A

DISSERTATION

ON

“AN ANALYSIS OF HOUSING LOAN SCHEMES OF STATE

BANK OF INDIA AND HDFC BANK.”
BY

KOMAL SANJAY HIRAVE

Under the guidance of

PROF. TEJALI DESARDA

Submitted To

SAVITRIBAI PHULE PUNE UNIVERSITY

In Partial fulfillment of the requirement for the award of the degree of

MASTER OF BUSINESS ADMINISTRATION (MBA)

PDEA’S
INSTITUTE OF TECHNICAL EDUCATION, RESEARCH
AND MANAGEMENT, AKURDI, PUNE-411035
2018-2020

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 PRELIMINARY PAGES

Sr. No. Particulars Page No

1 Title of the Project

2 College Certificate I

3 Declaration II

4 Acknowledgement III

5 Executive Summary IV

INDEX

Sr. No. Particular Page No

1 Introduction 8

2 Industry profile 10-12

3 Company profile 14-27

4 Literature Review 29-32

5 Objective of the Study 34

6 Scope of the study 36

7 Research Methodology 38-40

8 Data Analysis and Interpretation 42-52

9 Findings 54

10 Conclusion 56

11 Suggestions 58

12 Limitations of the study 60

13 Bibliography 62

14 Annexure 64-66

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 DECLARATION

I hereby declare that the project entitled “AN ANALYSIS OF HOUSING LOAN
SCHEMES OF STATE BANK OF INDIA AND HDFC BANK.”
Written and Submitted by me to the Savitribai Phule Pune University in partial fulfilment of
the requirement for the award of degree of Master of Business Administration.
Under the guidance of Prof. Tejali Desarda is my original work and the conclusions drawn
there in are based on the material collected by myself. This declaration will hold good & in
my wise belief with full consciousness.

Date:

Place:

Komal Sanjay Hirave

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 ACKNOWLEDGEMENT

I would like to express my deepest appreciation to all those who provided me the
possibility to complete this report. I have taken efforts in this project. However, it would not
have been possible without the kind support and help of many individuals and organization. I
would like to extend my sincere thanks to all of them.

It has been a great learning experience on this project entitled “AN ANALYSIS OF
HOUSING LOAN SCHEMES OF STATE BANK OF INDIA AND HDFC
BANK.”.

I would like to express my gratitude to the director of our institute Dr. Usha Ranawade
madam who as kindly given me an opportunity to conduct this project.

I would also like to thank to Prof .Tejali Desarda our internal guide to give me right
direction and proper guidelines for preparation of report.

I would also like to thank each and every person of the concerned organization for their
guidance and co-operation. Finally, yet importantly I would like to express my thanks to my
beloved parents for their blessings for the successful completion of this project.

Date:-
Place:- Akurdi , Pune-35

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 Executive summary
House is an important component and a measure of socio–economic status of the people. It is
regarded as a critical sector in terms of policy initiatives and interventions. A large portion of
our population is still lacking proper housing facility. The housing problem in India is an
upsetting problem both in the rural and urban areas. One of the main reasons of the problem
of housing shortage is its size of population. It is said that one among the every six persons in
the world is an Indian. India stands second among the world’s largely populated countries.
Home loans work like any other debt. That is, loans are simply specific money that we
borrow from a bank, a private lender, or some other type of lender. Afterwards, we must
repay our debts with interest. However, unlike other types of loans, home loans are different
in several respects. Owning a piece of land or property is a lifetime dream for every
individual. There are many home loans provider in the market. There are different type of
home loan i.e. Home Purchase Loans, Home Improvement Loans, Home Construction Loans,
Home Extension Loans, Home Equity Loans, Land Purchase Loans, Bridge Loans.
These are the basic forms of home loans used for purchasing of a new home. With about a
million home lenders and mortgage brokers it's becoming a tough challenge as the days are
progressing. But at the same time, when the sites are coming up with all the latest tools and
relevant information for us, and with all such conveniences, obtaining a home purchase loan
or mortgage become really pretty simple. However, at the same time though, we may be
flummoxed to look so many attractive rates and offers in the market, not to forget the hidden
costs associated with each of them. In general it includes: repairs, remodeling, energy-related
items , repairs, a new kitchen, a new bathroom, terrace, an extension or general property
improvements. Luxury items and fireplaces are generally not eligible, though. Many
improvements in landscape and even swimming pools are nowadays considered to be a part
of home improvement.
SCOPE OF THE STUDY:

Banks provide many schemes to attract customer, they offer discounts and different type of gifts
on the loan. There is also competition among these companies and banks. Many attractive
schemes launched are for advantages of customers. They reduce interest rate, reduce monthly
installment by increasing the time of installment. They reduce many formalities which a customer
has to complete during getting loan and the conditions regulations are also made easy and reduce
the process time. in the present study an attempt has been made to analyze the home loan schemes
of two different banks viz. SBI and HDFC.
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OBJECTIVE OF THE STUDY:

The main objective of the study is to find out the tariff changes charges by State Bank of India (SBI) in
comparison to Housing Development financial Corporation (HDFC) bank.
The aim of the study is to help (HDFC) to know where it lacks in loans and how for the performance of
(SBI) 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.

