COMPARATIVE STUDY OF HOME LOANS OF PNB

AND SBI BANK.

A dissertation submitted to Department of Management

in partial fulfillment of the requirement for the award of degree of
BACHELOR OF BUSINESS ADMINISTRATION (HONS.)

Submitted by: Supervisor:

KOMAL MARWAHA Miss Monika Kanali
7020070003 (lect,lpu)

LOVELY PROFESSIONAL UNIVERSITY

PHAGWARA
2010

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 TO WHOMSOEVER IT MAY CONCERN

This is to certify that the project report titled “Comparative study of home loans of
PNB and SBI” carried out by Miss KOMAL MARWAHA, D/o RAJESH
MARWAHA has been accomplished under my guidance & supervision as a duly
registered BBA(Hons) student of the Department of Management, Lovely
Professional University, Phagwara. This project is being submitted by him/her in the
partial fulfillment of the requirements for the award of the BBA(Hons) from Lovely
Professional University.

Her dissertation represents her original work and is worthy of consideration for the
award of the degree of BBA(Hons)

(Name & Signature of the Faculty Advisor)

Title:
Dare:

2
 DECLARATION

I KOMAL MARWAHA, hereby declare that the work presented herein is genuine
work done originally by me and has not been published or submitted elsewhere for the
requirement of a degree programme. Any literature, data or works done by others and
cited within this dissertation has been given due acknowledgement and listed in the
reference section.

(Student's name & Signature)

(Registration No.)

Date:

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 Acknowledgement

First of all my sincere gratitude goes to my academic supervisor Miss Monika Kanali,
lecture, lovely professional university,phagwara,who helpd andguided me for this
work. Her conversation and encouragement will always be remembered. In many
stages of project, her proudful expertise and professional knowledge provided crucial
and key injection to the technical solution.
I also would like to thanks all the staff members of the department, for their
cooperation and support during this work.
Finally, I wish to thank my family and friends for their encouragement and support
that accomplishment me throughout the research work.

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 TABLE OF COTENTS

Page Chapter
no.
6-11 CHAPTER 1
Section

1.1 Introduction to Subject

1.2 Objective, Need, Scope & Methodology

12-28 CHAPTER 2

Section
2.1 Introduction to Company
2.2 Overview of the industry (History, Growth, Landmarks, major players and
their market share)
2.3 Profile of the organization
2.4 Company’s history
2.5 Recent achievements and milestones
2.6 Product range of the company/industry
2.7 Performance of the company over the last few years(Statistical Profile)
2.8 Financial status of the organization
2.9 Future prospects/ plans

29-35 CHAPTER 3

Survey of Literature

36-65 CHAPTER 4

Interpretation

66 CHAPTER 5

Section
5.1 Conclusion
5.2 Limitations

67-69 CHAPTER 6
References
70-72 CHAPTER 7
Questionnaire

5
CHAPTER 1

1.1 Section

INTRODUCTION TO SUBJECT:

Home loans work like any other debt. That is, loans are simply specific money that
we borrow from a bank, a private lender, or some other type of lender. Afterwards, we
must repay our debts with interest. However, unlike other types of loans, home loans
are different in several respects. Owning a piece of land or property is a lifetime
dream for every individual. There are many home loans provider in the market.
There are different type of home loan i.e.

• Home Purchase Loans

• Home Improvement Loans
• Home Construction Loans
• Home Extension Loans
• Home Equity Loans
• Land Purchase Loans
• Bridge Loans

Home purchase loans: These are the basic forms of home loans used for
purchasing of a new home. With about a million home lenders and mortgage brokers
it's becoming a tough challenge as the days are progressing. But at the same time,
when the sites are coming up with all the latest tools and relevant information for us,
and with all such conveniences, obtaining a home purchase loan or mortgage has

6
become really pretty simple. However, at the same time though, we may be
flummoxed to look so many attractive rates and offers in the market, not to forget the
hidden costs associated with each of them.

Home improvement loan: Home improvement loans are used to finance

improvements and add on to the existing set of credentials of beauty on your owned
house, recently purchased property or rented accommodation. Home improvement
loans are used to maintain or enhance the value of your house.

In general it includes: repairs, remodeling, energy-related items (permanent in nature),

repairs, a new kitchen, a new bathroom, terrace, an extension or general property
improvements. Luxury items and fireplaces are generally not eligible, though. Many
improvements in landscape and even swimming pools are nowadays considered to be
a part of home improvement.

Home construction loan: Home construction loans are used to finance for the
construction of our newly acquired home or if we are planning to build a home.

The factors include in calculations for house building costs?

• Design of the house

• Construction cost
• Financing Cost
• Buildable site

All the above mentioned costs will help us to determine the amount we may need to
borrow. For example, besides calculating the construction costs, we may also be
required to consider the total expenditures to develop the site in order to build. Each
site is unique requiring different expenditures so this specific rupee amount will vary
from site location to site location.

Payment: Before the house starts getting build, we will be required to pay a deposit
to your builder as well as paying a deposit for the land if we are buying land. As work
progresses you will need to make payments to the builder. Certain loans can be
structured for progress payments to be made during construction.

Home extinction loan

Home extension loans are used by customers to get loans from the banks to extend
their houses, by adding more rooms, kitchens, wash rooms, terraces, or any other
rooms for your growing family. It may also be used to enclose open balcony/terrace
space, or constructing a Puja ghar.

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Maximum Amount of Home Extension Loans:

Banks generally offers about 70-85% of the total amount of home extension as loan.
The amount of loan sanctioned also depends on a number of factors such as the age of
the applicant at the time of loan, tenure of the loan, repayment capacity of the
borrower; his/her credit history etc.

Home equity loan:

Home equity loans helps customer to encash the market value of the commodity by
taking a loan by mortgaging the property. So, Home equity loans are availed by
customers, who wish to mortgage his/her property to the bank for taking some loan
for some other purpose. Then, it's up to the bank's discretion to consider the market
value of the property and accordingly decide how much to pay to the customer.

Both the residential as well as non residential property can be considered for the
approval of the loan, provided the mortgager is a licensed title holder and the land is
free form any kind of dispute.

Home equity loans don't restrict one to use the loan money in specific investments. It
might also be used in marriage, higher education, medical expenses, etc. However it
should not be used in any illegal or speculation purposes.

land purchase loan:

Land Purchase loans are used by customers who wish to purchase a plot of land for
commercial or residential purpose. Everyone has his/her dream perfectly sketched in
his souls and so is his ambition to get his house erected on the exact location he
dreamt that to be. If you have found and shorlisted the piece of land, and have arrived
here for finance, you have come to the best place you could have arrived in the web.

