Professional Documents
Culture Documents
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Contents
Introduction Industry profile Company profile Product profile Objective of study Scope of project Research methodology i) Primary Data ii) Secondary Data iii) Limitation of the study Theoretical background of the study Data analysis & interpretation Findings Conclusion Suggestions Bibliography Annexure
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Project Title:
Organization:
Chapter 1
INTRODUCTION
Introduction
The successful development in the banking business has become a complex process in the world of competition today. The development of marketing a new service, the complexity of a new and different product, their market and therefore their
process through which they developed, dictates that a number of different people, each which their own role, work together to create the service.
The project represents a information regarding companys/banks performance and the service for the home loans to the all sections of society.
The main objective of the project is to understand/study the different product of a housing loan, the rate of interest of housing loan the days for sanctioning of a housing loan. This will help us to select the appropriate bank of financial institution which will have less interest rate and maximum repayment period.
For the execution of the project, the methodology adopted is the collection of information through primary and secondary data collection method, questionnaire, processing and analyzing data.
The banks collected for comparison of a housing loan are the main stream banks in Kopargaon i.e. state bank of India, bank of Maharashtra , bank of Baroda ,central bank of India. Bank of Maharashtra is very good service provider in the banking sector
Chapter 2
INDUSTRY PROFILE
Industry Profile
A. Banking and finance in india
The Indian money market is classified in to : the organized sector(comprising private, public and foreign owned commercial banks and cooperative banks, together known as scheduled banks); and the unorganized sector(comprising individual or family owned indigenous bankers or money lenders and non banking financial companies (NBFCs)). The unorganized sector and micro credit and still preferred over traditional banks in rural and sub-urban areas, especially for non-productive purposes, like ceremonies and short duration loans.
B. Early History
Banking in India originated in the first decade of 18th century. The first banks were The General Bank of India, which started in 1786, and Bank of Hindustan, both of which are now defunct. The oldest bank in existence in India is the State Bank of India, which originated in the "The Bank of Bengal" in Calcutta in June 1806. This was one of the three presidency banks, the other two being the Bank of Bombay and the Bank of Madras. The presidency banks were established under charters from the British East India Company. They merged in 1925 to form the Imperial Bank of India, which, upon India's independence, became the State Bank of India. For many years the Presidency banks acted as quasi-central banks, as did their successors. The Reserve Bank of India formally took on the responsibility of regulating the Indian banking sector from 1935. After India's independence in 1947, the Reserve Bank was nationalized and given broader powers.
C. Post-independence
The partition of India in 1947 adversely impacted the economies of Punjab and West Bengal, paralyzing banking activities for months. India's independence marked the end of a regime of the Laissez-faire for the Indian banking. The Government of India initiated measures to play an active role in the economic life of the nation, and the Industrial Policy Resolution adopted by the government in 1948 envisaged a mixed economy. This resulted into greater involvement of the state in different segments of the economy including banking and finance. The major steps to regulate banking included: In 1948, the Reserve Bank of India, India's central banking authority, was nationalized, and it became an institution owned by the Government of India. In 1949, the Banking Regulation Act was enacted which empowered the Reserve Bank of India (RBI) "to regulate, control, and inspect the banks in India." The Banking Regulation Act also provided that no new bank or branch of an existing bank may be opened without a license from the RBI, and no two banks could have common directors. However, despite these provisions, control and regulations, banks in India except the State Bank of India, continued to be owned and operated by private persons. This changed with the nationalization of major banks in India on 19th July, 1969.
D. Nationalization
By the 1960s, the Indian banking industry has become an important tool to facilitate the development of the Indian economy. At the same time, it has emerged as a large employer, and a debate has ensued about the possibility to nationalize the banking industry. Indira Gandhi, the-then Prime Minister of India expressed the
intention of the GOI in the annual conference of the All India Congress Meeting in a paper entitled "Stray thoughts on Bank Nationalization." The paper was received with positive enthusiasm. Thereafter, her move was swift and sudden, and the GOI issued an ordinance and nationalized the 14 largest commercial banks with effect from the midnight of July 19, 1969. Jayaprakash Narayan, a national leader of India, described the step as a "masterstroke of political sagacity." Within two weeks of the issue of the ordinance, the Parliament passed the Banking Companies (Acquisition and Transfer of Undertaking) Bill, and it received the presidential approval on 9th August, 1969. A second dose of nationalization of 6 more commercial banks followed in 1980. The stated reason for the nationalization was to give the government more control of credit delivery. With the second dose of nationalization, the GOI controlled around 91% of the banking business of India. After this, until the 1990s, the nationalized banks grew at a pace of around 4%, closer to the average growth rate of the Indian economy.
E. Liberalization
In the early 1990s the then Narsimha Rao government embarked on a policy of liberalization and gave licenses to a small number of private banks, which came to be known as New Generation tech-savvy banks, which included banks such as Global Trust Bank (the first of such new generation banks to be set up) which later amalgamated with Oriental Bank of Commerce, UTI Bank (now re-named as Axis Bank), ICICI Bank and HDFC Bank. This move, along with the rapid growth in the economy of India, kick started the banking sector in India, which has seen rapid growth with strong contribution from all the three sectors of banks, namely, government banks, private banks and foreign banks.
The next stage for the Indian banking has been setup with the proposed relaxation in the norms for Foreign Direct Investment, where all Foreign Investors in banks may be given voting rights which could exceed the present cap of 10%at present it has gone up to 49% with some restrictions. The new policy shook the Banking sector in India completely. Bankers, till this time, were used to the 4-6-4 method (Borrow at 4%; Lend at 6%;Go home at 4) of functioning. The new wave ushered in a modern outlook and tech-savvy methods of working for traditional banks. All this led to the retail boom in India. People not just demanded more from their banks but also received more.
F. Current situation
Currently, banking in India is generally fairly mature in terms of supply, product range and reach-even though reach in rural India still remains a challenge for the private sector and foreign banks. In terms of quality of assets and capital adequacy, Indian banks are considered to have clean, strong and transparent balance sheets relative to other banks in comparable economies in its region. The Reserve Bank of India is an autonomous body, with minimal pressure from the government. The stated policy of the Bank on the Indian Rupee is to manage volatility but without any fixed exchange rate-and this has mostly been true. With the growth in the Indian economy expected to be strong for quite some time-especially in its services sector-the demand for banking services, especially retail banking, mortgages and investment services are expected to be strong. One may also expect M&As, takeovers, and asset sales. In March 2006, the Reserve Bank of India allowed Warburg Pincus to increase its stake in Kotak Mahindra Bank (a private sector bank) to 10%. This is the first time an investor has been allowed to hold more than 5% in a private sector bank
since the RBI announced norms in 2005 that any stake exceeding 5% in the private sector banks would need to be vetted by them. Currently, India has 88 scheduled commercial banks (SCBs) - 28 public sector banks (that is with the Government of India holding a stake), 29 private banks (these do not have government stake; they may be publicly listed and traded on stock exchanges) and 31 foreign banks. They have a combined network of over 53,000 branches and 17,000 ATMs. According to a report by ICRA Limited, a rating agency, the public sector banks hold over 75 percent of total assets of the banking industry, with the private and foreign banks holding 18.2% and 6.5% respectively. Since liberalization, the government has approved significant banking
reforms. While some of these relate to nationalized banks (like encouraging mergers, reducing government interference and increasing profitability and competitiveness) other reforms have opened up the banking and insurance sectors to private and foreign players.
