Aditi str updated

SUMMER TRAINING REPORT
ON
Retail Loans by Bank of Maharashtra
Submitted in the partial fulfillment of the Requirement for the award of the Degree
of
BACHELORS IN BUSINESS ADMINISTRATION (BANKING AND INSURANCE)
SUBMITTED BY
Aditi Goel
(00114901815)
BBA (B&I)
SESSION: 2015-2018
DEPARTMENT OF BUSINESS ADMINISTRATION
MAHARAJA SURAJMAL INSTITUTE
RECOGNISED BY UGC U/S 2(f), NAAC Accredited
(AFFILATED BY GURU GOBIND SINGH INDRAPRASTHA UNIVERSITY)
C-4, JANAKPURI, NEW DELHI –110058

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ACKNOWLEDGEMENT
It gives me great pleasure in presenting the project report that gives me details of my project on
‘Retail Lending’ carried out at Bank of Maharashtra, CPC-RETAIL 28/14, First Floor, East
Patel Nagar New Delhi- 110008.
I take this opportunity to express my whole hearted thanks to MR. B M GUPTA (CHIEF
MANAGER) at Bank of Maharashtra who has treated me as a bank employee & helped in all my
queries personally.
I would also like to express my deep sense of gratitude towards all managers staff and to all those
who directly or indirectly helped me in my successfully execution of my project.
I take this opportunity to express my profound gratitude and deep regards to my guide DR. SHAVITA
DESWAL -Associate Professor (Department of Business administration) for her exemplary guidance,
monitoring and constant encouragement throughout the course of my thesis. The blessings, help and my
guidance given by her time to time shall carry me a long way in the journey of life on which I am about to
embark.

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TABLE OF CONTENT
S.NO PARTICULARS PAGE NO.
1. CHAPTER 1 – INTRODUCTION
 OBJECTIVE OF THE STUDY
 RESEARCH METHODOLOGY
 LIMITATIONS OF STUDY
2.
CHAPTER 2 – PROFILE OF THE BANK
 ABOUT THE BANK
 ORGANISATIONAL STRUCTURE
 RETAIL LOAN POLICY
3.
CHAPTER 3- REVIEW OF LITERATURE
 RETAIL LOAN
 TYPES OF RETAIL LOAN
4.
CHAPTER 4- ANAYSIS AND
INTERPRETATION OF DATA
5.
CHAPTER 5- CONCLUSIONS AND
SUGGESTIONS
6.
BIBLIOGRAPHY

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CHAPTER - I
INTRODUCTION
 OBJECTIVES OF THE STUDY
 RESEARCH METHODOLGY
 LIMITATIONS OF THE STUDY

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TITLE OF THE PROJECT
“A study on retail lending of bank with special reference to BANK OF MAHARASHTRA”
INTRODUCTION OF LOANS
Lending of funds to the constituents, mainly traders, business and industrial enterprises, constitutes
the main of the banking company. The major portion of bank fund is employed by way of loans,
which is the most profitable employment of its fund. The major part of bank is earned from interest.
The business of lending, nevertheless is not without certain inherit risks largely depending on the
borrowed funds, a banker therefore, follow a very caution policy, and conducts his business on the
basis of safety, liquidity, profitability etc.
MEANING OF LOAN
Under the loans, credit is given for a specific purpose and for a predetermined period. Normally
these loans are repayable in installments. Funds are required for single non-repetitive transactions
and are withdrawn only once. If the borrower needs fund again or wants renewal of an existing
loan, a fresh request is made to the bank. This borrower is required to negotiate every time he is
taking a loan or renewing an existing loan. Banker is at liberty to grant or refuse such a request
depending upon his owner cash resources and credit policy of the control bank.

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OBJECTIVE OF STUDY
The main objective of the study is to understand the retail loans provided by Bank of
Maharashtra. Some more objectives are as follows:-
 To find out various loan schemes provided by bank
 To understand its process
 To find out the major challenges faced
 To learn various aspects of loan provided by bank
 To know the problems faced by consumers when obtaining the loan

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RESEARCH METHODOLOGY
Research Methodology in a way is systematic representation of research or any other problem. It
is a written game plan for conducting any research. It tends to describe the step taken by a
researcher in studying the research problem along with a logical background.
It tends to describe methodology for solution of the problem, the objective and limitations of the
study. Therefore in order to solve a problem, it is necessary to design a research methodology for
problem as the same way differs from problem to problem.
I have used secondary data for my research work in the organization. It includes telephone
directory, used leads of the bank, files of loan scheme maintained by the branch and the website
of Bank of Maharashtra.
LIMITATIONS OF THE STUDY
 It is very small research, which may be insufficient to give the real picture scope of retail
loan.
 Less time for doing research.
 The method of result is limited to the reliability of method of investigations, measurements
and analysis of data.
 Loan scheme has been revised very soon.

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CHAPTER – II
PROFILE OF THE BANK OF
MAHARASHTRA

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BANK OF MAHARASTRA
INTRODUCTION
Bank of Maharashtra is a major public sector bank in India. Government of India holds 81.61%
of the total shares.[2]
The bank has 15 million customers across the length and breadth of the
country served through 1897 branches as of 5 April 2016. It has largest network of branches by
any public sector bank in the state of Maharashtra.
HISTORY
The bank was founded by a group of visionaries led by the late V. G. Kale and the late D. K.
Sathe and registered as a banking company on 16 September 1935 at Pune.
The bank was registered on 16 September 1935 with an authorized capital of ₹ 1 million, and
began business on 8 February 1936. Bank's financial assistance to small units has given birth to
many of today's industrial houses. After nationalization in 1969, the bank expanded rapidly.
Shri Narendra Singh who had assumed the office of Chairman and Managing Director from 1
February 2012 left his office on 30 September 2013 on attaining superannuation. Shri Sushil
Muhnot was the Chairman and Managing Director before Ravindra Prabhakar Marathe. Ravindra
Prabhakar Marathe is the current MD and CEO

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AUTONOMY OF THE BANK
The bank attained autonomous status in 1998. As a result, the bank has limited interference of
Government bureaucracy in its decision making process and internal affairs
FOUNDER OF BANK OF MAHARASTRA
The Mahratta Chamber of Commerce (MCC) was established in Poona in 1934 and its Founder
Secretary Shri A.R.Bhat was a great visionary.
Shri Bhat initiated for a comprehensive review of banking services available in the region through
the special issue of Kesari news paper released in memory of Lokmanya Tilak within a few months
of establishment of MCC. He ensured that his friend, Shri V. P.Varde, considered as a doyen of
co-operative movement, wrote an article on the necessity of a separate bank for Maharashtra, thus
launching a public discussion on the subject. While there was no noticeable response to the article
of Shri Varde, Shri A R Bhat kept on discussing the subject with leaders in Trade and Industry.
Shri Bhat ensured that Mahratta Chamber and its Directors took up the issue and held a Conference
on Business and Industry in Poona on behalf of the MCC in February1935.
Shri Bhat pushed the proposal for formation of a bank and succeeded in getting the following
resolution adopted by the conference:
"For providing capital to the trade and industry in Maharashtra, it is essential to establish a Joint
Stock commercial bank. The Mahratta Chamber is, therefore, requested to make all the necessary
enquiries in that behalf and take appropriate steps for floating such a bank. The business
community in Maharashtra is urged to support such an effort. "

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The Swadeshi movement of the first decade of the 20th Century gave stimulus to the establishment
of a number of commercial banks under Indian Management in Maharashtra.
The MCC formed a sub-committee consisting of Sarvashri V.G.Kale, D.K.Sathe, N.G.Pawar,
G.D.Apte and A.R.Bhat to work out the details.
The first meeting of the committee was held on 19 May 1935 in the conference room of the Kesari
Mahratta office and besides the committee members, prominent personalities from the City like
Shri Babasaheb Kamat, the then President of the MCCI, J S.Karandikar, Rajabhau Godbole,
Govindrao Pandit, Damuanna Potdar, S.R.Sardesai, Baburao Gokhale, and N.N. Kshirsagar
among others participated in deliberations.
Another meeting of the sub committee with wider public representation was followed on 27 May
1935 in the meeting hall of Kesari Mahratta office and decisions on matters like the number of
Directors on the Board of the proposed bank (maximum to be 11 members), Amount of each share
(to be Rs.50/-) and primary condition for becoming a Director (to hold a minimum of 500 shares)
were taken.

