disbursement of home loans by commercial banks

DEPARTMENT OF MANAGEMENT

DISBURSEMENT OF HOME LOANS BY COMMERCIAL BANKS

A STUDY OF LUDHIANA CITY

Submitted to Lovely Professional University

In partial fulfillment of the requirements for the award of degree of

MASTER OF BUSINESS ADMINISTRATION

Submitted by:

MEHAK PURI

2020070070

Supervisor:

MISS BHARTI AGGARWAL

LECTURER

DEPARTMENT OF MANAGEMENT

LOVELY PROFESSIONAL UNIVERSITY PHAGWARA

(2007-09)

TO WHOMSOEVER IT MAY CONCERN

This is to certify that the project report titled “DISBURSEEMNT OF HOME LOANS

BY COMMERCIAL BANKS – ASTUDY OF LUDHIANA CITY” carried out by Miss

Mehak Puri D/o MR Ajay Puri has been accomplished under my guidance & supervision

as a duly registered MBA student of the Lovely Professional University, Phagwara. This

project is being submitted by him/her in the partial fulfilment of the requirements for the

award of the Master of Business Administration from Lovely Professional University.

Her dissertation represents his original work and is worthy of consideration for the award

of the degree of Master of Business Administration.

___________________________________ (Name & Signature of the Faculty Advisor)

Title: ______________________________

Date: ______________________________

Date:

DECLARATION

I, "MEHAK PURI”, hereby declare that the work presented herein is genuine work done

originally by me and has not been published or submitted elsewhere for the requirement

of a degree programme. Any literature, data or works done by others and cited within this

dissertation has been given due acknowledgement and listed in the reference section.

_______________________ (Student's name & Signature)

_______________________

(Registration No.)

Date:__________________

PREFACE

Research work in management is extremely important for it gives a close

view of the real business world and bridges the gap between theory and practical.

For any MBA student who is striving to perform outstanding, it is of paramount

importance that apart form theoretical knowledge one must also gain practical

knowledge. which in turn widely influence their conceptions and perceptions.

This project was undertaken towards the partial fulfillment of the requirements Lovely

professional university ,Phagwara. This really provided me an opportunity to

demonstrate my ability in applying theory to practical business situations.

The study undertaken by me is "disbursement of home loans by commericial banks " In

this, I have tried to perform my best.In the forthcoming pages an attempt has been made

to present comprehensive report concerning different aspects of my project.

ACKNOWLEDGEMENT

"Gratitude is not a thing of expression, it is more matter of feeling."

There is always a sense of gratitude which one express towards others for their

help and supervision in achieving the goals.

This formal piece of acknowledgement is an attempt to express the feeling of

gratitude towards people who helpful me in successfully completing of my

training.

I would like to express my deep gratitude to Miss bharti Aggarwal my training

coordinator for their constant co-operation. she was always there with his competent

guidance and valuable suggestion through out the pursuance of this research project.

Special thanks to Miss Bharti Aggarwal who guided me to work honestly and to give

valuable suggestion for improving my work

Last but not least I would also like to place of appreciation to all the respondents whose

responses were of utmost importance for the project.

Above all no words can express my feelings to my parents, friends all those

persons who supported me during my project. I am also thankful to all the

respondents whose cooperation & support has helped me a lot in collecting

necessary information.

I would also like to thank almighty God for his blessings showered on me during the completion of project report

EXECUTIVE SUMMARY

Home is a dream of a person that shows the quantity of efforts, sacrifices luxuries and

above all gathering funds little by little to afford one’s dream. Home is one of the things

that everyone one wants to own. Home is a shelter to person where he rests and feel

comfortable. Many banks providing home loans whether commercial banks or financial

institutions to the people who want to had a home. The housing sector plays an important

role in the economic development of the country

My project title is “disbusremnt o f home loans by commericial banks “ a study o f

ludhiana city. I selected this topic because The Indian housing finance industry has grown

by leaps and bound in few years.Total home loans disbursements by banks has risen

which witnesses phenomenal growth from last 5 years. There are greater number of

borrowers of home loans.so by this study we can find out satisfaction level of customers

and problems faced by them in obtaining home loans.

My objectives of study are-

• To make comparative study of Disbursement of home loans by commercial banks.

• To study the satisfaction level of customers about home loans.

• To study the problems faced by customers in obtaining the home loans.

For this I had taken four commercial Banks in Ludhiana city namely ICICI Bank, PNB,

standard chartered Bank, SBI. It includes two public sector banks and two private sector

banks. The period of study is five years commencing from 2004-2008.

In the research methodology I had taken both primary data as well as secondary data , in

the primary data I had make a questionnaire to check the satisfaction level of customers

about home loans . in the secondary data I had studied the annual reports of RBI

,commercial banks & broachers of these bank

For the first objective I had collected the information about the number of account

holders of specified banks, no of disbursement of home loans and recovery of these loans.

After analysis I came to following findings

In the comparative study of specified banks Its found that

Ø Punjab National Bank is having large number of customer base with high

loan disbursement and recovery of loans

Ø the standard chartered bank showed less outstanding balance which

presented in percentage form in the diagram

In case of second objective i.e customer satisfaction level it is found that

Ø On the basis of data the ICICI bank is emerging at higher position as

compare to Standard chartered bank and other public sector banks on

ground of professionally managed services, reliable & transparent system,

easy query handling etc

And problems face by customers in obtaining home loans are

§ The customer does not had proper knowledge about different

home loan products so they face problem in making a good

deal.

§ There are procedural delays, which harass the customers lot.

This will crush the curtsy of customers to avail the home loan.

§ The attitude of bank employees some times non cooperative

and it creates a hurdle in building trust and Confidence among

customers about banks.

§ The banks do not take into account the paying capacity of

customers. So some customers are not able to get amount of

loan needed by them.

Finally the whole research was carried out in a systematic way to reach at

exact results. The whole research and findings were based on the objectives

some of the limitation faced in collecting the data were

lack of time, lack of data, non-response, reluctant attitude and illiteracy of

respondents, which posed problems in carrying out the research.

Some of the suggestions are

ü 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.

ü 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.

ü 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.

ü Although the interest rates on specific norms, yet customers seek less

interest rate which can lower their cost of house. So banks should try to

lower their interest rates. Needles to say, that the bank which is having

lower interest rates, have the maximum clients for loans.

ü The public sector banks should improve their overall services to increase

the number of customers for home loans. They should recruit

professionals to provide such services and to satisfy the customers.

CONTENTS

S.No Chapter Page no

1 1.1 Introduction

introduction to home loans Advantages Disadvantages Disbursement o f home loans

Objectives of study Need of study Scope of study Methodology

Research design Source of data Tools for analysis Limitation of study

11

25

25

25

26

3 Survey of Literature

29

4 . Disbursement of home loans by

commercial banks

34

5 Analysis of customer satisfaction level 46

6 Conclusion & Suggestions 77

7 Bibliography 83

8 Appendix

85

CHAPTER 1

CHAPTER - 1

INTRODUCTION

1.1 INTRODUCTION TO HOME LOANS

Home is a dream of a person that shows the quantity of efforts, sacrifices

luxuries and above all gathering funds little by little to afford one’s dream.

Home is one of the things that everyone one wants to own. Home is

a shelter to person where he rests and feel comfortable. Many banks providing

home loans whether commercial banks or financial institutions to the people who

want to have a home.

Many banks are providing home loans at cheapest rate to attract

consumers towards them. The more customer friendly attitude of these banks,

currently offer to consumers cheapest loan over homes.

In view of acute housing shortage in the country, and keeping in

mind the social – economic role of commercial banks in the present times, the

RBI advised banks to encourage the flow of credit for housing finance.

With the RBI reducing bank rate, the home loan market rates nose-

diving by 50 basis points. The ICICI Bank and Standard chartered bank has

become the first player in this sector to announce a housing loan for a 20 years

period. No doubt it will enhance the end cost of the home but it will facilitate

people to plan their house over longer duration Now, it has been made easy for a

person to buy that dream house which he dreamt of long ago.

1.1 ADVANTAGES OF HOME LOANS

The various benefits of home loans arising to the customers are:-

(i) Attractive interest rates

The various banks offer attractive interest rates to boost and help

their customers. Many banks provide loans on fixed or floating rates to facilitate

consumers as per their needs.

(ii) Help in owning a home

The home availed by a person with the help of banks, because they

provide technical and financial assistance to customers for owning their dream

home.

(iii) No requirement of guarantor

The commercial banks now a days, liberlise their laws regarding

home loans. Some of banks don’t even require the guarantor to grant loan to their

consumers. They also make consumers free by reliving him to find a guarantor to

complete the proceedings of availing loan.

(iv) Door-Step Services

These door to step services are provided from enquiry stage to the

final disbursement takes place such services are beneficial for customers in

present busy life. Banks like ICICI bank and standard chartered bank provide

door to step services to customers to borrow loan.

(v) Loan period

There are many banks which provide maximum loan tenures upto

15-20 years based on the loan amount and the creatibility of customers. This

relieves the customers to repay loan amount till a long period.

(vi) For accidental death insurance

Some banks provide free accidental death insurance with housing

loan which is also beneficial for the customers.

These benefits or advantages of home loans are responsible for

making than so popular among customer that a person who don’t have their home

and want to buy, they do it with home loan. Home loans help such persons in

making their dream home.

1.2 DISADVANTAGES OF HOME LOANS

The main disadvantages of home loans are high lightened as below:

(i) Delays in processing

Many times, there are huge delays in processing of providing home

loans because various formulations to be fulfilled in this process. Due to these

delays customers feel mentally as well as financially weak.

