PREFACE

I am extremely happy to place before the esteemed teacher HOUSING

FIANANCE COMPANY MARKETING STRATEGY OF HDFC . It is an attempt
make by me to find out the leading brands in Sagar City.
The Project Report has on objective to get the B.B.A. Studetns
familiar with real life buisness situations and gives an opportunity to the
students to understand the theoretical concepts of marketing and finance in
practical way.
The research starts with a short introduction of the company
followed by the line of the objective and research methodology.
Next Chapter Deals with the data analysis and interpretation that is
based on questionnaire. Then comes the limitation, suggestions conclusion of
the research report.
Students name : NEERAJ KACHHI
Class :BBA VTH SEM.

GIMS

ACKNOWLEDGEMENT
I Wish to express my deep sense of gratitude to all who generously helped in
successful completion of the project work by sharing their valuable time and
knowledge.
I thankfully acknowlege Mr. Manish Jain (HOD BBA Dept) GIMS Sagar for
giving me the opportunity to conduct and survey.
I Would like to express my sincere thanks to MISS RUPALI PATEL
LecturerBBA Dept) and all other faculty members, GIMS sagar who directly and
indirectly rendered me all possible help and guidance for preparing the report.
Finally I would like to thanks my parents, my friends without whom completion
of my project report would not have been possible.

Students name : NEERAJ KACHHI

Class :BBA VTH SEM.

GIMS

CERTIFICATE
A

PROJECT

REPORT

ON

HOUSING

FIANANCE

COMPANY

MARKETING STRATEGY OF HDFC is prepared by NEERAJ KACHHI under

The guidance of Miss RUPALI PATEL is a satisfactory in respect to comments

Contents and presentation of the Subject Matter.

Language
Submission with in due date.

Signature of Supervisor

Signature of Examiner

Signature

of

HOD

GIMS

DECLARATION BY THE CANDIDATE

Date:
I declare that the project report titled HOUSING FIANANCE COMPANY
MARKETING STRATEGY OF HDFC is my own work conducted under the
supervision of MISS RUPALI PATEL, Gyanveer Institute of Management and
Science Sagar. To the best of my knowledge the report does not contain any
work, which has been submitted for the award of any degree, anywhere.

Students name : NEERAJ KACHHI

Class :BBA VTH SEM.

GIMS

TABLE OF CONTENTS
Preface
Acknowledgement
Certificate
Declaration by the Candidate
TOPIC NAME

PAGE
NO.

CHAPTER 1 INTRODUCTION
(A) COMPANY PROFILE
(B) HISTORY
(C) KEY PERSON
CHAPTER 2 OBJECTIVE
CHAPTER 3 RESEARCH METHODOLOGY
(A) TYPE OF RESEARCH
(B) SOURCE OF RESEARCH
CHAPTER 4 PRODUCT DETAILS
CHAPTER 5 FINANCIAL POSITION
CHAPTER 6 DATA ANALYSIS AND INTERPRETATION
CHAPTER 7 SWOT ANALYSIS
CHAPTER 8 LIMITATION
CHAPTER 9 SUGGESTION AND CONCLUSION
CHAPTER 10 BIBLIOGRAPHY
CHAPTER 11 QUESTIONNAIRE

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INTRODUCTION
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Housing is one of the best human needs of the society. It is closely

linked with the process of overall socio-economic development of a country. India,
being a highly populated country, there is a great need and scope for the development
of Housing Sector. Unfortunately, for some reasons or the other, the housing sector in
India has remained underdeveloped in the past, however, it is hoped that there would
be improvement in the near future.
Housing is a growing industry. There is substantial gap between demand and supply
and is persisting for a very long period. According to an estimate by the National
Building Organization, the cumulative shortage of total dwelling houses in the country
by the end of 1991 was 31 million. It is further estimated by this organization that the
demand for housing will be around 4.5million units, leaving a gap of one million
housing units annually. Hence, based upon this estimate, the cumulative shortage of
housing may reach to 41million units by the end of this century.
Presently, funds required per dwelling shelter are so high that the individuals saving
is not adequate to meet the expenditure of house building. As a result, there is great
demand for external housing finance.
Housing was given due priority only in 1988 when a National Housing Policy was
announce. The policy reflected the trust that housing was not merely consumption
expenditure but also a productive investment which would provide economic activity
in the country. Besides this, the policy also envisaged that an impetus given to housing
would stimulate economic development through creation of substantial employment
opportunities.

Consequently, the

institutional

mechanism

for

housing

was

strengthened by the establishment of National Housing Bank (NHB) by the Reserve

Bank of India.

COMPANY PROFILE

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The Housing Development Finance Corporation Limited ( HDFC) was amongst

the first to receive an 'in principle' approval from the Reserve Bank of India (RBI) to
set up a bank in the private sector, as part of the RBI's liberalisation of the Indian
Banking Industry in 1994. The bank was incorporated in August 1994 in the name of
' HDFC Bank Limited', with its registered office in Mumbai, India. HDFC Bank
commenced operations as a Scheduled Commercial Bank in January 1995.

BUSINESS FOCUS
HDFC is India's premier housing finance company and enjoys an impeccable
track record in India as well as in international markets. Since its inception in 1977,
the Corporation has maintained a consistent and healthy growth in its operations to
remain the market leader in mortgages. Its outstanding loan portfolio covers well
over a million dwelling units. HDFC has developed significant expertise in retail
mortgage loans to different market segments and also has a large corporate client
base for its housing related credit facilities. With its experience in the financial
markets, a strong market reputation, large shareholder base and unique consumer
franchise, HDFC was ideally positioned to promote a bank in the Indian
environment.