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BOARD OF DIRECTORS
SHRI RAVINDRA PRABHAKAR MARATHE
(MANAGING DIRECTOR AND CHIEF EXECUTIVE OFFICER)
SHRI R.K. GUPTA SHRI ALEKH C. ROUT
(EXECUTIVE DIRECTOR) (EXECUTIVE DIRECTOR)
MS. VANDITA KAUL SHRI G. SREEKUMAR SHRI R. THAMODHARAN
(GOVT. NOMINEE (RBI REPRESENTATIVE (SHAREHOLDER DIRECTOR)
DIRECTOR) DIRECTOR)
DR. ARCHANA RAVINDRARAI SHRI. DEENDAYAL
DHOLAKIA AGRAWAL
(PART TIME NON OFFICIAL (PART TIME NON OFFICIAL
DIRECTOR) DIRECTOR)

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ACHIEVEMENTS
 Bank has bagged the prestigious award in the 12th “Banking Technology Excellence
Awards 2015-16” organized by Institute for Development & Research in Banking
Technology (IDRBT), which is established by RBI. Bank has been awarded as the ‘Best
Bank among Mid Sized Banks’ in the category -“Use of Technology for Financial
Inclusion”.
 Bank bagged prestigious SKOCH AWARD 2016 in the field of Financial Inclusion. The
function of award ceremony was held at Bombay Stock Exchange, Mumbai on 9th June,
2016. The award was given away at the hands of Shri. Sameer Kochhar, Chairman Skoch
Group and Shri. Rajivkumar Agarwal, Whole Time Member SEBI, in presence of Shri.
Ashishkumar Chauhan, MD & CEO, BSE Ltd. On behalf of Bank of Maharashtra,
Shri. C B Arkatkar, DGM, FI-SLBC has received this award.He is accompanied by Shri.
Ramdasi, AGM, Shri. Kadu, CM, Shri. Yadav, Sr. Manager, FI Department.
 Bank has bagged two prestigious awards in the 11th “banking Technology Excellence
Awards 2014-15” organized by IDRBT (Institute for Development and Research in
Banking Technology – Established by RBI).
 Bank was conferred as BEST BANK-PUBLIC SECTOR in BFSI Awards-2015 by World
HRD Congress in recognition of the Best performances in Banking Category.
The Award was received by Shri S.Muhnot, Chairman & Managing Director on behalf of
the Bank at the function held at Mumbai.
 Financial Express India’s Best Bank Award
Sri.S.Muhnot, Chairman & Managing Director, Bank of Maharashtra is seen receiving
Winner Award– ‘Growth’ Category with Devendra Fadnavis, Chief Minister of
Maharashtra.
 Bank of Maharashtra Grabbed 2 Awards in Skoch Summit.
 Bank was conferred as BEST BANK-PUBLIC SECTOR in BFSI Awards-2014 in
recognition of the Best performances in Banking Category.
 Bank received “Greentech Fire Safety & Security Award 2013”by Greentech Foundation
in Gold category.
It is received by Shri S. Bharatkumar, General Manager Planning and Shri K.C. Padhy,
AGM, Security.

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Retail Lending Policy
Retail lending by banks in India gathered momentum following financial sector reforms in 1990s.
Till then most of the banking credit was focused on agriculture, industry and commerce. The major
role of bank lending till that time was to support supply. To ensure that bank lending does not go
to finance consumption, Reserve Bank of India had put various restrictions on retail credit; Banks
could lend only a specified small percentage of their total lending to individuals for non-productive
purposes. The regulator also imposed strict norms for rate of interest, margin stipulation and
maximum repayment period. These restrictions were gradually relaxed during 1990s which paved
the way for increased retail lending by Indian banks.
Retail Sector: Definition of areas
The term ‘Retail Lending’ has different connotations in different contexts. The Reserve Bank of
India’s report on currency finance provides a working definition: ‘Retail’ or household credit
comprises mainly of housing loans, advances to individuals against fixed deposits, credit card,
educational loans and loans for purchase of consumer durables’. For the purpose of bank’s policy
we have used RBI definition.
Retail Loans- Characteristics:
 These are small size loans
 These loans meet the needs of a large number of customers with well diversified portfolios
 The target customers are generally individuals/group of individuals or small organizations
 These loans offer standard products designed by the bank from time to time keeping in
view various personal needs of customers
 These loans are designed to cover varied segments of risks
 These loans promote consumption

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Objectives:
The Retail Lending Policy is framed with the following objectives:
 To improve flow of credit to Retail Sector.
 To formulate liberal norms of lending to Retail sector, to ensure availability of adequate
and timely credit to the sector.
 To devise an organizational structure at all levels for handling Retail credit portfolio in a
more focused manner.
 To promote consumption in the clientele.
Retail Credit comprises mainly of Housing Loans, Loans given to Individuals against Fixed
Deposits, Credit Cards, Educational Loans and Loans for purchase of Consumer Durables,
Personal Loans, and Vehicle Loans for personal use etc.
Bank’s approach to Retail Advances:
India has a vast potential for growth in consumption both qualitatively and quantitavely. With
factors like increased literacy levels and adaptability to technology retail lending in country has
taken a growth path. Additionally, emergence of affluent middleclass is expected to further grow
in numbers. The present generation of young and affluent working population in India has shed
the paradigm of ‘save now, consume later’ of the earlier generations to ‘affordable indulgence’.
Being aware of the present market scenario, the bank has defined its approach as defined its
approach as detailed I the following paragraphs:
Scope of Policy- Limitations and boundaries of policy:
This policy forms an integral part of the Bank’s Credit Policy and inter-alia cover Retail Lending
of the bank, comprising the below indicated points:
 Composition of retail sector
 Broad guidelines on lending to Retail Sector
 Centralize Retail loan processing
 Pricing Policy
 Identifying Thrust area of retail lending
Retail loan Policy is to include any loan given to an individual or group of individuals (related to
each other), for non business usage. The coverage of policy is categorized under different schemes,
but not limited to same. Bank

