tax deductibility is needed to treat debt and equity fi nancing of homes equally. Countries that limit deductibility create a debt tax p enalty that presumably leads households to shift from debt toward equity financi ng. The greater the shift, the less is the tax revenue raised by the limitation and smaller is its 34

negative impact on housing demand. Measuring the financing response to a legisla tive change is complicated by the fact that lenders restrict mortgage debt to th e value of the house (or slightly less) being financed. Taking this restriction into account reduces the estimated financing response by 20 percent (a 32 percen t decline in debt vs a 40 percent decline). The estimation is based on 86,000 ne wly originated UK loans from the late 1990s. 20) In 1 nov 2007 Marsha Courchane studied about The Pricing of Home Mortgage Lo ans to Minority Borrowers: How Much of the APR Differential. The public releases of the 2004 and 2005 HMDA data have engendered a lively debate over the pricing of mortgage credit and its implications regarding the treatment of minority mor tgage borrowers. We provide a unique empirical assessment of this issue by using aggregated proprietary data provided to us by lenders and an endogenous switchi ng regression model to estimate the probability of taking out a subprime mortgag e, and annual percentage rate ("APR") conditional on getting either a subprime o r prime mortgage. We find that up to 90 percent of the African American APR gap, and 85 percent of the Hispanic APR gap, is attributable to observable differenc es in underwriting, costing and market factors that appropriately explain mortga ge pricing differentials. Although any potential discrimination is problematic a nd should be addressed, our analysis suggests that little of the aggregate diffe rences in APRs paid by minority and non-minority borrowers are appropriately att ributed to differential treatment. 21) In 1991 Susan M. Wachter and Paul S. Calemhad studied about the Community Re investment and Credit Risk: Evidence from an Affordable Home Loan Program.This s tudy examines the performance of home purchase loans originated by a major depos itory institution in Philadelphia under a flexible lending program between 1988 and 1994. We examine long-term delinquency in relation to neighborhood housing m arket conditions, borrower credit history scores, and other factors. We find tha t likelihood of delinquency declines with the level of neighborhood housing mark et activity. Also, likelihood of delinquency is greater for borrowers with low c redit history scores and those with high ratios of housing expense to income, an d when the property is unusually expensive for the neighborhood where it is loca ted. 35

CHAPTER 4 INTERPRETATION: SBI: NO.50 1) What is your occupation? Business man Student Government Employee Other House wife 15 0 22 0 9 25 20 15 10 5 0 Series1 Series2 Series3 STUDENT GOVERNMENT EMPLOYEE BUSINESS MAN Interpretation:o o o o o o o Total Number Respondents an. 9 of our category of HOUSE WIFE OTHER 36 of Respondents was 46. 0 of our Respondents was Students. 22 of the were into government employees 15 of our Respondents were Businessm Respondents were Housewives. None of our Respondent belonged to the others. 4 respondents did not answer.

2) From how many years you are associated with this bank? Less than 1 year 1-5 years More than 5 10 24 12 30 25 20 Series1 15 10 5 0 Less than year 1-5 year more then 5 Series2 Interpretation:o o o o o Total Number of Respondents was 46 10 persons are associated less than 1 year 24 persons are associated from 1-5 years. 12 persons are associated from more than 5 years. 3) How do you come to know about the home loan schemes of that bank? News paper Television 18 14 37

Internet other resources 10 4 20 18 16 14 12 10 8 6 4 2 0 News paper Television Internet Other resources Series1 Series2 Interpretation:o o o o o Total Number of Respondents was 46 18 persons came to know from newspaper 14 per sons came to know from television 10 persons came to know from internet 4 person s came to know from other resources 4) Are you aware of these type of home loans? Home purchase loan Home construction loan Home improvement loan Home equity loan Land purchase loan 9 18 6 4 9 38

20 18 16 14 12 10 8 6 4 2 0 Series1 Interpretation:o o o o o 5) Are you aware all terms and conditions of home loans? Yes No lo an co ns tr u ct Ho io n m lo e an im pr ov em en tl oa Ho n m e eq ui ty lo La an nd pu rc ha se lo an Ho m e Ho m e pu rc ha se Total Number of Respondents was 46 Only 4 persons know home equity loan. Many of peoples know home construction loan. 9 peoples know home purchase loan. 6 peopl es knowhome improvement loans. 40 6 39

45 40 35 30 25 20 15 10 5 0 Yes No Series1 Interpretation:o o o Total Number of Respondents was 46. Many of persons know all terms and condition s of home loan i.e. 40. 6 persons had not know properly about all terms and cond itions. 6) Are you satisfy with the interest rate charges by your bank? Strongly agree Agree Disagree strongly disagree 12 30 4 0 40