CAPITAL STRUCTURE
The authorised capital of HDFC Bank is Rs.450 crore (Rs.4.5 billion). The
paid-up capital is Rs.311.9 crore (Rs.3.1 billion). The HDFC Group holds 22.1% of
the bank's equity and about 19.4% of the equity is held by the ADS Depository (in
respect of the bank's American Depository Shares (ADS) Issue). Roughly 31.3% of
the equity is held by Foreign Institutional Investors (FIIs) and the bank has about
190,000 shareholders. The shares are listed on the The Stock Exchange, Mumbai and
the National Stock Exchange. The bank's American Depository Shares are listed on
the New York Stock Exchange (NYSE) under the symbol "HDB".

DISTRIBUTION NETWORK

HDFC BANK
HDFC Bank is headquartered in Mumbai. The Bank at present has an enviable
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network of over 761 branches spread over 327 cities across India. All branches are
linked on an online real-time basis. Customers in over 120 locations are also serviced
through Telephone Banking. The Bank's expansion plans take into account the need to
have a presence in all major industrial and commercial centres where its corporate
customers are located as well as the need to build a strong retail customer base for
both deposits and loan products. Being a clearing/settlement bank to various leading
stock exchanges, the Bank has branches in the centres where the NSE/BSE have a
strong and active member base.

March 2006

March 2007

March 2008

Citied

228

316

327

Branches

535

684

1229

ATMs

1323

1605

2400

The Bank also has a network of about over 1977 networked ATMs across these cities.
Moreover, HDFC Bank 's ATM network can be accessed by all domestic and
international Visa/MasterCard, Visa Electron/Maestro, Plus/Cirrus and American
Express Credit/Charge cardholders.

TIMESBANK AMALGAMATION
In a milestone transaction in the Indian banking industry, Times Bank Limited (another new
private sector bank promoted by Bennett, Coleman & Co./Times Group) was merged with

HDFC Bank Ltd., effective February 26, 2000. As per the scheme of amalgamation
approved by the shareholders of both banks and the Reserve Bank of India, shareholders of
Times Bank received 1 share of HDFC Bank for every 5.75 shares of Times Bank. The
acquisition added significant value to HDFC Bank in terms of increased branch network,
expanded geographic reach, enhanced customer base, skilled manpower and the opportunity
to cross-sell and leverage alternative delivery channels.

MANAGEMENT
Mr. Jagdish Capoor took over as the bank's Chairman in July 2001. Prior to this, Mr. Capoor
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was a Deputy Governor of the Reserve Bank of India.

The Managing Director, Mr. Aditya Puri, has been a professional banker for over 25 years,
and before joining HDFC Bank in 1994 was heading Citibank's operations in Malaysia.
The Bank's Board of Directors is composed of eminent individuals with a wealth of
experience in public policy, administration, industry and commercial banking. Senior
executives representing HDFC are also on the Board.
Senior banking professionals with substantial experience in India and abroad head various
businesses and functions and report to the Managing Director. Given the professional
expertise of the management team and the overall focus on recruiting and retaining the best
talent in the industry, the bank believes that its people are a significant competitive strength.

HISTORY
HDFC BANK LTD was incorporated in August 1994 in the name of 'HDFC Bank Limited,
with its registered office in Mumbai, India. HDFC Bank commenced operations as a
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10

Scheduled Commercial Bank in January 1995.

HDFC BANK LTD was amongst the first to set up a bank in the private sector. The bank
was incorporated on 30th August 1994 in the name of HDFC Bank Limited, with its
registered office in Mumbai. It commenced operations as a Scheduled Commercial Bank on
16th January 1995. The bank has grown consistently and is now amongst the leading players
in

the

industry

HDFC is India's premier housing finance company and enjoys an impeccable track record in
India as well as in international markets. Since its inception in 1977, the Corporation has
maintained a consistent and healthy growth in its operations to remain the market leader in
mortgages. Its outstanding loan portfolio covers well over a million dwelling units.
HDFC has developed significant expertise in retail mortgage loans to different market
segments and also has a large corporate client base for its housing related credit facilities.
With its experience in the financial markets, a strong market reputation, large shareholder
base and unique consumer franchise, HDFC was ideally positioned to promote a bank in the
Indian environment In a milestone transaction in the Indian banking industry, Times Bank
was merged with HDFC Bank Ltd., effective February 26, 2000.

MISSION
I.
II.
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World Class Indian Bank

Benchmarking against international standards.
11

III.

To build sound customer franchises across distinct businesses

IV.

Best practices in terms of product offerings, technology, service levels, risk

management and audit & compliance
VISION STATEMENT OF HDFC BANK

The HDFC Bank is committed to maintain the highest level of ethical standards,
professional integrity and regulatory compliance. HDFC Banks business philosophy
is based on four core values such as:1. Operational excellence.
2. Customer Focus.
3. Product leadership.
4. People.
The objective of the HDFC Bank is to provide its target market customers a full range
of financial products and banking services, giving the customer a one-step window for
all his/her requirements. The HDFC Bank plus and the investment advisory services
programs have been designed keeping in mind needs of customers who seeks distinct
financial solutions, information and advice on various investment avenues.