Need of the study

Because of the following reasons, I prefer this project work to get knowledge of Housing loan
scheme provided by the bank.
 Banking is an essential industry.
 To study the Housing loan scheme of 2 banks.
 To identify the benefits of Housing loan schemes to the students.

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7|Page
 INTRODUCTION

A home loan simply means a sum of money borrowed from a financial institution or bank to purchase a
house. Home loans consist of an adjustable or fixed interest rate and payment terms. People generally take
a home loan for either buying a house /flat or a plot for land for construction of a house, or renovation,
extension and repairs to the existing house. The interest rates of home loan can be fixed or floating or
partly floating, suiting the needs of the borrower.
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 decision of one’s life. There are ample opportunities today for
young salaried investors to plan their moves early and buy a house at right time- and at right price. In the
process, not only do they fulfill that cherished dream of owning a house, but also put themselves on the
path to acquiring property 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.

There are 4 main types of personal loans available, each of which has their own pros and cons.

 Unsecured Personal Loans. Unsecured personal loans are offered without any
collateral.
 Secured Personal Loans. Secured personal loans are backed by collateral.
 Fixed-Rate Loans.
 Variable-Rate Loans.

The primary purpose of a loan is to facilitate the purchase of a house or to finance the construction of one.
A home is the biggest investment most people will ever make, and few private individuals could afford one
without a mortgage.

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9|Page
 INDUSTRY PROFILE

At the time of independence Indian economy was predominantly agricultural economy and the contribution
of agricultural sector was highest in the GDP. Slowly the agricultural contribution started decreasing and
the contribution of Industrial sector started increasing. The contribution of service sector was almost
insignificant. That time it was an assumption that service is just an augmentation of the physical product. In
the 1980s,. As a result of this, the eminence in thinking shifted to the service quality. A successful marketer
is one who observes the change, recognizes and exploits the opportunities that it has to offer in changing
marketing environment. Services are the growing sector of the Indian economy showing a subtle shift
towards service dominance. Banking, Insurance, Treasury and Telephone facility, public conveyance, dry
cleaning, radio transmission, hair cutting, tailoring, retailing etc are all service. We take these services. So
we are consumers. A group of service together may form a service organisation, like an educational
institution, where service of libraries, cafeterias, counselling, placement, bookstore, photocopying,
telephone and internet connection, and even a bank are all available. Such multiple service providers are
called complex service organisations.
Unlike we individuals, business and other organisations also depend on a wide array of service, usually
purchasing on a much larger scale than us, we individual households. Unfortunately, customers are not
always happy with the quality and value of the service they receive. People complain about late deliveries,
inconvenient service hours, needlessly complicated procedures, long queues, and a host of other problems.
Service providers face stiff competition. Many owners and managers complain about how difficult it is to
make a profit, to find skilled and motivate employees, or to place customers. The service sector is going
through a revolutionary change, which is dramatically affecting the way in which we live and work. New
service are continually being launched to satisfy consumers’ / customers’existing needs and to meet needs
that we did not even know they had. Not even 10 years ago, people anticipated a personal need for e–mail,
online banking, web hosting, and many other such service. Today, we feel we can’t do without them.
Similar transformation is occurring in business markets as well. Service organization is very wide in size.
At one end of the scale are huge international corporations operating in such industries as airlines, banking,
insurance, telecommunication, and hotels. At the other end of the scale is a vast array of locally owned and
operated small businesses, including restaurant, laundries, optometrists, beauty parlor , and such numerous
business to business service. Internal service are also spun out as separate service, which are outsourced
and they become a part of the marketplace and are therefore more easily identifiable as a contributing
component of the economy.
Banking in India has a long and elaborate history of more than 200 years. The beginning of this industry
can be traced back to 1786, when the country’s first bank, Bank of Bengal, was established But the
industry changed rapidly and drastically, after the nationalization of banks in 1969. As a result, the public
sector banks began experiencing numerous positive changes and enormous growth. Then came the much-
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talked-about liberalization and economic reforms that allowed banks to explore new business opportunities
and not just remain constrained to generating revenues from mere borrowing and lending. This provided
the Indian banking scenario a remarkable facelift that only continues to get better with time.
However, even today, despite the foray of foreign banks in the country, nationalized banks continue to be
biggest lenders in the country. This is primarily due to the size of the banks and the penetration of the
networks.
The Reserve Bank of India is the foremost monitoring body in the Indian Financial sector. It is a
centralized body that monitors discrepancies and shortcomings in the system. Industry estimates indicate
that out of 274 commercial banks operating in the country, 223 banks are in the public sector and 51 are in
the private sector. These private sector banks include 24 foreign banks that have begun their operations
here. The specialized banking institutions that include cooperatives, rural banks, etc. form a part of the
nationalized banks category. Opportunities account, banking officer, probationary officer, loan officer,
assessor, personal loan officer, home loan officer, home loan agent, loan manager, mortgage loan
underwriter, loan processing officer, accountant, product marketing and sales executive, and customer
service executive among others. In the Financial Services, some of the important jobs include that of a
stockbroker who is essentially a person who buys and sells securities on behalf of individuals and
institutions for some commission. While some brokers like to practice with individual clients others work
for institutions. Brokers who work for institutional investors are often called securities traders. Many prefer
to work as dealers, advisors and securities analysts.
The financial sector in India has become stronger in terms of capital and the number of customers. It has
become globally competitive and diverse aiming, at higher productivity and efficiency. Exposure to
worldwide competition and deregulation in Indian financial sector has led to the emergence of better
quality products and services. Reforms have changed the face of Indian banking and finance. The banking
sector has improved manifolds in terms of capital adequacy, asset classification, profitability, income
recognition, provisioning, exposure limits, investment fluctuation reserve, risk management, etc.