(ii) Fluctuating interest rates

Some banks give home loans at floating rates, which fluctuate at

different intervals due to some reasons. These changes sometimes, may lead to

increase in interest rate which will increase the cost of home loans to the

customers.

(iii) High Cost

The public sector banks charge high processing cost for home

loan’s sanctioning. They are forced to pay serious charges at various stage to

fulfil the requirements. Some consumers are not able to pay such charges so such

people could not avail the benefits of home loan schemes.

(iii) Problems in disbursement

There are many problems in disbursement of home loan amount.

There are some delay in disbursement of loan amount to the customers due to

legal formalities. This causes problems to the customers.

These are limitations or disadvantages of home loans. But some

times some banks charges high installments to repay loan amount. Such also

causes problem to customers. These limitations can be removed by providing

good and promote services to the customers.

1.3 DISBURSEMENT OF HOME LOANS

The every bank has its own procedure to disburse the loan amount

among customers. After choosing your right home, the next step is disbursement

of home loans. The loan amount is disbursed after identifying and selecting the

property or home that are purchased and submit the requisite legal documents.

In the disbursement of home loans a clear title and full verification

to ensure that a person has full rights on his house. The 230A clearance of seller

and /or 371 clearances from the appropriate authority of income tax is also

needed.

(i) Eligibility criteria

However, if one is a resident or non-resident individual who is

planning to buy a house in India, one can apply for a home loan. If a person has

decided to buy a property in the near future, he/she can apply for a loan before

even selecting the property. Once the maximum amount to put into the property

has been decided, the Housing Finance Institutions or Banks will let the

customer know that how much he/she is eligible for and this helps to plan out the

budget.

(ii) Conditions regarding co-applicants

All Housing Finance Institutions lay down conditions on who can

be co-applicants. All co-owners to the property. need to be co-applicants to the

loan necessarily. These institutions do not permit minors to join in as either co-

owner or as co-applicants because a minor is not eligible to enter into a contact

as per law. They do not permit even friends or relatives who are not blood

relatives to take a property jointly.

However, Income of co-applicants can be clubbed together to get

higher loan eligibility. Given below is a Table that throw light on acceptable

relationship of a co-applicant for clubbing of income.

Income Clubbing of Co-applicants:- It is as follows:-

Combination Income Clubbing: -

Ø Husband-Wife:- Income of husband-wife can be clubbed.

Ø Parent-son: - It can be clubbed if only son is there but not if any male

sibling exist.

Ø Brother-Brother: - If they are currently staying together and intend to

stay together in the new property, then only, their income-can be clubbed

for above purposes.

Ø Brother-Sister: - No clubbing-is possible.

Ø Sister-Sister: No clubbing is possible.

Ø Parent-Minor- Child: - No clubbing is possible in this case also.

(iii) General Terms and Conditions

The following are the terms and conditions applicable to the basic

home loan product only. These are likely to change on the basis of the variations

of the home loan product. Typically, in a general home loans, the following

conditions are applicable: -

a) The loan to value ratio (LTV) cannot exceed a particular percentage. This

differs from product to product and from one Housing Finance

Institutional Bank (HFI/B) to another. The components of the value of the

property calculated here are covered under cost of property.

b) The maximum tenure of the bank is nominally fixed by HFI/Bs. However,

HFls/Bs do provide for different tenures with different terms and

conditions.

c) The installment that one pay is normally restricted to about-50-per cent of

the monthly-gross income of the candidate.

d) The total monthly outflow towards all the loans that have been availed of,

including the current loan is normally restricted to 50% of the gross

monthly income.

e) One will be eligible for a loan amount which is the lowest as per one's

eligibility. This is calculated as per the LTV norms, the HR, norms and

the FOIR norms as mentioned above.

f) Most HFls/Bs consider the profile before they judge the repayment

capacity. The judgement is based on age, qualifications, number of

dependents, employment details, employer credentials, work experience,

previous track record of repayment of any loans that have been availed of,

occupation, the industry to which the candidate's business relates to, if

he/she is self-employed, then the turnover in the last 3-4 years etc.

g) Some HFIs/Bs insist on guarantees from other individuals for the

repayment of the loan. In such cases, the customers has to arrange for the

personal guarantee before the disbursement of the loan takes place.

h) The property should be technically clear before the HFIs/Bs disburses the

loans amount. Most of institutions and banks have a teams of technical

experts who visit the site to get a technical report before the disbursement

of loan. This is also beneficial to the customer as they check for the

technical quality and compliance with local laws.

i) The property should be legally clear before one can avail of a

disbursement of the loan amount. Housing-Finance Institutions /Banks

(HFIs/Bs) take legal clearance from their lawyers before the disbursement

of amount. This proves to be beneficial to the customers as a legal expert

checks his/her documentation to ensure that he/she get a proper title to the

property.

j) The disbursement of the loan is as per the progress of construction of the

property unless it is a ready property in which case the disbursement will

be by one single cheque. PEMI or simple interest on the loan amount

disbursed to the customer in case of a part disbursement will be payable

by the customer on the disbursement.

k) The disbursement in most cases will be favoring the builder or the seller

or the society or the development authority as the case may be. The

disbursement will come in the customer's favour under special

circumstances only.

l) The repayment of loan can be made either through deduction against

salary, post-dated cheques, standing instructions or Auto debit instructions

to bank.

m) The principle is amortized either on annual reducing or monthly reducing

basis as the case may be.

The above terms and conditions are generally true for most

Housing Finance Institutions/Banks with respect to the general Home Loans.

However, the specific terms and conditions vary with respect to special Housing

Finance Institutions or Banks.

(iv) Charges applicable to home loans

The different kinds of charges applicable to home loans are

discussed below:

a) Processing fees

First of all, comes the process fee. This is a charge that is levied by

most HFls/Bs. This has to be paid at the time of submission of the application

form. It's normally charged as a percentage of the loan amount sanctioned. Some

HFls also charge a flat fee based on the loan amount instead of a percentage.

When a lower amount is sanctioned the excess fees paid at the time of

submission of the application is adjusted with the charges, which one make to the

HFI/B subsequently. Most HFls/Bs refund the processing fee if the loan

application is rejected.

b) Administrative fees

This charge is again, normally, a percentage of the loan amount

sanctioned. It is collected by the HFI/B for the maintenance of customer's

records, issuing interest certificates, legal charges, technical charges, etc. though

the tenure of the loan. It is payable by the customer when he/she accepts the

offer letter given by the HFI/B. This payment has to be made before the

availment of the disbursement. The mode of collection of these fees varies from

one HFI/B to another.

c) Rate of interest

This is the rate of interest applicable on the loan amount through

the tenure of the loan. It is charged on the principal monthly reducing method.

Most HFIs/Bs give an option to select either a Fixed rate of interest or a variable

rate of interest.

d) Legal Charges

Some HFIs/Bs mainly Public Sector Banks levy legal charges that

they incur on getting the property documents vetted by their panel of lawyers.

e) Technical Charges

These charges are also levied by certain Housing Finance

Institutions/Banks (HFIs/Bs) to meet their expenses on the technical site visits to

the customer's property. This ensures quality of construction and construction

within the norms as stipulated by the respective approval authority.

f) Stamp duty and registration charges

HFIs that go in for a registered mortgage, pass these charges on to

the customer. These are rather heavy in certain states depending on the laws laid

down by the state where one buy a property.

g) Personal Guarantee from Charges

Since the personal guarantee provided by the customer need to be

stamped, these charges are also recovered from the customer. They are charged

to him by HFIs who demand for Guarantees.

h) Cheque Bounce Charges

In case the cheques through which one make a payment to HFls get

dishonored, some minimum charges are levied by the HFI. The same are

recovered from the customer.

i) Delayed payment charges

HFls/Bs charge delayed payment charges from the customer if

he/she delays the payment of installments beyond the due date.

j) Additional charges

These are levied as a percentage on the delayed payment charges by

most HFls. They are levied if one fail to pay the dues within the stipulated time

after a delay has taken place.

k) Incidental charge

This is payable in case the HFI/B sends a representative from their

organization to collect their outstanding dues. It is normally charged at a flat rate

per visit. These charges are levied by most HFls/Bs.

l) Prepayment Charges .

This is a penalty charged by HFls/Bs from when one makes either a

part prepayment or a full repayment of the loan. This charge is levied only on

lump sum payments and not on the EMls that one pays. This charge is levied on

the amount prepaid by one and not on the entire outstanding principal. These

charges are gradually being discount.

So, these are the charges levied by most Housing Finance

Institutions and Banks while granting home loan to the customers. Now, the

decision on the repayment capacity shall be talked about as follows: -

(iv)* Judgement regarding repayment capacity on the basis of income

To understand how the income of a customer is considered to arrive

at his repayment capacity, it is first necessary to classify customers into salaried

and self employed individuals.

a) The income of the salaried individual is considered in the following

manner:

Gross monthly income as it appears on the salary slip

Less:- Any non regular variable income appearing on the salary slip (including

overtime, etc.)

Add: - 50 per cent of the average variable income of the last six months.

Add: - Any fixed cash/voucher payments for which proof can be submitted.

Add: - 50 per cent of the average variable cash/voucher payments with proof like

traveling reimbursement etc.

Add:- HRA receivable if not being received already in the salary slip.