16 14 12 10 8 6 4 2 0 Strongly agree Agree Disagree strongly disagree Series1 Interpretation:o o o o o Total Number of Respondents was 46 12 among all consumers are strongly agreed by interest rate of the bank. 30 among all consumers are agreed by interest rate o f the bank 4 among all consumers are disagreed by interest rate of the bank 0 am ong all consumers are strongly disagreed by interest rate of the bank 7) Your bank offer which type of services? Mobile banking Net banking Forex banking 24 15 7 41

30 25 20 15 10 5 0 Mobile banking Net banking Forex banking Series1 Interpretation:o o o o Total Number of Respondents was 46. 24 persons said that bank offer mobile banki ng services. 15 said that bank offer net banking services. Only 7 persons said t hat bank offer forex banking services. 8) Do you agree that your bank loan processing is fast? Strongly agree Agree Disagree strongly disagree 8 26 9 3 42

30 25 20 15 10 5 0 Strongly agree Agree Disagree strongly disagree Series1 Interpretation:o o o o o Total Number of Respondents was 46. 8 persons strongly agree that bank home loan processing is fast. 26 persons agree that bank home loan processing is fast. 9 persons disagree that bank processing is fast. 3 persons strongly disagree that bank processing is fast. 9) Do you satisfy with the after home loan services provided by your bank are be st as compare to other bank? Strongly agree Agree Disagree strongly disagree 12 30 4 0 43

35 30 25 20 Series1 15 10 5 0 Strongly agree Agree Disagree strongly disagree Interpretation:o o Total Number of Respondents was 46 12 among all consumers are strongly agreed by after sale services of the bank. o o o 30 among all consumers are agreed by after sale services of the bank 4 among all consumers are disagreed by after sale services of the bank 0 among all consumer s are strongly disagreed by after sale services of the bank 10) Does the cost of home loan is appropriate, according to your demand? Yes No 33 13 44

35 30 25 20 Series1 15 10 5 0 Yes No Interpretation:o o Total Number of Respondents was 46. 33 persons said that home loan is appropriat e according to their demand. o 13 persons said that home loan is not appropriate according to their demand. 11) Are you satisfy with the employees behaviour of the bank? Strongly agree Agree Disagree strongly disagree 19 23 4 0 45

25 20 15 Series1 10 5 0 Strongly agree Agree Disagree strongly disagree Interpretation:o o o o o o Total Number of Respondents was 46. 19 persons very satisfied with the employee behaviour of the bank. 23 persons satisfied with the employee behaviour of the b ank. 4 persons disagree with the employee behaviour of the bank. No one is disag ree with the employee behaviour of the bank. 12) Does the bank give any discount upon loan services? Yes No 40 6 46

45 40 35 30 25 20 15 10 5 0 Yes No Series1 Interpretation:o o o Total Number of Respondents was 46. 40 persons said that bank give discount upon loan services. Only 6 persons said that bank does not give any discount upon lo an services. 13) Are you satisfy by the time taken in sanctioning the loan? Yes No 34 12 47

40 35 30 25 20 15 10 5 0 Yes No Series1 Interpretation:o o o Total Number of Respondents was 46. 34 persons are satisfied by the time taken 1 2 persons are not satisfied by the time taken 14) Have you face any difficulty during taking the loan? Yes No 39 7 48

45 40 35 30 25 20 15 10 5 0 Yes No Series1 Interpretation:o o o Total Number of Respondents was 46. 39 persons face difficulty during taking the loan. Only 7 persons does not face any difficulty during taking the loan. 15) Which grade you want to give of home loan schemes of the bank? Excellent Good Average below average 24 18 4 0 49

30 25 20 15 10 5 0 Excellent Good Average below average Series1 Interpretation:o o o o o Total Number of Respondents was 46. 24 persons give excellent grade of the bank. 18 persons gove good grade to the bank. Only 4 persons give average grade to th e bank. No none give below average grade to the bank. PNB: NO.50 1) What is your occupation? Business man Student Government Employee Other House wife 17 0 23 0 7 50

25 20 15 10 5 0 Series1 St ud en en t tE m pl oy ee O th er an m Bu sin Interpretation:o o o o o o o G ov er nm Total Number Respondents an. 7 of our category of of Respondents was 47. 0 of our Respondents was Students. 23 of the were into government employees 17 of our Respondents were Businessm Respondents were Housewives. None of our Respondent belonged to the others. 3 respondents did not answer.

