A

SUMMER TRAINING PROJECT REPORT

ON

“A STUDY ON HOME LOAN IN ICICI BANK”

Project Report submitted in partial fulfillment of the
requirement for the Degree
of
BACHELOR OF BUSINESS ADMINISTRATION
SESSION (2020-2023)

Submitted By: Submitted To:

Rohini Dabas Ms. Soniya Pal
Roll No:- 200938105056 (Faculty)
Enrollment No.

IME College, Ghaziabad

INSTITUTE OF MANAGEMENT EDUCATION

(Affiliated to Chaudhary Charan Singh University, Meerut)

1
 CERTIFICATE

This is to certify that the Project Report entitled “A Study on Home Loan in ICICI Bank”
submitted by Rohini Dabas, Roll No.: 200938105056 for partial fulfillment of the
requirement of BBA, embodies the bonafide work done by his/her under my supervision.

(Signature)
(Ms. Soniya Pal)
(Faculty)

2
 DECLARATION
I, Rohini Dabas student of BBA 5th semester, studying in IME College, hereby declare that
the work presented in this report entitled “A Study on Home Loan in ICICI Bank", was
carried out by me. I have not submitted the matter embodied in this report for the award of
any other degree or diploma of any other University or Institute.
I have given due credit to the original authors/sources for all the words, ideas, diagrams,
graphics, computer programs, experiments, results, that are not my original contribution.
I have used quotation marks to identify verbatim sentences and given credit to the original
authors/sources. I affirm that no portion of my work is plagiarized, and the experiments and
results reported in the report are not manipulated. In the event of a complaint of plagiarism
and the manipulation of the experiments and results, I shall be fully responsible and
answerable.

Rohini Dabas:

Roll No. : 200938105056

Programme:
(Candidate Signature)

3
 ACKNOWLEDGEMENT

It is my pleasure to be indebted to various people, who directly or indirectly contributed in

the development of this work and who influenced my thinking, behavior, and acts during the
course of study.
I am thankful to Ms. Soniya Pal (Faculty) of the person you worked under for his/her
support, cooperation and motivation during the training and for constant inspiration,
presence and blessings.
I also extend my sincere appreciation to your college guide name who provided his/her
valuable suggestions and precious time in accomplishing my project report.
Lastly, I would like to thank the almighty and my parents for their moral support and my friends with whom I
shared my day-to-day experience and received lots of suggestions that improved my quality of work.

Rohini Dabas
BBA-Vth Sem.

4
 INDEX

Serial Particulars
No.

1 Executive summary 6

2 Company profile 7-11

3 Objective of the study 12

4 Introduction 13-54

5 Literature review 55-64

6 Research methodology 65-66

8 Data Analysis 67-77

9 Finding 78

10 Conclusion 79

11 Limitation 80

12 Recommendation 81-82

13 Bibliography 83

14 Questionnaire 84-85

EXECUTIVE SUMMARY

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IN Every housing finance company there is a lot of emphasis which is given to what the
competitors are doing and what can be done in order to counter them or simply match the
competitors with respect to the services provided and also the variety of products which a
particular housing finance company has on offer.

A competitor normally is in a better position to dominate the market if it is lending at an

interest level, which is lower than what the market has to offer. Also, the amount of loan
which can be given also plays a significant role in the minds of the customer in deciding as
to which housing finance company should he/she opt for. The charges taken by the company
also plays a major if not vital role.

The project revolves around the various loan appraisal procedures, which the companies
follow with respect to credit, legal and technical appraisals. The main aspect in the credit
appraisal is to determine whether or not the customer has the willingness and ability to pay.
His track record and his present earnings would judge this. The amount of loan, which an
individual would be getting, would depend upon his liabilities and also the number of people
who are dependent on him. Also the project involves a careful study of the procedure, which
the companies follow when they do get a lead

COMPANY PROFILE

6
ICICI Bank is India's second-largest bank with total assets of about Rs.125,229 crore and a
network of over 450 branches and offices and about 1790 ATMs. ICICI Bank offers a wide
range of banking products and financial services to corporate and retail customers through a
variety of delivery channels and through its specialised subsidiaries and affiliates in the areas
of investment banking, life and non-life insurance, venture capital and asset management.
ICICI was formed in 1955 at the initiative of the World Bank, the Government of India and
representatives of Indian industry. The principal objective was to create a development
financial institution for providing medium-term and long-term project financing to Indian
businesses. In the 1990s, ICICI transformed its business from a development financial
institution offering only project finance to a diversified financial services group offering a
wide variety of products and services, both directly and through a number of subsidiaries and
affiliates like ICICI Bank.

ICICI Bank's equity shares are listed in India on stock exchanges at Chennai, Delhi, Kolkata
and Vadodara, the Stock Exchange, Mumbai and the National Stock Exchange of India
Limited and its American Depositary Receipts (ADRs) are listed on the New York Stock
Exchange (NYSE).

The Industrial Credit And Investment Corporation Of India Limited was incorporated on 5 th
January 1955 as a Public limited company under the Companies Act, 1913, and subsequently
renamed ICICI LTD with effect from September 11,1998. The Government of India, the
World Bank and representatives of Indian industry took an active interest in the formation
and development of ICICI.

After consideration of various corporate structuring alternatives in the context of the

emerging competitive scenario in the Indian banking industry, and the move towards
universal banking, the managements of ICICI and ICICI Bank formed the view that the
merger of ICICI with ICICI Bank would be the optimal strategic alternative for both entities,
and would create the optimal legal structure for the ICICI group's universal banking strategy
ICICI Bank was originally promoted in 1994 by ICICI Limited, and was its wholly owned
subsidiary. In the 1990s, ICICI transformed its business from a development financial

7
institution offering only project finance to a diversified financial services group offering a
wide variety of products and services, both directly and through a number of subsidiaries and
affiliates like ICICI Bank.ICICI Bank has transformed itself at a fast pace, making constant
efforts to take the first mover advantage in the technology-related businesses. The bank has
been in the forefront in the rapid expansion of its ATM network, setting up of call centers,
credit card business and consolidating technology infrastructure including data centers.

-consumer friendly housing finance company

History:
ICICI Home Finance Company Limited was incorporated on May 28, 1999 as 100%
subsidiary of ICICI Personal Financial Services Limited (ICICI PFS). ICICI Home Finance
Company Limited, was set up with the objective of providing long term housing loans to
individuals and corporate. The Company was registered on March 30, 2000 with National
Housing Bank (NHB) under National Housing Bank Act, 1987 in terms of Housing Finance
Companies (NHB) Directions, 1989. With effect from May 3,2002, ICICI Home Finance has
become a 100% subsidiary of ICICI Bank Limited.
Overview:
ICICI Home Loans are at present available to customers in 150 cities/towns across the
country. Loans are offered for purchase of new homes, purchase of resale homes and home
improvement. Besides, the company also offers loans for commercial property and loans
against existing property. The loans are offered for tenors up to 30 years. The company has
also introduced several customer friendly services such as 'door-step' service, 'know your
loan on phone' facility and 'ICICI Home Search' - free property brokerage services.
ICICI Personal financial services limited (ICICI PFS), FORMERLY ICICI- CREDIT, was
one of the first four companies to obtain registration as a non-banking financial company
(NBFC) from the Reserve Bank of India (RBI) on September 10, 1997 under the new section
45 IA of the Reserve Bank of India Act, 1934.

During the year 1998-99, there was a significant shift in the company’s operations from
leasing and hire purchase to distribution and servicing of all retail products for the ICICI

8
Group. It is now a focal point for marketing and distribution of all retail asset products for
ICICI, including auto loans, consumer durable finance and other financial products. The
company has thus become a critical part of ICICI’S retail strategy aimed at offering a
comprehensive range of products and services to retail customers.

In view of this reorientation of the business, the name of the company was changed from
ICICI CREDIT CORPORATION LIMITED to ICICI PERSONAL FINANCIAL
SERVICES LIMITED (ICICI PFS) effective March 22, 1999.

ICICI commenced its custodial services business in 1992 and played a pioneering role in the
business when it accepted the custodian role for the first ever GDR issue by an Indian
corporate (Reliance Industries Limited). ICICI has a major market share in the segment and
acts as custodian of 41 ADR/GDR issues and, in the process, has established relationships
with all the major overseas depository banks operating in the Indian Market. After its success
in the GDR segment, ICICI expanded its custodial operations by offering custodial services
to overseas institutional investors including foreign institutional investors (FII’S) and as on
June 30, 1999, the value of assets held in our custody exceeded US 2 billion.
At present, ICICI offers a full range of custodial services for primary and secondary market
operations pertaining to debt, equity, money market instruments GDR/EURO issues
conversions and GDR arbitrage to:

1. Overseas Institutional Investors like

a. FIIs
b. OCBs
c. OFFSHORE FUNDS
d. VENTURE FUNDS
2. Overseas Govermental Agencies

9
 3. Institutions looking for proprietary investments
4. Mutual funds
5. Private investment companies
6. Large corporate
7. High net worth individuals

As a value added service ICICI custodial services division assists the clients in preparation,
submission and follow up for various applications for regulatory approvals including initial
application by FII’S/OCB with SEBI/RBI.

PERSONAL BANKING

At ICICI BANK, they are commited to making banking a pleasure. This commitment is
manifested in the services they offer – a wide range of accounts, investment schemes, and
facilities. Each service offers their customers security, flexibility of operation and maximum
returns. The various services provided under this is as follows:

 Maxi Cash – savings Account

 Quantum – Fixed Deposits
 Quantum optima – Value added Savings Account
 Money plus – Current Account
 ATM
 Phone Banking
 Treasure Chest – Locker facility
 Power Pay Payroll
 Retail Treasury Instruments

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CORPORATE BANKING

MOBILE COMMERCE
ICICI Bank now brings Bank Account and ICICI Credit Card to customers fingertips. With
Mobile Commerce , customers can perform a wide range of query-based transactions from
their OrangeTM (MUMBAI) and AIRTEL (DELHI) Mobile Phone, without even making a
call.

 Access multiple accounts

 Balance enquiry to the linked accounts
 Cheque book requests
 Mini statement – Listing of last three transactions
 Request for account statements (by mail or fax)

VISION STATEMENT:
“To be the preferred brand for total financial and banking solutions for both corporates
and individuals”

In line with its vision statement, ICICI has capitalized on market opportunities to stretch the
borders of its business, and has evolved from a project finance institution to a financial
supermarket providing end-to-end financial services to corporate and retail customers.

OBJECTIVES OF THE STUDY

11
1.     To identify the issues faced by customers in obtaining the home loan.

