1

2
CHAPTER-1


INDUSTRY PROFILE



1.1 BANKING AND FINANCE IN INDIA


The Indian money market is classiIied in to : the organized sector(comprising private,
public and Ioreign owned commercial banks and cooperative banks, together known
as scheduled banks); and the unorganized sector(comprising individual or Iamily
owned indigenous bankers or money lenders and non banking Iinancial companies
(NBFCs)).
The unorganized sector and micro credit and still preIerred over traditional banks in
rural and sub-urban areas, especially Ior non-productive purposes, like ceremonies
and short duration loans.

Early History

Banking in India originated in the Iirst decade oI 18th century. The Iirst banks were
The General Bank oI India, which started in 1786, and Bank oI Hindustan, both oI
which are now deIunct. The oldest bank in existence in India is the State Bank oI
India, which originated in the "The Bank oI Bengal" in Calcutta in June 1806. This
was one oI the three presidency banks, the other two being the Bank oI Bombay and
the Bank oI Madras. The presidency banks were established under charters Irom the
British East India Company. They merged in 1925 to Iorm the Imperial Bank oI India,
which, upon India's independence, became the State Bank oI India. For many years
the Presidency banks acted as quasi-central banks, as did their successors. The
Reserve Bank oI India Iormally took on the responsibility oI regulating the Indian
banking sector Irom 1935. AIter India's independence in 1947, the Reserve Bank was
nationalized and given broader powers.


3
Post-independence

The partition oI India in 1947 adversely impacted the economies oI Punjab and West
Bengal, paralyzing banking activities Ior months. India's independence marked the
end oI a regime oI the Laissez-Iaire Ior the Indian banking. The Government oI India
initiated measures to play an active role in the economic liIe oI the nation, and the
Industrial Policy Resolution adopted by the government in 1948 envisaged a mixed
economy. This resulted into greater involvement oI the state in diIIerent segments oI
the economy including banking and Iinance. The major steps to regulate banking
included:
In 1948, the Reserve Bank oI India, India's central banking authority, was
nationalized, and it became an institution owned by the Government oI India.
In 1949, the Banking Regulation Act was enacted which empowered the Reserve
Bank oI India (RBI) "to regulate, control, and inspect the banks in India."
The Banking Regulation Act also provided that no new bank or branch oI an existing
bank may be opened without a license Irom the RBI, and no two banks could have
common directors.
However, despite these provisions, control and regulations, banks in India except the
State Bank oI India, continued to be owned and operated by private persons. This
changed with the nationalization oI major banks in India on 19th July, 1969.

Nationalization

By the 1960s, the Indian banking industry has become an important tool to Iacilitate
the development oI the Indian economy. At the same time, it has emerged as a large
employer, and a debate has ensued about the possibility to nationalize the banking
industry. Indira Gandhi, the-then Prime Minister oI India expressed the intention oI
the GOI in the annual conIerence oI the All India Congress Meeting in a paper
entitled "Stray thoughts on Bank Nationali:ation." The paper was received with
positive enthusiasm. ThereaIter, her move was swiIt and sudden, and the GOI issued
an ordinance and nationalized the 14 largest commercial banks with eIIect Irom the
midnight oI July 19, 1969. Jayaprakash Narayan, a national leader oI India, described
the step as a "masterstroke of political sagacity." Within two weeks oI the issue oI the
4
ordinance, the Parliament passed the Banking Companies (Acquisition and TransIer
oI Undertaking) Bill, and it received the presidential approval on 9th August, 1969.
A second dose oI nationalization oI 6 more commercial banks Iollowed in 1980. The
stated reason Ior the nationalization was to give the government more control oI credit
delivery. With the second dose oI nationalization, the GOI controlled around 91 oI
the banking business oI India.
AIter this, until the 1990s, the nationalized banks grew at a pace oI around 4, closer
to the average growth rate oI the Indian economy.
Liberalization
In the early 1990s the then Narsimha Rao government embarked on a policy oI
liberalization and gave licenses to a small number oI private banks, which came to be
known as New Generation tech-savvy banks, which included banks such as Global
Trust Bank (the Iirst oI such new generation banks to be set up) which later
amalgamated with Oriental Bank oI Commerce, UTI Bank (now re-named as Axis
Bank), ICICI Bank and HDFC Bank. This move, along with the rapid growth in the
economy oI India, kick started the banking sector in India, which has seen rapid
growth with strong contribution Irom all the three sectors oI banks, namely,
government banks, private banks and Ioreign banks.
The next stage Ior the Indian banking has been setup with the proposed relaxation in
the norms Ior Foreign Direct Investment, where all Foreign Investors in banks may be
given voting rights which could exceed the present cap oI 10at present it has gone
up to 49 with some restrictions.
The new policy shook the Banking sector in India completely. Bankers, till this time,
were used to the 4-6-4 method (Borrow at 4; Lend at 6;Go home at 4) oI
Iunctioning. The new wave ushered in a modern outlook and tech-savvy methods oI
working Ior traditional banks. All this led to the retail boom in India. People not just
demanded more Irom their banks but also received more.
Current situation
Currently (2007), banking in India is generally Iairly mature in terms oI supply,
product range and reach-even though reach in rural India still remains a challenge Ior
the private sector and Ioreign banks. In terms oI quality oI assets and capital
adequacy, Indian banks are considered to have clean, strong and transparent balance
sheets relative to other banks in comparable economies in its region. The Reserve
Bank oI India is an autonomous body, with minimal pressure Irom the government.
5
The stated policy oI the Bank on the Indian Rupee is to manage volatility but without
any Iixed exchange rate-and this has mostly been true.
With the growth in the Indian economy expected to be strong Ior quite some time-
especially in its services sector-the demand Ior banking services, especially retail
banking, mortgages and investment services are expected to be strong. One may also
expect M&As, takeovers, and asset sales.
In March 2006, the Reserve Bank oI India allowed Warburg Pincus to increase its
stake in Kotak Mahindra Bank (a private sector bank) to 10. This is the Iirst time an
investor has been allowed to hold more than 5 in a private sector bank since the RBI
announced norms in 2005 that any stake exceeding 5 in the private sector banks
would need to be vetted by them.
Currently, India has 88 scheduled commercial banks (SCBs) - 28 public sector banks
(that is with the Government oI India holding a stake), 29 private banks (these do not
have government stake; they may be publicly listed and traded on stock exchanges)
and 31 Ioreign banks. They have a combined network oI over 53,000 branches and
17,000 ATMs. According to a report by ICRA Limited, a rating agency, the public
sector banks hold over 75 percent oI total assets oI the banking industry, with the
private and Ioreign banks holding 18.2 and 6.5 respectively.
Since liberalization, the government has approved signiIicant banking reIorms.
While some oI these relate to nationalized banks (like encouraging mergers, reducing
government interIerence and increasing proIitability and competitiveness) other
reIorms have opened up the banking and insurance sectors to private and Ioreign
players.


Central bank Reserve Bank oI India
Nationalized banks
Allahabad Bank Andhra Bank Bank oI Baroda Bank oI
India Bank oI Maharashtra Canara Bank Central Bank
oI India Corporation Bank Dena Bank Indian Bank
Indian Overseas Bank Oriental Bank oI Commerce
Punjab & Sind Bank Punjab National Bank Syndicate
Bank Union Bank oI India United Bank oI India UCO
Bank Vijaya Bank IDBI Bank
6
State Bank Group
State Bank oI India State Bank oI Bikaner & Jaipur State
Bank oI Hyderabad State Bank oI Indore State Bank oI
Mysore State Bank oI Patiala State Bank oI Saurashtra
State Bank oI Travancore
Private banks
Axis Bank Bank oI Rajasthan Bharat Overseas Bank
Catholic Syrian Bank Centurion Bank oI Punjab City
Union Bank Development Credit Bank Dhanalakshmi
Bank Federal Bank Ganesh Bank oI Kurundwad HDFC
Bank ICICI Bank IndusInd Bank ING Vysya Bank
Jammu & Kashmir Bank Karnataka Bank Limited Karur
Vysya Bank Kotak Mahindra Bank Lakshmi Vilas
Bank Nainital Bank Ratnakar Bank SBI Commercial
and International Bank South Indian Bank Amazing
Mercantile Bank YES Bank
Foreign banks
ABN Amro Bank Barclays Bank Citibank HSBC
Standard Chartered Deutsche Bank
Regional Rural banks
South Malabar Gramin Bank North Malabar Gramin
Bank Pragathi Gramin Bank Shreyas Gramin Bank
Financial Services
Real Time Gross Settlement(RTGS) National Electronic
Fund TransIer (NEFT) Structured Financial Messaging
System (SFMS) CashTree Cashnet Automated Teller
Machine (ATM)














7
Structure / Constituents of Indian Finance System



The India Finance System is composed oI diIIerent institutions and will see
subsequent address to certain roles and have accordingly brought out a variety oI
instrumentation and helped create a healthy money market, which is Iundamental
requisite oI good Iinance system.







8
1.2 CATEGORIES OF BANK:


Banking in India Ialls mainly under two categories, viz. Commercial banks and Co-
operative banks, while commercial banks cater to the needs oI industry and trade
largely; the cooperative banks play a major role in Iinancing agriculture and allied
activities in rural areas, and trade and services in urban areas.
The commercial banks may be classiIied into Iour group in terms oI ownership: 1)
Public Sector Banks 2) Regional Rural 3) Indian Private Sector Banks and 4) Banks
incorporated outside India.
The commercial banks can be Iurther classiIied into Scheduled banks and Non
Scheduled Banks. Scheduled Banks are those listed in the second schedule to the
Reserve Bank oI India Act 1934
These banks satisIy the criteria laid down under section 42 (6) oI the RBI Act that
they should have capital and reserve oI Rs. 5 lakhs and their activities should not be
detrimental to the interests oI depositors. The scheduled banks are required to
maintain cash reserves equal to 5 oI DTL which can go up to 15 under section
42 (1). Those, which are not included in the 2
nd
schedule, are called the non-scheduled
banks. The number oI take- oven/liquidation as also in some cases up gradation into
scheduled banks category.

Introduction to finance :

Finance is the handmaiden oI economic growth Institutions like banks, which
command huge Iinancial resources, can play a crucial role in shaping the economy oI
a country by judiciously deploying their Iunds over such important activities as would
lead to an overall economic growth. A bank`s oIIer compared to a dam and the money
lying scattered with individuals and institutions in society to the water running its own
course without any direction. Money is collected by banks by way oI deposits, and
Irom this Iund money is turned back to the community in the Iorm oI loans. Thus,
banks act as a vital link between the savers and the needy.

India is striving to transIorm herselI into an industrially developed country based on a
rural and agricultural economy which should not only be able to Ieed the millions oI
9
her populations but also to produce raw material Ior her mills. This can be done by
bringing about the necessary change Irom an agrarian economy to a diversiIied one.
Banks have crucial role to play not only in the achievement oI this objective but more
signiIicantly in determining how speedily and eIIiciently it is achieved. Since the
nationalization oI the Iourteen major banks, the banking industry has developed
adequately enough to meet the changing needs, both corporate and personal. Banks
now oIIer a wide range oI Iinancial services in an extensively varied environment.
The complex task oI managing these changes and their consequences requires that
banker should be more proIessional than ever beIore.

The Business of Banking

Banking has been understood diIIerently at diIIerent times and indiIIerent countries.
In India, the earliest legislation that dealt with the business oI banking was the Indian
Companies Act 1913. The Banking Regulations Act came in 1936. Under this Act all
companies having their principal business, accepting deposits Irom the public were
classiIied as banks. Hence between 1936 and 1942 even trading and industrial
concerns accepting deposits were classiIied as banks, iI accepting such deposits was
their principal business. The Government oI India passed a compressive Banking
Regulation Act in 1949. Accordingly a banking company was deIined as a company
which carries on the business oI banking that is to say accepting Ior the purpose oI
lending or investing deposits oI money Irom the public, repayable on demand oI
otherwise, and withdrawal cheque, draIt, order oI otherwise. The study group
reviewing legislation aIIecting banking is oI the opinion that 'banking should be
abroad based. The deIinition given by the Banking Regulation Act 1949 is certainly
not exhaustive, and it needs certain alterations Ior the sake oI simpliIication. The
purpose oI accepting deposits is strictly not relevant Ior the deIinition oI banking,
through it is basic Ior banking regulation. There is no need to distinguish between
'loans deposits in the context oI banking regulation. The deIinition oI banking
should cover all Iorms oI deposits Irom the public, and banking regulation should take
into its ambit all the diIIerent types oI banking.
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1.3 FUNCTIONING OF A BANK:

Functioning oI a Bank is among the more complicated oI corporate operations. Since
Banking involves dealing directly with money, governments in most countries
regulate this sector rather stringently. In India, the regulation traditionally has been
very strict and in the opinion oI certain quarters, responsible Ior the present condition
oI banks, where NPAs are oI a very high order. The process oI Iinancial reIorms,
which started in 1991, has cleared the cobwebs somewhat but a lot remains to be
done. The multiplicity oI policy and regulations that a Bank has to work with makes
its operations even more complicated, sometimes bordering on illogical. This section,
which is also intended Ior banking proIessional, attempts to give an overview oI the
Iunctions in as simple manner as possible.
Banking Regulation Act oI India, 1949 deIines Banking as "accepting, Ior the purpose
oI lending or investment oI deposits oI money Irom the public, repayable on demand
or otherwise and withdrawal by cheques, draIt, order or otherwise."