TOP 10 PLAYERS IN BANKING & FINANCE

State Bank of India
HDFC bank
Citibank
ICICI Bank
Punjab National bank
UTI Bank
Hongkong & Shanghai Banking Corp.
Kotak Mahindra Bank
Sundaram Bank
Oriental Bank of Commerce.

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 India Home Loan Financing Statistcs

North
Sounth
East
West

2016
2017
2018
2019

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Company Profile of SBI:
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
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.
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.
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 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 Home Loan Schemes

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

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.

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.
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'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 18 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.

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.

SBI FUTURE PLANS:

SBI has set for itself an ambitious target of credit linking 1 million SHGs up to March
2008.The Bank has started to leverage our vast SHG network for various services beyond
credit delivery. The State Bank of India (SBI) has formulated a “home-grown strategy” to
merge its six associated banks with it within this fiscal. SBI drawn up a home-grown strategy
to carry out the merger programme and we may take up such mergers one by one, or two at a
time or in a phased manner. SBI want the future mergers to be as smooth as the merger.Post-
merger, the size of SBI’s balance sheet will cross Rs 12,00,000 crore and its profitability will
increased.

Purpose for which home loan can be availed: The loan will be sanctioned for the purpose
of purchase / construction / extension / repairs/renovation of new/second-hand residential
house/flat/plot of land and furnishings (hereinafter referred to as the ‘project’).
Premium of Home Loan Insurance cover (Optional) : The premium for the optional Home
Loan Life Insurance cover (if availed) will be added to the loan amount.

Loan to Value Ratio (LTV):

For loan amount upto Rs.20 Lacs, maximum permissible LTV ratio is 90% of the assessed
value of the property. For loan amount greater than Rs.20 Lacs and upto Rs.75 Lacs, maximum
permissible LTV ratio is 80%. A maximum permissible LTV ratio of 75% is applicable on a
loan amount above Rs.75 Lacs.
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Rate of Interest:

SBI home loan interest rate is 7.05% p.a. onwards. Currently SBI offering lowest home loan
rates in Indian market. As of now, SBI home loan rate is linked to Marginal Cost Based
Lending Rate (MCLR). However, from 1 October 2019, the bank will introduce another
benchmark rate, Repo Linked Lending Rate (RLLR).

Floating Rate of Interest: -

Interest on the loan will be charged at prevailing floating rate of interest on a daily reducing
balance at monthly rests. The rate of interest is subject to revision from time to time due to:

(i) changes in Base Rate or

(ii) Revision even without change in Base Rate the Bank has the option to reduce or
increase the EMI or extend the repayment period or both consequent upon revision in
interest rate.

Fixed Rate of Interest:- No Fixed rate option is available now

Interest on the loan will be charged at the prevailing fixed rate of interest on daily reducing
balance at monthly rests, subject to interest rate reset at the end of every two years on the
basis of fixed interest rates prevailing then. State Bank of India (SBI) may at its discretion
stipulate the periodicity of computation of interest. Further, SBI may at its sole discretion
alter the rate of interest suitably and prospectively in the event of major volatility in interest
rates during the period of the agreement. Thenceforth the rate of interest varied as aforesaid
shall be applicable to the Loan. SBI shall be the sole judge to determine whether such
condition exists or not. If the Borrower is not agreeable to the revised interest rate so fixed,
the Borrower can request SBI, within 15 days of receipt of the notice intimating change in
interest rates from SBI, to terminate the loan and the Borrower shall repay the Loan and any
other amount due to SBI in full and final settlement in accordance with the provisions of the
Agreement relating to pre-closure.

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Calculation of interest:-
Interest on the amount of the loan will be applied at the prevailing rate per annum on daily
reducing balance with monthly rests.

Intimation of change in Interest Rate:-

The borrower shall be deemed to have notice of changes in the rate of interest whenever there
are changes in Base Rate or increase in interest rates where there is no change in Base Rate
are either displayed on the Notice Board of the Branch or published in news papers or made
through entries of the interest rate charged in the passbook/statement of account furnished to
the borrower and the borrower is liable to pay such revised rate of interest.

Penal interest:-
In the event of a default in payment or any irregularity in the account, the Bank reserves the
right to levy a higher rate of interest as it deems fit. Enhanced rate of interest @2% p.a on the
Irregular amount for the period of irregularity, over and above the applicable rate will be
charged if the Equated Monthly Installment (EMI) remains unpaid for a period of 30 days
from the due date, for any reason, including a bounced cheque.

