Summer internship project on home loans


Published on

Published in: Business, Education, Technology

Summer internship project on home loans

  1. 1. CONTENT Page no. Acknowledgement………………………………………………………………... Executive Summary…………………….......................................................... Chapter 1………………………………………………………………………….. Profile o Student’s profile  Overview…………………………………………………………………...  History……………………………………………………………………...  Competitors…………………………………...…………………………....  Strength/Opportunity & weakness/Threats………………………………...  Different Products……………………...………….……………………….  Awards & Recognitions by SBI……….………………………………....... Chapter 2…………………………………………………………………………..  Introduction to Home loan Product...…………………………….……………  SBI Advance Product.……………………………………………………....  Statement the Problem……………………………………………………...  Research objectives…………………………………………...…………….  Significance and scope……………………………………………………... Chapter 3…………………………………………………………………………. Research methodology Chapter 4 ………………………………………………………………………... Analysis of data Chapter 5………………………………………………………………………....  Findings……………………………………………………………………  Suggestion & Recommendation……………………………………...…..  Conclusion………………………………………………………………… Annexure (Questionnaire)………….…………………………………………… Reference………………………………………………………………….…... 1
  2. 2. Acknowledgement If words are considered to be signs of gratitude then let these words convey the very same. My sincere gratitude to State Bank of India for providing me with an opportunity to work with State Bank of India and giving necessary directions on doing this project to the best of my abilities. I am highly indebted to Shri Hector Charles, Chief Manager (RACPC) and company project guide, who has provided me with the necessary information and also for the support extended out to me in the completion of this report and his valuable suggestion and comments on bringing out this report in the best way possible. I am grateful to all faculty members of Department of Business Administration, University of Lucknow, Lucknow and my friends who have helped me in the successful completion of this project. I extend my heartfelt thanks to Mr. Manoj Srivastav, Human Resource Manager Lucknow Head Office SBI. And also thankful to my friends for giving their valuable support. Thanking You 2
  3. 3. Executive Summary In the growing global competition, the productivity of any business concern depends upon the behavioral aspect of consumers. This topic deals with the customer’s perception towards other Advance Product from SBI credit cards at Lucknow. This project report contains 5 different chapters. The report begins with the introduction to company, its area of operation, its organization structure, its achievements, etc. The second chapter is the introduction to the Advance Product which gives a brief idea regarding ADVANCE PRODUCT of SBI MAIN BRANCH, Lucknow where the project is undertaken. It also contains the objectives and limitations of the project. The third chapter, methodology adopted in preparing this report is mentioned. It covers the sample procedure, types of data used and the data collection method. The fourth chapter comprehensive coverage of forecasting concepts and techniques which shows the analysis of data through tabulation, computation and graphical representation of data collected from survey. The fifth chapter deals with the findings, suggestion & conclusion part which is very much important after analysis is made. As we know that only analysis and conclusion is not the end of a research, so in the sixth chapter the recommendation part is covered which are made after a depth study of the analysis part of thesis. In each of the five chapters as described above, every chapter has been scheduled in a manner so as to enable the reader to appreciate the contents easily. The report is supported by figures and data wherever necessary with a view to assist the reader in developing a clear cut understanding of the topic. I hope this report will be extremely useful for those it is meant. Constructive and healthy suggestions for improvements of the report will be great fully appreciated. Somendra Singh 3
  4. 4.  Personal Detail  Company Profile  Overview  History  Competitors  SWOT Analysis  Different Products  Awards & Recognitions by SBI 4
  5. 5. Personal Details Name Gender Date of Birth Language Proficiency Parents’ Name : Somendra Singh : Male : Aug 12, 1991 : English & Hindi : Mr. Sunil Singh : Mrs. Geeta Devi Contact Address : Balrampur Management Hostel In front Baradari, kaiserbagh Lucknow -226001 (UP) Phone Email ID : 9807705662 : Educational Qualification Course Institution Department Of MBA(pursuing) Business Administration BNV Degree B.B.A College HSC Saraswati Bal Mandir Inter college SSC Saraswati Bal Mandir Inter college Year of passing Board/University Marks % University Of Lucknow 2011 University Of Lucknow 71.33 2008 UP Board 66.20 2006 UP Board 62.80 5
  6. 6. Personal Objective To work in highly challenging environment which best utilizes my capabilities and ascend the ladder of success through diligence. Extra Co-Curricular Activities and Achievements A member and actively participation in ingenuous youth association Participated in game and cultural activities Taken part in debates, skits and quizzes Won First Prize in Presentation in LUMBA Participated in “THIS IS PHYSICS” in IIT Kanpur SOFT SKILLS  Enjoy working in teams  Flexible to travel  Quick learner  Good presentation skills  Knowledge of MS Office  Listening skills 6