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Target market for Retail lending:
All individuals across various strata of society are target base for Bank’s retail loan. Facility to
offer a loan to an individual however depends on eligibility and scrutinizing of loan request and
fulfillment of scheme specific guidelines, as defined from time to time.
Exposure ceiling:
The exposure ceiling for single borrower shall be 15% of capital funds as on 31st
March of previous
year. Individual retail loans will not be part of Group concept (as per the norms defined under
bank’s Lending Policy). Under Housing Loans to Individuals, bank’s exposure is not to exceed
12.50% of Gross credit of immediate preceding quarter as per Lending Policy of the Bank.
SALIENT FEATURES OF RERTAIL LOANS
Types of facilities:
Retail loans are the finance facility of a fixed amount extended to meet a onetime requirement of
a customer, for a fixed tenure, to be repaid over a period in installments. To enable customers to
meet their emergency requirements, bankers also permit them an overdraft [OD]. This means that
bankers allow the customer to withdraw more than the credit balance in the customer’s current
account or give a temporary loan in the current account itself. The bank will also be providing
regular clean cash credit limit to the employees of Government Departments/ Organizations/
Companies of repute, having regular salary accounts with the bank.
Secured/Unsecured facilities:
Secured loans are always secured by an underlying asset against which funding is extended. This
lending is also known as asset based lending. A specific charge is created against such an asset.
Retail loans such as Housing Loans, Vehicle Loans, Consumer Loans, Loan against deposits< and
other loans where tangible security is available for the bank are considered to be Secured Loans.
This gives the bank to take possession of the asset and sell it to recover the loan in case of default.
Unsecured loans do not have any underlying security and are purely extended based on the
creditworthiness of the borrower. This is also known as non-asset based lending or clean loans or
unsecured loans. Personal Loans, Aadhaar Loans, Credit Cards, etc., fall under this category. There
is no tangible security available for the Bank in these types of facilities.

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Interest:
On a loan given at a fixed rate, interest is charged throughout the tenure of the loan at that rate
which is fixed at the time of granting the loan. The customer has to pay interest at the contracted
rate irrespective of whether the interest rate in the market goes up or down.
In case of floating rate of interest, the rate at which the interest is charged on the loan varies from
time to time according to the movement of interest rate in the market and is presently based on the
Base Rate of the Bank.
The Bank offers both the options to its customers under Housing Loan Scheme and customers are
to choose while applying for the facility.
Tenure:
The tenure for a loan depends upon the amount of the loan and repayment capacity of the customer.
However, the maximum tenure permitted depends upon the period over which the asset financed
will be subject to annual review. The clean loans will be given for a specified period only as per
product design.
Loan to Value ratio:
Loan to value ratio [LVR] refers to the maximum percentage of the value of the asset that is given
as a loan. It varies according to the nature of the asset and also the rate at which the asset is expected
to depreciate or reduce in value. The RBI norms in this regard will be deciding factors.

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COMMON GUIDELINES FOR LENDING TO RETAIL
SECTOR
Type of facilities:
All advances given under retail loans are mainly of Term Loan type with repayment period ranging
from 3 years for Personal Loan to maximum of 30 years for Housing Loan.
Only exceptions to above being overdraft facility in SB account offered under Mahabank Salary
Gain scheme and clean Cash Credit (CC) facility offered to individuals for consumption purpose.
Application form:
All loan requests are to be included with appropriate application form as amended from time to
time. The referred forms should be supported with all relevant papers/documents, as required for
the requested facility.
Receipt of application and acknowledgement:
Officer receiving the application form for credit facility should ensure submission of all relevant
documents (as required) and acknowledge the receipt of same to applicant and provide him/her
with a approximate time frame by when decision can be expected.
Registration of Application received (inward):
All application forms received at Field Offices should be recorded and Inward Number for same
should be written on it.
Time norms for disposal of loan applications:
Quick decision in all matter will always enhance customer satisfaction and in view of same, it is
to be ensured that all applications are to be disposed with a fixed time frame, subject to submission
of all relevant documents, as required under the scheme. Any undue delay in processing of
application should be justified with satisfying reason and should be reported to next Higher Office
(Branch should keep zonal office informed and delay in zonal office should be reported to Head
Office).

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Due Diligence/ Assessment of loan need- CIBIL check-up:
Right identification of applicant, and providing the required credit facility, go a long way to build
up customer’s confidence and also oblige him/her for repayment of loan taken. All loan proposals
are to be scrutinized as per laid down norms of the bank and proper Due Diligence is to be ensured
at all levels before sanction is conveyed. Credit history of customer should be verified from all
possible sources (including but not limited to0 CIBIL) before any decision is taken with regard to
proposal.
Income Criteria:
Income of individual or Repayment Capacity calculation for an individual’s loan processing
should be based on Income Tax Returns (ITR) filed by individual and salary slips (in case of
salaried individuals) or from other ascertainable facts/documents.
In case of individual businessmen or professionals, the income may be ascertained from different
sources such as
1. Balance sheet
2. Income tax returns etc.
Before considering the sources, consistency of income is to be ensured. For the businessmen
carrying proprietary concern and professionals persons, the term total income would mean “Net
profit plus depreciation”. However, repayment obligation on account of term liabilities should be
taken into consideration while deciding the quantum of loan and EMI.
In case of farmers, the branches may cross check the Gross & Net Annual Income of the applicant
with reference to the land holding, cropping pattern, sugar factory bills/cotton bills, agricultural
produce marketing committee bills etc. sale proceeds receipts/bills, income certified by competent
authorities and any other income proof to the satisfaction of sanctioning authority may be accepted
in lieu of above.
The loan quantum depends mainly on the repaying capacity of the applicant. Sanctioning authority
may consider other factors such as past experience in repaying the loans availed.
Margin requirement:
Minimum Margin in bank’s favor is to be ensured for all categories of loan (as applicable) and
unless relaxation allowed by appropriate authority.

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Rate of Interest:
Rate of Interest stipulated for retail loans shall be by way of Equated Monthly Installments (EMI)
as the target group for Retail Lending are individuals and have regular income by way of salary or
business income. While stipulating EMI, following points need to be noted:-
a) The repayment period should be reckoned from the date of first disbursement and the EMI
should be stipulated after calculating it properly by reffering the EMI chart so as to ensure
that entire dues are recovered within the stipulated tenor of the loan.
b) Interest accrued during moratorium period should be either recovered separately or should
be taken into account along with principal while fixing EMI.
c) Repayment of loan installments through Electronic Clearing System (ECS) may also be
considered in deserving cases.
Rate of interest on all retail loans will be guided by bank’s interest rate policy, as applicable from
time to time. All categories of loans shall be priced only with reference to the Base rate.
Security need:
Security as per scheme guidelines is to be ensured for all loans offered under retail category, unless
relaxation allowed by approximate authority. Security can be in form of guarantor of sufficient
net-worth, Mortgage/hypothecation of asset acquired or collateral security as acceptable under
different schemes.
OTHER IMPORTANT POINTS
 Retail loans are generally of small to medium amounts.
 Retail loans are generally granted to individuals: professionals, salaried employees or
businessmen for personal or domestic use.
 The retail loans given by the bank are generally for duration of five to seven years.
However housing loans are granted for a longer duration.
 A housing loan is granted against the security of mortgage of the house financed
 Housing loans are granted for either medium term or long term.
 A vehicle loan is granted against the security of hypothecation of the vehicle financed.
 The term EMI in a housing loan or vehicle loan is calculated on the basis of principal and
interest on the loan for the period of the loan.

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 A loan for purchase of consumer durables is granted against the security of hypothecation
of the item financed.
 All loan applications will be verified within a reasonable period of time.
 The sanction letter should be duly acknowledged by the applicants accepting the terms and
conditions of the sanction.
 The bank will ensure timely disbursement of loans sanctioned, and the expected timelines
would be mentioned in the sanction letter.
 Processing fees and other charges, penal interest rates, pre-payment options and any other
matter which affects the interest of applicant, shall be clearly indicated in the sanction
letter.
 The bank would not discriminate on grounds of sex, caste and religion in the matter of
lending. However, this does not preclude credit-linked schemes framed for weaker sections
of the society.
 In the matter of recovery of loans, the bank would not resort to undue harassment viz.
persistently bothering the borrowers at odd hours, use of muscle power for recovery of
loans etc.