2.     To study the customer satisfaction for home loans of ICICI Bank.

3.     To acquire knowledge pertaining to the various documents and the

formalities required for obtaining the home loans.

4. To study customer perception about the ICICI HOME LOAN.

INTRODUCTION

ABOUT THE COMPANY:

12
Eligibility

Home loan
You must be at least 21 years of age when the loan is sanctioned. The loan must terminate
before or when you turn 65 years of age or before retirement, whichever is earlier. You must
be employed or self-employed with a regular source of income.

Land loan
You must be at least 21 years of age when the loan is sanctioned.
The loan must terminate before or when you turn 65 years of age or before retirement,
whichever is earlier. You must be employed or self-employed with a regular source of
income.
You must be purchasing a plot of land for residential use. The purchase has to be from a
development authority or from a registered co-operative society. The purchase of the land
must be for the construction of a house. The plot of land must be clearly demarcated with
clear boundaries.

Office premise loan

 You must be at least 21 years of age when the loan is sanctioned.
 The loan must terminate before or when you turn 65 years of age.
 You must be self-employed with a regular source of income.
 The loan can be for the purchase / construction / extension of a non-residential
property.
 A loan for renovation or improvement will be given only at the time of acquisition of
property.
 Professionally qualified and self-employed individuals (doctors, pathologists,
chartered accountants, cost accountants, company secretaries, architects,
engineers,consultants,lawyers, chemists) can apply. A minimum of 3 year’s work experience
is a must

13
Home Equity Loans
. You must be at least 21 years of age when the loan is sanctioned.
. The loan must terminate before or when you turn 65 years of age or before retirement,
whichever is earlier.

. Your must be employed or self-employed with a regular source of income.

. You must be the owner of a self-occupied property.

Home improvement loans:-

These loans are given for implementing repair works and renovations in a home that has
already been purchased, for external works like structural repairs, waterproofing or internal
work like tiling and flooring, plumbing, electrical work, painting, etc. One can avail of such
a loan facility of a home improvement loan, after obtaining the requisite approvals from the

relevant building authority. the following are coming under the home improvement loans:

Balance- transfer loans:-

Balance Transfer is the transfer of the balance of an existing home loan that you availed at a
higher rate of interest (ROI) to either the same HFC or another HFC at the current ROI a
lower rate of interest.

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

NRI home loans:-

This is tailored for the requirements of Non-Resident Indians who wish to build or buy a
home or property in India. The HFCs offer attractive housing finance plans for NRI investors

14
with suitable repayment options. On would be entitled for home loans in the range of Rs 5
lakh to a maximum of Rs 1 crore, based on the repayment capacity, previous credit history
and the cost of the property. The bank may provide a maximum of 85% of the cost of the
property or the cost of
construction as applicable and 75% of the cost of land in case of purchase of land. The
repayment capacity is calculated taking into account factors such as:
 Age
 Income/Salary
 Qualifications
 Dependant/(s)
 Assets/Liabilities
 Credit History
 Stability / continuity of your employment/business
 Income of co-applicant/(s)
Taking home loans these days has become simpler. With the RBI regularly bring down
interest rates; taking home loans have become extremely easy. Housing loans which were
16.5% to 18% a few years ago fell by 11.5% to 13%. With interest rates going down, people
increasingly number apply to take these loans. Some of the leading banks offering home
loans in India, including ICICI Bank, IDBI Bank, HDFC Bank State Bank, Bank of Baroda,
Kotak Bank, SBI, Standard Chartered Bank and Axis Bank.

ICICI

Attractive interest rates

Door-step service from enquiry stage till final disbursement
No guarantor required
Can transfer your existing high-interest rate loan

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Can transfer your existing high-interest rate loan
Special 100% funding for select properties

Home loan
 Customer must be at least 21 years of age when the loan is sanctioned.
 The loan must terminate before or when you turn 65 years of age or before
retirement, whichever is earlier.
 Customer must be employed or self-employed with a regular source of income.

Feature
 Attractive Interest Rates
 Loans starting from Rs. 2laks*
 Term of loan up to 20 years
 Presence in more than 1000 locations
 Insurance options for your Home Loan at attractive Premium
 Free Personal Accident Insurance with every home loan

Loan Amount
A number of factors are taken into account when assessing repayment capacity. Customers
income, age, number of dependants, qualifications, assets and liabilities, stability/ continuity
of customer employment/ business are some of them. However, there are ways by which you
can enhance your eligibility.
 If cusstomer spouse is earning, put him/her as a co-applicant. The additional income
shall be included to enhance loan amount. Incidentally, if there are any co-owners
they must necessarily be co-applicants.
 customer fiancée's income can also be considered for sanctioning the loan on your
combined income? The disbursement of the loan, however, will be done only after
submit proof of marriage.

16
  Providing additional security like bonds, fixed deposits and LIC policies may also
help to enhance eligibility.

While there is no need for a guarantor, it could be that having one might enhance your
credibility with us. If so, our loan officer would provide customer with the necessary details.
The final amount to be sanctioned will depend on your repayment capacity. However, what
customer ultimately are entitled to will have to conform within the limits fixed for each loan.
Also, when the company looks at the total cost, registration charges, transfer charges and
stamp duty costs are included.

HOME LOANS

We at ICICI Bank understand the value of owning your own home. Our affordable home
loans can make all the difference to their dream of owning home.0% processing fee for a
limited period.
Refer to the table for a loan option that suits their need best

FIND THE RIGHT HOME

Introducing Home Search - Our FREE online property search facility. A one stop shop for
all their real estate needs.What you get 0% brokerage on first sale properties Access the
entire market under one roof Site visits to properties short listed by you Help in negotiating
the best price Help with legal documentation

Documents

Passport size photograph. Age verification: PAN card, Voters ID, Passport, License. Bank
statement for the last six months. Income Documents e.g. Latest Form-16, Certified IT
returns for latest 3 years. Processing Fee cheque. Loan Enclosure letter. These are the
documents required for sanctioning a loan. Customer may be asked to submit further legal

17
documents if required by ICICI or its approved lawyers. Do retain photocopies of all
documents being submitted by them.

Disbursement

Customer loan will be disbursed after you identify and select the property or home that
customer are purchasing and on their submission of the requisite legal documents.
While customer may be under the impression that the list of documents asked for is rather
extensive. Each and every single document asked for will be verified and checked to ensure
their safety.
This may take some time but the bank want to ensure a clear title and will complete all the
legal and technical verifications to ensure that they have full rights to their home.
The 230 A Clearance of the seller and / or 37I clearance from the appropriate income tax
authorities (if applicable) is also needed.
On satisfactory completion of the above, on registration of the conveyance deed and on the
investment of your own contribution, the loan amount (as warranted by the stage of
construction) will be disbursed by ICICI.

Listed below are the steps involved in availing of a home loan:

Step 1 A person applies for a home loan.

The executive meets the applicant and briefs him the entire loan process,
Step 2
requirements and the various options available.
The applicant chooses a Housing Finance Company (HFC) and hands over the
Step 3
income documents to the executive.
The income documents are handed over to the HFC for eligibility and
Step 4
approval.
The HFC verifies the documents and checks the repaying capacity, saving
Step 5
habits, tenure of service, etc. of the applicant and approves the loan amount.
Step 6 After approval, an offer letter is given to the applicant by the HFC, along with

18
 a list of original property title documents that have to be handed over to the
HFC.
Step 7 The applicant gives the original property title documents to the HFC.
The HFC scrutinises the legal and technical aspects of the original title
Step 8
documents.
If the HFC is satisfied as to the legal & technical aspects of the documents then
Step 9
the applicant is called to sign the loan agreement.
The loan disbursement schedule is decided by the HFC according to the stage
Step 10 of construction (if property under construction)or a one time payment is made
if property is ready for possession
The applicant gets possession of the property depending upon the level of
Step 11
completion of the property.
Step 12 The applicant starts paying the EMIs.

WHAT ALL CAN ONE TAKE A LOAN FOR:

There are different types of home loans tailored to meet ones needs. Here’s are some of
them:
Home Loans: This is the basic home loan for the purchase of a new home.
Home Improvement Loans: These loans are given for implementing repair works and
renovations in a home that has already been purchased by the client.
Home Construction Loan: This loan is available for the construction of a new home.
Home Extension Loan: This is given for expanding or extending an existing home. For eg:
addition of an extra room etc.
Home Conversion Loan: This is available for those who have financed the present home
with a home loan and wish to purchase and move to another home for which some extra
funds are required. Through home conversion loan, the existing loan is transferred to the new
home including the extra amount required, eliminating the need of pre-payment of the
previous loan.
Land Loans: This loan is available for purchase of land for both construction or investment
purposes.

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Bridge Loans: Bridge loans are designed for people who wish to sell the existing home and
purchase another one. The bridge loans help finance the new home, until a buyer is found for
the home.
Loan Against Property: Eairlier 3 Month Ago ICICI HFC Also handling the Loan Against
Property. People take loan on the behalf of his own existing property. Now The ROI on this
product is 13.75% and processing fees is 1% and service tax.(12.36% of processing fees) As
per criteria.
NO INCOME PROOF(NIP): In this product ICICI Provide the loan on the basis of Bank
Statement. In this product no documents req. except bank statement and income continuity
proof.

AUTO RTR: Loan given to a customer based on the auto loan taken from him from various
financial institutions.
Types of Loan Offered
1. Home loan
2. Office Premises Loan to Doctors
3. Home Equity Loan (Residendtial or Commercial)
Eligible Customer:
 Existing ICICI Bank Customer
 Customer of Other Lenders.
Eligible Entities:
 Self Employed Professional
 Self Employed Non Professional including companies
 Salaried Employee.
Minimum Loan Amount Possible: 10 lacs
Maximum Loam Amount Possible: 25 lacs
Explanation: Under Auto RTR loan can be given to a customer on the basis of auto loan
taken by him provided certain conditions are fulfilled. The loan can be given to individual
customer and also to partners/director of partnership firm or companies where the auto loan
has been taken in holding come in as a co-applicant or guarantor. If the applicant has more

20
than one RTR the eligilility of the multiple RTR can be combined to calculate the maximum
loan amount possible.
NOTE: Theloan under Auto RTR cannot be given to Transporter and Taxi operator. Also the
loan cannot be given on the RTR of commercial Vehicle like Scorpio, Sumo, Qualis, Tata
Indicab or as specified by the policy from time to time.