  7. 7. OVERVIEW  The deposits of Bank have risen to `12, 02,740 crores with the annual growth at 15.24% over that of last year’s level of `10, 43,647 crores.  On the advances front Bank has crossed the `10, 00,000 crores level and now the advances stand `10, 78,557 crores. Like the deposits, the growth of 20.70% over last year is better than the growth recorded by All Scheduled Commercial Banks. The growth has come mainly from a surge in advances to large corporates at `50,549 crores, which represents an unprecedented growth of 40.28% during this FY compared to 15.23% (`16,298 crores) achieved last FY. Mid corporate segment too has made a significant contribution of 31,472 crores giving an 18.15% growth, as against `12,173 crores (8.78% growth) last year.  The retail segment growth has been to the tune of `27,267 crores giving a growth of 14.95% against last year’s 10.85%. Major drivers in this segment have been our Home Loans and Auto loans which have registered a 16.28% (` 16,728 crores) and 35.47% growth (`6,494 crores) respectively.  Under flow of credit to the farming community, your Bank has disbursed direct Agriculture loans of `22,303 crores during the year, representing a growth of 25.85% covering 11.89 lac new farmers. Out of the total direct agriculture advance of 1,08,584 crores standing in the books as at 31.03.2013, 30.77% i.e. `33,409 crores is collateralized by gold.  During the year, the Bank expanded its reach by adding 719 branches to its network comprising 123 in Metros, 122 in Urban, 170 in Semi-Urban and 304 in rural areas. As at 31.03.13, out of total 14,816 branches, 66% (9851 branches) are in rural and Semi-urban areas.  State Bank group has one of the largest ATM networks in the world with 32,752 ATMs as on 31.03.13. Bank has introduced Cash Deposit Machines to facilitate customers to deposit cash in their accounts by swiping their SBI ATM cum Debit card. As on 31.03.13, the number of CDMs installed was 665. 7
  8. 8. Management The bank has 14 directors on the Board and is responsible for the management of the Bank’s business. The board in addition to monitoring corporate performance also carries out functions such as approving the business plan, reviewing and approving the annual budgets and borrowing limits and fixing exposure limits. Mr. Pratip Chaudhari is the Chairman of the bank.             Hemant G. Contractor (Managing Director) Arundhati Bhattacharya (Managing Director & Chief Financial Officer) Krishna Kumar (Managing Director) S. Visvanathan (Managing Director) S. Venkatachalam (Director) D. Sundaram (Director) Thomas Mathew (Director) S.K. Mukherjee (Officer Employee Director) Rajiv Kumar (Director) Jyoti Bhushan Mohapatra (Workmen Employee Director) Deepak Amin (Director) Harichandra Bahadur Singh (Director) Shareholding & Liquidity Sales State Govt.+ Central Govt. 2.71 GDR issue & Others Institutions(Mutual Fund, UTI, Insurance,Foreign institution and banks) 8.41 Oversease investors Non Institutions(Corporate bodies) 2.4 Institutions(Mutual Fund, UTI, Insurance,Foreign institution… Non Institutions(Corporate bodies) 26.49 Oversease investors State Govt.+ Central Govt. 62.31 GDR issue & Others 0 20 40 60 80 8
  9. 9. Key Areas of Operations The business operations of SBI can be broadly classified into the key income generating areas such as National Banking, International Banking, Corporate Banking, & Treasury operations. HISTORY The origin of the State Bank of India goes back to the first decade of the nineteenth century with the establishment of the Bank of Calcutta in Calcutta on 2 June 1806. Three years later the bank received its charter and was re-designed as the Bank of Bengal (2 January 1809). A unique institution, it was the first joint-stock bank of British India sponsored by the Government of Bengal. The Bank of Bombay (15 April 1840) and the Bank of Madras (1 July 1843) followed the Bank of Bengal. These three banks remained at the apex of modern banking in India till their amalgamation as the Imperial Bank of India on 27 January 1921. Primarily Anglo-Indian creations, the three presidency banks came into existence either as a result of the compulsions of imperial finance or by the felt needs of local European commerce and were not imposed from outside in an arbitrary manner to modernize India's economy. Their evolution was, however, shaped by ideas culled from similar developments in Europe and England, and was influenced by changes occurring in the structure of both the local trading environment and those in the relations of the Indian economy to the economy of Europe and the global economic framework. 9
  10. 10. The three banks were governed by royal charters, which were revised from time to time. Each charter provided for a share capital, four-fifth of which were privately subscribed and the rest owned by the provincial government. The members of the board of directors, which managed the affairs of each bank, were mostly proprietary directors representing the large European managing agency houses in India. The rest were government nominees, invariably civil servants, one of whom was elected as the president of the board. Group Photograph of Central Board (1921) Business The business of the banks was initially confined to discounting of bills of exchange or other negotiable private securities, keeping cash accounts and receiving deposits and issuing and circulating cash notes. Loans were restricted to Lakh and the period of accommodation confined to three months only. The security for such loans was public securities, commonly called Company's Paper, bullion, treasure, plate, jewels, or goods 'not of a perishable nature' and no interest could be charged beyond a rate of twelve per cent. Loans against goods like opium, indigo, salt woolens, cotton, cotton piece goods, mule twist and silk goods were also granted but such finance by way of cash credits gained momentum only from the third decade of the nineteenth century. All commodities, including tea, sugar and jute, which began to be financed later, were either pledged or hypothecated to the bank. Demand promissory notes were signed by the borrower in favor of the guarantor, which was in turn endorsed to the bank. Lending against shares of the banks or on the mortgage of houses, land or other real property was, however, forbidden. Indians were the principal borrowers against deposit of Company's paper, while the business of discounts on private as well as salary bills was almost the exclusive monopoly of individuals Europeans and their partnership firms. But the main function of the three banks, as far as the government was concerned, was to help the latter raise loans from time to time and also provide a degree of stability to the prices of government securities. 10