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TYPES OF LOAN:-
Bank grants loan for different periods short, medium and long and for different purpose.
 SHORT TERM LOAN
Short term loan is granted to meet the working capital needs of the borrowers. These loans
are granted against securities of tangible assets mainly the movable assets like goods and
commodities, shares, debentures etc. Since April 1995, RBI has made it mandatory for the
banks to grant a portion of bank credit to big customers in the form of loans, which may be
for previous maturities. The RBI has also permitted the banks to roll over such loans i.e. to
extend the loan for another period at the expiry of the tenure of the first loan.
 LONG AND MEDIUM TERM LOAN
Medium and long term loans are usually called ‘Term Loans’. These loans are granted for
more than one year and also meant for the purpose of capital asset for establishment of new
expansion or diversification an existing unit. Banks usually grant such loans together with
specialized financial institutions like industrial Finance Corporation of India, credit and
Investment Corporation etc.
 COMPOSITE LOAN
When a loan is granted both for buying capital assets and for working capital purpose it is
called composite loans. Such loans are usually granted to small borrowers such as artisans,
farmers, small industries etc.

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RETAIL LOANS
These are loans that are given to individuals for their purpose. Retail loans can be subdivided into
4 categories
 HOUSING LOANS
This is the loan scheme that is offered to individual for constructions of house,
purchase of house, plot purchase, repair, renovation, purchase of flat from private
builder, for furnishing etc. This is one of the retail products thus involve colossal
volumes in terms of customers and funds.
 EDUCATION LOANS
Education loan is given to the students for further studies in India and abroad both.
This loan can be for air fare travel expenses admission/tuition fees, boarding and
lodging expenses, books and stationery expenses etc.
 AUTO LOANS
Auto loan is given to individual to buy new/old car and two wheeler. It is very
popular loan among borrowers as today everyone want vehicle in their home and
bank provide them at easy installments.
 PERSONAL LOANS
Though normally banks provide loans for productive purpose only, but as an
exception loans are granted on a limited scale to meet the medical needs or the
educational expenses or expenses relating to marriage and other social purpose of
the needs persons. Such loans are called personal loans.

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ADVANTAGE OF LOANS
I. Financial discipline of the borrower
As the time of repayment of loans or its installments is fixed in advance, these systems
ensure a greater degree of self-discipline of borrower as compare to cash credit system.
II. Periodic review of loans A/C
Whenever a loan is granted or its renewal is sanctioned, banker gets an opportunity of
automatically reviewing the loan account. Unsatisfactory loan account may be
discontinued at the discretion of the banker.
III. Profitability
System is comparatively simple, interest occurs to the bank on the entire amount lent to a
customer.

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DRAWBACK OF LOANS
 Every time loan is required, it is to be negotiable to the banker. To avoid it, borrower may
borrow in excess of their exact requirement to provide for any contingency.
 Banks have no control over the use of fund borrowed by the customers, however banks
insist on hypothecation of the asset/vehicle purchase with loan amount.
 Though the loans are for fixed period but in practice they roll over i.e. they renewed
frequently.
 Loan documentation is more comprehensive as compared to cash credit system.

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CHAPTER: III
REVIEW OF LITERATURE

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RETAIL LOANS
Loan become necessary for every money minded person. From this way they can invest their
money in other profitable purposes. The best coming way to get loan for building home for buying
automobiles or education of your for personnel purposes is provided by Bank of Maharashtra at
preferential rate of interest. If you are eligible for loan then you will have money in hand in very
few days. The bank will provide you the facility of repayment in easy installments the loan are
made available to your doorstep.
CREDIT SCORES
Getting a retail loan for a business requires an acceptable personal credit score. A low credit score
caused by late payments and high personal debts can disqualify you for financing. On average,
commercial retail lenders look for a credit score 680 or higher. Some lenders may approve you
with a lower score. Regrettably, the lower your personal score, the higher the interest rate on the
retail loan. A higher loan rate can greatly increase the retail loan payments. Cleaning up your credit
first and then applying for financing not only helps you qualify for financing, but also helps you
qualify for a favorable commercial interest rate.
BASIC CONDITIONS
When evaluating an application to see if a property qualifies for a retail loan, lenders consider
several elements. For existing properties, the lender will request information on current tenants
and the sales history of these businesses. Lenders use this information to evaluate whether there's
enough income to support the payments on the retail loan. Anticipate your lender also evaluating
the net worth of the property. Lenders rarely offer 100 percent financing, but instead may offer 90
percent financing. This type of loan requires a 10 percent down payment.

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CONSIDERATIONS
Other factors taken into account by lenders before approving a retail loan include elements such
as the appearance of an existing property, the age of an existing property and the locality of an
existing or new retail store. Older, unsightly buildings may require extensive repairs and
maintenance. This affects loan approval because you may require additional funding in the future
to improve the property, and the property may appraise for less than the loan amount.
HOME LOANS
Bank of Maharashtra Loan against Property
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 interest-only 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
Loan against Property interest rates offered by Bank of Maharashtra depends upon Floating rates
changes with a single change in Bank of Maharashtra rate in your loan tenure. You should go for
floating rates if you can take the risk of hike in interest rates.

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FACILITY Term loan/OD Facility
ELIGIBILITY  Individuals to the age of 18-65 years owning unencumbered self-
occupied residential property/commercial property/or building in
his/her own name for a period not less than 1 year.
 Permanent employees of Central/State Govt./Public Sector
Undertakings, Reputed companies/MNCs, individual Businessmen,
Professionals and Self Employed individuals having minimum 2 years
standing.
 Loan against third party property, open plot, property on rental is
strictly prohibited.
 The loans should not be used for speculative purposes.
MINIMUM
ANNUAL
INCOME
 Rs. 5.00Lakh (last 2 years Average income)- Minimum past 2 year
ITR/Form 16 is mandatory.
 Close relative/s (son, daughter, sister, brother, along with the spouse)
may join as co applicant/s for supplement repayment capacity.

27
ADVANTAGES OF HOME LOAN
Buying a home is a big step. It is a source of anxiety, frustration -- and a huge sense of
accomplishment. With the zooming property rates, it is difficult a buy a home through our
savings entirely. Almost all of us have a to avail a home loan.
Usually, a home loan is one of the biggest liabilities. Considering the huge amount and the long
tenure involved, however your home loan also offers you some benefits. The below write-up
highlights the advantages of taking a home loan.
Sense of accomplishment
Buying a home is one of the biggest financial investments you may make in your lifetime; and
that's not just because of the sentimental value. The sum that most of us sink into our home
does make it the largest component of our investment portfolio.
Capital Appreciation
For each one of us who has seen property prices boom over the last five years, the prospect of
mouth-watering capital appreciation is the biggest argument for buying a home. Construction
costs alone, which account for more than 70 per cent of the flat's cost, have risen at 15 per cent
annually in the past decade. Rents too seem to keep up with inflation; making a home one of
the few investments can shield you from inflation for the long term.
 Cash accruals/depreciation also may be added to income, in case of
borrowers other than salaried class.
PURPOSE For meeting personal needs
LOAN
QUANTUM
 Based on repaying capacity and subject to the ceilings given below
a. Minimum: - Rs. 2.00 lakh
b. Maximum:-
 Properties located at metros:- Rs. 3.00 crore
 Properties located at other centers:- Rs. 1.00 crore
MARGIN 40% of the realizable value of the property
ROI 1 year MCLR + BSS @ 0.25% + 1.25%
REPAYMENT Maximum repayment period of 7 years or on borrower reaching the age of 75
years whichever is earlier.
DEDUCTION Should not exceed 60% of gross monthly salary/income.
SECURITY Mortgage of property

