IRJMSH Vol 5 Issue 10 [Year 2014] ISSN 2277 – 9809 (0nline) 2348–9359 (Print)

CUSTOMERS PERCEPTION AND SATISFACTION TOWARDS HOME LOANS

IN UTTRAKHAND: THE NAINITAL BANK LIMITED

CHETAN KASHYAP
RESEARCH SCHOLAR

GOVT. P.G. COLLEGE, RAMNAGAR

KUMAYUN UNIVERSITY, NAINITAL (UTTRAKHAND)

ABSTRACT
Uttrakhand is poised for very high growth in the coming years. To promote Uttrakhand as
an attractive destination for industrial investments, the state policy aims to promote public
private partnership to boost infrastructure and industrial development. The finance
companies have become the spine for the development of the economy on all parameters
in any state. Like wise the finance companies play a critical role in the development of
the Uttrakhand economy. The financial companies are not only important for the industrial
development but they are equally helpful in social development activities. The Uttrakhand
state has aim to provide adequate and timely financial assistance to help the small entrepreneurs,
middle class and weaker sections of the society. The present study was undertaken to analyze the
perceptions and satisfaction of the customers towards the home loans scheme provided by The
Nainital Bank Limited (NBL), Uttrakhand. The vision of the bank is "To emerge as a customer
centric National Bank & become the most preferred bank for its product, services, technology,
efficiency & financials."
This research paper examined the satisfaction level and problems faced by customers while
availing the home loans. With the help of some analysis it has found that the customers of the
bank were highly satisfied with the home loan services in relation to its services, transparency,
time taken for loan approval, employee co-operation and query handling , prima facie of some
problems like procedural delays, lack of knowledge and red-tapisim. The results further revealed
that the main reason for people to prefer this bank is the trust of the customers in the bank, lower
interest rates and easy repayable installments.

INTRODUCTION
Home loan is referred to that type of loan facility which allows you to buy land property and
houses. As buying home requires investment of large amount of capital, therefore it becomes not
always possible to pay such big amount at a time. One even may not be such financially stable to
pay a big amount at a time. Therefore, these people approach the banking organizations to apply
for loans. There may be a lot of different loan schemes available, but not all will be ideal for the
purpose. The best ones for property and house purchasing are the home loan schemes available
with most of the banks. The Home Loan scheme lets the customer avail a big sum of money (the

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cost price required to pay for the home) and then allows him / her to pay back at easy monthly
installments for a fixed period of time. Although interest rate is levied on the loan amount, but
still this option is much preferable due to the easy payback policy associated with them.
Housing is one of the basic needs of every individual as besides providing shelter and
security, it also enables easy access to the credit market by working as collateral comfort /
security. The urban population of India has been growing at a rapid pace. As per the Census
2011, 31.16 per cent of the total population is in the urban areas. The shortage of housing units
for the urban areas for 2012 is 1estimated at 18.78 million units . With time, there has been
expansion and improvement in the housing finance market by way of various financial reforms;
however the housing loans as a percentage of GDP have remained at around 7 per cent,
significantly lower than the levels achieved in most of the developed countries. The major policy
concern with respect to housing as well as housing finance market is the mismatch between the
demand and supply of housing units and the financial solutions available for the same.
The Nainital Bank Ltd (NBL) is based in Nainital, Uttarakhand and operates more than 100
branches across the states of Uttarakhand, UP, Delhi, Haryana and Rajasthan.
The bank provides a variety of products and services across the personal banking, business
banking and rural & agri banking segments. The Nainital Bank’s personal banking segment
provides deposits and retail loan products which includes Apna Ashiana, a housing loan scheme,
Suhana Safar, a car loan scheme, Naini Sahayog, a loan to salaried professionals, Naini
HealthCare, a scheme for doctors etc. The bank under its business banking segment offers
services ranging from working capital finance, short term corporate loans and project finance. Its
rural and agri banking segment extend loans for agricultural activities.
Recently, the bank launched eStamping facility to its customers. The bank also expanded its
service network to NEFT, RTGS and SMS banking. The bank has tied up with National
Insurance Co Ltd and ING-Vysya Life Insurance for selling general and life insurance products
respectively.
Housing loan scenario in India has changed drastically and has taken the front seat. Role
of NBL in providing housing finance has been reviewed from time to time and thus plays an
important role in providing housing credit under various schemes to priority sector as well as to
the weaker sections of the community.

The Nainital Bank Ltd. is provided the housing loan scheme name is “Apna Aashiyana For
Home” This scheme is formed with the objective to solve the problem of housing by providing
Housing Credit to the eligible constituents for the following purposes.

 To construct/purchase a new house/flat.

 To purchase a ready built house, which should not be more than 20 (twenty) years old.
 For repairs/renovation/addition/extension in the existing house/flat.
 For repayment of loan already availed by the concerned constituents from other
banks/housing finance institutions.
 For purchase of land provided it is part of the project and construction is completed
within 18 months.