  11. 11. First Five Year Plan In 1951, when the First Five Year Plan was launched, the development of rural India was given the highest priority. The commercial banks of the country including the Imperial Bank of India had till then confined their operations to the urban sector and were not equipped to respond to the emergent needs of economic regeneration of the rural areas. In order, therefore, to serve the economy in general and the rural sector in particular, the All India Rural Credit Survey Committee recommended the creation of a state-partnered and state-sponsored bank by taking over the Imperial Bank of India, and integrating with it, the former state-owned or state-associate banks. An act was accordingly passed in Parliament in May 1955 and the State Bank of India was constituted on 1 July 1955. More than a quarter of the resources of the Indian banking system thus passed under the direct control of the State. Later, the State Bank of India (Subsidiary Banks) Act was passed in 1959, enabling the State Bank of India to take over eight former State-associated banks as its subsidiaries (later named Associates). The State Bank of India was thus born with a new sense of social purpose aided by the 480 offices comprising branches, sub offices and three Local Head Offices inherited from the Imperial Bank. The concept of banking as mere repositories of the community's savings and lenders to creditworthy parties was soon to give way to the concept of purposeful banking sub serving the growing and diversified financial needs of planned economic development. The State Bank of India was destined to act as the pacesetter in this respect and lead the Indian banking system into the exciting field of national development. International presence  As of 28 June 2013, the bank had 180 overseas offices spread over 34 countries. It has branches of the parent in Moscow, Colombo, Dhaka, Frankfurt, Hong Kong, Tehran, Johannesburg, London, Los Angeles, Male in the Maldives, Muscat, Dubai, New York, Osaka, Sydney, and Tokyo. It has offshore banking units in the Bahamas, Bahrain, and Singapore, and representative offices in Bhutan and Cape Town. It also has an ADB in Boston, USA.  The Canadian subsidiary, State Bank of India (Canada) also dates to 1982. It has seven branches, four in the Toronto area and three in the Vancouverarea.  SBI operates several foreign subsidiaries or affiliates. In 1990, it established an offshore bank: State Bank of India (Mauritius). 11
  12. 12.  In 1982, the bank established a subsidiary, State Bank of India (California), which now has ten branches – nine branches in the state of California and one in Washington, D.C. The 10th branch was opened in Fremont, California on 28 March 2011. The other eight branches in California are located in Los Angeles, Artesia, San Jose, Canoga Park, Fresno, San Diego, Tustin and Bakersfield.  In Nigeria, SBI operates as INMB Bank. This bank began in 1981 as the Indo-Nigerian Merchant Bank and received permission in 2002 to commence retail banking. It now has five branches in Nigeria.  In Nepal, SBI owns 55% of Nepal SBI Bank, which has branches throughout the country. In Moscow, SBI owns 60% of Commercial Bank of India, with Canara Bank owning the rest. In Indonesia, it owns 76% of PT Bank Indo Monex.  The State Bank of India already has a branch in Shanghai and plans to open one in Tianjin.  In Kenya, State Bank of India owns 76% of Giro Commercial Bank, which it acquired for US$8 million in October 2005. COMPETITORS Competitors and other players in the field:Top Performing Public Sector Banks Andhra Bank Allahabad Bank Punjab National Bank Dena Bank Vijaya Bank Top Performing Private Sector Banks HDFC Bank ICICI Bank 12
  13. 13. AXIS Bank Kotak Mahindra Bank Centurion Bank of Punjab Top Performing Foreign Banks Citibank Standard Chartered HSBC Bank ABN AMRO Bank American Express SWOT Analysis Strength 1. The biggest bank in the country 2. Has a separate act for itself. Thus, a special privilege. 3. Biggest branch network in the country 4. First public sector to move to CBS Weakness The risks that could ensue to SBI in time to come are as under: • SBI is currently operating at a lowest CAR. Insufficient capital may restrict the growth prospects of the bank going forward. 13
  14. 14. • Stiff competition, especially in the retail segment, could impact retail growth of SBI and hence slowdown in earnings growth. • Contribution of retail credit to total bank credit stood at 26%. Significant thrust on growing retail book poses higher credit risk to the bank. • Delay in technology up gradation could result in loss of market shares. • Management indicated a likely pension shortfall on account of AS-15 to be close to Rs50bn. • Slowdown in domestic economy would pose a concern over credit off-take thereby impacting earnings growth. Opportunity 1. Pool in talent to replace the going top management to serve the next generation 2. Make better use of its CRM 3. Expansion into rural areas Threats 1. Consolidation among private banks 2. New bank licenses by RBI so there is increased competition in industry 3. Foreign banks that have sophisticated products 4. Lackluster performance of Indian Economy and Indian Rupee against foreign currency. 14
  15. 15. DIFFERENT PRODUCTS OF SBI DEPOSIT LOANS CARDS DIFFERENT CREDIT CARDS   S  H  C avings ome Loans onsumer BI International cards Account Cards S   L  L  C ife Plus Senior oan Against redit Card BI Gold cards Citizens Property Savings Account S    P  Fixed ersonal Travel BI Gold Master cards Deposits Loans Card S  C  D  S  ar Loan ebit Cards our City Your Cards ecurity Y Deposits   R  L ecurring oans ommercia Deposits against l Cards Securities C   T  T  C ax-Saver wo Wheeler orporate artnership Cards Fixed Deposit Cards   S  P alary Account re-approved repaid Loans Card P   A  R  P dvantage etail Asset urchase BI Employee Cards Woman Card Savings Account   R  ural Savings Farmer istribution Account Finance Cards P D 15 S