Now, that you have decided to purchase a land as an investment or for your own
dream home, you will realize that a land purchase loan is one you will cherish.

Loans that are strictly for land purchase can be as scarce as good residential plots.
While many lending firms around the nation compete to provide mortgages for the
purchase of a house on a lot, only local institutions typically will be interested in
lending for an empty lot.

Bridge loan:

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. Bridge loans are used by customers as an effective vehicle to capitalize on
a purchase opportunity. It can be considered as a short term financing scheme which

8
is generally expected to be paid back, within the range of 6-36 months, till the time
the borrower gets more permanent and lower cost financing.

So, bridge loans, (or swing loans as they are otherwise said) is a short term loan
provided by various banks like Bank of India, Citibank, ICICI etc. often used for
commercial real estate purchases, retrieve real estate from foreclosure.

Bridge loans in corporate finance are called gap financing, and are used to cover the
time between redemption of issuance of one bond and its replacement by a new issue.
They can also be operating loans for periods between LOI and acquisition, or quiet
period and IPO.

Bridge loan may contain a decent proportion of prepaid interest, sometimes as much
as six months. If the home gets sold before that time, you may receive interest
payments back, but if it hasn't sold, you may be required to continue payments.

1.2 Section

OBJECTIVES

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

 To know that which bank provide batter loan schemes.
 To analyze the home loan scheme by PNB and SBI banks.
 To know the consumer perception about the home loan of PNB and SBI.

SCOPE OF THE STUDY: This study is analysis and comparison of home loans
provided by the SBI and PNB banks. It is helpful in analysing the home loan service
provided to the customer and their comparison.

RESEARCH METHODOLOGY
Design of Research:
The research will be exploratory in nature. A population of peoples who take home
loan from these banks will be considered for this study. I will try to explore about the
home loans which would make a difference in the behavior of the consumer. Effort
will be made to throw light on most of the factors which have either indirect or direct
effect on the behavior of the consumer. I will also explore the impact of home loans
on the market share of the banks.

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Sampling plan:

• Population:

The study aimed to include the customers of SBI and PNB in nawanshahr, to
make a comparative analysis of home loan schemes of these two banks..

• Sample Size:
A Sample size of 100 respondents will be taken for the current study because it is
not possible to cover the whole universe in the available time period. So it is
necessary to take the sample size. In 100 respondents 50 respondents from PNB
and 50 from SBI. The sample will the peoples of age group lying between
eighteen to thirty years. The sample will be taken in the form of strata based on
age, sex, and income group.

• Sampling technique:

The sampling technique will be probabilistic sampling more specifically the

random convenient and judgemental sampling will be used. As in probabilistic
sampling the select unit for observation with known probabilities so that
statistically sound assumptions are supported from the sample to entire population
so that we had positive probability of being selected into the sample. I will go for
stratified random sampling as we are interested to study the home loan by SBI
and PNB banks, so we will make the strata on the basis of age, occupation,
income level, gender. And from each strata we will go for random sampling.

Sources of Data:

I will use primary source of data that is structured questionnaire. As these banks are
established from so many years, so many researchers have done research on this topic,
so we will find secondary data also and also use this data for the help of this research.
So, this research data will collected from the primary source and secondary source.

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

Tools and Techniques:

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

- BAR CHARTS

- PIE CHARTS

- TABLES

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

Technological Tools:
MS -WORD
MS-EXCEL

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CHAPTER 2

2.1 Section

INTRODUCTION TO COMPANY:

PUNJAB NATIONAL BANK :

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

STATE BANK OF INDIA:

State Bank of India (SBI) is India's largest commercial bank. SBI has a vast domestic
network of over 9000 branches (approximately 14% of all bank branches) and
commands one-fifth of deposits and loans of all scheduled commercial banks in India.
The State Bank Group includes a network of eight banking subsidiaries and several
non-banking subsidiaries offering merchant banking services, fund management,
factoring services, primary dealership in government securities, credit cards and
insurance.The eight banking subsidiaries are:State Bank of Bikaner and Jaipur
(SBBJ),State Bank of Hyderabad (SBH).State Bank of India (SBI),State Bank of

12
Indore (SBIR),State Bank of Mysore (SBM),State Bank of Patiala (SBP),State Bank
of Saurashtra (SBS) and State Bank of Travancore (SBT).

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

2.2 Section

OVERVIEW OF THE INDUSTRY:

HISTORY:
Banking in India has a long and elaborate history of more than 200 years. The
beginning of this industry can be traced back to 1786, when the country’s first bank,
Bank of Bengal, was established. But the industry changed rapidly and drastically,
after the nationalization of banks in 1969. As a result, the public sector banks began
experiencing numerous positive changes and enormous growth. Then came the much-
talked-about liberalization and economic reforms that allowed banks to explore new
business opportunities and not just remain constrained to generating revenues from
mere borrowing and lending. This provided the Indian banking scenario a remarkable
facelift that only continues to get better with time. However, even today, despite the
foray of foreign banks in the country, nationalized banks continue to be biggest
lenders in the country. This is primarily due to the size of the banks and the
penetration of the networks.

The Indian banking system can be classified into nationalized banks, private banks
and specialized banking institutions. The industry is highly fragmented with 30
banking units contributing to almost 50% of deposits and 60% of advances. The
Reserve Bank of India is the foremost monitoring body in the Indian Financial sector.
It is a centralized body that monitors discrepancies and shortcomings in the system.

Industry estimates indicate that out of 274 commercial banks operating in the country,
223 banks are in the public sector and 51 are in the private sector. These private sector
banks include 24 foreign banks that have begub their operations here. The specialized
banking institutions that include cooperatives, rural banks, etc. form a part of the
nationalized banks category.
Opportunities

The Banking sector is considered the most lucrative option in today’s job market. In
the industry, a position in Treasury or Forex is considered right on top and this is
followed by careers in Private Banking, Investment Banking and Retail Banking. One
could work in a variety of areas in banking industry including Recurring Deposit

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account, banking officer, probationary officer, loan officer, assessor, personal loan
officer, home loan officer, home loan agent, loan manager, mortgage loan underwriter,
loan processing officer, accountant, product marketing and sales executive, and
customer service executive among others.