Deriving Irom this deIinition and viewed solely Irom the point oI view oI the
customers, Banks essentially perIorm the Iollowing Iunctions:

Accepting Deposits Irom public/others (Deposits)
1. Lending Money to public (Loans)
2. TransIerring money Irom one place to another.
3. Acting as trustees.
4. Keeping valuables in saIe custody.
5. Government business.

But do these Iunctions constitute banking? The answer must be a no. There are so
many intricacies involved in the activities that a bank perIorms today, that the above
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list must sound very simple to a seasoned banker. Please click on the activity to see
what a Bank has to do to give the above services to its customers. These activities can
also be described as back oIIice banking. Banks are organized in a linear structure to
perIorm these activities at the base oI which lies a Branch. The corporate oIIice oI a
bank is normally called Head OIIice

FORMS OF ADVANCES:

Advances by commercial banks are made in diIIerent Iorms such as loans, cash credit,
overdraIts, bills purchased, bills discounted etc. These are generally short- term
advances. Commercial banks do not sanction advances on a long-term basis beyond a
small proportion oI their demand and time liabilities. They cannot aIIord to lock up
their Iunds Ior long period. Hence a considerable percentage oI their advances is
repayable on demand.
Advances may be granted against tangible security or in special deserving cases on an
unsecured/clean basis.
1. Loans
1. OverdraIts
2. Cash credits
3. Temporary OverdraIts
4. Clean advances
5. Term loans
6. Bridge loan
7. Participation loan
8. Loans to small borrowers
10. Hire purchase and leasing Iinance
11. Bills purchased
12. Bills discounted



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LOANS:

Bank loans are called indirect agents oI production. For achieving a sustained rate oI
economic growth over a long period, greater eIIorts have to be made to increase
agricultural and industrial production, and in this increased production, bank credit
plays a signiIicant role. But banks in India are not Iree to employ their Iunds n an
arbitrary manner, while lending, they will have to keep in mind Iactors like a desirable
balance among liquidity, saIely and proIitability, legal and statutory requirements,
socio-economic conditions oI the country, priorities set by economic planners, and so
on. Banks try to achieve this objective through maintaining a particular relationship
between their assets and deposits. As such, between advances and deposits in the Iorm
oI advances among as many diIIerent types oI securities and over as wide an areas as
possible, and they avoid granting too large a proportion oI their advances to one party
or to a single industry. While these Iactors limit banks capability to lend, they are,
nevertheless expected to grant credit according to the changing economic scene
conditioned by the programs and priorities oI diIIerent Five Year Plans.

In a loan account the entire amount is paid to the debtor at one time, either in cash or
by transIer to his current account. No subsequent debit ordinarily allowed except by
way oI interest, incidental charges, insurance premiums, expenses incurred is
provided Ior by installment without allowing the demand character oI the loan to be
aIIected in any way. There is usually a stipulation that in the event oI installment
remaining unpaid, the entire amount oI the loan will become due. Interest is charged
on the debit balance, usually with quarterly rests unless there is an arrangement to the
contrary. No cheque book is issued. The security may be personal or in the Iorm oI
shares, debentures. Government paper, immovable property, Iixed deposit receipts,
liIe insurance policies, goods etc.







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14
CHAPTER-2
COMPANY PROFILE
2.1 ICICI BANK-COMPANY OVERVIEW

ICICI Bank (Bombay Stock Exchange: 532174) (Iormerly Industrial Credit and
Investment Corporation oI India) is India's largest private sector bank and second
largest overall in terms oI assets. Together with its subsidiaries, ICICI Bank oIIers a
complete spectrum oI Iinancial services and products ranging Irom commercial
banking to investment banking, mutual Iund to insurance. As on September 30, 2010
the bank had total assets oI Rs. 3,849.70 billion and proIit aIter tax Rs. 17.42 billion
Ior the halI year ended September 30, 2010. ICICI Bank is also the largest issuer oI
credit cards in India.
In the absence oI retail deposits, the bank`s dependence on high-cost wholesale
deposits has grown, bringing down its net interest margin (the spread between the cost
oI Iunds and its earnings on such Iunds). Its low net interest margin is partly
compensated by its high Iee income, about 40 oI its total income, the highest among
Indian banks and comparable with global banks. To raise its Iee income, it has
exposed itselI to complicated, structured derivative products both in India and
overseas. The high-growth business model has also Iorced it to Irequently raise equity
Irom the market. The bank is constantly under pressure to keep its growth momentum
as otherwise the return on its expanding equity shrinks. Between 2004 and 2007, its
balance sheet has grown at more than 40 every year. It has also aggressively
expanded its overseas presence in past Iew years, setting up oIIices 18 countries and
building $25 billion (Rs 1.1 trillion) oI assets, roughly one-Iourth oI its book.
This business model worked wonderIully in a booming economy, in 2010, the market
conditions have changed. During the economic meltdown investors rushed to dump
ICICI`s stock, Iearing it had huge exposure to Lehman Brothers Holdings Inc., which
Iiled Ior Chapter 11 bankruptcy in the US. ICICI stock lost about halI its value due to
the global Iinancial turmoil. ICICI Bank`s exposure to Lehman was actually relatively
minuscule, but that did not put a lid on rumors oI bank directors selling their stocks
and depositors withdrawing money. As declared by ICICI's Joint MD, ICICI Bank is
well capitalized with a total capital adequacy ratio oI 14 in 2010, which conIirms
with the Basel II Norms.

The bank, headquartered in Mumbai, has a network oI about 2100 branches and 5230
ATMs in India and a presence in 18 countries. It oIIers a wide range oI banking
products and Iinancial services to corporate and retail customers through its
15
specialized subsidiaries and aIIiliates in the areas oI investment banking, liIe and non-
liIe insurance, venture capital and asset management. The bank currently has
subsidiaries in the United Kingdom, Russia and Canada, branches in United States,
Singapore, Bahrain, Hong Kong, Sri Lanka, Qatar and Dubai.
ICICI Company Structure (as on 31st December, 2010)
2.2 BUSINESS AND FINANCIAL METRICS
In the quarter ended September 30, 2010, the bank reported a 42 year-on-year
increase in core operating proIit. The bank's current and savings account (CASA)
ratio increased to 30 in 2008 Irom 25 in 2009. ICICI's earnings and net income
have grown continuously -- its income increased by a compound annual growth rate
(CAGR) oI 58 Irom 2001-2010 to Rs 31.15 billion. Its interest income has grown at
CAGR 56 Irom 2001-2010. This growth has been sustained in part by achieving
robust growth in its Iee income Irom both corporate and retail businesses. Its Iee
income, about 40 oI its total income, is the highest among Indian banks and
comparable with global banks. The growth has also been Iueled by strengthening its
deposit Iranchise and signiIicantly scaling up its international banking operations.

Key Financial Metrics 2010 2009 2008
Net Interest Income 81.14 86.67 73.04
Profit After Tax 53.45 51.17 50.56
Dividend Per Share 12.00 11.00 11.00
Total Assets 3634 3793 3997
Earnings Per Share 35.99 33.76 39.39
Source: Company reports (in Rs. Billions except Per Share Data)
16



Net Income and Revenue
2.3 BUSINESS SEGMENTS
Retail Banking (58 of Revenue)
ICICI Bank is the largest provider oI retail credit in India. Its total retail portIolio was
Rs. 1,316.63 billion at March 31, 2010, constituting 58 oI total loans at that date.
ICICI has continued its Iocus on strengthening its retail deposit Iranchise to create a
stable Iunding base. Its current and savings account (CASA) deposits as a percentage
oI total deposits increased Irom 22 at March 31, 2009 to 26 at March 31, 2010,
with savings account deposits increasing by 36 during Iiscal 2010. During the year,
it also expanded its branch network substantially. At March 31, 2010, it had 2016
branches and about 5,219 ATMs in India and presence in 18 countries,
http://en.wikipedia.org/wiki/Icicibank - citenote-icicipruliIe1-1


ICICI Revenue Decomposition (as on 30th September, 2008)
17
Small Enterprises (8 Revenue)
During Iiscal 2008, ICICI's small enterprises customer base increased by 26 to
about 1.1 million accounts. It has introduced its service oIIerings in over 400 new
branches, increasing its coverage to over 1,000 branches. During 2008, ICICI Iocused
on product specialization including investment banking Ior SMEs.
Corporate Banking & Project Finance (13 Revenue)
ICICI oIIers a complete range oI corporate banking products including rupee and
Ioreign currency debt, working capital credit, structured Iinancing, syndication and
transaction banking products and services. Fiscal 2008 saw continued demand Ior
credit Irom the corporate sector, with growth and additional investment demand
across all sectors. Making use oI its rich international presence, during Iiscal 2008,
ICICI was involved in 75 oI outbound mergers and acquisitions deals Irom India. It
is now a preIerred partner Ior Indian companies Ior syndication oI external
commercial borrowings and other Iund raising in international markets and has been
ranked number one in oIIshore loan syndications oI Indian corporate in calendar year
2007.
Project Finance is the Iinancing oI long-term inIrastructure and industrial projects
based upon a complex Iinancial structure where project debt and equity are used to
Iinance the project, rather than the balance sheets oI project sponsors.ICICI has the
lead arranger position across a variety oI project Iinance transactions in diverse
sectors. In 2008, it also Iorayed into select international project Iinance transactions.
International Banking (21 Revenue)
In 2001, ICICI identiIied international banking as a key opportunity. This business
segment is ICICI's highest growth segment (95.6 year-on-year growth). ICICI's
international strategy is Iocused on building a retail deposit Iranchise, diverse
wholesale Iunding sources and strong syndication capabilities to support its corporate
and investment banking business, and achieving the status oI a non-resident Indian
(NRI) community bank in key markets.

2.4 COMPETITION
O State Bank of India - State Bank oI India, a public sector bank, is the largest
bank in India. Besides personal and corporate banking, SBI is also involved in
NRI (Non Resident Indian) services through its network in India and overseas.
It is the only bank that Iigures in Fortune`s top 100 banks. Its 11,000 branches
and 5,600 automatic teller machines give it a reach throughout the length and
breadth oI the country; its work Iorce oI 200,000 dwarIs all other banks in
India.
O Punjab National bank - Punjab National Bank (PNB) is the second largest
government-owned commercial bank in India with about 4,500 branches
18
across 764 cities. This Iinancial institution oIIers services in personal and
corporate banking, including industrial, agricultural, and export Iinance, as
well as international banking. It competes with ICICI mostly in retail lending
and wholesale businesses
O HDFC - Housing Development Finance Corporation Limited Bank Limited or
HDFC Bank is one oI the largest private banks in India. The company
competes with ICICI in each segment, over a wide range oI banking services
covering commercial and investment banking on the wholesale side and
transactional/branch banking on the retail side. Recently, HDFC has overtaken
ICICI Bank in terms oI number oI branches. HDFC's Standard LiIe Insurance
Company competes with ICICI's insurance subsidiaries. Their mutual Iund and
asset management businesses are also in direct tussle.
O Bank of Baroda - Bank oI Baroda is another private player. It has an edge
over ICICI due to its rich countrywide network oI over 2800 branches. It also
has signiIicant international presence with a network oI 74 oIIices in 25
countries.

Total
Deposits
Total
Advances
Net
profit
Total
Assets
Branches
ICICI Bank 2,305.10 1,958.66 31.10 3,634.00 2100
State Bank of India 4,355.21 3,373.36 45.41 5,665.65 10,186
Punjab National
Bank
1, 398.60 1,990.48 20.48 1,990.48 4,500
HDFC Bank 1,007.69 634.27 15.90 1,332.51 1,725
(All money Iigures in Rs. billions, as on 31st March, 2010) Sources

2.5 BOARD OF DIRECTORS
Mr. K. V. Kamath, Chairman
Mr. Sridar Iyengar
Mr. Homi R. Khusrokhan
Dr. Anup K. Pujari
Mr. M.S. Ramachandran
Dr. Tushaar Shah
Mr. V. Sridar
Mr. V. Prem Watsa
Ms. Chanda D. Kochhar,
Managing Director & CEO

Mr. N. S. Kannan,
Executive Director & CFO

Mr. K. Ramkumar,
Executive Director

Mr. Rajiv Sabharwal,
Executive Director

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2.6 RECENT AWARDS AND ACHIEVEMENTS

4 For the second year in a row, ICICI Bank was ranked 70th in the
Brandirectory league tables oI the world`s most valuable brands by ,The
BrandFinance Banking 500.