Conditions:
 RTR should be clean i.e there should be no EMI in arrears and the peak delay should
not be more than 30 days.
 No cheque bounces
For 12 to 23 months RTR – 0 bounces
For 24 to 36 months RTR – Max 2 bounces.
There should be a co-borrower as per the income ownership matrix.
 Telephonic personal discussion required
 FI of both office and residence.
 Loan tenor should be as per the product offered.
 Lenders should be among the approved lender list

Balance Transfer:
BT stands for Balance Transfer i.e transferring the existing HL with an HFC to ICICI Bank

MONEY SAVER
Interest rate
Daily Reducing interest rate
Applicable rate : 11.50%
Fixed rate not applicable under this product
Loan Amt
Minimum Loan Amt is Rs . 500000
Only one shot single disbursements eligible for this loan
Profile &Product

21
Applicable for Salaried/SEP/SENP
Not applicable for NRIs
This product is applicable for new sanctions only
Only applicable for Home Loan & BT of HL
Money SaverA/c:
New account has to be opened – existing account cant be converted to money saver a/c
Normal saving a/c
Minimum balance of 5000/- req. to me maintained
Cheque book and Debit card will be given
No Internet & Phone banking facility on this account

MONEY MULTIPLIER
Description Norms
1. Company Selection Criteria
Financial Performance Annual Business Turnover >100Cr
Company Type MNC/Public Limited/PSU
ICICI Relationship Salary A/c, Any other relationship with
ICICI Division
Selection of the companies would be as per the selection criteria above and approved by the Business Head or
, Specific Companies. As approved by Head Mortgages. A memo would be required to be prepared &
approved by the appropriate authority.

2.Pre-qualification Criteria
Type of Loan Offered -Home Loan
-Balance Transfer of Home Loan
Eligibilities Employees of selected companies having
salaryamount to be taken as per salary slip
excluding overtime allowances variable
components, if any.
Co-borrower The applicant would provide a co-borrower as
per the income ownership matrix.
3.Eligibility Grid

22
Tenor of loan As per the respective Product Norms. (The
remaining years of service of the borrower or the
maximum tenor offered by ICICI,whichever is
less
LTV As per Product Norms
Loan Amount Minimum 3 Lacs & Maximum 75 Lacs
Salary Bands Salary band classification would be
>=10000/- & <25000/-p.m.
>=25000/-P.M.
Proof of Net salary 1.Latest Salary Slip
2.Last three months Bank statement showing
salary credits.
Calculation of Net salary Option 1.
From Latest salary Slip – net salary amount as per
salary slip less overtime allowance & variable
components. If any.
Option 2.
From bank statement/PPA A/c –Average of the
last 3 months salary credit in the bank
statement/PPA account.

Net Salary Multiplier for Loan Eligibility.

Each salary band in combination with the tenor of the loan would have a net salary multiplier
for arriving at the eligible loan amt.
The net salary multiplier would be arrived by applying the ICICI Loan EMI to net salary
(ILENS) ratio as below:-

1.If net salary is >= 10000/- &<25000/- P.M. –maximum ILENS

can be 50%
2.If net salary is >=25000/-P.M. Maximum ILENS can be 58%
Loan Eligibility :- Net salary * Net salary multiplier.

23
Documents required:
 Application Form with Photograph
 Admin/Processing Fee Chequeas applicable
 Salary slip /bank statement as applicable
 Residence & Office Verification
 Age Proof
 Proof of employment (copy of employee ID with employee no. Original Letter from
Employer (HR) confirming Name.

HOME LOAN AND LAND LOAN

Eligible Entities:- (1)Salaried (2)SEP-Self Employed Professional
(3)SENP-Self Employed Non Professional

1.Age Norms
Considered For Eligibilty
At application Min 21 years
At Maturity of Loan Lower of Age of retirement of 65

Not Considered For Eligibilty

At Loan Origination Minimum 18 years
At application Max.70 years
At Maturity of Loan Max. 80 years

2.Built Up Area
Min . Built Up Area
Home Loan Min built Up area – 400 sq.ft

Land Loan Min. – 800 sq. ft

Max. – 10000 sq. ft.

24
2. FOIR (FIXED OBLIGATION INCOME RATIO)
FOIR
Monthly Salary
8500<10000 45%
10000<25000 50%
>25000 55%
SENP Max. 100%subject to FOIR + LTV of
140%

3.LTV NORMS
HOME LOAN
IF COP = MV 85% OF COP
IF COP > MV 85% OF MV
IF COP < MV 80% OF MV (subject to 100% of COP)

LAND LOAN
Direct allotment by authority 85% of COP
Direct allotment by Society 75% of COP
Resale/Purchase from builder 75% of COP

LAND+CONSTRUCTION
Land purchased for less then 1 year 85% of (Cost of Const. +Cost of Land)
Land purchased for more then 1 year Lower of 100% of Cost of Const. Or 85%
of (Const. Cost + Land Cost)

4.CAP on Value
Cap based on COP
Property > 100 Lacs but less then or equal 80%
to 200 Lacs

Property > 200 Lacs 75%

25
Cap based on MV
Property > 100 lacs but less then or equal to 75%
200 lacs

Property > 200 Lacs 70%

5.Loan Amount
Home Loan

For Mumbai,Delhi,Banglore Min 3 Lacs

Max. 3Cr.
Others Min. 2 Lacs
Max. 3 Cr.

Land Loan

For Mumbai, Delhi,Benglore Min. 3 Lacs

Max. 50Lacs
Others Min. 2 Lacs
Max. 50 Lacs

Amount
This largely depends on a number of factors like ones age, profession, salary, the city one
resides in among other such factors. It varies between Rs. 2.1 lac to Rs. 1 crore depending on
the lender. As a rule of thumb, depending upon the HFC, one will have to cough up 15%-
20% of the loan amount as a down payment. For smaller amounts, this may not be much. But
for figures running into lakhs, this could make loads of difference. For eg. An apartment
costing Rs 10 lakh may get 85 per cent financing. So, one will have to arrange for the
remaining Rs 1.5 lakh. If one takes this into account, the additional thousands will definitely
put a strain on ones finances.

26
Tenure
Generally, the maximum tenure of home loans is 15 years, with a few lenders offering tenure
of 20 years or more (ICICI has recently launched a 30 year loan). The longer the tenure,
more one pays in total interest, but ones monthly payments will be less. So depending on
ones earning potential and bank balance, one can choose an appropriate tenure. An important
requirement of most banks/HFCs is that one pays up the entire loan before one retires. One
can always prepay ones entire loan amount before it is due. There is a trend to do away with
the pre-payment penalty being imposed by some lenders so its best one checks on this as
well.

Interest Rate
Without doubt the most important parameter to factor into ones calculations. The interest
rates may vary from institution to institution and generally range from about 11.0% to
around 12.0%. Repayment is in the form of EMI's (equated monthly installments). The
longer the tenure, the more one pays in interest, but ones monthly payment will be less.

Refinance
This is a concept that is yet to catch on in the home loan market but is bound to be a major
service in the months to come. Under this facility, one can take a new loan from another
bank/HFC to pay back an old loan before its natural tenure. It gives one the opportunity of
prepaying ones high cost debt and gets a lower cost one. In today's falling interest rate
scenario one should use this vehicle to lower ones debt payments as much as possible. The
lender facilitates the shift by paying the outstanding and transferring the asset to their
portfolio.

Miscellaneous charges
A heading that should be ignored at one’s peril! The interest rates and EMIs are not the only
cost factor. Never underestimate how much the processing and administration fees amount
to. A 0 .5% administration fee and a 0.5% processing fee on, say, a Rs 5,00,000 loan, would
amount to Rs 5,000. Other times, it could be just one fee (either administration or
processing) but could yet work out to be much more if it is considerably higher at, say, 2.5

27
per cent or 3 per cent. The various other fees, which one is required to pay along with the
margin amount, are:

a) Interest Tax
This is the tax payable on the interest paid on a home loan and not the principal. This tax is
some times included in the interest rate of the loan, or may be charged separately as interest
tax.

b) Processing Charge
It's a fee payable to the lender on applying for a loan. It is either a fixed amount not linked to
the loan or may also be a percentage of the loan amount. The loan amount received by you
can be less than the processing fee.

c) Prepayment Penalties
When a loan is paid back before the end of the agreed duration a penalty is charged by some
banks/companies, which is 2% of the amount being pre paid.

d) Commitment Fees
Some institutions levy a commitment fee in case the loan is not availed of within a stipulated
period of time after it is processed and sanctioned.

e) Others

It is quite possible that some lenders may levy a documentation or consultant charge.

Sanctioning

Documents

 Passport size photograph.

 Age verification: PAN card, Voters ID, Passport, License.

 Bank statement for the last six months.

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  Income Documents e.g. latest Form 16, Certified IT returns for latest 3 years.

 Admin Fee cheque.

 Loan Enclosure letter.

 These are the documents required for sanctioning a loan. You may be asked to submit
further legal documents if required by ICICI Bank or its approved lawyers.

 Do retain photocopies of all documents being submitted by you.

Disbursement

Your loan will be disbursed after you identify and select the property or home that you are
purchasing and on your submission of the requisite legal documents.

While you may be under the impression that the list of documents asked for is rather
extensive, please note that it is for your own good. Each and every single document asked
for will be verified and checked to ensure your safety.

This may take some time but we want to ensure a clear title and will complete all the legal
and technical verifications to ensure that you have full rights to your home.

The 230 A Clearance of the seller and / or 37I clearance from the appropriate income tax
authorities (if applicable) is also needed.

On satisfactory completion of the above, on registration of the conveyance deed and on the
investment of your own contribution, the loan amount (as warranted by the stage of
construction) will be disbursed by ICICI Bank.

The disbursement will be in favor of the builder/seller.

List of documents for disbursement

Standard documents:

 Loan Agreements

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  Disbursement Requests

 Post-dated Cheques

 Personal guarantor’s document

Adjustable Rate Loans

Home Loans / Land Loans:

The interest rate on ICICI Bank Home Loans / Land Loans is linked to the ICICI Bank
Floating Reference Rate (FRR) and moves up or down with the FRR. The FRR for ICICI
Bank Home Loans is currently 7.75% p.a.The EMI table for Adjustable Rate Home Loan /
Land Loan is given below:Up to 5 years 7.50 % 2004

6 - 10 years 7.50 % 1188

11 - 15 years 7.50 % 928

16 - 20 years 7.50 % 806

0% Processing Fee **

 Interest calculated on the basis of monthly rest.

 Maximum tenure of 20 years.

 No fee for part prepayment.

 Interest rates would be adjusted periodically with change in FRR.