In the Financial Services, some of the important jobs include that of a stockbroker
who is essentially a person who buys and sells securities on behalf of individuals and
institutions for some commission. While some brokers like to practice with individual
clients others work for institutions. Brokers who work for institutional investors are
often called securities traders. Many prefer to work as dealers, advisors and securities
analysts. Security analysts are those who advise companies on floatation’s of shares
as they are expected to have sound knowledge of capital markets.
Investment analysts are the backbone of the financial services sector. They study the
financial reports of companies, assess various statistical information, profitability
projections, compare financial results, survey the industry as a whole and on the basis
of the available information, and finally conclude to a decision. Equity Analysts do
jobs similar to investment analysts and research the equity markets and make
predictions.

Growth:
The limit for foreign direct investment in private banks has been increased from 49%
to 74%. In addition, the limit for foreign institutional investment in private banks is
49%. Liberalization and globalization have created a more challenging environment in
the banking sector as well as in the other segments of the financial sector such as
mutual funds, Non Banking Finance Companies, post offices, capital markets, venture
capitalists, etc.

Research and Markets has announced the addition of 'Indian Retail Banking, 2006' to
their offering. Indian Retail Banking continues to redefine the credit growth in the
country. It grew by a whopping 44.4% in 2005-06 to touch Rs 3,538 billion. This leap
was despite the increase in risk weight by RBI for housing and real estate loans during
August, 2005. Housing, which constitutes more than 52% of all retail loans, grew at a
robust rate of 44.35% during 2005-06. In order to help banks in India to understand
the market and competition and plan future strategies, we have just come out with an
Industry Insight on Indian Retail banking - 2006 edition.

This report analyses the retail banking market and its segments in India and presents
the key trends, along with issues and challenges. The report also paints a future
outlook for the market. Besides it profiles 21 major players in the retail banking space
and their strategies.

Finally, it seems Reserve Bank of India's (RBI) flurry of measures to restrain the
home finance market is paying off. With tightening of interest rates by the RBI and a
simultaneous increase in real estate prices in a few markets, the banking sector is
witnessing a decline in the growth of its home loan portfolio.

The home loan industry is experiencing a growth of 25% this year, as against 30%
growth in home loans earlier. Rajiv Sabharwal, senior general manager, ICICI Bank,

14
which has recorded the highest incremental growth in home finance segment in recent
past, said, “The real estate prices have become very high in few markets, which has
resulted in the fall in growth rates for home loans for the banking industry. Home loan
growth has reduced to 25% from its earlier growth rate at 30% and since we are an
integral part of the industry, there will be some impact on us too.”

He added that the bigger impact had come from real estate prices, but obviously
interest rates hikes will also have an impact. He, however, declined to disclose the
bank’s current home loan growth rate. Echoing a similar view, a senior official of
State Bank of India (SBI) said the home loan market is showing some signs of
slowing down.

However, another major player, Housing Development Finance Corporation (HDFC)

said the housing finance market for the middle class segment was growing at a
healthy pace.

PNB Bank is a leading home loan lender of the country with about 30% market share.
Retail lending comprises 70% of the total loan portfolio of the bank, of which the
home loan lending is about 50%. In the first half of fiscal 2007, the bank experienced
total home loan disbursements of Rs 13,400 crore.

MAJOR PLAYERS:

The financial sector in India has become stronger in terms of capital and the number
of customers. It has become globally competitive and diverse aiming, at higher
productivity and efficiency.

Exposure to worldwide competition and deregulation in Indian financial sector has led
to the emergence of better quality products and services. Reforms have changed the
face of Indian banking and finance. The banking sector has improved manifolds in
terms of capital adequacy, asset classification, profitability, income recognition,
provisioning, exposure limits, investment fluctuation reserve, risk management, etc.

TOP 10 PLAYERS IN BANKING & FINANCE

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

TOP 10 PLAYERS IN INSURANCE

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Life Insurance corporation of India
Bajaj Allianz General Insurance
ICICI Prudential Life Insurance
ICICI Lombard General Insurance
Birla Sunlife Insurance
Tata AIG General Insurance
New India Assurance Co.
Iffco Tokio General Insurance
Oriental Insurance Co.
HDFC Standard Life Insurance

2.3 Section

PROFILE OF THE ORGANISATION:

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

 Strengthen the infrastructure in the government securities market in order to make it

vibrant, liquid and broad based.
 Ensure the development of underwriting and market making capabilities for
Government Securities
 Improve secondary market trading system, which would contribute to price discovery,
enhance liquidity and turnover and encourage voluntary holding of Government
securities amongst a wider investor base
 Become an effective conduit for conducting open market operations.

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PROFILE OF SBI:

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

The Corporate Banking Group consists of dedicated Strategic Business Units that
cater exclusively to specific client groups or specialize in particular product clusters.
Foremost among these a specialized group is the Corporate Accounts Group (CAG),
focusing on the prime corporate and institutional clients of the country’s biggest
business centers. The others are the Project Finance unit and the Leasing unit.The
National Banking Group also delivers the entire spectrum of corporate banking
products to other corporate clients, on a nationwide platform.

The bank is also looking at opportunities to grow in size in India as well as

Internationally. It presently has 82 foreign offices in 32 countries across the globe. It
has also 7 Subsidiaries in India – SBI Capital Markets, SBICAP Securities, SBI DFHI,
SBI Factors, SBI Life and SBI Cards - forming a formidable group in the Indian
Banking scenario. It is in the process of raising capital for its growth and also
consolidating its various holdings. Throughout all this change, the Bank is also
attempting to change old mindsets, attitudes and take all employees together on this
exciting road to Transformation. In a recently concluded mass internal
communication programme termed ‘Parivartan’ the Bank rolled out over 3300 two
day workshops across the country and covered over 130,000 employees in a period of
100 days using about 400 Trainers, to drive home the message of Change and
inclusiveness. The workshops fired the imagination of the employees with some other
banks in India as well as other Public Sector Organizations seeking to emulate the
programme.

2.4 section

17
COMPANY HISTORY:

PNB HISTORY:

Punjab National Bank of India was established by Lala Lajpat Rai in the pre-
independence India in 1895 in Punjab, with Lahore as its head office. Today it is the
second largest public sector bank in India. It was nationalized in 1969 along with 13
other major commercial banks. The privatization started in 1989 when 30 per cent of
its shares were offered to the public and it was listed on the stock exchange.In 1992,
PNB became the first Philippine bank to reach P100 billion in assets. Later that year,
privatization continued with a second public offering of its shares.