  16. 16.   P  B  B eople's usiness usiness BI Advantage Cards Savings Installment Card Account Loans    F Freedom lexi Cash erchant Savings Services Account M Honors and Awards Bank’s achievements in various fields have received national and international recognition as enumerated below: FE Best Banks Award-Award for Initiatives National Award- 2011-12 Best Bank for Excellence in the field of Khadi & Village Industries (PMEGP) “Agriculture Leadership Award 2012” from Agriculture Today under Development Leadership category. “Best IT driven Innovation Award in Banking” in the Country from NASSCOM was awarded to APGVB, RRB sponsored by SBI. Ministry of Rural Development, GOI, awarded “Certificate of Excellence” for Bank’s proactive role in establishing Rural Self Employment Training Institutes across the country during the year 2011-12. Asia’s Best CSR Practice Award instituted by CMO Asia has been awarded to the Bank in Singapore. ‘Asian CSR Leadership Award 2012’ has been conferred to the Bank in Dubai. IPE Best CSR Award – 2012. Most Caring Companies of India Award – 2012. Star of the Industry Award for excellence in Banking (PSU) – 2012. 16 S
  17. 17. Golden Peacock Award 2012’ in Corporate Governance by the Institute of Directors on 11th October 2012. Golden Peacock Award 2012 in National Training Award-2012  Introduction to Advance Product  SBI Advance Product  Statement the Problem  Research objectives  Significance and scope 17
  18. 18. Introduction to Advance Product Now a day not all the people have the capacity to fulfill their requirement by their own earning, that’s why they need help from others. For this so many government & private sector bank provide them money to fulfill their requirement, that’s call the Advance Product (loan product) of the bank. All the banks have so many different types of advance product as per the requirement of the people or customers. In Lucknow also there are so many banks those provide loan to the people for different causes. Types of Advance Product  Home Loan  Educational Loan  Car Loan  Personal Loan  Property Loan  Loan Against SharesDebentures  Etc. Now a day a large no. of people are taking loan form different banks. It helps people to fulfill their need and it really easy to repayment the loan amount with a longer repayment period. Home Loans Home loans, also known as mortgages, use the borrower's home for collateral. This home can be a single-family house up to a four-unit property, as well as a condominium or cooperative 18
  19. 19. unit. Lenders fund home loans, but both the lenders themselves and brokers who act on behalf of the lenders originate, History Home loans came into widespread use in the United States in the boom years of the late 1800s. Since the average person usually cannot afford to pay cash for something as expensive as a home, lenders began offering loans for the difference between the purchase price of a home and the cash down payment supplied by the buyer. These loans were interestonly loans of between five and 10 years that were due in full at the end of the loan term. Homeowners would refinance the loan at the end of each term or save up enough cash to pay off the loan in the meantime. The Great Depression and its resulting foreclosures demanded a move to the modern amortized mortgage, which configures payments into both principal and interest portions. These 15- to 30-year loans pay off the home by the end of the loan term Significance Without home loans, most Americans could not afford to buy a home. The housing sector and related industries are a large share of the U.S. gross domestic product (GDP). According to the National Association of Home Builders, the housing industry as a whole contributes about 17 percent to 18 percent of the nation’s GDP. In fact, housing was largely responsible for the strong economic state of the U.S. throughout the early to mid-2000s and disguised an essentially weak economy, according to an article by MSN Money’s Bill Fleckenstein. Function The most common purpose of a home loan is to provide the funds a buyer needs to purchase a home. Home equity loans allow a homeowner to borrow against the difference between the home’s value and the current loan balance, or equity. Investor loans permit buyers to purchase homes as rental properties or to fix up and sell at a profit. 19
  20. 20. Types The two most widely used types of home loans are fixed-rate and adjustable-rate loans. A fixed-rate loan keeps the same interest rate for the life of the loan, which means that the principal and interest portions of the monthly payment stay the same. Adjustable-rate mortgages begin with a lower interest rate for the first few years and then adjust to market rates after the initial period is over. Caps are placed on how much the rate can adjust at any one time, as well as on how much the rate can increase over the life of the loan. This means the principal and interest portions of the monthly payment change repeatedly through the life of the loan. Effects Because home loans are a large share of the financial situation of the majority of Americans, taking the time to determine the right type of loan and to investigate terms is essential for any home buyer or owner. Federal law promotes the consumer’s ability to shop for the best loan by requiring lenders to give prospective borrowers Good Faith Estimates and Truth In Lending (TIL) statements that disclose and itemize the terms and costs associated with a loan. SBI HOME LOAN Most Preferred Home Loan provider SBI Bank offers a Home Loan with Attractive Interest Rates with Latest Schemes and Benefits. SBI also provides a Housing loan with different schemes SBI Easy Home Loan | SBI Advantage Home Loan | SBI Home Plus | SBI MY HOME CAMPAIGN | SBI Housing Finance Scheme Purpose 20
  21. 21. Purchase/ Construction of House/ Flat Purchase of a plot of land for construction of House Extension/ repair/ renovation/ alteration of an existing House/ Flat Purchase of Furnishings and Consumer Durables as a part of the project cost. Takeover of an existing loan from other Banks/ Housing Finance Companies. Eligibility Minimum age 18 years as on the date of sanction Maximum age limit for a Home Loan borrower is fixed at 70 years, i.e. the age by which the loan should be fully repaid. Availability of sufficient, regular and continuous source of income for servicing the loan repayment. Loan Amount 40 to 60 times of NMI, depending on repayment capacity as % of NMI as under – Net Annual Income Upto Rs.2 lacs EMI/NMI Ratio 40% Above Rs.2 lac to Rs. 5 lacs 50% Above Rs. 5 lacs 55% To enhance loan eligibility you have option to add: 1. Income of your spouse/ your son/ daughter living with you, provided they have a steady income and his/ her salary account is maintained with SBI. 2. Expected rent accruals (less taxes, cess, etc.) if the house/ flat being purchased is proposed to be rented out. 3. Depreciation, subject to some conditions. 4. Regular income from all sources Margin (Special Festival Season Offer) 21