4 ICICI Bank UK, HiSAVE product range has been awarded the Consumer
MoneyIacts Awards 2011 Ior the 'Best Online Savings Provider'

4 ICICI Bank ranked second in the Iinancial services sector in Business
World's,"Most Respected Company Awards 2011"

4 ICICI Bank was ranked 1st in the Banking and Finance category and 9th in
the "2010 Best Companies To Work For" by Business Today

4 Ms. Chanda Kochhar, Managing Director & CEO, ICICI Bank conIerred
with "Padma Bhushan"












20















21
CHAPTER-3

PRODUCT PROFILE

3.1 THE HISTORY OF INDIAN HOME LOANS:-

Home loans in India have made people Buy Property in India in spite oI the
skyrocketing prices. Today, we Iind considerable Real Estate Investment in India,
either in the Iield oI Residential Property in India or Commercial Properties in India.
Home Loans in India are disbursed by many Banks as Loan Banking is one oI the
most important Iunctions oI the Financial Services in India. Property Dealers and
Real Estate Consultants in India usually recommend that we undertake appropriate
Home Loan or Mortgage Loan counseling so that we can Buy Apartment in India at
an aIIordable Mortgage Rate. Purchasing the home oI your dreams is not an easy task.
Especially when you plan to buy a home on loan. Home loan means that you buy a
house on installments. In simpler terms when you want to own a home and can`t
aIIord to pay the amount in lump sum, you can pay it in monthly installments with an
interest rate.
In the last Iew years, housing loan scenario in India has changed drastically. It
has taken a Iront seat and people are looking Iorward to owning their own houses. It is
no more a dream that required liIetime saving and a diIIicult decision to make. Today
the new home purchase loan is much easily available and is much cheaper than what
was available earlier. Banks are now everywhere and the schemes are implemented
even in villages and smaller towns. The housing loans are popular there too, however,
the activity oI building Ilats is little slow. It would not be wrong to say that there has
been a boom in the home loan market and with this boom; there is also a boom in the
Number oI home loans mortgage brokers in India.
The main reason Ior this boom in home loan market is the change in government
policies. It is our government`s motivation that the home loan interest rates in India
have Iallen considerably. Lot many banks are oIIering home loans and this is
available at low EMIs (Equated monthly Installments). High EMIs are now a thing oI
past. Today lending rate is in the range oI 7.5 to 15 .
Again, there are diIIerent types oI home loans available today. The interest rate
available is also oI two diIIerent types. One is the Iixed rate loan and the other is the
Iloating rate loan. In the Iixed rate loan, whatever interest is Iixed on the start oI loan
is carried on Ior the complete period. However, in the other one, the interest rate is not
Iixed and as the interest rate goes up or low the eIIect is directly transIerred to the
person who is taking the loan. In the last Iew years the Iloating interest rate has been a
Iavorite among most oI the people taking home loans.
There is also a trend to opt Ior home construction loan. This loan is available
to those who want to design their homes according to their requirement and taste. In
other words, this loan is meant Ior those who themselves want to construct their new
home.
As shared earlier, taking a loan is not a diIIicult task. However, beIore taking a
loan, one must realize that the relationship with the bank will be Ior a longer period
usually 15 to 20 years so one must ensure Iaith and integrity in bank. Apart Irom low
rate oI interest, the bank should also provide some value added services. The other
thing is to look into is the property that is to be brought. Making sure that the builder
has all sanctions and Iacility to build a good building is very important.
22
Taking home loans these days has become simpler. With the RBI regularly
bring down interest rates; taking home loans have become extremely easy. Housing
loans which were 16.5 to 18 a Iew years ago Iell by 11.5 to 13. With interest
rates going down, people increasingly number apply to take these loans. Some oI the
leading banks oIIering home loans in India, including ICICI Bank, IDBI Bank, HDFC
Bank , Bank oI Baroda, SBI, Standard Chartered Bank and Axis Bank .

3.2 TYPES OF HOME LOANS
Once you have decided to take a Home Loan, the next thing that bothers you is the interest rate. The
three most common types oI Home loans are:
Fixed Rate Home Loan


II you have decided that you will buy a home and plan to stay in it till you Iully pay
oII the loan then a Iixed rate home loan will probably suit you. Under this type oI
loan, you will be assigned a Iixed interest rate, and then that rate will not change Ior
the liIe oI the loan. There may come a situation that interest rates increases but under
this scheme your rate will not change. But iI interest rates tumble even then you will
be paying the higher rate. In this case you have an option oI reIinancing to enjoy
paying low rate.
Adjustable Rate Mortgage


Unlike the Iixed rate home loan, the interest rate in this scheme goes up and down
with the market. To explain in simpler terms, iI the interest rate is low, the rate on
your home mortgage will be low and iI it's high, you have to pay according to the
higher rate. You are leIt perplexed at the rapid changes in the interest rates because at
the time oI paying dues you do not know what the current rate oI interest is. This type
oI loan doesn't suit all.

Adjustable Rate Mortgage is mainly Ior the beginners. In other words iI you are
buying a house only Ior investment purposes and plans to sell it soon, you can take the
beneIit oI low interest rate. Another beneIit oI Adjustable Rate Mortgage is to the one
who plans to purchase a home when rates are Ialling and when they are increasing you
can change it to a Iixed rate home loan.
BaIIoon Mortgage


In this type oI loan, Interest rates are much lower than Iixed rate mortgage or an
Adjustable Rate Mortgage. Under Balloon Mortgage scheme, you will make monthly
payments Ior a Iixed amount oI time, with a Iixed interest rate. The diIIerence is that
at the end oI the payment schedule, you will owe the unpaid balance in one lump sum.

The biggest disadvantage oI this type oI loan is that there is a huge payment due at the
end. But it`s beneIicial iI you are planning to hold the house Ior a short period oI time.

23
3.3 HOME LOAN PROCEDURE IN INDIA:-


Submission of Application Form: - AIter choosing a particular home loan, the
customer submits the application Iorm to the housing Iinance company (HFC) along
with other relevant documents as required by the HFC. They comprise documents to
establish income, age, residence, employment, investments, etc. The customer also
needs to hand over a cherub Ior payment oI an up Iront (non -reIundable) processing
Iee oI about 0.5-1 oI the loan amount to the HFC.

Validation of the Information: - In the next stage, HFCs validate the inIormation
provided by the customer on the application Iorm. They usually conduct checks on the
residential address oI the customer, the place oI employment oI the customer, and
credentials oI the employer. Some HFCs may insist on a personal interview with the
customer and perIorm a reIerence check on the reIerences provided by the customer
on the application Iorm.

Issue of Sanction Letter :- AIter due appraisal oI customer proIile, a sanction letter is
issued which contains details such as loan amount, rate oI interest, annual / monthly
reducing balance, tenor oI the loan, mode oI repayment and general terms and
conditions oI the loan. This is the actually the approval oI the money lending
procedure by the company. However, the money is sanctioned only aIter the
documents and the property on behalI oI which the loan is being granted is thoroughly
veriIied.

Submission of Documents: - Once the sanction letter is passed, the customer is
required to leave the entire set oI original documents pertaining to the property being
purchased with the HFC as security Ior the loan amount sanctioned. These documents
remain in the custody oI the HFC till the time the loan is Iully repaid. Once the
documents are handed over to the HFC, they send all the documents Ior a thorough
legal scrutiny.

Validation of Property: - Prior to disbursement, the HFC also conducts a site visit to
the customer's property to ensure that all construction norms have been adhered to
properly. Once the HFC is satisIied that the property is legally and technically clear,
they disburse the loan amount. The disbursement Irom the HFI is on the basis oI the
stage oI construction oI the property.

Payment Procedure: - Once all the above mentioned process, the borrower is entitled
to take the money Irom the lender party. Until such time that the entire sanctioned
amount is not drawn, the customer is supposed to pay a simple interest on the Actual
Amount drawn (without any principal repayments). The EMI payments commences
only aIter the entire sanctioned loan amount is drawn.



24
3.4 INTEREST RATES PROVIDED BY VARIOUS BANKS
Comparative Chart on Home Loan Interest Rates
Financial
Institutions
Tenure
(in
years)
Rate of Interest
Fixed
Rate of Interest
Floating
Processing
Charges
State Bank of India Up to 5
years
12.25 10.75 0.50 of
loan amount
5-20
years
12.25 11.25 -
ICICI 0-20
years
10.5 9.5 1 of loan
amount
LIC Housing
Finance Ltd.
0-20
years
10.5- 11 9.5 0.5 per cent
of the
amount
(max. Rs.
5000)
HDFC 0-20
years
13.25 11.25 1 of the
loan
amount
+applicable
service taxes
and cess)
HSBC 0-20
years
10.75 - 1 of loan
amount
Citibank 0-20
years
9.75 9.00 1 of loan
amount
Canara Bank Up to 5
years
10.75
- -
Above 5
yrs up
to 10
yrs
11.00
- -
Standard
Chartered Bank
0-20
years
10.5 9.25 1.25 of
loan amount
Canfin Homes Ltd 0-20
years
9.25-12 - -
Punjab National
Bank
0-20
years
10.5 (for <20
lakhs)
13 (for >20
lakhs)
9.25 (for <20
lakhs) 12 (for >20
lakhs)
1.25 of
loan amount

25
Lock-in facility by banks:-
A lock-in, also called a rate-lock or rate commitment, is a lender`s promise to
hold a certain interest rate and a certain number oI points Ior you, usually Ior a
speciIied period oI time, while your loan application is processed. (Points are
additional charges imposed by the lender that are usually prepaid by the consumer at
settlement but can sometimes be Iinanced by adding them to the mortgage amount.
One point equals one percent oI the loan amount.) Depending upon the lender, you
may be able to lock in the interest rate and number oI points that you will be charged
when you Iile your application, during processing oI the loan, when the loan is
approved, or later.
A lock-in that is given when you apply Ior a loan may be useIul because it`s
likely to take your lender several weeks or longer to prepare, document, and evaluate
your loan application. During that time, the cost oI mortgages may change. But iI your
interest rate and points are locked in, you should be protected against increases while
your application is processed. This protection could aIIect whether you can aIIord the
mortgage. However, a locked-in rate could also prevent you Irom taking advantage oI
price decreases unless your lender is willing to lock in a lower rate that becomes
available during this period.
It is important to recognize that a lock-in is not the same as a loan
commitment, although some loan commitments may contain a lock-in. A loan
commitment is the lender`s promise to make you a loan in a speciIic amount at some
Iuture time. Generally, you will receive the lender`s commitment only aIter your loan
application has been approved. This commitment usually will state the loan terms that
have been approved (including loan amount), how long the commitment is valid, and
the lender`s conditions Ior making the loans such as receipt oI a satisIactory title
insurance policy protecting the lender.

Oral or written lock-in agreement? :-
Some lenders have preprinted Iorms that set out the exact terms oI the lock-in
agreement. Others may only make an oral lock-in promise on the telephone or at the
time oI application. Oral agreements can be very diIIicult to prove in the event oI a
dispute. It is wise to obtain written, rather than verbal, lock-in agreements to make
sure that you Iully understand how your lender`s lock-ins and loan commitments work
and to have a tangible record oI your arrangements with the lender. This record may
be useIul in the event oI a dispute.
Charges of a lock-in:-
Lenders may charge you a Iee Ior locking in the rate oI interest and number oI
points Ior your mortgage. Some lenders may charge you a Iee up-Iront, and may not
reIund it iI you withdraw your application, iI your credit is denied, or iI you do not
close the loan. Others might charge the Iee at settlement. The Iee might be a Ilat Iee, a
percentage oI the mortgage amount, or a Iraction oI a percentage point added to the
rate you lock in. The amount oI the Iee and how it is charged will vary among lenders
and may depend on the length oI the lock-in period.
Types of lock-in:-
Locked-In Interest Rate--Locked-In Points: - Under this option, the lender lets you
lock in both the interest rate and points quoted to you. This option may be considered
26
to be a true lock-in because your mortgage terms should not increase above the
interest rate and points that you`ve agreed upon even iI market conditions change.
Locked-in Interest Rate--Floating Points: - Under this option, the lender lets you
lock in the interest rate, while permitting or requiring the points to rise and Iall (Iloat)
with changes in market conditions. II market interest rates drop during the lock-in
period, the points may also Iall. II they rise, the points may increase. Even iI you Iloat
your points, your lender may allow you to lock-in the points at some time beIore
settlement at whatever level is then current. (For instance, say you`ve locked in a 10
percent interest rate, but not the 3 points that went with that rate. A month later, the
market interest rate remains the same, but the points the lender charges Ior that rate
have dropped to 2. With your lender`s agreement, you could then lock in the lower
2. Points). II you Iloat your points and market interest rates increase by the time oI
settlement, the lender may charge a greater number oI points Ior a loan at the rate
you`ve locked in. In this case, the beneIit you might have had by locking in your rate
may be lost because you`ll have to pay more in up-Iront costs.
Indian Economy is growing at a nice pace (8 p.a) which is also driving per capita
income rise. The demand oI real estate has reached at a new peak according to ninth
Iive year plan there is a shortage oI 42million houses .But in India the Iigures to GDP
are smaller in comparison to the other countries Contribution oI housing to GDP is
close to 8. Sources: NHB


3.5 INDIAN HOME LOAN MARKET

Indian Market for Home loans is more than Rs.500, 000 Crore:-

Indian credit report in comparison to the other Asian countries is shown in the
statistics below, which is among the lowest. It is Indian psyche that credit is termed
bad, Indian are traditionally not inclined to take credit this reIlects in the Iigures
below:-

GRAPH: - 3.1

27
Indian home loans Industry:-
Indian Home loans industry is growing at a Iast pace 30 per annum, this can
be seen in the stats shown below with average ticket size (loan size) and Amount
disbursed is rising every year the opportunities have become more dominant Ior
diIIerent organization in India. The demand drivers are Iast growing middle class
population, rise in working women workIorce, bigger aspirations oI youth, Tax
saving, Transparency in the real estate market.
GRAPH: - 3.2




Still in comparison to other nations India has a long way to go, the Iigures
shown below shows that even the GDP/mortgage ratio is low which indicates that
credit is not well sought as Iigure below shows the average percentage oI mortgage to
GDP
GRAPH:-3.3

28

Comparison with other nations India Iall behind in terms oI Mortgage Penetration
which directly demonstrates the potential in Indian market Ior Housing mortgage
Iinance companies

GRAPH: - 3.4




Real Estate is currently sought oI as a great means oI Investment, the prices oI
residents have shot up very high which is clearly shown in the Iigure below, the major
cities have witnesses lot oI development and price appreciation which demonstrates
the growing demand . More and more people are migrating to cities Ior work /
business. More and more jobs are created and price index rise becomes inevitable.