In August 2005, PNB was fully privatized. The joint sale by the Philippine
government and the Lucio Tan Group of the 67% stake in PNB was completed within
the third quarter of 2005. The Lucio Tan Group exercised its right to match the P
43.77 per share bid offered by a competitor and purchased the shares owned by the
government. The completion of sale is expected to speed up the development of
PNB’s franchise and operational competitiveness.

SBI HISTORY:

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

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

18
2.5 Section

RECENT ACHIVEMENTS AND MILESTONES:

PNB Recent achievements and milestones

Punjab National Bank (PNB), has announced that it has completed 100% core
banking implementation at all its 4604 branches and extension counters through the
Finacle Universal Banking Solution from Infosys, on Sun infrastructure and the
Oracle Database setting a significant milestone for themselves and a new benchmark
for the Indian banking industry.

Completed in November 2008, 4 months ahead of schedule, the bank implemented

industry-leading Finacle core banking solution from Infosys across its operations
running a flexible, and scalable database platform from Oracle and innovative servers
from Sun Microsystems

With an increasingly dynamic business and regulatory environment, PNB sought to

not only achieve automation, but also centralize operations, standardize branch
processes, achieve high scalability for future business growth, provide flexibility of
creating innovative banking products to its lines of business, and at the same time,
reduce overall costs.

The visionary zeal and the futuristic view of the Bank’s top management in the year
2007-2008 incubated the idea of introduction of a Centralised Banking solution. The
bold and innovative thought culminated into the CBS architecture with Finacle
application on Oracle Database and Sun hardware platform with Solaris Operating
System.

With Finacle’s agile and future proof technology, the bank today has over 22,500
concurrent users. The solution’s scalability has also enabled the bank’s scalability to
be the best in the country with the number of peak transactions at 3.5 million.

Finacle core banking platform also provides the bank with exceptional agility for
product innovation and improved flexibility of operations. With seamless integration
of delivery channels such as ATM and internet banking solutions, PNB is able to
provide 24X7 services to customers at a reduced transaction cost.

PNB’s choice of the Oracle Database has provided the bank’s IT infrastructure with
robustness, management features, security and scalability as well as performance
requirements to service 3.5 million transactions and 22500 concurrent users – a
significant achievement in the Indian banking industry. In addition, the Oracle
Database will help PNB take control of its enterprise information, gain better business
insight, and quickly and confidently adapt to an increasingly changing competitive
environment.

19
With secure, highly available and scalable grids of low-cost servers and storage,
Oracle customers can tackle the most demanding transaction processing, data
warehousing, business intelligence and content management applications.

The 100% implementation of Finacle Core Banking Solution shall enable PNB to
further reduce operational costs and revenue leakage while improving productivity of
branches, introduction of new and innovative products and visibility of business. The
anywhere anytime banking facility will enable the bank to offer products for every
segment of the customer.

PNB long-standing and progressive partnership also highlights Finacle’s leadership in

large scale banking transformation, the solution’s future proof technology and
powerful capabilities. India is a strategic market for Finacle and we look forward to
closely collaborating with Punjab National Bank for their future growth plans.”

SBI RECENT ACHIVEMENTS AND MILESTONES:

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

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

SBI joins Chinese bank to touch 10,000 branches:

Public sector State Bank of India on Sunday became only the second bank in the
world to have 10,000 branches when Union Finance Minister P Chidambaram
inaugurated its latest branch here.
Speaking on the occasion, Chidambaram said China's ICBC Bank was the other bank
to have 10,000 branches. Opening 10,000 branches was a great feat. "It is not an easy
milestone though the SBI was the bank of the government and Indian people even
before other banks were nationalised," he said.
People all over the world, including the Chinese, would now know about this small
village where the 10000th branch of the SBI had been opened, he said adding they
would be amazed by the bank's growth. The bank should be proud of the achievement
he said and wished that the bank opened one lakh branches.
The Minister said out of the over 100 crore people, seventy 75 per cent did not have
any type of insurance. Similarly, 50 per cent of the 11 crore farmers did not have bank
account. Banks should go to the people and enroll them as account holders. 'That is
what economists say is financial inclusion,' he said.

20
2.6 Section

PRODUCT RANGE OF COMPANY/INDUSTRY:

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

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

2.7 Section

PERFORMANCE OF COMPANTY IN LAST FIVE YEARS:

PNB performance in last five years: 1st Quarter Net Income UP 48% Year-on-Year
Taking-off from a breakthrough performance in 2007 with a registered net income of
P1.5 billion, PNB continues to reap the benefits from its efforts to strengthen core
businesses, reduce non-performing assets and manage costs. Net Income for the 1st
Quarter of 2008 registered P457 million, up 48% from P308 million of the same
period last year. This performance bucks industry trends for the 1st quarter of 2008
based on published income reports.

Even as the operating environment proved volatile where negative trends are expected,
PNB still managed to reflect a 136% growth in foreign exchange gains year-on-year,
from P242 million to P571 million. A relentless focus in generating low-cost funds
from deposits and other funding sources led to a reduction in total interest expense by
as much as 27%. Total deposits closed firm at P180 billion.

Operating expenses were down 23% despite investments made in systems

enhancement and upgrading of facilities. The Bank has recently implemented a new
generation core banking system: Flexcube – an end-to-end solution designed to
automate both corporate and retail banking businesses; and effectively in-source core
overseas operations to its global data center in the Philippines. PNB’s Japan,
Singapore, Hongkong and United States branches as well as the London subsidiary
have already been converted and the rest of the Bank is expected to go live soon.

As of March 31, 2008, PNB’s consolidated total asset size remained strong at P242
Billion, up P2.7 billion versus end-2007. With the significant strengthening of its
balance sheet over the past few years, PNB has been able to concentrate on generating
new client relationships in the corporate segment, both in the large and SME
categories. The contribution from the consumer finance business has likewise
continued to register accelerated growth. Total consumer loans portfolio stood at P3.3

21
billion, up 25% from end-2007. Combined new bookings for the 1st quarter 2008
already reached the half-billion mark. PNB’s Net Loans and Receivables closed P77
billion.

As of March 31, 2008, PNB’s Capital Adequacy Ratio under Basel II remained
formidable at 18.51%, still way above the 10% ratio required by the Bangko Sentral
ng Pilipinas. Subject to appropriate approvals and clearances, PNB is going to the
capital markets to raise a minimum of P3 billion of Tier 2 Capital in preparation for
its maturing subordinated notes in February 2009.

