Project Report

On
“COMPARISON OF HOME LOAN SCHEME OF DIFFERENT BANKS”

Submitted in Partial Fulfillment for the Award of the

Degree of MBA(G) 2022-2023

Under the Guidance of: Submitted By:

Ms.Sonali Taneja Prashant
Assistant Professor University Enrolment No.02712303921

Delhi Institute of Advanced Studies

Plot No. 6, Sector-25, Rohini, Delhi-110085
(Approved by AICTE & Affiliated with GGSIP University for B. Com(H), BBA, B.COM(H), MBA &
MBA(FM) Programmes)
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 CERTIFICATE (ISSUED BY
DELHI INSTITUTE OF ADVANCED STUDIES)

DATE: 22/07/2022

CERTIFICATE
This is to certify that the Minor Project entitled “Comparison Of Home Loan Scheme Of Different
Banks” submitted by Mr. Prashant, Roll No. 02712303921 has been done under my guidance
and supervision in partial fulfillment of the requirement for the award of MBA(G) degree.

To the best of my knowledge the work and analysis mentioned in this Project Dissertation have
been undertaken by the candidate herself and necessary references have been recognized and
acknowledged in the text of the report.

Ms. Sonali Taneja

Assistant Professor

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 ACKNOWLEDGEMENT

I would like to express my gratitude to all those who gave me the possibility to complete this
Minor Project Report.
I am deeply indebted to my guide Ms. Sonali Taneja from Delhi Institute of Advanced
Studies whose help, stimulating suggestions and encouragement helped me in all the time of
research and writing of this project.

The learning was immense and valuable.

Prashant
Enrollment No.02712303921

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 DECLARATION

I hereby declare that the project work entitled “Comparison Of Home Loan
Scheme Of Different Banks” submitted to the Delhi Institute of Advanced Studies, is a

record of an original work done by me under the guidance of Ms. Sonali Taneja,
Assistant Professor and this project work is submitted in the partial fulfilment of the
requirements for the award of the degree of MBA(G).

I hereby certify that all the endeavor put in the fulfilment of the task are genuine and
original to the best of my knowledge and I have not submitted it earlier elsewhere .

Prashant

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 Table of Contents

Title Page 1
Certificate 2
Acknowledgement 3
Declaration 4
Table of Contents 5
Chapter 1 Introduction to the Topic 6-7
Chapter 2 Review of Literature 8-11
Chapter 3 Research Methodology 12-16
 Objectives of the Study
 Scope of the Study
 Data Collection/Data Sources
o Primary Source: Questionnaire, Interview
o Secondary Source: Ex: Financial Reports,
magazines, newspapers, annual report of
the company, internet etc.
Chapter 4 Introduction of Company 17-51
Chapter 5 Data Analysis & Interpretation 52-60
Customer Review 61
Recommendation 62-63
Conclusions
References & Bibliograpy 64

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 Chapter 1
INTRODUCTION

The roof over one’s head and ground beneath one’s feet count as the bare necessities of life.
There’s nothing quite like owing a home, however humble to give that warm and glowing
feeling. But when one buys a home, one has much more than a feel good purchase in mind!
It’s also a crucial investment decision, perhaps the biggest spending and most important
decision of your life. There are many opportunities today for young investors to plan their
moves early and buy a house at right time- and at right price. In the process, they not only
fulfill their dream of owning a house, but also put themselves on the path to acquiring assets
that would meet the needs and aspirations of their growing family, even as it leads to wealth
creation. Every individual aspires to own a home. But many either spend a lifetime saving to
purchase a house or exhaust money on monthly house rents.

Take a house loan and let the monthly rent (easily converted into affordable EMI’s)
build dream home

PROFITABLE PROPOSITION

“The overall demand in residential sector has grown by about 10-11.2% in the past few
months as compared to the same period last year. The growth is on account of some main
factors:

 One, income tax exemption.

 Two, with no similar rebates available for individuals in the high income group, they
are creating a second asset.
 Various Affordable Housing Scheme by Govt. of India.
 Urbanization
 Nuclear Households

Add to this the stable property prices over the last year and plunging interest rates, planning
for dream, home could not have been better timed. Rock-bottom interest rates,
standardization of periodicity of interest calculation across lenders (which make it easier to
compare loans), lower interest charges, waiver of loan application processing fee and a
customer friendly attitude is reason enough to celebrate the ascension of the home loan
consumer as the king.

In response, private players like ICICI Bank, IDBI Bank, Axis Bank and few others too
lowered their rates.

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 Market leader HDFC also brought down its interest rate to 7.55% very recently, to
participate in the interest rate war. If one is still not satisfied with the lowered loan rates
there’s more. Some industry watchers believe that the floating home loan rate will slip to
7.25% for long term loans another two or three years.
Most banks have changed the way the interest is calculated from annual rest to monthly
rests. Under the annual rest method, the EMI‟s (equal monthly installment) one pay through
a year, are factored in as part-repayment of the principal component only at the end of each
year. In other words one has to pay interest even on the installments one has paid until they
are reduced from the principal at the end of each year. Under monthly rests, the principal is
lowered by the appropriate amount each month. The thumb rule being that the more
frequently interest is calculated, the better for the creditor.

HDFC added monthly rests on its fixed interest loans apart from annul rests. As a result the fall in
the EMI‟s on fixed interest loans (where the interest rate is constant for the entire tenure of the loan,
irrespective of the changes in the lending rates) is more pronounced than on floating rate loans
(where the loan interest rate varies with the changes in the interest rate). For example, the EMI on a
fifteen year fixed interest loan for Rs. 16 lakh has come down by Rs. 16 lakh has come down by Rs.
1040, the corresponding fall in the EMI on a floating rate loan is only 5243. Apart from lowering the
cost of one’s loan, the switchover to monthly rests has another advantage: it makes it easier to
compare loans

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 Chapter 2

REVIEW OF LITERATURE
.
1) In 2021 Manpreet Batra, has studied about “India’s Enduring Urban Housing Shortage:
The Case for Upgrading Informal Settlements In 2015, the Indian government launched the
Pradhan Mantri Awas Yojana-Urban (PMAY-U) as a response to the perennial challenge of
shortage in urban housing. As of June 2021, 11.2 million houses have been sanctioned under
PMAY-U, of which 4.8 million have been completed. However, various analyses indicate
that PMAY-U dwellings may be insufficient in quantity, and that some of them may be either
unaffordable or unviable for those who need them the most. This paper dissects the nature of
India’s urban housing shortage and makes an assessment of PMAY-U. It recommends
according priority to the upgrade of informal settlements to address the gap and fulfill the
aim of providing housing for all

2) Dikshita Gajera1, Dr. Mohammedshakil S. Malek(2018) made an attempt to recognize,

review and investigate the purchasing pattern of people. Number of factors that are
considered by individuals while buying a house and even before buying are included in the
survey. Both 1BHK and 2 BHK flat buyer’s opinions are collected to study the consumer
behavior. This study found that both financial and location factors are significantly
influencing the decisions of buyers. This work concludes that economically strong people are
willing to buy 2 BHK flats and economically weak people are showing interest to buy 1 BHK
flats only and this work also suggests that the further research could be carried by including
number of critical factors that may influence consumer behavior.

3) Deepak Murlidhar Sundrani (2018) aimed to identify the factors that are influencing the
purchase decisions of various types of flats/apartments in Pune, India. The survey was
conducted in Pune city outskirts and 284 respondents are participated in the survey. The
recent buyers of 1 BHK, 2 BHK and 3 BHK are approached for the survey and ten factors are
considered to analyze most significant factor in each category of flats. This analysis reveals
that the most significant factor for 1 BHK flat buyers is price, no specific significant factor
for 2 BHK flat buyers and for 3 BHK flat buyers the most significant factors are product and
location. This study stated that the degree of significance given by latest buyers of various
types of flats or apartments towards various factors is varied. This study also concluded that the
research studies on home-buying behavior are useful for the participants in residential

4) In 04 Apr 2020 Amit Kumar Sinha, Abhishek Soni, Madhavi Prajapati had studied about
the An Overview on the Indian Real Estate Sector The Indian real estate industry is one of
the largest sectors after agriculture and primary sector in our country. These sectors
contribute about 6.5 % to 7 % and it is one of major source of job for unorganized sector of

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 Indian labor market. This sector was one of the main beneficiary of the post-liberalization
periods, where India become one of the hot property of the foreign direct investment, lot of
new ventures open day by day and salaries of Indian middle class increase exponential. Since
1990s it shows a major growth, and Indian metro cities, like Chennai Mumbai Delhi Kolkata
feels the boom in reality sector.

5) Magic bricks-property plus 2019 presents an overview of Indian realty market and scope
for future development in selected areas. Property prices in Indian residential market have
shown great appreciation in the last decade. Property investment in India is quite affordable
compared to other Global areas. Realty sector in India is having great potential for Growth
especially in Residential segment.

6) Chauhan and Shah 2019 found that housing shortage in India is increasing rapidly, mainly
because supply is much less than the housing demands. In urban area, the problem is more
complex and complicated as the pressure for houses and services due to both natural increase
and migration. The most important resources required to purchase House is finance. Housing
plays an important role in a country’s economy, typically accounting for 10 to 20 per cent of
total economic activity. In this present paper investigations have been made on all the
Housing finance Institutes in India and their mechanism in system.

7) Sumit Agarwal, Souphala Chomsisengphet and John C. Driscoll 2020 had studied about
the Loan commitments and private firms. They studied that, most loans are in the form of
credit lines. Empirical studies of line demand have been complicated by their use of data on
publicly traded firms, which have a wide menu of financing options. We avoid this problem
by using a unique proprietary data set from a large financial institution of loan commitments
made to 712 privately-held firms. We test Martin and Santomero's (1997) model, in which
lines give firms the speed and flexibility to pursue investment opportunities. Our findings are
consistent with their predictions. Firms facing higher rates and fees have smaller credit lines.
Firms with higher growth commit to larger lines of credit and have a higher rate of line
utilization. Firms experiencing more uncertainty in their funding needs commit to smaller
credit lines. Almost all firms convert unused credit line portions into spot loans and take out
new lines.

8) In September 2017 Ipseeta Satpathy has studied the various variables identified are
financial basics are behind drop in home cost, interest rate plays an important role, paper
work, decrease in profitability, awareness among the prospective customers, poor are not
getting the budgetary help, re-arrangement of housing policy of government, service quality,
speed of providing services and implementations of schemes should match the economic
profile of the borrowers.

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 9) In May 2020 Jyoti Bhoj has studied the Impact of COVID-19 on Real Estate Industry
with Reference to India recent pandemic has affect economies of various countries and India
is no exception. The IMF projected Indian growth rate at 1.9 percent for the financial year
2021which was previous estimated at 5.8 percent. This possess a great threat for Indian
economy. This effect of COVID-19 will be felt across sectors. Indian real estate which was
already recovering from the aftermath of demonetization and various reforms was jolted by
this pandemic with lockdown construction activity has stopped, real estate sales are not
happening. The Indian real estate should prepare itself to brace for a post COVID-19 world
and should prepare itself to utilise various new and tech driven steps to come back on track.
This article deals with understanding the pre pandemic real estate industry and analysing the
impact of COVID-19 on Indian real estate industry. It also presents the threats and
opportunities available to different real estate market participant.

10) In April, 2018 SALIMEDA VENKATA CHARY has publish a research paper On Low
Cost Housing System In India In India, there are only 24.67crore, who are households(India
Census, 2011).There are still Lakhs and Crores of people in the country, who do not own any
house yet. Shelter is the most basic need of a human being and Economically weaker sections
in a developing country like India are still facing much problems, as they are not able to own
any house. Construction costs are also becoming higher because of high cost of materials and
also due to high labour costs. The main aim of low cost housing construction techniques is to
reduce the construction cost by following effective processes, methods and by utilising good
alternate materials and this paper presents the same. Also this paper talks about the need for
low cost housing, challenges to overcome construction of low cost housing and few
construction techniques and methods for low cost housing.