Insurance:
The house/flat shall be insured comprehensively for the market value covering fire, flood,
Earthquake etc. in the joint names of the Bank and the borrower. Cost of the same shall be
borne by the borrower.

Inspection:
The Bank will have the right to inspect, at all reasonable times, the borrower’s property by an
officer of the Bank or a qualified auditor or a technical expert as decided by the Bank and the
cost thereof shall be borne by the customer.

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Bounced cheque/ECS or SI dishonours:-
A penalty of Rs 250/- will be charged for every bounced cheque/ECS or SI dishonours. The
rate may vary from time to time.
Repayment:
The loan is to be repaid in Equated Monthly Installments over the tenure of the loan. The
repayment installment commences from a date specified in the sanction letter. The liability to
the bank will be extinguished only when the outstanding in the loan account becomes Nil, on
payment of residual amount, if any.
Loan Tenor:
Maximum 30 years (or) up to the age of 70 years (the age by which the loan should be fully
repaid) of the borrower, whichever is early.
Pre-closure Charges:-
Loans on Fixed and Floating rate of interest:
No pre-payment/ Pre-closure penalty will be levied on Home Loans irrespective of the period
for which the account has run or source of funds.
Security:
i) Primary:- The loan will be secured by Equitable / Registered mortgage/extension
of mortgage of the land and building/flat for which the loan is to be sanctioned.
ii) Collateral:- Liquid securities of adequate value in the form of Life Insurance
policies, Government Promissory Notes, shares/ debentures, gold ornaments or
such other tangible security as may be deemed appropriate, may be pledged by the
customer in lieu of mortgage of the residential property financed by the Bank.
Interim Security Pending Mortgage:-
Wherever creation of mortgage is likely to be delayed for any valid reason, suitable security
including third party guarantee, as considered necessary, may be taken for the interim period.

Utilization of the loan:

The amount of the loan shall be utilized strictly for the purpose detailed in the borrower’s
application form and in the manner prescribed. The construction of the house/flat or the
modification/extension proposed by the borrower in the existing house/flat should be strictly
according to the plan approved by the Local Authorities/Town Planning and Development
authorities. Any modification desired in the plan as originally approved, can be undertaken
only after express sanction for it has been obtained from the appropriate authorit
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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 Experience 2years 3years
1) Application form with 1) Application form with photograph
photograph 2) Identity & residence proof
2) Identity & residence proof 3) Education qualifications certificate & proof
3) Last 3 months salary slip of business existence
Documentation
4) Form 16 4)Business profile,
5) Last 6 months bank salaried 5) Last 3 years profit/loss & balance 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

Fees and charges:

1. Processing fee: Collected at the time of Documentation.
Loan Amount Processing Fee
Upto Rs.25 Lac 0.25% of Loan Amount. Minimum
Rs.1000/-
Above Rs.25 Lac and upto Rs.75 Rs.6500/-
Lac

Above Rs.75 Lac Rs.10,000/-

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Company profile of HDFC Bank:
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. HDFC Limited founded in 1997 by Ravi
Maurya and Hansmukhbhai 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 animpeccable 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
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.

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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 mutual fund 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 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.

23 | P a g e
LOAN AMOUNT :

You can avail of maximum of up to 85% 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 8.75%.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 13.75% .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.

24 | P a g e
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 ay one of the following:
a) Passport
b) Driving license
c) Voters identity car5d identity card issued by the employer (if employed in state/central
government)
d) PAN 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.

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.

25 | P a g e
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 availup to a maximum of 85% of the cost of the property (including the cost of the
land). HDFC lendsup 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.

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.

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.

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

26 | P a g e
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 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).

27 | P a g e
28 | P a g e
 REVIEW OF LITERATURE:

What is a Loan?
A loan is money, property or other material goods given to another party in exchange for future repayment
of the loan value amount, along with interest or other finance charges. A loan may be for a specific, one-
time amount or can be available as an open-ended line of credit up to a specified limit or ceiling amount.

Loan:
Loans can come from individuals, corporations, financial institutions and governments. They offer a way to
grow the overall money supply in an economy, as well as open up competition and expand business
operations. The interest and fees from loans are a primary source of revenue for many financial institutions,
such as banks, as well as some retailers through the use of credit facilities.

How a Loan Works:

The terms of a loan are agreed to by each party in the transaction before any money or property changes
hands. If the lender requires collateral, this requirement will be outlined in the loan documents. Most loans
-also have provisions regarding the maximum amount of interest, as well as other covenantssuch as the
length of time before repayment is required.

Types of Loan:

1. Secured-

A secured loan is a loan in which the borrower pledges some asset (e.g. a car or house)
as collateral.A mortgage loan is a very common type of loan, used by many individuals to purchase
residential property. The lender, usually a financial institution, is given security – a lien on the title to the
property – until the mortgage is paid off in full. If the borrower defaults on the loan, the bank would have
the legal right to repossess the house and sell it, to recover sums owing to it.