Price Index: FIG-3.5



The above Iigure shows the rise in prices oI space per sq Ieet in diIIerent
major cities.
Sources: RBI
29
Housing shortage in India: - The below Iigure shows the ever-increasing demand Ior
houses in India and also mentioned here is the Rural and urban requirement. Banks
are driving new strategies to tap both the markets in a diIIerent way Rural/Urban.
There are categories with Indian loan demand, which is shown in this Iigure




FIG: - 3.6


In million



















30
3.6 PURPOSE OF HOME LOAN: -
Housing loans oIIered by banks are oI diIIerent types:-
O Home Purchase Loans
O Home Construction Loans
O Home Improvement Loans
O Home Extension Loans
O Home Conversion Loans
O Land Purchase Loans
O Stamp Duty Loans
O Bridge Loans
O Balance TransIer Loans
O ReIinance Loans
O Loans to NRIs
Home purchase loans:-
This is the basic home loan Ior the purchase oI a new home. II you want to
buy a Ilat in some society or some already built house, banks and HFCs sanction you
home purchase loans Ior this process.

Home construction loans:-
This loan is available Ior the construction oI a new home on a said property.
The documents that are required in such a case are slightly diIIerent Irom the ones you
submit Ior a normal Housing Loan. II you have purchased this plot within a period oI
one year beIore you started construction oI your house, most HFCs will include the
land cost as a component, to value the total cost oI the property. In cases where the
period Irom the date oI purchase oI land to the date oI application has exceeded a
year, the land cost will not be included in the total cost oI property while calculating
eligibility.


Home improvement loans:-
These loans are given Ior implementing repair works and renovations in a
home that has already been purchased, Ior external works like structural repairs,
waterprooIing or internal work like tiling and Ilooring, plumbing, electrical work,
painting, etc. One can avail oI such a loan Iacility oI a home improvement loan, aIter
obtaining the requisite approvals Irom the relevant building authority. The Iollowing
are coming under the home improvement loans:
O External repairs
O Tiling and Ilooring
O Internal and external painting
O Plumbing and electrical work
O WaterprooIing and rooIing
O Grills and aluminum windows
O WaterprooIing on terrace
O Construction oI underground/overhead water tank
O Paving oI compound wall (with stone/tile/etc.)
O Bore well.
31
Home extension loans:-
An extension loan is one which helps you to meet the expenses oI any
alteration to the existing building like extension/ modiIication oI an existing home; Ior
example addition oI an extra room etc. One can avail oI such a loan Iacility oI a home
extension loan, aIter obtaining the requisite approvals Irom the relevant municipal
corporation.

Home conversion loans:-
This is available Ior those who have Iinanced the present home with a home
loan and wish to purchase and move to another home Ior which some extra Iunds are
required. Through a home conversion loan, the existing loan is transIerred to the new
home including the extra amount required, eliminating the need Ior pre-payment oI
the previous loan.

Land purchase loans:-
This loan is available Ior purchase oI land Ior both home construction or
investment purposes.

Bridge loans:-
Bridge Loans are designed Ior people who wish to sell the existing home and
purchase another. The bridge loan helps Iinance the new home, until a buyer is Iound
Ior the old home.

Balance- transfer loans:-
Balance TransIer is the transIer oI the balance oI an existing home loan that
you availed at a higher rate oI interest (ROI) to either the same HFC or another HFC
at the current ROI a lower rate oI interest.

Refinance loans:-
ReIinance loans are taken in case when a loan Ior your house Irom a HFI at a
particular ROI you have taken drops over the years and you stand to lose. In such
cases you may opt to swap your loan. This could be done Irom either the same HFI or
another HFI at the current rates oI interest, which is lower.

NRI home loans:-
This is tailored Ior the requirements oI Non-Resident Indians who wish to
build or buy a home or property in India. The HFCs oIIer attractive housing Iinance
plans Ior NRI investors with suitable repayment options.
On would be entitled Ior home loans in the range oI Rs 5 lakhs to a maximum oI Rs 1
Crore, based on the repayment capacity, previous credit history and the cost oI the
property. The bank may provide a maximum oI 85 oI the cost oI the property or the
cost oI construction as applicable and 75 oI the cost oI land in case oI purchase oI
land. The repayment capacity is calculated taking into account Iactors such as:
O Age
O Income/Salary
O QualiIications
O Dependant/(s)
O Assets/Liabilities
O Credit History
32
O Stability / continuity oI your employment/business
O Income oI co-applicant/(s)
Taking home loans these days has become simpler. With the RBI regularly
bring down interest rates; taking home loans have become extremely easy. Housing
loans which were 16.5 to 18 a Iew years ago Iell by 11.5 to 13. With interest
rates going down, people increasingly number apply to take these loans. Some oI the
leading banks oIIering home loans in India, including ICICI Bank, IDBI Bank, HDFC
Bank State Bank, Bank oI Baroda, Kotak Bank, SBI, Standard Chartered Bank and
Axis Bank.

3.7 ICICI BANK HOME LOAN:-
Highlights:-
O Finances up to 85 oI the cost oI the property (Agreement value Stamp duty
Registration charges).
O Home improvement loan, which Iacilitates internal and external repairs and
other structural improvements like painting, waterprooIing, plumbing and
electric works, tiling and Ilooring, grills and aluminum windows. Finances up
to 85 oI the cost oI renovation (100 Ior existing customers).
O Home extension loan Ior extension oI an existing dwelling unit under the same
terms as applicable to home loan.
O Land Purchase Loan to purchase land Ior constructing house. Finances up to
70 oI the cost oI the land. Repayment over a maximum period oI 10 years.
O Fixed Rate, Floating Rate and options to structure loan as partly Iixed or partly
Iloating.
O Flexible repayment options to suit individual needs.
O Insurance cover under Term Assurance Plan
O OIIer in-house scrutiny oI property documents.
Eligibility; - ICICI Bank home loans are available for:
O Purchase oI Ilat, row house, bungalow Irom developers
O Purchase oI existing Ireehold properties
O Purchase oI properties in an existing or proposed co-operative housing society
or apartment owner's association
O Purchase oI Iirst Power oI Attorney purchases in Delhi Ior DDA Ilats allotted
beIore 1992.
O Construction oI own house
ICICI Bank oIIers Home Loans to Resident as well as Non Resident Indians
O You must be at least 25 years oI age when the loan is sanctioned
O The loan must terminate beIore or when you turn 65 years oI age or age oI
retirement, whichever is earlier.
O You must be salaried or selI-employed with a regular source oI income
O Minimum age oI co-applicant should be 18 years
How to enhance your eligibility
33
O II your spouse is an earning member, you can make him/ her co-applicant.
Their income will be considered to enhance the eligibility
O In case oI co-owners, they must necessarily be co-applicants
Loan Amount: - 85 oI the cost oI the property (including the cost oI the land) and
based on the repayment capacity oI the customer.
Rate of Interest: - The current applicable Iloating rate oI interest in respect oI the
total loan approved is as Iollows:

For loans up to Rs.20, 00,000:-

Term of Loan
(No. of Years)
Rate Per Annum
(p.a)
Up to 5
6 - 10
11 - 15
9.5
9.5
9.5
For loans greater than Rs.20, 00,000
Term of Loan
(No. of Years)
Rate Per Annum
(p.a)
5
10
15
9.75
9.75
9.75
All loans on annual rest basis. You repay the loan in Equated Monthly installments
(EMIs) comprising principal and inertest
.EMI per Rs 1, 00,000 (Ior loan up to Rs.20,00,000)
Term of Loan
(No. of Years)
Rupees
5
10
15
2100
2100
2100
EMI per Rs.1, 00,000 (Ior loan greater than Rs.20, 00,000)
Term of Loan
(No. of Years)
Rupees
5
10
15
2199
1416
1175
34
Pending Iinal disbursement, you pay interest on the portion oI the loan disbursed.
This interest is called pre-EMI interest. An early redemption charge oI 2 oI the
amount being prepaid is payable on repayment oI a loan ahead oI schedule.
Repayment Period: - Repayment Options -
Step Up Repayment Facility; - helps younger borrowers to take a much bigger loan
today based on an increase in their Iuture income.
Flexible Loan installments Plan: - OIten customers, parents and their children wish
to purchase properties together. The parent is nearing retirement and their children
have just started working. This option helps such customers combine the incomes and
take a long term home loan where in the installment reduces upon retirement oI the
earning parent.

Tranche Based EMI - Customers purchasing an under construction property need to
pay interest (on the loan amount drawn based on level oI construction) till the
property is ready. To help customer save this interest, ICICI has introduced a special
Iacility oI Tranche Based EMI. Customers can Iix the installments they wish to pay
till the time the property is ready Ior possession. The minimum amount payable is the
interest on the loan amount drawn. Anything over and above the interest paid by the
customer goes towards Principal repayment. The idea is customer beneIits by starting
EMI and hence repays the loan Iaster.

Accelerated Repayment Scheme provides borrower the opportunity to repay the
loan Iaster by increasing the EMI. Whenever the borrower gets an increment, increase
in disposable income or have lump sum Iunds Ior loan prepayment, they can beneIit
by saving oI interest because oI Iaster loan repayment. Borrower can beneIit by:
O Increase in EMI means Iaster loan repayment
O Saving oI interest because oI Iaster loan repayment
O You can invest lump sum Iunds rather than use it Ior loan prepayment. The
return Irom the investments also gives you the comIort oI paying the increased
EMI...










35

Documents Required:-

Salaried
Customers
Self Employed Professionals Self Employed Businessman
Application Iorm
with photograph
Application Iorm with photograph Application Iorm with photograph
Latest Salary-slip
Education QualiIications
CertiIicate and ProoI oI business
existence
Education QualiIications
CertiIicate and ProoI oI business
existence
Form 16
Last 3 years Income Tax returns
(selI and business)
Business proIile
Last 6 months bank
statements
Last 3 years ProIit /Loss and
Balance Sheet
Last 3 years Income Tax returns
(selI and business)
Last 3 years ProIit /Loss and
Balance Sheet
Processing Iee
cheque
Last 6 months bank statements
Processing Iee cheque
Last 6 months bank statements (selI
and business)
Processing Iee cheque

The Credit Appraisal is an important step in sanctioning loan applications .Hence the
Credit Appraiser needs to have certain important documents to compute the credit
worthiness oI the applicant .In the case oI salaried person these include the Iollowing
:-

1) SALARY SLIPS (3 MONTHS CURRENT):- The salary slip is usually a printed
sheet oI paper that contains 2 components

Income/Earnings column: - It contains an exhaustive list oI the various components
that are added to the person`s salary. They contain various components like Basic pay,
HRA etc.

Deductions: - It contains an exhaustive list oI various components that are deducted
Irom the persons Earnings. They contain various components like Income tax,
Provident Iund, Employee Loans etc.

2) BANK STATEMENTS (6 MONTHS CURRENT) :- The bank statement
contains the various transactions that the applicant perIorms in his bank account. It
has 3 components

O Date
O Descriptions: - It contains the brieI and standardized description oI the
activity or the account related to the transaction .Egg. Clearing cheque
166129, TransIer deposit.
O Deposits: - It contains the amounts that were credited to the account
36
O Withdrawal: - It contains the amounts that were debited to the account. This
is careIully studied to Iind out about any regular withdrawals or a series oI
checks so that any existing loans may be revealed and there can be a correct
estimate oI the repayment capacity.
O Balance :- It shows eIIect oI transaction on the pre existing account balance
O Special feature: - ICICI will not consider any loan s without standing EMI
oI or below 6 months.

3) FORM 16 :- It is Iorm given by Employer which states the income earned Irom
that company during the Iull Iinancial year, and gives the details oI Tax deducted at
source.

4) COPY OF INCOME TAX RETURN (SARAL) :- The SARAL tax return Iorm
reveals the structure oI incomes and/or the various earnings oI the tax returnee .It also
shows the various deductions that will not be included and it also contains the Rebates
on which he earns tax beneIit.

5) RESIDENCE PROOF :- The residence prooI includes the Electricity bill,
Telephone bill, Ration Card, Passport.

6) PHOTO ID PROOF :- The photo prooI includes the Pancard ,Voter ID card,
Employee ID card, Passport etc.

7) AGE PROOF: - The age prooI includes the Pan card, Passport, Photo ID.


8) LOAN APPLICATION FORM DULY FILLED :- It can also be downloaded
Irom ICICI's user Iriendly web based portal.