Commerce Punjab & Sind Bank Punjab National Bank Syndicate Bank Union Bank of India United Bank of India UCO Bank Vijaya Bank IDBI Bank State Bank of India State Bank of Bikaner & Jaipur
State State Bank of Hyderabad State Bank of Indore State Bank Group Bank of Mysore State Bank of Patiala State Bank of
Saurashtra State Bank of Travancore Axis Bank Bank of Rajasthan Bharat Overseas Bank Catholic Syrian Bank Centurion Bank of Punjab City Union Bank Development Credit Bank Dhanalakshmi Bank Federal Bank Ganesh Bank of Kurundwad
Private banks
HDFC Bank ICICI Bank IndusInd Bank ING Vysya Bank Jammu & Kashmir Bank Karnataka Bank Limited Karur Vysya Bank Kotak Mahindra Bank Lakshmi Vilas Bank Nainital Bank Ratnakar Bank SBI Commercial and International Bank South Indian Bank Amazing Mercantile Bank YES Bank
Foreign ABN Amro Bank Barclays Bank Citibank HSBC banks Standard Chartered Deutsche Bank Regional South Malabar Gramin Bank North Malabar Gramin Rural banks Bank Pragathi Gramin Bank Shreyas Gramin Bank
Real Time Gross Settlement(RTGS) National
Financial Electronic Fund Transfer (NEFT) Structured Financial Services Messaging System (SFMS) CashTree Cash net
Automated Teller Machine (ATM)
Commercial Banks
Private Sector
Associate Banks
Nationalized Banks
Non-Scheduled Banks
H. Categories of Bank:
Banking in India falls mainly under two categories, viz. Commercial banks and Co-operative banks, while commercial banks cater to the needs of industry and trade largely; the cooperative banks play a major role in financing agriculture and allied activities in rural areas, and trade and services in urban areas.
The commercial banks may be classified into four group in terms of ownership: 1) Public Sector Banks 2) Regional Rural 3) Indian Private Sector Banks and 4) Banks incorporated outside India. The commercial banks can be further classified into Scheduled banks and Non Scheduled Banks. Scheduled Banks are those listed in the second schedule to the Reserve Bank of India Act 1934 These banks satisfy the criteria laid down under section 42 (6) of the RBI Act that they should have capital and reserve of Rs. 5 lakhs and their activities should not be detrimental to the interests of depositors. The scheduled banks are required to maintain cash reserves equal to 5 % of DTL which can go up to 15 % under section 42 (1). Those, which are not included in the 2nd schedule, are called the non-scheduled banks. The number of take- oven/liquidation as also in some cases up gradation into scheduled banks category.
I. Introduction to finance :
Finance is the handmaiden of economic growth Institutions like banks, which command huge financial resources, can play a crucial role in shaping the economy of a country by judiciously deploying their funds over such important activities as would lead to an overall economic growth. A banks offer compared to a dam and the money lying scattered with individuals and institutions in society to the water running its own course without any direction. Money is collected by banks by way of deposits, and from this fund money is turned back to the community in the form of loans. Thus, banks act as a vital link between the savers and the needy.
India is striving to transform herself into an industrially developed country based on a rural and agricultural economy which should not only be able to feed the millions of her populations but also to produce raw material for her mills. This can be done by bringing about the necessary change from an agrarian economy to a diversified one. Banks have crucial role to play not only in the achievement of this objective but more significantly in determining how speedily and efficiently it is achieved. Since the nationalization of the fourteen major banks, the banking industry has developed adequately enough to meet the changing needs, both corporate and personal. Banks now offer a wide range of financial services in an extensively varied environment. The complex task of managing these changes and their consequences requires that banker should be more professional than ever before.
be abroad based. The definition given by the Banking Regulation Act 1949 is certainly not exhaustive, and it needs certain alterations for the sake of simplification. The purpose of accepting deposits is strictly not relevant for the definition of banking, through it is basic for banking regulation. There is no need to distinguish between loans deposits in the context of banking regulation. The definition of banking should cover all forms of deposits from the public, and banking regulation should take into its ambit all the different types of banking.
K. Functioning of a Bank:
Functioning of a Bank is among the more complicated of corporate operations. Since Banking involves dealing directly with money, governments in most countries regulate this sector rather stringently. In India, the regulation traditionally has been very strict and in the opinion of certain quarters, responsible for the present condition of banks, where NPAs are of a very high order. The process of financial reforms, which started in 1991, has cleared the cobwebs somewhat but a lot remains to be done. The multiplicity of policy and regulations that a Bank has to work with makes its operations even more complicated, sometimes bordering on illogical. This section, which is also intended for banking professional, attempts to give an overview of the functions in as simple manner as possible. Banking Regulation Act of India, 1949 defines Banking as "accepting, for the purpose of lending or investment of deposits of money from the public, repayable on demand or otherwise and withdrawal by cheques, draft, order or otherwise."
Deriving from this definition and viewed solely from the point of view of the customers, Banks essentially perform the following functions: 1. Accepting Deposits from public/others (Deposits) 2. Lending Money to public (Loans) 3. Transferring money from one place to another. 4. Acting as trustees. 5. Keeping valuables in safe custody. 6. Government business. But do these functions constitute banking? The answer must be a no. There are so many intricacies involved in the activities that a bank performs today, that the above list must sound very simple to a seasoned banker. Please click on the activity to see what a Bank has to do to give the above services to its customers. These activities can also be described as back office banking. Banks are organized in a linear structure to perform these activities at the base of which lies a Branch. The corporate office of a bank is normally called Head Office
L. Forms of advances:
Advances by commercial banks are made in different forms such as loans, cash credit, overdrafts, bills purchased, bills discounted etc. These are generally shortterm advances. Commercial banks do not sanction advances on a long-term basis
beyond a small proportion of their demand and time liabilities. They cannot afford to lock up their funds for long period. Hence a considerable percentage of their advances is repayable on demand. Advances may be granted against tangible security or in special deserving cases on an unsecured/clean basis.
1. 2. 3 4. 5. 6. 7. 8. 9. 10. 11.