Similarly, a loan taken out to buy a car may be secured by the car. The duration of the loan is much
shorter – often corresponding to the useful life of the car. There are two types of auto loans, direct and
indirect. In a direct auto loan, a bank lends the money directly to a consumer. In an indirect auto loan, a car
dealership (or a connected company) acts as an intermediary between the bank or financial institution and
the consumer.

29 | P a g e
2. Unsecured-

Unsecured loans are monetary loans that are not secured against the borrower's assets. These may be
available from financial institutions under many different guises or marketing packages:

 credit card debt

 personal loans
 bank overdrafts
 credit facilities or lines of credit
 corporate bonds (may be secured or unsecured)
 peer-to-peer lending

The interest rates applicable to these different forms may vary depending on the lender and the borrower.
These may or may not be regulated by law. In the United Kingdom, when applied to individuals, these may
come under the Consumer Credit Act 1974.

Interest rates on unsecured loans are nearly always higher than for secured loans because an unsecured
lender's options for recourse against the borrower in the event of default are severely limited, subjecting the
lender to higher risk compared to that encountered for a secured loan. An unsecured lender must sue the
borrower, obtain a money judgment for breach of contract, and then pursue execution of the judgment
against the borrower's unencumbered assets (that is, the ones not already pledged to secured lenders). In
insolvency proceedings, secured lenders traditionally have priority over unsecured lenders when a court
divides up the borrower's assets. Thus, a higher interest rate reflects the additional risk that in the event of
insolvency, the debt may be uncollectible.

3. Demand-

Demand loans are short-term loans that typically do not have fixed dates for repayment. Instead, demand
loans carry a floating interest rate which varies according to the prime lending rate or other defined contract
terms. Demand loans can be "called" for repayment by the lending institution at any time. Demand loans
may be unsecured or secured.

4. Subsidized-

A subsidized loan is a loan on which the interest is reduced by an explicit or hidden subsidy. In the context
of college loans in the United States, it refers to a loan on which no interest is accrued while a student
remains enrolled in education.

30 | P a g e
5. Concessional-

A concessional loan, sometimes called a "soft loan", is granted on terms substantially more generous than
market loans either through below-market interest rates, by grace periods or a combination of both. Such
loans may be made by foreign governments to developing countries or may be offered to employees of
lending institutions as an employee benefit

Home loan

Meaning- A home loan (or mortgage) is a contract between a borrower and a lender that allows
someone to borrow money to buy a house, apartment, condo, or other livable property. A home
loan is typically paid back over a term of 10, 15 or 30 years.

How Does a Home Loan Work?

For most people, purchasing a home is the biggest financial decision they will ever make. And
with homes often costing hundreds of thousands -- and in some cases millions -- of dollars, most
people can't afford to pay cash for the entire property up front. As a result, they need to take out a
home loan (i.e. borrow) from a bank, credit union, or specialized mortgage lender for borrowers
with lower budgets (such as the USDA, FHA, or VA).

There are several types of home loans available on the market, but each home loan is typically
defined by four main factors:

1. The Principal, or the amount of money you're borrowing. This amount is typically the
purchase price minus your down payment, minus closing costs and other related fees.
2. The Term, or how long you have to repay the entire loan. The term of a home loan can
range between five to 30 years.
3. The Interest Rate, or the annual amount you need to pay the lender to borrow the money,
shown as a percentage of the current principal balance.
4. The Repayment Frequency, or how often you make payments. Borrowers usually pay
back their mortgages on a monthly or bi-weekly basis.

What different types of home loans are offered by mortgage lenders?

Home loans are designed to suit a variety of borrower needs and budgets, and thus can come in several
different forms. Here are three of the most common types of home loans.

31 | P a g e
  Fixed-Rate Mortgages:
The most common type of home loan is the fixed-rate mortgage, which requires a borrower to
repay the principal over a "fixed term" (an unchanging length of time) with a "fixed rate" (an
interest rate that never fluctuates over that time period). Borrowers looking for steady and
predictable mortgage payments often take out 30-, 15-, or 10-year fixed-rate mortgages.
Generally, the shorter the term of the fixed-rate mortgage, the lower the interest rate the
borrower can get.
 Adjustable-Rate Mortgages (ARMs):
Unlike a fixed-rate mortgage with its static interest rates, adjustable-rate mortgages (ARMs) have
variable interest rates that can move up or down over the course of the loan. To entice buyers with
smaller budgets, lenders frequently offer one-year ARMs with a more affordable introductory
interest rate for the first year (often with interest rates that are significantly lower than a
comparable fixed-rate mortgage). The interest rate can then increase in the following years if
market interest rates go up. As you might imagine, this can become costly for a borrower if the
Federal Reserve raises interest rates over time, as the borrower's monthly ARM payments would
also increase.
 Hybrid, Adjustable-Rate Mortgages:
A cross between a fixed-rate mortgage and an ARM, the hybrid mortgage offers a fixed rate for a
set term (usually fewer than 10 years) and then allows the interest rate to adjust up or down much
like an ARM loan would. For example, a 5/1 hybrid mortgage, or 5/1 ARM, offers a borrower a
fixed interest rate for 5 years before switching to an adjustable rate (with the rate adjusting once
per year) for the remainder of the home loan's term. As the "goldilocks" option among home loans,
hybrid mortgages typically offer interest rates that are lower than fixed-rate mortgages and higher
than ARMs.