11) In May 2019 1Dr. Bhartendu Kr. Chaturvedi, Mr. Ayush Sharma they studied about
Anticipating and Gearing up Real Estate Sector in India The Indian economy has transformed
authentically over the last two decades. Indian real estate sector is one of the fastest growing
and globally recognized sectors. This sector is the second largest employer in India after
agriculture and is captivating huge investments especially by attracting Foreign Direct
Investments (FDI). The real estate sector is a critical sector of our economy. It has a huge
multiplier effect on the economy and therefore, is a big driver of economic growth
contributing about 8-9% to India’s GDP. It is not only pioneering the SEZ’s but the broader
aspects of Special Investments Region (SIR’s) also. Indian also ranks 3 rd for most L.E.E.D
(Leadership in Energy & Environmental Design) –certified space globally with nearly 12
million sqm. The total market is expected to touch US$ 118 billion by 2020

12) Basu 2019 in his paper “Financial Performance of NBFCs – A Comparative Study on
Selected Investment and Assets Finance Companies” make a comparative analysis of the
financial performance of selected investment and assets finance companies during the period
from 2005-06 to 2014-15. To compare the performance of NBFCs on the basis of selected
performance indicators the study employed Kruskal-Wallis Test (H Test).The study
concluded that there is no difference between the financial performances of each category of
NBFCs apart from their nature of activities under their respective categories.

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 13) August. 2018 Manureet Riar* and Dr. G.S. Bhalla** has conducted a study in punjab
Problems Faced by the Housing Finance Borrowers Housing is a one time achievement in
person’s life. Since it is an expensive and valuable asset, there arises need for huge amount of
funds for purchase of quality housing. Then there exists a gap between the aspirations people
have regarding quality housing and their ability to finance due to lack of funds. This gap is
then bridged by ‘Housing Finance’. Thus, it can be rightly said that Housing Finance exists to
make quality housing affordable. (King, Peter, 1960). The study attempts the problems faced
by the home loan borrowers in procurement of housing loan.

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 Chapter 3
RESEARCH METHODOLOGY

Research methodology is an important part of every project. Because it helps in knowing

how to select the representative sample from the world or the general population, the right
research tools and techniques to complete the research.
The study of the consumer behavior is important because he is the king. The research process
is based upon survey method, so in order we go to service provider and services user which is
the customers.
The research involves the following steps:
 Define the problem and research objective: The problem and objective is to assess
the services offered by the various service providers and what the customer wants.

 Developing the research plan: The second stage of the research methodology is to
develop a research plan. The research plan designed to take the decision on the data
sources, research approaches, research instruments, sampling plan and contact
methods.

 Research Type: Secondary Research

 Research instrument: The use of an effective research instrument is very important

because through this instrument we collect data in this project through observations
and personal interview were conducted.

 Sampling plan: After finalizing the research approach and instruments a sampling
must be designed.

 Sampling unit: Data have been collected from banks & their website.

 Sampling size: It has been collected from four banks & their website.

 Sampling procedure: what process should be used to collect the sample. So,
representation sample, convenience sampling is used.

 Collect the information: After completing all the steps, the data are collected from
different sources.

 Analyze the information: After the data is collected they are analyzed to know the
findings. The data is then tabulated to develop the frequency distribution.

 Present the findings: As the last step, the findings are presented that are relevant to
the major marketing decisions
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 OBJECTIVE OF THE STUDY

The main objective of the study is to do comparative analysis of home loans schemes of other
banks in comparison to HDFC bank.

The aim of the study is to help HDFC to know where it lacks in loans and how far the
performance of other banks is better so that HDFC figure out the common problems being
faced by the customers while dealing in the loan department so that further HDFC can
improve its services and schemes offered by them to their customers.

SCOPE OF THE STUDY

HOME LOAN

A home loan is a credit solution under which one can avail of funds to purchase or renovate
an existing or under-construction property – be it residential or commercial. The loan is
secured in nature, i.e., the loan amount is sanctioned against a collateral

Who can avail of these loans?

According to lending institutions, any Indian resident who is over 21 years of age at
the beginning of the loan and below 65at its maturity can avail the loan. Salaried Employees
as well as Self- Employed citizens can apply.

Why should one option for a loan to buy a house?

Taking a loan seems like a good option when the money at hand is insufficient to buy the
house of your dreams. Experts believe that even if you have the sums to purchase the property in
one go, it is better to take a home loan. Instead of spending a lump sum amount on the property, it is
better to go for a large amount down-payment and pay off the remaining amount in higher amount,
monthly EMIs, since you can afford it.

The Quantum of loan that one can avail of :

Loan sanctioned depend on customer repayment capacity – which is based on customers

current income and customer future repayment capacity. You would include your spouse‟s
name to enhance the loan amount. The maximum loan can be sanctioned varies with each
bank/institutions and ranges from Rs.10 lakhs to Rs. 1 crore.

Benefits of taking a home loan:

Even if you have sufficient funds to buy a house, a home loan offers benefits such as saving tax,
ensuring enough liquidity and opportunity to let your funds grow. A home loan is one of the
cheapest borrowing tools which comes with a low rate of interest. Unlike other loans, there’s
zero prepayment penalty on home loans with floating interest rates. So, there are definitely some
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 advantages in taking the loan route.
The value of your house generally grow while the loan remains constant. If you had opted to
wait, save up and buy a house, it would, in the long run cost you much more; home loans also
come with many tax benefits.

Tax benefits of taking a home loan:

The income tax authorities look with favor upon those servicing a housing loan from
specified financial institutions. And, it is up to you to be wise enough to take advantage of
this.

Section 24 of the Income Tax:

Interest on loan till Rs.1.5 lakhs per annum is exempted form income tax (under section
23/24(1) of the Income tax act).

Section 88 of Income Tax Act:

You get a 20% rebate on repayment of principle during a financial year. Once again, over the
years, the principle repayment eligible for rebate has been enhanced from Rs.10,000 to the
current limit of Rs.20,000 Stamp duty, registration fee or transfer of such house property to
the assesses is also considered under this amount.

Financial Institutions, which give, home loans:

Leading Banks Housing finance companies

FINANCIAL IMPLICATIONS OF AVAILING A LOAN (SMALL OR BIG)

There are several charges involved apart from repayment of the actual loan amount:

1. Processing fees- A processing fee (PF) is charges at the time of submission of the
application form and covers expenses incurred for processing the application form. This fee
has to be paid upfront by the customer – in some cases, it is non-refundable.
2. Administration fees- to meet operating expenses.
3. Pre-EMI- A simple interest calculated on the disbursement amount in case of a plot
under construction.
4. EMI- The EMI is an abbreviated form of the equated money installment and is simply
referred to as monthly installment in common parlance. And, being a self-explanatory term
that is exactly what it is. The amount you will have to pay you financier every month when
repaying your loan. Being a monthly payment, at the end of the year, you would have paid 12
EMIs.

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 TYPES OF LOANS AVAILABLE

Broadly two types- fixed rate and variable rate loans; while the former deals with a fixed rate
of interest over the entire duration of the loan, the latter has the rate of interest changing
according to the fluctuations in the market.

LOAN THAT ONE CAN AVAIL

Up to 85-90% of the total cost based primarily upon the individual’s payback capacity.

GENERAL CONDITIONS THAT GOVERN A HOME LOAN:

These are likely to vary with respect to the different types of housing loans:

 The maximum period of the loan is normally fixed by HFIs. However, HFIs do
provide for different tenors with different terms and conditions.
 The Installment that you pay is normally restricted to amount 45% of your monthly
gross income.
 You will be eligible for a loan amount, which is the lowest as per your eligibility.
This is calculated on the basis of your gross income and payback capabilities.
 Some HFIs insist on guarantees from other individuals for due repayment of your
loan. In such cases you have to arrange for the personal guarantee before the
disbursement of your loan tasks place.
 Most HFIs have a panel of lawyers who go through your property documents to
ensure that the documents are clear and are not misrepresented. This is an added
benefit that you get when you avail of a loan from an HFI.
 You repay the loan either through Deduction against Salary, Postdated, cheques, and
standing instructions or by Cash/DD.

WHAT ALL ONE CAN TAKE THE LOAN FOR?

There are different types of home loan tailored to meet ones needs here’s some of them.

 Home purchase loan: This is the basic home loan for the purchase of new home.
 Home improvement loans: These loans are given for implementation repair works &
renovation in a home that has already been purchased by the client.
 Home construction loan: This is available for the construction of new home.
 Home extension loan: This is given for expanding or extending an existing home for
e.g.: addition of an extra room etc.
 Home conversion loan: This is for those who have financed the present home with
home loan & wish to purchase& move to another home for which some extra funds
are required through home on version loan ,existing loan is transferred to the new

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 home including the extra amount required eliminating the pre payment of the
previous loan.
 Land purchasing loan: this loan is available for the purchasing of land for both
construction and investment purpose.
 Bridge loan: these are designed for those people who wish to sell the existing home
& purchase another one. The bridge loan help finance the new home, until a buyer is
found for the home.

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 Chapter 4

HDFC BANK

INTRODUCTION

HDFC (Home Development Finance Corporation) Home Loan, India have been serving the
people for around 3 decades and providing various housing loan according to their varied
needs at attractive and reasonable interest rates. Owing to their wide network of financing,
HDFC Home Loans provide services at doorstep and helps you find a home as per your
requirements.

COMPANY PROFILE

HDFC Limited founded in 1997 by Ravi Maurya and Hansmukh bhai Parekh, is an Indian
NBFS focusing on home loans. HDFC operates through almost 450 locations throughout the
country with its corporate head quarters in Mumbai, India. HDFC also has an international
office in Dubai, UAE with service associates in Kuwait. HDFC is the largest housing
company in India for the last 27 years.
HDFC was amongst the first to receive an in principal approval from RBI to set up a bank in
the private sector, as a part of the RBI‟s liberalization of the Indian banking industry. It was
incorporated on 30th august 1994 in the name of „HDFC Bank Limited‟, with its registration
office in Mumbai. HDFC began its operations as a scheduled commercial bank on 16th
January 1995.

ABOUT THE PROMOTER

HDFC, the promoter, is India‟s premier housing finance company and enjoy an impeccable
track record in India as well as in international markets.

Since its inception in 1997, HDFC has maintained a consistent growth in its operation and
profitability. Its outstanding loan portfolio covers over a million dwelling units. HDFC has
developed significant expertise in retail mortgage loans to different market segment and also
has a large corporate client base in relation to its housing related credit facilities and its
investment in portfolio.

With its tremendous brand equity, the strong reputation in the Indian and international
financial services market, large shareholder base and unique consumer franchise, HDFC was
ideally positioned to promote a bank in the

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 Indian environment. HDFC (together with its fully owned subsidiary HDFC Investment
Limited) owns about 31 % of the equity. They had started with a strategic alliance with the
Natwest group in UK with 20% equity, which has divested later on. The bank has also signed
a memorandum of understanding for strategic business collaboration with chase Manhattan
Bank in Feb. 2, 1999.

BUSINESS PHILOSOPHY

The mission of the HDFC Bank is to be world class Indian bank. This would imply a bank
that would meet various financial needs of its customers in a convenient and cost effective
manner at international standard of service.

The bank seeks to achieve the status of a “preferred organization” among its major
constituents- customers, shareholders, regulators, employees, suppliers etc. while
maintaining the highest level of integrity and corporate governance.

The business philosophy at HDFC bank is based on four core values: operational excellence,
customer focus, and product leadership and people competitors.

The Bank faces the strong competition in all of their principal lines of business. Their
primary competitors are large public sector banks, other private sector banks, foreign banks
and in some product areas, non-banking financial institutions.