2) From how many years you are associated with this bank? 3) Less than 1 year 1-5 years More than 5 17 19 11 Ho us e es s w ife 51

20 18 16 14 12 10 8 6 4 2 0 Less than 1 1-5 years year More than 5 Series1 Interpretation:o o o o Total Number of Respondents was 47 17 persons are associated less than 1 year 19 persons are associated from 1-5 years. 11 persons are associated from more than 5 years. 3) How do you come to know about the home loan schemes of that bank? News paper Television Internet other resources 12 22 9 4 52

25 20 15 Series1 10 5 0 News paper Television Internet other resources Interpretation:o o o o o Total Number of Respondents was 47 12 persons came to know from newspaper 22 per sons came to know from television 9 persons came to know from internet. 4 person s came to know from other resources. 4) Are you aware of these type of home loans? Home purchase loan Home construction loan Home improvement loan Home equity loan Land purchase loan 9 19 9 2 8 53

20 18 16 14 12 10 8 6 4 2 0 Series1 Interpretation:o o o o o 5)Are you aware all terms and conditions of home loans? Yes No pu rc ha se co ns lo Ho an tr u m ct e io im n pr lo an ov em en Ho tl m oa e eq n La ui nd ty lo pu an rc ha se lo an Ho m e Ho m e Total Number of Respondents was 47. Only 2 persons know home equity loan. Many o f peoples know home construction loan. 9 peoples know home purchase loan. 9 peop les knowhome improvement loans. 34 13 54

40 35 30 25 20 15 10 5 0 Yes No Series1 Interpretation:o o o Total Number of Respondents was 47. Many of persons know all terms and condition s of home loan i.e. 34. 13 persons had not know properly about all terms and con ditions. 6)Are you satisfy with the interest rate charges by your bank? Strongly agree Agree Disagree strongly disagree 11 34 2 0 55

40 35 30 25 20 15 10 5 0 Strongly agree Agree Disagree strongly disagree Series1 Interpretation:o o o o o Total Number of Respondents was 47. 11 among all consumers are strongly agreed b y interest rate of the bank. 34 among all consumers are agreed by interest rate of the bank 2 among all consumers are disagreed by interest rate of the bank 0 a mong all consumers are strongly disagreed by interest rate of the bank 7) Your bank offer which type of services? Mobile banking Net banking Forex banking 26 13 8 56

30 25 20 15 10 5 0 Mobile banking Net banking Forex banking Series1 Interpretation:o o o o Total Number of Respondents was 47. 26 persons said that bank offer mobile banki ng services. 13 said that bank offer net banking services. Only 8 persons said t hat bank offer forex banking services. 8)Do you agree that your bank loan processing is fast? Strongly agree Agree Disagree strongly disagree 4 21 13 9 57

25 20 15 Series1 10 5 0 Strongly agree Agree Disagree strongly disagree Interpretation:o o o o o Total Number of Respondents was 47. 4 persons strongly agree that bank home loan processing is fast. 21 persons agree that bank home loan processing is fast. 13 persons disagree that bank processing is fast. 9 persons strongly disagree that bank processing is fast. 9) Do you satisfy with the after home loan services provided by your bank are be st as compare to other bank? Strongly agree Agree Disagree strongly disagree 14 29 4 0 58

35 30 25 20 15 10 5 0 Strongly agree Agree Disagree strongly disagree Series1 Interpretation:o o Total Number of Respondents was 47. 14 among all consumers are strongly agreed b y after sale services of the bank. o o o 29 among all consumers are agreed by after sale services of the bank 4 among all consumers are disagreed by after sale services of the bank 0 among all consumer s are strongly disagreed by after sale services of the bank 10) Does the cost of home loan is appropriate, according to your demand? Yes No 29 18 59

35 30 25 20 Series1 15 10 5 0 Yes No Interpretation:o o Total Number of Respondents was 47. 29 persons said that home loan is appropriat e according to their demand. o 18 persons said that home loan is not appropriate according to their demand. 11)Are you satisfy with the employees behaviour of the bank? Strongly agree Agree Disagree strongly disagree 16 25 6 0 60

30 25 20 15 10 5 0 Strongly agree Agree Disagree strongly disagree Series1 Interpretation:o o o o o Total Number of Respondents was 47. 16 persons very satisfied with the employee behaviour of the bank. 25 persons satisfied with the employee behaviour of the b ank. 6 persons disagree with the employee behaviour of the bank. No one is disag ree with the employee behaviour of the bank. 12)Does the bank give any discount upon loan services? Yes No 35 12 61