9) CHARGES FOR PROCESSING FEES :- This is a standard and nominal Iee to
be paid at the time oI applying Ior loan

Fees structure. 0.5 oI loan amount
Service tax oI 12
(Less)Education Less oI 3

OR 5618/-
ICICI takes Irom applicant whichever is less. This is applicable time to time.
10) PHOTOCOPIES OF PROPERTY PAPERS.


NON RESIDENT INDIAN

SALARIED/EMPLOYED; - An NRI is a person with Indian citizenship but residing
in another country. An NRI can take a housing loan Irom ICICI Bank. He is however
not eligible Ior a Top Up loans, Home Equity Loans, on Residential Premises Loans
.He is however eligible Ior Home Improvement and Home Extension Loans Irom
ICICI Bank.
37
An NRI Loan is appraised on the Net Salary. This is the take home pay package
obtained aIter reducing the deductions Irom the earnings .As this salary is low it
reduces their loan eligibility .However the salary is converted into Indian Currency Ior
computing credit worthiness. The Iigure obtained is higher in Indian currency hence
the loan eligibility rises.Eg 5,487$ American dollars will mean 2, 46,915 Rupees.

SELF EMPLOYED PROFESSIONALS: - An NRI applicant can also be a Doctor,
Engineer etching these cases ICICI will put them in the special category oI SelI
Employed ProIessionals.
Their credit appraisal is carried out as Iollows:-
Their latest available ProIit and Loss A/c is reviewed by the credit appraiser. This
account has two sides a ProIit side which reveals all earnings and gains .There is also
a Loss side which shows all taxes, liabilities and losses.
We reIer to the ProIit side as the Gross Receipts. These include components revealing
the nature and amount oI the Prime income and other earnings E.g. Consultation Iees
in case oI Doctor.
From the Gross Receipts we calculate the Gross ProIits and thereon move to calculate
Loan eligibility .Which is the loan amount that can be conveniently sanctioned to the
applicant.

Loan Eligibility Gross ProIit * 2
Another important consideration is that the Annual outIlow oI EMIs should not
exceed the NET PROFIT. The Net ProIit is computed by deducting the various costs
and losses Irom the Gross proIit.

SOURCES OF LOAN APPLICANTS

1) WALK IN :- This reIers to the Applicants who apply Ior the loan by going to the
service centre or regional branch oIIice .They may have come to know about ICICI
Bank`s home loan service Irom any source but this is their Iirst contact with ICICI
Bank is in absence oI any intermediary like Iriends, sales men etc.The applicants who
contact through or by the Website are also included in the walk in category. Walk-In
applicants are given concessions on Iees and charges which is applicable Irom time to
time.

2) CALLCENTRE LEADS: - Call Centre`s have been especially started by ICICI
Bank to assist persons searching Ior home loans at easy rates and good service. Call
centre`s contacts probable needIul oI home loan, contacts them, explains them the
various advantages oI an ICICI Bank home loan and get their loan application Iilled.
Every ICICI Bank service centre has its own team which is managed by leader who
reports directly to the Branch Manager.

3) DSAs and BSAs; - These are respectively the Direct selling agents and the
Business selling agents. The DSAs reIer to organizations which work in agreement
with ICICI Bank and Iorwards them the loan requests oI applicants they contact or
those that contact them on the other hand BSAs usually Iorward loan requests and
assist ICICI Bank by Iorwarding them the names addresses contact no`s etc oI various
probable needIul oI home loans BSAs usually are Builders who book houses Ior sale
in the Iuture. They may also include Brokers.Egs Ior DSAs are Nishk, Chatrath, and
BKM.etc
38

Deposits: Individuals: - these are:-

O Fixed Rate Deposits
O Variable Rate Deposits
ICICI Bank has instituted well-deIined service standards Ior both depositors and
deposit agents. ICICI Bank has been able to mobilize deposits Irom over 10 lac
depositors. Outstanding deposits grew Irom Rs. 1,458 Crores in March 1994 to 19,359
Crores in March 2009. Much oI this success can be attributed to its strong brand
image, superior services, security and above all, the signiIicant contribution made by
ICICI Bank`s deposit agents. ICICI Bank has over 15,000 deposit agents and
distributes all its retail savings (deposit) products primarily through this channel.
ICICI Bank has been awarded 'AAA rating Ior its deposits Irom both CRISIL and
ICRA Ior the FOURTEENTH consecutive year, representing highest saIety as
regards timely payment oI principal and interest.
The problem oI Negative Amortization is speciIic to the Adjustable or the Variable
rate loans that are lent to customers. In the case oI Variable rate home loans there are
three components:-
O RPLR 14 (CURRENT)
O SPREAD 3 (CURRENT)
O ROI- 11
The term RPLR is short Ior Retail Prime Lending Rate. This rate is dependent on
market Iorces .In India the RPLR has been observing an upward trend .As a result oI
this there is a change in rate oI interest to be applied to diIIerent loans.RPLR is
revised every 3 months in which it may or may not change.
Spread reIers to a special discount oIIered to loan applicants coming to ICICI Bank
this discount is Iixed by ICICI Bank. Every loan applicant is eligible to receive this
discount Irom ICICI Bank Ltd.It helps create a market advantage and beneIits the
Applicants. Spread is Iixed Ior an uncertain length oI time .It is absolutely dependent
on the company`s discretion to change it or not. Currently ICICI Bank is oIIering
2.5 spread on a loan oI above 20 lacs and 3 spread on a loan oI below 20 lacs.
ROI is the rate oI interest that is applicable to the loan at the time oI lending. It is
computed by subtracting spread discount Irom the RPLR. at the time oI lending the
ROI is good enough to repay the interest as well as the principal components
.However as the RPLR increases as it is bound to do so aIter some time the required
EMI also increases .Hence aIter some time the EMI becomes insuIIicient to repay the
principal as well as the interest component .













39
STAGES OF HOME LOAN






















The representation shown above is not a perIect copy oI the actual process. This is
because these stages are taking place simultaneously and one application is being
taken care Ior by the experienced employees oI both ICICI Bank Ltd service centre
and ICICI Bank Ltd HUB (also called the back end oIIice).Also the applicant may be
asked to send inIormation or may be asked questions regarding his requirement and/or
his documents Ior his own convenience Hence the loan application may or may not
shuttle through diIIerent stages.

APPLICATION STAGE :- This is the stage where the Application Form Iirst
reaches the concerned Service Centre Here all the documents in the application are
reviewed by the experienced staII present at the service centre The ICICI Bank Ltd
employee who reviews the Iile checks to see whether all documents are present and in
their proper place .He checks iI the documents are duly Iilled, not Iake, attested by
authority in question and present in order. In case any document is missing the
applicant is contacted electronically or by mail .The applicant is contacted by
telephone and requested Ior the document until he denies it being with him. This
exercise is called FOLLOW UP. The credit appraisal oI the loan application starts at
this stage. The service centre employees compute the gross salary, IIR, FOIR, Loan
Eligibility ratio etc.The credit worthiness oI the applicant is calculated here.
It is also at this stage that the QUICK DATA ENTRY oI the loan application
is done to create a serial no. oI the application. AIter that another page appears and
more data is entered .It is now that a special and unique LOAN A/C NO. is created
under which all the loan processes will be carried out. The number that has been
generated is communicated to the applicant by means oI a letter and/or electronic
communication the system oI electronically recording the data helps to create ready
reIerence, a prooI ,helps in quick and easy processing oI the data. It also helps to very
easily and quickly share data with other employees oI ICICI.


HUB
LOGIN
SCANNIGN
G


DATA
ENTRY

RECOMMENDATI
ON OVER (ROVR)



DOUBLECHECKING
OVER(DCOVR)

FIXED
CHARGES


DISBURSEMENT
OF LOAN


APPLICATION
40
The next and important processing perIormed at the service centre is that oI
Iilling up a document known as the INTERVIEW SHEET Ior processing individual
loans (salaried cases) .It contains various simple entries like :-
1. Name oI borrower
2. Name oI co-borrower
3. Income details:-Family background and permanent address etc.
It also contains various important entries like.
5. Gross Salary
6. Rental
7. Other incomes
8. Obligations: - The various other loans that the applicant is entitled to pay, their
amount, their remaining terms, source etc.
9. Remarks;- This column contains the various Iindings that the employee has Iound
out aIter thorough review oI the applicants documents such as bank statement, salary
slip etc.

Hence the interview sheet contains the important Iindings which the employee
has collected aIter careIul review oI the various documents .The interview sheet helps
to cut corners and helps save time by not having other employees to go through the
documents again and again .It hence acts as a source oI quick reIerence.
AIter all this has been perIormed well enough the loan application will be
arranged in a Iile and all it will be given its loan a/c no which also acts as its Iile no.
the Iile is now ready to be sent to the HUB where Iurther processing will take place.


SCANNING: - In this stage the various important documents oI the applicant are
scanned. This helps to create their electronic copy which acts as a ready reIerence, a
prooI, and can also be shared and utilized by other employees oI ICICI Bank.

DATA ENTRY :- The Iile has been sent to the back end oIIice or the HUB .At HUB
there are many experts with their own specializations. these oIIicials review the
various parts oI the Iile again and perIorm many specialized tasks Data entry is also
one oI these tasks .this entry is much more diIIerent and complex as compared to the
earlier perIormed Quick Data Entry. An exhaustive amount and type oI inIormation
has to be entered into the ILPS system ranging Irom Personal Details, Employment
Details to Property Rate History and Customer Interactions.

RECOMMENDATION OVER (ROVR) :- The Recommendation OVER is also
reIerred to as the First Appraisal at this stage certain specially appointed persons have
been given the responsibility oI recommending a loan. These people have to take
special care oI reviewing every document, and all the small details that need to be
considered beIore considering the loan application to be valid. AIter this the Iile is
sent to another specially appointed person as explained below. At this stage iI any
correction or mistake is present it can be sent back to the Service Centre.

DOUBLE CHECKING OVER :- As the name suggests at this stage a specially
appointed person will double check all the past proceedings .He will examine the
Loan Iile Ior any discrepancies ,any missing and /or misplaced documents, the Credit
Appraisal results,etc. This is a very important stage and must be handled with
exceptional care. This is because a mistake at this stage can cause a great loss to the
41
company. The Double checker is responsible Ior the ultimate sanctioning oI the loan
.II any mistake is done at this stage there is no going back and hence any protection.
ICICI takes great care while appointing double checkers .They should have completed
a select number oI years with the company and should have shown exemplary
perIormance and must possess experience.

SANCTIONING :- An authorized sanctioning authority within ICICI Bank itselI will
review
the remarks oI Double Checker and Sanctioning authority .II it considers the loan
suitable to be Sanctioned it gives its approval .AIter it has given its approval stamp
the ILPS system will automatically send a letter to the Applicant that his loan has
been sanctioned.
AIter this approval the Applicant can go to whichever Service Centre which he selects
to get his loan disbursed.

SPECIAL CASE :- A special case can arise iI the applicant has not mentioned the
property Ior which he wants to take a loan .In that case the applicant can let the case
be remain pending . This means that the Applicants loan request will be considered to
be complete even though he has not decided the property. However the Applicant is
expected to Iinalize the property in a short time.
A Property Address is necessary to
1. get the loan disbursed
2. Process the Legal and Technical Appraisal oI the property and its Papers.



DISBURSEMENT: - The last and Iinal stage in the Home Loan process is that oI
disbursement. AIter the sanctioning has taken place the applicant becomes a
registered customer oI ICICI Bank .
He can now take the disbursement oI the loan Irom any oI the various service centre
oI ICICI Bank .The loan shall be disbursed in one Lump sum or in suitable
installments to be decided by ICICI Bank with reIerence to the need and/or progress
oI construction (which decision shall be Iinal and binding on the borrower).The
borrower hereby acknowledges the receipt oI the loan disbursed as indicated in the
receipt.








42
















43

CHAPTER-4


OB1ECTIVES OF STUDY



There is no stronger Ioundation Ior your dream home, than a cheap loan. Home loans
have become those stronger Ioundations Ior people who want to own a home. The
main objectives oI the study are as Iollows :-

1) To know the Customers perceptions about home loans oI ICICI Bank.

2 2) ) T To o a an na al ly yz ze e t th he e h hi is st to or ry y o oI I I IC CI IC CI I B Ba an nk k l lt td d. .

3) To know the ideas oI customers about home loan products and services.

4) To make comparative study oI Disbursement oI home loans by
Commercial banks.

5) To study the satisIaction level oI customers about home loans.

6) To study the problems Iaced by customers in obtaining the home loans.

7) T To o l le ea ar rn n a ab bo ou ut t v va ar ri io ou us s a as sp pe ec ct t o oI I I IC CI IC CI I B Ba an nk k h ho om me e l lo oa an n l lt td d. .


















44



4.1 PURPOSE OF THE STUDY



The main purpose oI this study is to attain the knowledge oI the processing system oI
home loans. The main purpose oI the study is as Iollows :-


O To know the ideas oI customers about home loan products and services.

O To study the satisIaction level oI customers about home loans.


O To study the problems Iaced by customers in obtaining the home loans.

O O T To o l le ea ar rn n a ab bo ou ut t v va ar ri io ou us s a as sp pe ec ct t o oI I I IC CI IC CI I B BA AN NK K h ho om me e l lo oa an n l lt td d. .



4.2 SCOPE OF STUDY

The Indian housing Iinance industry has grown by leaps and bound in Iew years. Total
home loans disbursements by banks have been raised which witnessed phenomenal
growth Irom last 5 years. There is greater number oI borrowers oI home loans. So by
this study we can Iind out satisIaction level oI customers and problems Iaced by them
in obtaining home.





