WHOLESALE BANKING

Principal competitors in wholesale banking are public and new private sector banks as well
as foreign banks. The large public sector banks have traditionally been the market leaders in
the commercial lending. Foreign banks have focused primarily on serving the needs of
multinational companies and the Indian corporations with cross- border financing
requirements including trade, transactional and foreign exchange services, while the large
public sector banks have extensive branch networks and large local currency funding
capabilities.

RETAIL BANKING
In retail banking, their principal competitors are the large public sector banks, which have
much larger deposit bases and branch networks,, other new private sector banks and foreign
banks in case of retail loan products. The retail deposit shares of the foreign banks are quite
small in comparison to the public sector banks, and have also declined in the last five years,
which we attribute principally to the competition from new private sector banks. However,
some of the foreign banks have a significant presence among non-resident Indians and also
compete for non-branch based products such as auto loans and credit cards. They face
significant competition primarily from foreign banks. In provision of debit cards and also
expect to face competition from foreign banks when we begin offering credit cards. In
mutualfund sales and other investment related products, their principal competitors are
brokers and foreign private banks.
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 TREASURY

In treasury advisory services for corporate clients, the compete principally with foreign
banks in foreign exchange and derivatives trading as well as SBI and other public sector
banks ion the foreign exchange and money market business.

LOANS

HDFC brings back you a wide range of loans to cater your financial needs.
The bank offers the following loans:

1) Personal loans.
2) Consumer loans.
3) Auto loans
4) Loans against shares
5) Loans against RBI bonds
6) Loans against insurance policy
7) E- Instant loans give the facility of loans approval in the 60 second on the internet.
8) HDFC has offices spread all over the country. This extensive network helps HDFC in
providing services to large and well spread out clients. This network of
interconnected offices (on data circuits) helps HDFC to process application for
purchase of property anywhere in India. HDFC has further established an office in
Dubai and service associates in Kuwait, Oman and Quarter to make to easier for
Middle East based non-resident Indians to apply for loan to HDFC-India.
9) HDFC is pioneer of housing finance in India and has been a leader in business for the
last 23 years. HDFC has vast experience and a very committed and skilled staff to
handle housing loan applications and solving customer problems.

HDFC LOAN SCHEME PURPOSE

HDFC Limited offers loans for the following purposes:

 Land purchase
 Home construction/purchase
 Home extension
 Home improvement loans
 Short-term bridge loans
 Non-resident premises loans for professionals.

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 LOAN AMOUNT

You can avail loan between 75% to 90% of the cost of the property, including the cost of the
land.

LOAN TENURE

You can repay the loan over a maximum period of 20 years under both FRHL and ARHL.
Repayment will not ordinarily extend beyond your age of retirement (if you are employed) or
on your reaching 65 years of age, whichever is earlier. However, HDFC will endeavor to
determine the repayment period to suit your convenience.

RATE OF INTEREST

The rate of interest of HDFC is 7.55%.under the monthly rest option, interest is calculated on
monthly rests. Principal repayment is credited at the end of every month.

At HDFC you have the choice between the normal FRHL and the innovative ARHL.
Alternatively you can also avail the part of the loan under FRHL and balance under ARHL.
HDFC also offers you the option to switch between schemes for the nominal fee. Interest
rates on ARHL will be linked to HDFC‟s Retail Prime Lending Rate (RPLR) which currently
is 16.95% .The rate on your loan will be revised every three months from the date of first
disbursement, if there is a change in RPLR, i.e. the interest rate on your loan may change.
However, the EMI on the home loan disbursed will not change. (if the interest rate increases,
the interest component in an EMI will increase and the principal component will reduce,
resulting in an extension of the term of the loan, and vice versa when the interest rate
decreases).customer will be provided with an annual statement indicating the details of the
interest and principal payment made during the year.

SECURITY

Security for the loan normally is first mortgage of the property to be financed and/or such
other collateral security as may be necessary. Interim security may be required, if the
property is under construction. Collateral or interim security could be assigned to HDFC of
life insurance policies, the surrender value of which is at least equal to the loan amount,
guarantees from sound and solvent guarantors, pledge of shares and such other investments
that are acceptable to the HDFC.

Loans from HDFC are available even if you are availing a housing loan from your employer.
HDFC has already entered into arrangements with several employers enabling employees to
avail of loans both from the employer as well as HDFC for the same property. Please do
ensure that the title of the property is clear, marketable and free from encumbrance. To
elaborate there should not be any existing mortgage, loan or litigation which is likely to
affect the title to the property adversely.

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 DOCUMENTS/SUPPORTING DOCUMENTS TO BE ATTATCHED:

FOR ALL THE APPLICANTS:

1) Allotment letter of the o-operative society/association of the apartment owners.

2) Copy of approved drawings of proposed construction/purchase/extension.
3) Agreement for sale/sale deed/detailed cost estimate from architect/engineer for the
property to be purchased/constructed/extended/renovated.
4) If you have been in your present employment/business or profession for less than a
year, mention an a separate sheet details of the of the occupations for previous five
years, giving position held, reason for change and period of same.
5) Applicable processing fees.
6) Proof of residence: attested copy of any one of the following:

a) Ration card
b) Passport
c) Driving license
d) Voters identity card
e) Current telephone bill/electricity bill/gas bill
7) Proof of identity: attested copy of any one of the following:
a) Passport
b) Driving license
c) Voters identity card identity card issued by the employer (if employed in
state/central government)
d) PAN card
e) Adhar card
8) Certificate of loan outstanding issued by the lender (for refinance cases only)
9) Any other information regarding your repayment capacity that is necessary and will
assist HDFC in appraising the loan proposal.

ADDITIONALLY

IF YOU ARE EMPLOYED:

1) Verification of the employment form with only part I filled in.

2) Latest original salary slip/salary certificate (Last 3 Months) showing all deductions.
3) If your job is transferable, permanent address where correspondence relating to the
application can be mailed.
4) A letter from your employer agreeing to deduct the EMI towards the repayment of the
loan from your salary. This will expedite the processing of your loan application.
5) Your updated original bank pass book/s or original bank statement/s showing salary
and saving entries for the last six months.
6) A photo-copy of your Form-16 (issued by your employer) for the last assessment
year.

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 IF YOU ARE SELF EMPLOYED:

1) Balance Sheets and Profit & Loss Accounts of the business/profession along with
copies of individual income tax returns for the last three years certified by the
Chartered Accountant.
2) A note giving information on the nature of your business/profession, form of
organization, clients, suppliers, etc.
3) Copies of individual tax challans for the last three years
4) Copy of advance tax challan (if any)
5) Your updated original Bank Pass Book/s or Original Bank Statement/s showing
saving s entries for the last twelve months.

TAX BENEFIT

You are eligible for certain tax benefits on principal and interest components of a loan under
the Income Tax Act, 1961.

ELIGIBILITY

The repayment capacity as determined by the HDFC will help in deciding how much we can
borrow (the cost of the property or Rs.1crore whichever is lower). Repayment capacity takes
into consideration factors such as income, age, qualifications, number of dependents,
spouse’s income, assets, liabilities, stability and continuity of occupation and saving history.
And, of course, HDFC‟s main concern is to make sure you can comfortably repay the amount
you borrowed.

ABOUT THE PRODUCT

HDFC‟s Home Loans offers you various unique benefits and are easy to arrange and
repayable in easy monthly installments. The terms of the loan can be structured according to
the customer requirement.

Home loans can be applied for by either individually or jointly. Proposed owner of the
property, in respect of which the loan is being sought, will have to be co-applicants.
However, the co-applicants need not be co-owners. Loans can avail up to a maximum of 85%
of the cost of the property (including the cost of the land). HDFC lends up to a maximum of
Rs. 10000000 on a home loan to an individual. You can repay the loan over a maximum
period of 20 years. They determine the loan amount after evaluating the repayment capacity
of the individual. HDFC‟s main concern is to help individuals comfortably repay the
borrowed amount.

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 SUPERIOR PROCESSING CAPACITY:

HDFC has over the years invested substantially into the computer systems and training. This
has enabled HDFC to respond to customer needs and build up capabilities to approve loan on
the spot or disburse them fast.

BRANCH NETWORK:

HDFC has offices spread all over the country. This extensive network helps HDFC in
providing service to large and well spread out clients. This network of interconnected offices
(on data circuits) helps HDFC to process applications for purchase of property anywhere in
India. HDFC has further established an office in Dubai and service associates in Kuwait,
Oman, Qatar, Bahrain and Saudi Arabia to make it easier for Middle east based non-resident
Indians to apply for the loan to HDFC-India.

EXPERIENCED TRAINED STAFF:

HDFC is a pioneer of housing finance in India and has been a leader in the business for the
last 30 years. HDFC has vast experienced and very committed and skilled staff to handle
housing loan applications and solving customer problems.

FREE COUNSELLING:

HDFC believes that it is in the business of providing solutions to an individuals need for
owing a house, and not just in the business of providing finance. Keeping this in mind HDFC
will provide free counseling to on how and where to buy a house in India (property services)
or what are the prices and trends in the real estate market or what precautions one should take
before buying a house. This service is offered at any of the HDFC‟s offices.

LEGAL AND TECHNICAL GUIDANCE:

HDFC has qualified legal and technical staffs who liaise with developer to collect and
scrutinize the property documents and permissions. We have master files of most projects
being developed by the reputed developers. It has always been HDFC‟s endeavor to protect
the interest of the borrower, as we believe that the buying a house is one of the most
Important decisions in this life.

FLEXIBLE (CUSTOMIZED) REPAYMENT SCHEMES:

Keeping in mind the fact that each individual has unique problem requiring unique solution,
HDFC has developed various repayment options like Step Up Repayment Facility (SURF),
Flexible Loan Installment Plan (FLIP) Balloon Payment plan and Structured Repayment
Plan.

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 STEP UP REPAYMENT FACILITY

HDFC Ltd has a hitherto “with you, right through” .This statement HDFC proves time and
Again by developing close relationship with individual customers and by constantly
Developing and marketing in the market new and innovative products that increase the
Comfort level of the customers. Along the same philosophy HDFC came up with Step Up
Repayment Facility which once again reassures customers that HDFC helps you achieve
your dream.

This facility is especially helpful to those customers who want to get a loan on an amount
that is not falling within the permissible limit of their repayment capacity. It also is in line
with HDFCs aim to provide greater degree of personalization in service and the tools. Hence
there can be the situation wherein the applicant is not in the position to pay the required EMI
which is calculated by the ILPS (Individual loan processing system).HDFC in this case offers
to let the applicant use one of the two plans to repay the loan amount.

The EMI Chooser 1

In this plan the applicant gets the advantage from HDFC to select the amount that
he wants to pay as his fist EMI. This means that HDFC will let the applicant decide
What amount he can comfortably pay to HDFC in the first term of his Loan Repayment
Schedule. The system will calculate the next two EMIs for the next two terms

The customer can hence decide when he wants to repay the maximum amount of the Loan to
HDFC and when he wants to repay minimum leftover or remaining amount of the loan in the
form of still smaller EMIs.

The EMI Chooser 2

This plan is an extension of the aforementioned plan .In this plan HDFC helps the Applicant
by letting him choose two EMIs .This means that the Applicant can select the amount that he
wants two pay for both the First and the Second terms of his repayment schedule. This
translates into more help and more convenience to the applicant. However the benefits of
these plans don’t stop here.

The Applicant can also allocate the term length for which he wants to pay what amount
This translates into a great advantage to the Applicant .He can now link

1. His current salary

2. The rate of average increment,
3. His existing and expected obligations,
4. His existing and expected expenses

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 5. The length of the term among others.

HDFC can hence assist the Applicant in developing a much more personalized loan plan as
compared to its competitors in the Housing Loan market.