PNB will emerge as the 4th largest domestic bank in the country in terms of asset size
once its planned merger with Allied Banking Corporation (ABC) is completed. The
respective Board of Directors of PNB and ABC passed resolutions last April 30, 2008
approving the plan to merge the two banks. This transaction is subject to the approval
of shareholders and regulatory authorities and is expected to be completed by the 3rd
quarter of 2008.

SBI performance in last five years: State Bank of India (SBI) is all geared up to
increase its business per employee and profit per employee as it thinks that for SBI,
these two parameters are among the lowest in the industry.
On one hand, the bank is trying to reduce its staff strength
which would eventually improve the ratios; but on the other, the bank is also going
flat out to increase its customer base.

"Our business per employee and profit per employee is one of the lowest in the
industry," SBI had recently said in a joint statement issued by the management and
unions.SBI's generates Rs 2.99 crore of business per employee, while its profit per
employee is just about Rs 2.17 lakh. By contrast, majority of the large public sector
banks are better in terms of both these parameters.

For instance, Canara Bank has a business per employee (BPE) of Rs 4.42 crore, while
Union Bank of India's BPE is at Rs 4.36 crore and Bank of Baroda's (BoB) Rs 3.51
crore. These are according to their respective annual reports for 2005-06.

On the other hand, Canara Bank's profit per employee (PPE) is also on the higher side
at Rs 3.02 lakh. The PPEs of Union Bank and BoB are at Rs 2.66 lakh and Rs 2.13
lakh, respectively.

"Over the years, we have been steadily losing our marketshare from about 35% in
1970s to around 16% in 2006. Our vast network is failing to attract the new and
demanding young customers," SBI said in that statement, which is addressed to all
SBI officers and employees andaimed at changing their attitude towards customers.

22
The statement was jointly signed by chairman OP Bhatt, managing directors TS
Bhattacharya and Yogesh Agarwal and top office bearers of its officers and
employees associations.

To address these issues, both the management and unions have agreed to work hand
in hand. They have appealed to the bank's staffs to go flat out to increase its customer
base."Let us be conscious of the customer's overall needs rather than only the
transaction at hand. Let us expand our customer base," the statement read.

The bank has nearly 37 lakh savings bank accounts in the Bengal circle
itself.Meanwhile, the country's largest and oldest bank has offered an exit option
scheme (EOS) to its employees. The bank has some 2.1 lakh staffs, out of which
nearly 1.4 lakh are clerical and subordinate employees.

2.8 Section

FINANCIAL STATUS OF THE ORGANISATION:

PNB financial status for last five years:

Annual results
Mar ' 08 Mar ' 07 Mar ' 06 Mar ' 05 Mar ' 04
Sales 14,265.02 11,537.48 9,584.15 8,459.85 7,778.94

Operating profit 10,029.21 7,149.74 5,721.06 4,683.04 4,056.84

Interest 8,730.86 6,022.91 4,917.39 4,453.11 4,154.99
Gross profit 4,006.24 3,230.64 2,874.77 2,707.21 3,120.86
EPS (Rs) 64.98 48.84 45.65 44.72 41

Balance sheet
Mar ' 08 Mar ' 07 Mar ' 06 Mar ' 05 Mar ' 04
Sources of funds
Owner's fund

Equity share capital 315.30 315.30 315.30 315.30 265.30

Share application money - - - - -

Preference share capital - - - - -
Reserves & surplus 10,467.35 9,826.31 8,758.68 7,533.50 4,425.47
Loan funds

23
Secured loans - - - - -
Unsecured loans 1,66,457.23 1,39,859.67 1,19,684.92 1,03,166.89 87,916.40
Total 1,77,239.88 1,50,001.28 1,28,758.90 1,11,015.69 92,607.16
Uses of funds
Fixed assets

Gross block 3,699.64 2,247.74 2,106.92 1,875.65 1,645.93

Less : revaluation reserve 1,535.70 293.85 302.38 312.49 321.04
Less : accumulated depreciation 1,384.12 1,237.92 1,076.69 910.42 746.08
Net block 779.83 715.98 727.84 652.74 578.81
Capital work-in-progress - - - - -
Investments 53,991.71 45,189.84 41,055.31 50,672.83 42,125.49
Net current assets
Current assets, loans &
4,380.84 3,980.80 3,762.79 3,101.44 3,261.18
advances
Less : current liabilities & 14,798.23 10,178.51 9,518.93 12,194.80 8,114.48
provisions
Total net current assets -10,417.38 -6,197.71 -5,756.14 -9,093.36 -4,853.30
Miscellaneous expenses not - - - - -
written
Total 44,354.15 39,708.10 36,027.01 42,232.20 37,850.99
Notes:
Book value of unquoted
- - - - -
investments
Market value of quoted - - - - -
investments
Contingent liabilities 1,04,055.87 74,700.48 58,739.31 47,047.19 32,229.85
Number of equity 3153.03 3153.03 3153.03 3153.03 2653.03
sharesoutstanding (Lacs)

Profit loss account

Mar ' 08 Mar ' 07 Mar ' 06 Mar ' 05 Mar ' 04
Income:

Operating income 15,925.65 12,104.24 9,791.12 9,712.63 9,617.34

Expenses

Material consumed - - - - -
Manufacturing expenses - - - - -
Personnel expenses 2,461.54 2,352.45 2,114.97 2,121.23 1,654.06
Selling expenses 23.31 18.03 20.15 19.16 10.85

24
Adminstrative expenses 1,247.47 1,360.77 941.38 933.60 1,764.91
Expenses capitalised - - - - -
Cost of sales 3,732.33 3,731.25 3,076.51 3,073.99 3,429.82
Operating profit 3,462.46 2,350.09 1,797.23 2,185.53 2,032.53
Other recurring income 231.62 186.67 131.54 470.69 59.85
Adjusted PBDIT 3,694.08 2,536.76 1,928.77 2,656.22 2,092.38
Financial expenses 8,730.86 6,022.91 4,917.39 4,453.11 4,154.99
Depreciation 170.23 194.80 186.65 183.28 181.45
Other write offs - - - - -
Adjusted PBT 3,523.85 2,341.96 1,742.12 2,472.94 1,910.93
Tax charges 1,247.15 629.05 412.83 495.49 660.79
Adjusted PAT 2,047.63 1,539.33 1,436.66 1,409.50 1,108.45
Non recurring items 1.13 0.76 2.65 0.62 0.24
Other non cash adjustments - - - - -
Reported net profit 2,048.76 1,540.08 1,439.31 1,410.12 1,108.69
Earnigs before appropriation 2,064.28 1,723.57 1,439.31 1,410.12 1,108.69
Equity dividend 409.89 409.89 189.18 174.18 106.12
Preference dividend - - - - -
Dividend tax 69.66 63.11 26.53 23.48 13.60
Retained earnings 1,584.73 1,250.57 1,223.60 1,212.46 988.97