KEY PERSON
MR.HASMUKHBHAI PAREKH
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12

If ever there was a man with a mission it was Hasmukhbhai Parekh, our Founder
and Chairman-Emeritus, who left this earthly abode on November 18, 994.

MR. DEEPAK PAREKH

Deepak Parekh is the Chairman of HDFC, the countrys
leading housing finance company. A pioneer in mortgage finance,
he has enabled scores of Indian middle class people owning their
houses or apartments through affordable loans.

OBJECTIVE OF THE STUDY

o To study how to choose the right housing finance bank.

o To study how do get loan for construction of residential houses.
o To discuss housing credit more affortable.
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13

o To know the some of housing finance schemes.

o To discuss some tip for buying house.
o To study of terms and condition of home loan.

RESEARCH METHODOLOGY

Research Design:
The research design indicates the type of research methodology under taken to
collect the information for the study.
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14

The researcher used both descriptive and analytical type of research design for his
research study. The main objective of using descriptive research is to describe the state
of affairs as it exits at present. It mainly involves surveys and fact finding enquiries of
different kinds. The researcher used descriptive research to discover the characteristics
of customers. Descriptive research also includes demography characteristic of
consumer who use the product.
The researcher also used analytical research design to analyze the existing facts
from the data collected from the customer.
Area of study:
The area of study is confined to Co-operative Bank , Sagar City. .
Sampling design:
A Sample design is a definite plan for obtaining a sample from a given population. It is
the procedure used by the researcher in selecting items for the sample.
Sample size:
Sample size=45 samples, variance and confidence methods are used for
determining sample size.
Sampling Technique:
The researcher adopted simple random sampling for the study.

SOURCES OF DATA
DATA COLLECTION METHOD
Primary data:
Primary data is the new or fresh data collected from the respondents through
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15

structured scheduled questionnaire.

Secondary data:
The secondary data are collected through the structured questionnaire, and also from
the past records maintained by the company.

PRODUCTS
DETAILS

HOME LOAN TYPES

Owning a piece of land or

property is a lifetime dream
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16

for every individual. There are many home loans provider in the market to make
your dream come true. But before you opt for any home loan provider, you need
to consider certain factors related to property that you are interested in buying
and also about the salient features offered by a home loan provider and also
study some Home Loans and Home Insurance FAQs which helps in applying a
Home Loan in India.
And the most important thing is you should know about each and every
termrelated with Home Loans before applying for a Loan. It is always advisable
to consult a home loan expert or consultant before applying for a home loan or
purchasing a property.
You can take different types of home loans like Bridge Loans, Home
construction Loans, Home Equity Loans, Home Extension Loans, Home
Improvement Loans, Land Purchase Loans etc for different schemes available in
the market. There are different types of home loans tailored to meet your needs.
Home Purchase Loans: These are the basic forms of home loans
used for purchasing of a new home.
Home Improvement Loans: These loans are given for
implementing repair works, healing and renovations in a home that
has already been purchased.
Home Construction Loans: These loans are available for the
construction of a new home.
Home Extension Loans: These loans are given for expanding or
extending an existing home. For egg: addition of an extra room etc.
Home Conversion Loans: These loans are available for those who
have financed the present home with a home loan and wish to
purchase and move to another home for which some extra funds
are required. Through home conversion loan, the existing loan is
transferred to the new home including the extra amount required,
eliminating the need of pre-payment of the previous loan.
Land Purchase Loans: These loans are available for purchasing
land for both construction and investment purposes.
Bridge Loans: Bridge loans are designed for people who wish to
sell the existing home and purchase another one. The bridge loans
help finance the new home, until a buyer is found for the home.
HOUSING FINANCE IN INDIA

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17

The Home loan sector in India is the pi-vital role player in the growth of the real estate
scenario in India. With tax incentives given to the housing finance sector in the annual budget
of 2001, transactions related to buying and selling of residential properties increased
considerably and was much higher as compared to previous years.
Since the new class of buyers are relatively younger set of customers who are more aware
about legal documentation and approvals, buyers are now more 'end-users' rather than
investors; the property market in India undergoes transformation to align itself with global
standards with an increased emphasis on quality & cost control and documentation methods.
In the current economy of India, the real estate sector has the maximum propensity to
generate income and demand for materials, equipment and services. It can be said that
housing finance companies were formed for co-existing with buyer's requirements of housing
loans for investing in properties. Home loans are made available by financial institutions to
both Indian and NRI customers at floating and fixed rate of interest and also at attractive EMI
options.

For construction or buying a new home

For home repairs and renovations

For purchase of plots

Against mortgage of property

No tax benefits are available for NRI customers unless you file returns and thereby become
eligible to avail of the tax benefits.
Besides home loans, Commercial property loans are also available and different financial
institutions in India provide commercial loans at different rates and different upper limits.
Real estate loans are available to builders, promoters and real estate developers. The
experience and financial standing of the builders is taken into account before the loan is
granted which is to be returned with the minimum installments.
Today, the amount of money that a city dweller spends on rent is roughly the same, or only
slightly less than the amount he pays as an EMI on a housing loan. Earlier the home loan
sector in India was solely dependent on nationalized and public sector banks, but the entry of
public sector banks into the housing finance business marked the beginning of the first round
of interest rate cuts. And this reduction in interest rates has enhanced the borrowing power of
customers. Moreover, HFCs are offering incentives to attract investors like

Some companies sanction the housing loan without requiring you to identify
property as a pre-requisite for eligibility

Free accident insurance & property insurance

Waiving of pre-payment penalty

Waiving of processing fee

There are a few documents which the finance companies require for setting up

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18

Salaried Employee
The latest
showing
deductions

Self-employed

salary slip Computation of income for

statutory the previous two years,
certified by a Chartered
Accountant

Form 16 (showing tax Profit & Loss Account and

deducted at source by Balance Sheet for the
employer)
previous two years, certified
by a Chartered Accountant
Proof
of
age
(birth
certificate/voter
identity
card/passport/schoolleaving
certificate/valid
driving license

Proof
of
age
(birth
certificate/voter
identity
card/passport/schoolleaving
certificate/valid
driving license)

Proof of residence (phone Proof of residence (phone

bill/electricity
bill/ration bill/electricity
bill/ration
card).
card).

