Project On Retail Assets of BOB Ok

SUMMER INTERNSHIP PROGRAM
on
Competitive Analysis Of Retail Assets and

Product
for
Bank of Baroda
2014-2015
Submitted By:
Sandeep Humbe
Under Guidance:
Mr. Atul Pise
SINHGAD INSTITUTE OF BUSINESS ADMINISTRATION AND

COMPUTER APPLICATION, LONAVALA
Acknowledgement
First and foremost, I wish to thank Bank of Baroda for providing me opportunity to
undergo my internship training.
I am very much thankful to Mr.Kishorkumar Akulwar (Chief Manager, PCMC
Branch, Pune) for his constant encouragement and regular ideas and feedback for
contributing maximum in project.
Further, I would also like to thank all the employees of Retail Loan Factory, Bank of
Baroda, PCMC Branch, pune. Branch and all the responders of survey, without whom
it would be impossible for me to complete the project.
I am also very thankful to Mr. Atul sir (Chief of Retail Loan Factory, PCMC
Branch, Pune) keen interest in project and guided me in project work.
Last but not the least, my sincere regards to all faculty members of Bank of Baroda,
PCMC Branch, Pune. for their pain stalking supervision and downright suggestions
which brought a lot of confidence in me to complete this dissertation report.
Declaration
I, Sandeep humbe, hereby declare that the Dissertation on Competitive study of
Banks Retail Loan Products Vis--vis Competitions / Peer Banks at Bank of
Baroda, PCMC (Pimpri Chinchwad Municiple Corporation) Pune assigned to me for
the requirement of partial fulfillment of Master Of Business Administration in
Sinhgad Institute Of Business Administration And Computer Applicatin, Lonavala,
Pune. It is the original work conducted by me and data provided in this study is
authentic to the best of my knowledge and belief.
This report is not submitted to any other institute or university for the award of any
other degree.
Humbe S.C.
MBA 2015-2016
SIBACA,Lonavala.
Index
Contents
Page No.
1.
Executive Summary
2.
Banking Industry Background
a.Early History
b. Post-independence
c.Nationalization
d. Liberalization
e.Current Situation
f. Structure of Indian Finance System
g. Categories of Banks
h. Introduction to Finance
i. The Business of Banking
j. Functioning of Banks
k. Forms of Advances
10
3. Loans
10
4. Bank of Baroda Background
12
History
12
Centenary Year
12
Mission & Vision Statement
13
Achievements
13
Objectives
14
Global Presence
14
Company Network (National & International)
15
Contents
Retail Loans
Page No.
26
a. Key Products
26
b. Home Loans
27
c. Education Loans
28
d. RBI Directives for Home Loans
30
e. Tax Benefits
31
Home Loans in India
34
Introduction
34
Comparative Analysis of PSU Banks
37
Competitive Advantage of BOB Over SBI
40
Comparative Analysis of Private Sector Banks
41
Competitive Advantage of PSU Banks Over Private Banks
43
Education Loans in India
44
Introduction
44
Comparative Analysis of PSU Banks
46
Competitive Advantage of BOB Over SBI
50
Comparative Analysis of Private Sector Banks
51
Competitive Advantage of PSU Banks Over Private Banks
53
9. Research Methodology
54
a. Research Objective
54
b. Steps of Research Methodology
55
Executive Summary
All around the world retail lending has been an established market; however its rise in
emerging economies like India has been of recent origin. If recent statistics on
consumer finance are any indication, the last few years have been trend setting. The
traditional debt-averse, middle-class Indians who lived within their thrifty means,
never to venture beyond their means, seem to have given way to a new middle-class
that is free from all inhibitions regarding conspicuous consumption. Unlike its
predecessors, the middle-class of today has donned a new attitude; it attaches no
social-stigma in taking loans for spending.
Indian retail banking is up and kicking. During 2004-05 retail contributed 42% of
overall credit growth. Growing at the CAGR of 35% over last 5 years the retail asset
touched Rs1,89,000 crore. Major product segments of retail credit include housing
finance, education loan, auto finance, personal loans, consumer durable loan and
credit cards to name a few. Housing constitutes the biggest segment of 48% of the
entire retail credit; followed by the auto loans segment which constitutes almost
27.8%. While the balance retail credit is used by consumer durables at 7.2%,
educational and other personal loans take the remaining 16%.
Banks are increasing their dominance in housing finance and capturing the market
share of the housing finance companies. During 2004-05, the market share of banks
stood at 62%, against the 33% by Housing finance companies; Rs2-5 lakh margins
constitutes almost a third of the loan size. All the players in this market are adopting
an aggressive attitude and the housing loan availability is playing into the players
hands. Despite this phenomenal growth in India, the housing loan as a percentage of
GDP at 4.91% indicates low penetration when compared to other countries like
Malaysia (17%) and Thailand (9%). But again this coupled with the population
growth indicates good future prospects.
Following the housing loans, it is the education loan which is also giving the growth
of retail credit the necessary boost. The last few years have witnessed a high increase
in students aspiring for management and professional courses, leading to a spurt in
educational loans. Banks are now having a direct tie-up with the educational
institutions to cash in on the opportunity. Public sector banks (PSBs) are more focused
on the educational loans segment. In the educational loan segment, disbursement of
domestic banks has surged by 13% to Rs2249 crore in 2004-05; up from Rs1983 crore
in 2003-04. The number of students availing education loans has increased to
1,40,000 from 1,08,000 during this period.
In India, all the retail banking segments are expected to witness a tremendous growth
owing to the low cost of borrowing, changing customer attitudes towards borrowing
and optimism regarding economic growth. Retail lending constitutes just 12.36% of
the Indian banking system. Given this macroeconomic scenario, the share of retail
banking will grow dramatically and it is expected that about 35% of the incremental
growth in net credit will come from retail banking. This requires expansion and
diversification of retail banking product portfolio, better penetration and faster service
mechanism. Hitherto, the growth had come from metros and tier I cities. While the
loan requirement from larger cities will continue to grow, explosive growth in credit is
expected to register in tier II cities, semi-urban and rural areas.
However, there are some areas of concern like rising NPA in consumer loans
particularly, the delinquency rates in credit cards, and frauds in home loans. Housing
prices have grown rapidly. Deflation of asset value is a possibility in certain areas.
Aggressive credit growth in retail has increased the requirement for measuring and
managing this risk. These require extremely skilled workforce and highly evolved
credit delivery and monitoring processes. The other concern is of suicidal pricing by
the aggressive banks. This is bringing the margins under pressure. Though rational
pricing is critical, the competitive market shall continue to see the pricing pressure.
There is also a need for a database and management information system to identify
the right type of borrowers.
Keeping pace with explosive changes will pose challenge to regulatory authorities.
This will not limit only to increase of risk weight of consumer loan by 25 basis points
which the regulator announced in mid-term policy review 2004-05. Revision of credit
cards issue regulations, and recent draft guidelines on outsourcing are the steps in the
right direction. Lack of consensus on definition of retail and transparency in
declaration by the players as well the coverage of retail by the central banker in its
reports; all of this needs a thorough re-look.
Banking and Finance in India

The Indian money market is classified in to,
1. The Organized Sector (comprising private, public and foreign owned
commercial banks and cooperative banks, together known as scheduled
banks); and
2. 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.
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.
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.
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.
Liberalization
In the early 1990s the then Narsimha Rao government embarked on a policy of
liberalisation 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.
Current Situation
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 timeespecially 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 (2010), India has 96 scheduled commercial banks (SCBs) - 27 public sector
banks (that is with the Government of India holding a stake), 31 private banks (these
do not have government stake; they may be publicly listed and traded on stock
exchanges) and 38 foreign banks. They have a combined network of over 53,000
branches and 49,000 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.
Structure / Constituents of Indian Finance System

The India Finance System is composed of different institutions and will see
subsequent address to certain roles and have accordingly brought out a variety of
instrumentation and helped create a healthy money market, which is fundamental
requisite of good finance system.
Categories of Bank
Banking in India falls mainly under two categories, viz. Commercial banks and Cooperative 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 2 nd schedule, are called the non-scheduled
banks. The number of take- oven/liquidation as also in some cases up gradation into
scheduled banks category.
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.
The Business of Banking