Loans Overdrafts Cash credits Temporary Overdrafts Clean advances Term loans Bridge loan Participation loan Loans to small borrowers Hire purchase and leasing finance Bills purchased
Chapter 3
COMPONY PROFILE
The Bank was founded by a group of visionaries led by the late V. G. Kale and the late D. K Sathe and registered a banking company on the 16th September, 1935 at Pune. The authorized capital was Rs. 10 lakhs and issued capital of Rs. 5 Lakhs. Their vision was to reach out to and serve the common man and meet all their banking needs. Successive leadership of the Bank and the employees have endeavored to fulfill their vision. Today , Bank of Maharashtra has over 12 million customers across the length and breadth of the country served through a network of 1508 branches in 23 states and 2 Union Territories a truly pan India bank. 1936 1938 1940 1944 1946 : : : : : Commenced operation on 08.02.1936 in Pune Second branch of the bank was opened in 1938 at Fort, Bombay. Third branch came up at Deccan Gymkhana, Pune. Status as Scheduled Bank obtained. Deposits crossed Rs. One crore mark, formed fully owned Subsidiary Maharashtra Executor & Trustee Company, The first branch outside Maharashtra opened in Hubli (Mysore State , Now Karnataka) 1949 1963 1966 : : : Expansion to AP : Hyderabad branch opened Expansion to Goa : Panjim Branch opened Expansion to Madhya Pradesh Indore branch opened . Entered in Gujrat : Baroda branch opened 1969 : Nationalised along with 13 other Banks, Entry in Delhi by opening Karolbagh branch on 19.12.1969 1974 : Deposit base crossed Rs.100 Crore mark Marathwada Grameena Bank, first RRB established on
1976 :
26.08.1976 1978 : New Head Office building inaugurated by Hon,ble Prime Minister of India Shri Morarji Desai, Deposits crossed the figure of Rs.500 Crores 1979 : "Mahabank Agricultural Research and Rural Development Foundation" registered as a public trust, was established for Undertaking research and extension work and to provide more extensive services to farmers. 1985 : 500th branch in Maharashtra state was opened at the hands of the Prime Minister, Mrs. Indira Gandhi at Nariman Point , Mumbai. First Advanced Ledger Posting Machine (ALPM) was installed at the branch. Golden Jubilee Year Celebrations launched at the hands of Dr. Manmohan Singh, Governor Reserve Bank of India 1986 1987 : : Thane Grameena Bank sponsored The 1000th branch of the Bank was inaugurated at Indira vasahat, Bibwewadi, Pune at the auspicious hands of Dr. Shankar Dayal Sharma, the Honorable Vice President of India. 1991 : "Mahabank Farmer Credit Card" was launched, Entered into Domestic Credit Card Business, Main Frame Computer installed, became member of the SWIFT 1995 : Diamond Jubilee Celebrations Dr.C.Rangarajan the RBI Governor was the Chief Guest, Deposits crossed Rs.5000 crore mark. 1996 : Moved into "A" category from the earlier "C" category. Autonomy obtained 2000 : Deposits crossed Rs.10,000 crore mark
Public issued of Shares-24% owned by Public Listed in BSE and NSE Bancassurance and Mutual Fund distribution business started Crossed total business level of Rs.50,000 Crore, Branch CBS Project started
2009 :
Entered into 75th year of dedicated service to the Nation. Adopted 75 underdeveloped villages for integrated overall development
2010 :
100% CBS of branches achieved, Total Business crossed Rs.One lakh crore, opened 76 branches in the Platinum Year taking the total to 1506
Our Vision To be a vibrant, forward looking, techno-savvy, customer centric bank serving diverse sections of the society, enhancing shareholders' and employees' value while moving towards global presence.
3.3 IT Initiatives
The Bank completed the process of networking all its branches and bringing them under Centralized Solution, thereby achieving 100% CBS. Insurance of VISA ATM Debit Card (Insta-Card) as Welcome Kit at the time of opening of accounts for Savings and Current Accounts. The Mobile Banking product "Maha Mobile" was launched offering services like balance enquiry, view last transactions, cheque status enquiry, request for cheque book/statement of accounts, change MPIN and intra bank fund transfer up to Rs.50,000 per day. A customer centric product "Maha e-statement" for sending weekly/monthly electronic statements for saving, current, cash credit and loan accounts automatically to the registered customers via email. Sending transaction alerts and reminders to customers for the transactions done by them. Online Share Trading-Maha E-Trade: For facilitating safe and easy online share trading for its customers, Bank has entered into an arrangement with M/s Religare Securities Pvt. Ltd. , M/s Munoth Securities and M/s Enam Securities. Facilitating e-commerce transactions including online shopping, utility bill payments, airline ticketing etc through the Internet. Cheque Deposit Machines for collection of Cheques with image acknowledgement have been rolled out at 15 centers. Application Supported by Blocked Amount (ASBA) : Facility to apply for IPO / FPO based on lien marking (without remitting the share application money) as per SEBI guidelines has been extended to retail investors.
As part of corporate social responsibility, pilot FI implementation has been rolled out at Nandurbar, Malharpeth Satara and Parvati, Pune. An electronic queue management system for streamlining the customer service at frontline counters has been implemented for the customers at select branches from Pune, Nasik and Delhi. As per directives of Government of India, Bank has initiated steps to implement CBS in the Maharashtra Gramin Bankar, an RRB sponsored by the Bank.
education , drinking water, housing , financial inclusion, rain water harvesting and water shed development programmes. These villages are located in the states of Maharashtra, Kanataka , Andhra Pradesh, Madhya Pradesh, Goa Chhalitisgarh and Gujrat. The Rural Development Centres at Hadapsar and Bhigwan have been undertaking various developmental activities for the benefit of farmers viz. Lab to Land Project, Development of Saline Soil Testing and Offering advice on the use of fertilizers. A Trust viz. Mahabank Agricultural Research and Rural Development Foundation (MARDEF) undertake various projects and village improvement programmes. MARDEF is imparting training to farmers on various subjects in agriculture, e.g. dairy emu farming, goat rearing, cultivation practices in grape farming, application of fertilizers, agriculture credit schemes, etc. " Mahabank Agril Bulletin" is published every quarter with focus on new trends in agriculture. The interactive access to farmers / villagers is provided at doorstep
through "Krishi Mitra " in Pune and Satara districts, a mobile van carrying Touch Screen Facility and the Officials accompanying the vehicle provide information to farmers on various schemes of the Bank. The Bank has established Mahabank Self Employment Training Institute (MSETI) for providing training to rural youth and women to enable them to acquire skills for self-employment. The Institute has centers at Pune, Nagpur, Aurangabad, Amravati and Nasik. So far the Institute imparted training to 5,742 youths and has achieved settlement rate of 71 percent. Gramin Mahila Va Balak Vikas Mandal (GMVBVM) , an NGO formed by Bank of Maharashtra NIMB is actively involved in formation , nurturing , training and
ensuring linkage of SHGs to Bank Credit. The GMVBVM also helps SHGs in marketing products of SHGs through outlets established in Pune City under the
name "SAVITRI ". The GMVBVM guides and actively helps SHGs for selection and purchase of raw materials and quality production. The Bank started a novel project for counseling farmers in six districts of Vidarbha area in Maharashtra State on different subjects, like agriculture, animal husbandry etc. under the "Mahabank Vidarbha Shetkari Jagruti Abhiyan".