45

CHAPTER-5

REVIEW OF LITERATURE


SUMMARY:-

AIter going through previous studies oI Home loans I came to conclude
that-

There is growth oI home loans aIter 2001.

Home loans have an inverse relation with interest rates i.e. when interest rate
low the demand oI home loans increase. (Ojha 1987)

People are going more towards home loans than private mortgage insurance
.(Berstain 2008)

Government taking various steps to encourage people to go toward home
loans .(Haavio, Kauppi 2000)

Growth oI home loans are due to increase oI living standard oI people,
shiIting Irom joint Iamily to nuclear Iamily .(Lacourr, Micheal 2007)

There are some problems also attach with these home loans such as time i.e
Iilling oI application oI loan to closing ,people have their own speciIied needs Irom
these home loans which are not IulIilling. (Lacour Micheal 2006).

SBI provides a very low interest rate on home loans as compared to other
banks. (SBI May 2000)

Now after this conclusion the details of reviews are below-

Berstain David (2009) examined in his study taken Irom 2001 to 2008 that in
this period there is increase use oI home loans as compared to private mortgage
insurance (PMI).he have divided his study into Iour sections. Section 1 describes why
people are going more Ior home loans than PMI. the main reason Ior this that now
home loans market provide Piggybank loans Ior those people who don`t have 20 oI
down payment. Section 2 tells the Iactors responsible Ior the growth oI home loans
and the risks on shiIting toward home equity market without any PMI coverage. PMI
can protect lenders Irom most losses up to 80 oI LTV and the absence oI PMI will
result in considerable losses in an environment. Section 3 tells the measures in
changes oI type oI loans. For this he have taken the data Irom the 2001 and 2007 AHS
a joint project by HUD and Census The results oI this analysis presented in Table One
reveal a sharp increase in the Prevalence oI owner-occupied properties with multiple
mortgages among properties with Newly originated Iirst mortgages. Section 4
describe the Financial status oI single-lien and multiple-lien households and Ior this
46
he have taken the survey oI consumer Iinance and show that Iinancial position is more
weaker in multiple loans than the single loans.
Vandell, Kerry D (2008) analyzes the sharp rise and then suddenly drop down home
prices Irom the period 1998- 2008. changes in prices are Ior the reasons as such
economic Iundamentals , the problem was not subprime lending per se, but the Feds
dramatic reductions, then increases in interest rates during the early- mid-2000 , the
housing boom was concentrated in those markets with signiIicant supply-side
restrictions, which tend to be more price-volatile; he problem was not in the excess
supply oI credit in aggregate, or the increase in subprime per se, but rather in the
increased or reduced presence oI certain other mortgage products.

La courr, Micheal (2007) analysis in his study the Iactors aIIected the increase in the
level oI Annual percentages rates (APR) spread reporting during 2005 over 2004. The
three main Iactors are changes in lender business practices; (2) changes in the risk
proIile oI borrowers; and (3) changes in the yield curve environment. The result show
that aIter controlling Ior the mix oI loan types, credit risk Iactors, and the yield curve,
there was no statistically signiIicant increase in reportable volume Ior loans originated
directly by lenders during 2005, though indirect, wholesale originations did
signiIicantly increase. Finally, given a model oI the Iactors aIIecting results Ior 2004-
2005, we predict that 2006 results will continue to show an increase in the percentage
oI loans that are higher priced when Iinal numbers are released in September 2007.

La cour Micheal (2006) examined the home purchase mortgage product preIerences
oI LMI households. Objectives oI his study to analysis the Iactors that determined
Iactors their choice oI mortgage product , is diIIerent income groups have some
speciIied need to met particular product. The role pricing and product substitution
play in this segment oI the market and do results vary when loans are originated
through mortgage brokers? For this they have use the regression analysis and the
results are high interest risk reduce loan value. SelI employed borrower chooses
reduce documented loans than salaried workers. Use oI this product type seems to be
more prevalent among borrowers with substantial Iunds Ior down payment and better
credit scores. In case oI pricing Multi Iamilies requires price premium and larger
loans carry lower rate. And the role oI time, particularly, the time required Ior the loan
to proceed Irom application to closing it is Iind that government lending taking the
longest time and Nonprime loans the shortest time.Multi Iamily properties take longer
time in closing. And during peak season take longer time to close. And Ior last
objective it is Iind that broker originated loans close Iaster. The eIIect oI mortgage
brokers on pricing and other market outcomes is Iertile ground Ior additional research.

Dr. Rangarajan C. (2001) said that the Iinancial system oI India built a vast network
oI Iinancial institutions and markets over times and the sector is dominated by
banking sector which accounts Ior about two-third oI the assets oI organized Iinancial
sector.


Haavio, Kauppi (2000) stated that countries where a large proportion oI the
population lives in owner occupied housing are experiencing higher unemployment
rates. Than countries where the majority oI people live in private rental housing,
which might suggest that rental housing enhances labour mobility. In this paper, they
develop a simple inter temporal two region model that allow us to compare owner
47
occupied housing markets to rental markets and to analyze how these alternative
arrangements allocate people in space and time announced that it will oIIer loans Ior
Rs. 2-10 lakhs at 12.5 percent the lowest rate oIIered by any housing Iinance provider,
big brother SBI has taken the rate war in the home loans category to new heights. This
is because, apart Irom the low rate, the interest on these loans is calculated on
principal, which is reduced every month unlike other housing Iinance companies
which calculate interest on annually reducing basis.

Narasimham Committee (1991) points out that although the banking system in our
country has made rapid progress during the last two decades, there is decline in
productivity and eIIiciency and erosion oI proIitability. The committee strongly
makes indications oI liberalizing, deregulating economy to make Indian baking
system more competitive and eIIicient.

Ojha (1987) in his paper "modern international caparison oI productivity and
ProIitability oI public sector banks oI India" making Comparison on the basis oI per
employee indicators and taking examples oI state bank group and Punjab National
bank noted that Indian banks are the lowest in all accounts. However such
international comparison will not be Iair Ior numbers oI reasons.

Godse (1983) in his essay, 'looking a Iresh at banking productivity observe that
productivity aspect is only at the Conceptualization stage in banking industry. He
suggested improvement in productivity and procedures, costing oI operations and
capital expenditure etc.

Fanning (1982), while examining bank productivity oI British banks observed that
although the productivity oI the UK clearing banks is improving, they are still heavily
over manned as compared with similar banks elsewhere.

Kulkarni (1979) in his study 'Development responsibility and proIitability oI banks
stated that while considering banks costs and proIits, social beneIits arising out oI it
cannot be ignored. He suggested that while meeting social responsibility banks should
try to make developmental business as successIul as possible.

Varde and Singh (1979) in a study "proIitability oI commercial banks" over 15 years
gave consideration to two types oI Iactors that eIIects interest rates levels i.e. internal
Iactors (including operational and managerial eIIiciency oI individual basis).

Banking Commission (1972) reviewed bank operating methods and procedures and
made recommendations Ior improving and modernizing these, particularly relating to
customer`s services, credit procedure and internal control systems. It observed that
present methods oI working out branch proIitability are not appropriate and an
integrated costing and Iinancial reporting system is needed.

Department of Banking operations and development, RBI : Bombay observed that
the rapid expansion oI banks activities since 1970 called Ior a phase oI consolidations
to improve the quality oI banks operational eIIiciency, productivity and customer
services.


48








































49


CHAPTER -6


RESEARCH METHODOLOGY OF THE STUDY

RESEARCH METHODOLOGY:-

Research methodology is a way to systematically show the research problem.
It may be understood as a science oI studying how research is done scientiIically. It is
necessary Ior the researcher to know not only the research methods but also the
methodology.
This Section includes the methodology which includes. The research design,
objectives oI study, scope oI study along with research methodology and limitations
oI study etc.
O To know the Customers perceptions about home loans oI ICICI BANK housing
development Iinance corporation LTD.
O To study the satisIaction level oI customers about home loans.

O To study the problems Iaced by customers in obtaining the home loans.

O To make comparative study oI disbursement oI home loans by commercial
banks, the study shall be conducted in the manner enumerated below-


6.1- RESEARCH DESIGN:-

This project is based on exploratory study as well descriptive study. It was an
exploratory study when the customer satisIaction level was studied to suggest new
methods to improve the services oI ICICI BANK LTD in providing home loans and it
was descriptive study when detailed study was made Ior comparison oI disbursement
oI home loans by commercial banks.


6.2 - SOURCES OF DATA :-

To IulIill the inIormation need oI the study. The data is collected Irom primary
as well as secondary sources-

A - PRIMARY SOURCE:-

I decided primary data collection method because our study nature does not
permit to apply observational method.
In survey approach we had selected a questionnaire method Ior taking a customer
view because it is Ieasible Irom the point oI view oI our subject & survey purpose.
We conducted 100 sample oI survey in our project to judge the satisIaction level oI
customers which took home loans.
50


Sample size;-
For the questionnaire I have taken the sample size oI 200 customers oI various
Banks.


B - SECONDARY SOURCE:-

It was collected Irom internal sources. The secondary data was collected on
the basis oI organizational Iile, oIIicial records, news papers, magazines, management
books, preserved inIormation in the company`s database and website oI the company.


6.3- SAMPLING :-

Sampling reIers to the method oI selecting a sample Irom a given universe with
a view to draw conclusions about that universe. A sample is a representative oI the
universe selected Ior study.

SAMPLE SIZE :-
Large sample gives reliable result than small sample. However, it is not Ieasible to
target entire population or even a substantial portion to achieve a reliable result. So, in
this aspect selecting the sample to study is known as sample size. Hence, Ior my
project my sample size was 100.
The Sample Size consists oI both the ProIessional and Business class people.
IT peoples, Doctors, Jewelers, Timber Merchants & Real estate Agents are taken as
Sample.

SAMPLING TECHNIQUE:-
Random sampling technique was used in the survey conducted.
TOOLS OF ANALYSIS:-
Data has been presented with the help oI bar graph, pie charts, line graphs etc.

PLAN OF ANALYSIS:-
Tables were used Ior the analysis oI the collected data. The data is also neatly
presented with the help oI statistical tools such as graphs and pie charts. Percentages
and averages have also been used to represent data clearly and eIIectively.

6.4 DATA COLLECTION INSTRUMENT DEVELOPMENT :-
The mode oI collection oI data will be based on Survey Method and Field
Activity. Primary data collection will base on personal interview. I have prepared the
questionnaire according to the necessity oI the data to be collected.


51
6.5 LIMITATIONS OF THE STUDY:-
This study also includes some limitations which have been discussed as Iollows:

i) The sample size oI 200 customers and 4 banks might prove a limitation because oI
diIIiculty in generalization oI results.

ii) To collect the data Irom various banks was quite diIIicult due to non- cooperation
oI some banks. This proved to be major limitation oI the study.

iii) To access such a large number oI customers were diIIicult because oI non-
cooperative attitude oI respondents.


iv) Lack oI data was also the other limitation oI the study as some oI banks do not
have proper data on topic.


v) There was limitation oI time to conduct such a big survey in limited available time.


vi) Ignorance and reluctant attitude oI customers was also a major limitation in this
study.

Thus above all were the limitations in this research study. The maximum
eIIorts were made to overcome these limitations in the study.




























52

53




CHAPTER-7
ANALYSIS AND INTERPRETATION



7.1 - DISBURSEMENT OF HOME LOANS BY DIFFERENT BANKS:-


ICICI BANK LTD :-

Years
No. oI Home
loan
Account
holders.
Home loan Disbursed
(In Crore Rs.)

Distributed Recovered Balance

2005-06

2006-07

2007-08

2008-09

2009-10

700

950

1130

1435

1594

90.07

120.00

144.67

180.33

240.00

63.05

91.20

127.31

165.90

228.12

27.02

28.8

17.36

14.43

11.88


Interpretation:-

On the above table, it is evident that there are increase in No. oI account
holders Irom 700 to 1594 in the year 2009-10. The loan amount distributed among
home loan account holder has also increased Irom Rs.90.07 Crore in 2005-06 to
Rs.240 Crore in 2009-10. The recovery procedure Ior home loans is also
strengthening due to increment in recovered amount, i.e. Rs.63.05 Crore to Rs.288.12
Crore. So it nut shall there are upward trend in number oI accountholders and
disbursement oI home loans.










54





Punjab National Bank :-

Years
No. oI Home
loan account
Holders.
Home loan Disbursed
(In Crores Rs.)
Distributed Recovered Balance
2005-06

2006-07

2007-08

2008-09

2009-10
810

950

1120

1433

1500
120.15

183.26

213.65

240.87

265.15
97.28

150.00

185.86

231.07

265.05
22.87

33.26

28.05

9.80

9.10




Interpretation:-

The Punjab National Bank is Public sector Bank. It comes second aIter State
Bank oI India in its branch location and expansion. From the Table, the Iigures show
that there are increasing trend in customer base Irom 810 in the year 2005-06 to 1500
in the year 2009-10. The bank also show enhancement in loan amount up to Rs.265.15
Crore in the year 2009-10. The recovery process oI loans in past is slow but now it is
increasing.
