40 35 30 25 20 15 10 5 0 Yes No Series1 Interpretation:o o o Total Number of Respondents was 47. 35 persons said that bank give discount upon loan services. Only 12 persons said that bank does not give any discount upon l oan services. 13)Are you satisfy by the time taken in sanctioning the loan? Yes No 30 17 62

35 30 25 20 Series1 15 10 5 0 Yes No Interpretation:o o o Total Number of Respondents was 47. 30 persons are satisfied by the time taken 1 7 persons are not satisfied by the time taken 14)Have you face any difficulty during taking the loan? Yes No 43 4 63

50 45 40 35 30 25 20 15 10 5 0 Yes No Series1 Interpretation:o o o Total Number of Respondents was 47. 43 persons face difficulty during taking the loan. Only 4 persons does not face any difficulty during taking the loan. 15)Which grade you want to give of home loan schemes of the bank? Excellent Good Average below average 18 20 8 1 25 20 15 Series1 10 5 0 Excellent Good Average below average 64

Interpretation:o o o o o Total Number of Respondents was 47. 18 persons give excellent grade of the bank. 20 persons gove good grade to the bank. Only 8 persons give average grade to th e bank. 1 person give below average grade to the bank. 65

CHAPTER 5 5.1 Section CONCLUSION: All the people are availing loan facility from both the banks. No. of respondent s of SBI were 46 and 47 of SBI Bank. Peoples are relating with PNB more satisfy with the interest rate as compare to SBI. SBI peoples much know about home loans then PNB. Both PNB and SBI mostly offer mobile banking services. Processing of SBI is fast then PNB. After home loan services of PNB is good as compare to SBI. Peoples related with SBI is more satisfy with the employee behaviour as compare to PNB.People are more satisfied by SBI for time taken for sanctioning the loan . From all this I conclude that SBI bank provide good home loan services as comp are to PNB and many peoples are very satisfied from SBI. 5.2 Section LIMITATIONS Although best of the efforts were made to conduct a prefect survey but still it faces certain limitation. Following were certain limitation of this project. 1.T he survey was conducted only on 100 respondents. 2.Some of the respondents did n ot answer all the questions, which could hamper the final results to a certain e xtent. 3.The study confines itself to the respondents of NAWANSHAHAR region only. Hence findings would not be relevant to other cities. 66

CHAPTER 6 REFERENCES: Craig, Ben R. and Thomson, James B.,Federal (August 2001). Home Loan Bank Lendin g to Community Banks: Are Targeted Subsidies Necessary? FRB of Cleveland Working Paper No. 01-12. Available at SSRN: http://ssrn.com/abstract=282410 or DOI: 10. 2139/ssrn.282410 Singh, Fulbag and Sharma, Reema,(December 2006) Housing Finance in India: A Case Study of LIC Housing Finance Limited. ICFAI Journal of Financial Economics, Vol . 4, No. 4, pp. 63-74, December 2006. Available at SSRN: http://ssrn.com/abstrac t=959359 LaCour-Little, (May 18, 2007) Michael,Economic Factors Affecting Home Mortgage D isclosure Act. SSRN: http://ssrn.com/abstract=992815 Borde, Stephen F. May/June 1991 ,Is the Savings and Loan Industry Facing Extinct ion?The Secured Lender,Vol.47. SSRN:http://ssrn.com/abstract=151018 Rosner, Joshua (June 29, 2001).,Housing in the New Millennium: A Home Without Eq uity is Just a Rental with Debt,Available at SSRN: http://ssrn.com/abstract=1162 456 Jacoby, Melissa B.( dec 2006) Home Ownership Risk Beyond a Subprime Crisis: The Role of Delinquency Management. Fordham Law Review, Vol. 76, 2008; UNC Legal Stu dies Research Paper No. 1074442. Available at SSRN: http://ssrn.com/abstract=107 4442 Moriizumi, Yoko,Current Wealth, (dec 1999) Housing Purchase and Private Housing Loan Demand in Japan. Journal of Real Estate Finance and 67