Banking has been understood differently at different times and indifferent countries.
In India, the earliest legislation that dealt with the business of banking was the Indian
Companies Act 1913. The Banking Regulations Act came in 1936. Under this Act all
companies having their principal business, accepting deposits from the public were
classified as banks. Hence between 1936 and 1942 even trading and industrial
concerns accepting deposits were classified as banks, if accepting such deposits was
their principal business. The Government of India passed a compressive Banking
Regulation Act in 1949. Accordingly a banking company was defined as a company
which carries on the business of banking that is to say accepting for the purpose of
lending or investing deposits of money from the public, repayable on demand of
otherwise, and withdrawal cheque, draft, order of otherwise. The study group
reviewing legislation affecting banking is of the opinion that banking should 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.
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
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 short- term
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.
Loans
7.
Bridge loan
Overdrafts
8.
Participation loan
Cash credits
9.
Loans
Temporary Overdrafts
Clean advances
to
small
borrowers
10.
Term loans
Hire
purchase
leasing finance
11.
Bills purchased
and
Loans
Bank loans are called indirect agents of production. For achieving a sustained rate of
economic growth over a long period, greater efforts have to be made to increase
agricultural and industrial production, and in this increased production, bank credit
plays a significant role. But banks in India are not free to employ their funds n an
arbitrary manner, while lending, they will have to keep in mind factors like a desirable
balance among liquidity, safely and profitability, legal and statutory requirements,
socio-economic conditions of the country, priorities set by economic planners, and so
on. Banks try to achieve this objective through maintaining a particular relationship
between their assets and deposits. As such, between advances and deposits in the form
of advances among as many different types of securities and over as wide an areas as
possible, and they avoid granting too large a proportion of their advances to one party
or to a single industry. While these factors limit banks capability to lend, they are,
nevertheless expected to grant credit according to the changing economic scene
conditioned by the programs and priorities of different Five Year Plans.
In a loan account the entire amount is paid to the debtor at one time, either in cash or
by transfer to his current account. No subsequent debit ordinarily allowed except by
way of interest, incidental charges, insurance premiums, expenses incurred is
provided for by installment without allowing the demand character of the loan to be
affected in any way. There is usually a stipulation that in the event of installment
remaining unpaid, the entire amount of the loan will become due. Interest is charged
on the debit balance, usually with quarterly rests unless there is an arrangement to the
contrary. No cheque book is issued. The security may be personal or in the form of
shares, debentures. Government paper, immovable property, fixed deposit receipts,
life insurance policies, goods etc.
Bank of Baroda
Bank of Baroda was founded by Maharaja Sayajirao Gaekwad of Baroda on July 20,
1908 with a paid up capital of Rs 10 lakhs. Since then bank has traversed an eventful
and successful journey of almost 103 years. Today, Bank of Baroda has a network of
3211 branches including 80 overseas branches spread over 25 countries. In mideighties, the Bank of Baroda diversified into areas of Merchant Banking, Housing
Finance, Credit Cards and Mutual Funds. In 1995 the Bank raised Rs 300 crores
through a Bond issue. In 1996 the Bank tapped the capital market with an IPO of Rs
850 crores.
Bank of Baroda took the lead in shifting from manual operating systems to a
computerized work environment. Today, the Bank has 1918 computerized branches,
covering 70% of its network and 91.64% of its business.
Bank of Baroda gives high priority to quality service. In its quest for quality, the Bank
has secured the ISO 9001:2000 certifications for 15 branches.
In 2010, Bank of Baroda became the 3rd Largest Bank in India when it over took
ICICI Bank. Total Business crosses Rs 4,00,000 crores.
Centenary Year
On the 20th July 2007, the Bank entered its Centenary year. In its quest to become a
world-class bank with global best practices, the Bank is, now, well poised to take-off
with the most modern business and HR systems and processes. The Bank has already
initiated myriad HR interventions with special thrust on internal talent discovery,
upgrading the managerial skills through training, and improving the motivational
level of the employees of the bank
Mission Statement
To be a top ranking National Bank of International
Standards committed to augmenting stake holders' value
through concern, care and competence.
A Saga of Vision and enterprise

It has been a long and eventful journey of almost a century across 25 countries.
Starting in 1908 from a small building in Baroda to its new hi-rise and hi-tech
Baroda Corporate Centre in Mumbai, is a saga of vision, enterprise, financial
prudence and corporate governance.
Achievements
1) Business Performance
The Bank continued scaling new heights of business size recording global
business growth of 24.07 per cent during 2007-08. Its domestic deposits
increased by 22.82 per cent and domestic advances rose by 25.63 per cent.
During 2007-08, the Banks overseas business grew by 24.56 per cent
primarily due to a substantial increase of 35.70 per cent in overseas advances.
The overseas business contributed 20.0 per cent to total business and 23.8 per
cent to net profit. The level of net profit at Rs 1,435.52 crore for the year
2007-08 reflected a robust year-onyear growth of 39.9%.
On the front of asset quality management, while the Gross NPA in domestic
operations stood at 2.18 per cent at end-March 2008, the same for Overseas
Operations was just 0.55 per cent. The global Net NPA was pegged at 0.47
percent by the year-end 2007-08 in line with the promise given by the Bank to
its stakeholders.
Total Business (Deposit+ Advances) increased to Rs 2,58,735.45 crore

reflecting a growth of 24.07%.
Gross Profit and Net Profit were Rs 3,028.55 crore and Rs 1,435.52
crore respectively. Net Profit registered a growth of 39.85% over
previous year
Net NPAs to Net Advances declined from 0.60% last year to 0.47%.
Objective of Bank of Baroda

1. Special focus on improving relations with the existing corporate customers
as well as efforts to add new quality customers to the Banks Book.
2. Thrust on business process reengineering to reduce the transaction costs.
3. A dedicated effort to add 2.5 to 3.0 million quality customers to Banks book
in FY09 and in subsequent years.
4. By end of the current financial 2010-11, the Bank is targeting 54 more
branches for ISO 9001:2000 quality certification.
Global Presence of Bank of Baroda
Bank of in
Branch Network (as of 22/06/2010)
International Operations
Wide Global Network

Bank of Baroda started its overseas journey by opening its first branch way back in
1953 in Mombassa, Kenya. Since then the Bank has come a long way in expanding its
international network to serve NRIs/PIOs and locals. Today it has transformed into
India's International Bank.
It has significant international presence with a network of 80 offices in 25 countries
including 43 branches/offices of the Bank, 27 branches of its seven Subsidiaries and 4
Representative Offices in Malaysia, China, Thailand & Australia. The Bank also
has one Joint Venture in Zambia with 9 branches.
The Bank has presence in world's major financial centers i.e. New York, London,
Brussels, Dubai, Hong Kong, and Singapore.
The "round the clock around the globe", Bank of Baroda is further in the process of
identifying/opening more overseas centers for increasing its global presence to serve
its 33 million global customers in still better way.
Recently, it upgraded its operations in Guangzhou, China from Representative Office
to a branch on 2nd August 2008. It also has plans to upgrade its Representative
Offices in Australia and Malaysia.
It has further plans to establish overseas offices in Houston (USA), Canada, New
Zealand, Qatar, Saudi Arabia, Mozambique, Russia etc. Besides this, it has plans to
extend its reach in existing countries of operations in UK, UAE, Uganda, Kenya and
T&T etc.
Customers
Competitors
Individual
State Bank of India
Stock Broking Entities
Punjab National Bank
HUF (Hindu Undivided Family)
Union Bank of India
Proprietorship Concerns
HDFC
Public Limited Companies
ICICI
Private Limited Companies
Strengths
Corporate Partnership Firms

It has diversified customer profile, including Blue chip companies, small and
medium sized companies, retail customers, self-help groups, and high net worth
individuals.
It has strong brand equity and a wide customer base of over 5 million.
Bank of Barodas financial strength has been recognized by international credit
rating agencies.
A strong capital base ensures that it is well placed for growth of business.
The bank, which has consistently earned profit since its inception, has committed
and competent human capital to power its aggressive growth plan.
The Values of the Bank
Management Team - The core strength of
Future of the Bank

Bank of Baroda looks confidently
Bank
into future to face & thrive in
Technology and Tech Initiatives
intense competitive environment
Strategic Initiatives
that is emerging in global era.
Corporate Banking and Credit
Product Profile
Wholesale Banking
SME Banking
Retail Banking
Rural/Agri Banking
Wealth Management
Demat
Deposit Products
Loan Products
ATM / Debit Cards
Internet Banking
Rapid Funds2India
Baroda e-Trading
Objective of the Study

The main objective of this study is to analyze different types of home loans and
education loans offered by Bank of Baroda and also identify the competitive
advantage of Bank of Baroda over its competitors and peer banks in retail loan
segment in India. This study also covers the recent transformations taken place in
retail loan segment in recent past in both Public sector and Private sector financial
institutions in India.
During this study, I came to know about different types of home loans and education
loans and the procedure involved in the approval or rejection of the loans in Bank of
Baroda. Following are the other objectives that are also involved in the successful
completion of the project assigned.
To know the scenario of home loans and education loans in India.

To know different types of loans offered by Bank of Baroda and its
competitors in home loan and education loan category.

To know the procedure followed by different financial institutions during
the sanction of loans.

To know various parameters that play major role in the approval or
rejection of loan applications.

To know the differences in rate of interest and other fees charged by Bank
of Baroda and other financial institutions in retail loan segment.

To know the concessions in interest rates and charges and penalties, value
added services and benefits offered by various financial institutions in
India.
To know the RBI directives and tax benefits that is allowed by the Govt. of
India to the applicants in home loan and educational loan category.

To know both the financial institutions point of view and also the
customers point of view.