Office Premises Loan:

The current rate of interest for these loans is 9.75% for all tenures. The interest rate on these
loans is linked to the ICICI Bank Floating Reference Rate (FRR) and moves up or down with
the FRR. The EMI table is given below

Floating rate

30
Tenure (yrs) Rate of Interest EMI per Lac

Up to 5 years 9.75% 2113

6 - 10 years 9.75% 1308

11 - 15 years 9.75% 1060

Interest calculated on the basis of monthly rest.

Maximum tenure of 15 years. A pre-payment fee of 2% on the amount prepaid, either in part
or full.

Home Equity Loans:

The current rate of interest for these loans is 9.75% for residential property and 10.25% for
commercial property. The interest rate on these loans is linked to the ICICI Bank Floating
Reference Rate (FRR) and moves up or down with the FRR.

Tenure (yrs) ROI EMI/lac ROI EMI/lac

Up to 5 years 9.75% 2113 10.25% 2138

6 - 10 years 9.75% 1308 10.25% 1336

11 - 15 years 9.75% 1060 10.25% 1090

 Interest calculated on the basis of monthly rest.

 Maximum tenure of 15 years.

 No fee for part prepayment.

Fixed Rate Loans

Home Loans / Land Loans:

The EMI table for Fixed Rate Home Loans / Land Loans is given below:

31
Up to 5 years 7.75% 2016

6 - 10 years 7.75% 1201

11 - 15 years 7.75% 942

16 - 20 years 7.75% 821

0% Processing Fee **

The interest rate is calculated on a monthly reducing basis. No fee for part prepayment.

Office Premises Loan:

Up to 5 years 10.50% 2150

6 - 10 years 10.50% 1350

11 - 15 years 10.50% 1106

 The interest rate is calculated on a monthly reducing basis.

 A pre-payment fee of 2% on the amount prepaid, either in part or full.

Home Equity Loans:

Tenure (yrs) ROI EMI/lac ROI EMI/lac

Up to 5 years 10.50% 2150 11.00% 2175

6 - 10 years 10.50% 1350 11.00% 1378

11 - 15 years 10.50% 1106 11.00% 1137

The interest rate is calculated on a monthly reducing basis.

Loans against commercial property shall be offered only to doctors.

32
No fees on part prepayment.

ICICI Bank Home- Floating Reference Rate

 The ICICI Bank Floating Reference Rate is currently 7.75% p.a.

What is the repayment tenure?

 Home Equity Loans - Maximum loan tenure of 15 years.

 Office premise loan - Maximum loan tenure of 15 years.

 Home loan - Maximum loan tenure of 30 years.

REPAYMENT

How is the loan repaid?

All loan repayments are done via equated monthly installments (EMI).

What is an EMI?

An EMI refers to an equated monthly installment. It is a fixed amount which you pay every
month towards your loan. It comprises of both, principal repayment and interest payment.

When does the repayment start?

EMI payments start from the month following the month in which the full disbursement has
been made.

How is the EMI paid?

33
The EMI is to be paid every month through post-dated Cheques (PDCs) or direct deductions
from your salary. If you are opting for PDCs, then you will have to provide 36 upfront. The
PDCs are to be dated on the 1st of every month. However, if you receive your salary a few
days later, no problem. We provide the flexibility of dating the Cheques for the 7th of the
month.

What if a PDC bounces?

In the case of a bounced cheque or delayed payment, charges and outstanding dues will be
charged as per the prevailing company policy. You can replace old PDCs with new ones
within 5 - 7 working days.

What is pre-EMI interest?

on the disbursed amount. This interest is called pre-EMI interest (PEMI) and is payable
monthly till the final disbursement is In the case of part disbursement of the loan, monthly
interest is payable only made, after which the EMIs would commence.

The property need not even be in the same city where you are residing. The only condition
being that ICICI Bank has home loan operations in both the cities.

Should there be a change in your financial status or plans, you can withdraw your sanction
within 6 months of approval.

However, we are always ready to assist our customers in the event of legitimate problems.
And, we might reconsider this if we find that there are satisfactory reasons for the delay.

And, neither would we charge you extra for this delay. If it is refinancing you are interested
in, it is possible within 6 months from the date of purchase of property.

FAQ

What are the minimum & maximum loan amounts?

You can get a home loan ranging from a minimum of Rs. 2 lakh (Delhi, Mumbai &
Bangalore

34
Rs. 3 Lakh) to a maximum of Rs. 3 crore. The loan amount depends on your repayment
capability and is restricted to a maximum of 85% of the cost of the property or the cost of
construction as applicable.

Repayment capacity takes into consideration factors such as income, age, qualifications, and
number of dependants, spouse's income, assets, liabilities, stability, continuity of occupation
and savings history.

What are the loan tenure options?

You have the option of selecting a term you are comfortable with, ranging up to 30 years,
provided the term does not extend beyond your reaching 65 years of age or retirement age,
whichever is earlier.

How is the interest charged/calculated?

ICICI Bank Home Loans has two schemes, (a) Fixed Rate Home Loans (b) Adjustable Rate
Home Loans. If you opt for an Adjustable Rate Home Loan, the interest rate would vary with
the ICICI Bank Home Floating Reference Rate. Under the Fixed Rate Home Loans the rate
applicable on the date of disbursement remains fixed during the entire duration of the loan.

Do I have to pay any additional charges?

You don't have to pay any processing fee - this offer is valid for a limited period only.
However, Administration fee of 0.5% of the loan amount would have to be paid.

What security/collateral do I have to provide?

Typically the security for the loan is a first mortgage of the property to be financed, by way
of deposit of title deeds and/or such other collateral security as may be necessary. The title to
the property should be clear, marketable and free from any encumbrances.

35
What are the stages involved in taking a loan?

There are two main stages –

1.Sanction of the loan, whereby you get an approval for a specific loan amount based on the
value of your property and repayment capabilities.

2. Disbursement of the loan amount.

What is a Monthly Reducing balance?

An Equated Monthly Installment (EMI) has 2 components, interest and principal. When the
interest is calculated on monthly rests, the principal on whom the interest is charged goes
down every month. This results in a significant saving for the customer over the tenure of the
loan.

What is an Annual Reducing balance?

An Equated Monthly Installment (EMI) has 2 components, interest and reduces only at the
end of the year reduces only at the end of the year.

What is an amortization schedule?

An amortization schedule is a table giving the reduction of your loan amount by monthly
installments. The amortization schedule gives the breakup of every EMI towards repayment
interest and outstanding principal of your loan.

What are the tax benefits of taking a home loan?

The tax benefits on a home loan, under the Income Tax Act, are two-fold:

A) Principal repaid: Rebate under section 88 (2) of the Income tax Act is available to
individuals on repayment of the principal portion as given below

Up to Rs.1, 50,000 20%

36
More than Rs.1, 50,000 but not exceeding Rs. 5 lakh 15%

More than Rs.5 lakh None

Moreover, the rebate is allowed up to the maximum limit of Rs.20, 000 per financial year on
the repayment of the principal sums, which need not be out of income chargeable to tax of
the year in which such repayment is made.

B) Interest repaid: Under section 24 of the Income Tax Act, in case of self-occupied
property, deduction is allowed up to Rs.1,50,000 per annum for houses acquired or
constructed with capital borrowed after March 31, 1999 as long as the acquisition or
construction is completed within 3 years from the end of the year in which such loan is
taken.

37
 COMPARISION OF PROCEDURE FOLLOWED BY
THE HOUSING FINANCE COMPANIES WHEN A
LEAD IS OBTAINED

In order to have a better understanding of the various loan appraisal procedure which are
followed in various HFC’s and also the general procedure which are followed in these HFC’s
with respect to the movement of a particular lead from the enquiry stage till the time of
disbursement of loan, it can be better understood by the help of flowcharts.

An enquiry is generally obtained in a HFC’s through either of the following ways:

 Walk in Customer

 Via E-Mail

 Telephonic Inquiry

 Through Direct Selling Agents

To determine the eligibility of the individual, the following factors are taken in to
consideration

The age of the applicant : The age of the applicant in this case should not be less than 21
years at the time of applying for a loan; if his income is being taken for the calculation of
loan amount. Although he/she should be a minimum of 18 years of age if they are co-owners
in the property for which the loan is being taken. This means that a person can be a co-owner
but not a co-borrower. If the applicant is an NRI the minimum age of the applicant at the
time of the loan origination should be 25 years and maximum at the time of loan maturity 60
years or the age of the retirement.

Also the applicant should not be more than 60 years of age or have past his retirement age if
salaried at the time of applying for a loan, if their income is to be taken for calculation of the

38
loan amount. But, if he/she is co-owners in the property for which the loan is being taken
then he/she also have to apply even though their income would not be considered.

Number of co-borrowers:

The number of co-borrowers should not exceed 3. Co- borrowers can be spouse, parent, or
brother or son, a minor cannot be a borrower; income of co-borrower can be considered for
eligibility. This means that apart from the income of the main applicant, 2 more incomes can
be clubbed.

The clubbing of income is possible only in case of spouse and son. Income of the daughter
and daughter in law is not considered for loan eligibility.

Maximum Loan amount and amount of loan required:

1 crore or 85% of the cost of the property (declared cost), whichever is lower would the
maximum amount which could be financed. This is done to determine whether or not the
applicant is putting in the requisite amount i.e. 15% of the cost on its own or not.

Location of the property:

It is important to determine the location of the property for which the loan is being taken.
This is because there are areas where unauthorized colonies or flats have been constructed or
are in the process of being constructed, thus in such areas it is not advisable for the bank to
go ahead with the loan process.

Profile of the Applicant:

There are certain types of people to whom loan is not given notably politicians and property
dealers among others. Thus it becomes important for the bank to ascertain the exact profile
of the applicant.

The bank in order to have full proof of the age and income of the applicant asks the
prospective customer to furnish some documents. The documents to be submitted to the bank
are as follows:

39
  Photocopy of age proof

 Photocopy of address proof

 Signature proof

 Verification of Employment form

 Latest salary slip/salary certificate showing all deductions for at least the past 6
months

 Form 16 from your employer for the past 3 years.

If your job is transferable, permanent address where correspondence relating to the

application can be mailed.

If you have been in your present employment / business or profession for less than a year,
mention details of occupation for previous 5 years, giving position held, reasons for change
and period of the same.

THE ABOVE MENTIONED DOCUMENTS ARE REQUIRED IN CASE

THE APPLICANT IS SALARIED

If the applicant is a Non Resident Indian (NRI), then along with the above mentioned
documents he would also be required to submit a photocopy of his passport.

If the applicant is a self employed professional, then the following documents would be
required:

 Balance sheet and profit and loss account of the business/profession along with
copies of individual income tax returns for the past 3 years as certified by a chartered
accountant.