Why Does a Home Loan Matter?

Home loans make buying a home a reality for people who want to own property. Getting a home
loan often takes a substantial investment (closing costs, down payment, time to apply), but these
upfront costs can be recouped by a homeowner over time if their property value appreciates. Given
the upside potential, it's little wonder why homeownership rates in the United States have
historically averaged more than 60% since the 1950

32 | P a g e
33 | P a g e
 OBJECTIVES OF THE STUDY

 Primary objective :

The study of an analysis of Housing Loan Schemes of State Bank Of India ( SBI) and Housing

Development Finance Corporation (HDFC).

 Secondary Objective :

 To study the cost of home loans provided by the bank.

 To know that which bank provide better loan schemes.

 To analyze the home loan scheme by HDFC and SBI banks.

 To know the consumer perception about the home loan of HDFC and SBI.

34 | P a g e
35 | P a g e
 SCOPE OF THE STUDY

 This study is analysis and comparison of home loan schemes provided by the SBI and

HDFC banks.

 It is helpful in analyzing the home loan schemes service provided to the customer and
their comparison. The comparison of the housing loan scheme for 1 year is only done. 100
people from Pimpri-Chinchwad was taken into study, and their data was collected.

36 | P a g e
37 | P a g e
 RESEARCH METHODOLOGY

1. Introduction: -

Research Methodology is a systematic process of identifying &

formulating by setting objective & methods for collecting, editing & tabulating data
to find the final solution.

1.1 Research Design: -

 The Problem that follows the task of defining the research problem is the preparation of
the design of the research is called research design. This research design concern with research studies
with a focus on Housing Loan.

1.2 SOURCES OF DATA COLLECTION: -

• Primary Data
• Secondary Data

 Primary Data: -

Primary data has been collected through unstructured interviews of the mangers,
accounts staff of the banks, Questionnaire for the clients of the bank was prepared
for the purpose of data collection.
 Secondary Data: -

Data was collected from books, magazines, websites, going through the records
of the organization, etc. It is the data which has been collected by individual or
someone else for the purpose of other than those of our particular research study, or
in the other words we can say that secondary data is the data used previously for the
analysis & the results are undertaken for the next process.
a) Internet
b) Documentary information provided by the manage

38 | P a g e
 Sampling plan:
Population:
The study aimed to include the customers of SBI and PNB in nawanshahr, to make a
comparative analysis of home loan schemes of these two banks..
•
Sample Size:
A Sample size of 100 respondents will be taken for the current study because it is not
possible to cover the whole universe in the available time period. So it is necessary to take the
sample size. In 100 respondents 50 respondents from PNB and 50 from SBI. The sample will
the peoples of age group lying between eighteen to thirty years. The sample will be taken in
the form of strata based on age, sex, and income group.
Sampling technique:
The sampling technique will be probabilistic sampling more specifically the random
convenient and judgemental sampling will be used. As in probabilistic sampling the select
unit for observation with known probabilities so that statistically sound assumptions are
supported from the sample to entire population so that we had positive probability of being
selected into the sample. I will go for stratified random sampling as we are interested to study
the home loan by SBI and PNB banks, so we will make the strata on the basis of age,
occupation, income level, gender. And from each strata we will go for random sampling.
Sources of Data:
I will use primary source of data that is structured questionnaire. As these banks are
established from so many years, so many researchers have done research on this topic, so we
will find secondary data also and also use this data for the help of this research. So, this
research data will collected from the primary source and secondary source.

Our method of collecting the data is from the questionnaire that will be filled by the respondent
from the sample, it will be structured questionnaire.

39 | P a g e
Tools and Techniques:

As no study could be successfully completed without proper tools & techniques, same with
my project. For the better presentation and right explanation I used tools of statistics and
computer very frequently and I am very thankful to all those tools for helping me a lot. Basic
tools which I used for project are: -

BAR CHARTS - PIE CHARTS – TABLES

Bar charts and pie charts are very useful tools for every research to show the result in a clear,
simple way. Because I used bar charts and pie charts in my project for showing data in a
systematic way. So I need not necessary for any observer to read all the theoretical detail,
simple on seeing the charts anybody that what is being said.

Technological Tools:

MS -WORD

MS-EXCEL

Above application software of Microsoft helped me a lot in making project more

interactive and productive.

40 | P a g e
41 | P a g e
 DATA ANALYSIS

Sr. No Particulars Private Banks Public Banks

(HDFC bank) (SBI Bank)
1. Beneficiaries Economically affluent sections of Economically weaker
society sections also
2. Objective Commercial National and Social
3. Aimed at Profit Earning Net Profit alone
4. Margin Money Must Flexible
5. Security Necessary Less Important
6. Interest Rate High Reasonable
7. Attitude Rigid and strict Flexible and Liberal

Sr. No Basis of Difference HDFC SBI

1. Max loan for house in Max. 75 Lacs and above Max. Rs. 42 lacs to 85 lacs
India
2. Interest Rates Up to Rs. 30 lacs 7.85 % to 8.35% Up to Rs.30 Lacs Effective
and above 75. Lacs 8.10% to rate 7.40 % to 7.75% and
8.60% Above 75 lacs 7.75% to
8.10%
3. Eligibility Applicants must be at least 18 years Applicants must be at least
old and less than 65 years old. 18 years old and less than
70 years old.