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The Interest Rate on this scheme comparatively is very low other than banks in Uttrakhand
i.e. 10.25%.

Performance Highlights 2013-14

 Total Business stood at Rs.7120 crore.

 Deposit increased to Rs.4650 crore.
 Gross advances increased to Rs.2470 crore.
 CASA to total deposits stood at 36.33%.
 C.D. Ratio stands at 53.12%.
 Bank’s Net Owned funds increased to Rs.445.28 crore.
 Cost of Deposits stands at 7%.
 Yield on Advances stands at 12.53%.
 Priority Sector Lending stands at 64.22% of adjusted net bank credit against RBI
stipulation of minimum 40%.
 Operating profit increased to Rs.96.86 crore.
 Net Profit stood at Rs.65.42 crore.
 Capital Adequacy Ratio stood at 15.02% as per Basel-II and 15.13% as per Basel-III
norms.
 Gross NPA to gross advances stood at 2.47%.
 Net NPA remains at 0.00% (Zero Level).
 Net Interest Margin (NIM) stands at 3.71%.
 Return on Average Assets (RoA) stood at 1.48%.
 Business per Employee increased to Rs.8.73 crore from 7.48 crore.
 Book value per share stands at Rs.65.97%.
 Earnings per share (EPS) stood at Rs.9.69%.
 All Branches working on CBS platform with RTGS/NEFT and SMS alert facility.
 Implementation of Financial Inclusion plan in line with RBI/GOI Directives.

OBJECTIVES
Main objectives of the present study are :
1. To know general perceptions about home loans of NBL.
2. To study the satisfaction level of customers about home loans of NBL.
3. To study the major problem faced by customers while availing home loans.

RESEARCH METHODOLOGY
This study is compiled with the help of both primary and secondary data. The primary data were
collected directly from the respondents with the help of interview. Secondary data were collected
from the books, journals and websites.

RESPONDENTS SATISFACTION TOWARDS HOME LOAN: AN ANALYSIS

INTEREST RATE: The opinion of the respondents regarding the statement that whether
interest rates of NBL are comparatively less than the other bank.
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FAST AND EFFICIENTS ERVICES: The opinion of the respondents regarding the statement
that whether bank is providing fast and efficient services to meet customer requirements has been
endorsed by more than 90 percent of the respondents.
PAPER WORK: The opinion of the respondents regarding the statement that whether paper
work for loan processing is time consuming.
REPAYMENT PERIOD: The respondents are satisfied with the repayment period of the bank.
TIME TAKEN FOR LOAN APPROVAL: The opinion of the respondents regarding the
statement that whether they are satisfied with the time taking for loan approval at NBL.

PROBLEMS FACED BY THE CUSTOMERS:

LACK OF KNOWLEDGE: Some of the respondents either disagree or strongly disagree with
the problem of lack of knowledge while availing home loan.
PROCEDURAL DELAY: There are procedural delays in disbursing the home loan amount in
bank under study.
NON-COOPERATION OF BANK EMPLOYEE: The customers are facing the problem of
non-cooperation of bank employee’s during the home loan procedures.
RED – TAPISM: The problems of red-tapism has also faced by the customers during taking the
home loans. It is highly paper work formalities required by the banks.

CONCLUSION
The home loan market in India has grown at a rapid and alarming rate of over 40% over the
period of the last four years. And from the reports from one of the industry experts, it is evident
that there is very little chance that these will be any significant decline in growth rates in the
future. Therefore it becomes important at this point in time to examine the key factors that have
been instrumental in triggering this high growth period.
These are several reasons that can be considered as having attributed to the growth of the home
loan market. On the demand side, the first and the most important factor for the growth has been
faster rise in incomes as compared to property prices, thus making housing more affordable. It
was found that the Nainital Bank ltd. is very popular among the customers these days in the
Uttrakhand State. The trust level that customers have with this banks is very high in comparison
to other banks. Customers are associated with banks for many services that they require on
regular basis and people tend to prefer banks which
Provide better facilities and convenient banking. From the overall analysis it can be said that the
satisfaction level of workers in relation to the services provided by NBL is very high. Different
banks offer same product but their services differentiate and the bank has gone far in this
direction. The customer can choose those schemes which he feels is good for him and have the capacity
to repay it on that specified time period.

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IRJMSH Vol 5 Issue 10 [Year 2014] ISSN 2277 – 9809 (0nline) 2348–9359 (Print)

References:
i. http://en.wikipedia.org/wiki/Banking_in_India
ii. http://www.nainitalbank.co.in/English/interest_rate1.aspx
iii. http://www.uttarakhandgraminbank.com/branchlist.html
iv. http://bankifsccode.com/THE_NAINITAL_BANK_LIMITED/UTTARAKHAND/A
LMORA
v. http://business.mapsofindia.com/bankbranches/the_nainital_bank_limited/uttarakhand
/
vi. "Banks struggle with RBI norms". The Times of India. 1 October 2006.
vii. "About Nainital Bank in info2india.com".

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