28
Low interest rate
Buying a home is a long-term decision of over a 10-year period; the interest rates may go
through several up and down cycles. Therefore, you can be sure that you will benefit from
falling rates at some point in the cycle.
There could also be situations in which the interest rates fall, allowing you to prepay your loan
and own your home. For instance, those who bought property in 1995, at an interest rate of 18
per cent, not only saw interest rates fall dramatically over the next decade, to bottom out at
about 7.5 per cent, property prices too appreciated steeply. This works as a double boost to
wealth.
Tax Benefit: Interest paid
As per Section 24(b) of the Income Tax Act, 1961 a deduction up to Rs. 1.5lakh towards the
total interest payable on the home loan towards purchase / construction of house property can
be claimed while computing the income from house property. (The deduction stands reduced to
Rs. 30,000 in case of loans taken prior to March 01, 1999).
The interest payable for the pre-acquisition or pre-construction period would be deductible in
five equal annual installments commencing from the year in which the house has been acquired
or constructed.
DISADVANTAGES OF HOME LOAN
Can't claim HRA component:
If you are making repayment against your home loan, the major disadvantage of home loan is you
can't claim the benefits of HRA, if the property is self occupied. You can claim maximum benefits
or Rs. 1.5lakhs on the loan amount you paid every year. But if you are staying in a rented house,
so you can claim the HRA benefits accordingly. If you are staying in any metro city and you are
getting salary of Rs. 40,000 per month and you are getting 40% of basic salary as HRA. In that
case, you are missing a major component that can be claimed as HRA to save income tax.
Long term commitment:
No doubt taking a home loan is long-term commitment. The minimum tenure of a home loan is 7
years and average tenure of home loan is 10 years to 15 years. If you have other liabilities as well
to be fulfilled during the same tenure such as your child's higher education, marriage or saving for
your retirement, it might prove as major pitfall for the same. Home loan increases your financial
burden for at least initial years. For instance, if you get your salary hiked by 7% and the inflation

29
rate is 10%, still you have the loss of 3%. Therefore, it is quite clear if you are not getting the good
jump in your salary during the initial years, it will increase your burden.
Change in interest rate:
You can't predict the financial outflow for next five years or 10 years. Same with the situation with
banks and loan interest rates. If the RBI makes any changes in the loan interest rate and increases
it even for 1% then you are supposed to pay the increased amount for the rest of the tenure.
Therefore, either you need to pay the higher amount as EMI or you will ask the bank to increase
the tenure. In both cases, it is going to increase your financial burden.
Loss of savings:
To make the down-payment for your home you use your saving. Either you withdraw money from
FD, policy, term deposits, etc., or you make down-payment with your saving account. In both
cases, you lose your saving. You divert your funds to make the down-payment, so you miss the
interest on those saving. Besides, with increased financial liability it is not possible to save with
the same flow. So, you are at loss with both the sides.
EDUCATION LOAN
A loan offered to a student which is used to pay off education-related expenses, such as college
tuition, room and board at the university, or textbooks. Many of these loans are offered to students
at a lower interest rate, such as the Perkins loan or Stafford loan. In general, students are not
required to pay back these loans until the end of a grace period, which usually begins after they
have completed their education.
Education loan is a special kind of loan granted by banks under which some amount of money is
granted to students at special rates. With the help of education loan, the students can achieve higher
and costly studies at cheaper rates. Education loan scheme of Bank of Maharashtra is as follows:-

30
PURPOSE For studies in India and Abroad
ELIGIBILITY Studies in India: - graduation courses/ colleges under universities approved
by UGC, other courses leading to diploma/ degree etc. conducted by colleges/
universities approved by UGC/ Govt./ AICTE/ AIBMS/ ICMR etc.
Studies abroad:- Job oriented prof./ Technical/ PG Courses/ Post
Graduation :- MCA, MBA, MS etc.
AGE Student should be Indian national, have secured admission by entrance
test/merit based selection.
MAXIMUM
RETURN
In India: Rs. 10.00 lac
Abroad : Rs. 20.00 lac
Loan for higher amount can be considered on merit and case to case basis
SECURITY Upto Rs. 4.00 lakh: clean, parents to be co-borrowers

31
Above Rs 4.00 lakh and below Rs. 7.50 lakh: No collateral except
satisfactory third party guarantee
Above Rs. 7.50 lakh: collateral equivalent to quantum of finance after
providing requisite margin
GUARANTOR Upto Rs. 4.00 lakh: clean, parents to be co-borrowers
Above Rs 4.00 lakh and below Rs. 7.50 lakh: satisfactory third party
guarantee
Above Rs. 7.50 lakh: parents to be joint borrowers/ guarantor not be insisted
upon
MARGIN Upto Rs. 4.00 lakh: Nil
Above Rs 4.00 lakh-
5% for studies in India
15% for studies abroad
DEDUCTION
LIMIT
N.A.
RATE OF
INTEREST
 Simple interest during moratorium period, there after compounded
monthly
 1% interest concession may be provided to the loanees if the interest
is serviced regularly as and when applied during the study period
when repayment holiday is specified for interest/ repayment under
the scheme. Interest concession is available only for moratorium
period.
REPAYMENT For loans up to Rs.7.50lakh: Up to 10 years, in EMI (Loan + Int. accrued
together), after moratorium
For loan above Rs.7.50lakh: Up to 15 years, in EMI (Loan + Int. accrued
together), after moratorium
Moratorium: Course Period + 1 Year or 6 months after getting job, whichever
is earlier
PROCESSING
FEE
Nil
INSURANCE N.A.
SPECIAL
OFFERS
Interest rate concession
 0.25% concession for Mahasaraswati accounts for 3 years
 0.50% concession for girl students

32
 0.50% concession to our existing Housing Loan borrower
 0.50% concession – for students getting admission in top rated
Premier Institutions (list be made available)
 Concession offered on providing additional guarantor for
educational loans between Rs.4Lakh to Rs 7.5 Lakh -0.25%
*Over all Maximum concession of 0.5% allowed
OTHERS  Loan will be granted to student with parent as Co-borrower/s
 Loan will be disbursed in stages as per requirement directly to
Institute / College.
 Pre-approved Education loan (In principle sanction) is available for
student applying to multiple universities/Colleges for study abroad.
OTHER
FACILITY
Student can apply education loan in online mode through our website.
This Facility is now available for all the branches.
ADVANTAGES OF EDUCATION LOAN
Makes education accessible
The world is becoming increasingly specialized and complex, and education is evolving to meet
those needs. Students today can choose from a wide range of specialized courses and programs at
all levels – graduate, post graduate degree, diploma, vocational training – in India and abroad. But
with these advancements, education has also become very expensive. An education loan, with its
deferred repayment schedule, makes it possible for deserving students to chase their dreams
without having to compromise due of financial difficulties.