Cash flow
Mar ' 08 Mar ' 07 Mar ' 06 Mar ' 05 Mar ' 04
Profit before tax 3,295.91 2,169.13 2,033.87 1,904.74 1,768.68

Net cashflow-operating activity 1,756.13 -10,144.34 14,961.44 1,073.53 529.29

Net cash used in investing activity -444.46 -159.41 -465.64 -349.83 -176.20
Netcash used in fin. activity 1,873.54 1,157.57 -793.13 1,544.81 390.24
Net inc/dec in cash and equivlnt 3,185.21 -9,146.17 13,702.66 2,268.51 743.33
Cash and equivalnt begin of year 15,645.52 24,791.69 11,089.03 8,820.51 8,077.19
Cash and equivalnt end of year 18,830.72 15,645.52 24,791.69 11,089.03 8,820.51

SBI financial status for last five years:

Annual results
Mar ' 09 Mar ' 08 Mar ' 07 Mar ' 06 Mar ' 05
Sales - - 0.90 0.44 0.66

Operating profit - - 0.35 -0.06 -0.03

25
Interest 24.67 21.36 21.29 21.30 21.30
Gross profit -24.63 -18.24 -4.79 -21.17 -20.35
EPS (Rs) -16.42 -12.17 -3.19 -14.13 -13.58

Balance sheet
Mar ' 08 Mar ' 07 Mar ' 06 Mar ' 05 Mar ' 04
Sources of funds
Owner's fund

Equity share capital 15.00 15.00 15.00 15.00 15.00

Share application money - - - - -

Preference share capital - - - - -
Reserves & surplus -309.56 -291.32 -286.64 -265.66 -245.35
Loan funds

Secured loans - - - - -
Unsecured loans - - - - -
Total -294.56 -276.32 -271.64 -250.66 -230.35
Uses of funds
Fixed assets

Gross block 0.57 0.57 0.72 0.72 2.86

Less : revaluation reserve - - - - -
Less : accumulated depreciation 0.10 0.10 0.24 0.24 1.59
Net block 0.48 0.48 0.48 0.48 1.27
Capital work-in-progress - - - - -
Investments - - - - -
Net current assets

Current assets, loans & advances 11.44 16.30 23.98 24.38 32.15
Less : current liabilities & provisions 306.47 293.09 296.10 275.52 263.77
Total net current assets -295.04 -276.79 -272.12 -251.14 -231.62
Miscellaneous expenses not written - - - - -
Total -294.56 -276.32 -271.64 -250.66 -230.35
Notes:

Book value of unquoted investments - - - - -

Market value of quoted investments - - - - -
Contingent liabilities 0.22 0.21 0.22 10.40 10.40
Number of equity sharesoutstanding 150.00 150.00 150.00 150.00 150.00

26
(Lacs)

Profit loss account

Mar ' 08 Mar ' 07 Mar ' 06 Mar ' 05 Mar ' 04
Income:

Operating income 1.02 0.90 0.44 0.66 10.90

Expenses

Material consumed - - - - -
Manufacturing expenses 0.03 - - - -
Personnel expenses 0.12 0.09 0.14 0.20 0.72
Selling expenses - - - - 0.03
Adminstrative expenses 0.29 0.41 0.29 0.48 12.45
Expenses capitalised - - - - -
Cost of sales 0.44 0.51 0.44 0.68 13.20
Operating profit 0.58 0.39 0.01 -0.03 -2.30
Other recurring income 2.53 12.16 0.10 0.79 -
Adjusted PBDIT 3.11 12.55 0.11 0.76 -2.30
Financial expenses 21.36 21.35 21.36 21.30 28.66
Depreciation - - 0.01 0.02 1.02
Other write offs - - - - -
Adjusted PBT -18.24 -8.80 -21.26 -20.56 -31.98
Tax charges - 0.01 0.01 - -
Adjusted PAT -18.25 -8.81 -21.27 -20.56 -31.98
Non recurring items - - 0.01 0.08 -2.95
Other non cash adjustments - 4.13 0.27 0.17 9.65
Reported net profit -18.25 -4.67 -20.99 -20.31 -25.29
Earnigs before appropriation -312.32 -294.08 -289.40 -268.42 -248.11
Equity dividend - - - - -
Preference dividend - - - - -
Dividend tax - - - - -
Retained earnings -312.32 -294.08 -289.40 -268.42 -248.11

Cash flow
Mar ' 08 Mar ' 07 Mar ' 06 Mar ' 05 Mar ' 04
Profit before tax -18.24 -4.67 -20.98 -21.06 -25.29

27
Net cashflow-operating activity -4.89 5.65 0.08 -7.02 88.19
Net cash used in investing activity - - 0.01 0.85 29.46
Netcash used in fin. activity - - - -0.46 -131.50
Net inc/dec in cash and equivlnt -4.89 5.65 0.09 -6.64 -13.85
Cash and equivalnt begin of year 16.16 10.51 10.42 17.06 30.91
Cash and equivalnt end of year 11.27 16.16 10.51 10.42 17.06

2.9 Section

FUTURE PLANS:

PNB future plans:

PNB has initiated various steps in a bid to expand its operations in the state of Kerala.
These include opening new branches and increasing the number of its core banking
solutions branches. PNB currently has 71 CBS branches in Kerala and has registered
good growth from this region.

PNB in looking at increasing its international presence and in line with this, the
company is planning to set up offices in UK, Singapore, Hong Kong and Canada. The
Canada office is likely to open very soon, while the other locations are likely to
commence operations by end of this fiscal year.

PNB unvieled its plans to raise additional capital of Rs. 21,000 million to fund its
business expansion plans for this current fiscal.

SBI future plans:

SBI has set for itself an ambitious target of credit linking 1 million SHGs up to March
2008.The Bank has started to leverage our vast SHG network for various services
beyond credit delivery.