The Applicant can also save money by using these plans .This is because the total Outflow in
case of a regular plan is more as compared to these special plans. The Applicant will hence
obtain more benefit in case of Prepayment and elsewhere.

C. All Loans from HDFC Ltd are subject to Tax exemption and be treated as Rebate.
Hence HDFC lets the customer save their hard earned money.

FLEXIBLE LOAN INSTALMENT PLAN (FLIP)

Another First of its kind product from HDFC .This is also to assist the Applicant to easily
secure a loan in the following condition. FLIP is used when the applicant and co-applicant
want to jointly repay the loan. There is however a problem in the situation which would
otherwise not allow the loan to be sanctioned. There are two applicants’ hence two
incomes
.Therefore in the joint payment they can combine their income to repay the loan .Let there be
Mr. A and B who want to take a loan for 14 years .A is the father and B is the son of A .Now
consider the situation in which A and B want to take a loan and jointly repay it .But A is 52
years old and B is only 25 .Hence A will retire after 8 years and will not be repaying the
EMI but B can continue to repay the loan. In that case although there will be a problem at
other places but in HDFC this is solved by taking different incomes in the terms. Hence the
income that will be considered earlier will be the father’s income and at his retirement or at
any other selected stage of repayment we will begin to consider only the income of the son.

The advantage of FLIP in terms of the Applicant is that of joint payment, personalization,
easy repayment, and freedom from many possible problems. In the Illustration the father is
going to pay only for 105 months and after that we are to consider the sons salary only for
the next remaining 60 months.

PARI PASSU/SECOND MORTGAGE ARRANGEMENT:

HDFC has a tie-up with a large number if public sector organizations and banks which
enable us to offer loans to your employees with the flexibility of their spouse also availing a
loan from his/her own employer.

SAFE DOCUMENT STORAGE FACILITIES:

HDFC has state of art storage facilities which are theft and fire proof, at various locations
where loan and property documents are stored. In this way valuable documents are stored

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 Safely over the period of the loan and are released almost immediately after a customer repay
his loan.
ELECTRONIC MAIL:

HDFC through its E-mail services can promptly respond to queries. In addition, HDFC can
promptly send its application form cum brochure and other detail on its loan products by e-
mail to interested individuals. For Non-resident Indians our interactive website offers another
means of contacting us. In our effort to reach out globally dispersed Non-resident Indians, we
will continuously enhance our website.

HOME CONVERSION LOAN:

HDFC offer the option of a home conversion loan to its existing customer who are interested
in moving to a new house. Through this scheme the customer can apply to have their existing
loan transferred towards the purchase of the new home. Customers may also apply for an
additional loan amount for the purchase of the new house. This gives the customers the
option of selling t6heir existing house if they wish to, without having to repay their old loan

APPLICATION CAN BE MADE BEFORE SELECTING THE PROPERTY:

Individuals may make an application for the loan even if the property has not been selected
or the construction has not commenced. HDFC can provide assistance in locating an
appropriate house to such customers.

HOME IMPROVEMENT LOANS:

As an exclusive offer to its existing customers HDFC offers Home Improvement Loan up to
100% of the improvement cost as compared to the home improvement loans up to 70% of the
improvement cost offered to the general public.

FEE:

A processing fee of 0.5% of the loan amount applied for rs.5 per rs.1000 of the loan applied
for is payable when the application form is submitted to HDFC. This fee is in the respect of
costs incidental to the application. For example:

Loan applied for fees

Rs.20000 Rs.100
Rs.100000 Rs. 500

On approval of the loan, a loan offer is made to you on acceptance of the offer. You have to
pay an administrative fee of Rs.0.5% of the loan approved. You can also pay the processing
fee and administrative fee upfront i.e. 1% of the loan at the time of submission of the loan

26 | P a g e
 application itself. This fee is in respect of the costs incidental to the application. Taxes as
applicable will be charged on the fees collected.

CHARGES:

For Fixed Rate Home Loan (FRHL) an early redemption charge of 2% of the amount being
prepaid is payable, if the amount being repaid is more than 25% of the opening balance.
However under Adjustable Rate Home Loan (ARHL) option early redemption charges of 2%
is payable only in case of commercial refinance. You may be required to submit the copies of
your Bank Statements or any other documents that HDFC deems necessary to verify the
source of prepayment.
You can make payment for fees and charges by cheque marked “payee’s account only”
drawn on a bank in a city where HDFC has an office or by demand draft (payable at par to
HDFC).

HOW TO APPLY

Customer can either download (in PDF format) the application form or get the application
form by E-mail. Alternately the customers can collect the application form from any of your
nearest HDFC offices. Customer need to submit it along with supporting documents and
processing fee at any HDFC office that is convenient to the customer. Customers can make
payments by the cheque marked “payee’s account only” drawn on a bank in a city where the
HDFC has an office, by demand draft (payable at part to HDFC) or by cash. Customer can
make an application at any time after they have decided to acquire a house even when the
house has not been selected or construction has not commenced.
HDFC will consider your application, make enquiries as it deems necessary and convey its
decision to you. On acceptance of the offer, you will have to pay an administrative fee for the
loan approved. Customer can take the disbursement of the loan after the property has been
completed and you have invested your own contribution in full (own contribution is the total
cost of the property less HDFC‟s loan). The loan will be disbursed in full or in suitable
installments (normally not exceeding three in number)taking into account the requirement of
the funds and the progress of the construction, as assessed by HDFC and not necessarily
according to the builder’s agreement.

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28 | P a g e
 ICICI HOME FINANACE COMPANY LTD

Consumer friendly housing finance company

ICICI home finance company ltd was incorporated on May 28, 1999 as 100% subsidiary of
ICICI Personal Financial Services Limited (ICICI PFS). ICICI finance company Ltd was set
up with objective of providing long term housing loan to individual and corporate. The
company was registered on March 30‟2000 with National Housing Act, 1987 in terms of
Housing Financing Companies (NHB) direction, 1989 with effect from May 3, 2002, ICICI
home finance has become a 100% subsidiary of ICICI bank Ltd.

OVERVIEW

ICICI home loans are at present available to customer in 150 cities/towns across the country.
Loans are offered for the purchase of new homes. Purchase of resale homes and home
improvement. Besides the companies also offers loans for commercial property and loans
against existing property. The loans are offers foe tenors up to 30 years. The company has
also introduced several customers friendly services such as „door step services‟, „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 non banking financial banking companies(NFBc)
from the reserve bank of India (RBI) on September 10, 1997 under the new section 45 I A
of the RBI act ,1939.

During the year 1998-1999, there was a significant shift in the company’s operations from
leasing and hire purchase to distribution and servicing the all the retail products for ICICI,
including two auto loans, consumer durable finance & another financial products. The
company has become a critical part of ICICI‟s retail strategy aims at offering a
comprehensive range of products &services to retail customers. In view of this reorientation
of the business, the name of the company was changed from ICICI Corporation Limited to
(ICICI PFS) effective march 22, 1999.

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 ICICI commenced its custodial services business in 1992 & played a pioneering role in the
business when it accepted the custodian role for the first ever GDR issue by an Indian
corporate (reliance industry Ltd). ICICI has a major market share in the segment act as
custodian of 41 ADR/GDR issues & in the process, has established the relationship will all
the major overseas institutional investors including foreign institutional investors (FII‟s) &
as on the June 30,1999, the value of asset held in our custody exceeded us 2 billion. At
present, ICICI offers a full range of custodial services for primary and secondary market
operation pertaining to debt, equity, money market instruments GDR/EURO issues
conversion & GDR arbitrage to:
1) Overseas institutional investors like
a) FIIS
b) OCBS
c) OFFSHORE FUNDS
d) VENTURE FUNDS
2) Overseas government agencies.
3) Institutional looking for proprietary investment.
4) Mutual funds
5) Private investment companies
6) Large corporate
7) High net worth individual

As a value added services ICICI custodial services division assist the client in preparation,
submission & follow up for various applications by FII‟S/OCB with SEBI/RBI

APPLICATION PROCESS OF YOUR HOME LOAN

Your search for the perfect home loan ends here at ICICI Bank Home Loans, even before
your have found the perfect property.

The moment you decide to buy a home, you can put in your application for a home loan. Yes,
you can apply for a home loan even before you have selected the property.

The property need not even be in the same city where you are residing. The only condition
being that ICICI Bank has Home Loans 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 of your home loan.

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.

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 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.

PERSONAL BANKING

At ICICI bank they are committed to making banking a pleasure. This commitment is
manifested in services they offer a wide range of account, investment scheme & facilities.
Each services offer their customer security, flexibility of operations & maximum returns.
The various services provided under this is as follow:
1) Maximum cash-saving account
2) Quantum fixed deposits
3) Quantum optima –value added saving account
4) Money plus-current act
5) ATM
6) Treasure chest –cocker facility
7) Power pay roll
8) Retail treasury instruments

CORPORATE BANKING

MOBILE COMMERSE
ICICI bank now brings back account & ICICI credit card to customers fingertips .with
mobile commerce customer can perform a wide range of query –based transaction from their
orange tm (Mumbai) & Airtel (DELHI) mobile phone , without even making a call.

1) Access multiple accounts

2) Balance inquiry to the linked account
3) Cheque book request
4) Mini statement –listing of last three transactions5) Request for account statements (by
mail or fax)

ICICI

1) Attractive IR
2) Door step service from enquiry stage till the final disbursement.
3) No guarantor required.
4) Can transfer your existing high interest rate loan.
5) Special 100% funding for special properties.

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 FACTORS AFFECTING YOUR LOAN AMOUNT

With ICICI Bank Home Loans, you can get a home loan suited to your needs. The home loan
amount depends on your repayment capability and is restricted to a maximum of 80% of the
cost of the property or the cost of construction as applicable. A number of factors are taken
into account when assessing your repayment capacity. Repayment capacity takes into
consideration factors such as income, age, qualifications, number of dependants, spouse's
income, assets, liabilities, stability, continuity of occupation and savings history.
However, there are ways by which you can enhance your eligibility.

If your spouse is earning, put him/her as a co-applicant. The additional income shall be
included to enhance your loan amount.
In case of any co-owners they must necessarily be co-applicants.

The final amount to be sanctioned will depend on your repayment capacity. However, what
you 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.

Documents required for Home Loan Sanction

ICICI Bank Home Loans, India‟s leading Home Loans Provider, offers attractive interest
rates and unbeatable benefits to ensure that you get the best deal. Keeping your convenience
in consideration, we ask you for minimal mandatory documents for the sanctioning of your
home loan, to keep the process totally hassle-free.

We require the following documents to sanction your home loan:

Sanction Documents Completed application form

Photograph
Fee Cheque
Photo Identity Proof
Age Proof
Signature Verification Proof
Residence Address Proof
Document for the Salaried
Last 3 months‟ Salary Slip
Form 16
Bank Statement for the last 6 months from Salary Account
Repayment Track record of existing loans / Loan closure letter

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 Document for the Self-employed
Income Tax Return / Computation of Total Income / Auditors Report / Balance Sheet / Profit
& Loss Account certified by Chartered Accountant for last 2 years (3 years for Home Equity)
(both for business and personal of partners/directors)
Bank statement for the last 6 months from operating account
Repayment Track record of existing loans / Loan closure letter
Board Resolution in case of a company
Proof of existence
Office Address Proof
 Photo Identity Proof, Residence Address Proof, Signature Verification Statement for all the main
partners / directors.

HOME LOAN

1) Customer must be at 21 year of age when the loan is sanctioned.