  22. 22.  Purchase/ Construction of a new House/ Flat/ Plot of land: 15% for loans up to Rs. 1 cr., 20% for loans above Rs. 1 cr.  Repairs/ Renovation of an existing House/ Flat: 15% Interest Rates w.e.f 27.2.2008 Floating interest rates (linked to State Bank Advance Rate - SBAR) (SBAR: 12.25% p.a.) Loan Tenor Upto 5 years -> Above 5 years and upto 15 years Above 15 years and upto 25 years Upto Rs.30 Lacs Above Rs.30 Lacs 2.00% below SBAR, 10.25% p.a. 1.75% below SBAR, 10.50% p.a. 1.75% below SBAR, 10.50% p.a. 1.50% below SBAR, 10.75% p.a. 2.25% below SBAR, 10.00% p.a. 2.00% below SBAR, 10.25% p.a. Fixed interest rates Tenure (p.a.)*Upto 10 years Rate of Interest 12.75% * Fixed rate loans will be subject to: 'force maejure' clause and interest reset at the end of every two years on the basis of fixed interest rates prevailing then. Home Loan Process & various steps involved There are various steps involved in getting a Home Loan from selecting your property to filling up the loan application. Following are the various stages in Home Loan: The first step involved in the process is to find your property which is followed by the verification of property documents, post that the documents are examined & simultaneously you can start searching for the lender who can offer the BEST Home Loan Deal after checking your eligibility criteria. 22
  23. 23. Know the Home Loan Eligibility: Banks offer the loan amount only after checking your profile & based on various eligibility criteria’s like age, income & salary banks lend you the money. Select the Best Home Loan after evaluation: Comparing home loan interest rates is the primary feature in the home loan selection, however other fees & charges like Application fees, processing fees, legal charges should not be neglected when comparing various loan offers. To check the interest rates & other charges incurred by various banks, Deal4Loans has brought in a Home Loan Comparison Chart across various Banks. for the Loan: After you have selected your lender, you have to fill in the application form wherein the lender requires complete information about your financial assets & liabilities; other personal & professional details together with the property details & its costs. & Verification Process: You are required to submit the necessary documents to the bank which will be verified together with the details in the application. & default check: Bank checks out the borrower’s loan eligibility (through repayment capacity) & the amount of loan is confirmed. The borrower’s repayment capacity is reached which is based on the income, salary, age, experience & nature of business etc. Bank also checks credit history through the Cibil Score which plays a critical role in deciding & approving your loan application. Low Credit Score implies that the bank upfront rejects your application on the basis of earlier credit defaults; on the other hand high credit score gives a green signal to your application. sanctions Loan & Offer letter to the borrower: After the credit appraisal of the borrower bank decides the final amount & sanctions the loan, the bank further sends an offer letter to the borrower which constitutes the details like rate of interest, loan tenure & repayment options etc. Copy to the Bank: The borrower needs to send an acceptance copy to the bank after the borrower agrees with the terms & conditions in the offer letter. checks the legal documents: The bank further asks the legal documents of property from the borrower to check its authenticity so as to keep them as a security for the loan amount given. The next step involved is the valuation of the property by the bank which determines the loan amount sanctioned by the bank. of agreement & the loan disbursal: The borrower signs the loan agreement & the bank disburses the loan amount. 23
  24. 24. Comparative study of Home Loans in India Bank Name State Bank Of India ICICI Bank HDFC Ltd Floating Per lac EMI Interest rate 9.95% Rs.962 Scheme I Scheme I :10.15% :Rs.975 (Fixed 1 yr) (Fixed 1 yr) Scheme II : Scheme II : 10.15% Rs.975 (Fixed (Fixed 2yrs) 2yrs) Scheme III : Scheme III : 10.50% Rs.998 (Fixed (Fixed 3yrs) 3yrs) then 10.15% then Rs.975 Processing Fee Prepayment Charges Up to 25 lacs : 0.125% of loan amount minimum Rs.1000/25-75 lacs : Rs.3,250/75 & above : 5,000/- Nil 0.50% of loan amount upto 1 crore N.A 10.15% Rs.975 0.5% or maximum 10,000+service tax (12.36%) No prepayment charges shall be payable for partial or full prepayments irrespective of the source 10.50% 10.75% Rs.998 Rs.1015 1% of the loan amount applied for, subject to a minimum of Rs 10000 plus service tax. This fee is payable on application and is not refundable Nil LIC Housing Scheme I : 10.25% (Fixed for 2 yrs) Scheme II : 10%(Fixed for 3 yrs) Scheme III : 10.75%(Fixed for 10 yrs) Scheme I : Rs.982 (Fixed for 2 yrs) Scheme II : Rs.965 (Fixed for 3 yrs) Scheme III : Rs.1015 (Fixed for 10 yrs) Up to 50 lacs : 10,000 +(Service tax) 50 lacs & above : 15,000 +(service tax) Nil AXIS Bank 10.25% (Upto Rs.982 (Upto 1% of the Loan Amount 25 Lacs), then 25 Lacs), then 10.50% Rs.998 HSBC Bank Nil 24