The above income calculated for the calculation of eligibility using IIR and

FOIR norms. For calculation of FOIR, the installments of all the loans that one

has availed of currently for which repayment is being made is taken into account

as well. The lower of the two eligibilities is considered as the maximum

repayment capacity.

b) To consider income of Self-employed individuals we further classify them

into Professionals and non-professionals.

• Professionals: - Comprising doctors, chartered accountants, lawyers,

architects, etc. For calculation of eligibility of professional's income is

computed by most HFIs using the gross professional receipts instead of

the Net profit as in the case of self-employed non-professionals.

• Non-Professionals: - The income of non-professionals is normally

calculated by HFIs in the following manner: -

Average of the net profits of last 2 years as it appears in the profit and loss

account (Returns need to be filed for the same. They should be filed regularly

before the due date is over).

Less: - Any income, which is unusual and non-recurring in nature like sale of

some asset, etc which affects profits substantially,

Add: - Any expense that is unusual and non-recurring in nature like repairs and

maintenance that has not been capitalized and effect profit adversely.

Add: - 50 per cent of the average depreciation of the last two years. The above

income is calculated for the calculation of eligibility using IIR and FOIR norms.

For calculation of FOIR the installments of all the loans that one has availed of

currently for which repayment is being made is taken into account and the

eligibility is worked out. The lower of the two eligibilities is considered as the

maximum repayment capacity.

(v) Credit documentation

Given below is the exhaustive list of credit documents- that need to

be submitted for a general home loan product. The documents vary from one

HFI/B to another based on one's employer, qualifications experience etc. The

general requirements are as follows: -

a) Income Documents: - For salaried slips for the last three months-

appointments letter-salary certificate-retainership agreement, if appointed as a

consultant-Form 16 issued by the employer in customer's name income document

for self employee - last three years profit and loss account statement duly

attested by Chartered Accountants. Last three years Balance Sheets duly attested

by Chartered Accountant, last three years Income Tax Returns with computation

chart duly filed and certified by the Income Tax authorities.

b) Proof of employment: - Identify card issued by the employer- Visiting

card.

c) Employer's details (In case of private limited companies): -

Profile of employer on employers letterhead (to be signed by a senior

person in the organization) comprising

• Name of promoter/directors

• Background of promoters/directors

• Nature of business activity of your employer

• Number of employees

• List of branches/factories

• List of suppliers

• List of clients/customers

• Turnover of employer

• Annual reports of the employer for the last two to three years.

d) Proof of age (Anyone of the following): - Passport- Voter's ID card-PAN

card-Ration card-Employer's identity card-School leaving certificate-Birth

certificate.

e) Proof of residence (Anyone of the following): - Ration card-Passport-

PAN card-Rent agreement, if the customer is staying currently on rent- Bank

Pass book-Allotment letter from the company if he/she is residing in company

quarters.

f) Proof of name change (If applicable): - A copy of the official gazette -A

copy of a newspaper advertisement publicizing the name change-Marriage

certificates.

g) Proof if investment (If required): - Bank statement for the last six

months of all operating and salary accounts - Bank statements for the last six

months of all current accounts, if self-employed-any other photocopies of

investments held, if required by the HFC.

(vi) Legal documentation

Legal Documentation the typical legal documents that need to be

submitted to the HFC arc discussed here. Given below is a list of legal property

documents that need to be submitted to the HFC for mortgage of the property.

The name and the list of documents vary from state to state and also depend on

the type of property being financed. A broad outline of the documents required is

given below.

a) Acceptance copy of the offer letter issued by the HFC/B.

b) Title documents of the property that include -sale agreement duly

registered-Own contribution receipts - Allotment letter-Registration

receipt-Land documents indicating ownership, if applicable- Possession

letter-Lease agreement, if applicable (Property bought from a

development authority) - Mortgage deed if the HFC opts for a registered

mortgage.

c) No Objection Certificate from the developer, society or development

authority as applicable.

d) Personal Guarantees, if applicable.

e) In case of alternator additional security, documents for the same

depending upon the security details.

f) Post dated cheques for the EMls.

The above documents are only indicative in nature and do not cover

the entire list. It may, also be noted that in a resale case, the previous chain of

agreement also need to be taken.

(vii) The tax benefits that are applicable to housing loans for individuals

Currently Tax Benefits to individuals are available only for the

Home Loans and Home Extension Loans products. The benefits available are

covered under these sections.

Property Insurance :- Is it compulsory to insure the property? Some HFls

insist on a mortgage redemption life insurance policy. In this case the customer

gets a benefit of an interest rate reduction. Though the HFI may not insist, it is

better to go in for property insurance to safeguard the asset against any sort of

damage or loss. The customer can select the tenure for the property insurance.

The insurance premium is changed up front. Most insurance companies provide

for huge discounts on the rate of premium for larger tenures. The premium

charged currently is seventy-seven for every lakh of property for a year.

So a customer has to fulfil various conditions to be eligible for

availing home loan from a Housing Finance Institution/Bank After fulfiling these

conditions, a customer can avail loan at low interest rate i.e. fixed rate or

floating rate. A decision on whether one should go in for a fixed-rate loan or a

floating-rate loan now is a function of two factors i.e. One's perception of where

interest rates in the economy are headed and one' capacity to ride the interest rate

changes.

A floating-rate loan let one take advantage of further falls in

interest rates but one stand to loose if interest rate, rise again. However this

decision is based on the perception of the consumer.

1.2 OBJECTIVES OF STUDY

There is no strongest foundation for your dream home, than a cheap loan.

Home loans have become that stronger foundations for people who want to own a

home. The main objectives of the study are as follows:-

i) To make comparative study of Disbursement of home loans by

commercial banks.

ii) To study the satisfaction level of customers about home loans.

iii) To study the problems faced by customers in obtaining the home loans.

1.3 NEED OF STUDY

The Indian housing finance industry has grown by leaps and bound in few years.Total

home loans disbursements by banks has risen which witnesses phenomenal growth from

last 5 years. There are greater number of borrowers of home loans.so by this study we can

find out satisfaction level of customers and problems faced by them in obtaining home

loans.

1.4 SCOPE OF STUDY

The present study will be confined to four commercial Banks in Ludhiana city namely

ICICI Bank, PNB, standard chartered Bank, SBI. It includes two public sector banks and

two private sector banks. The period of study is five years commencing from 2004-2008

1.5 RESEARCH METHODOLOGY

Research Methodology

Research methodology is a way to systematically show the research

problem. It may be understood as a science of studying how research is done

scientifically. It is necessary for the researcher to know not only the research

methods but also the methodology.

This Section includes the methodology which includes. The research design,

objectives of study, scope of study along with research methodology and

limitations of study etc. To study the disbursement of home loans by commercial

banks, the study shall be conducted in the manner enumerated below-

1.5.1 Research Design

This project is based on exploratory study as well descriptive

study. It was an exploratory study when the customer satisfaction level was

studied to suggest new methods to improve the services of banks in providing

home loans and it was descriptive study when detailed study was made for

comparison of disbursement of home loans by commercial banks.

1.5.2 SOURCES OF DATA

To fulfill the information need of the study. The data is collected from primary as well as

secondary sources-

A -Primary source-

I decided primary data collection method because our study nature does not permit to

apply observational method.

In survey approach we had selected a questionnaire method for taking a customer view

because it is feasible from the point of view of our subject & survey purpose. We

conducted 100 sample of survey in our project to judge the satisfaction level of customers

which took home loans.

• Sample size

For the questionnaire I have taken the sample size of 100 customers of selected banks

B - Secondary source

Secondary data is taken from such as:

• Information collected from customers.

• Annual published report of RBI

• The various reports and journals published by RBI concerned with banking

• Different brochure of banks.

Reports of various study group or working groups appointed by Government from time to

time

1.5.3 Tools of Analysis

The analysis of data is done on the basis of following statistical techniques:-

• Percentages.

• Averages

• Charts

•

1.5.4 Limitations of the study

This study also includes some limitations which have been discussed as follows:

i) The sample size of 100 customers and 4 banks might prove a limitation

because of difficulty in generalization of results.

ii) To collect the data from various banks was quite difficult due to non-

cooperation of some banks. This proved to be major limitation of the

study.

iii) To access such a large number of customers was difficult because of non-

cooperative attitude of respondents.

iv) Lack of data was also the other limitation of the study as some of banks

do not have proper data on topic.

v) There was limitation of time to conduct such a big survey in limited

available time.

vi) Ignorance and reluctant attitude of customers was also a major limitation

in this study.

Thus above all were the limitations in this research study. The

maximum efforts were made to overcome these limitations in the study.

CHAPTER 2

CHAPTER - 2

REVIEW OF LITERATURE

SUMMARY

• After going through pervious studies of Home loans I came to conclude that-

• There is growth of home loans after 2001

• Home loans have an inverse relation with interest rates i.e. when interest rate low

the demand of home loans increase. (Ojha 1987)

• People are going more towards home loans than private mortgage insurance

(Berstain 2008)

• Government taking various steps to encourage people to go toward home loans

(Haavio, Kauppi 2000)

• Growth of home loans are due to increase of living standard of people, shifting

from joint family to nuclear family (La courr, Micheal 2007)

• There are some problems also attach with these home loans such as time i.e filling

of application of loan to closing ,people have their own specified needs from these

home loans which are not fulfilling. (La cour Micheal 2006)

• SBI provide a very low interest rate on home loans as compared to other banks.