Economics, Vol. 21, Issue SSRN: http://ssrn.com/abstract=237815 1. Available at http://ideas.repec.org/p/fip/fedcwp/9015.html http://ideas.repec.org/p/fip/fedgfe/2004-27.html Hillebrand, Eric T. and Koray, Faik,Interest Rate Volatility and Home Mortgage L oans. Applied Economics, Forthcoming. Available at SSRN: http://ssrn.com/abstrac t=923358 Lin, Emily Y. and White, Michelle J. (November 2000),Bankruptcy and the Market for Mortgage and Home Improvement Loans. Michigan Law and Economics Rese arch Paper No. 00-013. Available at SSRN: http://ssrn.com/abstract=252699 or DOI : 10.2139/ssrn.252699 Bernstein, David P. (October 14, 2008) ,Home Equity Loans and Private Mortgage Insurance: Recent Trends & Potential Implications. Availabl e at SSRN: http://ssrn.com/abstract=1277353 LaCour-Little, Michael,The Home Purc hase Mortgage Preferences of Lowand Moderate-Income Households. Real Estate Econ omics, Vol. 35, No. 3, pp. 265-290, Fall 2007. Available at SSRN: http://ssrn.co m/abstract=1007862 or DOI: 10.1111/j.1540-6229.2007.00190.x Wheelock, David C(Oc tober 24, 2008)..,Government Response to Home Mortgage Distress: Lessons from th e Great Depression.Federal Reserve Bank of St. Louis Working Paper No. 2008-038A . Available at SSRN: http://ssrn.com/abstract=1289440 Chiuri, Maria Concetta and Jappelli, Tullio, (March 2001) Financial Market Imperfections and Home Ownershi p: A Comparative Study. CEPR Discussion Paper No. 2717. Available at SSRN: http: //ssrn.com/abstract=264399 Do, Chau and Paley, Irina,Explaining the Growth of Hi gher-Priced Loans in HMDA: A Decomposition Approach. Journal of Real Estate Rese arch, Vol. 29, No. 4, 2007. Available at SSRN: http://ssrn.com/abstract=1030058 LaCour-Little, Michael, Rosenblatt, Eric and Yao, Vincent W.(February 1, 2009)., Home Equity Extraction by Homeowners: 2000-2006. Journal of Real Estate Research , 2009. Available at SSRN: http://ssrn.com/abstract=1336049 Nini, Greg and Carey , Mark, (August 2004) Is the Corporate Loan Market Globally Integrated? A Pricin g Puzzle. FRB International Finance Discussion Paper No. 813. Available at SSRN: http://ssrn.com/abstract=585742 Hendershott, Patric H. and Pryce, Gwilym B.J. ( July 2005).,The Sensitivity of Homeowner Leverage to the Deductibility of Home M ortgage Interest.NBER Working Paper No. W11489. Available at SSRN: http://ssrn.c om/abstract=762768 68

 Courchane, Marsha, (November 1, 2007). The Pricing of Home Mortgage Loans to Min ority Borrowers: How Much of the APR Differential Can We Explain? Available at S SRN: http://ssrn.com/abstract=1374872 Calem, Paul S. and Wachter, Susan M. (Nov 1, 1999),Community Reinvestment and Credit Risk: Evidence from an Affordable Hom e Loan Program. Real Estate Economics, Vol. 27. Available at SSRN: http://ssrn.c om/abstract=145360 69

CHAPTER 7 QUESTIONNAIRE: Name____________ Qualification_________ Age 18-25 25-35 35-40 _ 16) What is your occupation? Business man House wife Other Student 17) From how many years you are associated with this bank? 1-5 Less than 1 year More than 5 year Above Gender________ Government employee

3) How do you come to know about the home loan schemes of this bank? News paper Internet Television Other resources 4) Are you aware of these type of home loans? Home purchase laon Home improvemen t loan Home equity loan Home construction loan Home extention loan Land purchase loan 5) Are you aware all terms and conditions of home loans? Yes No A

6) Are you satisfy with the interest rate charges by your bank? Strongly agree gree 70

Strongly disagree Disagree 7) Your bank offer which type of services ? Mobile banking Forex banking 8) Do y ou agree that your bank loan processing is fast? Strongly agree Strongly disagre e Agree Disagree Net banking 9) Do you satisfy with the after home loan services provided by your bank are be st as compare to other bank? Strongly agree Strongly disagree Agree Disagree 10) Does the cost of home loan is appropriate, according to your demand? Yes 11) Are you satisfy with the employees behaviour of the bank? Strongly agree ongly disagree Agree Disagree 12) Does the bank give any discount upon loan services? Yes No No No Str

13) Are you satisfy by the time taken in sanctioning the loan? Yes 14) Have you face any difficulty during taking the loan? Yes No

If yes then specify___________________________ 15) Which grade you want to give of home loan schemes of your bank? Excellent Good 71

Average Below average 16) Any suggestions that you want to give___________________________________ _____________________________________________________________________ 72