 A note giving information on the nature of the business/profession, year of

establishment, present bankers, form of organization, clients, suppliers etc.

40
  The net worth as an applicant/co-applicant.

 Proof of age.

In case the applicant is a non-professional then the documents, which would be required,
are:

(a) Individual:

Latest 3 years ITR’s with computation for the individual applicants and co applicants.

Latest form 16 & salary slip of directors.

(b) Firm/company:

Latest 3 years audited Profit and loss accounts and balance sheets of the firm/company.

Latest 3 years ITRs for the firm/company.

On receiving the above mentioned income documents in the above 4 cases i.e. Salaried, Self
Employed Professional, Self Employed Non-Professional and Non Resident Indian, if the
bank is satisfied with the documents then it would proceed to the next step which is to
calculate the loan amount for which the applicant would be eligible. Following are the
necessary information required for calculation of the loan amount.

 Income of the Applicants

 Number of Dependants

 Monthly Expenditure

 Repayment Capacity

 Employment History

 Number of Years of Service Left

41
These and other such factors affect the credit rating of the borrower. Some information may
also be requested for the approval of the loan. The time taken for receipt of such information
is crucial since it will affect the length of time required for a loan approval. The above-
mentioned factors would be discussed in detail below:

Income of the Applicant:

The family's gross monthly income is the most important factor, which helps the appraiser
determine the loan amount to be sanctioned, and by extension the amount of EMI the
borrower can comfortably repay.

EMIs are the monthly repayments of the loan by the borrower. These are called equated
installments as they are equated over the term of the loan and include the entire amount the
borrower will pay to the financier. In other words it includes both the principal and the
interest on it. This is done for convenience both for the financier and the borrower. For
HDFC it is administratively convenient to account and monitor the recovery of the loan over
the loan tenure. For the borrower it is convenient to keep track of his fixed monthly liability
and being of a fixed nature over the loan tenure makes it easier for him to do his own
personal planning of his finances- To determine the loan amount we calculate what is called
the Income Installment Ratio (IIR). The IIR is usually assumed to be 35% of the family's
gross income. This means that HDFC feels 35% of the gross monthly income to be the
maximum EMI repayment capacity of the loan applicant. Therefore if the family's gross
monthly income is Rs.10, 000 then the maximum EMI repayment capacity is assumed to be
Rs.3500. To calculate the loan amount to be sanctioned the above-mentioned amount is
divided by the EMI for Rs. 100,000 at the applicable rate of interest for the term of the loan.
However it must be pointed out that there is nothing sacrosanct about 35%. It is only a guide
to help the credit appraiser to operate at a level that has been empirically derived as a safe
indicator of the applicant’s EMI repayment capacity. It is up to the credit appraiser and his
skill as an appraiser to operate in a band near about the 35% IIR and assign whatever IIR he
deems fit for that particular applicant.

42
Number of Dependents:

The no of dependants in this case to be maximum 5.

Monthly Expenditure:

Another important aspect is the amount, which is generally spent by the applicant in a
month. This means determining his lifestyle and the amount of income he/she normally
keeps aside at the end of the month. This amount is directly related to the number of
dependents and the size of the family, i.e. the lesser the family size the greater would be the
income, which is saved at the end of the month.

Repayment Capacity:

The capacity of the borrower to repay the loan amount depend upon each of the above 3
factors. Along with this it also depends on other obligations, which the applicant is facing.
Other obligation means that there might be a situation wherein the applicant has taken a
personal loan like car loan or education loan for which EMI’s are also being paid on a
monthly basis. In such a scenario the loan amount is determined by a ratio called the Fixed
Obligation Income Ratio (FOIR). The FOIR is usually taken as 40%. We multiply the
gross monthly income by the FOIR and then deduct the fixed obligation from this figure and
then divide the remainder by the EMI for a Rs. 100,000 at a given rate of interest for a given
term of loan.

Employment History:

The loan applicant’s nature of work is another important pointer to his income affordability.
For instance a person working as a software engineer might be earning quite a lot but
because of the inherently unstable nature of his profession, the loan amount to be given to
him may work out less than an employee working in a PSU. Also it is necessary to establish
the frequency in which the applicant changes his/her job, as an applicant who frequently
changes his job is insecure and thus would not be able to satisfy the bank over his ability to
repay the loan amount.

43
Number of Years of Service Left:

This is an important factor in determining the loan amount as it tells the appraiser as to what
should be the duration of the loan in terms of years and also whether or not the applicant
would be able to repay the loan when he/she retires.

On determining the loan amount, the customer can either accept the eligibility criteria of the
bank, if the amount is near about his expectations or can refuse the offer made by the bank.
On the event of the former occurring the bank then asks for a cheque towards processing the
loan, which would be 0.5% of the loan amount.After taking the processing fee the property
documents are required by the bank which vary under different circumstances.

(A) Incase the property is purchased from the builder:

 Original copy of your agreement with the builder.

 7/12 extract or property register card of the land under construction.

 Index II extract of your agreement with the builder.

 Copy of N.A. permission for the land from the collector.

 Search and title report (with the details of documents) for the last 30 years.

 Development agreement between the owner of land and the builder.

 Copy of order under the Urban land Ceiling Act.

 Copy of building plans sanctioned by the competent authority.

 Commencement certificate granted by Corporation / Nagar Palika.

 Building completion certificate (if available).

 The latest receipts of taxes paid.

 Partnership deed or memorandum of association of the builders firm.

44
(B) Incase the property is being purchased from a cooperative society:

 Original share certificate of the Society.

 Allotment letter from the society in your name

 Copy of the lease deed, if executed.

 Certificate of the registration of the society.

 Copy of the byelaws of the society.

 No objection certificate from the society.

 7/12 extract or property register card in the society's name.

 Copy of N.A permission for the land from the collector.

 Search and title report (with the details of documents) for the last 30 years.

 Copy of order under the Urban Land ceiling Act.

 Copy of the building plans sanctioned by the competent authority.

 Commencement certificate granted by Corporation / Nagar Palika.

 The latest receipts of taxes paid.

 Original Agreement to assign / Deed of assignment.

(C) If construction on own land:

 Original sale deed of land.

 7/12 extract or property register card in your name.

 Copy of N.A. permission for land from the collector.

 Search and title report (with the details of documents) for the last 30 years.

45
  Copy of order under Urban Land Ceiling Act.

 Copy of the building plans sanctioned by the competent authority.

 Building permission granted by Corporation / Nagar Palika

 The latest receipts of taxes paid.

 Estimate of cost of construction certified by the architect.

After receiving the required documents HDFC Ltd. Then files in the details of the applicant
pertaining to his/her income as well as the applicant’s property details. Details regarding the
applicant’s referees are also filed. Referees are those who are recommending the case of an
applicant and are giving guarantee to the bank that the applicant is of sound nature and is
unlikely to default.

The bank then carefully checks the details of the referees and also recommends the case to
higher authority if the appraiser feels that some of the details are not up to his satisfaction.
Any such remarks are then listed which would be referred to a lawyer or a senior employee
thus delaying the loan process.

After the lawyer or the senior management approves the case, the file then goes to what is
called the double checker. A double checker verifies all the details of the applicant right
from his/ her age to his income and his property. The double checker then rectifies any fault
before putting the file online. Once the file is put online the sanction letter is given to the
customer who collects the sanction letter after giving the requisite legal documents.

The various legal documents, which may be required, are

1. Sale deed

It is an instrument in writing which transfers the ownership of the property or properties in

exchange for a price paid/consideration. This is a document that requires to be registered
compulsorily.

2. Conveyance Deed

46
The sale deed that is issued by the development authority in favour of the original allotted is
called conveyance deed.

3. Agreement for Sale It is an agreement which is entered into between the parties for
dealing with the property and which creates a right to obtain a sale deed mentioning the
property. Normally it fixes a time for completion, payment of earnest money or part payment
of purchase consideration. Generally it is a document that precedes a sale deed and in such
cases does not require registration and will also not confer any charge or right on the
property. However in some states the sale agreement itself will be registered and will act as a
sale deed.

4. All Previous Sale Deeds in Original (If required in the case of Resale)

Previous chain of original conveyance/sale deeds to have a trace of past ownership. If the
deed has been lodged for registration, then we should ask for the certified true copies of such
conveyance, sale deeds, etc

5. Perpetual Lease Deed/ Sub Lease Deed

Lease Deed is an instrument in writing which transfers the right to use and the right to
possess a property in exchange for a price /consideration. However the lessee does not have
the right to dispose off the property as he wishes.

This is because typically in leasehold cases the house construction or the flat is built on
leasehold plots. Thus though the flat or the house is owned by the lessee and the lessee has
the right to do whatever he wishes with the house, he has no ownership right on the land on
which the house is built. Therefore if he wishes to take make further construction on the land
etc he is required to take permission from the lesson, which is usually the development
authority of the area.

Lease Deeds are called Perpetual Lease Deeds because usually the tenure of these kinds of
leases are for very long periods to ensure that the owner is able to enjoy the benefits of the
property for a long time. For example DDA lease are usually for tenure of 99 years.

47
6. Allotment Letter

This is the letter issued by the development authority/builder in favour of the borrower to
inform him that he has been allotted a flat in the property being developed. This is similar to
a Share Certificate issued by a Co-op Grp Hsg Society.This letter is issued after the borrower
has paid registration money.

7. Share Certificate

Share certificate of the society bears the name of the seller. The share certificate issued by
the society in favour of the owner ensures that the owner is recognized by the society.

8. Possession Letter This is issued after the borrower fulfils his payment obligations to the
builder/authority whether it is construction linked/cash down informing him that he can take
possession of his house and can register his property and execute the conveyance deed.

9. Certificate of Search cum non Encumbrance

This records details of transfer of ownership of a property in succession upto the current
owner. It shows the date, the names of the parties involving the amount of consideration, the
extent and schedule of the property. This certificate can be obtained from the sub registrar’s
office for a payment of fee from any previous year till date.This certificate isalso useful in
establishing the events as to how and when the resentowner came into possession of the
property.

10. Title Report for last 12 years indicating chain of ownership and encumbrances

An advocate issues a title certificate after conducting a search of the title of the property,
which the borrower intends to purchase. The title certificate would state if the property is
clear, unencumbered and has a clear marketable title. It is mandatory for the developer to
annex a copy of these reports in the "Agreement for Sale" with the intended purchaser of the
flat. In other words, it would state whether or not there is any existing mortgage, litigation,
condition or claim which is likely to affect the title of the buyer adversely.