2) The loan must terminate before or when you twin 65 year of age or before retirement,
Whichever is earlier.
3) Customer must be employed or self employed with regular source of income

LOAN AMOUNT

 A number of factors are taken into account when assessing repayment capacity.
 Customer income, age, number of dependents, qualification, asset &liabilities,
stability and continuity of customer employment. Business is one of them. However
there are ways by which you can enhance your eligibility.
 If the customer spouse is earning put he/she as a co-applicant the additional income
shall be included to enhance the loan amount. Incidentally, if there are any co owners
they must necessarily be co-applicant customer fiancée’s income can also be
considered sanctioning the loan on your combined
 Income .the disbursement of the loan, however will be done only after the submit
proof of Marriage. Providing additional security like bonds, fixed deposits & LIC
policies may also help to enhance Eligibility.
 While there is no need for guarantor, it could be that having one might enhance your
credibility with us. If so, our loan officer would provide customer with positive
necessary details.
 The final act to be sanctioned will depend on your repayment capacity. However,
what customers 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, stamp duty,
transfer charges are also included.

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 HOMELOAN

We at ICICI bank understand the value of owing your house. Our affordable home loans can
make all the difference to their dreams of owing home.

FIND THE RIGHT HOME

Provide facility for search of free online property. A one stop shop for all their
Real Estate needs.

WHAT YOU GET

0% brokerage on first sale properties access the entire market under our roof site visits to the
properties short listed by you. Help in negotiating the best price. Help the legal
documentation.

LISTINGS BELOW ARE THE STEP INVOLVED IN AVAILING OF A HOMELOAN

 A person applies for a home loan

 The executive meets the applicant & briefs him the entire loan process,
requirements & the various options available.
 The applicant chooses a housing finance company (HFC) & handover the income
 Document to the executive are the income documents are headed over to the HFC for
eligibility & approval.
 The HFC verifies the documents & checks the repaying capacity, saving habits,
tenure of services etc. of the applicant & approves the loan amount.
 After approval an offer letter is given to the applicant by the HFC, along with list of
original title documents that have to hand over to the HFC.
 The applicant gives the original property title document to the HFC
 The HFC scrutinizes the legal & the technical aspects of the original title document.
 If the HFC is satisfy as to the legal & technical aspect of the document then the
applicant is called to sign the loan agreement
 The loan disbursement schedule is decided by the HFC according to the stage of
construction (If property under construction) or a onetime payment is made if
property is ready for Possession.
 The applicant gets possession of the property depending upon the level of completion
of the property.
 The applicant can start paying the EMIs.

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 DISBURSEMENT

Customer loan will be disbursed after you identify & select the property or the home that
customer are purchasing and on their submission of the requisite legal documents.
While the customer may be under impression that the list of documents asked for it is rather
extensive. Each and every single document asked for will be verified & check to ensure their
safety. This may take some time but the banks want to ensure a clear title and will complete
all the legal & technical verification to ensure that they have full right to their home.
The 230 a clearance of the sellers or 371 clearance from the appropriate income tax
authorities (if applicable) is also needed on satisfactory completion of above, on registration
of 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.
The disbursement will be in favor of the builder/seller.

At ICICI Bank Home Loans, we disburse the loan amount after you identify and select the
property or home that you are purchasing and submit 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.
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.

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.
Disbursement Documents

Property documents (as per P&D for respective states and as asked by empanelled lawyers
for individual cases)
Facility Agreement
Disbursal Request Form
Cheque Submission Form – for Pre EMI and EMI cheques
ECS or Auto Debit for ICICI Bank account holders or Post Dated Cheques for EMI / Pre
EMI
Personal Guarantor‟s Documents (PG Form, Photograph, Identity Proof, Address Proof,
Signature Verification and Income documents, if applicable)

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In case of property is owned by a company
 Memorandum of Entry
 Form 8
 NOC

AMOUNT

This largely depend on a no. of facts like ones age ,profession, salary, the city one reside is
among other such factors. it varies between 2.1lakh to 1crore depending on the lender- as the
rule of the thumb, depending on HFC one have to cough up 15% - 20% of the loan amount as
the down payment. For smaller amount, this may not be much. But for figure remaining into
lakh this could make loads of difference. For e.g. an apartment of costing Rs 10 lakh may get
85% financing, so one will have to arrange for remaining Rs 15 lakh. If one takes this into
amount the additional thousands will definitely put a strain on ones finances
.
TENURE

Generally the maximum tenure of home loans is 20 years, with a few lenders offering tenure
of 30 years. ICICI offers 20 year loan. The longer the tenure, the more one pay in total
interest but ones monthly payment will be less. So depending ones earning potential & bank
balance one can choose an appropriate tenure. An important requirement of most of the
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. Repayment is in the form of EMI‟s (equated
monthly installment). The longer the tenure, the more one pays in interest, but ones monthly
payment will be less. The interest rate of ICICI is

REFERENCE

Slab Floating Interest Rate (p.a.)

For Salaried For Self Employed

Up to Rs. 35 lakh 7.60%-8.05% 7.70%-8.20%

Rs. 35 lakh to Rs. 75 lakh 7.60%-8.05% 7.70%-8.35%
Above Rs. 75 lakh 7.60%-8.30% 7.70%-8.45%

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This is 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 another loan before its natural tenure. It gives one the opportunity of
prepaying ones high cost debt and get a lower cost one. In today‟s falling interest rate scenario
one should use this vehicle to lower ones debt payment as much as possible. The lender
facilitates the shift by paying the outstanding and transferring the asset to other portfolio.

MISCELLANEOUS CHARGES

The interest rates and EMI‟s are not only the cost factor. Never underestimate how much the
processing fee and administration fees amount to. A 0.5% administration fees and 0.5%
processing fee on say, a Rs.500000 loan would be Rs.5000. other timesit 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% or 3%. The various other fees, which one is required to pay
along with the margin amount are:

INTEREST TAX:

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

PROCESSING CHARGE

It is the fee payable to the lender on applying for a loan. It is either a fixed amount not linked
to the loan or may be a percent of the loan amount. The loan amount received by you can be
less than processing fee.

PREPAYMENT PENALTIES

When the loan is paid back before the e nd of the agreed duration a penalty is charged
by some banks or companies, which is usually between 1% and 2% of the amount being
prepaid.

OTHERS

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

ICICI BANK ANNOUNCES ITS BASE RATE, VALID FROM JUNE 8, 2022

In an official announcement on its website, ICICI Bank said, “RBI policy repo rate
effective June 8, 2022, is 4.90 per cent. ICICI Bank External Benchmark Lending
Rate (I-EBLR) is referenced to RBI policy repo rate with a mark-up over repo rate. I-
EBLR is 8.60 per cent p.a. p.m. effective June 8, 2022
37 | P a g e
 PUNJAB NATIONAL BANK

INTRODUCTION

PNB has over 4500 branches and offices bringing the Punjab National Bank to your
doorstep. Around 2400 offices come under the network of Centralized Banking Solution or
CBS. A need for centralized banking system prompted PNB to go computerized and what
followed was the establishment of CBS in Punjab National Bank branches in all the leading
cities like Delhi, Pune, Chennai, Mumbai, Ahmedabad, Chandigarh, Gurgaon, Hyderabad,
Jalandhar, Kolkata, Ludhiana, Nodal and Bangalore. Internet Banking Services are provided
to all customers in the CBS branches. A branch and ATM locator is also available on the
official website of Punjab National Bank. For an overview of the annual report or the bank
profile, the site can be resourceful. The website also provides info on the careers and
recruitments at PNB and the exam results. The careers at nationalized banks like PNB are the
most sought after one and candidates are selected on the basis of their exam result. PNB
topped the Best Paying Commercial Bank category with an overall rating of 87.45% as
evaluated by the SSS Retirement, Death & Funeral Benefits Program.

PROFILE OF PNB

The profile of the PNB shows superior banking services in corporate, personal and
international banking, industrial and agricultural finance and finance of trade. Punjab
National Bank boasts of a varied clientele consisting of small and medium industrial units,
exporters, multi-national companies, Indian conglomerates and NRI. The Bank is changing
outdated front and back end processes to modern customer friendly processes to help
improve the total customer experience. With about 8500 of its own 10000 branches and
another 5100 branches of its Associate Banks already networked, today it offers the largest
banking network to the Indian customer. The Bank is also in the process of providing
complete payment solution to its clientele with its over 8500 ATMs, and other electronic
channels such as Internet banking, debit cards, mobile banking, etc.The objectives of the
Company are in line with objectives laid down by RBI for the Primary Dealers:

Vibrant, liquid and broad based.

Securities

enhance liquidity and turnover and encourage voluntary holding of Government securities
amongst a wider investor base
ng open market operations.

38 | P a g e
 PNB HISTORY

Punjab National Bank of India was established by Lala Lajpat Rai in the pre-independence
India in 1895 in Punjab, with Lahore as its head office. Today it is the second largest public
sector bank in India. It was nationalized in 1969 along with 13 other major commercial
banks. The privatization started in 1989 when 30 per cent of its shares were offered to the
public and it was listed on the stock exchange. In 1992, PNB became the first Philippine bank
to reach P100 billion in assets. Later that year, privatization continued with a second public
offering of its shares. In August 2005, PNB was fully privatized. The joint sale by the
Philippine government and the Lucio Tan Group of the 67% stake in PNB was completed
within the third quarter of 2005. The Lucio Tan Group exercised its right to match the P
43.77 per share bid offered by a competitor and purchased the shares owned by the
government. The completion of sale is expected to speed up the development of PNB‟s
franchise and operational competitiveness.

Today, State Bank of India (SBI) has spread its arms around the world and has a network of
branches spanning all time zones. SBI's International Banking Group delivers the full range
of cross-border finance solutions through its four wings - the Domestic division, the Foreign
Offices division, the Foreign Department and the International Services division.

PNB RECENT ACHIEVEMENTS AND MILESTONES

PNB is known to embrace performance-based approach leading it to multiple awards and

recognition, such as:
 Utkarsh PuraskarDigiDhan Award 2019-20 by Ministry of Electronics & Information
Technology for second highest digital payment transactions.
 The best Micro, Small & Medium Enterprises (MSME) bank award at Banking Excellence
Awards 2016.
 The National Payments Excellence Award, 2016 for Aadhaar Enabled Payment Systems
(AEPS).
 Vigilance Excellence Award 2016-17 awarded by Institute of Public Enterprises (IPE),
Hyderabad.
 Second best bank in SHG credit linkage under Ministry of Rural Development’s National
Rural Livelihood Mission (NRLM) scheme.

REGULAR HOUSING FINANCE SCHEME FOR PUBLIC

PNB reaches out to you with fast, friendly and most convenient home loans for:

 Construction or purchase of house/ flat.

 Purchase of house/ flat on First Power of Attorney basis from the original allottee
 Carrying out repairs/ renovations/ additions/ alterations to existing house/ flat
 Special Feature- To cover the loan outstanding, life Insurance cover is also available
on payment of one time premium which can also be financed by the Bank.

39 | P a g e
PRODUCTS

HOUSING LOAN FOR PUBLIC

Objective To ensure availability of Housing Loan at attractive rates and ensure a house for all.

For construction of house/ flat;

For purchase of built house/flat.
For purchase of under construction house/flat from Housing Boards/ Development Authorities/ Co-operative
Societies/ Approved Private Builders/ Projects.
Purpose
For carrying out Additions to the house/flat.
For carrying out repairs/ renovation / alterations/ cost of furnishing to the house/flat.
For meeting cost escalation in the cases of under-construction flats to existing Housing Loan borrowers.
For purchase of land/plot for house building.

Individuals or group of individuals (co-borrowers) who are having an assured source of regular income viz.
Eligibility Salaried employees, Professionals, Self Employed persons, businessman, farmers etc. Staff members are also
eligible under public scheme.

For Construction/Additions/Purchase of House/Flat: Need based loan depending upon the project cost and
repaying capacity of the borrower.
Quantum Of For purchase of Land/ Plot for House Building: Maximum Rs.50 lac.
Finance For repairs / renovation / alterations: Maximum Rs.50 lac.
Cost of furnishing may be included in the project cost with maximum upto 15% of Home Loan or Rs.50 lakh
whichever is lower, within the prescribed Loan to Value (LTV) ratio.