33
Easily available
You can get an education loan quickly and easily. Almost every nationalized and private bank
offers a variety of education loans for different tenures and courses. The loan papers are processed
in about 15-30 days of applying.
Repayment moratorium
This is one of the best features of an education loan. You need to start repaying your student
loan only one year after completion of course or six months after you get a job, whichever is earlier.
The moratorium period gives you the relief that you need, to focus on your studies and to find a
good job once you complete your course. The bank charges simple interest during the moratorium,
and this amount is added to your principal amount when you start repaying. If you pay interest
during the moratorium period, you can get 1% interest concession.
Interest rate benefits
Banks offer education loans at lower interest rates than personal loans. Female student applicants
get a 0.5% concession in the interest rate. If you are seeking admission to a premier institution and
have a good academic record, you may be able to negotiate a lower interest rate. If you are a
borrowing below Rs.4lakh, there is no margin to be paid and you do not have to provide collateral.
You also get a tax benefit on the interest component of your loan for eight years or till you pay off
the loan, whichever is earlier.
DISADVANTAGES OF LOAN
Stringent eligibility criteria
Unfortunately, just because you think you are a deserving student doesn’t mean you will
automatically get an education loan. Banks have their criteria for deciding a borrower’s eligibility.
And if you don’t satisfy those criteria, you may have to pay higher interest or you may not get a
loan altogether.
Margin requirement and interest rates
For loans above Rs.4lakh, you need to arrange money for the margin amount to be paid by you,
which can go up to 15% of the loan amount. Although interest rates are lower than personal loans,
they can still be pretty steep for some borrowers (they usually range from 11-17%).

34
The simple interest adds up during the moratorium period which is added to your principal amount
when you start repaying the loan. If you have a floating interest rate and the interest rate rises, then
your debt burden also increases.
Repayment pressure
For some reason, if you are unable to complete your studies on time or do not get a job quickly,
then the repayment pressure can escalate. A delay in repayment can make you liable to pay late
payment fees and additional interest charges. These will increase the already existing pressure to
repay. This also adds pressure on the co-applicants, usually your parents. The bank may or may
not offer you an extension. All of this might negatively affect your credit score, making future
loans expensive
PERSONAL LOAN
Consumer loan granted for personal (medical), family (education, vacation), or household
(extension, repairs, purchase of air conditioner, computer, refrigerator, etc.) use, as opposed to
business or commercial use. Such loans are either unsecured, or secured by the asset purchased or
by a co-signor (guarantor). Unsecured loans (called signature loans) are advanced on the basis of
the borrower's credit-history and ability to repay the loan from personal income. Repayment is
usually through fixed amount installments over a fixed term. Also called consumer loan.
It is a type of unsecured loan and helps to meet your current financial needs. You don’t need any
security/collateral while availing it. Personal loan gives you the flexibility to use the funds as per
your convenience and need.
Personal Loan is your solution for instant cash and can be used for traveling, wedding, medical
emergency, home renovation, or anything else.

35
S.NO. PARAMETER DETAILS
1. Name of the scheme Maha Bank Personal Loan Scheme
2. Purpose For Personal Expenses such as Medical Expenses, Expenses
on Travel / Tour, Income Tax liability, Expenses for Family
Functions etc.
3.
Eligibility Existing Housing Loan Borrowers (Salaried Individuals only)
/Corporate Salary Account holders (Minimum 2 years in
employment and with 1year in the current organization)
having minimum standing of 1 year relationship with our
Bank.
4.
Min. Annual Income
For Corporate Salary Account holders: Rs. 3.00lakh (last year
income) - Minimum past 2 year ITR/Form 16 from the
Employer is Mandatory.
For Existing Housing Loan Borrowers (For Salaried
Individuals only) : Rs. 2.50lakh (last year income) - Minimum
past 2 year ITR/Form 16 from the employer is Mandatory,
Subject to sufficient disposable income.
5.
Age Limit  Minimum : 21 Years
 Maximum: 60 Years
6.
Quantum of Finance Maximum loan amount: Rs.1.50lakh, Subject to deduction
norms
7.
Margin NIL
8.
Rate of Interest 1.00% discount in applicable interest rate will be given to
Existing Housing Loan Borrowers / Corporate Salary
account Holders

36
9.
Repayment Maximum 36 Months
10.
Deduction Not to Exceed 60% of the Gross Income including Proposed
EMI
11.
Processing Charges 1.00% of the Loan Amount (Min.:Rs.1000/-)
12.
Security Clean
13.
Guarantor One guarantor acceptable to the Bank
ADVANTAGES OF PERSONAL LOAN
 The biggest advantage of personal loan is that it can be used for variety of purpose, unlike
housing loans which can be used for only construction or purchase of house or vehicle loan
which can be used only for purchasing of vehicle. For example, if an individual needs
$5000 for marriage, $2000 for the renovation of a house and $1000 for other important
expenditures then a personal loan of $8000 will solve all his or her problems.
 Another advantage of personal loan is that the whole process right from applying for loan
to the documentation of loan and then disbursement of loan takes far less time then
compared to other loans. Hence when one is in urgent need of funds then a personal loan
is the best option.
 All type of loans requires collateral security but personal loans are exception and hence
people who do not have any fixed assets with them and are unable to get any loan then
personal loan comes to rescue for such people. In short lack of any requirement of collateral
security gives personal loan another edge over other types of debts.

37
DISADVANTAGES OF PERSONAL LOAN
 The biggest drawback of this type of loans is that they carry very high interest rate, since
personal loan is unsecured in nature therefore lenders or banks charge higher rate of interest
on these loans as compared to housing or vehicle loans.
 It is not easy to get this type of loan it is not like you will walk in the bank and bank will
give you money, in order to get personal loan an individual needs to have good credit rating
and good credit history hence this requirement regarding credit rating and history makes
majority of individuals ineligible for personal loan.
 Another disadvantage of personal loan is that many banks and financial institutions do not
allow part repayment of the loan which in turn results in debt getting bigger and bigger due
to interest. So for example if you have taken $10000 personal loan and if you want to repay
$1000 then bank will not allow such part repayment which is not the case with housing or
other type of loans where the loan amount keeps getting reducing due to part repayment
feature resulting in lower overall interest.
As one can see from the above that personal loans are ideal when there is short term cash
requirement but borrower does not have any collateral and borrower requires funds
immediately. However before taking personal loan an individual should keep in mind that
personal loan carry very higher interest rates which can lead to problems if the loan is not
repaid in time.

38
VEHICLE LOAN
The subject of car finance comprises the different financial products which allow someone to
acquire a car with any arrangement other than a single lump payment. The provision of car finance
by a third party supplier allows the acquirer to provide for and raise the funds to compensate the
initial owner, either a dealer or manufacturer.
Car finance is required by both private individuals and businesses. All types of finance products
are available to either sector; however the market share by finance type for each sector differs,
partly because business contract hire can provide tax and cash flow benefits to businesses.