48
* The only difference between the certificate of search cum non encumbrance two is
that while the certificate of search cum non encumbrance is issued by the sub-registrar
the title report is issued by the advocate. The essential purpose behind the documents
remains the same.

11. Draft 3 Letter

A very important letter that confirms the following:

 Sale of the property in question

 Obtaining of necessary permissions/approvals/sanctions from the competent authority

 Assurance that the property is clear, free and non encumbered

 No objection to the property being mortgaged

 Undertaking that as soon as the registration formalities are completed the documents
will be sent to HDFC as security.

12. Receipts of Payments

All payments made to the builder/coop group hsg society/ development authority must be
submitted to HDFC before the disbursement takes place. This is to ensure that the borrower
makes a minimum contribution towards the property. This is because HDFC wants that the
borrower also bears some risk regarding the property in question.

13. Mutation Letter :

Mutation is a change of one name to the other. The revenue authorities issue it. For ancestral
properties this helps to establish ownership.

14. No objection certificate/Permission to mortgage ( Resale case)

NOC from the society for transfer and sale of flat. The seller should apply to the society to
issue a no objection certificate indicating that the society has no objection to transfer the

49
share certificate to the buyer. The certificate should also mention that the seller has no
default/outstanding payments to be made to the society as of date.

Once such a certificate is obtained you could proceed the Agreement for sale and filing the
37-I form with the Income Tax (if applicable), preparing the sale/conveyance deed
/agreement.

There also should be a mention in the agreement that the said property is not mortgaged to
anyone and if there happens to be a mortgage then on or before the date of execution of the
sale/conveyance deed, the seller should ensure that the mortgage account is clear.On doing
this a date is fixed on which the first disbursement would be given. On that day the customer
comes with a cheque of 0.5% in favour of HDFC Ltd. Towards administrative fees and
subsequently collects his disbursement cheque. On receiving all the disbursement Cheques
the file is then locked. The time between the first cheque and the full disbursement, the
applicant would be paying Pre EMI on simple interest on the amount of loan received.

50
INTERPRETATION OF RESULTS OBTAINED

AGE OF THE BORROWER:

Minimum Age: Apart from Citibank all other HFC’s are offering loans to customers with
the minimum age of 21 years, whereas Citibank offers loans only after the age of 25 Yrs.
This gives an opportunity to the customers below the age of 25 to possess a house of their
own.

Maximum Age: All HFC’s give loans to customers only up to their retirement age or for a
maximum of 20 years whichever is earlier. It is 15 years for Standard Chartered.

MINIMUM LOAN AMOUNT:

HDFC and ICICI are offering loans even below the coveted figure of one lac. On the other
hand, HSBC does not lend below 2 lacs, Standard Chartered and City Bank below 2.1 lacs
and IDBI below 1 lac. This signifies that HDFC Ltd. and ICICI are targeting people at all
income levels. Therefore, an applicant whose income falls within a range of Rs.5000-6000
can also afford to take a loan. Thus both HDFC and ICICI are in

ICICI offers loans to a maximum amount of Rs. 3 Crore, Citibank along with HSBC Bank
finance up to 2 crore. HDFC Ltd. And Standard Chartered are financing only up to 1 crore
and IDBI finance not more than 50 lacs. Thus, ICICI by having an upper limit of 3 crore is
targeting customers who are looking for a high value loan who are unable to get that much
amount from other HFC’s.

LOAN AMOUNT PROVIDED:

HDFC 9.22 lacs

ICICI 13.17 lacs

HSBC 11.40 lacs

STANDARD CHARTERED 14.15 lacs

51
CITIBANK 12.28 lacs

IDBI 9.48 lacs

If other obligations:

HDFC 5.26 lacs

ICICI 7.90 lacs

HSBC 8.81 lacs

STANDARD CHARTERED 9.43 lacs

CITIBANK 6.82 lacs

IDBI 9.48 lacs

As seen from the example given earlier, that for a given income different HFC’s give
different amounts of loans. This loan amount is calculated on the basis of the applicant’s
income, the rate of interest the HFC is offering and the tenure of the loan. On the basis of the
example given, a customer would be inclined to go towards ICICI even though they are
providing less than Standard Chartered. But it must be noted that Standard Chartered is only
lending for a period of 15 years whereas ICICI is lending for a tenor of 20 years. The
customer also would consider taking a loan from either City Bank or HSBC as they offer a
much lesser rate of interest than the competitors. As far as HDFC and IDBI goes the
customer would probably not even give them a second look.Also it can be seen that if a
customer has other obligations, then the loan amount financed comes down drastically. Even
here HDFC is lending much less than the competition.

52
CHARGES:

All HFC’s normally charge between 0.5% to 1% of the loan amount towards processing and
administrative charges. HSBC charges around 1.8% of the loan amount towards processing
fee and administrative charges.If in case the customer wants to repay the loan ahead of the
amortization schedule, then a certain penalty is charged by the HFC’s which is 2% of the
outstanding loan amount.

INCOME OF THE APPLICANT:

More often than not an individual is unable to apply for a loan at a particular HFC just
because his/her income does not meet the selection criteria. Some HFC’s have a criteria that
the applicant should be earning a minimum of some amount in order for him/her to be
eligible for a loan. In order to apply at HSBC the applicant must be earning a minimum of
1.5 lacs net per annum or 12,500 per month net. For Citibank and Standard Chartered it is 1
lac gross and 96,000 for IDBI. HDFC and ICICI in this aspect are in a better position as they
do not have any such criteria and can give loans to people who are earning as low as 5000
per month also.

DOCUMENTATION:

All HFC’s require certain documents in order to satisfy themselves that the information
provided by the applicant is authentic. For the benefit of both the applicant and the HFC in
question the lesser the number of documents the better it is as it saves the applicant of
arranging for necessary documents and the HFC of needless paper work.

MODE OF REPAYMENT:

Stan C and Citibank are offering special products called 'Home Saver' and 'Home Credit'
respectively. In case of Stan C the customer would be given a loan a higher rate of interest of
10.25% (daily reducing balance and along with the loan with customer the bank would open
a current account, where he has an option of depositing his savings in it and since the interest
is calculated on daily reducing balance, whatever amount he deposits in the current would be
reduced from his loan amount and the interest would be calculated on the remaining amount.

53
This in turn would reduce the tenor of the loan and the applicant would be in a position to
pay off his loan faster and at lesser interest. The Monthly EMI would get deducted from the
current account monthly.

On the other hand, Citibank is also offering a similar loan and much lower rate of interest of
9.25%.

This type of loan is only beneficial if a person is taking a loan above Rs.5 lacs and has
enough monthly savings. In case a person does not have any savings, he may end up paying
more than what he would have paid in an ordinary loan.

LITERATURE REVIEW

54
Before giving details regarding the research methodology used in the study, it is appropriate
to present a brief overview of the research articles, case studies, and books written on this
particular topic. The area of study may be within the country or outside the country.

Review of literature helps a researcher to get acquainted with his/her selected research
problem and also may provide some guidelines in selecting a proper research methodology.
It is also helpful in finding out the research gaps in the existing literature.

This will help the researcher in fine-tuning his/her research problem and methodology.
Another advantage of reviewing in the existing literature is that in cases where the research
problems are similar, the conclusions and findings may be easily compared. This will help
the researcher in determining whether his/her findings are possible or not.

The literature under review may be of two types: (i) concerning the conceptual and
theoretical framework. (ii) the empirical literature dealing with the studies made in the past
which are similar to the one that the researcher intended to undertake.

The basic outcomes of such review will be the knowledge as to what data are available for
analytical purposes, which will help the researcher to specify his/her own research problem
in a more meaningful way.
Thus, review of literature is helpful in formulating the research problem and also helps the
researcher in deciding about the most appropriate methodology to be used.

While comparing the results of the earlier studies with his/her own results, care must be
taken to verify whether the objectives and methodology are similar.

While reviewing the earlier studies a researcher has to state the objectives of the study,
describe the concepts and definitions used, the methodology employed and the important
findings and conclusions of the study. The researcher is supposed to make a critical review
of methodology used by the earlier researcher of the methodology if any.

55
The researcher should improve his methodology in light of this In the following paragraphs
several similar studies undertaken earlier are reviewed keeping in mind, the following
aspects: 1) The objectives, 2) Area of study with reference year, 3) Research methodology
used and 4) Major findings and conclusions.

A Paper entitled “Whether Today’s Customers are satisfied? – A Study with Banks”
Authored by Ashok Kumar M. et.al. (2009)

The objective was to rank the banks on the basis of customers satisfaction and to find out the
problems faced by the present day customers with the banker and to make suggestions for
better working of the banking services.
The study is restricted to Coimbatore headquarters only. Only 105 customers were
considered as sample for the study which was conducted during the months of May and June,
2008.
SBI and its associate bank were taken for the study. The findings of the study are:
 42.86% of the respondents are in the age group of 31-40 years. 68-57% are married,
42.86% have post-graduate education, 36.19% are businessman, and 35.24% are
employed. 37.14% respondent’s income range between `1,000 to 15,000.
 With infrastructure 51% of the respondents were found to be satisfied. With regard to
location of the bank, 25% of their customers are highly satisfied.
 Regarding attitude of the bankers toward its customers, only 59% are found to be
satisfied and only 6.7% were found to be highly satisfied.
 Regarding investment opportunities, 35% of the respondents are satisfied
 16.19% of the respondents were dissatisfied regarding advice towards investment.
 51% of the customers are satisfied with the banks the behaviour towards customers
by the bank employees.
 Regarding Evening Banking services, phone banking services & Sunday banking
services there were 33%, 18% and 11% dissatisfied customers respectively.
 With regards to the core banking service only 28.9% of the respondents were aware
of the functioning of CBS, with regards to online banking services 70% and the
functions of smart card, digital cash and e-purse 69% respondents are satisfied.

56
  80% of the customers are satisfied with the proximity of the ATM.
 41% are satisfied regarding the approach of banks towards redressal.
 Overall rate compared to age and income was found to be significant whereas rest of
the factors considered do not have significant influence on the other. The researcher
suggested that,

 The facilities of the bank should be made more convenient for customer comforts.
 The ATM services should be extended with few more cabins.
 Customer meets should be organized at reasonable intervals so that they can establish
better rapport with the customers and educate them about the latest advancement
made in the bank.
 Additional branches can be opened to reduce the burden of work on the existing
branch.
 The banks should improve the working performance of operations

A Research Study entitled “A Study on Customers Preference and Satisfaction of Four

Basic Banking Services in Coimbatore and Erode” Authored by Vetrivel T.(2010)

The objectives of the study were:

 To know the overall satisfaction and dissatisfaction levels of bank customer with
respect to four-dimensional banking services –Loan services, deposit scheme
services, Insurance services and value added services.
 To know the customer’s opinion and preferences about various supporting factors of
four dimensional banking services.
For this purpose, 300 customers of two major cities of Coimbatore and Erode were selected
at random and the study period was for nine months. (August 2009 to April 2010). Chi-
square test was used to analyze the data.