(SBI May 2000)

Now after this conclusion the details of reviews are below-

Berstain David (2008) examined in his study taken from 2001 to 2007 that in this period

there is increase use of home loans as compared to private mortgage insurance (PMI).he

have divided his study into four sections. Section 1 describes why people are going more

for home loans than PMI. the main reason for this that now home loans market provide

Piggybank loans for those people who don’t have 20% of down payment. Section 2 tells

the factors responsible for the growth of home loans and the risks on shifting toward

home equity market without any PMI coverage. PMI can protect lenders from most losses

up to 80% of LTV and the absence of PMI will result in considerable losses in an

environment. Section 3 tells the measures in changes of type of loans. For this he have

taken the data from the 2001 and 2007 AHS a joint project by HUD and CensusThe

results of this analysis presented in Table One reveal a sharp increase in the Prevalence of

owner-occupied properties with multiple mortgages among properties withNewly

originated first mortgages. Section 4 describe the Financial status of single-lien and

multiple-lien households and for this he have taken the survey of consumer finance and

show that financial position is more weaker in multiple loans than the single loans

Vandell ,kerry D (2008) analysis the sharp rise and than suddenly drop down home

prices from the period 1998- 2008. changes in prices are for the reasons as such economic

fundamentals , the problem was not sub prime lending per se, but the Fed‘s dramatic

reductions, then increases in interest rates during the early- mid-2000 , the housing

―boom was concentrated in those markets with significant supply-side restrictions,

which tend to be more price-volatile; he problem was not in the excess supply of credit in

aggregate, or the increase in sub prime per se, but rather in the increased or reduced

presence of certain other mortgage products

La courr, Micheal(2007) analysis in his study the factors affected the increase in the

level of Annual percentages rates (APR) spread reporting during 2005 over 2004. the

three main factors are changes in lender business practices; (2) changes in the risk profile

of borrowers; and (3) changes in the yield curve environment. The result show that after

controlling for the mix of loan types, credit risk factors, and the yield curve, there was no

statistically significant increase in reportable volume for loans originated directly by

lenders during 2005, though indirect, wholesale originations did significantly increase.

Finally, given a model of the factors affecting results for 2004-2005, we predict that 2006

results will continue to show an increase in the percentage of loans that are higher priced

when final numbers are released in September 2007.

La cour Micheal (2006) examined the home purchase mortgage product preferences of

LMI households. Objectives of his study to analysis the factors that determined factors

their choice of mortgage product , is different income groups have some specified need to

met particular product. The role pricing and product substitution play in this segment of

the market and do results vary when loans are originated through mortgage brokers? For

this they have use the regression analysis and the results are high interest risk reduce loan

value. Self employed borrower chooses reduce documented loans than salaried workers.

use of this product type seems to be more prevalent among borrowers with substantial

funds for down payment and better credit scores. In case of pricing Multi families

requires price premium and larger loans carry lower rate. And the role of time,

particularly, the time required for the loan to proceed from application to closing it is find

that government lending taking the longest time and Nonprime loans the shortest time.

Multi family properties take longer time in closing. And during peak season take longer

time to close. And for last objective it is find that broker originated loans close faster.

The effect of mortgage brokers on pricing and other market outcomes is fertile ground for

additional research.

Dr. Rangarajan C. (2001) said that the financial system of India built a vast network of

financial institutions and markets over times and the sector is dominated by banking

sector which accounts for about two-third of the assets of organized financial sector.

Haavio, Kauppi (2000) stated that countries where a large proportion of the population

lives in owner – occupied housing are experiencing higher unemployment rates. Than

countries where the majority of people live in private rental housing, which might suggest

that rental housing enhances labour mobility. In this paper, they develop a simple inter

temporal two region model that allow us to compare owner occupied housing markets to

rental markets and to analyze how these alternative arrangements allocate people in space

and time. announced that it will offer loans for Rs. 2-10 lakh at 12.5 percent the lowest

rate offered by any housing finance provider, big brother SBI has taken the rate war in

the home loans category to new heights. This is because, apart from the low rate, the

interest on these loan is calculated on principal, which is reduced every month unlike

other housing finance companies which calculate interest on annually reducing basis.

Narasimham Committee (1991) points out that although the banking system in our

country has made rapid progress during the last two decades, there is decline in

productivity and efficiency and erosion of profitability. The committee strongly make

indications of liberlising, deregulating economy to make Indian baking system more

competitive and efficient.

Ojha (1987) in his paper "modern international caparison of productivity and

profitability of pubic sector banks of India" making Comparison on the basis of per

employee indicators and taking examples of state bank group and Punjab National bank

noted that Indian banks are the lowest in all accounts. However such international

comparison will not be fair for numbers of reasons.

Godse (1983) in his essay, “looking a fresh at banking productivity” observe that

productivity aspect is only at the Conceptualization stage in banking industry. He

suggested improvement in productivity and procedures, costing of operations and capital

expenditure etc.

Fanning (1982), while examining bank productivity of British banks observed that

although the productivity of the UK clearing banks is improving, they are still heavily

over manned as compared with similar banks else where.

Kulkarni (1979) in his study “Development responsibility and profitability of banks”

stated that while considering banks costs and profits, social benefits arising out of it

cannot be ignored. He suggested that while meeting social responsibility banks should try

to make developmental business as successful as possible.

Varde and Singh (1979) in a study "profitability of commercial banks" over 15 years

gave consideration to two types of factors that effects interest rates levels i.e. internal

factors (including operational and managerial efficiency of individual basis).

Banking Commission (1972) reviewed bank operating methods and procedures and

made recommendations for improving and modernizing these, particularly relating to

customers services, credit procedure and internal control systems. It observed that present

methods of working out branch profitability are not appropriate and an integrated costing

and financial reporting system is needed.

Department of Banking operations and development, RBI : Bombay observed that the

rapid expansion of banks activities since 1970 called for a phase of consolidations to

improve the quality of banks operational efficiency, productivity and customer services.

CHAPTER 3

CHAPTER – 4

DISBURSEMENT OF HOME LOANS BY COMMERCIAL

BANKS

This chapter contains results and discussion on disbursement of

Home loans by Commercial Banks. It is divided into two parts one part is related

to the disbursement of home loans by different banks and the second part

included the comparative study of disbursement of home loans made by

commercial banks.

Disbursement of Home loans by different banks.

4.a ICICI Bank

Years No. of Home loan

account holders.

Home loan Disbursed

(in crore Rs.)

Distributed Recovered Balance

2004-05

2005-06

2006-07

2007-08

2008-09

700

950

1000

1303

1594

90.07

120.00

144.67

180.33

240.00

63.05

91.20

127.31

165.90

228.12

27.02

28.8

17.36

14.43

11.88

Interpretation

On the above table, it is evident that there are increase in No. of

account holders from 700 to 1594 in the year 2008-09. The loan amount

distributed among home loan account holder has also increased from Rs.90.07

crore in 2004-05 to Rs.240 crore in 2008-09. The recovery procedure for home

loans is also strengthening due to increment in recovered amount, i.e. Rs.63.05

crore to Rs.288.12 crore. So it nut shall there are upward trend in number of

accountholders and disbursement of home loans.

4.b Punjab National Bank

Years No. of Home

loan account

holders.

Home loan Disbursed

(in crores Rs.)


2004-05

2005-06

2006-07

2007-08

2008-09

810

950

1120

1433

1500

120.15

183.26

213.65

240.87

265.15

97.28

150.00

185.86

231.07

265.05

22.87

33.26

28.05

9.80

9.10

Interpretation

The Punjab National Bank is Public sector Bank. It comes second

after State Bank of India in its branch location and expansion. From the Table,

the figures show that there are increasing trend in customer base from 810 in the

year 2004-05 to 1500 in the year 2008-09. The bank also show enhancement in

loan amount up to Rs.265.15 crore in the year 2008-09. The recovery process of

loans in past is slow but now it is increasing.

4.c Standard Chartered Bank

Years No. of Home loan

account holders.

Home loan Disbursed

(in crores Rs.)


2004-05

2005-06

2006-07

2007-08

2008-09

106

130

154

180

260

6.21

11.55

17.06

20.09

24.10

5.27

10.16

14.35

18.68

23.91

0.94

1.38

2.70

1.41

0.48

Interpretation

The standard chartered bank is a private sector bank. It has also

upgrade its position in banking sector in Ludhiana. The figures shown in table

reveals that there is upward shift in customer base of Bank from 106 customers

to 260 customers. The bank has also increased its share in housing finance by

distributing Rs. 24.10 crores in 2008-09. The recovery procedure of Home loan

is very sound.

4.d State Bank of India

Years No. of Home

loan account

holders

Home loan Disbursed

(in crores Rs.)


2004-05

2005-06

2006-07

2007-08

2008-09

650

853

1019

1132

1434

104.33

123.24

150.65

176.75

224.00

98.12

105.00

133.46

144.65

209.16

6.21

18.24

17.19

32.10

14.84

Interpretation:-

The amount reveal that there is tremendous increase in Home loan

accountholders. The amount distributed as home loan is also increased from Rs.

104.33 in 2004-05 to Rs. 224 crore in 2008-09. But the recovery mechanism of

the Bank is not so good thats why the outstanding amount shows fluctuating

trend.