4. Repayment Charges No prepayment charges for

individual applicants with variable NIL
interest rate loans.
2 % Prepayment charges for fixed
rate and non-individual borrowers.
5. Loan Tenure
Up to 30 Years Up to 30 Years

42 | P a g e
 DATA ANALYSIS:

Q1. Gender -

Gender No. of Respondents

Male 64
Female 36
Total 100

Gender

Male
Female

Interpretation –
From the above graph Shows 64 respondents are male and 36 are female.

43 | P a g e
Q2. Age

18-20 20
21-25 50
25-30 20
Above 30 10
Total 100

Age

18-20
21-25
25-30
Above 30

Interpretation –
The total respondents are 100. Among the total respondents 20 are in the age group 18-20 years,50are in
the group of 21-25 years, 20are in the age group of 25-30 years, 10 are in the age group above 30 years.

44 | P a g e
Q3. Occupation -

Occupation No of
Respondents
Salaried 60
Professionals 15
Self Employed 20
Others 5
Total 100

70

60

50

40

30

20

10

0
Salaried Others Professionals Self Employed

Interpretation -
The table and graph above show the Occupation of the respondents. It shows that 60 respondents
are Salaried , 15 Professionals, 5 Self employed, 20 others.

45 | P a g e
Q4. Annual Income

Annual Income No of
Respondents
Below 2 lacs 10
2-4 lacs 50
4-6 lacs 25
6 lacs and above 15
Total 100

Income

Below 2 lacs
2-4 lacs
4-6 lacs
6 lacs above

Interpretation:-
From the above graph it interpret the income level of the respondent from that 50
peoples income is between 2-4 lacs and 25 peoples income is 4-6 lacs and 6 lacs above is 15 and
,below 2 lacs is 10.

46 | P a g e
 Q 5. How do you come to know about the home loan schemes of that bank?

Resource No of
Respondents
News Paper 55
Television 20
Internet 15
Other Resources 10
Total 100

Resource
60

50

40

30

20

10

0
News Paper Television Internet Other Resources

Interpretation:-
As above graphs Shows

1) Total Number of Respondents was 100

2) 55 persons came to know from newspaper

3) 20 persons came to know from television

4)15 persons came to know from internet

5) 10 persons came to know from other resources

47 | P a g e
Q.6 What is the purpose of home loans?

Home purchase loan 10

Home construction loan 45
Home improvement loan 30
Home equity loan 5
Land purchase loan 10

50

45

40

35

30

25

20

15

10

0
Home purchase Home construction Home Home equity loan Land purchase loan
loan loan improvement loan

Interpretation:-
As above Graph shows

1) Total Number of Respondents was 100

2) Only 5 Respondents know home equity loan.

3) Many of Respondents know home construction loan.

4) 10 Respondents know home purchase loan.

5) 30 Respondents know home improvement loans.

48 | P a g e
Q7 Do you Own a Home ? If Yes have to opted for Home loan

Yes 60

No 40

Total 100

Own Home
70

60

50

40

Own Home
30

20

10

0
Yes No

Interpretation:-
From the above graph Total Number of Respondents was 100. Many of persons know all
home loan i.e. 60.and 40 persons had not opted for Home loan .

49 | P a g e
Q 8. If Opted for Home Loan from Which bank ?

Banks No of Respondents
SBI 30
PNB 5
HSBC 15
HDFC 50
Total 100

Banks
60

50

40

30
Banks

20

10

0
SBI PNB HSBC HDFC

Interpretation –
From the above chart we came to know that out of 100 respondents 30 respondents take home
loan from SBI bank, 5 from PNB bank, 15 from HSBC and 50 respondents are taking home loan
from HDFC bank.

50 | P a g e
 Q. 9 What made you select this Bank?
No of No of
Respondents of Respondents of
HDFC bank SBI bank
Service Quality 35 30
Simple Procedure 15 10
Interest Rate 40 25
Advertisement 10 5
Total 100 70

40
35
30
25
20 No of Respondents of HDFC
15 bank
No of Respondents of SBI bank
10
5
0

Interpretation –
From the above graph it is clear that 35 selected HDFC bank because of its service quality and
30 respondent are selected SBI bank for their service quality,
15 respondents selected HDFC bank because of its simple procedure and 10 respondents are
selected SBI for their simple procedure.
40 respondents selected HDFC bank because of its interest rate and 25 respondents are selected
SBI for their interest rate,
10 respondents selected HDFC bank because of its s and 5 respondents are selected SBI bank for
their advertisement.

51 | P a g e
Q.10 Do you avail for tax benefit?
No of
Respondents
Yes 70
No 30
Total 100

Tax Benefit
80

70

60

50

40

30

20

10

0
Yes No

Interpretation –
From the above graph we came to know that out of 100 respondents 70 of respondents said that
they got tax benefit and 30 said they didn’t get tax benefit.