The important findings of the studies were:

 As far as overall satisfaction is concerned out of the 172 bank loan customers i.e.
50% of customers were satisfied and the remaining 50% dissatisfied due to poor

57
 services, penalties for late payment, fear of threats, interest rate confusion, hidden
cost, unknown deduction etc.
 Overall satisfaction on bank deposit schemes resulted positively.
 Banking insurance services still need to be given attention by focusing on customer
issues.
The study reveals that new innovative schemes, strategies to cater to non-users of insurance
services have to be adopted, in value-added services. Customers preference fo net banking
was least ranked and if the bankers wish to increase net banking traffic,bankers should take
maximum efforts to educate the consumers by offering online training instead of handing
out instruction manuals. The researchers suggest that if the banks want to sustain customers
on a long-term basis, bankers should work towards 100% customer’s satisfaction.

A Paper entitled “Housing Finance Sector in India – An Overview” by Sreelaxmi P.

(2007)

The author stated that housing has always been an important agenda for the Government of
India. It generates national income by creating employment and helps the individuals in their
socio – economic development. It gives impetus to the economy by enhancing capacity
utilization of related industries such as steel, cement, transportation, etc. The home loan
sector in India is on a boom. The new class of young buyers, whose affordability is high, is
spending a little more on paying EMI rather than spending huge amounts on the rents,
thereby owning a house. The government is also encouraging this sector by allowing tax
benefits. The housing finance sector shows an exponential growth as compared to the other
areas of credit. The annual growth rates (in %) of direct housing finance disbursals by the
Primary Lending Institution during 2001-02, 2002-03, 2003-04 and 2004-05 were 25,76,29
and 32 respectively.

While housing finance is experiencing exponential growths, the menace of bad loans cannot
be ignored. These loans required better monitoring, fair assessment of property and
compliance able to overcome the problem of non- performing Assets e.g. In 2004-05,
percentage of NPA in housing finance was only 1.4 compared to 2.80% in case of banks’

58
total retail credit. Once the loan is sanctioned the job of the lender is not over. He has to
exercise vigilance and monitor the payments of installments by the borrowers. It is advisable
to make periodical review of the borrower’s financial position to ensure his capabilities of
prompt payments of installments.

The researchers suggest that the industry has been constructing stories on a safe foundation.
It will continue to thrive so long as it plays safe averting NPAs. Necessary measures like
takeover of bad loans, fair assessment of property and employee morale may be taken by the
financial institution by improving their performance and avoiding NPAs.

A Paper entitled “Housing Finance: A Study the Problems and Prospects” Authored by
Rajasekhar D. et.al. (2008)

The objective of the study was to analysis the trend in the growth and structure of LICHFL
in Chennai city and to evaluate the relative performance of LICHFL in providing housing
loans in Chennai city. One hundred respondents have been selected on the basis of random
sampling technique. Researcher used conventional statistical tools like percentage and
average for analyzing perception of the borrowers about the LICHFL.

Linkert scaling test was used. The study revealed that in Chennai, 34% of the respondents
have reported that the institution provides loan at low rate of interest, 33% have reported
easy installments, 31% reported that they approached for simple procedure and formalities
and only a negligible 2% of the respondent represents located near to their house. The other
findings of the study are:
45% of the respondents have bought loan for purchase of house, 37% of have bought the
loan for purchase of flat, 16% for construction of house and remaining 2% for other reasons.
 93% of the sample respondents preferred the flexible type rate and 7% preferred
fixed rate of interest.
 The researchers suggest that the deposit of title deed is the most required document at
the time of getting loan from the institution. The study shows that 54%, 36% and
10% of the respondents preferred the repayable period of more than 10 years, more

59
 than 15 years and more than 5 years respectively. So, the majority of the respondents
preferred more than 10 year to settle their loan amount.
 53%, 27% and 14% of the respondents were paying their loan amount through ECS,
through postdated cheque and through the collecting bank respectively. So, it may be
concluded from the above result that majority of the respondents preferred to pay
their loan amount through the Electronic Clearing System.
 A large majority i.e. 75% of sample respondents reported that there is delay in
sanction and disbursement of loan amount.

The Study entitled “Housing Finance in India – Problems and Prospects” Authored
by Chaubey M. (2009)

The objectives of the study were:

(i) To Study the customer’s views on housing finance offered by HDFC in Varanasi, and
(ii) To know about the relative performance of HDFC in providing housing loans in city.
The sample of the study was selected on the basis of random sampling techniques.
For analyzing the perception of the borrowers, Likert scaling test was used. The study
reveals that,

 42%, 32%, 22% and 4%, opted for loans because of low interest rate, easy
installment scheme, simple procedure and other reasons respectively.
 26%, 34%, 38%, and 2% respondents have borrowed loans for purchase of flats,
purchase of house, construction of house and other reasons respectively.
 100% respondents made the repayment in equated monthly installments.
 43% respondents knew about the interest rate.
 92% respondents preferred floating interest rates and 8% respondent preferred fixed
interest rates.
 72%, 18% and 10% respondents came to know about bank through print and
electronic media, friends and relatives and Builders/Developers respectively.

60
  50%, 24%, 20% and 86% respondents have reported of mortgage of finance through
property, gold and others insurance policy equal to the loan sanctioned, deposit for
the title deed and additional collateral security respectively.
 58%, 28% and 14% respondents opted for more than 15 years, 5 years and 10 year as
the term of loan, respectively.
 40%, 38% and 18% respondents repaid their loan amount through postdated cheques,
through ECS and through salary deduction and 4% were paying directly to the bank.
 70% respondents agreed that there is a delay of loan approval that there is a delay of
loan approval and disbursement.The researcher suggested that,
 Option of repayment of EMI in monthly, quarterly or half yearly basis should be
given.
 To win the confidence of customers and bring transparency in all the transactions, it
is necessary that the details of their loans accounts should be available online.
 Most of the customers suggested that the loan processing / sanctioning time should be
reduced.
 Customers suggested that the bank should provide online approval of application.
 As far as the opinion of respondents about various facilities and policies of the bank
is concerned, it is found that:-
 72% of the respondents opined that the government is encouraging the housing sector
 Only 50% said that the officials of the institutions were helpful.
 Only 28% of them reported that they were getting entire cost of flat as a loan.
 Only 40% of the respondents felt that rate of interest changed by the institutions is
reasonable.
 Only 42% of them were satisfied with the existing facilities for obtaining loan.
 Above half of them (52%) stated that the loan also covered life or fire insurance
benefit.
 Only 42% reported that repayment period is adequate.
 48% respondents stated that they were regular in making prompt payments.

Thus, by and large, opinion of the respondent is not very much in favor of the institutions,
because except in two cases in all the remaining cases a favorable opinion was expressed by

61
less than 50%. Similarly, regarding various problems faced by the customers, it was found
that more than half of the respondents either strongly agreed or agreed with the statements
about delay in approval and disbursement, inadequate guidelines, tedious procedure lack of
interest on part of officials, difficulty in getting security, inconvenience in paying EMI,
irrelevant securitization, illogical approach and insufficient amount sanctioned. Thus,
majority of the respondent’s face most of the problems listed above.

A Research Paper entitled “Prospects and Problems of Housing Microfinance inIndia:

Evidence from “Bhavanashree” Project in Kerala State” Authored by ManojP.K.
(2010)

He has examined the exact nature of housing microfinance in India, it’s problems and
prospects and particularly deterrents to its growth, with a view to suggesting suitable
remedial strategies for its faster development; based on an empirical study of “Bhavanshree”.

The Objectives of this study were:

 To make an overall study of the housing microfinance initiatives the world over their
performance track record, trends and patterns.
 To critically study the extent and nature of housing problem in India, and to examine
the need for alternative financing models.
 To make an empirical study of activities of “Bhavanshree”.
 To identify the major problems of existing “Bhavanshree” Schemes and also suggest
suitable strategies for its fast and healthier growth.

The study is based on primary and secondary data. Primary data were collected using two
separate interview schedule viz. for the ‘Bhavanashree’ beneficiary and respective bankers
for the ‘Bhavanashree’ unit concerned. Secondary data were collected from various
publications. This study concluded that in spite of various shortcomings of the housing
microfinance scheme ‘Bhavanashree’ sponsored by the Government of Kerala, has got
immense potential to come up if suitable strategies are adopted. Due to the wide range of
microfinance activities currently being undertaken by ‘Kudumbashree’ and the excellent

62
nexus with banks, initiating productive housing scheme and obtaining better terms from
banks like fixed rate loans appear to be quite feasible.

HYPOTHESIS TESTING

H1 -Demand of home loan have significant correlation with the interest rate.

H0 -Demand of home loan have no significant correlation with the interest rate.

CORRELATIONS
VARIABLES=homeloan taken and interest rate
 

63
 Correlations

Homeloan Interest
taken rate
Homeloantak Pearson
1 .899**
en Correlation
Sig. (2-tailed) .000
N 100 100
intersetrate Pearson
.899** 1
Correlation
Sig. (2-tailed) .000
N 100 100
**. Correlation is significant at the 0.01 level (2-tailed).

From the available data it is find out that there is significant correlation between

demand of home loan and the interest rate.

RESEARCH METHODOLOGY OF THE STUDY

RESEARCH METHODOLOGY:-
Research methodology is a way to systematically show the research problem. It may be
understood as a science of studying how research is done scientifically. It is necessary for the
researcher to know not only the research methods but also the methodology. This Section
includes the methodology which includes. The research design, objectives of study, scope of
study along with research methodology and limitations of study etc.

64
  To know the Customers perceptions about home loans of ICICI BANK.
 To study the satisfaction level of customers about home loans.
 To study the problems faced by customers in obtaining the home loans.
 To make comparative study of disbursement of home loans by commercial banks, the
study shall be conducted in the manner enumerated below-

3.1- RESEARCH DESIGN:-

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

3.2 – SOURCES OF DATA :-

To fulfill the information need of the study. The data is collected from primary as well as
secondary sources-
A - PRIMARY SOURCE:-
I decided primary data collection method because our study nature does not permit to apply
observational method. In survey approach we had selected a questionnaire method for taking
a customer view because it is feasible from the point of view of our subject & survey
purpose. We conducted 100 sample of survey in our project to judge the satisfaction level of
customers which took home loans.
• Sample size;-
For the questionnaire I have taken the sample size of 100 customers
B – SECONDARY SOURCE:-
It was collected from internal sources. The secondary data was collected on the basis of
organizational file, official records, news papers, magazines, management books, preserved
information in the company’s database and website of the company.