Housing Loan Upto Rs.30 lac 20%/10%# $

Housing Loan Above Rs.30 lac and Upto Rs.75 lac 20%

Housing Loan Above Rs.75 lac 25%/20%$

^^Revised Margin Valid Up To 31.03.2023

Sanction Limit Existing Margin Revised Margin

Margin
Housing Loan Above Rs.75 lac 25% 20%
(Borrower`S
Contribution)
Purchase of Land/Plot for House Building 25%

$ CIC Score of borrower 700 & above or -1 & 0, (In case of joint borrower(s), the CIC score of each
borrower must be 700 and above or -1& 0) valid upto 31.03.2023.
Charges e.g. stamp duty, registration charges and other documentation charges shall be borne by the
borrower and shall not be considered towards margin money. However such charges may be added to the
cost of the house/dwelling unit for the purpose of calculating LTV ratio in cases where the cost of the
house/dwelling unit does not exceed Rs.10 lakh. Acquisition cost of Plot be considered towards Margin
Money.

Security Equitable/registered mortgage of the property in question.

40 | P a g e
 Loan for carrying out repairs/ renovation / alterations to the house/flat: Max.15 years inclusive of
moratorium period, if any.
Loan for Others: Max. 30 years inclusive of moratorium period, if any.
The income of the spouse and earning children (whether married or unmarried) and of the joint owners can
Repayment be added for determining the income for the purpose of borrowers` repaying capacity. In such cases, they
should be made co-borrower.
Parents can also be made as co – borrower in cases where the property is in the single name of Son /
Daughter or in the joint name of Son and Daughter and also clubbing of their income be permitted for the
purpose of eligibility/repayment of loan.

For Construction/ Additions of House/ Flat: Till completion of construction (including additions) or 18
months, from the date of disbursement of first installment of the loan, whichever is earlier.
Repayment
For carrying out repairs/ renovation / alterations to the house/ flat: Till completion of repairs/ renovation /
Holiday/
Moratorium alterations or 6 months, from the date of disbursement of first installment of the loan, whichever is earlier.
For purchase of ready built House/ flat OR land/plot: Till the date of possession or 3 months from the date of
advance, whichever is earlier.

PNB Flexible Housing Loan

This variant provides the borrowers advantage of substantial savings on the interest
component on account of facility to:
 Deposit their surplus funds in the overdraft account; and
 Withdraw the same at their choice as per their needs

Eligibility

Customers who are below the age of 50 years and existing Housing loan borrowers who have
availed loan under our Housing Loan scheme for public subject to fulfillment of all terms &
conditions of this variant:

Purpose

For all purposes as per details described under Housing Finance scheme except for purchase
of land/plot.

Nature of Facility

Term Loan - 80% and overdraft 20%

Extent of Loan

First enhancement allowed after 3 years, Overdraft limit can be enhanced maximum upto
50% of the total loan amount sanctioned. Extent of enhancement equal to reduction in Term
Loan Amount.
Borrowers are entitlement for 20% increase in the original total limit sanctioned after a lapse
of five years.
Enhancement(s) is/are for personal needs is/are allowed in the shape of a separate Overdraft
41 | P a g e
 limit.

Margin
Term Loan - 20% and Overdraft - 25%:

Repayment

Term Loan component: As per Housing Loan Scheme for Public.

Overdraft component:
For Borrowers below 55 years: Servicing of Interest as and when charged i.e. on Monthly Basis.

For 55 years and above: On monthly reducing drawing power maximum upto the age of 70 year

INDIVIDUAL
For construction/purchase of house/flat: - 75% of the cost of construction of house or
purchase of house/flat. Cost of car parking up to the maximum extent of 5% of the cost of
flat/house can also be included in the cost of the project. For carrying out repairs/
renovations/ additions/ alterations: - 75% of the estimated cost subject to maximum of Rs. 20
lacs.

Loan is available up to Rs. 20 lacs for purchase of Land/ Plot. Loan is available maximum up
to Rs. 2 lacs for furnishing

PRODUCT RANGE OF COMPANY/INDUSTRY:

The products and services provided by the PNB are in various fields, such as:

• NRI services
• International banking
• Corporate banking
• Agricultural banking
• International banking

ELIGIBILITY

Age of the applicant must be less than 70 years.

Existing home loan borrower can also apply provided their loan account is regular and no IR
irregularity persist.

DOCUMENTS NEEDED

1. Proof of identity
42 | P a g e
 2. Proof of income
3. Proof of residence
4. Bank statement or Pass Book where salary or income is credited.
5. Education Certificate
6. Photos
7. Salary slips & form 16
8. Income tax return last 3 years along with balance sheets.
9. Assets liabilities statements.
10. Documents of property.
11. Estimate of construction.
12. Guarantor

FREEHOLD AND LEASEHOLD PROPERTY

The loan can be granted both for freehold and leasehold property.

In case of leasehold, loan can be granted on the basis of power of attorney basis from original
allotee where DDA/PUDA/HUDA permit conversion of leasehold into freehold property
otherwise advance is not permitted against plot purchased on Power of Attorney basis.

EXTENT OF LOAN

For construction/purchased of house/flat 75% of the cost of construction or purchase of

house/flat. For carrying out repairs/renovation/additions/alternation: - 75% of the estimated
cost subject to maximum of Rs. 20 lacs. Loan up to Rs. 20 lacs for purchase of land/plot
Loan is available maximum up to Rs. 2 lacs for furnishing

CHARGES

Pre payment charges 2%

Balance Transfer Charges

(incase of refinance)
2%

Part-payment Charges Nil

Switching Charges
(Fixed to Floating or vice-a-versa)
Nil

43 | P a g e
 SPEED OF SANCTION OF LOAN

The loan will be sanctioned within 7 working days.

TENURE:

You can repay the loan over a maximum period of 25 years under both FRHL and ARHL in
PNB. Repayment will not ordinarily extend beyond your age of retirement (if you are
employed) or on your reaching 65 years of age, whichever is earlier.

RATE OF INTEREST

Floating Interest Rate (p.a.)

Slab
For Salaried For Self Employed
Up to Rs. 35 lakh 6.75%- 6.90%
Rs. 35 lakh to Rs. 50 lakh 7.15% 7.30%
Above Rs. 75 lakh 7.60%-8.30% 7.70%-8.45%

The interest rate can be fixed or floating

Option can be changed from fixed to floating and vice versa with flat charges of 2% fee on
balance outstanding.
DOCUMENTATION CHARGES
Rs. 1350 + Service Tax

UPFRONT FEE

For loans up to Rs. 300 lacs = 0.50% of the loan amount with a cap of Rs. 20,000/-
For loans above Rs. 300 lacs =0.90% of the loan amount

REPAYMENT

1. Loan is to be repaid in equated monthly installments within a period of 25 years or before

the borrower attains the age of 65 years.

2. Repayment of loan for repair/ renovation/ addition/alteration has, however been restricted
to 10 years. Father/Mother can also be made co-borrower in cases property is in single name
of his /her son and also clubbing of their income is permitted for determining eligibility
criteria. Minimum 24 advance cheque should be obtained as and when, 6 cheques remain,
fresh lot to be obtained out of 24, 23 cheques should be of the amount equal to the balance.
Loan is to be repaid in EMI within a period of 25 years or before the borrower attains the age
of 65 years.

44 | P a g e
 SECURITY

Mortgage of property for which finance is being given

In case of purchase of house/ flat from housing board/ society where mortgage cannot be
created immediately, a tripartite agreement shall be executed amongst the housing board/
society, borrower and the Bank
In case of purchase of house/ flat on first power of attorney, additional security equal to
125% of the loan amount by way of mortgage of some other property or pledge of bank's
FDR/ LIC policy/ Govt. Securities, NSCs, KVPs, IVPs, / PSU Bonds etc. has to be provided

FEATURES

Loan can be sanctioned by branch/hub near to the present place of work/posting /residence of
the borrower.
Loan can be sanctioned even if property is in the name of wife/parents provided that the
owner is made co-borrower.
Loan can be granted for 2nd house in the same city.
Loan can be granted for purchase of house for rental purpose
For take over, permission of higher authority is not required.

IMPORTANT CONDITIONS LOAN CANNOT BE GRANTED:

 For construction in Un-authorized colonies.

 If property is to be used for commercial purpose.
 Without approved Map.

PRE- PAYMENT CHARGES

 Nil- In cases where the loans are prepaid by the borrower from their own sources
 Nil- In cases where the borrower shifts to other bank within 30 days from the date of
issuance of circular for upward revision in the rate of interest to be charged in his
account or change in other terms of sanction.
 2 % - In cases where the account is taken over by some other Bank/ Financial
institutions by way of a ailment of loan from such bank/ financial Inst

DISBURSEMENT FOR HOME LOAN

a. For outright purchase of house/flat, the loan amount will be paid in lump sum to the
vendor.

45 | P a g e
 STATE BANK OF INDIA

INTRODUCTION

State Bank of India (SBI) is India's largest commercial bank. SBI has a vast domestic
network of over 9000 branches (approximately 14% of all bank branches) and commands
one-fifth of deposits and loans of all scheduled commercial banks in India. The State Bank
Group includes a network of eight banking subsidiaries and several non-banking subsidiaries
offering merchant banking services, fund management, factoring services, primary dealership
in government securities, credit cards and insurance. The eight banking subsidiaries are: State
Bank of Bikaner and Jaipur (SBBJ),State Bank of Hyderabad (SBH).State Bank of India
(SBI),State Bank of 13 Indore (SBIR),State Bank of Mysore (SBM),State Bank of Patiala
(SBP),State Bank of Saurashtra (SBS) and State Bank of Travancore (SBT). Today, State
Bank of India (SBI) has spread its arms around the world and has a network of branches
spanning all time zones. SBI's International Banking Group delivers the full range of cross-
border finance solutions through its four wings - the Domestic division, the Foreign Offices
division, the Foreign Department and the International Services division.

PROFILE

The SBI‟s powerful corporate banking formation deploys multiple channels to deliver
integrated solutions for all financial challenges faced by the corporate universe. The
Corporate Banking Group and the National Banking Group are the primary delivery channels
for corporate banking products.

The Corporate Banking Group consists of dedicated Strategic Business Units that cater
exclusively to specific client groups or specialize in particular product clusters. Foremost
among these a specialized group is the Corporate Accounts Group (CAG), focusing on the
prime corporate and institutional clients of the country‟s biggest business centers. The others
are the Project Finance unit and the Leasing unit. The National Banking Group also delivers
the entire spectrum of corporate banking products to other corporate clients, on a nationwide
platform. The bank is also looking at opportunities to grow in size in India as well as
internationally. It presently has 82 foreign offices in 32 countries across the globe. It has also
7 Subsidiaries in India – SBI Capital Markets, SBICAP Securities, SBI DFHI, SBI Factors,
SBI Life and SBI Cards - forming a formidable group in the Indian Banking scenario. It is in
the process of raising capital for its growth and also consolidating its various holdings.
Throughout all this change, the Bank is also attempting to change old mindsets, attitudes and
take all employees together on this exciting road to Transformation. In a recently concluded
mass internal communication programme termed „Parivartan‟ the Bank rolled out over 3300
two day workshops across the country and covered over 130,000 employees in a period of

46 | P a g e
 100 days using about 400 Trainers, to drive home the message of Change and inclusiveness.
The workshops fired the imagination of the employees with some other banks in India as
well as other Public Sector Organizations seeking to emulate the programme.

HISTORY

The origins of State Bank of India date back to 1806 when the Bank of Calcutta (later called
the Bank of Bengal) was established. In 1921, the Bank of Bengal and two other Presidency
banks (Bank of Madras and Bank of Bombay) were amalgamated to form the Imperial Bank
of India. In 1955, the controlling interest in the Imperial Bank of India was acquired by the
Reserve Bank of India and the State Bank of India (SBI) came into existence by an act of
Parliament as successor to the Imperial Bank of India.