To know the advantages and drawbacks in the loan products provided by
Bank of Baroda over other financial institutions in India.
Thus, all these objectives helped to complete the study successfully.
Work Done
a. Online Automation of Customer Data (LAPS)
LAPS (Lending Automation Processing Software) is used to automate the
customer profile i.e., personal details, employment details, income details,
CIBIL report, property details etc. Based on the details entered, the software
provides a rating to the customer. This rating is used to decide whether to
approve the loan requested by the customer or not.
Procedure for applying Retail Loans

Application
CIBIL Reports
Appraisal
LAPS
Pre Credit
Inspection
Deviation
Approval
Disbursal
a.
Application
First of all, the applicants have to make an application to the concerned bank in
which he/she wants to get loan. Also need to submit the documents that are
requested by the bank as per the needs of the loan.
b.
CIBIL (Credit Information Bureau (India) Limited) Reports

CIBILs aim is to fulfill the need of credit granting institutions for
comprehensive credit information by collecting, collating and disseminating
credit information pertaining to both commercial and consumer borrowers, to a
closed user group of Members. Banks, Financial Institutions, Non-Banking
Financial Companies, Housing Finance Companies and Credit Card
Companies use CIBILs services to check the credibility of the customer in
order process his request (i.e., loan process, credit card approval or any
sanctioning any of companys products to the customer).
c.
Pre Credit
Banks or financial institutions will verify the all documents submitted by the
customer for loan and the customers income, liabilities, valuation of
personal properties and ability to repayment of the loan. Based on this
report, the Pre Crediting Officer suggests deviations (if any) in interest rate,
repayment period, loan amount, additional security etc. regarding the
application of the customer in order to approve the loan.
d.
Deviation
In this phase, the Loan Officer suggests deviations (if any) in the loan amount,
repayment tenure, processing charges, security or interest rates by considering
the Pre Credit Report of the customer prepared by Pre Crediting Officer of the
bank. This is also an important phase in the loan procedure. Branch Manager
can also suggest deviations at any point of time during loan sanction process.
e.
Online Automation of Customer Data (LAPS)

LAPS (Lending Automation Processing Software) is used to automate the
customer profile i.e., personal details, employment details, income details,
CIBIL report, property details etc. Based on the details entered, the software
provides a rating to the customer.
f.
Inspection (Residence, Work Place, Personal Property)

Based on the documents submitted about the residence, employment, property
etc. are being inspected by a loan officer of the financial institution.
g. Appraisal
Based on the inspection report submitted by the loan officer, customers
credibility will be appraised which is a major phase in loan sanctioning
procedure.
h. Approval
Based on the rating given by the LAPS and the appraisal report, senior
manager of the branch or any other employee of equivalent designation will
decide whether to approve the loan or not.
i.
Disbursal
Once the loan has been approved, the loan amount will be disbursed based on
the requirement of the customer. Based on the nature of the application,
additional documents may be required during disbursement of the loan amount.
Comparative Study of Housing Loan Applicants

Name
Age, Marital
Status &
Qualificatio
n
Employment
Details
(Salaried/
Self
Employed)
CoApplicant
Income
Details
Lokesh Kumar Singh

30Yrs, Graduate &
Single
Bharat Singh
29Yrs, Graduate &
Married
Amit Kumar
28Yrs, Graduate
Middle Management,
Indian Oil Corporation
Ltd.,
West Bengal.
Govt. Public Sector
None
Proprietor,
Own Business / Self
Employed
Proprietor,
Own Business / Self
Employed
Yes
None
Gross Income,
Rs73,845
Deductions,
Rs16,744
Gross Income,
Rs366,66 (Applicant)
Rs39,027(CoApplicant)
Deductions,
Rs5486 (Applicant)
Gross Income,
Rs14194
Deductions,
Rs1560
Relationship
with Bank
Loan Details
(Loan Amt.
@ ROI
(Tenor))
Purpose
Property
Cost
EMI
Mobility of
Individuals
Location
No. of
Dependents
Proof of
Income of
Borrower
Ratings
No
Rs2000 (Co-Applicant)
Yes (Short Term)
Yes (Short Term)
Rs20L @ 8.75%
(240Months), Flexible
ROI
Rs34L @ 9.50%
ROI
Rs5L @ 9.00%
ROI
Purchase of Flat
Rs30.08L
Purchase of Flat
Rs42.40L
Purchase of Old Flat

Rs13.69L
EMI
Rs18,2
based
14
on
Propose
d Loan
Amount
EMI
Rs27,5
repaym 63
ent
capacity
of
borrowe
r
EMI
Within
Limit
Limit
Has not changed
location in past 3 years
EMI
Rs35,5
based
04
on
Propose
d Loan
Amount
EMI
Rs37,9
repaym 30
ent
capacity
of
borrowe
r
EMI
Within
Limit
Limit
Has not changed
Has not changed

Income Tax Returns
Income Tax Returns
Income Tax Returns
1. Net worth to Loan

Ratio 0.70
2. Net Annual Income
of the Borrower
Rs6,85,212.00
3. Fixed Obligations to
Income Ratio 0.47
4. Marketability of
Property (Home Loan
Very Good
5. Guarantors Net
worth to Loan Ratio
0.00
6. Loan to Value Ratio
0.66
7. Number of Joint
Applicants 0

Ratio 2.92
of the Borrower
Rs8,18,484.00
Income Ratio 0.77
4. Marketability of
Property (Home Loan
Good
5. Guarantors Net
worth to Loan Ratio
0.00
0.80
7. Number of Joint
Applicants 1

Ratio 3.45
of the Borrower Rs1,51,608.00
Income Ratio 0.40
4. Marketability of
Property (Home Loan)
Very Good
5. Guarantors Net
worth to Loan Ratio
0.00
- 0.36
7. Number of Joint
Applicants 0
EMI
based on
Propose
d Loan
Amount
EMI
repayme
nt
capacity
of
borrowe
r
EMI
Limit
Rs4,11
2
Rs5,5
37
Within
Limit
8. Housing Loan
Purpose Category
Purchase (New
construction
9. Stability of Income Income has been
steadily increasing over
last 3yr
Obtained 115
Cut-Off -96
Grading HL6
Sanctioned
Score
Loan Status
8. Housing Loan
Purpose Category
Purchase (New
construction
9. Stability of Income Income has been
steadily increasing over
last 3yr
Obtained 79
Cut-Off -96
Grading HL10
Rejected
8. Housing Loan
Purpose Category
Purchase (Old
construction
9. Stability of Income
- Income has been
steadily increasing
over last 3yr
Obtained 98
Cut-Off -96
Grading HL8
Sanctioned
Key Terms
Total Income Total Deductions
Loan Requested
1.
Net Worth to Loan Ratio =
2.
Fixed obligations to Income Ratio =Total Liabilities

Total Income
3.
Loan to Value Ratio =
Loan Requested
Value of the Property
For self Employed:

4.
HL Housing Loan
Computation of Income, Balance sheet, the Profit and Loss A/C along
with 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.
Documents required to Process Loan Application

For General
Applicant:
A/C
continuity proof for the last one year.
Passport
Photograph
Officesize
address
proof.
Age
Verification
Certificate
Residence
address
proof. (school/college/leaving certificate or mark
sheet,
PAN card. certificate
Election Identity
card, Passport,
Driving License, Ration
Qualification
for self-employed
professionals.
Card, Birth Certificate.)
Sale deed/ Agreement of sale. (In case of Housing Loan)
Bank Statement for past 36 months or salary Account and any other
Copy of approval plan if applicable. (In case of Housing Loan)
operating A/C.
Letter of allotment of Housing Board or society. (In case of Housing
Loan)
Permission for construction if applicable. (In case of Housing Loan)
Valuation of property which is to be financed. (In case of Housing

Loan)
In case of agricultural land conversion into copy of relative order.
For Salaried:
Latest salary certificate/sleep showing all the deduction of the employer.
Four months salary statements required in case of variable salary
Latest form 16/ I.T. Returns
Appointment/Increment letter from the employer for annual benefit to be

considered.
Note
More or less additional documents may be required as per the banks rules.
Terms related to Retail Loans
EMI: Equated Monthly Installment till the loan is paid back. It consists of a
portion of interest and the principal.
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.
Monthly Reducing Balance: In this system interest reduces monthly with

repayment of Principal amount.
Annual Reducing Balance: In this system principal is reduced annually at the

end of the year so you end up paying interest even for the portion of principal
you have actually paid back.
Fixed Rate of Interest: Rate of interest remains unchanged throughout the

period of the loan.
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
loan, then banks/ institutions charge penalty for the prepayment.
Commitment Fee: Some institution charge commitment fee in case the loan
is not availed within a stipulated period, after it is processed and sanctioned.
Miscellaneous Cost: It is quite possible that some lenders may charge

documentation or consultant charges.
Retail Loans
A wide range of solutions for your financial needs.
Bank of Baroda offers a wide range of retail loans to meet your diverse needs.
Whether the need is for a new house, child's education, purchase of a new car or home
appliances, our unique and need specific loans will enable you to convert your dreams
to realities.
Key Products
Housing Loan
Housing Loans to NRIs / PIOs
Home Improvement Loan
Loan Against Future Rent Receivables
Mortgage Loan
Advance Against Securities
Education Loan
Baroda Career Development Loan
Auto Loan
Two Wheeler Loan
Loan to Doctors
Traders Laon Loan to Pensioners
Personal Loan
Baroda Ashray (Reverse Mortgage Loan)
Loan for financing Individuals for subscription to Public Issues /IPO
Housing Loan - Bank of Baroda