  25. 25. IDBI PNB Housing Finance ING Vysya 10.25% Rs.982 10.50% (For Rs.998 (For Salaried/SEP), Salaried/SEP), 11% (SENP) Rs.1032 (SENP) 10.75% Rs.1015 Up to .50%of loan If Balance amount Transfer then (Rs 2500 to be collected 2% Otherwise at login and balance at Nil the time of sanction ) 0.5% NIL 0.5% of the loan amount NIL Standard Chartered 9.99% (Upto Rs.964 (Upto Rs.7500/- + Service tax 25Lacs), then 25Lacs), then 10.15%Rs.975 10.25% Rs.982 NIL Citibank 9.75% Rs.948 10.25% (Upto Rs.982 (Upto 25Lacs), then 25Lacs), then 10% Rs.965 10.50% Rs.998 0.25% or 5,000 + 12.36%( service tax) NIL 12000 + Service Tax Nil Deutsche Bank India Bulls Federal Bank Allahabad Bank 10.50% Rs.998 10.15% (Upto Rs.975 (Upto Up to 30 lacs 25Lacs), then 25Lacs), then 5,000+12.36%(Service 10.75% Rs.1015 tax) 30 lacs & above : 15,000+12.36%(Service tax) 10.48% Rs.997 10,000 + Service Tax 10.20% (Upto Rs.978 (Upto 0.50% of loan amount, 25Lacs), then 25Lacs), then Maximum Rs. 10,000/10.45% Rs.995 Bank of 10.55% (Upto Rs.1002 Maharastra 25lacs), then (Upto 25lacs), 10.75% then Rs.1015 NIL N.A NIL 0.50% (Max. Rs. 50,000/-) Nil Central Bank of India 10.25% Rs.982 0.50% of the loan amount subject to maximum of Rs.20,000/- Nil Corporation Bank 10.25% Rs.982 0.50% of Loan amount (Max.Rs.50,000/-) NIL Bank of India 10.25% Rs.982 0.25% of loan amount. Min.Rs.1,000 and Max. Rs.20,000 Nil 25
  26. 26. Union Bank of India United Bank of India 10% Rs,965 10.75% (upto Rs.1015 (upto 25 lacs) then 25 lacs) then 10.55% Rs.1002 Processing charges are 0.50% of the loan amount subject to maximum of Rs. 15,000 NIL 0.50% of the loan amount N.A UCO Bank 10.20% Rs.978 0.5% of the loan amount, minimum Rs.1500/- & maximum Rs. 15000/- NIL Bank of Baroda 10.25% Rs.982 Loan upto Rs.30 Lacs 0.50% (Minimum Rs.5,000/-) Above 30 Lacs - 0.40% (Min. Rs.15,000/- & Max. Rs.50,000/-) N.A. Canara Bank 10.45% Rs.995 Oriental Bank of Commerce 10.25% Rs.982 0.50% of the loan amount, subject to maximum of Rs. 20000/- plus service tax NIL Punjab National Bank 10.25% Rs.982 Vijaya Bank 10.50% Rs.998 0.25% of loan amount. Maximum Rs.10000. Exclusive of Service Tax N.A Syndicate Bank 10.25% Rs.982 upto Rs.25 lacs 0.25% (Min Rs 1000 Max Rs 5000) 26 lacs to 75 lacs 0.55% (Max.Rs.500/-) above Rs.75 lacs 0.55% (Max Rs.10000/) N.A Indian Overseas Bank 10.25% Rs.982 A flat rate of 0.58% of the loan amountmaximum of Rs. 10,190/- There is no hidden charge. This is subject to change from time to time without prior intimation. N.A Data taken from following link: - 26
  27. 27. Point of Differentiation  Provision for on the spot "In principle" approval.  Loan sanctioned within 6 days of submission of required documents.  Option to avail Home Loan as a Term Loan or as an Overdraft facility to save on interest and maximize gains (see SBI MaxGain in the following sections)  Option to club income of your spouse and children to compute eligible loan amount  Provision to finance cost of furnishing and consumer durables as part of project cost  Repayment permitted up to 70 years of age  Free personal accident insurance cover up to Rs.40 Lac.  Optional Group Insurance from SBI Life at concessional premium (Upfront premium financed as part of project cost)  Interest calculated on daily reducing balance basis, and starts from the date of disbursement.  ‘Plus’ schemes which offer attractive packages with concessional interest rates to Govt. Employees, Teachers, Employees in Public Sector Oil Companies.  Special scheme to grant loans to finance Earnest Money Deposits to be paid to Urban Development Authority/ Housing Board, etc. in respect of allotment of sites/ house/ flat  Option to avail loan at the place of employment or at the place of construction  Complimentary international ATM-Debit card  Complimentary SBI Classic/ International Credit Card  Option for internet-banking  Concessional package under ‘Credit Khazana’ for prospective Auto Loan, Student Loan, Personal Loan borrowers whose accounts are conducted satisfactorily. 27
  28. 28. Statement of problem  SBI Main Branch, Lucknow allotted my internship is ”To explore the possibilities of takeover of Home Loans in Lucknow”  To find out what kind of service provide by the competitors in advance product.  To find out the need and want of the customer and hence formulate the strategy to level the economy in the society.  How the products are helping the customer.  To know the utility of the product.  To find out the need of the customer in Lucknow region and introduce new product or facilitate new service in existing product. Research objectives Summer Internship is mutually beneficial both for me and for the bank. It gave me practical exposure and helps me in developing my interpersonal skills and acquiring on road side skills- 28
  29. 29.  First and foremost objective is to explore the possibilities of Housing loans in Lucknow  Generating leads of home loans from my collected information through survey forms  To maintain good relationship with old customer and try to find out their satisfaction level  To know the competitor’s market share in Lucknow.  To know what kind of services competitor gives to their customers.  To place SBI Advance Product ahead of the competitors  Switch other bank’s Home Loan customer to the State  To make the customer aware of the benefits of the product and convince him to go for SBI Advance Product. Significance and scope The geographical scope of the study is restricted to Lucknow only with sample size of 200 people. All the analysis and suggestions are based on the analysis of the both primary and secondary data. Therefore the scope of the study revolves around the following aspects: Consumer perception towards SBI Home Loan and services.  Consumer awareness about Housing Finance Product scheme and its benefit.  Aware the Bank about the customer problems, especially in case of Home Loan Documentation. 29
  30. 30. Research methodology 30
  31. 31. Research methodology Research methodology is a methodology for collecting all sorts of information & data pertaining to the subject in question. The objective is to examine all the issues involved & conduct situational analysis. The methodology includes the overall research design, sampling procedure & fieldwork done & finally the analysis procedure. The methodology used in the study consistent of sample survey using both primary & secondary data. The primary data has been collected with the help of questionnaire as well as personal observation book, magazine; journals have been referred for secondary data. The questionnaire has been drafted & presented by the researcher himself.  Sample Size: Sample of 200 people was taken into study, and their data was collected  Sampling Technique: To study the Project, a Simple Random Sampling technique is used.  Data Collection: Data collection is mainly dealt with the way data is collected. We have Collected data mainly through two ways1. Primary data collection – we collected primary data by visiting individual Houses and meeting with individual persons. We also visited some apartments in Jopling road, Rajendra nagar and Indra nagar. Here we meet with societies Managers and try to convince them to arrange a meeting with society persons. 31