Today, State Bank of India (SBI) has spread its arms around the world and has a network of
branches spanning all time zones. SBI's International Banking Group delivers the full range of
cross-border finance solutions through its four wings - the Domestic division, the Foreign Offices
division, the Foreign Department and the International Services division.

SBI RECENT ACHIVEMENTS AND MILESTONES:

AWARDS:
SBI has been the proud recipient of the ICRA Online Award - 8 times, CNBC TV – 18, Crisil
Award 2006 - 4 Awards, The Lipper Award (Year 2005-2006) and most recently with the
CNBC TV - 18 Crisil Mutual Fund of the Year Award 2007 and 5 Awards for our schemes.

SBI Card reaches three million milestones:

SBI Card, a joint venture between State Bank of India and GE Money, announced yet
another landmark achievement of crossing the three million cardholders-marks. Roopam
Asthana, CEO-SBI Card, said, "This milestone is even more remarkable as we have added
one million cardholders in just ten months. Our objective is to accelerate the pace of growth
by extending the benefits to a broader range of consumers in Tier II cities, along with
improved value propositions for the urban affluent customers." SBI Card recently signed up
Indian cricketer Yuvraj Singh as its brand ambassador.

SBI joins Chinese bank to touch 10,000 branches:

Public sector State Bank of India on Sunday became only the second bank in the world to
have 10,000 branches when Union Finance Minister P Chidambaram inaugurated its latest
branch here. Speaking on the occasion, Chidambaram said China's ICBC Bank was the other
bank to have 10,000 branches. Opening 10,000 branches was a great feat. "It is not an easy
milestone though the SBI was the bank of the government and Indian people even before
other banks were nationalized," he said. People all over the world, including the Chinese,
would now know about this small village where the 10000th branch of the SBI had been
opened, he said adding they would be amazed by the bank's growth. The bank should be
proud of the achievement he said and wished that the bank opened one lakh branches. The

47 | P a g e
 Minister said out of the over 100 crore people, seventy 75 per cent did not have any type of
insurance. Similarly, 50 per cent of the 11 crore farmers did not have bank account. Banks
should go to the people and enroll them as account holders. 'That is what economists say is
financial inclusion,' he said.

Main SBI Home Loan Schemes

 SBI Realty : Purchase of plot of land

 SBI Optima : Loan to existing home loan borrowers
 SBI Green Home Loan : For homes that fight against the adverse climate change,
SBI offers 0.25% concession in interest rate and waiver of processing fees
 SBI Flexi : Combination of floating and fixed interest rate, in a pre determined ratio
 NRI Home Loans : Loans for NRIs and PIOs
 SBI Freedom : Pledging other financial security than mortgaging the house
 SBI Max Gain : Operate your home loan account like your SB or Current Account

PRODUCT RANGE OF COMPANY/INDUSTRY:

The products and services provided by the SBI are in various fields, such as:
• Banking services
• NRI services
• International banking
• Corporate banking
• Agricultural banking
• International banking

SBI HOUSING LOAN

Features
 SBI Home Loan provides no cap on maximum loan amount for the
purchase/construction of house/flat.
 There is an option to club the income of the applicant's spouse and children to
compute the eligible loan amount.
 The bank provides free personal accident insurance cover.
 A complimentary international ATM cum Debit card is also provided by SBI.
 On the spot "in principle" approval is a special provision for the applicant.
 If all the required documents are submitted by the applicant, SBI Home Loan is
sanctioned within 6 days of the date of submission.
 The applicant can also consider SBI's Home Loan as a Term Loan or as an Overdraft
facility, in case he/she wants to save on interest and maximize gains.
 SBI Home Loan also provides free personal accident insurance cover up to Rs 40
Lakhs.
 Repayment is permitted up to 70 years of age, which is an added advantage of SBI
Home Loan.

48 | P a g e
 SCHEMES PROVIDED BY SBI

The Most Preferred Home Loan provider SBI Bank offers a Home Loan with Attractive
Interest Rates with Latest Schemes and Benefits. SBI also provides a Housing loan with
different schemes. Schemes Are:-

1. SBI Easy Home Loan

2. SBI Advantage Home Loan
3. SBI Housing Finance Scheme
4. SBI Happy Home Loans
5. SBI Life Style Loan
6. SBI Green Home Loan
7. SBI Home Plus
8. SBI Home Line
9. SBI MY HOME CAMPAIGN

PRODUCTS

'SBI-Flexi' Home Loans are designed to enable borrowers to hedge their Home Loan against
unfavorable movement in interest rates and gives the customers a one time irrevocable option
to choose one of the three customized combinations of fixed and floating interest rates.
'SBI-Freedom' Home Loans are customized for high net worth individuals and offer benefits
such as 100 per cent finance of the project and no mortgage of the property, provided the
individual could show liquid securities such as LIC policies or NSCs.

ELIGIBILITY

The minimum age of the applicant is 21 years, on the date of the sanction of the loan. The
maximum age limit for a Home Loan applicant is 70 years. It is the maximum age limit,
within which the loan should be fully repaid. The applicant should consist of sufficient,
regular and continuous source of income for repaying the loan.

DOCUMENTS

Completed Application Form with one Passport Size Photograph

Identity Proof - the applicant can make use of his/her PAN Card/Voter ID/ Passport/Driving
License, for the purpose.
Residence Proof - the applicant can make use of his/her Recent Telephone Bill/ Electricity
Bill/Property tax receipt/Passport/Voters ID
Proof of business address in respect of businesspersons/ industrialists
Sale Deed, Agreement of Sale, Letter of Allotment, Non Encumbrance Certificate,
Land/Building Tax paid receipt etc.
Copy of Approved Plan and approval from the Local Body
Statement of Bank Account/ Pass Book for last 6 months

49 | P a g e
 INTEREST RATE (SBAR is currently 12.90%)

SBI Home Loan Scheme Interest Rates % p.a

Regular Home Loan 7.55% to 8.05%

Top-up Loan 7.95% to 8.55%

Tribal Plus 7.65% to 8.15%

CRE Home Loan 7.75% to 8.25%

Realty Loan 7.85% to 8.25%

P-LAP 9.30% to 9.70%

Eligibility Criteria & Documentation required for SBI Home Loan

Salaried Self employed

Age 21years to 60years 21years to 70years
Income Rs.1,20,000 (p.a.) Rs.2,00,000 (p.a.)
Loan Amount
5,00,000 - 1,00,00000 5,00,000 - 2,00,00000
Offered
Tenure 5years-20years 5years-20years
Current
2years 3years
Experience

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 1) Application form with photograph
1) Application form with
2) Identity & residence proof
photograph
3) Education qualifications certificate &
2) Identity & residence proof
proof of business existence
3) Last 3 months salary slip
Documentation 4) Business profile,
4) Form 16
5) Last 3 years profit/loss & balance
5) Last 6 months bank salaried
sheet
credit statements
6) Last 6 months bank statements
6) Processing fee cheque
7) Processing fee cheque

Other Products from SBI (State bank of India)

1) SBI Personal Loan

2) SBI Card
3) SBI Home Loan
4) SBI Housing Loan

LOAN TENURE

You can repay the loan over a maximum period of 25 years under both FRHL and ARHL in
SBI . Repayment will not ordinarily extend beyond your age of retirement (if you are
employed) or on your reaching 65 years of age, whichever is earlier.

51 | P a g e
 Chapter 5
ANALYSIS OF DATA

The home loans provided by the banks are more or less same at the basic level. The banks generally try to
go ahead of other banks in terms of attracting number of customers to their countries. For this they are
trying to offer some unique services as per the unique requirements of the unique important customers

COMPARITIVE STATEMENT OF HOME LOAN

Name of State Bank of HDFC

ICICI Bank Punjab National Bank
Lender/Slab India

Up to 30 Lakh 7.60 – 8.20 7.45-8.85 7.55-8.55 7.55-8.75

Above 30 Lakh & 7.60 – 8.35 7.55-8.45 7.55-9.00

7.40-8.55
up to 75 Lakh

Above 75 Lakh 7.60 – 8.45 7.40-8.50 7.55-8.45 7.55-9.10

Processing Fee 0.5% 0.5% 0.5% 0.5%
Penalty 2% 2% 2% 2%
Tenure 30 years 30 years 30 years 30 years
Minimum Age 21 21 23 21
Maximum Age 65 70 70 65
Housing Loan Approvals to Customers Based on Income Slabs in FY21 at HDFC

Category Household Income per Home Loan Approvals in FY21

annum

% in Value % in Number
Terms Terms

Economically Weaker Up to ` 3 lac 2% 6%

Section

Low Income Group Above ` 3 lac up to ` 6 lac 14% 27%

Middle Income Group Above ` 6 lac up to ` 18 lac 44% 48%

High Income Group Above ` 18 lac 40% 19%

Total 100% 100%

52 | P a g e
 COMPARISION OF MAJOR PLAYERS

The markets for home loans have been sizzling in India. The spurt in growth in recent years
and the prospect of continued buoyancy in demand have attracted many players to the
industry which till a couple of years back had two major players- HDFC and LIC Housing
Finance. The result is cut-throat competition, which has benefited the loan seekers. The home
loan market has grown at a compounded rate of over 40% over the last four years. And from
what industry experts believe that there is a little chance that there will be any significant
decline in the growth rates going forward. So what have been the key factors in triggering of
this high growth period?
There are several reasons for the same on the demand side:-

 Improve Affordability

 Government Incentives
 Decline interest rates, which have greatly reduced the cost of borrowing (both on
interest and capital)

 Urbanization: Currently 32% of the Indian population reside in cities; estimated to be

50% by 2030
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Then there are factors on the supply side too which have supported this growth:-

 More competition in the housing finance sector resulted in companies charging lower
interest rates, sometimes even at the cost of spread (i.e. profit margin)

 The fee for getting the home loan has reduced dramatically over the last couple of
years. From over 2% of the loan amount to as long as 0.25% (some companies are
known to wave of the fee entirely). Housing Finance Companies have introduced
several new products to meet the needs of wide variety of customers. One such
scheme, the Step up Loan, where EMI‟s increases as the income of the individual
increases has been a big hit with the individuals just starting off with their careers.

 One other factor is increasing collaboration between Housing Finance Companies and
builders. Such partnership minimizes the service and funding related issues
significantly thus making it easier to buy property.

One innovation in the housing finance sector has been the introduction of floating rate home
loan simply put the cost of such home loan or the interest rate not fixed during the tenure of
the loan. Instead interest rate is benchmarked against some index/ indicator. So as the
benchmark rate moves up or down, the cost of your loan too changes, at some predetermined
frequency (usually once a quarter).

Ideally loan seekers should opt for a floating rate home loan when it is expected that the
interest rate will decline going forward. Fixed rate loans should be preferred when the
interest rates are expected to rise.

But is the choice that simple? In today’s environment when there is a lot of talk about rising
interest rate, should investor shun floating rate home loan? Altogether is there still some
merit in this instrument? “In the last one year, there was a trend of floating rate home loans
being more popular as compared to the fixed rate loan. As of now, this trend is
continuing” saysMr. Suresh Menon, GM (Mumbai region), HDFC Limited.

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 There are three important issues which one needs to consider before opting for one type
of a loan over the other:-

 First, an important determinant of what you go in for should be the long term
expectation of interest rate. For example if you (or the experts) expects the rates to
rise for the next one year, but then decline gradually over the next several years a
floating rate product may be preferable. The other option for going in for a fixed rate
product and then switching at the end of the year will entail costs (there could be
penalty of 1%-2% of the outstanding loan amount) and may not make financial sense.
Moreover floating rate home loans do not change the rate of interest every quarter
(even though they review the rate every quarter). Mr. Menon points out “The
attraction of a floating rate home loan is that it does not attract a part prepayment
charge. This could appeal to individuals who get lump sum bonuses which they can
use to reduce their loan exposure.”