1. Baroda Housing Loan - Be a Proud Home Owner
Bank of Baroda invites you to be a proud owner of your own home and offers easy
Home Loan with a number of conveniences to suit your budget.
Home Loan is available for,
Purchase of new / old dwelling unit.
Construction of house.
Purchase of plot of land for construction of a house.
Repaying a loan already taken from other Housing Finance Company / Bank.
Repayment period up to 25 years (floating rate option).
2. Baroda Home Improvement Loan

Bank of Baroda brings to you a unique loan product. A loan for Repairs / Renovations
/ Improvement / Extension of Home and for Furniture, Fittings & Fixtures.
Key Benefits
Loan available for repairs / renovation / improvement / extension of the
existing house.
Loan available for purchase of furniture / fixtures / furnishing / other gadgets
such as fans, geysers, air conditioners etc. required, to:
o
Our existing housing loan borrowers
New borrowers
Education Loan - Bank of Baroda
Education is the most important investment one makes in life. Higher studies and
specialization in certain fields call for additional financial support from time to time.
Whether you are planning school education (nursery to standard XII) of your child,
pursuing a graduate or post-graduate degree, the Bank of Baroda Education Loans,
can help finance your ambitions and goals.
Following are the loan options available:
1.
Baroda Vidya
Bank of Baroda presents a one of its kind finance option for parents of
students pursuing school education. These loans are available for studies from
Nursery to Senior Secondary School.
2.
Baroda Gyan
A loan product specially designed for students pursuing Graduation, Post Graduation, Professional & Other courses in India. Bank of Baroda extends a
helping hand to energize your studies and promote education of the youth.
3.
Baroda Scholar
Bank of Baroda presents financial assistance to students going abroad for
Professional / Technical studies. The loan offering is designed to empower you
with the financial capability to realize your dreams... Achieve your goals...
Reach out to the maximum limits...
4.
Baroda Career Development

Gainfully employed persons intend to pursue higher education, vocational
courses, trainings, pilot trainings, skill up gradation, diploma or degree courses
offered in aviation, hospitality and travel management, executive development

etc. in India / abroad.
To help the future management leaders acquire higher specialized managerial
skills and dominate the global arena, Bank of Baroda brings to you Baroda
Career Development, a unique loan facility for working persons.
RBI Directive for Home Loans

The Reserve Bank of India (RBI) has in the latest directive asked the Indian banks to
be more "fair and transparent" while signing their agreements with the consumers.
This has come following complaints from various consumer sections regarding home
loans.
It has emphasized on the fact that while giving a home loan, the banks should not tie
their loans with their own prime lending rates (PLR) which often results in pro-bank
and against consumer interest.
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.33.660
p.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:
Capital is borrowed for acquiring or constructing a property on or after April

1, 1999.
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 2006-07.
Terms and conditions for availing Tax benefits on Home Loans

1.
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 Rs1, 50, 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 now want to avail a third loan to refinance the second loan, tax rebate
on interest payments will not be permissible.
Home Loans in India

You'll soon realize that home loan
companies do exist, and they continue
to exist to provide Basic Home
Insurance as well as Home Loan
Information including Home Loan
Resources because of the very people
who desire to own a house the soonest
possible time - like you!
It is definitely one of the major things
that one can board on in his / her
lifetime. The bad news is: however is
that not everyone in this globe is like you, loaded enough (financially, of course) to be
able to build a house as soon as he wants to.
Whether you are Non Resident Indian or Resident of India, and you are thinking to
start your journey of buying a new house, looking to move to a new house, investing
in property or are looking forward to refinance, Consider answering these questions to
yourself:
Which type of home loan should I prefer?
What interest rate and repayment period will be affordable by me?
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
plunge into 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 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.
Home Loan Types
Owning a piece of land or property is a lifetime dream for every individual. There
are many home loans provider in the market to make your dream come true. But
before you opt for any home loan provider, you need to consider certain factors
related to property that you are interested in buying and also about the salient features
offered by a home loan provider and also study some Home Loans and Home
Insurance FAQs which helps in applying a Home Loan in India.
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
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.
Why take a Home Loan?

What's an average middle class Indian's most cherished dream?
Purchasing and moving into a dream house would generally rank among the top three
things on the wish list of most people. After all its what been proved by Maslows
Law of Hierarchy as well. That entire house hunting every few years, grumpy
landlords, killing rents would be a thing of the past. Hey, you even get to use nails to
hang your favorite paintings and pictures. Dont you???
Taking a home loan nowadays has become very simpler. The RBI has been regularly
slashing interest rates, with the result that housing finance loans that came at an
interest rate of 16.5% to 18% eight years ago are now available at 9.50% to 14.50% or
lower. Each year the Finance Minister's generosity during the Budget seems to be
solely concentrated for the housing sector and construction sector. The Budget 2000's
allowed interest payment up to Rs1lakh and principal payment of Rs20, 000 to be
exempted from income tax. To top it all, the Housing Finance Companies (HFCs) are
aggressively wooing customers. Now, when the sun shines, its the best time to make
hay. Isnt it?
Comparative Analysis of PSU Banks Home Loan Products

Bank
Bank of Baroda
Products
Type
Baroda
Home Loan
Max.
Amount
Interest
(P.a.)
9.5%
to
10.75%
(Fixed)
8.5%
to
9.75%
(Floating)
10.5%
Baroda
Home
Improvement
Loan
Baroda
14.5%
Home Loans
to
NRIs/PIOs
Up to Rs1Cr
State Bank of
India
Type
SBI HIFIVE
(<=Rs5L)
SBI Easy
(<=Rs50L
)
SBI
Advantag
e
(>Rs50L)
Interest (P.a.)
8% to 10.5%
(Fixed)
9%(Floating)
8% to 11%
(Fixed)
9.25%
(Floating)
8% to 11%
(Fixed)
10%(Floating)
No Upper Limit
Bank of
India
1. Construction
2. Purchase
3. Repairs
Construction
&
Purchase Rs3Cr
Tenure
Processing
Charges
Home Loan - 25Yrs

15Yrs 25Yrs
Home Improvement Loan 10Yrs
Up to Rs20L,
Up to Rs5L - Rs1K,
0.35% of the Loan
Rs5L to Rs10L - 2K,
Above Rs20L,
Rs10L to Rs20L-Rs5K,
0.4% of the Loan
Rs20L to Rs50L - Rs7K,
Rs50L to 1Cr - Rs8K,
Rs1Cr to 5Cr - Rs10K,
Above Rs5Cr - Rs20K
Repairs Rs20L,
Purchase of a
Plot-Rs30L,
Purchase/Acquire
of House Hold Rs1L
Ranges Up to
20Yrs
Up to Rs30L,
0.55% of Loan
Amt.(Min. Rs3K,
Max.-10K)
Rs30L-Rs50L,
Rs15K
Rs50L-Rs1Cr,
Rs20K
Rs1Cr - Rs3Cr,
Rs50K
Margin
Home Loan,
Up to Rs20L 20%
Above Rs20L 15%
Home Improvement Loan,
25% of the Project Cost
Up to Rs75L 20%
Above Rs75L 25%
Up to Rs10L,
15% Cost of the
Property,
Above Rs10L,
20% Cost of the
Property
Eligibility
1. Minimum age must be 21

years. Age of the borrower
plus repayment period should
not be beyond retirement age
or 65 years whichever is
earlier
2. Must be employed/selfemployed or having a
business unit and staying
abroad at least for 2 years
3. Must have minimum gross
annual income equivalent to
Rs.5Lacs per annum.
1. The applicant should be at

least 18Yrs old from the date
of loan sanction.
2. The loan applicant should
have a source of regular
income.
3. In case of NRIs the
applicant should be holding a
legitimate Indian passport or a
legitimate work permit and
should have been employed
overseas for at least 2Yrs.
1.
Salaried
employees,
Professionals like
Doctors, Lawyers,
Engineers,
Chartered
Accountants, Selfemployed
persons. Requests
are
also
considered
in
special cases from
Group
of
individuals, NRIs,
PIOs, HUF, Prop.
Firm, Partnership
firms
and
corporate.
Fixed
No
Floating
8.75%
to 11%
Interest
Rates
Fixed
Up
Rs30L,
9.5% to
10.5%
to
Fixed
Floatin
g
8% to 11%
9% to 10%
Security
Prepaymen
t Penalty
USPs
Above
Rs30L,
10.25% to
10.75%
Floatin Up
to
g
Rs30L,
8.5% to 9%
Above
Rs30L,
9.25%
to
9.75%
An equitable mortgage of the 1. Equitable mortgage of the
housing property and / or property.
other suitable securities.
2. Other tangible security of
adequate value like NSCs,
Life Insurance policies etc., if
the property cannot be
mortgaged.
Up to Rs20L No 1. The bank charges a penalty
Prepayment
Penalty
(If for prepayment of the home
Closed from own sources)
loan if the loan is pre-closed
In case of full prepayment or even before the half of the
foreclosure (other than from genuine loan tenure.
own sources) fees will be 2. There is no provision of
charged at 0.5% for each penalty for bulk payments if
year of the residual period the loan scheme is not
subject to max. 2%.
discontinued.
1. 0.25 bps concession in rate