COMPARATIVE STUDY OF DISBURSEMENT OF HOME

LOANS BY COMMERCIAL BANKS:-

There are number of schemes and products, offered by commercial banks to

attract the customers. The comparison among different commercial banks which

offer home loans in regard of Disbursement of home loans are as:-

4.1 No. of Home loan accountholders

Table 4.1(a)

Years ICICI

Bank

Punjab

National

Bank

Standard

chartered Bank

State Bank

of India

2004-05

2005-06

2006-07

2007-08

2008-09

700

950

1000

1303

1594

810

950

1120

1433

1500

106

130

154

180

260

650

853

1019

1132

1434

Average of No. of accounts holders:-

Total of home loan customers

= --------------------------------------

No. of years

Name of Bank

ICICI Bank

Punjab National Bank

Standard Chartered Bank

State Bank of India

Total

Interpretation

The figure reveals that Punjab

of home loan accountholders. So it ranks first among other banks. But privates

sector bank ICICI bank is not behind so much with 31% also market leader. The

banks have shown increase in their customers base from 2004 t

Punjab national bank comes as market leader in the home loan cases.

10

15

20

25

30

35

Percentage of hom

e loan holders

Home loan holders of commercial banks

Table 4.1 (b)

Average (Rs) Percentage of

Accountholders


1109

1163

166

1018

32

34

5

29

3456 100

The figure reveals that Punjab national bank is having large number



banks have shown increase in their customers base from 2004 t


0

5

10

15

20

25

30

35

ICICI Bank Punjab National Bank


State Bank of India

Name of bank

Fig. 4.1Home loan holders of commercial banks

Percentage of

Accountholders

national bank is having large number



banks have shown increase in their customers base from 2004 to 2008. But


4.2 Home loans distributed by Commercial banks.

Table 4.2 (a)

(Rs. in crore)

Average of home loans granted

Total home loans granted

= ---------------------------------

No. of years

Table. 4.2 (b)

(Rs. in crore)

Name of Bank Average (Rs) Percentage of home

loans granted

ICICI Bank



State Bank of India

155.01

204.62

15.80

155.79

29

39

3

29

Total 531.22 100

To understand the comparison more effectively and closely, it has been shows

diagrammatically as follows:-

Years ICICI Bank Punjab

National

Bank

Standard

chartered Bank

State Bank

of India

2004-05

2005-06

2006-07

2007-08

2008-09

90.07

120.00

144.67

180.33

240.00

120.15

183.26

213.65

240.87

265.15

6.21

11.55

17.06

20.09

24.10

104.33

123.24

150.65

176.75

224.00

Interpretation:

There is no doubt that every bank tries to maximize its home loan

disbursement. But on the basis of data it is concluded that Punjab national bank

shows high average of loan grants Rs. 20.62 crore as compared to ICICI,

standard charted bank and SBI respect

crores. On this analysis the public sector banks are higher loan provider as

compared to private sector banks due to credibility and loan offers by public

sector banks.

0

5

10

15

20

25

30

35

40

ICICI Bank

Percentage of hom

e loan granted

Fig. 4.2 Home loans granted by commercial banks




standard charted bank and SBI respectively Rs. 155.01, Rs. 15.80 and Rs. 155.79





State Bank of India

Name of bank

Fig. 4.2 Home loans granted by commercial banks




ively Rs. 155.01, Rs. 15.80 and Rs. 155.79



4.3 Recovery of Home loans

Table 4.3 (a)

(Rs. in crore)

Years ICICI

Bank

Punjab

National

Bank

Standard chartered

Bank

State Bank

of India

2004-05

2005-06

2006-07

2007-08

2008-09

63.05

91.20

127.31

165.90

228.12

97.28

150.00

185.86

231.07

256.05

5.27

10.16

14.35

18.68

23.91

98.12

105.00

133.46

144.65

209.16

Average recovery of home loans

Total home loans recovered

= ----------------------------------

No. of years

Table 4.3 (b)

(Rs. in crore)

Name of Bank Average (Rs) Percentage of home

loans recovered

ICICI Bank



State Bank of India

135.21

184.05

14.47

138.08

30

39

3

28

Total 471.80 100

It is more clear with the help of this diagram.

Interpretation:

In the previous years the recovery process of granting loans are

very unorganized and inefficient. So there are less recovery of home loans by the

commercial banks. But it is evident from the table that every bank whether

public or private showed increase

national bank has the greatest recovery of home loans i.e. 39%, thereafter ICICI

bank recovered the 30% of sanction amount. The standard chartered bank is

having lowest recovery of their granted amount as home lo

0

5

10

15

20

25

30

35

40

ICICI Bank

Percentage of recovery

Fig. 4.3 Home loans recovered by commercial banks




public or private showed increase in their recovery of home loans. The Punjab



having lowest recovery of their granted amount as home loans.



State Bank of India

Name of bank

Fig. 4.3 Home loans recovered by commercial banks




in their recovery of home loans. The Punjab



4.4 Outstanding Balance

Table 4.4 (a)

(Rs. in crore)

Years ICICI Bank Punjab

National

Bank

Standard

chartered

Bank

State Bank

of India

2004-05

2005-06

2006-07

2007-08

2008-09

27.02

28.8

17.36

14.43

11.88

22.87

33.26

28.05

9.80

9.10

0.94

1.38

2.70

1.41

0.48

6.21

18.24

17.19

32.10

14.84

Average of balance due

Total of Balance due in 5 years

= --------------------------------------

No. of years

Table 4.4 (b)

(Rs. in crore)

Name of Bank Average

(Rs)

Percentage of

balance due

ICICI

PNB


State Bank of India

19.89

20.61

1.38

17.72

33

34

2

31

Total 59.15 100

Average of one bank

%age = --------------------------- x100

Total Average of Banks

The Diagrammatically presentation of data is as

Interpretation

From the above table and figure it shows that standard chartered

bank has been less outstanding balance among other banks. The public sector

banks got high balances due to large customer base, not proper recovery process

and lack of modernisation of activities. The private sector bank ICICI bank is

having more balance due i.e. 33% as compared to standard chartered bank.

0

5

10

15

20

25

30

35

ICICI Bank

Percentage of balance due

Fig 4.4 Balance due on home loans by commercial banks

The Diagrammatically presentation of data is as below:




of modernisation of activities. The private sector bank ICICI bank is




State Bank of India

Name of bank

Fig 4.4 Balance due on home loans by commercial banks




of modernisation of activities. The private sector bank ICICI bank is


CHAPTER 4

ANALYSIS OF CUSTOMER SATISFACTION LEVEL

The customer is king of market. The bank can perform its activities

effectively & efficiently if it gains reputation among customers. The analysis is

based on the responses given by customers through questionnaires.

Reasons for getting the home

Sr.No. Number of Reasons

a. Non-availability of funds

b. Reluctancy to pay cash in one go

c. Tax benefit

d. Any other

Interpretation

To interpret the response of the questions, the figures shows that

most of the customers find the problem in availability of funds i.e. 36% and very

0

5

10

15

20

25

30

35

40

Non-availability of funds

Percentage of customers

Fig 5.1 Reasons for getting the home financed

CHAPTER - 5




based on the responses given by customers through questionnaires.

Table 5.1

Reasons for getting the home financed

Number of Reasons Percentage

availability of funds 36

Reluctancy to pay cash in one go 35

24



availability Reluctancy to pay cash in one go

Tax benefit Any other

Fig 5.1 Reasons for getting the home financed




Percentage

36

35

24

5



less number of customers found problem in paying cash in one go is 35%,

customers get housing loan for tax benefits is 24%. This was the expected

response because a large number of people find a problem of availability of

funds which works as an obstacle in owning a dream home.

In today's life, people hardly earn both means and ends of life and

they don't have much of money to buy a home or a land to construct house

because of cost of property. So, they take the advantage of home loans provided

by different banks at different terms feasible to the customers. There are very

less number of people, who don't own home even when they have sufficient

funds and they take the advantage of home loans because they don't want to pay

huge cash in one go.

On the basis of study, it is concluded that most of people lack of

money in fulfiling their dreams and few of them were reluctant to pay cash in

one go and wanted to pay their home loans slowly in installments.

Table 5.2

From which of bank you have got your home financed

Name of Banks Percentage of customers

ICICI Bank 55

Punjab National Bank 15

Standard Chartered Bank 07

State Bank of India 20

Any other 03

To understand the response more effective and closely, it has been

showed diagrammatically as follows :

Interpretation

The analysis showed that a large number of customers prefer ICICI

Bank as compared to others. The data shows that 7% of customers took loan from

Standard Chartered Bank, 20% of customers from State Bank of India 15%

customers took loan from Punjab National

from ICICI Bank and a 3% of customers fall under the category of 'Any other'

which included State Bank of Patiala, Canara Bank, Punjab and Sind Bank, etc.

The data shows that most of people prefer private sector banks a

compared to public sector banks. This is because of the extra services provided

by private sector banks. However, there is less difference in figures of State

Bank of India and Punjab National Bank. But there is considerable difference in

figures of the two private sector banks i.e. ICICI bank and Standard Chartered

Bank. As ICICI is the market leader in the home loans sector. This may be the

reason for such difference in Standard Chartered Bank's percentage and ICICI

Bank's percentage. Another reason for

specialized services in home loans, more amounts of loans, and efficient query

handling.

0

10

20

30

40

50

60

ICICI Bank


Fig. 5.2 From which of bank you have got your home




customers took loan from Punjab National Bank, 55% of customers took loan



The data shows that most of people prefer private sector banks a




two private sector banks i.e. ICICI bank and Standard Chartered



Bank's percentage. Another reason for the preference of ICICI Bank may be their


ICICI Bank Punjab National Bank


State Bank of India

Any other

Name of bank

Fig. 5.2 From which of bank you have got your home financed




Bank, 55% of customers took loan



The data shows that most of people prefer private sector banks as




two private sector banks i.e. ICICI bank and Standard Chartered



the preference of ICICI Bank may be their


However, the analysis showed that the people prefer ICICI Bank

for home loan because of their services and excessive feat

compared to other banks.