 Second, the issue whether fixed rate home loan are actually „fixed rate‟. When
considering a fixed rate home loan over floating rate of home loan a strong selling
point is that if interest rate were to rise dramatically you will be protected.
Apparently the reality is some what different. It seems that companies that have given
out fixed rate home loans can revise their rates upwards in exceptional circumstances
(significant rise in interest rate for one) so if you think interest rate will remain rage
bound over the near term and decline over the long term, you are still better off with
the floating rate product.

 Third, a fixed rate loan is generally priced higher as compared to the floating rate
product. This holds true in the current environment where the fixed rate loan is at a
higher interest rate as compared to the floating rate loan. The difference is currently
about 0.25% to 21%. So if you expect that interest rate are likely to move up, but only
to the extent of this differential, then you should ideally be in different between the
two types of loan. The deciding factors then should be when you think the rates will
increase and also the long term expectations of interest rates.

As always there is no one answer to whether you should go in for floating or a fixed rate
home loan. If you are a person with very little appetite for risk or negative surprises, opt for
fixed rate home loan. But in case you can take on some risk a floating rate home loan is
worth a look.

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 Five step to take a right loan:-

1) Gather data on interest rate. Get interest rate information from more than one source
and get the same information from each so you can compare the offers.

2) Get information on fees. Find out about processing fees, administration charges and
other costs that may be involved in taking the home loan. A written statement of all
the fees from the housing finance companies will ensure that there will be no
surprises later on. Use the lowest amount of fees to negotiate with the other lenders.

3) Get pre-approval letter. This gives you substantial leverage as you are then seen as
serious buyer by the seller of the property. Also, having the letter in your hand will
set a limit to the amount of money you can commit to the property. This will help in
identifying the right property.

4) Bargain for a lower rate of interest. Housing finance will reduce their „rack‟ rates for
customers with the good credit record. A bargain deal will easily fixed a home loan
at significantly lower rates (at times you can get a discount of as high as 0.50
percent). Here again get a confirmation of the rate (and for how long it will remain
fixed) via a letter.

5) Watch out for a predatory lending. Don’t include false information on your home
loan application to get quick approval. Also do not borrow more money than you
need or can afford.

A floating interest rate allows customer to take advantage of interest rate movements. They
get immunity from adverse movements and read the benefits of any fall in interest rate but a
floating rate loan makes sense only when interest rate are high so that they can take
advantage of possible fall. But predicting interest rate movement could confound even
seasoned market watchers.

If they are looking for a home loan, be prepared to cough up a pretty sum as down payment.
The RBI, in a recent meeting with the bankers cautioned banks against lending 100% of the
property value. That is because of increasing competition in home loan some banks have
been funding even 110% of the agreement value. This means your loan not only pay for the
property, it helps with the stamp duty and registration charges and even furnishing. Its being
sweet deal so for, as borrower not only need have no access to other funds, they also get tax
breaks.

The RBI‟s position is that lending such sums will remain additional risk for the bank. In case
of default, the bank may not have sufficient collateral security to recover dues and may have
to write off the additional borrowings. However, the bankers do not seen unduly worried.

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 SWOT ANALYSIS OF HOUSING FINANCE INDUSTRY

STRENGTHS

1) Increase in Urbanization create demand for housing

2) Demand for 1 Bhk & 2 Bhk are increasing rapidly.
3) Housing finance companies could grow at 13 per cent year on year in 2022-23 as
against an 11 per cent growth this fiscal
4) Tax benefit & other facilities provided on loan repayments.

WEEKNESSES

1) Higher Cost of Acquisition of Land

2) Slow Judiciary system has negative impact on HFC
3) The health of an HFC depend upon its ability to mob up low cost funds.
4) AN HFC is unable to tap the rural market due to lack of proper retrieval procedures
5) The rural market offers a higher rate of return; it has a higher risk & default rate.
6) Many legal impendent exist, deferring purchase of certain types of property beyond a limit

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 OPPORTUNITIES

1) NITI Aayog expects that the Indian real estate sector will reach a market size of $1
trillion by 2030 and will account for 13 per cent of India’s GDP by 2025.
2) The current shortage of housing in urban areas is estimated to be ~10 million units.
An additional 25 million units of affordable housing are required by 2030 to meet the
growth in the country’s urban population.

3) While the loan facility is backed by the security of property this sector represent a low
margin But on the low margin but on the same line low risk segment.
4) In order to revive around 1,600 stalled housing projects across top cities in the
country, the Union Cabinet has approved the setting up of Rs. 25,000 crore (US$ 3.58
billion) alternative investment fund (AIF).

5) The roles of NHB in refinancing & providing regulation of housing finance system.

6) The government initiatives to promote the sector & its contribution in uplifting the
sector.

THREATS
The industry faces increased competition as more & more foreign backs & Housing
Finance Companies are providing loan facility

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 SWOT ANALYSIS OF HDFC HOME FINANACE

STRENGTH

1. HDFC is one of the leading new age private sector bank

2. HDFC Bank has over 5,779+ branches and over 17,238 ATMs, in more than 800 cities in
India
3. HDFC has a large collaborations with corporate for employee salary accounts.

4. HDFC bank is a top-rated institution with a high amount in client satisfaction when compared
with other private banks.

WEAKNESS

1. Although they are doing good but as per their Annual Report 2020-21 loan approval for
middle and high income group are higher in comparison to low income group and EWS.
2. Some of the bank’s product categories are underperforming and have limited market reach.

3. HDFC bank does not have a significant presence in rural areas in comparison to nationalised
banks.

4. HDFC does not have aggressive advertising strategies in comparison to ICICI

5. The bank is focused on clients with high-end needs

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OPPORTUNITIES

1. HDFC bank has higher attributes for asset quality than the bank owned by government, and
therefore the growth in profits is expected to rise.

2. Large and SME are expanding at a speed. HDFC is well-known for its ability to manage
account for corporate salaries.

3. HDFC bank has strengthened its bad loans portfolio and its repayment of bad debts is higher
when compared with banks that are backed by government

4. The company’s overall financial condition is very strong so that they can expand the business
to international markets. They can earn more scope and recognition from these opportunities.

THREATS

1. New technologies developed by the competitor or market disruptor could be a serious threat
to the industry in medium to long term future.

2. Nationalized banks like SBI, Union Bank, PNB.

3. Private Banks likes ICICI & standard chartered & Citi Bank with its home credit scheme.

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 CUSTOMER REVIEWS
Customer have share their opinions
1) "Excellent Loan Service"
HDFC LIMITED Home Loan Posted on Jan 29, 2020
I have my housing loan from HDFC because documentation process was easy and I can check everything
on their net banking. On their portal, they have a option to change the interest rate for that there will be a
extra charges based on the credit i have and they will decide the interest rate based on the customer
profile. The process is so simple. Whatever the requirement is there for me I can do it on my own through
net banking.

2) Easy loan"
HDFC LIMITED Home Loan Posted on Jan 17, 2020
My home loan was taken from HDFC Limited but the rate of interest was nominal. The interest rate was
10.8% when I took the loan and it will be good if I get an offer around 8%. Pre closure is there, but i am
not sure about the charges and i am paying EMI of Rs.20280 with the tenure of 15 years.

3) "Easy process one"

HDFC LIMITED Home Loan Posted on Dec 17, 2019
I have taken a home loan in HDFC LIMITED. The amount was 48 lakhs which was sufficient as per my
requirement. The tenure period of 15 years. The process was smooth and sanctioned the loan within 1
month. Interest is nominal 8.5% . Pre closure is applicable and i am paying EMI of Rs. 45k every month.

4) “Worst after loan customer support”

HDFC LIMITED Home Loan Posted on Apr 07, 2022

There is no one to reach out after taking loan from hdfc ltd. No dedicated customer support for existing
customer. It deserve 0 star unfortunately there is no option for that.

5) “Unpleasant experience”
HDFC LIMITED Home Loan Posted on May 10, 2022

I was being followed up regularly until they receive complete processing fee, once I paid all fees no one
contacted me I had to follow up and they hardly bother to process my file.
I wasted almost 2 months with such unprofessional bank there is no proper escalation and tracking
mechanism.
Do not depend on this bank very unprofessional and non transparent process.

Source
https://www.bankbazaar.com/showUserReviews-1327991-HDFCLIMITED-HOME_LOAN.html

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 RECOMMENDATION

The following suggestions are strongly recommended:

 On behalf of customer reviews there is an scope of improvement in after sales & services,

by improving their services HDFC can get more customer base.

 Simplify the procedure, reduce service charges & demand only the basic

essential proof.

 To broaden the customer base the vast middle income and low income strata

should be fully exploited

 To increase their customers, the banks should provide specialized services in this

sector. These services can be such as proper guidance to the Customer regarding the

processing of loans, especially for the customers who are illiterate.

 Time to time banks launched new loan products for the customers with extra unique features.

 If customer fails to deposit the payment on time. The penalty should be case to

case basis rather than the same for the entire customer base.

 Restriction to be reduced to bare minimum for loan advances & for repayment. For

e.g. offers Long term repayment facilities & have no age restriction to choosing

repayment. The maximum age for repayment could be increase to 65-70 years of

age. Such facility will grow fast retail segment of the bank.

 The Banks should use easy procedure, or say, less lengthy procedure for the

sanctioning of loan to the customer. There should be less number of legal formalities,

in case this exists, then, these should be completed in less time. This will be helpful in

attracting more customers.

 To satisfy their customers and for good dealings in future, the banks should make prompt

disbursement of loan amount to the customers so that they can buy or construct their dream

home as early as possible.

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 CONCLUSION

The Indian customer has come a long way from purchasing to fulfilling their needs from
buying a house customers now grab everything that comes their way but they do their own
survey of optimum loans; same is the case with banks & housing loans. With innumerable
choices before him, the customer is needed then king. It is therefore imperative that if the
bank has to succeed in competitive world, it should be technological starry. Customer centric
progressive driven by highest standard of cooperative governance & guided by sound ethical
values & above all should have personalized customer services. There is scope of exploiting
the vast middle income group by releasing loans with special interest rate, which would be
beneficial to both parties.

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 REFERENCE AND BIBLOGRAPHY

A COMPARATIVE STUDY OF HOME LOAN IN PUBLIC AND PRIVATE

SECTOR BANKS. (2022a). International Journal of Management, Public Policy and
Research, 1(2), 49–55. https://doi.org/10.55829/ijmpr.v1i2.42

KUMAR, D. S., & Miryala, R. K. (2020). Impact of RERA on Home Loan Borrowers
in India. International Journal of Indian Culture and Business Management, 1(1), 1.
https://doi.org/10.1504/ijicbm.2020.10035262

Nirmal Kumar, K. S. (2018). Performance of Home Loan: A Study with Reference to

HDFC Bank: Chennai. International Journal of Current Research and Academic
Review, 6(1), 54–59. https://doi.org/10.20546/ijcrar.2018.601.009

Joshi, M. (2019). Case Analysis: HDFC: Housing Development and Finance

Corporation, India. SSRN Electronic Journal. https://doi.org/10.2139/ssrn.1478049

Bodhgire, N. B. (2021). Comparative analysis of the profitability ratios of SBI, ICICI

and HDFC banks in the India. Asian Journal of Multidimensional Research, 10(10),
1556–1568. https://doi.org/10.5958/2278-4853.2021.01007.7

Lapsiwala, S. (2018). Affordable Housing: The Growing Demand for Indian Sector.
International Journal for Research in Applied Science and Engineering Technology,
6(4), 929–938. https://doi.org/10.22214/ijraset.2018.4158

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https://www.hdfc.com/digital-annual-report-2020-2021/mda.html
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interest-rates-current
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