The State Bank of India (SBI) has formulated a “home-grown strategy” to merge its
six associated banks with it within this fiscal.
SBI drawn up a home-grown strategy to carry out the merger programme and we may
take up such mergers one by one, or two at a time or in a phased manner. SBI want
the future mergers to be as smooth as the merger.Post-merger, the size of SBI’s
balance sheet will cr-oss Rs 12,00,000 crore and its profitablity will increased.

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CHAPTER 3

REVIEW OF LITERATURE:

1) In august 2001 James B. Thomson and Ben R. Craig had studied about the
Federal Home Loan Bank Lending to Community Banks,are Targeted
Subsidies Necessary? The Gramm-Leach-Bliley Act of 1999 amended the
lending authority of the Federal Home Loan Banks to include advances
secured by small enterprise loans of community financial institutions. Three
possible reasons for the extension of this selective credit subsidy to
community banks and thrifts are examined, including the need to: subsidize
community depository institutions, stabilize the Federal Home Loan Banks,
and address a market failure in rural markets for small enterprise loans.

They empirically investigate whether funding constraints impact the small-

business lending decision by rural community banks. Specifically, they
estimate two empirical models of small-business lending by community banks.
The data reject the hypothesis that access to increased funds will increase the
amount of small-business loans made by community banks.

2) In December 2006 Fulbag Singh and Reema Sharma had studied about the
housing Finance in India. Housing, as one of the three basic needs of life,
always remains on the top priority of any person, economy, government and
society at large. In India, majority of the population lives in slums and shabby
shelters in rural areas. From the last decade, the Government of India has been
continuously trying to strengthen the housing sector by introducing various
housing loan schemes for rural and urban population. The first attempt in this
regard was the National Housing Policy (NHP), which was introduced in 1988.
The National Housing Bank (NHB) was set up in 1988 as an apex institution
for housing finance and a wholly-owned subsidiary of Reserve Bank of India
(RBI). The main objective of the bank is to promote and establish the housing
financial institutions in the country as well as to provide refinance facilities to
housing finance corporations and scheduled commercial banks. Moreover, for
the salaried section, the tax rebates on housing loans have been introduced.
The paper is based on the case study of LIC Housing Finance Ltd., which
analyzes region-wise disbursements of individual house loans, their portfolio
amounts and the defaults for the last ten years, i.e., from 1995-96 to 2004-05
by working out relevant ratios in terms of percentages and the compound
annual growth rates. A relevant chart has also been prepared to highlight the
results.

3) In May 18, 2007 Michael LaCour-Little had studied about the Economic Factors
Affecting Home Mortgage Disclosure Act Reporting. The public release of the 2004-
2005 Home Mortgage Disclosure Act data raised a number of questions given the
increase in the number and percentage of higher-priced home mortgage loans and
continued differentials across demographic groups. Here we assess three possible
explanations for the observed increase in 2005 over 2004: (1) changes in lender
business practices; (2) changes in the risk profile of borrowers; and (3) changes in
the yield curve environment. Results suggest that after controlling for the mix of loan
types, credit risk factors, and the yield curve, there was no statistically significant

29
 increase in reportable volume for loans originated directly by lenders during 2005,
though indirect, wholesale originations did significantly increase. Finally, given a
model of the factors affecting results for 2004-2005, we predict that 2006 results will
continue to show an increase in the percentage of loans that are higher priced when
final numbers are released in September 2007.

4) In may 1991 Stephen F. Borde had studied about the “Is the Savings and Loan
Industry Facing Extinction?” This article tells about the Saving and loan crisis.
Proposed solutions are discussed in the context of the industry as it currently stands.
With a somewhat similar liability structure to that of banks (mainly short-term
deposits), the asset structure of S&Ls is quite different. Whereas banks assets
consist of short-term loans, S&L assets consist largely of long-term loans, such as
home ownership mortgages. Therefore, in the absence of adequate hedging
measures, S&Ls are more vulnerable to interest rate risk, which can lead to lower
profits when interest rates rise.

5) In June 29, 2001 Joshua Rosner had studied about the Housing in the New
Millennium: A Home Without Equity is Just a Rental with Debt.
They studied about the prospects of the U.S. housing/mortgage sector over the next
several years. Based on our analysis, we believe there are elements in place for the
housing sector to continue to experience growth well above GDP. However, we
believe there are risks that can materially distort the growth prospects of the sector.
Specifically, it appears that a large portion of the housing sector's growth in the
1990's came from the easing of the credit underwriting process. Such easing includes:

* The drastic reduction of minimum down payment levels from 20% to 0%

* A focused effort to target the "low income" borrower
* The reduction in private mortgage insurance requirements on high loan to value
mortgages
* The increasing use of software to streamline the origination process and
modify/recast delinquent loans in order to keep them classified as "current"
* Changes in the appraisal process which has led to widespread overappraisal/over-
valuation problems

If these trends remain in place, it is likely that the home purchase boom of the past
decade will continue unabated. Despite the increasingly more difficult economic
environment, it may be possible for lenders to further ease credit standards and more
fully exploit less penetrated markets. Recently targeted populations that have
historically been denied homeownership opportunities have offered the mortgage
industry novel hurdles to overcome. Industry participants in combination with eased
regulatory standards and the support of the GSEs (Government Sponsored
Enterprises) have overcome many of them.

If there is an economic disruption that causes a marked rise in unemployment, the

negative impact on the housing market could be quite large. These impacts come in
several forms. They include a reduction in the demand for homeownership, a decline
in real estate prices and increased foreclosure expenses.

These impacts would be exacerbated by the increasing debt burden of the U.S.
consumer and the reduction of home equity available in the home. Although we have
yet to see any materially negative consequences of the relaxation of credit standards,
we believe the risk of credit relaxation and leverage can't be ignored. Importantly, a
relatively new method of loan forgiveness can temporarily alter the perception of
credit health in the housing sector. In an effort to keep homeowners in the home and
reduce foreclosure expenses, holders of mortgage assets are currently recasting or
modifying troubled loans. Such policy initiatives may for a time distort the relevancy of
delinquency and foreclosure statistics. However, a protracted housing slowdown
could eventually cause modifications to become uneconomic and, thus, credit quality

30
 statistics would likely become relevant once again. The virtuous circle of increasing
homeownership due to greater leverage has the potential to become a vicious cycle
of lower home prices due to an accelerating rate of foreclosures.
6) In dec 2002 Melissa B. Jacoby had studied about the Home Ownership Risk Beyond
a Subprime Crisis: The Role of Delinquency Management. They studied that Public
investment in and promotion of homeownership and the home mortgage market often
relies on three justifications to supplement shelter goals: to build household wealth
and economic self-sufficiency, to generate positive social-psychological states, and to
develop stable neighborhoods and communities. Homeownership and mortgage
obligations do not inherently further these objectives, however, and sometimes
undermine them. The most visible triggers of the recent surge in subprime
delinquency have produced calls for emergency foreclosure avoidance interventions
(as well as front-end regulatory fixes). Whatever their merit, I contend that a system
of mortgage delinquency management should be an enduring component of housing
policy. Furtherance of housing and household policy objectives hinges in part on the
conditions under which homeownership is obtained, maintained, leveraged, and - in
some situations - exited. Given that high leverage or trigger events such as job loss
and medical problems play significant roles in mortgage delinquency independent of
loan terms, better origination practices cannot eliminate the need for delinquency
management.