Sources of information about Home Loans Scheme

Sources of information

Newspapers

Magazines

Banners/Hoardings/Pamphlets

Word of mouth

Any other source

0

5

10

15

20

25

30

35

40

45

50

Newspapers Magazines


Fig 5.3 Percentage of sources of information about Home


for home loan because of their services and excessive features of home loans as

compared to other banks.

Table 5.3

Sources of information about Home Loans Scheme

Sources of information Percentage of customers

49

16

Banners/Hoardings/Pamphlets 11

20

04

Magazines Banners Word of mouth Any other source

Fig 5.3 Percentage of sources of information about Home Loans Scheme


ures of home loans as


Interpretation

The data shows that around 20% of customers got information from

source of 'Word of Mouth' which includes information from friends, relatives,

colleagues etc. 49% of customers got information from newspapers, only 16% of

customers from magazines and 4% of customers got information about home

loans schemes under 'Any other source' and 11% through Banners/

Hoardings/Pamphlets

Table 5.4

Giving importance to the factors which influence the choice of bank

Factors


Most

importan

t

Very

importan

t

Importan

t

Less

importan

t

Not

importan

t

(a) Less

documentation

58% 24% 16% 1% 1%

(b) Speedy

processing

40% 51% 9% - -

(c) Low interest rates 32% 45% 23% - -

(d) Flexible

repayment

29% 31% 35% 3% 2%

(e) Personal dealings 36% 20% 24% 16% 4%

(f) Reputation and

credibility

32% 33% 27% 8% -

(g) Transparency and

reliability

(h) Professional

Management

Interpretation

The data shows that almost all features were important to the

customers. Some of the factors were not important for a few numbers of

customers.

The analysis showed that 'Less documentation' as 'Most important'

for 58% of customers, 40% of customers quot

Important' to them, 'Low Interest Rates' were 'Very Important' for 45% of

customers. Most of people were neutral about repayment options, 36% of

customers gave importance to credibility and transparency of services,

'Professional Management' was also of due importance to 36% of customers.

So, the data shows the highest percentage given to the factors like

0%

10%

20%

30%

40%

50%

60%

a b


Fig. 5.4 Importance to the factors which influence the choice of bank

Most important Very important

34% 21% 26% 19%

29% 36% 29% 6%




for 58% of customers, 40% of customers quoted 'Speedy processing', 'Most




nal Management' was also of due importance to 36% of customers.


b c d e f g h Factors


Very important Important Less important Not important

-

-




ed 'Speedy processing', 'Most




nal Management' was also of due importance to 36% of customers.



Not important

less documentation, speedy processing in disbursement of loan, and low interest

rates by the customers because the customers want to avail loan in less time,

without much of formalities and at less cost. That's why they give due

importance to factors like low interest rates, flexible repayment options etc. so

that they can feel ease while getting loan and after the disbursement of loan in

repayment of that loan properly.

In today's age, customers seek more facilities and beneficial

features from banks and they prefer a bank, which provides all these services at

low cost. So, all the features are important to a customer.

Table 5.5

Opinion about the services of different banks under study

a. ICICI Bank

Services of banks

Percentage of customers agreeing

Strongly

agree

Agree Neutral Disagree Strongly

disagree

a. Professionally

managed

86% 10% 4% - -

b. Reliable &

transparent

67% 33% - - -

c. Socially responsible 75% 10% 15% 4% -

d. Customer care 20% 68% 8% - -

e. Query handling 20% 76% 4% - -

Interpretation

Customers from ICICI Bank are quite satisfied from their services

like query handling and customers

social responsibility of banks towards customers and professionally managed

services. They don't give so good response to reliability and transparency

services of banks. '

So, customer's satisfaction level towa

lightly satisfied.

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

a


Fig. 5.5( a) Opinion of customers about ICICI Bank

Strongly agree


like query handling and customers care. They give neutral response regarding



So, customer's satisfaction level toward ICICI bank's services is

b c d e

Factor

Fig. 5.5( a) Opinion of customers about ICICI Bank

Agree Neutral Disagree Strongly disagree


care. They give neutral response regarding



rd ICICI bank's services is

5.5 b. Punjab National Bank

Services of banks

a. Professionally

managed

b. Reliable &

transparent

c. Socially responsible

d. Customer care

e. Query handling

0%

10%

20%

30%

40%

50%

60%

a


Fig. 5.5( b) Opinion of customers about Punjab National Bank

Strongly agree



Strongly

agree

Agree Neutral Disagree

60% 13% 27% -

53% 47% - -

Socially responsible 15% 10% 50% 25%

10% 28% 40% 25%

4% 20% 26% -

b c d eFactors




Disagree Strongly

disagree

-

-

-

-

-


Strongly disagree

Interpretation

The analysis reveals that the customers of PNB are less satisfy

from their bank. They gave 60% to professionally managed services, 4% to query

handling, 15% to social responsibility, 53% to reliability and transparency. In

overall, the customer of Punjab National Bank were not fully satisfied by the

services offered by it.

5.5(c) Standard charted Bank

Services of banks


Strongly

agree


disagree

a. Professionally

managed

72% 14% 14% - -

b. Reliable &

transparent

43% 14% 43% - -

c. Socially responsible 14% 28% 43% 15% -


e. Query handling 57% 22% 21% - -

0%

10%

20%

30%

40%

50%

60%

70%

80%

a


Fig. 5.5(c) Opinion of customers about Standard Chartered Bank

Strongly agree

b c d eFactors




Strongly disagree

Interpretation

The analysis shows that the customers of Standard Charted are

averagely satisfied from their bank. They gave 72% to professionally managed

services 57% to query handling, 14% to social responsibility, 43% to reliability

and transparency, as highest satisfaction level.

5.5 (d) State Bank of India

Services of banks


Strongly

agree


disagree

a. Professionally

managed

50% 25% 20% 5% -

b. Reliable & transparent 12% 58% 30% - -

c. Socially responsible 14% 14% 71% - -


e. Query handling 25% 63% 12% 10% -

Interpretation

The customers from State Bank of India

level. They gave 58% to reliability and transparency, 65% to customer care, 63%

query handling and 25% to professionally managed services of banks.

So, customer are not so much agree with the socially responsible

services of the bank. They gave neutral response to this service. However, they

were also disagree with some of the services of the bank.

0%

10%

20%

30%

40%

50%

60%

70%

80%

a


Fig. 5.5(d) Opinion of customers about State Bank of India

Strongly agree

The customers from State Bank of India, also average satisfaction




the bank. They gave neutral response to this service. However, they

were also disagree with some of the services of the bank.

b c d eFactors

Fig. 5.5(d) Opinion of customers about State Bank of India


, also average satisfaction




the bank. They gave neutral response to this service. However, they

Strongly disagree

Table 5.6

Opinion of customers about home loan schemes

5.6 (a) ICICI Bank

Services of banks


Strongly

agree


disagree

a. Amount of loan 60% 35% 5% - -

b. Legal formalities 42% 45% 14% - -

c. Interest rates 32% 56% 12% - -

d. Repayment options 26% 64% 10% - -

e. Security demanded 20% 32% 48% - -

f. Installments 55% 40% 5% - -

g. Services of bank 45% 30% 18% 6% 1%

h. Processing for

sanction of loan

55% 24% 18% 3% -

Interpretation

The analysis shows that the customers of ICICI bank gave 60 per

cent of amount of loan and legal proceedings, 56% to interest rates, 45% to

proceedings and services, 55% to installments.

So, customer of ICICI bank didn't give response regarding the

services of the bank except to the amount of loan and legal formalities.

0%

10%

20%

30%

40%

50%

60%

70%

a b

Percentag

e of customers

Fig. 5.6( a) Percentage of satisfaction level of customers of ICICI Bank

Strongly agree



proceedings and services, 55% to installments.


ices of the bank except to the amount of loan and legal formalities.

b c d e f g h

Factors

Fig. 5.6( a) Percentage of satisfaction level of customers of ICICI Bank

Strongly agree Agree Neutral Disagree Strongly disagree




ices of the bank except to the amount of loan and legal formalities.

5.6 (b) Punjab National Bank

Services of banks


Strongly

agree


disagree

a. Amount of loan 10% 60% 30% - -

b. Legal formalities 25% 34% 31% 10% -

c. Interest rates 33% 48% - 11% -

d. Repayment options 18% 30% 15% 17% 20%




h. Processing for

sanction of loan

38% 48% 24% - -

Interpretation

On the basis of data the customers of Punjab National Bank give

average satisfaction level to their services. They gave 60% to the amount of loan

and legal formalities and 55% to the security provided, 48% to the installment

interest rates and proceedings.

different home loan schemes offered by bank.