  32. 32. We gave information to them and filled survey sheet by them. 2. Secondary data collection – it is collected through secondary sources like data of sells of the flat from some of my friends and senior’s company, Data from LDA etc. After that we make call to them and make survey. And visited them if required.  Data Analysis: After data collection, I’m able to analyze customer’s views, ideas and opinions related to Advance Product and about SBI Advance Product and from this, SBI will come to know the customer requirements.  Data Interpretation: For easy interpretation of data table chart, pie chart, line and bar chart used with some Quantitative technique. The total no. of respondent is taken as 100% and their response is denoted in percentage. It is very conspicuous for a person to understand it.  Classification & tabulation of data:  The data thus collected were classified according to the categories, counting sheets & the summary tables were prepared. The resultant tables were one dimensional, two dimensional.  Statistical tools used for analysis:  Out of the total respondents, the respondents who responded logically were taken into account while going into statistical details & analysis of data. The tools that have been used for analyzing data & inference drawing are mainly statistical tools like percentage, ranking, averages, etc. As per questionnaire and market surveys I have find out different responses from different people. According to their responses I analyze the findings and draw certain remarks. 32
  33. 33. Analysis of data GRAPHICAL REPRESENTATION OF DATA Q1. On which bank you depend for your regular transaction? 33
  34. 34. SBI 47 % (94) Any other PSUs 37.5 % (75) Private bank Foreign Bank 17% (26) 1.5% (03) TOTAL NO. OF PEOPLE 200 Sales State Bank of India Other PSUs Any private Bank Foreign Bank It has been observed that approximately 47% correspondents are using the service of SBI for their daily transaction, around 33.5% of people are using the services of other PSUs (Mainly Bank of Baroda, PNB, Vijaya Bank, Corporation Bank) for their transaction and 17% of people are using HDFC, ICICI & other Private Bank service respectively in Lucknow. Only 1.5%people uses foreign banks. It also shows that SBI have the highest market position in Lucknow as per my sample. Q2. Are you aware of products & services provided by SBI? YES 82% (164) NO Total No. of People 18% (36) 200 34
  35. 35. NO 18% YES 82% We can say that customers (around 82%) in Lucknow have the idea about the Home loan of SBI they know about the all current offers of in HOME LOANs, the rest 18% have the idea about the product they are using. In this 18% most of the people are from typically small shopkeeper and some govt. employee and Farmers. Q3. If yes are you aware of the Home loans of SBI? YES 92% NO 10% TOTAL NO. OF PEOPLE 200 35
  36. 36. % OF PEOPLE 7% YES NO 92% It is clear that most of the people have the idea about the advance product of SBI. Almost all the 95% people who have the idea about the advance product are the user of SBI product & service. Q4. Which bank you prefer for taking loans? 85% (1800) SBI ICICI 7% (140) HDFC 2% (40) OTHER 1% (20) TOTAL NO. OF PEOPLE 2000 36
  37. 37. Sales 2% 1% 12% SBI ICICI HDFC 85% OTHER According to my sample size 85% of people prefer SBI for loan product, but some people prefer ICICI, HDFC or OTHER Bank for loan because they are working with that bank & it is easier for them to get loan from their bank & it easier for them to pay the interest because it is less as compare to other bank because they are the employee of that bank. Q5. What do you feel about the services providing by SBI in Home Loan product? Dissatisfactory 4% Moderate 52% Satisfactory 37% Delighted 7% TOTAL NO. OF PEOPLE 200 37
  38. 38. CUSTOMER PERCEPTION TOWARDS THE SERVICE PROVIDE BY SBI IN ADVANCE PRODUCT 4% 7% Dissatisfactory 37% Moderate 52% Satisfactory Delighted From this it is clear that the service provide by SBI in its advance product is good in between the customer. All of them satisfy with the product provide by SBI. 55% of people said that the service provide by SBI is good & 43% said it is excellent & just 2% of people said that it is satisfactory. Q6. Which features you like most in Loan segments of SBI? LESS PAPER WORK 3% ATTRACTIVE INTEREST RATE 35% TRANSPARENCY 20% FAST PROCESSING 2% LONGER REPAYMENT PERIOD 40% 38
  39. 39. HOME LOAN’S SERVICES 55% EMPLOYEE BEHAVIOUR 82% TOTAL NO. OF PEOPLE 2000 FEATURES LIKE BY CUSTOMER 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Most of the people like the attractive interest rate & longer repayment period. It’s easier for people to repay the whole loan amount with its interest with low interest rate and with longer repayment period. 39
  40. 40.    Findings Suggestion & Recommendation Conclusion 40
  41. 41. PROJECT Findings:  From this project it is found that SBI Home Loans having the 1st place in the market at Lucknow, but HDFC and ICICI also working hard for for improving their market share in home loan segment so they are the main threat or competitor.  It has been observed that a person first of all come to the SBI for sanctioning their loan but bad response from SBI force them to switch to the other bank.  All of SBI customers are satisfied with the services provided by the bank.  Many of these customers are well aware of SBI and their home loan product and satisfied with the low interest rate and longer repayment period of the advance product.  Most of the customers at Lucknow feels that SBI really trying hard for improving their services.  Approximately 43% of advance product users said that the service of SBI in advance product is excellent.  A response from customer care is so clear & good.  Many customers have no time to call customer care so that they are not able to know about the service & features of SBI advance product.  Most customers are shifted from other bank’s advance product to SBI because of hidden charges, high interest rate, less repayment period.  Government employees are more concern than private employees for advance product. REASONS FOR HIGHLY USE OF SBI ADVANCE PRODUCT:  LOWEST INTEREST RATES IN INDUSTRY  LONGER REPAYMENT PERIOD THAT IS OF 30 YEARS 41