CRITERIA FOR ELIGIBILITY OF HOME LOANS.

The realty boom in India has given a new dimension to the finance sector in India - both in
Home Loans and Home Insurance segments. This has not only given a competitive edge to
the finance companies to provide attractive options to customers but has also contributed to
the increased investments in the real estate sector. This has resulted in 13 new institutions
foraying into the housing finance business in the last three years.
Major Home Loan Providers

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Banks
&
Public Sector
Housing
Finance
Companies

State Bank of India, Corporation Bank,

Punjab National Bank, Central Bank, Dena
Bank, Allahabad Bank, Bank of
Maharashtra, Bank of Baroda Housing
Finance, Can Fin Homes, GIC Housing
Finance, LIC Housing Finance, PNB
Housing Finance, SBI Home Finance,
Centbank Home Finance, HUDCO, LIC,
etc.

Financial
Institutions

HDFC, ICICI Ltd, Citibank, HSBC,

StandardChartered- Grindlays, IDBI Bank,
etc

19

TAX BENEFITS ON HOME LOANS

As the Indian real estate market makes an upward swing, and investors opt for housing
finance or home loans, tax benefits obtained from them is a lucrative option. Customers
availing of Home Loans can claim a certain portion of the interest and principal that they pay
towards the loan installments for reducing tax liability. Resident Indians are eligible for
certain tax benefits on principal and interest components of a loan under the Income Tax Act,
1961. Moreover, an added tax benefits under Sec 80 C on repayment of principal amount up
to Rs. 1,00,000 p.a. can be availed that can further reduce your tax liability by about Rs.
30,000 p.a.
Tax benefits can be claimed on both the principal and interest components of the home loan
as per the Income Tax Act, 1961. These deductions are available to assesses, who have taken
a loan to either buy or build a house, under Section 24(b). Interest on borrowed capital is
deductible up to Rs 150,000 if the following conditions are satisfied:

Capital is borrowed on or after April 1, 1999 for acquiring or constructing a

property.

The acquisition/construction should be completed within 3 years from the end

of the financial year in which capital was borrowed.

The person, extending the loan, certifies that such interest is payable in respect
of the amount advanced for acquisition or construction of the house

A loan for refinance of the principle amount outstanding under an earlier loan
taken for such acquisition or construction.
If the conditions stated above are not fulfilled, then the interest on borrowed
capital is deductible up to Rs 30,000 though the following conditions have to
be satisfied:

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20

Capital is borrowed before April 1, 1999 for purchase, construction,

reconstruction repairs or renewal of a house property.

Capital should be borrowed on or after April 1, 1999 for reconstruction,

repairs or renewals of a house property.

If the capital is borrowed on or after April 1, 1999, but construction is not

completed within 3 years from the end of the year, in which capital is
borrowed.

In addition to the above, principal repayment of the loan/capital borrowed is eligible for a
deduction of up to Rs 100,000 under Section 80C from assessment year 2006-07.
Terms and conditions for availing Tax benefits on Home Loans
1. Tax deductions can be claimed on housing loan interest payments, subject to
an upper limit of Rs 150,000 for a financial year. Interest on the fresh loan can
be claimed as a deduction, subject o the stated upper limit.
2. An additional loan for extension/addition to the same house and the person's
deductions on the existing loan are less than Rs 150,000; he can claim further
benefits from the additional loan taken, subject to the upper limit of Rs
150,000 for a financial year.
3. Tax benefits under Section 24 and deduction under section 80C of the Income
Tax Act can be claimed only when the payment is made. If a person fails to
make EMI payments, he cannot claim tax benefits for the same.
4. According to the Income Tax Act, only the person who has taken the loan can
claim tax rebates.
5. The interest on home loans taken for repairs, renewals or reconstruction, also
qualifies for the deduction of Rs 150,000.
6. A husband and wife, both of whom are tax-payers with independent income
sources, get tax deduction benefits, with respect to the same housing loan; to
the extent of the amount of loan taken in their own respective name.
7. If a person buys a house and sells it within the same year/after 3 years, and if
any profit is made, then a capital gains tax liability arises on the same for
which the individual is liable to pay short-term capital gains tax since the sale
took place in the same year. But, if the sale had taken place after 3 years, then
a long-term capital gains tax liability would have arisen.
8. If it is proved that the home loan is simply an arrangement between the loanseeker and the builder or with a third party for the purpose of claiming tax
benefits, then tax benefits will not be allowed and benefits, previously
claimed, will be clubbed to the income and taxed accordingly.
9. Tax benefits on interest on housing loans are allowable only for the original
loan and for a second loan taken to repay the first loan and not for subsequent
loans. This means that if you have already availed of one loan to refinance the
original loan and want to no avail a third loan to refinance the second loan, tax
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21

rebate on interest payments will not be permissible. This is because the

Section 24 (1) only talks of the second loan and not of subsequent loans. Even
if you take the second loan at a rate of interest higher than the original loan,
you will be eligible for a tax rebate on the second loan.