0%

10%

20%

30%

40%

50%

60%

a b


Fig. 5.6.( b) Percentage of satisfaction level of customers of Punjab National Bank

Strongly agree




interest rates and proceedings. So the customers of PNB did not fully satisfied by

different home loan schemes offered by bank.

c d e f g h

Factors

Fig. 5.6.( b) Percentage of satisfaction level of customers of Punjab National Bank





So the customers of PNB did not fully satisfied by

5.6 (c) Standard Chartered Bank

Services of banks


Strongly

agree


disagree

a. Amount of loan 59% 31% 10% - -

b. Legal formalities 31% 45% 24% - -

c. Interest rates 14% 52% 24% 10% -

d. Repayment options 26% 30% 44% - -




h. Processing for

sanction of loan

30% 13% 27% 30% -

Interpretation

According to the data, satisfaction level of customers of Standard

Chartered Bank, they were satisfied with the amount, security, proceedings

regarding the sanctioning of loan, services of the

They gave 30% to the proceedings of the home loans, 55% to

services and the amount of loan provided, and security held for the loan amount,

50% to installments, 52% to interest rates etc. So, their satisfaction level was

less for proceedings and av

0%

10%

20%

30%

40%

50%

60%

a


Fig. 5.6( c) Percentage of satisfaction level of customers of Standard Chartered

Strongly agree



regarding the sanctioning of loan, services of the bank.




less for proceedings and average for all other services.

b c d e f g h

Factors

Fig. 5.6( c) Percentage of satisfaction level of customers of Standard Chartered Bank







Fig. 5.6( c) Percentage of satisfaction level of customers of Standard Chartered


Services of banks


Strongl

y agree


disagree

a. Amount of loan 38% 52% 10% - -

b. Legal formalities 38% 52% - 10% -

c. Interest rates 38% 48% - 14% -

d. Repayment options 18% 30% 15% 17% 20%




h. Processing for

sanction of loan

38% 48% 24% - -

Interpretation

According to the data the customers of State Bank of India give


and legal formalities and 55% to security provided. 48% to the installments

interest rates and proceedings. To

proceedings of the banks due to some reasons.

0%

10%

20%

30%

40%

50%

60%

a b


Fig. 5.6(d) Percentage of satisfaction level of customers of State

Strongly agree




interest rates and proceedings. To they didn't show high satisfaction level to the

proceedings of the banks due to some reasons.

b c d e f g h Factors

Fig. 5.6(d) Percentage of satisfaction level of customers of State Bank of India





they didn't show high satisfaction level to the

Strongly disagree

Table 5.7

Please give importance to the factors that influenced your choice of bank

5.7 (a) ICICI Bank

Percentage of Customers agreeing

Most

Important

Very

Important

Important Less

Important

Not

Important

(a) Less

documentation

40% 42% 18% - -

(b) Speedy

processing

60% 25% 10% 5% -

(c) Low interest

rates

30% 55% 15% - -

(d) Flexible

repayment

25% 60% 10% 5% -

(e) Personal dealing 55% 35% 10% - -

(f) Reputation and

credibility

45% 30% 15% 5% 5%

(g) Transparency

and reliability

60% 40% - - -

(h) Professional

Management

80% 12% 8% - -

Interpretation

The analyse shows that the customers of ICICI gave more

important to professionally managed working, speedy work and personal dealing

they don't give much importance to interest rate and reputation. This shows that

customers of ICICI gave more importance

cost of working at the time of selection of bank.

0%

10%

20%

30%

40%

50%

60%

70%

80%

a

Percentag

e of customer

Fig.5.7 (a) Percentage of reasons that influence the selection of bank for

Most Important Very Important




customers of ICICI gave more importance to services of bank rather than low

cost of working at the time of selection of bank.

b c d e f g hFactors

Fig.5.7 (a) Percentage of reasons that influence the selection of bank for customers of ICICI Bank

Very Important Important Less Important Not Important




to services of bank rather than low

Fig.5.7 (a) Percentage of reasons that influence the selection of bank for

Not Important

5.7 (b) Punjab National Bank


Most

Important

Very

Important

Important Less

Important

Not

Important

(a) Less

documentation

24% 38% 28% 10% -

(b) Speedy

processing

36% 42% 22% - -

(c) Low interest rates 30% 44% - 26% -

(d) Flexible

repayment

20% 28% 14% 16% 22%

(e) Personal dealing 12% 28% 36% 24% -

(f) Reputation and

credibility

14% 32% 28% 10% 16%

(g) Transparency

and reliability

54% 46% - - -

(h) Professional

Management

60% 15% 25% - -

Interpretation

The analysis reveals that customers of Punjab National Bank gave high

importance to reliability, professional management and speedy processing. Interest is

also a factor of importance for them. Other factor like personal dealing or less

documentation are also important for them. This shows that customer gave a mixed

responses for the reason of selection of this bank.

0%

10%

20%

30%

40%

50%

60%

a

Percentage of customer

Fig5 .7( b) Percentage of reasons that influence the selection of bank for customers of

Most Important




also important for them. This shows that customer gave a mixed

responses for the reason of selection of this bank.

b c d e f g h

Factors

Fig5 .7( b) Percentage of reasons that influence the selection of bank for customers of Punjab National Bank





also important for them. This shows that customer gave a mixed

Fig5 .7( b) Percentage of reasons that influence the selection of bank for customers of

Not Important

5.7 (c) Standard Chartered bank


Most

Important

Very

Important

Important Less

Important

Not

Important

(a) Less

documentation

30% 44% 26% - -

(b) Speedy

processing

32% 16% 28% 24% -

(c) Low interest rates 18% 50% 26% 6% -

(d) Flexible

repayment

22% 34% 44% - -

(e) Personal dealing 70% 16% 14% - -

(f) Reputation and

credibility

54% 30% 10% 4% 2%

(g) Transparency

and reliability

44% 10% 42% 4% -

(h) Professional

Management

72% 14% 14% - -

Interpretation

On the basis of the data it can be understood that according to the

customers of Standard Chartered the main reasons behind the selection of this bank is

professional management and personal dealing. They gave 50% to interest and 44% to

less documentation. These also represent some of other reason for their customer the

which force them to select this bank.

0%

10%

20%

30%

40%

50%

60%

70%

80%

a


Fig. 5.7.(c) Percentage of reasons that influence the selection of bank for customers of

Most Important




. These also represent some of other reason for their customer the

which force them to select this bank.

b c d e f g h

Factors

Fig. 5.7.(c) Percentage of reasons that influence the selection of bank for customers of Standard Chartered Bank





. These also represent some of other reason for their customer the

Fig. 5.7.(c) Percentage of reasons that influence the selection of bank for customers of

Not Important



Most

Important

Very

Important

Important Less

Important

Not

Important

(a) Less

documentation

36% 48% - 12% -

(b) Speedy

processing

36% 44% - 20% -

(c) Low interest rates 38% 42% - 16% -

(d) Flexible

repayment

16% 26% 14% 20% 24%

(e) Personal dealing 24% 60% 14% 12% -

(f) Reputation and

credibility

30% 32% 14% 14% 10%

(g) Transparency

and reliability

10% 50% 40% 10% -

(h) Professional

Management

40% 20% 20% 15% 5%

Interpretation

As per the data the main reasons behind the choice of this bank by

his customers are the low interest rates, speedy processing and reliability of the

bank. Personal dealing and less documentation also proves to be important for

them. So with this the cust

an every reason.

0%

10%

20%

30%

40%

50%

60%

a


Fig 5.7( d) Percentage of reasons that influence the selection of bank for customers of

Most Important




them. So with this the customers of SBI puts near about equal weightage to each

b c d e f g h

Factors

Fig 5.7( d) Percentage of reasons that influence the selection of bank for customers of State Bank of India





omers of SBI puts near about equal weightage to each

Fig 5.7( d) Percentage of reasons that influence the selection of bank for customers of

Not Important

PROBLEMS FACED BY CUSTOMERS IN AVAILING HOME LOANS

There are everything in the world has good or bad points. No doubt

banking industry has made many efforts to enhance the customer satisfaction but

customer still faced some problems. These are high lightened as below:

1) The customer does not have proper knowledge about different home loan

products so they face problem in making a good deal.

2) There are procedural delays, which harass the customers lot. This will

crush the curtsy of customers to avail the home loan.

3) The attitude of bank employees some times non cooperative and it creates

a hurdle in building trust and Confidence among customers about banks.

4) The banks do not take into account the paying capacity of customers. So

some customers are not able to get amount of loan needed by them.

So above discussed are the problems which faced by customers

while availing home loans.

CHAPTER 5

CHAPTER - 6

CONCLUSION & FINDINGS

This is the last chapter of this project report. In this project report

the summary of the whole project has been covered how the whole project was

carried out and the analysis was made.

This project is based on the “Disbursement of home loans by

commercial banks”. This topic covers the objective of studying the customer

satisfaction level and comparative study of disbursement of home loans by

commercial banks. So first of all objectives were received to carry out this

project.

To study the topic under research the secondary as well as primary

data was collected secondary data was collected from the banks providing home

loans through personal visit to their offices, information provided them in

reports, sites of banks etc. The primary data was collected through

questionnaires. On the basis of collected data an analysis was made on the

disbursement procedures and services in regards of it and also a discussion was

made on the satisfactions level of customers availing home loans from these

banks.

The detailed study of these aspects of home loans revailed that in

what way banks can attract most of the customers towards them. The private

sector banks are attracting consumers by providing door-step services and by

establishing their franchise to service their customers. These banks have gained a

lot as compared to public sector banks.

While studying this project a lot of problems were faced in data

collection from banks as well as customers due to their non-cooperation and

ignorance and a lot of efforts were made to remove such limitations in the study.

To conduct the project more effectively and efficiently, first of all

detailed study of home loans was made i.e. regarding its benefits and limitations,

eligibility criteria and procedure of disbursement.

Then according to topic considerable review of literature was made

as mentioned in chapter II. The review of literature was made to facilitate the

further study on the topic by taking help of findings of the previous researchers

or experts relating same field.

The most important part of the project was research methodology

which has been covered in chapter No. 3. In this various aspects like research

design scope of the study. Objectives of the study, data collection techniques are

used and the limitations of study are discussed.