of interest is available to
employees
of
preferred
organizations and group
borrowers.
2. Hassle free processing of
loans as majority of proposed
housing societies is approved
by the bank.
3. One of the Oldest Banks in
India and Customer Trust.
4. One of the largest and
most widespread networks of
branches across in India.
5. Easy and Flat EMI
Repayment Option.
6. Interest charged on the
1.
No
Application
or
Administration Charges.
2. Loans can be repaid up to
the age of 70Yrs.
3. Only Bank to offer Home
Loans @ 8% p.a. ROI (for 1 st
Year).
4. Low Processing Charges.
5. No Upper Limit on the
Loan.
6. Interest charged on the daily
reducing balance.
1.
Equitable
Mortgage
(1st
Charge)
on
land/flat/house.
2.
3rd
Party
Guarantee.
No
1. Interest is
calculated on
daily balance
basis.
2. No Prepayment
Penalty.
3. Free Personal
Accident Ins.
Cover for the
borrower.
4. Loan amt. of
Rs1L for
furnishing the
house/flat.
daily reducing balance.

7. Free Personal Accident
Ins. Cover for the borrower.
Analysis
Among PSU Banks, SBI has better product profile in home loan category.
Bank of Baroda competes strongly with SBI by providing equivalent product
profile.
SBI offers loan at flexible interest rates by charging 8.00% p.a. interest rate for
first year. Whereas, Bank of Baroda offers flat interest rate of min. 8.50% from
the first year of loan disbursement.
Bank of Baroda offers a concession of 0.25bps in interest rates for employees

of Govt. or Preferred Organizations. Whereas, SBI offers no concession to any
type of customers.
Bank of Baroda process the loan application in 6 days after submitting loan
application. Whereas, SBI takes at least 10 to 15 days to process the loan
application.
Bank of India does not charge any penalty on prepayment of loan. Whereas,
Bank of Baroda charges nil penalty on amount prepaid from own sources.
SBI offers a no upper limit on the loan amount. Whereas, Bank of Baroda
offers a max. amount of Rs1Cr.
Competitive Advantage BOB Over SBI Housing Loans

Bank
Concession
Margin
Bank of Baroda
State Bank of India
Offers 0.25bps concession in Rate

of Interest to Employees of
Preferred Organizations & Group
Borrowers.
Over Rs20L of loan amount only
20% of margin is charged.
No concession in Interest Rates

is Offered.
Up to Rs75L of loan amount a
margin of 20% is charged.
Prepayment Penalty
Interest Rates
EMIs
Up to Rs20L No Prepayment The bank charges a Penalty for

Penalty (If it is closed from own Prepayment of the home loan
sources).
if the loan is pre-closed even
before the half of the genuine
loan tenure.
Flexi Interest Rate Facility is Flexi Interest Rate is not
provided.
provided.
Flexible EMIs.
Reducing EMIs.
EMIs-Housing Loans
Bank
Amt.,
Rs30L
Tenure,
15Yrs
EMIs
(Rs.)
Total
Interest
Paid
(Rs)
Bank of Baroda
General
Govt. or Preferred Organization
Floating
Fixed
Floating
Fixed
(8.50%)
(9.50%)
(8.25%)
(9.25%)
29,542.19
30,875.77
29,104.21
31,326.74
23,17,594.2
25,57,638.6
22,38,757.8
26,38,813.2
SBI
Floating
Fixed
22,897.25
17,43,101.98
28,669.56
27,859.42
24,912.39
20,33,282.14
Competitive Advantage SBI Over BOB Housing Loans

Bank
Bank of Baroda
SBI
Products
Less Number of Categorizations.
Wide Variety
Categorizations
Amount
Maximum up to Rs1Cr.
No Upper Limit on the Loan.
Tenure
Maximum of 25Yrs.
Processing Charges
Prepayment Penalty
of
Product
Maximum of 25Yrs but the

Individual age can be up to
70Yrs.
Charges a Min. of 0.35% on Loan Low Processing Charges.
Amount.
No Penalty up to Rs20L.
No Penalty for Bulk Payments.
Comparative Analysis of Private Banks Home Loan Products

Bank
HDFC Bank
ICICI Bank
HSBC Bank
Products
1. Construction
2. Purchase
3. Repairs
1. Construction
2. Purchase
3. Repairs
1. Construction
2. Purchase
3. Repairs
Max.
Amount
Max - Rs1Cr
Min. - Rs2L
Max. - Rs1Cr
Mumbai &
New Delhi(NCR),
Tenure
Ranges Up to 20Yrs
Processing
Charges
1% of Loan Amt. + Service 0.5% of the loan amount or

Tax as Applicable
Rs1500/(Rs2000/for
Mumbai, Delhi & Bangalore),
whichever
is
higher
+
applicable Service Tax &
Surcharge.
15% of the cost
Home Loa,
15% to 20% of the Cost
Margin
Eligibility
Interest
Rates
Security
Ranges Up to 25Yrs
1. The applicant should be at

least 18Yrs old from the date
of loan sanction.
income.
applicant should be holding a
legitimate Indian passport or
a legitimate work permit and
should have been employed
overseas for at least 2Yrs.
Fixed
14.25%
Floatin 8.75% to
g
9.25%
1. You must be employed or

self-employed with a regular
source of income.
2. Age Should be in between
24Yrs to 65Yrs.
Not Required
1. Equitable Mortgage (1st

Charge) on land/flat/house.
2. 3rd Party Guarantee.
Fixed
Floatin
g
13.75
11.25%
Rs.5L to Rs.5Cr
Bengaluru,
Rs.5L to Rs.3Cr
Chennai,
Rs.2L to Rs.3Cr
Ranges
Up
to
25Yrs
1% of the loan
amount applied for,
subject
to
a
minimum
of
Rs10000
plus
service tax.
15% of the Cost
1.Age Should be in
between 24Yrs to
65Yrs
2. Income,
Rs5L p.a (salaried)
Rs7. 5L p.a (selfemployed)
Fixed
11% to
14%
Floating 9% to
14%
Prepaymen
t Penalty
1. No prepayments allowed in
first 6 months
2. 6 months - 5 years,
1.5% of original loan
amount
3. 5 years -10 years,
0.75% of original loan
amount
4. > 10 years,
No closure fee
Nil - 2% + applicable Service 1. You can opt to

Tax & Surcharge on full pre-pay up to 25%
prepayment
of your loan every
year. Pre-payment
is permitted after a
minimum of 6
months following
loan disbursal.
2. For amount in
excess of 25% of
the loan amount
sanctioned - 3%.of
Amt. Prepaid
USPs
1. The customer can break the 1. Doorstep delivery of home

loan into two segments with loan papers.
one part being charged with
fixed rates and another part 2. Sanction approval without
with floating rates, thus having selected a property.
minimizing the risk factor.
2. No security/guarantor is 3. Brand Image and has more
required.
number of customers.
3. Among Private Banks,
HDFC offers low ROI (i.e., 4. Highly networked bank in
8.25% p.a.) on loan amt.
India.
4. An applicants minimum
age should be at least 18Yrs.
1.
Prepayment
option up to 25% of
loan after 6 months
of disbursement.
2.
Pre-approved
loan facility.
3. Provides the
option of switching
from a floating rate
home loan to a
fixed rate home
loan once a year at
no extra cost.
4. Resident Indians
are eligible for
certain tax benefits
on principal and
interest components
of a housing loan
under the Income
Tax Act, 1961.
Analysis
Among Private Banks, HSBC bank has better product profile in home loan
category. HDFC bank and ICICI bank competing strongly with HSBC bank by
providing equivalent product profile.
HDFC bank offers loan at flexible interest rates by charging 8.25% p.a.
interest rate for first year. Whereas, HSBC bank offers flat interest rate of min.
9.00% from the first year of loan disbursement.
HSBC bank offers a max. amount of Rs5Cr. Whereas, other private sector
banks offer a max. amount of Rs1Cr.
Comparative Study - PSU Banks Over Private Banks - Housing Loan

Bank
PSU Banks
Categorizations
Private Banks
PSU Banks provide Wide Variety

of Product Categorizations one of
which is State Bank of India.
Bank of Baroda offers 0.25bps
concession in rate of interest to
Govt. or Preferred Organization
employees.
Concession
Less
Number
Categorizations.
of
No Private Bank offers a

concession in rate of interest.
Amount
State Bank of India offers a no HSBC offers a Maximum

upper limit on the loan amount.
amount of Rs5Cr.
Prepayment Penalty
Bank of Baroda Charges No Fee

on part prepayment / full
prepayment of the loan amount
from own sources.
State Bank of India offers 8.00%
interest rate for 1st year after
disbursement of loan amount.
SBI Offers Low Processing
Charges.
Interest Rates
Processing Charges
EMI
Tenure
Among Private Banks, Only