55




Standard Chartered Bank :-

Years
No. oI Home
loan
account
holders
Home loan Disbursed
(In Crores Rs.)
Distributed Recovered Balance
2005-06

2006-07

2007-08

2008-09

2009-10
106

130

154

180

260
6.21

11.55

17.06

20.09

24.10
5.27

10.16

14.35

18.68

23.91
0.94

1.38

2.70

1.41

0.48




Interpretation:-

The standard chartered bank is a private sector bank. It has also upgraded its
position in banking sector. The Iigures shown in table reveal that there is upward shiIt
in customer base oI Bank Irom 106 customers to 260 customers. The bank has also
increased its share in housing Iinance by distributing Rs. 24.10 Crores in 2009-10.
The recovery procedure oI Home loan is very sound.





















56





HDFC BANK:-


Years
No. oI
Home
loan account
holders
Home loan Disbursed
(In Crores Rs.)
Distributed Recovered Balance
2005-06

2006-07

2007-08

2008-09

2009-10
650

853

1019

1132

1434
104.33

123.24

150.65

176.75

224.00
98.12

105.00

133.46

144.65

209.16
6.21

18.24

17.19

32.10

14.84



Interpretation :-

The amount reveals that there is tremendous increase in Home loan
accountholders. The amount distributed as home loan is also increased Irom Rs.
104.33 in 2005-06 to Rs. 224 Crore in 2009-10. But the recovery mechanism oI the
Bank is not so good that`s why the outstanding amount shows Iluctuating trend.





















57
7.2 COMPARATIVE STUDY OF DISBURSEMENT OF HOME LOANS BY
COMMERCIAL BANKS:-

There are number oI schemes and products, oIIered by commercial banks to
attract the customers. The comparison among diIIerent commercial banks which oIIer
home loans in regard oI Disbursement oI home loans are as:-


No. of Home loan account holders ;-

Table 7.2(a)


Years
ICICI
Bank

Punjab
National
Bank
Standard
chartered Ban
HDFC LTD
2005-06

2006-07

2007-08

2008-09

2009-10
700

950

1130

1435

1594
810

950

1120

1433

1500
106

130

154

180

260
650

853

1019

1132

1434

Average oI No. oI accounts holders: - Total oI home loan customers
--------------------------------------
No. oI year


Table 7.2 (b)

Name of Bank Average (Rs)
Percentage of
Accountholders

ICICI BANK

Punjab National Bank

Standard Chartered Bank

HDFC LTD


1161

1163

166

1018
32

34

5

29
Total 3456 100
58

GRAPH:- 7.2






Interpretation:-

The Iigure reveals that ICICI Bank is having large number oI home loan
accountholders. So it ranks Iirst among other banks. But government sector PNB is
not behind so much with 31 also market leader. The banks have shown increase in
their customer`s base Irom 2005 to 2010 but ICICI Bank comes as market leader in
the home loan cases.












59
7.3 AMOUNT DISTRIBUTED BY ICICI BANK AND COMMERCIAL
BANKS:-

Table 7.3 (a)

Years ICICI BANK
Punjab
National
Bank
Standard
chartered Bank
HDFC LTD
2005-06

2006-07

2007-08

2008-09

2009-10
120.15

183.26

213.65

240.87

265.15
90.07

120.00

144.67

180.33

240.00
6.21

11.55

17.06

20.09

24.10
104.33

123.24

150.65

176.75

224.00

(Rs. In Crore)


Average oI home loans granted

Total home loans granted
---------------------------------
No. oI years


Table. 7.3 (b)

Name of Bank Average ((Rs in Crore))
Percentage of home
loans granted
ICICI BANK

Punjab National Bank

Standard Chartered Bank

HDFC LTD
204.62

155.01

15.80

155.79
39

29

3

29
Total 531.22 100
60

To understand the comparison more eIIectively and closely, it has been shows
Diagrammatically as Iollows:-

GRAPH:- 7.3


HOME LOANS GRANTED BY ICICI & OTHER
BANKS



Interpretation:-

There is no doubt that every bank tries to maximize its home loan
disbursement. But on the basis oI data it is concluded that ICICI Bank shows high
average oI loan grants Rs. 204.62 Crore as compared to HDFC Ltd, standard charted
bank and PNB respectively. Rs155.01, Rs. 15.80 and Rs. 155.79 Crores. On this
analysis the ICICI Bank is higher loan provider as compared to other sector banks.








\





61
7.4 RECOVERY OF HOME LOANS:-

Table 7.4 (a)

Years
ICICI BANK
(Rs in Crore)
Punjab
National
Bank( Rs in
Crore)
Standard
Chartered
Bank (Rs in
Crore)
HDFC
BANK (Rs
in Crore)
2005-06

2006-07

2007-08

2008-09

2009-10
97.28

150.00

185.86

231.07

256.05
63.05

91.20

127.31

165.90

228.12
5.27

10.16

14.35

18.68

23.91
98.12

105.00

133.46

144.65

209.16




Average recovery oI home loans

Total home loans recovered
----------------------------------
No. oI years




Table 7.4 (b)


Name of Bank Average (( Rs in Crore )
Percentage of home
loans recovered
ICICI BANK
Punjab National Bank
Standard Chartered Bank
HDFC LTD
184.05
135.21
14.47
138.08
39
30
3
28
Total 471.80 100

62


It is clearer with the help oI this diagram:-
GRAPH:- 7.4


LOANS RECOVERED BY ICICI & OTHER BANKS






Interpretation:-

In the previous years the recovery process oI granting loans are very
unorganized and ineIIicient. So there is less recovery oI home loans by the
commercial banks. But it is evident Irom the table that every bank whether public or
private showed increase ICICI Bank has the greatest recovery oI home loans i.e. 39,
thereaIter Punjab national bank recovered the 30 oI sanction amount. The standard
chartered bank is having lowest recovery oI their granted amount as home loans.











63
7.5 OUTSTANDING BALANCE :-

Table 7.5 (a)


Years
ICICI BANK
(Rs in Crore)
Punjab
National
Bank(Rs in
Crore)
Standard
chartered
Bank(Rs in
Crore)
HDFC LTD
(Rs in Crore)
2005-06

2006-07

2007-08

2008-09

2009-10
22.87

33.26

28.05

9.80

9.10
27.02

28.8

17.36

14.43

11.88
0.94

1.38

2.70

1.41

0.48
6.21

18.24

17.19

32.10

14.84

Average oI balance due

Total oI Balance due in 5 years
--------------------------------------
No. oI years


Table 7.5 (b)


Name of Bank
Average
(Rs)
Percentage of
balance due (Rs in
Crore)
ICICI BANK

PNB

Standard Chartered Bank

HDFC LTD
20.61

19.89

1.38

17.72
34

33

2

31

Total 59.15 100

Average oI one bank
age --------------------------- x100
Total Average oI Banks

64
The diagrammatically presentation oI data is as:- GRAPH:- 7.5


Balance due on home loans by ICICI LTD and
commercial banks






Interpretation:-

From the above table and Iigure it shows that standard chartered bank has been less
outstanding balance among other banks. The ICICI Bank got high balances due to
large customer base, not proper recovery process and lack oI modernization oI
activities. The public sector bank PNB is having more balance due i.e. 33 as
compared to standard chartered bank and HDFC Ltd.


















65
7.6 CUSTOMER FEEDBACK


The analysis is based on the responses given by customers through questionnaires.

AGE GROUP OF SURVEYED RESPONDENTS

TABLE 7.6.1:

Age group No. of Respondents
18 - 25 years 94
26 - 35 years 50
36 - 49 years 34
50 - 60 years 18
More than 60 years 4


CHART-7.6.1:


Analysis:- From the chart above we Iind that 47 oI the respondents Iall in the age
group oI 18 25 years, 25 Iall in the age group oI 26 35 years and 17 Iall in the
age group oI 36 49 years.
ThereIore most oI the respondents are relatively young (below 26 years oI age) and
6 respondent`s age are 50-60 years and 2 respondent`s age are 60 to above years.



66

GENDER CLASSIFICATION OF SURVEYED RESPONDENTS


TABLE-7.6.2

Sr. No. Category No. of Respondents Percentage
1 Married 140 70
2 Unmarried 60 30
Total 200 100
Base 200 respondents


CHART-7.6.2






Interpretation
From the table and graph above it can be seen that
70 respondents are married.
30 respondents are unmarried.


67

EDUCATIONAL QUALIFICATION OF RESPONDENT`S


TABLE-7.6.3

Sr. No. Category No. of Respondents Percentage
1 Under graduate 50 25
2 Graduate 80 40
3 Post graduate 70 35
Total 200 100
Base 200 respondents

CHART-7.6.3






Interpretation
From the table and graph above it can be seen that
25 respondent`s are under graduate.
40 respondents are Graduate.
35 respondents are Post graduate.



68

NUMBER OF YEAR`S ARE YOU IN CBD BELAPUR ?

TABLE-7.6.4
Sr. No. Category No. of Respondents Percentage
1 Less than Iive years 78 39
2 More than Iive years 122 61
Total 200 100
Base 200 respondents


CHART-7.6.4

Staying years in CBD BELAPUR



Interpretation
From the table and graph above it can be seen that
39 respondent`s are in CBD Belapur is less than Iive years.
61 respondent`s are in CBD Belapur is more than Iive years.





69
CUSTOMER PROFILE OF SURVEYED RESPONDENTS


TABLE 7.6.5:
Customer profile No. of respondents
Student 6
Housewife 4
Working Professional 102
Business 44
Self Employed 22
Government service employee 22

CHART-7.6.5







Interpretation
From the table and graph above it can be seen that:-
51 oI the respondents are working proIessionals, 22 are into business and 11 are
selI-employed, 11 oI the respondents are government service employee and 3 oI
the respondents are student and 2 oI the respondents are house-wiIe.




70
ANNUAL HOUSE HOLD INCOME

TABLE-7.6.6

Sr. No. Category No. of Respondents Percentage
1 Less than 2 lacs 98 49
2 Between 2 to 5 lacs 62 31
3 Between 5to 8lacs 30 15
4 More than 8 lacs 10 5
Total 200 100
Base 200 respondents

CHART-7.6.6




Interpretation

From the table and graph above it can be seen that
49 respondent`s annual household income is less than 2 lacs.
31 respondent`s annual household income is between 2 to 5 lacs.
15 respondent`s annual household income is between 5 to 8 lacs.
5 respondent`s annual household income is more than 8 lacs.





71
DO YOU KNOW ABOUT ICICI HOME LOANS?

TABLE 7.6.7:

Category No. of Respondents
Yes 182
No 18


CHART:-7.6.7


Awareness about ICICI Bank





Interpretation:-
From the table and graph above it can be seen that
91 respondent`s are known about ICICI Bank
9 respondent`s are not known about ICICI Bank





72
REASONS FOR GETTING THE HOME FINANCED


TABLE 7.6.8:-

Sr.No. Number of Reasons Percentage
a.
Non-availability oI Iunds

36
b. Reluctance to pay cash in one go 35
c. Tax beneIit 24
d. Any other 5


GRAPH:- 7.6.8






Interpretation :-
To interpret the response oI the questions, the Iigures shows that most oI the
customers Iind the problem in availability oI Iunds i.e. 36 and very less number oI
customers Iound problem in paying cash in one go is 35, customers get housing loan
Ior tax beneIits is 24. This was the expected response because a large number oI
people Iind a problem oI availability oI Iunds which works as an obstacle in owning a
dream home.
In today's liIe, people hardly earn both means and ends oI liIe and they don't
have much oI money to buy a home or a land to construct house because oI cost oI
73
property. So, they take the advantage oI home loans provided by diIIerent banks at
diIIerent terms Ieasible to the customers. There are very less number oI people, who
don't own home even when they have suIIicient Iunds and they take the advantage oI
home loans because they don't want to pay huge cash in one go.



FROM WHERE YOU HAVE GOT YOUR HOME FINANCED

TABLE-7.6.9


Name of Banks / company Percentage of customers
ICICI BANK 55
Punjab National Bank 15
Standard Chartered Bank 07
HDFC LTD 20
Any other 03

To understand the response more eIIective and closely, it has been showed
diagrammatically as Iollows :-

GRAPH:- 7.6.9


FROM WHERE HAVE YOU GOT YOUR
HOME FINANCED


74
Interpretation:-

The analysis showed that a large number oI customers preIer ICICI Bank as compared
to others. The data shows that 7 oI customers took loan Irom Standard Chartered
Bank, 20 oI customers Irom HDFC Ltd, 15 Customers took loan Irom Punjab
National Bank, 55 oI customers took loan Irom ICICI Bank and a 3 oI customers
Iall under the category oI 'Any other' which included State Bank oI India, Canara
Bank, Punjab and Sind Bank, etc.
The data shows that most oI people preIer ICICI Bank compared to public
sector banks and other private banks. This is because oI the extra services provided by
ICICI Bank. However, there is less diIIerence in Iigures HDFC Ltd and Punjab
National Bank. But there is considerable diIIerence in Iigures oI the two private sector
banks i.e. HDFC Ltd and Standard Chartered Bank. As ICICI is the market leader in
the home loans sector. This may be the reason Ior such diIIerence in Standard
Chartered Bank's percentage and HDFC Bank`s percentage. Another reason Ior
specialized services in home loans, more amounts oI loans, and eIIicient query
handling.
However, the analysis showed that the people preIer ICICI Bank Ior home
loan because oI their services and excessive Ieat compared to other banks.