  42. 42.  LOWEST EMI FOR HOME LOANS  INTEREST CHARGED UPON REMAINING OF BALANCE  LONGER REPAYMENT PERIOD  QUICK PROCESSING Suggestion & Recommendation Recommendation:  Customer awareness programme is required so that more people should attract towards advance product.  If there are any kind of hidden charges than that must disclose to customer before giving loan to them.  SBI must take some steps so that customers can get their loan in time. Like phone verification by customer care that one customer is got their loan on time or not .It must be before a certain date so necessary steps can be taken.  SBI should more concern about physical verification rather than phone verification so it will avoid fraud or cheating.  Advance product selling agents must not give any type of wrong information regarding advance product.  For the better service new offers would be require.  SBI customer care should more concern about the fastest settlement of customer problems.  Before deducting or charging any monetary charge SBI must consult with customer.  Agents should be trained, well educated & proper trained to convince the people about different advance product.  It is the duty of the bank to disclose all the material facts regarding advance product, like interest charged, repayment period, other types of charges, etc.  Special scheme should be implemented to encourage both customer and agents.  The bank should increase the period for repayment of loan. 42
  43. 43.  SBI should more focus on Retaining existing customers.  SBI must focus on Segmentation based on customer knowledge Product offering based on customer demand.  SBI must take feedbacks of customers regarding features & services. Conclusion From the analysis part it can be conclude that customers have a good respond towards SBI advance products in Lucknow. SBI is in 1st position having large number of customers & providing good services to them. The bank has a wide customer base, so the bank should concentrate on this to retain these customers. In present scenario SBI is the largest advance product issuer in India. Within a very short period of time the achievement made by SBI is excellent, what a normal bank cannot expect, but it is being done by SBI. It happens due to employee dedication towards the organization, fastest growing Indian economy, & brand image. To be the largest advance product issuer, SBI should focus on Launch Innovative product  Customized advance products  Better customer services  Fastest customers problem solving techniques  Customer retention Apart from all the above, SBI believe in providing good customer services to their customers which is a key factor for success in future. 43
  44. 44. 44
  45. 45. SURVEY FORMAT (EXISTING UNITS) Name of the apartment Building / Residential Colony Address Builder ‘s Type – Private or Govt, body (Please Specify) Person Contacted Address Contact No. & email ID Profession Income Group Profession Taken On 45
  46. 46. Bank From which Finance Was Availed Amount / Year of loan availed Rate of Interest Do you know SBI Home Loan -Lowest EMI i.e. .Rs.874/-per lac -Longest repayment period -30 years -Lowest Intt. Rates – 9.95%p.a. -Processing Charges – only Rs. 10001-per Housing Loan -No Hidden Charges Would you like to switch over your loan to SBI Survey carried out by Mr / Mrs. 46
  47. 47. SOME EXAMPLES OF THE SURVEY CONDUCTED BY OUR TEAM Sample 1 Name of the apartment Sahara state Builiding / Residential Colony Address 10/104, Deepak apartment sahara state lko Builder ‘s Type – Private or Govt, body Private body (Please Specify) Person Contacted AK Nigham Contact No. & emailid 9839205152 Profession Engineer Income Group 5 lac Profession Taken On Bank From which Finance Was Availed SBI bank Amount / 30 lac. Year of loan availed Rate of Intrest 10% Do you know SBI Home Loan -Lowest EMI i.e. .Rs.874/-per lac 47
  48. 48. -Longest repayment period -30 years -Lowest Intt. Rates – 9.95%p.a. -Processing Charges – only Rs. 10001-per Housing Loan -No Hidden Charges Yes, want to switch over Would you like to switch over your loan to SBI Sample 2 Name of the apartment Sahara state Builiding / Residential Colony Address 10/204, Deepak apartment ,lko. Builder ‘s Type – Private or Govt, body Private body (Please Specify) Person Contacted Dinkar kumar Contact No. & emailID 9452114080 Profession BDO Income Group 12 lac Profession Taken On Bank From which Finance Was Availed SBI (main branch) Amount / 26 lac. Year of loan availed Rate of Intrest 10% Do you know SBI Home Loan -Lowest EMI i.e. .Rs.874/-per lac -Longest repayment period -30 years -Lowest Intt. Rates – 9.95%p.a. 48
  49. 49. -Processing Charges – only Rs. 10001-per Housing Loan -No Hidden Charges Yes, want to switch over Would you like to switch over your loantto Sample 3 Name of the apartment Sahara state Builiding / Residential Colony Address 10/301, Deepak Apartment lko. Builder ‘s Type – Private or Govt, body Private body (Please Specify) Person Contacted Ramesh chandra Contact No. & emailID 9792680777 Profession Contracter Income Group 13 Lac Profession Taken On Bank From which Finance Was Availed Bank of India Amount / 60 lac. Year of loan availed Rate of Intrest 10.5% Do you know SBI Home Loan -Lowest EMI i.e. .Rs.874/-per lac -Longest repayment period -30 years -Lowest Intt. Rates – 9.95%p.a. 49
  50. 50. -Processing Charges – only Rs. 10001-per Housing Loan -No Hidden Charges Yes , want to switch over Would you like to switch over your loan to SBI 50
  51. 51. References   NNUAL_REPORT_2012_13_ENGLISH.pdf     51