As per the recommendations of High level Committee for review of Lead Bank Scheme, SLBC has formed 11 sub committees on various subjects for effective implementation of Lead Bank Scheme. During the year, three SLBC and two Steering Committee meetings were held.
Expanding the ATM network of the Bank to 500 by March, 2011 from the present level of 358 ATMs. Implementation of CBS in Regional Rural Bank (RRB): The Bank has initiated steps to implement CBS in the Maharashtra Gramin Bank , an RRB sponsored by the Bank.
To be everyone's bank for every banking need and a one stop Financial Services Mall.
3.8 Customer Service Committee 3.8.1 High Level Committees on Customer Service
As per guidelines issued by Reserve Bank of India bank has constituted Board Committee on Customer Service and reconstituted Standing Committee on Customer Service. There is outside representation on Standing Committee. These Committees meet every quarter and take review of the policies having bering on customer service.
by these committees.
the Banking Codes and Standards Board of India. It has signed a covenant to implement the Code of Bank's Commitment to Customers. All staff members should go through the Code and ensure that there is total compliance of the same.
at Head Office, once in a Quarter, to Discuss / Review Minutes of the Quarterly Customer Service Committee Meetings held at the Regional Office Level, Customer Issues, Suggestions for further increasing Customer Satisfaction levels, Grievance etc.
Promptness in Encashment of Cheques' Drafts. Promptness in Deposit of Cash. Expediting issuance of Drafts / IT/ MT Cheque Books. On spot issuance of FDR. Timely compliance of Standing Instructions. Speedy Collection of outstation Cheques / Bills. Time! Credit for Outstation Cheques. Promptness in issuance of Certificate of Interest paid on the FDRs. Timely completion of Pass Book/ Issuance of Statement of Accounts.
Our bank has adopted KYC/AML Compliance policy. It consists of (1) Customer Acceptance Policy (2) Customer Identification Procedure (3) Monitoring of Transactions
(4) Risk Management. The major work areas of KYC/AML compliance, which is applicable to new as well as existing accounts, consist of following:
II.
Collection of customer information such as true name, true address, date of birth, nature of employment or business, source of income, financial status, name of employer if employed, PAN, photograph/s etc. of individual customer/s and prescribed documents in case of non-individual customers.
III.
Classification of each account into high, medium & low risk categories depending upon the risk perceived and creation of customer profile and its up-dation based on the operations in the accounts.
IV.
Periodical review of risk categorization of accounts at the periodicity of not less than once in six months for all accounts.
V.
the periodicity of not less than once in two years, in case of high & medium risk categories & not less than once in five years in case of low risk categories customers.
VI. VII.
Transactions monitoring so as to detect any abnormal/suspicious transaction. Reporting of Cash and Suspicious transactions & counterfeit currency notes detected, (CTR, STR, CCR) to Principal Officer of the bank through Regional Office, for onward submission to Financial Intelligence Unit India (FIU-IND).
VIII.
Maintenance & preservation of records in respect of nature, amount, currency & date of transaction, parties to the transaction etc. for 10 years from the date of cession of transaction which will permit reconstruction of individual transactions so as to provide if necessary, evidence for prosecution of person involved in criminal activity.
IX.
Record pertaining to the identification of customer & his address obtained while opening of accounts & during the course of business relationships are to be preserved for at
least 10 years after the business relationship is ended. The identification record & transactions data should be made available to competent authorities upon request. X. (ix)Ensure to cross check all account opening applications & transactions carried out in the
accounts with updated consolidated list of terrorists individuals/organizations circulated by RBI/Govt. & report these accounts which bear resemblance with individuals/entities listed therein to RBI/FIU-IND through Principal Officer of the Bank. XI. XII. XIII. KYC compliance to be ensured by branches in following manners (A) KYC Compliance of Existing Accounts Collection of customer information by getting filled in customer information form or personal information from afresh which contains mandatory information as given under (I) above. XIV. XV. Ensuring photographs of each signatory. Classification of account into three risk categories based on the collected information of the
account and as per the guidelines given & taking review of risk categorization at the periodicity of not less than once in six months. XVI. Carrying out customer identification procedure, (collection of identify proof, address proof
and mandatory information) by collecting the copies of officially valid documents namely Passport/PAN Card/Driving License/Voter's Identity Card issued by Election Commission of India, in case of individuals. For non individual accounts (legal persons) prescribed documents are to be collected. XVII. Collection of documents for confirmation of address namely electricity bill, telephone bill,
or any other documentary evidence of address, current, permanent, for non individual accounts, address of works, factory, registered office, contact phone/mobile numbers, e-mail addresses etc. as the case may be. XVIII. Xerox copies duly verified from the originals under the signature of authorized Officials &
certified true copy in case of non individual accounts are to be kept on record. XIX. Obtaining PAN where the account holder is Income Tax Assessee is mandatory as per the
Income Tax Rules. XX. Existing account holders who are unable to give identity and address documents as
mentioned earlier, then such accounts should be categorized under simplified/relaxed KYC norms & the operations in such accounts should be restricted to, Balance to Rs. 50000/- & credit summation to Rs. 1 lakhs during the year, till the account holder submits the documentary evidence/proof of identity and address acceptable to the banks. XXI. In case existing old accounts also, identity proof, address proof & other mandatory accounts are satisfactorily operated
since last several years, customers are known to the bank and their credentials are not doubted.
shop & establishment Act, sales & income tax returns, CSTNST certificate, certificate/registration document issued by sales tax/service tax/professional tax authorities, license issued by the registering authority like certificate of practice issued by institute of chartered accountants of India, institute of cost accountants of India, Indian medical council, food & drug control authorities etc. (any two of the documents are to be obtained which should be in the name of the proprietary concern.) Classifying the account as and when opened into three risk categories as per the given guidelines & on the basis of information available. In case the individual customer who desires to open as account is unable to provide copy of officially valid document of identity and or address proof, then account can be opened with Introduction from the existing account holder (subject to certain conditions). Operations in the account should be restricted to balance to Rs. 50,000/- & credit summation to Rs. 1 lakhs during the year. Introducer should be six months old, having satisfactory operations in the account, he should certify address, photograph of the person opening new account & he should be subjected to full KYC procedure. Monitoring of transactions (applicable to all types of accounts) Monitoring of transactions in all accounts to be done regularly on an ongoing basis so as to detect abnormal/suspicious transactions. High risk accounts to be monitored intensively. Reporting Principal Officer of the bank. (AGM Inspection) for further reporting to FIU-IND in electronic format. Cash Transactions Report (CTR) Suspicious Transaction Report (STR) Counterfeit Currency Report. (CCR)
Chapter 4
PRODUCT PROFILE
Product profile
Housing loan scheme for public
Purpose
3. Repairs/Renovation of existing house Persons Eligible Salaried Persons, Professionals, Businessmen with sufficient disposable income. Farmers having min five acres of irrigated land holding. Non Resident Indians are also eligible. Age Minimum 21 yearsMaximum 50 yrs. for salaried persons. Maximum 55 years for other than salaried persons Margin Quantum of Loan 1) For salaried class a) 75% of cost of house including registration, mortgage, electricity deposit etc. ( category wise as above) b) 50 times of Gross Salary or 60 times of Net Monthly salary whichever is higher. c) Minimum of (a) or (b) 2) For Businessmen a) equal to average annual income (Net profit + Depreciation) of last 3 yrs X 4 times (B/S, IT returns) Also note repayment of any other term liabilities. b)75% of cost of house c) Min of (a) or (c) 3) For Farmers 4 times of average annual net income. Cross check gross income, land holding, cropping pattern, Sugar 25%
Factory/APMC/ other agencies bills etc. Ensure for repayment capacity & repayment experience. If jointly owned, consider joint holders income Maximum Loan Quantum No maximum limit for Metro/Urban area Rs.15 lakh in Semi Urban/Rural area Rs.5 lakh for repairs/renovation in all areas Total deductions including proposed EMI should not exceed 65% of gross monthly salary / annual income. Security Upto Rs 25000/- One Guarantor with sufficient income/net worth Above Rs 25000/Equitable/Regd. Mortgage of property or Equal amount of paper security (NSCs, FDRs of our Bank etc. excluding shares) guarantee of the spouse. Insurance For full value against fire/ Earthquake etc with Banks clause.