SOURCES OF INFORMATION ABOUT HOME LOANS SCHEME

TABLE-7.6.10


Sources of information

Percentage of customers
Newspapers 98
Magazines 32
Banners/Hoardings/Pamphlets 22
Word oI mouth 40
Any other source 08






75
CHART:-7.6.10



Sources of information about Home Loans Scheme


Interpretation:-

The data shows that around 20 oI customers got inIormation Irom source oI
'Word oI Mouth' which includes inIormation Irom Iriends, relatives, colleagues etc.
49 oI customers got inIormation Irom newspapers, only 16 oI customers Irom
magazines and 4 oI customers got inIormation about home loans schemes under
'Any other source' and 11 through Banners/ Hoardings/Pamphlets .













76
OPINION ABOUT THE SERVICES OF ICICI BANK

TABLE-7.6.11


Services of ICICI
Bank
Percentage of customers agreeing
Strongly
Agree
Agree Neutral Disagree
Strongly
Disagree
a. ProIessionally
Managed
86 10 4 - -
b. Reliable &
Transparent
67 33 - - -
c. Socially
Responsible
75 10 15 4 -
d. Customer Care 20 68 8 - -
e. Query Handling 20 76 4 - -

GRAPH-9.11

Opinion of customers about ICICI Bank


77

Interpretation:-

Customers Irom ICICI Bank are quite satisIied Irom their services like query
handling and customers social responsibility oI banks towards customers and
proIessionally managed services. They don't give so good response to
reliability and transparency services oI banks. So, customer's satisIaction level
toward ICICI Bank services is lightly satisIied.



OPINION OF CUSTOMERS ABOUT HOME LOAN SCHEMES


TABLE-7.6.12




Services of ICICI
Bank
Percentage of customers agreeing
Strongly
Agree
Agree Neutral Disagree
Strongly
disagree
a. Amount oI loan 60 35 5 - -
b. Legal Iormalities 42 45 14 - -
c. Interest rates 32 56 12 - -
d. Repayment options 26 64 10 - -
e. Security demanded 20 32 48 - -
I. Installments 55 40 5 - -
g. Services 45 30 18 6 1
h. Processing Ior
sanction oI loan
55 24 18 3 -









78

GRAPH:- 7.6.12

Percentage of satisfaction level of customers of ICICI Bank





Interpretation:-

The analysis shows that the customers oI ICICI Bank gave 60 percent oI
amount oI loan and legal proceedings, 56 to interest rates, 45 to proceedings and
services, 55 to installments. So, customer oI ICICI Bank didn't give response
regarding the services oI the bank / company except to the amount oI loan and legal
Iormalities.












79
DATA GIVES PREFERENCE OF RESPONDENTS OF HOME LOANS
COMPANIES AND BANKS

TABLE:- 7.6.13


COMPANY`S NAME
NO. OF
RESPONDENTS
()
ICICI Bank 156 78
STANDARD CHARTERED
BANK
4 2
HDFC Ltd 20 10
PNB 14 7
SBI 6 3
TOTAL 200 100

GRAPH:-7.6.13


NO. OF RESPONDENTS


INTERPRETATION:-

From the table and graph above it can be seen that:-
78 oI the people contacted preIer ICICI Bank to any other and thereIore it is
ranked no.1 by that percent oI respondents.



80






























81

CHAPTER-8

FINDINGS

ICICI IN COMPARISON TO OTHER BANKS


1. ICICI BANK having good brand image in the minds oI customers.
2. Majority oI the people got loans Irom ICICI BANK only
3. Most oI the customers are not aware oI the products oI HDFC home loans
4. Some oI the customer`s Ielt that the interest rates are somewhat high
5. Some oI the customer not having good Iaith on private banks like Standard
chartered bank, HSBC bank etc.
6. Most oI the people are directly go to HDFC to apply a home loan
7. Some oI the customer oI ICICI already beneIited through ICICI Bank home
loan products and services
8. Customer awareness is medium about ICICI Bank Home loan products.


PROBLEMS FACED BY CUSTOMERS IN AVAILING HOME LOANS


There are everything in the world has good or bad points. No doubt banking
industry/ company has made many eIIorts to enhance the customer satisIaction but
customer still Iaced some problems. Based on the Ieedback received Irom the
customers some oI these problems are high lightened as below:

1) The customer does not have proper knowledge about diIIerent home loan
products so they Iace problem in making a good deal.

2) There are procedural delays, which harass the customer`s lot. This will
crush the curtsy oI customers to avail the home loan.

3) The attitude oI bank employees sometimes non cooperative and it creates a
hurdle in building trust and ConIidence among customers about banks.

4) The banks do not take into account the paying capacity oI customers. So
some customers are not able to get amount oI loan needed by them.

So above discussed are the problems which Iaced by customers while availing home
loans.

82






























83

CHAPTER-9

CONCLUSION


1) In my study we came to know that many people are interested to take a home loan Irom ICICI
BANK to construct their homes.
2) Home loans have long period when compare to other personal loans and other loans. So peoples are
conIused to take a home loan.
3) Even though the interest rates are high peoples are willing to take a loan Irom ICICI BANK due to
some reasons.
4) The interest rates also somewhat high when compare to other banks
5) The loan sanction process is low when compare to other banks.
6) For disbursement process is also it will take low time when compare to other banks
Finally the whole research was carried out in a systematic way to reach at exact results. The
whole research and Iindings were based on the objectives. However, the study had some limitations
also such as lack oI time, lack oI data, non-response, reluctant attitude and illiteracy oI respondents,
which posed problems in carrying out the research. But proper attention was made to carry out research
in proper way and to make accurate conclusion Ior the ICICI BANK which may beneIicial Ior banks to
enhance their customer base.























84











85


CHAPTER-10

RECOMMENDATIONS AND SUGGESTIONS


These suggestions have been discussed as follows:-

1) To increase their customers, the ICICI BANK should provide specialized services in this
sector. These services can be such as proper guidance to the customer regarding the processing oI
loans, especially Ior the customers who are illiterate.

2) To satisIy their customers and Ior good dealings in Iuture, the ICICI BANK should make
prompt disbursement oI loan amount to the customers so that they can buy or construct their dream
home as early as possible.

3) The ICICI BANK should use easy procedure, or say, less lengthy procedure Ior the
sanctioning oI loan to the customer. There should be less number oI legal Iormalities, in case this
exists, then, these should be completed in less time. This will be helpIul in attracting more customers.

4) Although the interest rates on speciIic norms, yet customers seek less interest rate which
can lower their cost oI house. So banks should try to lower their interest rates. Needles to say, that the
bank which is having lower interest rates, have the maximum clients Ior loans.

5) ICICI BANK provide loan according to the repaying capacity oI the customer and his/her
eligibility. Due to which, some customers are not able to get amount oI loan needed by them. So, the
ICICI BANK should soIten their norms regarding the loan amount.

6) Create awareness: The Company has to take care oI awareness creation about the products
and services among the customers.

7) Charges: The Company has to reduce the mortality and administration charges.

8) The company has to reduce their interest rates on home loan products and services.

9) The company has to identiIy the potential customers.
10) Company should consider the present competition and should act according to the
customer needs.

11) The ICICI BANK should try to provide proper knowledge regarding their home loan
schemes, even to people who don't know about such schemes and their beneIits especially in rural
areas. So they should provide knowledge to the ignorant customers, especially in rural areas and
backward urban area. So, above are the main suggestions provided to the ICICI BANK. By considering
these suggestions, the ICICI BANK can strengthen their customer base in home loans sector. They
should improve their services and reduce legal proceedings and should be Iriendly to their customers.
All this will be helpIul to satisIy their customers.







86



























87


BIBLIOGRAPHY

REFERENCES
REVIEWS

Berstain David(2008), 'Home equity loans and private mortgage insurance: Recent Trends &
Potential Implications, Vol.3 No.2, August 2008, Pp. 41 - 53
Dr. Rangarajan C. (2001), 'A Simple Error Correction Model oI House Price.Journal oI
Housing Economics Vol. 4, No. 3,pp 27 34
Fanning (1982), 'The Demand Ior Home Mortgage Debt Journal oI Urban Economics, Vol
11 No 2, November, pp. 770-774
Godse (1983), 'looking a Iresh at banking productivity, Journal oI Real Estate Literature,
Vol. No. 13, Page 141 to 164.
Haavio, Kauppi(2000) , 'Residential Lending to Low-Income and Minority Families:
Evidence Irom the 1992 HMDA Data," Federal Reserve Bulletin,Vol no 80(2), December
2000 Pp-79-108
Kulkarni (1979), 'Development responsibility and proIitability oI banks Journal oI Economic
Perspectives, Vol 9 No 1 ,pp. 26-32.
La courr, Micheal(2007) , 'Economic Factors AIIecting Home Mortgage Disclosure Act
Reporting The American Real Estate and Urban Economics Association, Vol.2 No. 2 May
18, 2007, Pp. 45 -58
La cour Micheal(2006) , 'The Home Purchase Mortgage PreIerences OI Lowand-Moderate
Income Households, Forthcoming in Real Estate Economics , Vol 18, No 4 , December 20,
2006, p. 585.
Vandell ,kerry D(2008), 'Subprime lending and housing bubble:tail wag dog?International
Journal oI Bank Marketing, vol 21,no 2, pp. 53-7
Brochure on home loans Irom ICICI BANK

NEWS PAPERS
The Times oI India
Financial Express

WEB PAGES:-

http://www.icicibank.com/

http://www.hdIcindia.com/others/popup/news/hdIcIinresultjune3008.html

http://www.iloveindia.com/real-estate/housing-Iinance- companies/hdIc.html

http://www.loansnews.inIo/Home-loan/hdIc-home-loans/

http://www.icicibank.com/Personal-Banking/loans/home-loan/index.html

http://www.thinkplaninvest.com/2009/01/ICICI-will-cut-home-loan-rates/

http://www.suncorp.com.au/suncorp/personal/homeloans/tips/Iaq.aspx

http://investing.businessweek.com/research/stocks/people/people.asp?ricICICI.BO

http://www.economywatch.com/companies/Iorbes-list/india/housing-development-Iinance-
corporation.html

88
http://www.rbi.org.in/

http://www.munichre.com/en/press/pressreleases/2007/20071030proIileicici.aspx

http://ayaanbayaan.com/icici-ltd-Iinancial-results-indian-gaap-Ior-the-period-april-to-june-2009/

http://www.valuenotes.com/press/prICICI250ct05.asp?ArtCd70013&CatC&Id100





















































89

































90

QUESTIONNAIRE

Dear Sir/ madam

I am Sukhwant Sandhu doing MBA Irom University oI Mumbai. I m preparing a project on A
STUDY ON HOME LOANS. For this I have designed a Questionnaire to know your views and
satisIaction level oI home loans .please Iill the given as per your thinking and experiences with this. I
will be thankIul to you Ior this.


1. Name:
2. Age:
(a) Below 30 (b) 30-40 (c) 40-50 (d) Above 50

3. Occupation:
(a) ProIessional (b) SelI-employed (c) Salaried (e) Others

4. Which income group do you belong? (Per annum)
(a) Below 2 lakhs (b) 2-4 lakhs
(c) 4-6 lakhs (d) 6 lakhs and above


5. Have you ever taken Home loan beIore?
(a) Yes (b) No


6. II yes, Irom which Bank/company?
(a) ICICI (b) HDFC (c) UTI
(d) Centurion bank oI Punjab (e) others



7. Are you satisIied with the services provided? (On 5 point scale)

Highly dissatisIied Neutral satisIied highly dissatisIied
dissatisIied



8. While taking loan, which things attract you the most?

(a) Interest rates (b) Service Provided
(c) Payback period (d) Schemes
(d) Others
Name:
.............................
Address: ............................
Contact No :......( O)...... (M).........
City: ..................Pin: ........State: ..........
91

9. Even iI the Interest rate is high Ior the personal loans, you will go Ior it?
(a) Yes (b) No


10. How much loan amount you took?
(a) Less than 1 lakhs (b) 1-5 lakhs
(c) 5-10 lakhs (d) more than 10 lakhs


11. Even iI the Interest rate is high Ior the Home loans, you will go Ior it?
(a) Yes (b) No


12. Do you own a home.?
Yes | | No | |
II Yes, then, Proceed...

13. Have you get it Iinanced?
Yes | | No | |
II Yes, then, proceed....

14. What is reason Ior getting it Iinanced?
1. Non availability oI Iunds | |
2. Reluctance to pay cash in on go | |
3. Tax beneIit | |
4. Any other (please speciIy) .........................................

15. From which oI the Iollowing banks/ company you have got iI Iinanced?
Standard Chartered Bank | | State Bank oI India | |
ICICI Bank | | HDFC LTD ]
Any other (please speciIy) ...........................................


16. From where have you got inIormation about home loans scheme?
(Check list).........
Newspapers | | Magazines | |
Hoarding/banners | | Word oI mouth | |
Any other (please speciIy)...........................................

17. What problems did you Iace while getting home loans?
a. Lack oI knowledge
b. Procedural delays and non cooperation
c. Any other (please speciIy) ........................................

18. Did you Iace any problem aIter sanction oI loan?





19. What suggestions do you want to give Ior improvements in home loans Scheme?




THANKS
92