39
S.NO. PARAMETER DETAILS
1. Purpose Purchase of New four Wheeler i.e. Car, Jeep, Multi Utility
Vehicles (MUVs), SUVs etc. for personal use. (i.e. not for
hiring/ferrying passengers) for individuals (18 years and
above)/Companies and Corporate entities.
2. Age Limit For individuals (18 years and above ) Maximum age at
Maturity of loan should not exceed 70 years
3.
Eligible Entities
Permanent salaried employees of Central / State
government / Corporate Salary Account Holders /
Employees of PSU & Companies of repute with minimum
1 year of confirmed service in the current organization.
a. Businessman/Self-Employed Persons / Independent
Entrepreneurs who have regular source of income
based on 2 years IT Returns.
b. Farmers having minimum 5 acres of land holding
engaged in production oriented agricultural activities
and in other allied activities minimum land holding of 5
Acres and sufficient disposable income
c. Pensioners of Central/State Government/PSU having
minimum pension of Rs.25000/- per month.
d. Corporate Clients (Partnership/Proprietorship Firms/
Companies): 2 year IT Return/Income proofs based on
audited balance sheet, P&L A/c.
The above provisions are applicable only for existing
customers with 1 years standing Others to be considered on
perusal of 3 years IT Returns / Income proofs.
4.
Min. Annual
Income
For Salaried/Pensioners: Rs. 3.00 lakhs (last year income) -
Minimum past 2 year ITR/Form 16 from the Employer is
Mandatory.
1. For Businessmen/Professionals: Rs. 4.00 lakhs (last
year income)- Minimum past 2 year ITR with
supporting documents are mandatory.

40
2. For Persons engaged in Agriculture & Allied activities
having ascertainable Minimum income of Rs.4.00
lakhs.
3. For Corporate Clients (Firms/Companies): Rs. 4.00
Lakhs (Last year income)- Minimum past 2 year ITR
with supporting documents are mandatory.
5.
Quantum of
Finance
1-For Salaried/Pensioners Persons: - Up to 36 times of Net
Monthly Salary/Pension on the basis of Last Salary/Pension
Drawn, subject to ‘Deduction Norms’
2-For Other Individuals : Up to 2 times Average annual
income based on 2 years ITRs or Gross Taxable income as per
latest ITR(whichever is lower), subject to ‘Deduction Norms’
(Total income would mean Cash Accruals).
Maximum Loan amount :No Upper Limit (For applicant
falling under above 1 & 2 Category)
3-For Corporate Clients (Firms/Companies) : Max. Rs.
100.00Lakhs or Up to 3 times of Average annual income based
on 2 years ITRs or Gross Taxable income as per latest ITR.
6. Margin For Existing / New Housing Loan Borrowers And
Corporate Salary Account holders – Min. 10% of Cost of
Vehicle + RTO charges For Others -- Min. 15% cost of
vehicle + RTO charges For Corporate Clients
(Firms/Companies)- Minimum 20% of Cost of Vehicle +
RTO charges
7. Security Hypothecation of vehicle purchased. Our Hypothecation
charge should be registered with Regional Transport Office
Authorities.
8.
Rate of Interest
1-0.25% discount in applicable interest rate will be given to
Existing Housing Loan / MSME & Corporate borrowers
/Corporate Account holders/ Professional & Self Employed
Borrowers, having minimum standing of 1 years relationship
with our Bank. 2-In case of housing loan borrowers whose
account remained continuously in standard category for five
years and above, rate of interest will be at discount of 0.50%.

41
9. Repayment Maximum 84 Months.
10. Deduction Not to Exceed 60% of the Gross Income including Proposed
EMI
Not to exceed 65% of the Gross Income including Proposed
EMI in case of Existing Housing Loan borrowers under
Standard category for 2 years
11. Processing
Charges
Waiver of Processing fee w.e.f. 10/10/2016 to 31/12/2016
ADVANTAGES OF VEHICLE LOAN
 Established Lenders - Banks are among the most established lending parties
around. They are not likely to pull some of the tricks that ‘cheap money shops’ and other
third parties sometimes engage in. Customers can often profit from selecting lenders with
integrity, a good reputation, and a large cash flow.
 Additional Services - In addition to a bank car loan, banks can also help with
mortgages and other forms of loans. Some banks can apply a home equity loan or home
equity line of credit (HELOC) to an auto loan. Making your bank a one-stop shop can be a
way to streamline different types of borrowing including car finance.
 Pre-approval - Some banks will also allow you to get pre-approved for a car loan. In
order to come onto the dealer’s lot with confidence and know what kind of car you can
afford before talking to a representative. For some buyers who might not completely trust

42
their local dealership, or those who just want a clearer picture of their eligibility for
financing, this option can be helpful.
DISADVANTAGES OF VEHICLE LOAN
 Less Favorable Rates for ‘Unconventional’ Bank Loans - Some
banks say they are “not in the business” of doing auto loans or other personal loans. They
will grudgingly offer you an auto loan that may be accompanied by generally higher or
uncompetitive interest rates. These are not really the best lenders for financing a vehicle.
If they’re not interested in making a deal for your money, find someone else who is.
 Skipping Preferred Customer Status - If a particular bank does not know
you or have a financial history with you, you won't get some of the preferred status that
you might enjoy from another lender. Say, the dealer you bought your last car from, or a
local credit union connected to your employer.
 Third-party Loans and Dealer's Lot Financing - Since a bank will
provide outside financing for getting your next vehicle, communications with this outside
party may be less convenient than going through your local dealership. For that reason,
some customers like to skip the outside process and just figure up their financing on the
dealer's lot. It all depends on what kind of deals you can get from third-party lenders
compared to what your dealership will offer you.

43
CHAPTER- IV
ANALYSIS AND INTERPRETATION
OF DATA

44
STRENGHTS
1. Public sector undertaking. Thus, has govt.
backing
2. In this area for more than 75 years. Thus,
expertise in this field.
3. Very high investments in SLR securities
4. High connectivity to common man in some
parts of the country
5. Over 1500 branches in 23 states and 2
union territories
WEAKNESS
1.Risk averse
2.Low profitability
3.Increasing NPAs
THREATS
1.Competitors
2.New bank licenses
3.Dis-investments by the government
OPPORTUNITIES
1.Rural Areas
2.Increasing Non-SLR investments to
increase profits
3.Making their credit cards profitable

45
COMPARISON OF BANK OF MAHARASHTRA AND SBI
SBI
SBI is India's largest bank in the country with an asset size of over Rs 13 trillion. Although the
bank's loan book is largely skewed towards corporate (large, mid and small) loans (50% of total
advances in FY12), the retail side is also fast catching up. SBI has a network of almost 14,270
branches and over 22,141 ATMs across the country.
BANK OF MAHARASHTRA
Registered in 1935 with an authorized capital of Rs 1 m, Bank of Maharashtra (BoM) commenced
business in 1936. The government held 78.95% stake in the bank at the end of March 2012 after
an infusion from the government and a preferential allotment from LIC. BoM has the largest
network of branches owned by any public sector bank in the state of Maharashtra. The bank had a
franchise of 1,589 branches at the end of FY12 of which 34% were located in the rural areas.