52 | P a g e
53 | P a g e
  Most of the people are work in Government Sector.

 Most of the people aware about the housing loan schemes

 Most of people gets information about schemes of the bank through

newspaper and internet.

 Peoples are satisfied with the Interest rates of the bank.

 Most of the people uses mobile banking for transactions

 Most of people agree with the banking process is fast.

 Peoples satisfied with the home loan services

 Most of the people like the process of getting home loan. Process may

not be time consuming

 People satisfied with the employees behavior of the bank

 Bank also Provided discount upon loan services

 Customer like the documentation work

 Most of the people know about HDFC home loan scheme

through television.

 People aware about the terms and condition of home loans.

 The bank provided cost of home loan appropriate according to

customers demand and for their satisfaction.

54 | P a g e
55 | P a g e
 LIMITATIONS OF THE STUDY
Although best of the efforts were made to conduct a prefect survey but still it faces certain

limitation. Following were certain limitation of this project.

1. The survey was conducted only on 100 respondents.

2. Collecting primary data was time consuming.

3. The respondents were not very much keen to discloses personal information and decision-
making process.

4. Resource Constraints: -
The Resource made available for the project work were not sufficient. As the resources given by the
company were limited, it affected the project work. Hence, the findings can be subjected only to a limited
set of statistical tests.
5. Bias on the part of interviewers: -
There is a responsibility that the information provided by the respondents is not completely true
because some of them might not have.

56 | P a g e
57 | P a g e
Suggestions-

 Banks should go for advertisement campaign from Scratch.

 Banks should try to cash its brand image.

 Strong branch network should be made and staff personnel’s incentives should be increased.


 Banks should increase its product line in education loans.

 Banks should introduce some new model keeping in mind the loan suitable for medium
income group customer.
 Presence of some famous personality in Advertisement or in pamphlets insuring better
retention in mind of customers.

 The banks should provide a combined booklet of the product range in order to upgrade the
knowledge of future takings of loans.

 Online processing for various inspections and verifications etc.

 Online Disbursals and Repayments.

 The bank should make sufficient provisioning for bad loans and in this regards, the
bank should strictly ,abide by the guidelines of RBI.

 To Increase their customers, the bank 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.

 To satisfy customers and for good dealings in future, the bank should make prompt
disbursement of loan amount to the customers so that they can buy or construct their
dream home as early as possible.

 The bank should improve their overall services to increase the number of customers
For home loans. They should recruit provide such services and to satisfy their
customers.

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 CONCLUSION

All the people are availing loan facility from both the banks. No. of respondents of SBI were

70 of SBI Bank. Peoples are relating with HDFC more satisfy with the interest rate as

compare to SBI. HDFC peoples much know about home loans than SBI . Both HDFC and

SBI mostly offer mobile banking services. Processing of SBI is fast then HDFC. After home

loan services of HDFC is good as compare to SBI. Peoples related with SBI is more satisfy

with the employee behavior as compare to HDFC .People are more satisfied by HDFC for

time taken for sanctioning the loan. From all this I conclude that HDFC bank provide good

home loan services as compare to SBI and many people’s are very satisfied from HDFC

Bank.

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 REFERRED BOOKS: -

 Craig, Ben R. and Thomson (August 2001). Home Loan Bank Lending
to Community Banks: Are Targeted Subsidies Necessary

 Eric T Koray, Interest Rates and Home Mortgage Loans.

 David. P Home Equity Loans and Private Mortgage Insurance: Recent

Trends & Potential Implications.

 WEBSITES: -

 www.wikipedia.in
 WWW.indopedia.in 
 www.Google.in

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 Questionnaire: -
Part- A

1. Name: -
2. Gender –
a) Male
b) Female

3. Age –
a) 18-20
b) 21-25
c) 25-30
d) Above 30
4. Occupation –
a) Salaried
b) Businessman
c) Housewife
d) Student
e) Other

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 Part- B
5. Have you ever taken Home loan?
a) Yes
b) No
6. If Yes, from Which bank?
a) SBI
b) HDFC
c) HSBC
d) PNB
7. Are you satisfied by the services offered by the bank?
a) Satisfied
b) Highly Satisfied
c) Neither Satisfied nor dissatisfied
d) Dissatisfied
e) Highly Dissatisfied
8. Do you agree that bank Loan Processing is Fast ?
a) Strongly Agree
b) Agree
c) Neutral
d) Disagree
e) Strongly Disagree
9. Are you satisfied with Employee Behavior ?
a) Satisfied
b) Highly Satisfied
c) Neither Satisfied nor dissatisfied
d) Dissatisfied
e) Highly Dissatisfied

10. Which is suitable for housing loans?

a) Public Sector
b) Private Sector

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 11. Are you satisfied with Rate of Interest Offered by Bank ?
a) Satisfied
b) Highly Satisfied
c) Neither Satisfied nor dissatisfied
d) Dissatisfied
e) Highly Dissatisfied
12. Do you avail for tax benefit?
a) Yes
b) No

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