Axis Bank charges No Fees
prepayment of part / full loan
amount.
HDFC Bank offers 8.25%
Interest Rate for 1st year after
disbursement of loan amount..
ICICI Bank Offers 0.5%
Processing Charges on the
loan amount.
Bank of Baroda offers Flat EMIs.
HDFC Bank offers flat EMIs.
SBI allows a maximum repayment All Private Bank allows
period of 25Yrs but the individual repayment for a Max. of
age must can be up to 70Yrs.
15Yrs.
EMIs - Housing Loan

Bank
Amt.,
Rs30L
Tenure,
15Yrs
EMIs
(Rs.)
Total
Interest
Paid
(Rs)
Bank of Baroda
General
Govt. or Preferred
Organization
Floating
Fixed
Floating
Fixed
Floating
Fixed
31,326.74
29,983.46
40,457.39
26,38,813.2
23,97,022.8
42,82,330.2
(8.50%)
(9.50%)
(8.25%)
(9.25%)
29,542.19
30,875.77
29,104.21
23,17,594.2
25,57,638.6
22,38,757.8
Analysis
HDFC
In Home Loan category, SBI is the market leader. Whereas, Bank of Baroda is
competing strongly by providing better products and services.
Education Loans in India

Most students and parents today realize
how expensive an education is. Whether
you hope to study at a private high school,
a college, university, or an overseas school,
tuition costs plus the costs of books and
living can quickly add up. If you are
worrying about the cost of school, you
should not feel that money has to decide
your education. There are a number of
financial aid options that can help you.
Educational loans can be one important
part of your overall financial aid package.
There are special distance education loans,
need-based loans, college loans, government based loans, and private education loans
-- in fact, chances are excellent that there are educational loans that can meet your
specific needs.
What Education Loans are?
Educational loans work like any other debt. That is, loans are simply specific money
that you borrow from a bank, a private lender, or some other type of lender.
Afterwards, you must repay your debts with interest. However, unlike other types of
loans, educational loans are different in several respects:
Different Qualification Features
Loans created for students recognize the fact that students have not had time to build
up credit rating. For this reason, applications for student loans are simpler and more
streamlined. The qualifications for such loans are also usually more lenient.
Generous Repayment Terms

Loans designed to help students pursue an education recognize that students should
spend their school time studying, not working to repay a loan. For this reason, many
loans created for students allow students to pay back their debts very gradually and
only after graduating. This means that students can focus on their studies rather than
on their loans. In fact, most loans designed for students give students the opportunity
to put off repaying their debt until six months after graduation. This gives students a
chance to settle down and find a job before repaying their debts.
Many Various Student Loan Types are Available
Since there are so many students, each with separate needs, there are a number of
loans designed to help students pay for their education. Many of these loans are
designed specifically to help students with their unique money issues. There are loans
created by private sources, by the government, and by schools. Many feature very low
interest rates. Some are need-based and some are not. No matter what a student's
financial needs, there is likely a loan available that can help the student meet their
educational goals.
Comparative Analysis of PSU Banks - Education Loan Products

Bank
Products
Bank of Baroda
Type
Baroda Vidya
Interest
(P.a.)
10.00%
State Bank of India

Education
abroad.
in
India
Corporation
Bank
or Corp Vidya
(Education in India
or abroad.)
Baroda Gyan
12.00%
Baroda Scholar 12.00%
Baroda Career 12.75%
Development
Plan
Max.
Amount
Tenure
Type
Max.
Amount
Rs4L
Baroda
Vidya
Baroda Gyan Rs10L
Baroda
Rs20L
Scholar
Baroda
In India,
Career
Rs10L
Developmen Abroad,
t Plan
Rs20L
A Maximum amount of Rs50L
is sanctioned based on the Merit
of the Candidate.
Type
Period
Baroda
Max.
12
Vidya
EMIs.
1st
EMI to be
due
12
months after
1st
disbursement
of
each
year's loan
component.
Baroda Gyan 5 to 7Yrs
after
Moratorium
Baroda
Period
Scholar
In India Rs10L
Abroad Rs20L
In India Rs10L
Abroad Rs20L
5Yrs 7Yrs
(Moratorium
Period
Course period + 1 year or 6
months after getting job,
whichever is earlier.)
7Yrs 10Yrs
(Moratorium Period Course period + 1
year or 6 months
after getting job,
(Course
period + 1
year or 6
months after
Tenure
Processing
Charges
Margin
Eligibility
Baroda
Career
Developmen
t Plan
Type
Baroda
Vidya
60 EMIs
(Course
period + 6
months or 3
months after
getting job,
whichever is
earlier.)
Amount
Nil
Baroda
Gyan
Nil
Baroda
Scholar
1% of the
Loan
amount
Sanctioned
.
(Refundabl
e)
Baroda
Career
Developme
nt Plan
Type
Max. Amount
Baroda
Nil
Vidya
Baroda Gyan Up to Rs4LNil
Above Rs4L5%
Baroda
15%
Scholar
Baroda
Career
Developmen
t Plan
1. No processing fee/ Studies in India Nil

upfront charges.
Studies Abroad 2. Deposit of Rs.5000/- for Rs.2000.
education loan for studies
abroad which will be
adjusted in the margin
money.
Up to
Rs4L
Abov
e
Rs4L
Nil
In India,
5%
Abroad,
15%
Up to Nil
Rs4L
Above In India,
Rs4L
5%
Abroad,
15%
1. Should be an Indian national 1. The applicant should be 1. Should be an

residing in India.
at least 18Yrs old from the Indian
national
2. Secured admission to the

eligible courses in the reputed
institutions (foreign/indian).
3. Have secured admission to
the course through entrance test
/ merit based selection process.
Eligibility
Interest
Rates
Security
date of loan sanction.

income.
applicant should be holding
a legitimate Indian passport
or a legitimate work permit
and should have been
employed overseas for at
least 2Yrs.
residing in India.
2.
Should
have
completed previous
qualifying
examinations.
3. Secured admission
to
Professional/
Technical courses in
India
or
abroad
through Entrance test
/
Merit
based
selection
process/
Management quota.
4. Person already in
gainful employment
not eligible for loan
under the scheme
except for pursuing
evening
course
covered under the
scheme of approved
Institute.
5. If a gainfully
employed
person
wants to pursue full
time education either
on study leave or by
resigning
from
present employment,
such proposals may
be
considered
provided
the
applicant submits the
proof in this regard
to the sanctioning
authority
before
disbursement
of
loan.
Up to 10.00%
Up to Rs4L 11.25%
Up
to 11.00%
Rs4L
Rs4L
Above
12.75%
Abov 12.00% - 12.75%
Rs4LRs5L
Above
12.00%
e
Rs4L
Above
11.75%
Rs4L
Rs7.5L
Rs7.5L
Above
11.50%
Rs7.5L
1. Up to Rs.4L - No security
1. Up to Rs.4L - No
1. Up to Rs.4L,
2. Above Rs.4L and up to
security
CoRs.7.5L,
2. Above Rs.4L and up to
obligation
of
Collateral in the form of a Rs.7.5L,
Parent/s,
Grand
suitable 3rd party guarantee
Collateral security in the Parent/s (if parents
Security
along with assignment of future

income
3. Above Rs.7.5L,
Tangible collateral security
equal to 100% of the loan
amount along with assignment
of future income
Baroda Career Development
Plan,
1. 100% tangible collateral
security by way of mortgage of
property or assignment of
securities NSC, KVP, LIC
policy, FDR etc.
2. Personal guarantee of
Father / mother of the applicant
or any other person having
sufficient worth.
form of suitable third party

guarantee. The bank may, at
its discretion, in exceptional
cases, waive third party
guarantee if satisfied with
the net-worth/means of
parent/s who would be
executing the documents as
"joint borrower".
3. Above Rs.7.5L,
Tangible collateral
security of suitable value,
along with the assignment
of future income of the
student for payment of
installments.
All loans should be secured
by parent(s)/guardian of the
student borrower. In case of
married
person,
coobligator can be either
spouse or the parent(s)/
parents-in-law
Prepaymen
t Penalty
Charges 1% of the Outstanding Charges