HDFC BANK
HDFC Bank was incorporated in 1994 by Housing Development Finance Corporation
Limited (HDFC), India's largest housing finance company. It was among the first companies
to receive an 'in principle' approval from the Reserve Bank of India (RBI) to set up a bank in
the private sector. The Bank started operations as a scheduled commercial bank in January
1995 under the RBI's liberalization policies.
Times Bank Limited (owned by Bennett, Coleman & Co. / Times Group) was merged with
HDFC Bank Ltd., in 2000. This was the first merger of two private banks in India.
Shareholders of Times Bank received 1 share of HDFC Bank for every 5.75 shares of Times
Bank.
In 2008 HDFC Bank acquired Centurion Bank of Punjab taking its total branches to more
than 1,000. The amalgamated bank emerged with a base of about Rs. 1,22,000 crore and net
advances of about Rs.89,000 crore. The balance sheet size of the combined entity is more
than Rs. 1,63,000 crore.
HOME LOAN OF HDFC BANK
Features
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22

Maximum loan-80% of the cost of the property (including the cost of the
land) and based on the repayment capacity of the customer.
Applicant and Co- Applicant to the loan-Home Loans can be applied for
either individually or jointly. Proposed owners of the property, will have to be
co-applicants. However, the co-applicants need not be coowners.
Maximum Term-20 years subject to your retirement age.
Adjustable Rate Home Loan-Loan under Adjustable Rate is linked to
HDFC's Retail Prime Lending Rate (RPLR). The rate on your loan will be
revised every three months from the date of first disbursement, if there is a
change in RPLR, the interest rate on your loan may change. However, the EMI
on the home loan disbursed will not change*. If the interest rate increases, the
interest component in an EMI will increase and the principal component will
reduce resulting in an extension of term of the loan, and vice versa when the
interest
rate
decreases.
* Conditions Apply
Fixed Rate
Home Loan : Loan Purposes
One can apply for Power Home for the following purposes:

Purchase of
Flat, row house, bungalow from developers
Existing freehold properties
Properties in an existing or proposed co-operative housing society or
apartment owner's association
First Power of Attorney purchases in Delhi for DDA flats allotted before 1992.
Home Loan: Eligibility
Salaried

Self

Age

21-60 years

25-65 years

Income

Income
provided

criteria

not

Job
Job
experience
Experience provided

not Job
experience
provided

not

Residence
Proof

not Residence
provided

not

Residence
provided

criteria

proof

not Income
provided

Home Loan: Loan Amount

Limits on home loan
Minimum - Rs 1 lac

Maximum - Rs 50 lacs

proof

Margin

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20% in the case of home loans

25% in case of improvement or renovation loans

23

Home Loan: Documentation

You can download the Application Form and submit alongwith the following
documents for an approval of loan.

Salaried
Customers

Self
Professionals

Application form Application

with photograph photograph
Identity
and Identity
Residence Proof Proof
Latest
slip

Salary-

Employed Self
Businessman
form

and

with Application
photograph

Residence Identity
Proof

Employed
form

and

with

Residence

Education Qualifications Education Qualifications

Certificate and Proof of Certificate and Proof of
business existence
business existence
Last 3 years Income Tax
Business profile
returns (self and business)

Form 16

Last 3 years Income Tax

Last 6 months Last 3 years Profit /Loss returns (self and business)
bank statements and Balance Sheet
Last 3 years Profit /Loss
and Balance Sheet
Processing
cheque

Last 6 months
fee statements

bank

Processing fee cheque

Last 6 months
statements
(self
business)

bank
and

Processing fee cheque

Home Loan: Interest Rates & Charge

Applicable
Rates Fixed rates
Basis%
Variable rates%
(Monthly Rest Basis)
%
RPLR
Upto and including Rs 30
11.50
lacs

9.75

RPLR - 5.75

Rs.30.01 lacs to Rs.75

11.50
lacs

10.00

RPLR - 5.50

Over Rs.75 lacs

10.25

RPLR - 5.25

11.50

The above rates are subject to change without notice.

Home Loan: Terms and Conditions
Repayment

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Step Up Repayment Facility- Helps young executives take a much bigger

loan today based on an increase in their future income, this helps executives
buy a bigger home today!
Flexible Loan installments Plan- Often customers, parents and their children,
wish to purchase properties together. The parent is nearing retirement and their
24

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 of the earning parent.
Tranche Based EMI- Customers purchasing an under construction property
need to pay interest ( on the loan amount drawn based on level of
construction) till the property is ready. To help customer save this interest, we
have introduced a special facility of Tranche Based EMI. Customers can fix
the installments they wish to pay till the time the property is ready for
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 customer benefits by starting EMI and
hence repays the loan faster.

Security
Security for the loan is a first
mortgage of the property to be
financed, normally by way of
deposit of title deeds and/or such
other collateral security as may be
necessary. Interim security may be
required, if the property is under
construction.

