Summer internship project on home loans

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

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

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

 Personal Detail
 Company Profile


Overview



History



Competitors



SWOT Analysis



Different Products



Awards & Recognitions by SBI

4

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
: somendrasingh49@gmail.com

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

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

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

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

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

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 Rs.one 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

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


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

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

• 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

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



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

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

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

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

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

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


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

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

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

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

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: - http://www.housingindia.info/NHBHomeLoanRates.aspx

26

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

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


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

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

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

Analysis of data

GRAPHICAL REPRESENTATION OF DATA
Q1. On which bank you depend for your regular transaction?
33

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

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

% 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

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

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

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





Findings
Suggestion & Recommendation
Conclusion

40

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

 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

 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

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

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

SOME EXAMPLES OF THE SURVEY CONDUCTED BY OUR
TEAM
Sample 1

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.

Rate of Intrest

10%


47

Housing Loan
-No Hidden Charges

Yes, want to switch over
Would you like to switch over your loan
to SBI

Sample 2

Sahara state

Address

10/204, Deepak apartment ,lko.


Private body

(Please Specify)
Person Contacted

Dinkar kumar

Contact No. & emailID

9452114080

Profession

BDO

Income Group

12 lac

Profession Taken On

SBI (main branch)

Amount /

26 lac.

Rate of Intrest

10%



48

Housing Loan
-No Hidden Charges
Yes, want to switch over
Would you like to switch over your
loantto

Sample 3

Sahara state

Address

10/301, Deepak Apartment lko.


Private body

(Please Specify)
Person Contacted

Ramesh chandra

Contact No. & emailID

9792680777

Profession

Contracter

Income Group

13 Lac

Profession Taken On

Bank of India

Amount /

60 lac.

Rate of Intrest

10.5%



49

Housing Loan
-No Hidden Charges
Yes , want to switch over
Would you like to switch over your loan
to SBI

50

References
 http://www.sbi.co.in/user.htm
 http://www.sbi.co.in/webfiles/uploads/files/1373614553213_SBI_UNABRIDGED_A
NNUAL_REPORT_2012_13_ENGLISH.pdf
 http://www.deal4loans.com/home-loans-interest-rates.php
 http://www.moneycontrol.com/company-facts/statebankindia/shareholdingpattern/SBI
 http://www.housingindia.info/NHBHomeLoanRates.aspx
 http://www.businessdictionary.com/definition/researchmethodology.html#ixzz2bRyCysu7

51

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