Rate of Interest:
Mahabank Housing Loan Scheme
fixed/ Floating Tenor A. Upto . inclusive of 5 years and Above 5 years and Upto and inclusive of 10 years Above 10 years but below & inclusive of 20 years
floating Upto `.30 lacs. Above `.30 lacs & less than `. 75 lacs. Fixed floating `.75 lacs & above fixed fixed floating
0.50%
12.00%
12.25%
----
Repayment
: Max. Repayment period is as under: 1. For construction of house 20 years. 2. For repairs/renovation 5 years. 3. For extension of House 10 years
Note
1) Repayment by EMI for all borrowers except farmers. 2) For Farmers - Annually or 6 monthly depending on harvesting time, cropping pattern, income from allied activities. 3) Repayment to start one month after full disbursement or 18 months after the first disbursement whichever is
earlier. Maximum period up to date of retirement. If to be continued from pension, then obtain deposit equal to loan balance amount. 4) Sanctioning authority may allow reduction in repayment period & apply revised interest rate based on regular repayment & capacity to repay & recovery of Process fee 5) Step up EMI or ballooning of repayment can be considered at initial stage 6) Lump sum / part payment of loan above EMI can be allowed. No Prepayment Charges
Processing Charges:
Loan Slab Loan upto Rs.5.00 lakh Loan above Rs.5.00 lakh and upto Rs.15.00 lakh Loan above Rs.15.00 lakh Processing fees Rs.1000/Rs.2500/Rs.5000/-
Present Loan
Security
Charge on the new property to be taken while releasing the charge on the existing property simultaneously.
Other Terms
3. Bridge loan
Purpose
To acquire a new flat and utilize the sale proceeds of existing one as margin or consideration.
Limit
Housing loan together with bridge loan not to exceed 85% of the cost of proposed house.
Repayment Capacity
To be assessed for both HLP+ Bridge loan. But EMI will be taken only on HLP, if bridge loan is repaid within stipulated period of 9 months.
Maximum Period
9 months. If the property could not be sold, then EMI to be collected on entire portion by converting / merging bridge loan into HLP
Special Clause
To be incorporated in the document to ensure that existing flat is taken as additional security in the event of failure to repay Bridge loan in time.
Other Terms
Period
Raising such funds, purchase of house and subsequent application of loan to Bank should take place within a period of 6 months
8. Additional loan
Purpose Loan for additional Expenses due to escalation in cost on the same security subject to repayment capacity.
Expansion
Expansion of existing house on which existing loan is outstanding without any overdue
Terms Preference
All normal terms and conditions to be followed. To our existing farmer-customers where the land is already mortgaged for other facilities & repayment of present loans is regular.
Sanction
A free credit card is offered to all housing loan borrowers Golden Jubilee Rural Housing Loan Scheme is in vogue & continues on above terms & conditions population below 50000 & Loan Maximum Rs 5 Lakh)
Chapter 5
OBJECTIVE OF STUDY
Objective
1)
Study of Home Loans for Bank of Maharashtra. Comparative study of home loan of the banks in Kopargaon. For the period of 3 years on following criteria.
2)
Interest rate Total distribute loan amount Total distribute home loan amount Account holders\ for home laon Numbers of defaulters in home loan Duration of sanctioning the home loan To study practical cases in Bank of Maharashtra, to find out reasons for defaulters.
Chapter 6
SCOPE OF PROJECT
Scope
1) This project will help Bank of Maharashtra to know is position with respective home loan in Kopargaon reason. 2) It will also help the bank to concentrate on the weakness which should be overcome for improving performance in housing loan. 3) This project also gives idea about home loan its document required interest rate charged etc.
Chapter 7
RESEARCH METHODOLOGY
Research Methodology
Research forms the foundation of any project that is undertaken: Research in common parlance refers to the search of knowledge. One can also define research as a scientific and systematic search of pertinent information on a specific topic. Redman and Moray define research as systematized effort to gain new knowledge. Humans are generally very inquisitive in nature and this inquisitiveness is the mother of knowledge and the method employed by humans to gain knowledge of the unknown is research. Research thus is an original contribution to the existing stock of knowledge making for its advancement. It is the pursuit of the truth with the help of study, observation, comparison and experiment. Research methodology is a way of systematically solving the research problems. It may be understood as a science of how research is done. The purpose of research is to discover answer to the question through application of scientific procedures. All this means that the researcher has to design a separate mythology for the problem undertaken by him which may differ from problem to problem. Research carried out in their project is based on theoretical and field study. & Structure of interview method.
Research objective
The Objective of this study is to compare housing product of different banks in Kopargaon. This will help us to identify and select appropriate bank which will have less interest rate and maximum repayment of period with easy documentation.
Sources of data
A. Primary Data:
This data can be collected through experiment or through survey. The various method of primary data collection is: 1. Observation method 2. Interview method 3. Questionnaire method
B. Secondary Data:
Secondary data refers to the data which have already been collected and analyzed by someone else usually published data are available in form of: 1. Various publication of central, state and local government. 2. Books Magazine and Newspapers. 3. Accounting records, sales force reports etc. 4. Websites of banks.
Digramatic approach
Data analysis involves converting a series of recorded observation (data) into descriptive statements (information). The Analysis will be showed with the help of a) Chart b) Graphs
Step 1: Objective of Study of Home-Loans The first step in this study is the defining the objectives of the study and according to that develop the further plan.
Step 2:Developing plan for gathering information The second stage calls for developing the most efficient plan for gathering the need information. Decide the methods of data collection and the data sources, sampling method and contact method. Decide the primary and secondary sources for collecting the data.
Primary Data: Primary data is a data, which is gathered by the researcher himself. Primary data of this project is collected by the personal visit to the banks.