1%
of
the
Loan Amount.
Outstanding Loan Amount.
USPs
1. 1% interest concession, if
interest debited during the
repayment holiday is serviced.
2. Hassle free processing.
3. One of the Oldest Banks in
India and Customer Trust.
4. One of the largest and most
widespread
networks
of
branches across in India.
5. Easy EMI Repayment
Option.
6. 1% Concession in rate of
interest to loans for girl student.
7. Interest charged on the daily
reducing balance.
Analysis
1.
Low Processing
Charges.
2. Interest charged on the
daily reducing balance.
3. 0.5% Concession in rate
of interest to loans for girl
student.
4. One of the Oldest Banks
in India and Customer
Trust.
5. One of the largest and
most widespread network of
branches across in India
are deceased). No
other security.
2. Above Rs.4L and
up to Rs.7.5L,
Co obligation of
Parent/s
Grand
Parent/s (if parents
are
deceased)
together
with
collateral in the form
of suitable third
party guarantee.
3. Above Rs.7.5L,
Co-obligation of
Parents/Grand
Parents (if Parents
are
deceased)
together
with
tangible
collateral
security along with
the assignment of
future income of the
student for payment
of installments. The
loan to be fully
secured
after
maintaining
prescribed margin on
respective securities.
Nil
1.1%
interest
concession,
if
interest
debited
during the repayment
holiday is serviced.
2. 0.5% Concession
in rate of interest to
loans for girl student.
3. 0.5% Concession
loans for SC/ST.
4.
Maximum
Repayment Period of
10Yrs.
Among PSU Banks, Bank of Baroda has better product profile. Whereas, SBI
competing strongly.
Bank of Baroda offers a max. amount of Rs50L.
Bank of Baroda offers 1% concession to girl students. Whereas, SBI and

Corporation Bank offers 0.5% concession to girl students.
Competitive Study BOB Over SBI Educational Loan

Bank
Categorizations
Concession
Amount
Bank of Baroda
State Bank of India
Wide Variety of Product

Categorizations.
1. 1% Concession in rate of
interest to loans for girl
student.
2. 1% interest concession, if
repayment
holiday
is
serviced.
A Maximum amount of
Rs50L is allowed.
Less
Number
of
Categorizations.
0.5% Concession in rate of
interest to loans for girl
student.
Prepayment Penalty
Charges
1%
of
the
outstanding loan amount.
Interest Rates
Charges 10.00% Interest

Rate up to Rs4L.
Low EMI for the loans up to
Rs7.5L.
EMIs
A Maximum amount
Rs20L is allowed.
of
Charges 11.25% Interest

Rate up to Rs4L.
High EMI for the loans up to
Rs7.5L when compared to
Bank of Baroda.
EMI- Educational Loan

Product
Rs 4L @ 5Yrs
Rs 5L @ 5Yrs
Rs 15L @ 5Yrs
Bank of Baroda
EMI
Total Interest
8,598.82
1,09,929.20
11,122.22
1,67,333.20
33,366.67
5,02,000.20
State Bank of India

EMI
Total Interest
8,746.92
1,24,815.20
11,312.65
1,78,759
33,177.48
4,90,648.8
Baroda Career Development Plan

Rs 10L @ 5Yrs
Rs 15L @ 5Yrs
Analysis
22,625.30
33,937.95
3,57,518
5,36,277
Among PSU Banks, Bank of Baroda is the market leader. Whereas, SBI is
competing strongly as it is oldest and highly networked bank in India.
Comparative Analysis of Private Banks - Education Loan Products

Bank
Axis Bank
HDFC Bank
HSBC Bank
Products
Education in India or abroad
Education in India or
abroad
Max.
Amount
In India Rs10L
Abroad Rs20L
(Min. Rs50K)
5Yrs 7Yrs
Education in India or
abroad for Students and
also Working Executives.
In India Rs15L
Abroad Rs20L
Working Executives Rs6L
5Yrs 7Yrs
(Moratorium
Period
Course period + 1 year or 6
months after getting job,
Tenure
Processing
Charges
Margin
Eligibility
Upto Rs1Cr
(Min. Rs5L)
Ranges Up to 15Yrs
1% of the loan amount applied Max. 2% of the loan amt.

for, subject to a minimum of
Rs10000 plus service tax.
Up to
Rs4L
Abov
e
Rs4L
Nil
1% of the loan
amount applied for,
subject
to
a
minimum
of
Rs10000 plus service
tax.
5% to 15% of the Loan 15% of the Loan
Amount
Amount
In India,
5%
Abroad,
15%
1. Applicant need to be a
Resident Indian
Secured
admission
to
professional/technical courses
in India or Abroad through
Entrance Test/Merit based
selection process.
1. Applicant need to be a
Resident Indian
2. Applicant should be aged
between 16 - 35 yrs.
3. All Loans require a coapplicant.
1.Age Should be in
between 18Yrs to
65Yrs
2. Income,
Rs5L p.a. (salaried)
Rs7. 5L p.a. (selfemployed)
Eligibility
Interest
Rates
Security
Security
Prepaymen
t Penalty
USPs
15.75%
12.00% to 14.00%
1. Third party guarantee and/or

collateral security may be asked
for in appropriate cases.
2. Assignment of LIC policy in
favor of the Bank for the sum
assured being at least 100% of
the loan amount. The policy is
kept alive during the currency
of the loan. To ensure this, the
annual premium may be
included in the computation of
the loan requirement, along
with the tuition fees and other
recurring charges. Further, the
future income of the student
needs to be assigned in favor of
the Bank for meeting the
installment obligations.
Nil
Up to Rs7.5 L ,
1.
Residential
No Collateral Or Third Property. Both selfParty Guarantee.
occupied and owned
by either primary or
Above Rs7.5L,
co-applicant.
2. Must have a co1. Residential Property
applicant in India
2. HDFC Bank Fixed and can only be
Deposit
parents or spouse of
3. LIC/NSC/KVP
student.
1. Pre-approved loan facility.
Charges 4% on the
principal out sanding
1. Insurance Protection
from HDFC ERGO.
2. No Security is required
2. No Prepayment Penalty.
up to Rs7.5L of loan
3. Doorstep delivery of home amount.
3. No Security is required
loan papers.
for studies in Management
Institutes up to Rs12L
(Min.).
4. A tax rebate is offered
under section 80-E of the
Income Tax Act 1961* for
the entire interest amount
paid towards your education
loan.
13.00%
1. Up to 25% of the
outstanding loan
Nil (Once Every
Financial Year).
2. Excess of 25% of
the outstanding loan
4% of the amount
prepaid.
1. Prepayment option
up to 25% of loan
after 6 months of
disbursement.
2. 0.5% Concession
loans for girl student.
3. A Max. amount of
Rs1Cr is provided.
Analysis
Among Private Sector Banks, HSBC has better product profile offering a max.
loan of Rs1Cr. Whereas, other banks offers a max. loan amount of Rs20L.
HDFC Bank offers a low interest rate of 12.00% among private sector banks.
HSBC bank offers a max. repayment tenure of 15Yrs. Whereas, Axis bank
offers nil penalty on prepayment of loan amount.
Comparative Study - PSU Banks Over Private Banks - Education Loan

Bank
Categorizations
Concession
Amount
Prepayment Penalty
Interest Rates
Processing Charges
EMI
Tenure
PSU Banks
Bank of Baroda provides Wide
Variety
of
Product
Categorizations.
1. Bank of Baroda Offers,
a.1% Concession in rate of
interest to loans for girl student.
b.1% interest concession, if
repayment holiday is serviced.
2. Corporation Bank Offers,
a.0.5% Concession in rate
of interest to loans for SC/ST.
Bank of Baroda offers a Max.
amount of Rs50L.
Private Banks
Less
Number
Categorizations.
of
HSBC
Bank
Offers
a
Concession
of
0.5%
Concession in rate of interest
to loans for girl students.
HSBC offers a
amount of Rs1Cr.
Maximum
Corporation Bank charges Nil as

penalty on the prepaid loan
amount.
Bank of India offers reasonable
Interest Rates.
SBI Offers Low Processing
Charges.
Axis Bank also charges Nil as

penalty on the prepaid loan
amount.
HDFC Bank offers 12.00%
Interest Rate.
HSBC Bank Offers 1%
Processing Charges on the loan
amount.
Bank of Baroda offers Flat HDFC Bank also offers flat
EMIs.
EMIs.
Corporation
Bank
allows HSBC Bank allows repayment
repayment for a Max. of 10Yrs.
for a Max. of 15Yrs.
EMI- Educational Loan
Product
Rs 4L @ 5Yrs
Bank of Baroda
EMI
Total Interest
8,598.82
1,09,929.20
HDFC Bank
EMI
Total Interest
8,897.78
1,33,866.80
Rs 5L @ 5Yrs
Rs 15L @ 5Yrs
11,122.22
33,366.67
1,67,333.20
5,02,000.20
11,122.22
33,366.67
1,67,333.20
5,02,000.8
Baroda Career Development Plan

Rs 10L @ 5Yrs
Rs 15L @ 5Yrs
22,625.30
33,937.95
3,57,518
5,36,277
Analysis
In Education loan category, Bank of Baroda holds edge over all other PSU and
Private Sector Banks by providing better products and services.
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.
Research Objective
The Objective of this study is to compare housing loan products and educational loan
products of different banks with products of Bank of Baroda. This will help us to
know the Competitive Advantage of Bank of Barodas loan products over its
competitors.
Steps in Research Methodology

Step 1: Objective of Study of Home-Loans and
Educational Loans
The first step in this study is the defining the
Defining the Problem

&
Research Objective
objectives of the study and according to that develops

the further plan.
Develop Research
Plan
Step 2: Developing plan for gathering information

This stage calls for developing the most efficient plan
for gathering the need information. Decide the
Collect the
Information
methods of data collection and the data sources,

sampling method and contact method. Decide the
primary and secondary sources for collecting the data.
Analysis of the
Information
Present the Findings
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.
Step 4:Analyze the Information
Step 5:Present the Findings
Make the Decision
Sources of Data
A. Primary Data
Primary data is a data, which is gathered by the researcher himself. 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
The methods adopted in this study are,
Personal interview through structured questionnaire of Finance and
Marketing head of RLFs of different banks etc. Sample of questionnaire is
attached as an annexure.
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.
The methods adopted in this study are,
Collecting data from websites of various banks, articles given in various
sites etc. which are mentioned in the references of the project.
Diagrammatic 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. Tables
Sampling Plan
This plan calls for the main three decisions for selecting the sample of banks from
whole population of banks in the city.
1
Sampling Unit
Here we define the target population that will be sampled. Total numbers of banks
working in India are approximately 48.
2
Sample Size
How many banks and financial institution should be surveyed?