In the chapter No. 4 i.e. Disbursement of home loans by

commercial banks the data collected is presented in tables and diagrams. To

make comparative study on the topic 4 banks namely ICICI Bank, Punjab

national Bank, Standard chartered Bank and State Bank of India are taken into

account. However, after collecting data, an analysis was made to know the

results on the basis of collected data on the basis of data the Punjab National

Bank is having large number of customer base with high loan disbursement and

recovery of loans. But the standard chartered bank showed less outstanding

balance which presented in percentage form in the diagram.

To know the customer satisfaction level primary data is collected

by questionnaire. The data was collected on the basis of responses were given by

respondents. But it was very difficult to collect data because people were non-

cooperative and ignorant about home loan. On the basis of data the ICICI bank is

emerging at higher position as compare to Standard chartered bank and other

public sector banks on ground of professionally managed services, reliable &

transparent system, easy query handling etc. The problem faced by customers

while availing home loans also revailed by this project. This analysis was the

basis of the suggestions on final results.

Finally the whole research was carried out in a systematic way to

reach at exact results. The whole research and findings were based on the

objectives. However, the study had some limitations also such as lack of time,

lack of data, non-response, reluctant attitude and illiteracy of respondents, which

posed problems in carrying out the research. But proper attention was made to

carry out research in proper way and to make accurate suggestions for the banks

which may beneficial for banks to enhance their customer base.

SUGGESTIONS

However, on the basis of the collected data and the analysis along

with detailed discussion made in conclusion of this report, some suggestions can

be made to the banks which will be helpful to them in improving their services.

These suggestions have been discussed as follows:

1. 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.

2. 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.

3. 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.

4. Although the interest rates on specific norms, yet customers seek less

interest rate which can lower their cost of house. So banks should try to

lower their interest rates. Needles to say, that the bank which is having

lower interest rates, have the maximum clients for loans.

5. The public sector banks should improve their overall services to increase

the number of customers for home loans. They should recruit

professionals to provide such services and to satisfy the customers.

6. The scheme of Punjab National Bank is quite beneficial for the persons

who want to buy or construct their own home. But their scheme is not

properly reachable to general public or in rural areas. That's why they

have customers for home loans from their own staff or the account holders

in their bank only. So, they should make the scheme more transparent and

reachable to the common man so that they can avail the benefits of the

scheme.

7. Although ICICI Bank is a market leader in 'home loans' sector but they

should innovate their services, viewing the- increasing competitions from

other banks such as Standard Chartered Bank.

8. The Standard Chartered Bank should fix the initial installments at lower

rates as their customers face problems in paying high initial installment

due to their financial problem. So, they should fix installments according

to the repayment capacity of the customer. This suggestion may be applied

to all other banks also.

9. As the banks provide loan according to the repaying capacity of the

customer and his/her eligibility. Due to which, some customers are not

able to get amount of loan needed by them. So, the banks should soften

their norms regarding the loan amount.

10. The Banks should try to provide proper knowledge regarding their home

loan schemes, even to people who don't know about such schemes and

their benefits especially in rural areas. So they should provide knowledge

to the ignorant customers, especially in rural areas and backward urban

area So, above are the main suggestions provided to the banks. By

considering these suggestions, the banks can strengthen their customer

base in home loans sector. They should improve their services and reduce

legal proceedings and should be friendly to their customers. All this will

be helpful to satisfy their customers.

REFERENCES

• REVIEWS

Ø Berstain David(2008), “Home equity loans and private mortgage insurance:

Recent Trends & Potential Implications”, Vol.3 No.2, August 2008, Pp. 41 - 53

Ø Dr. Rangarajan C. (2001), “A Simple Error Correction Model of House Price”.

Journal of Housing Economics Vol. 4, No. 3,pp 27 – 34

Ø Fanning (1982), “The Demand for Home Mortgage Debt” Journal of Urban

Economics, Vol 11 No 2, November, pp. 770-774

Ø Godse (1983), “looking a fresh at banking productivity”, Journal of Real Estate

Literature, Vol. No. 13, Page 141 to 164.

Ø Haavio, Kauppi(2000) , “Residential Lending to Low-Income and Minority

Families: Evidence from the 1992 HMDA Data," Federal Reserve Bulletin,Vol no

80(2), December 2000 Pp-79-108

Ø Kulkarni (1979), “Development responsibility and profitability of banks” Journal

of Economic Perspectives, Vol 9 No 1 ,pp. 26-32.

Ø La courr, Micheal(2007) , “Economic Factors Affecting Home Mortgage

Ø Disclosure Act Reporting” The American Real Estate and Urban Economics

Association, Vol.2 No. 2 May 18, 2007, Pp. 45 -58

Ø La cour Micheal(2006) , “The Home Purchase Mortgage Preferences Of Low-

and-Moderate Income Households”, Forthcoming in Real Estate Economics , Vol

18, No 4 , December 20, 2006, p. 585

Ø Narasimham Committee (1991), “Alternative Mortgage Products and Housing

Consumption. Working paper

Ø Ohja J (1987) “Productivity and profitability of Punjab sector banks in India, An

international compassion”, State Bank of India monthly review, Vol 28,

No78,July 1987, pp1013.

Ø Vandell ,kerry D(2008), “Subprime lending and housing bubble:tail wag dog?”

International Journal of Bank Marketing, vol 21,no 2, pp. 53-7

Ø Varde and Singh, “prospects and problems of real estate of india”. International

Research Journal of Finance and Economics,Vol. No. 11, Page 279 to 324.

Ø Brochure on home loans from ICICI bank

Ø Brochure on Home loans from Standard Chartered banks.

Ø Brochure on home loans from State Bank of India

Ø Brochures on home loans from Punjab National Bank.

• WEB PAGES

ü www.allinfinance.com/credithttp://www.allinfinance.com/credit

ü http://www.bseindia.com/downloads/HomeLoans.pdf

ü http://www.business-standard.com/india/news/pnb-obc-hike-home-loan-

rates/283616/

ü www.ficci.com/general/new-addition/housing-highlights.pdf

ü http://www.icicibank.com/pfsuser/loans/homeloans/hlratesandfees.htm

ü http://www.indiahousing.com/standard-chartered-bank-home-loans.html

ü http://www.statebankofindia.com/viewsection.jsp?lang=0&id=0,3,513

http://www.allinfinance.com/credit

http://www.bseindia.com/downloads/HomeLoans.pdf

http://www.business-standard.com/india/news/pnb-obc-hike-home-loan-rates/283616/

http://www.business-standard.com/india/news/pnb-obc-hike-home-loan-rates/283616/

http://www.ficci.com/general/new-addition/housing-highlights.pdf

http://www.icicibank.com/pfsuser/loans/homeloans/hlratesandfees.htm

http://www.indiahousing.com/standard-chartered-bank-home-loans.html

http://www.statebankofindia.com/viewsection.jsp?lang=0&id=0%2C3%2C513

QUESTIONNAIRE

Dear Sir/ madam

I am Mehak Puri doing MBA from Lovely professional university . I m perpariing a

project on DISBURSEMENT OF HOME LOANS BY COMMERICIAL BANKS . For

this I have designed a Questionniare to know your views and satisfaction level of home

loans .please fill the given as per your thinking and experiences with this. I will be

thankful to you for this .

1. Do you own a home

Yes [ ] No [ ]

If Yes, then, Proceed.

2. Have you get it financed?

Yes [ ] No [ ]

If Yes, then, proceed

3. What is reason for getting it financed?

1. Non availability of funds [ ]

2. Reluctance to pay cash in on go [ ]

3. Tax benefit [ ]

4. Any other (please specify) .........................................

4. From which of the following banks you have got if financed?

Standard Chartered Bank [ ] State Bank of India [ ]

ICICI Bank [ ]

Any other (please specify) ...........................................

5. From where have you got information about home loans scheme?

(Check list)

Newspapers [ ] Magazines [ ]

Hoarding/banners [ ] Word of mouth [ ]

Any other (please specify) ...........................................

6. What is your general opinion about the services of the bank. From where you

have got home loans?

Strongly

agree


disagree

a. Professionally

managed

b. Reliable &

transparent

c. Socially responsible

d. Customer care

e. Query handing

7. Give your satisfaction level for the following of your home loan scheme?

Strongly

satisfied

Satisfied Neutral Dissatisfied Strongly

dissatisfied

a. Amount of loan

b. Legal formalities

c. Interest

rates

d. Repayment option

e. Security

demanded

f. Installments

g. Services of bank

h. Processing for

sanction of loan

8. Please give importance to the factors that influenced your choice of bank

Most

Important

Very

Important

Important Less

Important

Not

Important

(a) Less

documentation

(b) Speedy processing

(c) Low interest rates

(d) Flexible repayment

(e) Personal dealing

(f) Reputation and

credibility

(g) Transparency and

reliability

(h) Professional

Management

9. What problems did you face while getting home loans?

a. Lack of knowledge

b. Procedural delays and non cooperation

c. Any other (please specify) ........................................

10. Did you face any problem after sanction of loan?

11. What suggestions do you want to give for improvements in home loans

scheme?

Name: _____

Age: [ ] 20-30 years [ ] 30-40 years

[ ] 40-46 years [ ] above 50 years

Income:

Occupation: [ ] Business [ ] Service

Any other (please specify) ............................................

Sex: [ ] Male [ ] Female

Address:

Phone No.:

THANKS

disbursement of home loans by commercial banks

Documents

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