Disbursement
The loan will be disbursed in full or in suitable installments, taking into account the
requirement of funds and progress of construction, as assessed by the Bank directly to seller
or builder or local development authority or supplier of materials etc.
Processing charges or admission fee
Processing fee equivalent to 0.5% of the loan amount (applied for) will be collected along
with the application form (taxes as applicable).
Penalty for early closure - Nil
Other Conditions
Bank reserves the right to reject any application without assigning reasons thereof
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25

 The applicant will undertake to inform the Bank as and when there is a change in address or
employment
The terms and conditions mentioned above and elsewhere under the scheme are subject to
modification from time to time solely at Bank's discretion.
Home Loan: Fair Practice Code For Lenders
As directed by the Reserve Bank of India, vide circular DBOD.No.Leg.No. BC.65/
09.07.005/2006-07 dated March 6, 2007; the Bank has adopted modified Fair Practice Code
for lenders as approved by the Board of Directors. The salient features of the same are:
i) Applications for Loan
In the loan application form, the Bank shall provide comprehensive information including
information about fees and charges if any payable for processing and amount of such fees
refundable in case of non acceptance of application, prepayment options and other matter
which affects the interest of the borrowers, of all categories of loans, irrespective of the
amount of loan sought by them.
ii) Processing
a. The Bank shall provide acknowledgement for receipt of all loan applications
indicating the time frame within which the application will be disposed of.
b. The Bank shall verify the loan application and if additional details / documents
are required, these will be sought from the applicant.
c. For all categories of loans and irrespective of any threshold limits, the Bank
will be expected to process the application without delay. In case the
application is turned down, the Bank will convey in writing to the applicant
the reasons for rejection within one month.
iii) Loan Appraisal and Terms and Conditions
a. The sanctioning authority will be expected to ensure proper assessment of the
credit application as per the extant instructions and credit policy of the bank.
The availability of adequate margin and security will not be a substitute for
due diligence on the creditworthiness of the customer.
b. All the terms and conditions and other caveats will be duly communicated by
an authorized official of the Bank to the customer in writing.
c. The acceptance of the customer will be obtained on the sanction letter with the
customer's signature under the caption A copy of the loan agreement along
with all the enclosures quoted in the loan agreement will be furnished to the
customer at the time of issue of the sanction letter.
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26

d. The sanction letter / loan agreement will clearly state that the credit facilities
will be extended solely at the discretion of the Bank and that drawings under
the following circumstances will be solely at the discretion of the Bank.
i.

Drawings beyond the drawing power / sanctioned limits.

ii.

Honoring of cheques issued for the purpose other than specifically stipulated
in the sanction.

iii.

Drawings in an account once it is classified as NPA.

iv.

No drawings will be allowed in case of non-compliance of the terms and

conditions by the borrower.

v.

Meeting further requirements of the borrower on account of growth in

business will be subject to proper review of the credit limits.
iv) Disbursement of loans including changes in terms & conditions

a. The disbursement will be done immediately on compliance of all the terms

and conditions of the sanction by the borrower and the branches need not refer
to the sanctioning authority for disbursement.
b. Any changes in the terms and conditions of the sanction such as interest and
charges will be notified to the borrower before effecting the changes.
c. Any changes in interest rate and charges will be effected only prospectively
after giving due notice to the borrower.
v) Post disbursement supervision
a. The post disbursement supervision, such as submission of periodical reports
and periodic inspection, will be stipulated at the time of issue of the sanction
letter. The sanction letter would also mention whether the Bank or the
borrower will bear the cost of inspection.
b. The Bank will issue notices to the borrowers in advance in case the Bank
decides to recall the advance / accelerate the payment / accelerate the
performance under the loan agreement. Or seek additional securities.
c. The Bank shall release all securities on receiving payment of loan. However,
the Bank may decide to exercise the right to set off any legitimate right or lien
for any other claim against borrower. In case the Bank decides to retain the
security, the borrower will be notified about the remaining claims and the

GIMS

27

documents under which the Bank is entitled to retain the security till the
relevant claim is paid / settled
v) Others
a. The Bank will not interference in the affairs of the borrowers except where
provided for in the terms and conditions of the loan sanction documents, such
as periodic inspection, scrutiny of books of accounts, verification of stocks
and book debts, and scrutiny of QIS statements.
b. In case any information not disclosed earlier by the borrower has come to the
notice of the Bank, the Bank will have the right to elicit the necessary
information from the borrower and initiate action to protect its interest.
c. While, the Bank may participate in credit-linked schemes framed for weaker
sections of the society, the Bank shall not discriminate on grounds of sex,
caste and religion in the matter of lending.
d. In the matter of recovery of loans, the Bank shall not resort to undue
harassment such as persistently bothering the borrowers at odd hours and use
of muscle power.
e. In the case of receipt of request for transfer of borrowal account, either from
the borrower or from other banks / FIs which propose to take over the loan, the
Banks' consent or objection, if any, shall be conveyed within 21 days from the
date of receipt of request.
vi) Grievance Redresser
Though the sanction of the loans will be at the sole discretion of the Bank,
borrowers will have an opportunity to appeal against the decision of the
Bank's functionaries. Any such grievance received from the borrower will be
heard and disposed of by the next higher authority. For this purpose the
following review structure is available to the borrower.
Services & Charges
ICICI Home Finance ensures that you get the best Home Loans in terms of interest rates and
other facilities. You can choose from Adjustable, Fixed or Floating Rate Home Loan.