3.3- SAMPLING :-

65
Sampling refers to the method of selecting a sample from a given universe with a view to
draw conclusions about that universe. A sample is a representative of the universe selected
for study.
SAMPLE SIZE :-
Large sample gives reliable result than small sample. However, it is not feasible to target
entire population or even a substantial portion to achieve a reliable result. So, in this aspect
selecting the sample to study is known as sample size. Hence, for my project my sample size
was 100. The Sample Size consists of both the Professional and Business class people. IT
peoples, Doctors, Jewelers, Timber Merchants & Real estate Agents are taken as Sample.
SAMPLING TECHNIQUE:-
Random sampling technique was used in the survey conducted.
TOOLS OF ANALYSIS:-
Data has been presented with the help of bar graph, pie charts, line graphs etc.
PLAN OF ANALYSIS:-
Tables were used for the analysis of the collected data. The data is also neatly presented with
the help of statistical tools such as graphs and pie charts. Percentages and averages have also
been used to represent data clearly and effectively.

3.4 DATA COLLECTION INSTRUMENT DEVELOPMENT :-

The mode of collection of data will be based on Survey Method and Field Activity. Primary
data collection will base on personal interview. I have prepared the questionnaire according
to the necessity of the data to be collected.

66
 DATA ANALYSIS
Question- 1

Do you want purchase a home.

(1) Yes ( ) (2) No ( )

No. Purchase the loan Percentage

1. Yes 55%

2. No 45%

Analysis

Form the complete the survey, I found that 55% consumers are purchase a
home.

Question – 2

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Do you need home loan for purchase home.

(1) Yes ( ) (2) No ( )

No. Need home loan for purchase home Percentage

1. Yes 60%

2. No 40%

Analysis

Form the complete the survey, I found that 60% consumer are need home loan
for purchase home.

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Question – 3

Do you try in ICICI Bank for home loan.

(1) Yes ( ) (2) No ( )

No. Try in icici bank for Percentage

home loan
1. Yes 35%
2. No 65%

Analysis

Form the complete the survey, I found that 35% consumer are try in icici bank
for the home loan.

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Qestion-4

Do you go to ICICI Bank directly for apply home loan.

(1) Yes ( ) (2) No ( )

No. Go to icici directly for apply home loan Percentage

1. Yes 30%
2. No 70%

Analysis

Form the complete the survey, I found that 30% consumer are go to icici bank
directly for apply home loan.

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Question-5

You have the total knowledge of all documents for apply home loan.

(1) Yes ( ) (2) No ( )

No. Total Knowledge of all document for apply Percentage

home loan
1. Yes 20%

2. No 80%

Analysis

Form the complete the survey, I found that 20% consumer are Knowledge of all
documents for apply home loan.

71
Question-6
Do you have any problem for obtaining the home loan .

(1) Yes ( ) (2) No ( )

No. Problem for obtaining the home loan Percentage

1. Yes 75%

2. No 25%

Analysis
Form the complete the survey, I found that 75% consumer are purchase the
home .

Question-7

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Do you think that the bank should improve the working performance?

(1`) Yes ( ) (2) No ( )

No. Bank should improve the performance Percentage

1. Yes 75%
2. No 25%

Analysis

Form the complete the survey, I found that 75% consumer are think that the
bank should improve the working performance.

73
Question -8
You are satisfied Sunday is working day.

(1) Yes ( ) (2) No ( )

No. Sunday is working day Percentage

1. Yes 85%

2. No 15%

Analysis

Form the complete the survey, I found that 85% consumer are Sunday is
working day.

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 Question-9

Do you satisfy services of online banking?

(1) Yes ( ) (2) No ( )

No. Services of online banking Percentage

1. Yes 95%

2. No 5%

Analysis

Form the complete the survey, I found that 95% consumer are satisfy the
services of online banking.

Question-10

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 Majority of people go to loan from ICICI Bank only
.
(1) Yes ( ) (2) No ( )

No. People go to loan from icici bank only Percentage

1. Yes 58%

2. No 42%

Analysis

Form the complete the survey, I found that 58% consumer are people go to loan
from icici bank only.

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Question-11

Are you satisfying the scheme of ICICI Bank home loan.

(1) Yes ( ) (2) No ( )

No. Scheme of ICICI Bank home loan Percentage

1. Yes 55%

2. No 45%

Analysis
Form the complete the survey, I found that 55% consumer are satisfy the
scheme if icici bank home loan.

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 FINDINGS
 ICICI BANK having good brand image in the minds of customers.
 Majority of the people got loans from ICICI BANK only
 Some of the customer’s felt that the interest rates are some what high.
 Most of the people are directly go to ICICI to apply a home loans
 ICICI BANK providing good services to their customers.
 The customers face the problem for obtaining the home loans.
 Find the knowledge of all documents for apply home loans.
 The customers satisfy services of online banking.
 Find the correlation analysis on the basis of questionnaire.

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 CONCLUSION

The home loan market in India has grown at a rapid and alarming rate of over 40% over the
period of the last four years. And from the reports from some of the industry experts, it
isevident that there is very little chance that there will be any significant decline in growth
rates in the future. Therefore it becomes important at this point in time to examine the key
factors that have been instrumental in triggering this high growth period. There are several
reasons that can be considered as having attributed to the growth of the home loan market.
On the demand side, the first and the most important factor for the growth has been faster
rise in incomes as compared to property prices, thus making housing more affordable. Most
of the housing finance companies in India have introduced several new home loan products
in order to meet the needs of a wide variety of customers. The various home loan schemes
have their different interest rates in the market. The customer can choose those schemes
which he feels is good for him and have the capacity to repay it on that specified time period.
If unwavering liability is what suits your profile, then fixed interest rate home loan should be
the natural choice. On the other hand, if you can handle risks and are willing to go the extra
mile to benefit from any further fall in interest rates, floating rate home loans will be best
suited for you.

LIMITATIONS OF THE STUDY

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This study also includes some limitations which have been discussed as follows:
i) The sample size of 100 customers and 4 banks might prove a limitation because of
difficulty in generalization of results.
ii) To collect the data from various banks was quite difficult due to non- cooperation of some
banks. This proved to be major limitation of the study.
iii) To access such a large number of customers was difficult because of non-cooperative
attitude of respondents.
iv) Lack of data was also the other limitation of the study as some of banks do not have
proper data on topic.
v) There was limitation of time to conduct such a big survey in limited available time.
vi) Ignorance and reluctant attitude of customers was also a major limitation in this study.
Thus above all were the limitations in this research study. The maximum efforts Were made
to overcome these limitations in the study.

RECOMMENDATIONS

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More often than not a customer looking for a loan of about 20 lacs for a 25-lac property for
20 years has to settle for an amount, which is much less than his expectations. The applicant
goes from bank to bank just to see from where he can get the best possible deal and a loan
amount, which is near his expectations. Thus, what ICICI should do is to increase the
Income Installment Ratio (IRR) from its present 35% and thereabout to about 45-50%
mark so as to provide as much loan to the customer as possible. By doing so we would not
only be in a position to increase our client base but also would be better equipped to tackle
the competition who at the moment is gaining from us, just by providing more loan than
what we provide.

ICICI can introduce a differential policy set up whereby different income group people
would be given different preference. In other words, different IRR ratios for different
income groups would reduce the chances of default. The different ratios could be:

40% for a person earning up to 10,000 per month

45% for a person earning between 10,000 and 15,000 per month

50% for a person earning between 15,000 and 20,000 per month

55% for a person earning more than 20,000 per month

By this the loan provided by ICICI to a customer would be 14.48 lacs as against 9.22 lacs
when 35% was taken as IRR (Refer to example). Also if the customer has any other loan
running then the loan amount would be 9.22 lacs as against 5.46 lacs as before. ICICI in
order to increase its customer base should not go in for high value loans as the chances
in default in such a case is more? They should at best raise the 1 crore barrier but that also
not for all customers but for those who have a creditability in the market only after taking
necessary guarantees that there would be no default. The guarantee could be taking over of
the premises and other assets belonging to the customer up till the value of default plus
interest, which would be double of what is being paid.The documents that are required by
ICICI are a lot more than what other HFC’s require. It can be argued that since ICICI is an
old player in the market and having a vast experience it is averse in taking risks when it

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comes to property related documents and income documents. ICICI wants to absolutely sure
that the facts are all correct and that there is no legal angle involved which would later prove
to be a problem. But what it is not realizing is that prospective customers are being driven
towards the competition, as they require documents, which are not as many as what we at
ICICI require. Thus we are loosing out to competition on this aspect. Thus reduction in the
number of documents is a must.

ICICI should lower the processing fee and other charges like administrative charges and
pre-payment charges in order to attract more customers. By lowering the fee customers
would be inclined to take a loan from ICICI as they would be charged much less than what
they would be from the competition.

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 BIBLIOGRAPHY

SITES:

1. EBSCO.COM
2. ICICI.COM
3. GOOGLE.COM
4. WIKIPEDIA.COM

MAGAZINE:

1. PROFESSIONAL BANKER

QUSTIONNAIRE

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1) Do you want purchase a home.

(1) Yes ( ) (2) No ( )

2) Do you need home loan for purchase home.

(1) Yes ( ) (2) No

( )

3) Do you try in ICICI Bank for home loan .

(1) Yes ( ) (2) No ( )

4) Do you go to ICICI Bank directly for home loan.

(1) Yes ( ) (2) No ( )

5) You have total knowledge of all documents for apply home loan.

(1) Yes ( ) (2) No ( )

6) Do you have any problem for obtaining the home loan.

(1) Yes ( ) (2) No ( )

7) Do you think that the bank should improve the working performance?

(1) Yes ( ) (2) No ( )

8) Do you satisfying Sunday is working day.

(1) Yes ( ) (2) No ( )

9) You are satisfying services of online banking.

(1) Yes ( ) (2) No ( )

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10) You are satisfying the interest rate of ICICI Bank.

(1) Yes ( ) (2) No ( )

11) Majority of people go to loan from ICICI Bank home loan.

(1) Yes ( ) (2) No ( )

12) Are you satisfy the scheme of ICICI Bank home loan.

(1) Yes ( ) (2) No ( )

13) Do you admit that ICICI Bank provided good services to their customer.

(1) Yes ( ) (2) No ( )

85