Secondary Data: Secondary data is a data is data which is gathered from the available sources i.e. newspaper, magazine, Internet, financial books. Etc
Step 3:Collect the Information This is the most important step in the study. This is up to the individuals ability to gather the information from the selected samples.
LIMITATION OF STUDY
1. I was unaware of their operation. The banking activities are very large in number. I wish to know the whole gamut of policy and operations. 2. Financial terminology was new to me and that was a limitation to understand the whole process. 3. I had no work experience earlier, so I had a hesitation in approaching my colleagues. Soon I overcame this problem. 4. Time Constraint was one of the limitations. Document verification requires more time and concentration. A minute mistake in the exercise could be costly.
Chapter 8
or in the form of shares, debentures. Government paper, immovable property, fixed deposit receipts, life insurance policies, goods etc.
Which type of home loan should I prefer? Will it be the best scheme that will be fitting my budget? Can any insurance plan cover for an unpaid monthly due? Is there a fine or penalty or even some reward as well if the whole amount of loan is paid ahead of the due date? These are just a dash of the questions to be answered when considering
taking the plungeinto the loan journey. The different home loan types are hereby
presented to you to make your journey that more smoother or step by step, safer and comfortable. Yet, Got a fix on fixed rate or variable rates, offset accounts, lines of credit or bridging loans!! With so many real estates sites coming up in Indian market, finding an ideal house isn't that big a issue nowadays, when you can virtually see all across the home you need to purchase by the various real estate simulation programs and videos available, but you still need to purchase it, right? - To really say "own" it. A home loan, also popularly identified as a mortgage, is an easier financial option to own a house. Once you've decided to endeavor on a home loan, there are so many things that you need to be informed with. Not only is it going to be an emotional experience, it is also going to be a very informative monetary journey, as you will be dealing with the whole caboodle of the mortgage process along the way. There are thousands of home loan companies waiting to provide you with your financial needs. Part of the success of this whole financial move is partly in your hands, the greater part relies on the efficiency of your chosen mortgage company.
And the most important thing is you should know about each and every term related with Home Loans before applying for a Loan. It is always advisable to consult a home loan expert or consultant before applying for a home loan or purchasing a property. You can take different types of home loans like Bridge Loans, Home construction Loans, Home Equity Loans, Home Extension Loans, Home Improvement Loans, Land Purchase Loans etc for different schemes available in the market. There are different types of home loans tailored to meet your needs.
Home Purchase Loans: These are the basic forms of home loans used for purchasing of a new home.
Home Improvement Loans: These loans are given for implementing repair works, healing and renovations in a home that has already been purchased.
Home Construction Loans: These loans are available for the construction of a new home.
Home Extension Loans: These loans are given for expanding or extending an existing home. For eg: addition of an extra room etc.
Home Conversion Loans: These loans are available for those who have financed the present home with a home loan and wish to purchase and move to another home for which some extra funds are required. Through home conversion loan, the existing loan is transferred to the new home including the extra amount required, eliminating the need of pre-payment of the previous loan.
Land Purchase Loans: These loans are available for purchasing land for both construction and investment purposes.
Bridge Loans: Bridge loans are designed for people who wish to sell the existing home and purchase another one. The bridge loans help finance the new home, until a buyer is found for the home.
Households should get credit counseling before signing any loan agreement. In such case, banks should give credit counseling to customer before giving a loan. Any non-governmental organization can also give independent credit counseling to small borrowers.
Consumers often complain of not receiving benefits of falling interest rates as banks tie their floating rate loans with its PLR and even when rates fall, the banks kept the PLR unchanged. But when interest rates are hiked, the banks increase the benchmark rate, thus making customers pay a higher rate and consequently increase the number of EMIs too. The RBI has asked the banks to mend rules for the same.
Individual borrowers should ask for the exact tenure and EMI while taking a fixed rate loan. The RBI has also resolved to look into all consumer complaints if it is bought to the regulator's notice.
The IRDA (insurance regulator) has powers to take action against banks if a customer feels cheated while buying an insurance product. On its regulatory
role, the RBI is trying to maintain a balance between the extent of freedom granted to the banks and the objectives of governance.
RBI has made it mandatory for all banks - including private and foreign banks - to offer a passbook to their customers with the address and telephone number of the nearest branch.
Customers have often been harassed by banks' call centers where there is no accountability of the query made. The "do not call" registry has also been flouted by banks as customers are bombarded with unnecessary product offerings. The RBI has directed the Indian Banks' Association to come out with a single "do not call" registry or when a customer adds his name to a single bank registry it should then stop unsolicited calls from all banks.
On rising credit card frauds and wrong statements given by the banks, the RBI has asked the customers to approach the ombudsman to redress their problems. This way the RBI feels would inculcate more consumer friendly practices among Indian banks.
Tax benefits
There are certain tax benefits for the resident Indians based on the principal and interest component of a loan under the Income Tax Act, 1961. It may help one get tax benefit up to Rs.50, 490 p.a. (approx). if interest repayment of Rs.1,50,000 p.a. is paid. In addition to this, one also is eligible for getting tax benefits under section 80C on repayment of Rs.1, 00,000 p.a. that further reduces the tax liability by Rs.30,000p.a.
These deductions are available to assesses, who have taken a loan to either buy or build a house, under Section 24(b). However, interest on borrowed capital is deductible up to Rs150, 000 if the following conditions are fulfilled:
The acquisition and construction should be completed within 3 years from the end of the financial year in which capital was borrowed.
The person, extending the loan, certifies that such interest is payable in respect of the amount advanced for acquisition or construction of the house
A loan for refinance of the principle amount outstanding under an earlier loan taken for such acquisition or construction. If the conditions stated above are not fulfilled, then the interest on
borrowed capital is deductible up to Rs30, 000 though the following conditions have to be satisfied:
Capital is borrowed before April 1, 1999 for purchase, construction, reconstruction repairs or renewal of a house property.
Capital should be borrowed on or after April 1, 1999 for reconstruction, repairs or renewals of a house property.
If the capital is borrowed on or after April 1, 1999, but construction is not completed within 3 years from the end of the year, in which capital is borrowed.
In addition to the above, principal repayment of the loan/capital borrowed is eligible for a deduction of up to Rs1,00,000 under Section 80C from assessment year 2011-12.
Tax deductions can be claimed on housing loan interest payments, subject to an upper limit of Rs1, 50, 000 for a financial year.
2. An additional loan for extension/improvement to the same house and the individual's deductions on the existing loan are less than Rs1, 50,000; he can claim further benefits from the additional loan taken, subject to the upper limit of Rs 150,000 for a financial year. 3. Tax benefits under Section 24 and deduction under section 80C of the Income Tax Act can be claimed only when the payment is made. If an individual fails to make EMI payments, he cannot claim tax benefits for the same. 4. According to the Income Tax Act, tax rebates can only be claimed by the loan applicant. 5. The interest on home loans taken for repairs, renewals or reconstruction, also qualifies for the deduction of Rs 150,000. 6. A husband and wife, both of whom are tax-payers with independent income sources, get tax deduction benefits, with respect to the same housing loan; to the extent of the amount of loan taken in their own respective name.