46
HOUSING LOAN SCHEME COMPARISON
PARTICULARS BANK OF MAHARASHTRA STATE BANK OF INDIA
Interest Rate 8.75% 8.35%
Lowest EMI Rs. 787 per lakh Rs. 758 per lakh
Max Tenure up to 30 years up to 30 years
Processing Fee Upto 0.25% Upto 1.00%
Prepayment,
Foreclosure Charges
N/A Allowed with nil charges for
floating rate loans to
individuals
Age (i) Minimum: The applicant/s must
be 21 years old (completed) as on
the date of application.
(ii) Maximum: 65 Years for
Professional & Self Employed i.e.
for Doctors/Architects/CAs etc.
And 60 years for others, subject to
having sufficient disposable income
Min 18 and Max 70 years for
Salaried
Self Employed
Security Equitable / Registered Mortgage of
Housing Property.
Equitable / Registered
mortgage/extension of
mortgage of the land

47
BANK OF MAHARASHTRA AND BANK OF BARODA
BANK OF BARODA
It all started with a visionary Maharaja's uncanny foresight into the future of trade and enterprising
in his country. On 20th July 1908, under the Companies Act of 1897, and with a paid up capital of
Rs 10 Lacs started the legend that has now translated into a strong, trustworthy financial
body, THE BANK OF BARODA.
Bank of Baroda is a pioneer in various customer centric initiatives in the Indian banking sector.
Bank is amongst first in the industry to complete an all-inclusive rebranding exercise wherein
various novel customer centric initiatives were undertaken along with the change of logo. The
initiatives include setting up of specialized NRI Branches, Gen-Next Branches and Retail Loan
Factories/ SME Loan Factories with an assembly line approach of processing loans for speedy
disbursal of loans.
Between 1913 and 1917, as many as 87 banks failed in India. Bank of Baroda survived the crisis,
mainly due to its honest and prudent leadership. This financial integrity, business prudence,
caution and an abiding care and concern for the hard earned savings of hard working people, were
to become the central philosophy around which business decisions would be effected. This cardinal
philosophy was over years of its existence, to become its biggest asset. It ensured that the Bank
survived the Great War years. It ensured survival during the Great Depression. Even while big
names were dragged into the Stock Market scam and the Capital Market scam, the Bank of Baroda
continued its triumphant march along the best ethical practices.

48
HOUSING LOAN SCHEME COMPARISON
PARTICULARS BANK OF
MAHARASHTRA
BANK OF BARODA
Max Tenure up to 30 years 30 years
Prepayment, Foreclosure
Charges
floating rate loans
Age (i) Minimum: The applicant/s
must be 21 years old
(completed) as on the date of
application.
Professional & Self Employed
i.e. for
Doctors/Architects/CAs etc.
And 60 years for others,
subject to having sufficient
disposable income
Salaried
Self Employed
Security Equitable / Registered
Mortgage of Housing
Property.
mortgage/extension of
mortgage of the land

49
BANK OF MAHARASHTRA AND ICICI BANK
ICICI BANK
Despite being the second largest bank in the country after SBI in terms of asset size, ICICI Bank
lost its share of the banking sector's advances from 10.2% in FY07 to 8% in FY12. At the end of
March 2012, the bank had assets of over Rs 4.8 trillion and a franchise of over 9,000 ATMs and
2,750 branches spread across the country. Retail assets constituted 34% of advances in FY12 as
against 65% in FY07. The bank is focusing on loan origination in the large corporate, SME and
agrie segments and on non-fund based products and services. Besides the bank itself being the
market leader across retail loan portfolios, its subsidiaries ICICI Life Insurance, ICICI General
Insurance and ICICI AMC are leaders in their respective businesses.
ICICI Bank is India's largest private sector bank with total assets of Rs. 7,206.95 billion (US$ 109
billion) at March 31, 2016 and profit after tax Rs. 97.26 billion (US$ 1,468 million) for the year
ended March 31, 2016. ICICI Bank currently has a network of 4,850 Branches and 13,780 ATM's
across India.
ICICI Bank's Board members include eminent individuals with a wealth of experience in
international business, management consulting, banking and financial services. ICICI Bank is
deeply engaged in human and economic development at the national level. The Bank works closely
with ICICI Foundation across diverse sectors and programs.

50
COMPARISON OF HOME LOAN SCHEME
PARTICULARS BANK OF
MAHARASHTRA
ICICI BANK
Charges
floating rate loans
application.
i.e. for Doctors/Architects/CAs
etc. And 60 years for others,
disposable income
Salaried
Self Employed
Mortgage of Housing Property.
 CIBIL Score: Your past CIBIL history and repayment record of existing loans and credit
cards has direct impact on your Home loan eligibility. If you have a poor repayment record,
then you may not get the loan but on the other side, a regular repayment record increases your
Home loan eligibility
 Loan Amount: ICICI Bank gives you Home loan depending upon your income. ICICI
Bank gives you an amount ranging from Rs. 1,500,000 to Rs. 100,000,000. To improve chances
of approval, apply for a loan amount that you can comfortably service

51
BANK OF MAHARASHTRA AND HDFC BANK
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 RBI's liberalization 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.
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, strong market reputation, large shareholder base and unique consumer franchise, HDFC
was ideally positioned to promote a bank in the Indian environment.
HDFC Bank's mission is to be a World Class Indian Bank. The objective is to build sound customer
franchises across distinct businesses so as to be the preferred provider of banking services for
target retail and wholesale customer segments, and to achieve healthy growth in profitability,
consistent with the bank's risk appetite. The bank is committed to maintain the highest level of
ethical standards, professional integrity, corporate governance and regulatory compliance. HDFC
Bank’s business philosophy is based on five core values: Operational Excellence, Customer Focus,
Product Leadership, People and Sustainability.

52
COMPARISON OF HOME LOAN SCHEME
PARTICULARS BANK OF
MAHARASHTRA
HDFC BANK
Charges
floating rate loans
application.
i.e. for Doctors/Architects/CAs
etc. And 60 years for others,
disposable income
Salaried
Self Employed

53
CHAPTER V
CONCLUSIONS
&
RECOMMENDATIONS

54
SUGGESTIONS
1.Interest rate, processing fees, tenure, margin money-all these are important in loans-housing
loan, auto loans, personal loan, education loans etc. So bank should revise all above keeping in
view all other banks. Bank should appoint some marketing executive for this purpose who can
give information of market and other banks, revision of loan timely so that our bank can revise it
very soon. These marketing executive should give report to Head Office directly for timely
processing so that as early as possible, market can be fully captured.
2. Loan limit of all loans should be increasing keeping in other view private sector banks and
nationalized banks.
3. One of the major weakness of bank of Maharashtra is processing timely. As today every person
is very busy. He cannot more days for taking loan so. Processing time should be reduced. But this
processing time can be reduced only when the sanction authority is necessary for branch offices.
4. As in nationalized banks, there is not negative file, but in bank of Maharashtra there is a list of
negative profile. This is the main reason of the nationalized banks having more customers. So.
Negative file should be reduced or eliminated.
5. Other private sector banks like ICICI, HDFC etc. have lower interest rate than BOM. So the
bank should reduce it interest rate for being in the competition with these banks.
6. Bank of Maharashtra is lower loan amount than other banks, so it should increase its loans
amount for attracting customer towards it products loans .
7. The bank should give authority to all its branches for providing loans.

55
CONCLUSION
Bank of Maharashtra has such a great reputation that it can very well go out and sell it product to
the out sides customers and be a winner. These are the responses from the people who knew about
Bank of Maharashtra but those of them who did not know it felt very happy when they came to
know that group. Bank of Maharashtra has come out with a new life insurance venture. The only
points now is, that when the company enjoys such a great reputations. What it has got to do (to
private its product to the people at very competitive price and make them sure that their investment
in the company is absolutely secure.
Our project was based to retail loans and product range of retail loans of BOM
The retail loan provided by BOM include
 Home Loan
 Personal Loan
 Education Loan
The home loans provided by BOM is less than other banks and having lowest processing fees. In
comparison to other bank it has higher interest rate than same bank.
The personal loan is having maximum tenure period and lower interest rate. It contain less amount
of personal loans by the banks.
Education loans is provided by only a few banks and services provided by bank for education loans
is not so goods.

56
BIBLIOGRAPHY
 http://www.bankofmaharashtra.in/
 www.cibil.com
 www.google.co.in
 https://incometaxindiaefiling.gov.in/e-
Filing/Services/ITRStatusLink.html

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