Large samples give more reliable results than small samples. Here 14% of the
population of study i.e. 5 units (branches) are undertaken for study.
3. Data Collection Procedure
Here I took all the information needed for this study, by means of personal visits
to banks and by interview. This is the most versatile method. The interviewer can
ask more number of questions; can record additional observations about the
respondents.
Limitations of the Study
It is a small research, which may be insufficient to give the real picture scope of
the retail loans in India.
The research is based on observation and data collected from the internet and
also direct interview of bankers.
The method of result is also limited to the reliability of method of

investigations, measurement and analysis of data.
Auto loan are not included in the study of retail loans.
Education loans are not providing by other banks like ICICI & IDBI. So, it
cannot compare with other banks.
People were not interested in replying to the interview properly.
Loan scheme has been revised very soon. So the study is effective till july,
2010.
Education loan is provided for some special customers. It is not possible for
every customer to get Education Loans.
All the suggestions are up to my knowledge and the study conducted by me by

visiting various websites, research papers and direct interview of bankers.
Findings & Conclusion

Bankers View
The main businesses of bank is accepting deposits with low interest rates & lend
it on high interest rate and enjoy the variation for long period of time.
Maximum interest rate will help the bank, but it will not attract customer to earn
the interest for long period. Retail Lending in term of home loans, education
loans is more reliable to gain constant interest for long period of time and the
recovery will be more. Maximum fund will be disbursed and will have less risk
rather than other loans, which are in short term and high interest rate schemes.
Among banking sector, Bank of Baroda & SBI will enjoy long term benefit &
other may have problem in future course. The number of customers that banks
are chosen for retail loans are salaried employee in which it reduces the risk
involved in recoveries.
Customers View
In terms of Home loan, SBI is better because of its wide variety of products and
low interest rates. Whereas, Bank of Baroda is trying to provide better products
and services by providing concession in interest rates to govt. and preferred
organization employees.
Bank of Baroda bank sanction loan within short time period with respect to
Nationalize banks.
Nationalize banks takes maximum time for processing loan application.
In co-op. banks loan will be sanctioned but it depends upon the relation with
banking personnel & member of the banks.
The very important benefit that the customer getting is tax benefit. Home loans
are the only loan product which Government Of India have given relief & tax
deduction up to Rs1,50,000 p.a. for the income tax payee.
That is the reason for customer paying less interest that he actual is having.
Suggestions & Recommendations
Interest rate, processing fees, tenure, security and margin money-all these are
important in all kinds of retail loans - housing loans, education loans, auto
loans, personal loans etc. So bank should revise all above keeping in view of
all other banks. Bank should appoint some marketing executive for this
purpose who can give information of market and other banks, revision of loan
timely so that the bank can revise it very soon. These marketing executives
should give report to Head Office directly for timely processing, so that the
market can be fully captured as early as possible.
Limit of loan amount of all retail loans should keep increasing keeping in view
of private sector banks and other nationalized banks.
One of the major strengths of Bank of Baroda is timely processing of loan

application. So, it must keep on processing the loan application as soon as
possible.
The major competitor to Bank of Baroda in Home Loan category is State Bank
of India. In order to compete with SBI, Bank of Baroda must introduce
attractive schemes in home loan category and must also adjust the interest rate
that makes a major difference.
In Education Loan category, Punjab National Bank is a major competitor to

Bank of Baroda in Northern part of India. Bank of Baroda has a good portfolio
in educational loan category, but it is not successful in utilizing this advantage.
It has to promote its products well in the market in order to can gain advantage
over Punjab National Bank.
Bank of Baroda should not only attract salaried people but also the
businessmen and contractors where more money will be disbursed and may
enjoy large rate of interest.
Bank must adopt new methodology for recovering balances.
Bank needs to identify and select the sectors in which the funds are invested in
large and for long time period such as Home Loan.
Bibliography
Private Sector Banks
PSU Banks
www.bankofbaroda.com
www.hdfcbank.com
www.statebankofindia.com
www.hsbc.co.in
www.corpbank.com
www.icicibank.com
www.bankofindia.com
www.axisbank.com
www.rbi.org.in
www.unionbankofindia.co.in
www.unitedbankofindia.com
Other Links
www.timesofindia.com
www.wikipedia.org
www.deal4loans.com
www.apnaloan.com
www.bankbazar.com
www.ruppeetimes.com
www.guide2homeloan.com
Questionnaire
Name of the Bank :
Address :
E-mail :
1. What are your housing / education loan products?

2. What is the rate of interest for housing / education loan?
Floating rate of interest
Fixed rate of interest
(Concession Offered if any?)
What are the documents required for housing / education loan?
What is the maximum amount a borrower can take for housing / education loan?
What percent of margin is allowed on the loan amount?
What is the amount of housing loan in the total disbursement of loan?
a 0-20% b.20-40% c.40-60% d. 60-80% e. 80% and above
What security is to be provided to process the loan?
(Is a Guarantor required (If so what his / her age limit must be)?)
What is the repayment period?
0-5 years
5-10 years
15-20 years
20 years and above
8.
9.
How many days are required for processing a housing / education loan application?
a. 0-10 days
30-40 days
b. 10-20 days
40 days and above
How many days are required for disbursing first installment of loan amount?
d. 0-10 days
30-40 days
e. 10-20 days
40 days and above
10. What is the amount to be paid to process the loan application?

11. What will be the penalty if a part or full loan amount is prepaid?
12. Whether branch will be given as per borrowers choice?
13. What value added services you provide for the borrower?
14. What is the rating system followed in processing the loan?
15. Does interest rate depends on rating system or not?
Financial Statements of Bank of Baroda

(FY 2009-2010)
Balance Sheet
Profit & Loss Statement

Project On Retail Assets of BOB Ok

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SUMMER INTERNSHIP PROGRAM

Competitive Analysis Of Retail Assets and

SINHGAD INSTITUTE OF BUSINESS ADMINISTRATION AND

Banking Industry Background

f. Structure of Indian Finance System

i. The Business of Banking

4. Bank of Baroda Background

Mission & Vision Statement

Company Network (National & International)

d. RBI Directives for Home Loans

Home Loans in India

Comparative Analysis of PSU Banks

Competitive Advantage of BOB Over SBI

Comparative Analysis of Private Sector Banks

Competitive Advantage of PSU Banks Over Private Banks

Education Loans in India

Comparative Analysis of PSU Banks

Competitive Advantage of BOB Over SBI

Comparative Analysis of Private Sector Banks

Competitive Advantage of PSU Banks Over Private Banks

b. Steps of Research Methodology

Banking and Finance in India

Structure / Constituents of Indian Finance System

The Business of Banking

A Saga of Vision and enterprise

Total Business (Deposit+ Advances) increased to Rs 2,58,735.45 crore

Objective of Bank of Baroda

Global Presence of Bank of Baroda

Branch Network (as of 22/06/2010)

Wide Global Network

State Bank of India

Stock Broking Entities

Punjab National Bank

HUF (Hindu Undivided Family)

Union Bank of India

Public Limited Companies

Private Limited Companies

Corporate Partnership Firms

The Values of the Bank

Management Team - The core strength of

Future of the Bank

into future to face & thrive in

Technology and Tech Initiatives

intense competitive environment

that is emerging in global era.

Corporate Banking and Credit

Objective of the Study

To know the scenario of home loans and education loans in India.

competitors in home loan and education loan category.

the sanction of loans.

rejection of loan applications.

of Baroda and other financial institutions in retail loan segment.

India to the applicants in home loan and educational loan category.

customers point of view.

Procedure for applying Retail Loans

CIBIL (Credit Information Bureau (India) Limited) Reports

Online Automation of Customer Data (LAPS)

Inspection (Residence, Work Place, Personal Property)

Comparative Study of Housing Loan Applicants

Lokesh Kumar Singh

Yes (Short Term)

Purchase of Old Flat