7. If an individual buys a house and sells it within the same year or after 3 years, and if any profit is made, then a capital gains tax liability arises on the same for which the individual is liable to pay short-term capital gains tax since the sale took place in the same year. But in case, if the sale had taken place after 3 years, then a long-term capital gains tax liability would have arisen. 8. On being proved that the home loan is simply an arrangement between the loan-seeker and the builder or with a third party for the purpose of claiming tax benefits, then tax benefits will not be allowed and benefits, previously claimed, will be clubbed to the income and taxed accordingly. 9. Tax benefits on interest on housing loans are allowable only for the original loan and according to Section 24 (1), tax benefits can also be availed for a second loan taken to repay the first loan but not for subsequent loans. This means that if you have already availed of one loan to refinance the original loan and want to no avail a third loan to refinance the second loan, tax rebate on interest payments will not be permissible.
Step 9: Sign papers. You're finally ready to go to "settlement" or "closing." Be sure to read everything before you sign! Step 10: The House is yours now. Have Puja or hawan.
EMI: Equated Monthly Installment till the loan is paid back. It consists of a
Floating Rate of interest: Rate of interest which varies with the market
lending rate. This means that there is an element of risk of paying more than budgeted amount in case the lending rates goes up
end of the year so you end up paying interest even for the portion of principal you have actually paid back
Processing charge: It's a fee payable to the on applying for the loan
Prepayment Penalties: When loan is paid back before the agreed term of the
Commitment Fee: Some institution charge commitment fee in case the loan is
Eligibility
Home loan eligibility for Resident Indians depends upon the repayment capacity of the loan applicant. The maximum loan that can be sanctioned varies with the banks and other housing finance companies (HFC) and generally, the maximum loan amount granted is 80 to 85% of the cost of your home. Home loan eligibility corresponding to repayment option is based on the following factors. Even though, the eligibility criteria may vary according to the HFCs regulations.
1. STATE BANK OF INDIA 2. BANK OF MAHARASHTRA 3. ICICI BANK 4. STATE BANK OF HYDERABAD 5. BANK OF BARODA 6. CENTRAL BANK OF INDIA 7. CANARA BANK 8. HDFC BANK 9. AHMEDNAGER DISTRICT CO-OPERATIVE BANK 10. THE KOPARGAON PEOPLES CO-OPERATIVE BAN 11. DENA BANK 12. UNION BANK OF India 13. BANK OF INDIA
The next step is bank send all document to head office in Ahmednagar then Head office checking all documents and again send to local branch.
The next step is identification and selection of the property. Bank or financial institutions will verify the all documents and the customers i.e. Income and ability to repayment.
Documents required at the disbursement stage as per the procedure & draft booklet for the location in which the property is located.
Documents required for sanctioning of the Home Loan: For General Applicant:
Passport size Photograph Age verification (school/college/leaving certificate or mark sheet, PAN card.
Election Identity card, Passport, Driving License, Ration Card, Birth Certificate.) A/C. Bank statement for past 36 months or salary Account and any other operating
schedules of company and individuals for past 3 years duly certified by C.A. Memorandum/Article of Association or partnership as applicable. Brief profits of the company. A/C continuity proof for the last one year. Office address proof. Residence address proof. Qualification certificate for self employed professionals. Sale deed/ Agreement of sale Letter of allotment of Housing Board or society. Copy of approval plan if applicable. Permission for construction if applicable. Valuation of property which is to be financed. In case of agricultural land conversion into copy of relative order. NOC under the provision of ULC Regulation Act,1976 in original
Chapter 9
Home Loan 87 80 80
Loan amount, A/c holders & defaulters. Year Total Loan Amt. 2008 2009 2009 - 2010 2010 2011 Distributed 27,00,00,000 29,00,00,000 25,00,00,000 Total Loan Home Total Amt. Holder A/c Total for Defaulter for Home Loan. 65 70 67
3) Bank of baroda
Interest Rate Year 2008 2009 2009 - 2010 2010 2011 Fixed Rate 11.00% 11.25% 11.50% Floating Rate 10.00% 10.25% 10.50%
Loan amount, A/c holders & defaulters. Year Total Loan Amt. 2008 2009 2009 - 2010 2010 2011 Distributed 7,20,00,000 7,58,00,000 13,40,00,000 Total Loan Home Total Amt. Holder A/c Total for Defaulter for Home Loan. _ _ 1
Loan amount, A/c holders & defaulters. Year Total Loan Amt. 2008 2009 2009 - 2010 2010 2011 Distributed 46,00,000 48,00,000 52,00,000 Total Loan Home Total Amt. Holder A/c Total for Defaulter for Home Loan. 6 8 8
Home Loan 53 62 71
Interpretation:
In these year SBI charges highest interest rate (floating & fixed). Bank of Maharashtra, Bank of Baroda & Central Bank of India charges the same lowest Fixed Interest rate. Bank of Baroda charges the lowest floating interest rate comparatively another 3 banks in Kopargaon region.
2009 2010 Name of Bank Bank of Maharashtra State Bank of India Bank of Baroda Central Bank of India Fixed Rate 11.50% 11.50% 11.25% 11.50% Floating Rate 10.50% 11.00% 10.25% 10.50%
Interpretation:
In the year Bank of Maharashtra, SBI & Central Bank of India give the same highest Fixed Interest rate for home loan. Bank of Baroda lowest fixed interest rate. SBI charge highest & Bank of Baroda charges the lowest floating interest rate.
2010 2011 Name of Bank Bank of Maharashtra State Bank of India Bank of Baroda Central Bank of India Fixed Rate 12.00% 11.25% 11.50% 12.00% Floating Rate 11.00% 10.75% 10.50% 11.25%
Interpretation : In these year Central Bank of India charges the highest interest rate (Floating & Fixed) & Bank of Maharashtra charged highest fixed interest rate(12.00%) & Bank of Baroda charges the lowest floating interest rate.
Total distribute loan amount & total distribute home loan amount. Year Bank of Maharashtra State Bank of India Bank of Baroda Central Bank of India 2010 11 Total distribute loan amount & total distribute home loan amount. Year Bank of Maharashtra State Bank of India Bank of Baroda Central Bank of India Total Loan Amt. Distributed 3,80,00,000 25,00,00,000 13,40,00,000 52,00,000 Total Home Loan Amt. Distributed 4315,000 10,00,00,000 3,00,00,000 16,00,000 Total Loan Amt. Distributed 3,05,00,000 29,00,00,000 7,58,00,000 48,00,000 Total Home Loan Amt. Distributed 21,00,000 17,00,00,000 2,38,00,000 13,00,000
2009 - 10
6.89% 58.62% 31.40% 27.08%
2010 -11
11.36% 40.00% 22.39% 30.77%
INTERPRETATION : In all 3 years SBI % of distributed home loan % is high & Bank of Maharastras % is low in the total distributed home loaon A/c.