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28

Charges
Loan Processing
Charges

Home Loans
Charges

Renewal

0.5% to 1%

2% on the principal
outstanding on full
prepayment
Charges for late payment
2% per month
1.75% on principal
Charges for changing from fixed to floating rates of interest
outstanding
1.75% on principal
Charges for changing from floating to fixed rates of interest
outstanding
Cheque Swap Charges
Rs. 500/Document Retrieval Charges
Rs. 500/Cheque bounce charges
Rs. 200/Prepayment Charges

Note : Service Tax and other taxes, levies, etc. applicable as per prevailing rate will be
charged over and above these charges.
Repayment Terms of your Home Loan
In our endeavor to make taking a home loan an easy process for you, we at ICICI Bank
Home Loans address all your queries about the repayment terms of Home Loans with
respect to tenure, home loan EMIs, methods of home loans EMI payments and pre-EMI
interest.
What is the repayment tenure?
How is the loan repaid?
What is an EMI?
When does the repayment start?
How is the EMI paid?
What if a PDC bounces?
What is pre-EMI interest?
When do I pay PEMIs?
COMPARE HOUSING LOAN OF DIFFERENT BANKS
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29

Loan Provider

Rates
Interest
9.5%

of Loan Amount

Loan Duration

100000
2000000

- 1 - 5 Yrs

100000
2000000

- 1 - 5 Yrs

10000
1500000

100000
2000000

- 1 - 5 Yrs

10.5%

100000
5000000

- 1 - 5 Yrs

10.5%

100000
20000000

- 1 - 5 Yrs

10.5%

100000
10000000

- 1 - 5 Yrs

10.5%

100000
10000000

- 1 - 5 Yrs

11.0%

100000
2000000

- 1 - 5 Yrs

11.0%

100000
10000000

- 1 - 5 Yrs

11.25%

200000
10000000

- 1 - 5 Yrs

9.5%

9.75%

1 - 5 Yrs

9.75%

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30

FINANCIAL POSITION

GIMS

31

GIMS

32

GIMS

33

GIMS

34

STRUCTURE OF HOUSING FINANCE INDUSTRY

Housing Finance

Informal Sector

Formal Sector

Household
savings

Government
Central
Govt.

Disposal of
Existing
properties

Borrowings from
friends, relatives and
money lenders etc.

Banking

State
Govt.

Public
Authorities

Commercial
Banks

Cooperative
Banks

Non-Banking

Other Banks

HUDCO

Non-Banking
Finance Companies
(NBFCs)

House Finance
Companies (HFCs)

Non-Banking
Housing Finance
Companies
(NBHFCs)

Insurance
LIC/GIC

GIMS

Specialized
Institution
HDFC

35

DATA ANALYSIS AND INTERPRITATION

If you are make or purchase your own home than are you like to take
facility of Housing Finance?
NO. OF RESPONDENT

PERCENTAGE

30
YES

74%
15

NO

26%
45

TOTAL

100%

Interpretation
The above column chart depicts that 74% person are
GIMS

36

taking home loan and only 26% are not taking home
loan.
%
ICICI

24%

HDFC

38%

PNB

16%

SBI

19%

OTHE
R

3%

TOTAL

100%

1) If yes, Which Housing Finance Bank you chose?

GIMS

37

Interpretation
Total number of respondent was 37
24% person is chose ICICI bank
38% people are chose HDFC bank
16% person is chose PNB bank
And, 19% people are chose SBI bank

GIMS

38

2) Are you aware all terms and conditions of home loans?

YES
NO
TOTAL

GIMS

%
65%
35%
100%

39

Interpretation
Total Number of Respondents was 37.
Many of persons know all terms and conditions of home loan i.e. 65%.
35% persons had not know properly about all terms and conditions

4) How do you come to know about the home loan

schemes of that bank?
%
NEWSPAPER

22%

TELEVISION

16%

INTERNET

30%

OTER RESOURCES

32%
100 %

GIMS

40

Interpretation
Total Number of Respondents was 37
22% persons came to know from newspaper
16% persons came to know from television
30% persons came to know from internet
32% persons came to know from other resource

GIMS

41

5) Your bank offer which type of services?

%

GIMS

MOBILE
BANKIN
G

38%

NET
BANKIN
G

32%

FOREX
BANKIN
G

0%

OTHER

30%

TOTAL

100%

42

Interpretation
38 persons said that bank offer mobile banking services.
32 said that bank offer net banking services.
30% said that bank offer other services.
And no one said that bank offer forex banking services.

6) According to you which of the following banks

provides optimal or economical interest rate?
GIMS

43

%
22%
22%
43%
14%
100%

ICICI
PNB
HDFC
SBI
TOTAL

INTERPRETATION
The above graph shows that according to the 43% of
total

sample

size,

HDFC

provides

the

optimal/economical interest rate. The next preference is

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44

given to ICICI and PNB was providing the optimal

interest rate. i.e. 22% And only 14% of the respondent
preferred SBI.

7) Which feature of your scheme satisfied you to take

it?

LOW
INSTALLMENT
MAXIMUM
TIME PERIOD
HIGH
INSTALLMENT
NOTHING
TOTAL

GIMS

%
46%
35%
11%
8%
100
%

45

INTERPRETATION
The above graph shows that according to the 46%
respondent satisfy, lower installment. 35% was satisfy
maximum time period, 11% was satisfy high installment
And only 8% of the respondent not satisfy any feature
of loan schemes.

8) How would you rate the overall quality of your

relationship with banks of housing finance considering
all of your experiences with them? Would you say it
is.

GIMS

NO.

VERY GOOD

19%

GOOD

20

49%

FATR

14

32%

POOR

0%

TOTAL

37

100%

46

INTERPRETATION
According this chart, mostly 49% respondent rate the
overall quality of your relationship with banks of
housing finance good 32% are fair, 19% very
good and no one rate in poor.

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47

9) On a scale of 1 to 5 where 1 represents extremely

dissatisfied and 5 represents extremely satisfied
How would you rate your level of satisfaction with
banks of housing finance in regards to price?

EXCELLEN
T
VERY
GOOD
FAIR
POOR
TOTAL

GIMS

NO.
5

%
14%

10

24%

20
10
45

59%
3%
100%

48

INTERPRETATION
Mostly 59% respondent level of satisfaction is fair
regarding to price, 24% rated in very good, 14% rated in
excellent, and only 3% rated in poor .

10) In the case of suitability of EMI, which bank would you prefer?

ICICI

N
O.
10

SBI

HDFC

15

PNB

12

TOTA
L

45

GIMS

%
22
%
16
%
40
%
22
%
100
%

49

INTERPRETATION
The above graph shows that according to the 40
percentage of total sample size, HDFC provides suitable
EMI. The next preference is given to ICICI and PNB
has received the third preference for providing suitable
EMI. And only 16 percent of the sample preferred SBI.

SWOT ANALYSIS

GIMS

50

STRWNGTHS
1)An
active
mainstream sector .

2)Effective
regulatory
framework.
3)Extensive network
of regional bank
microfinance
institution,
cooperatives credit
unions and rural
bank.

WEAKNESSES

Interest rate war persistent

Dilution in due diligence on part of

leaders is a often seen.

Lack of uniformity of norms.

Increase in default rates.

OPPORTUNITIES
Increasing
urbanization.

THREATS

High switching costs of customers.

Housing
microfinance
potential.

Lower transaction levels in realty sector.

has

Tax rebates on house

loan.

Falling interest rates.

Higher cost of home ownership is mainly

depending the demand at other end.

LIMITATION
1. Some of the respondents did not aware the terms and condition of home loan
schemes.
2. Some of the respondents did not answer all the questions. This could hamper
the final results to a certain extent.
3. We had limited time for conducting this survey report.
4. The study confines itself to the respondents of BILASPUR only. Hence
findings would not be relevant to other cities.

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51

5. People mind set about the survey was an obstacle in acquiring complete
information & positive interaction.
6. Respondents were very busy in their schedule. So it was very time consuming
for them to answer all the questions properly.

FINDING
1) According to this project report 74% interested in housing finance.
2) 38% people like to take HDFC bank home loan. Because this bank give well
services.
3) I am finding in this project serve more bank use new technology like: internet
banking, mobile banking, and forex banking.
4) According to this serve customer satisfied low installment schemes of bank.
5) 72% people did not face any difficulty during takingthe loan
6) Mostly people recommended HDFC bank of hosing finance.

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52

SUGGESTION AND CONCLUSION

SUGGESTION
1. There is more time period for repayment of home loan.
2. Housing finance institution take steps to solve customer problems
immediately.
3. Loan sanction date should be according to customer convenient.
4. A customer awareness program should be taking place in rural area.
5. Housing finance bank take feedbacks of customers regarding features &
services
6. For the better service new offers would be require.
7. Bank should give all information related to terms and condition.
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53

8. To make people aware about the benefit of becoming Housing finance Banks
Sales
Executive, following activities of advertisement should be done
through
9. Print Media.
10. Hoarding & Banners.
11. Distribution of leaflets containing details information
12. Make people understand about the various benefits of its products..

CONCLUSION
Housing is a growing industry. Various public and private institutions have
entered in this field. These institutions have initiated various house financing
schemes to cater the diversified needs of this sector.
Besides the emerging and expanding institutional set up, the system of credit
delivery of housing is still inadequate. The responsibility to provide house
finance largely was rested with the Central Government till the early eighties.
The setting up of the NHB in 1988, as the apex housing finance institution,
GIMS

54

was the beginning of the emergence of housing finance as a fund based

financial service in the country.
Its role fall into three categories promotional, financial and regulatory.
Housing finance institutions must become self sustaining units which work
on full cost recovery basis and device innovative financial instruments to
mobilize their resources from household sector.

BIBLIOGRAPHY

GIMS

Internet

Catalogs

Research Methodology -C.R.Kothari.

55

QUESTIONNAIRE
1) If you are make or purchase your own home than are you like to take
facility of Housing Finance?
A. Yes

B. No

2) If yes Which Housing Finance Bank you chose ?

A ICICI Bank
C Punjab national bank

B
D

HDFC Bank
SBI bank

3) Are you aware all terms and conditions of home loans?

Yes

B No

4) How do you come to know about the home loan schemes of that bank?
A News paper
B Television
C Internet
D Other resources
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56

5) Your bank offer which type of services?

A Mobile banking
B Net banking
C Forex banking
D Other
6) According to you which of the following banks provides optimal or
economical interest rate?
A ICICI
B PNB
C HDFC

D SBI

7) Which feature of your scheme satisfied you to take it ?

A Low installment

B Maximum time period

C High installment amount

Nothing

8) In the case of suitability of EMI, which bank would you prefer?

A ICICI
B SBI
C HDFC

D PNB

9) Are you satisfy by the time taken in sanctioning the loan?

A Yes
B No
10) And, IN case of long term which bank would you choose?
A ICICI
B SBI
C PNB
D HDFC

Signature

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57