Name of Bank Bank of Maharashtra State Bank of India Bank of Baroda Central Bank of India
2009 - 10
80 120 148 62
2010 -11
80 180 178 71
INTERPRETATION :
In all 3 years SBI having more home loan A/c holders & Central Bank of India having less home A/c holders as compared another banks.
Name of Bank Bank of Maharashtra State Bank of India Bank of Baroda Central Bank of India
2009 - 10
0 70 0 8
2010 -11
0 67 1 8
Interpretation : In all three years SBI having more defaulters & Bank of Maharashtra & Bank of Baroda having only one defaulters in the years 2008 09 & 2010 11 respectively.
Interpretation : Bank of Maharashtra sanctioning the home loan in 7 days, State Bank of India in 5 days. And Bank of Baroda & Central Bank of India Sanctioning the home loan in 6 days & 15 days respectively.
Practical Cases for Home Loan in the Bank of Maharashtra at Kopargaon1] Mr.Prakash Khare , Kopargaon. He is a teacher. His monthly income / salary Rs 20000pm. He taken a home loan from bank of Maharashtra, Kopargaon. On 12.4.2005 at 9.00% interest rate [floating interest rate]. His home loan period is 20 year and his amount is Rs 4,50,000. His loan installment is Rs 6100 p.m. he paid the total amount
of loan Rs 2,80,000 and Rs5,06,000.amount remained in his loans . he totally paid 72 installment. Current interest rate is 11.50%.
Mr. Khare give the following document to bank for loan purpose 1]2 photograph. 2]Voting card Xerox.
1] 8A. 2] Certificate of Non Agriculture Land [Issued by collector Act 44 ]. 3]Tax paid Receipt. 4] Search Report [Issued by Advocate] 5] Estimate and plan of House [Issued by registered civil engineered] 6] Local Authority [Issued by municipal corporation ]
Solution Mr. Khare taken loan from bank of Maharashtra ,Kopargaon at Rs 450000. On 9,00% interest rate & his loan installment is Rs 6100pm, but he is not paid regular installment ,hence Bank charged the penalty on his remained loan amount . because bank rule is any customer not paid the regular installment charged the penalty [Penalty means - compounding interest + 2% penalty]. Mr.Khare not knows the penalty charge on his loan amount .
In this period , bank of Maharashtra interest of home loan is 10 time changed [like 9.25 % , 9.75%, 10.25%, 10.50% , 10.75% , 9.50%, 11.25%, 11.75% ]. Mr.Khare loan amount is increase . because he not paid the regular installment & bank charged the penalty . He paid total amt. is Rs. 280000 in 72 installments means he paid Rs. 3889 per month. [280000/72 = 3889] but his actual instalments is Rs. 6100 per month and he paid Rs. 3889 per month. His installments amt. remains is Rs. 2211 per month on his remains amt. add in Remains loan amt. and plus bank charged penalty on his loan. Amount hence his loan is increases like Rs. 506000. he taken loan of Rs 450000 & his remained loan amount is Rs506000. Conclusion , Bank should inform to all the customer for the home loan the amount of penalty being charged in case of defaulters.
2] Mr. Suryavanshi ,Kopargaon. He is teacher . his monthly income/salary is Rs 15000. He taken home loan from bank of Maharashtra , Kopargaon.His loan Amount is Rs175000. On 28.12.2004. at 9.50% interest rate [floating interest rate] his loan amount Rs 175000 . his loan installment Rs 1000pm . He paid total Amount Rs 150000 &Rs 58770.is remaincce in his loan . he total 100 installment is paid. His loan current interest rate is Rs11.50%. He Gives the following document to bank
1]80A 2]Certificate of Non Agriculture Land [Issued by collector Act 44] 3]Tax paid Receipt . 4]Search Report [Issued by Automate] 5]Estimate & plan of House [Issued by Registered civil engineered] 6]Local Authority [Issued by municipal corporation]. 7]Income Source [Salary sleep] 8]1 Garuntered 9]Mortgaged Certificate of his land.
Solution Mr. Suryavanshi , Kopargaon. He taken loan from Bank of Maharashtra , Kopargaon ,on 28/.12.2004 at Rs 175000.&intrest rate is 9.50% ,&his installment Rs 1000pm.his monthly income is Rs 15000pm . He paid regular installment .bank not charged penalty because he paid regular installment of his loan . He paid Rs150000 & Rs 58770 is remained amount in his loan .
Chapter 10
FINDINGS.
Findings
1) It is found that in first two years (2008-09, 2009-10) SBI charges high interest
rate & in 2010-11 Central Bank of India charges high interest rate for home loan as compared to other banks while Bank of Baroda charges lowest. 2) It is being observed that out of the total amount of loan distributed % of home loan is high in SBI for all three years with 48.15%, 58.62% & 40.00%
respectively for 2008-09, 2009-10 & 2010-11. Bank of Maharashtra has distributed lowest % of amount for home loan. 3) SBI is having highest number of A/C holders for home loan for all three years. 4) Number of defaulters is highest in SBI & lowest in Bank of Maharashtra & Bank of Baroda.
5) Time taken for sanctioning home is lowest in SBI i.e. 5 days and highest in
Central Bank of India is 15 day.
Chapter 11
CONCLUSION
Conclusion
1. With compare to all four banks. Bank of Baroda and SBI have a very good
performance in home loan sector in Kopargaon region.
3. Bank of Maharashtra sanction loan only to credit worthy customers & so they
are in good position with only one defaulter in 3 years.
Chapter 12
SUGGESTIONS
Suggestion
1. 2. Bank of Maharashtra should reduce the interest rate to attract customers. Bank of Maharashtra should launches the new attractive scheme for increasing
3.
defaulters so should maintain it. 4. Bank of Maharashtra should try to reduce the time taken for sanctioning home
loan which will help to attract customer. 5. While going through practical cases it found that bank is not giving
information about penalties being charges. Bank should disclosed all the home loan related to penalties in case of defaulters to customers.
Chapter 13
BILBIOGRAPHY
Bibliography
Books :
1) Practical Banking Advances By Bedi & Haldikar. 2) Fund Management in Commercial Bank. By Malhotra & Verma
Internet :
www.bankofbaroda.com www.googlesearch.com www.sbi.co.in www.mahabank.com www.bankrate.com www.apnaloan.com
Chapter 14
ANNEXURE
Questionnaire
Name of the Bank : Name of the person : 1) What is the Interest rate of Housing Loan? Fixed Rate 2008 2009 2009 2010 2010 2011 Floating Rate
2) What is the amt. of total Loan Distributed in 3 Years? Year 2008 2009 2009 2010 2010 2011 3) What is the total distributed amt. for Home Loan? Year 2008 2009 2009 2010 2010 2011 4) How many customer/A/cs of Home Loan? Year 2008 2009 2009 2010 2010 2011 5) How many number of defaulters for Home Loan? Year 2008 2009 2009 2010 2010 2011 No. A/c. Amt. Amt.
6) How many days are required for sanctioning of Home Loan? Signature