One function of this brief essay is to identify an existing rough framework for
managing delinquency. Legal scholarship should no longer discuss mortgage
enforcement primarily in terms of foreclosure law and instead should include other
debtor-creditor laws such as bankruptcy, industry loss mitigation efforts, and third-
party interventions such as delinquency housing counseling. In terms of analyzing
this framework, it is tempting to focus on its impact on mortgage credit cost and
access or on the absolute number of homes temporarily saved, but my proposed
analysis is based on whether the system honors and furthers the goals of wealth
building, positive social psychological states, and community development. Because
those ends are not inexorably linked to ownership generally or owning a particular
home, a system of delinquency management that honors these objectives should
strive to provide fair, transparent, humane, and predictable strategies for home exit as
well as for home retention. Although more empirical research is needed, this essay
starts the process of analyzing mortgage delinquency management tools in the
proposed fashion.

7) In 1999 Yoko Moriizumi had studied about the Current Wealth, Housing Purchase
and Private Housing Loan Demand in Japan.
Japanese households accumulate wealth for downpayments at a high rate. Therefore,
current wealth plays an important role in home acquisition as public loans whose
direct mortgage lending is a strong support for home purchasers. We estimate the
wealth effect on private mortgage debt as well as housing consumption by applying a
model where mortgage debt demand is derived from house purchase decisions and
is determined jointly with housing consumption. We use a simultaneous equation
Tobit estimation method. Wealth effects on private mortgage debt, likelihood of
borrowing, and housing consumption are not elastic. On the other hand, a change in
housing consumption affects the likelihood of borrowing elastically much more than
the private mortgage amount of borrowers. Housing and private mortgage markets
fluctuate very closely with the number of participants in the mortgage market.
Therefore, the number of housing starts is linked strongly to the private mortgage
market.

8) Robert B. Avery and Allen N. Berger had studied about the Loan commitments
and bank risk exposure. They studied about the Loan commitments increase a
bank's risk by obligating it to issue future loans under terms that it might
otherwise refuse. However, moral hazard and adverse selection problems

31
 potentially may result in these contracts being rationed or sorted. Depending
on the relative risks of the borrowers who do and do not receive commitments,
commitment loans could be safer or riskier on average than other loans. the
empirical results indicate that commitment loans tend to have slightly better
than average performance, suggesting that commitments generate little risk or
that this risk is offset by the selection of safer borrowers.

9) Sumit Agarwal,Souphala Chomsisengphet and John C. Driscoll had studied

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

10) Faik Koray and Eric T. Hillebrand had studied about the Interest Rate Volatility and
Home Mortgage Loans . they studied that The U.S. economy has experienced
substantial fluctuations in real and nominal interest rates since the 1970s. This
paper investigates empirically the relationship between home mortgage loans
and volatility in mortgage rates for the period 1971:02 through 2003:03.
Contrary to common wisdom, we find a positive relationship between mortgage
rate volatility and home mortgage loans. Further investigation indicates that
this is due to volatility in the bond market. In times of high interest volatility,
households disinvest in government securities and invest in real assets, which
yield a positive relationship between mortgage rate volatility and home
mortgage loans.

11) In nov 2000 Michelle J. White and Emily Y. Lin had studied about the
Bankruptcy and the Market for Mortgage and Home Improvement Loans. They
studied that This paper investigates the relationship between bankruptcy
exemptions and the availability of credit for mortgage and home improvement
loans. We develop a combined model of debtors' decisions to file for
bankruptcy and to default on their mortgages and show that the theory predicts
positive relationships between both the homestead and personal property
exemption levels and the probability of borrowers being denied mortgage
(secured) and home improvement loans. We test these predictions empirically
and find strong and statistically significant support when evidence from cross-
state variation in bankruptcy exemption levels is used. Applicants for
mortgages are 2 percentage points more likely to be turned down for
mortgages and 5 percentage points more likely to be turned down for home
improvement loans if they live in states with unlimited rather than low
homestead exemptions. These relationships also hold when we introduce state
fixed effects into the model.
12) In October 14, 2008 David P. Bernstein had studied about the Home Equity Loans
and Private Mortgage Insurance: Recent Trends & Potential Implications. They
studied about the the impact of increased use of home equity lines and decreased

32
 private mortgage insurance (PMI) on mortgage markets. The data confirms that in the
years leading up to the mortgage crisis home buyers and lenders have aggressively
used piggyback loans to avoid taking out PMI on first mortgages. Multiple-mortgage
financing packages as a percent of newly originated mortgages (mortgages
originated within the previous five years) went from 14.8% in survey year 2001 to
21.5% in survey year 2007. The multiple-mortgage percentage for seasoned
mortgages (mortgages originated more than five years prior to the origination date)
also increased by a modest amount. Further comparisons reveal a large decrease in
the proportion of mortgages with PMI with the largest decreases in PMI coverage
occurring among newly originated multiple-lien packages. Data from the SCF was
used to compare five financial characteristics (credit card debt, installment loans,
consumer credit, home-owners equity, and liquid assets) for multiple-lien versus
single-lien households. The comparisons suggest single-lien households tend to have
slightly stronger financial variables than multiple-lien households. The data does not
support the view that homeowners with multiple liens are less risky and should
therefore be allowed to avoid PMI. The reduced use of PMI and the increased use of
home equity loans increased mortgage holder risk in several different ways and was
a contributing factor to the 2008 mortgage and financial crisis. This change in lending
and borrowing behavior is not a subprime market problem.

13) In aug 2007 Michael LaCour-Little had studied about the The Home Purchase
Mortgage Preferences of Low- and Moderate-Income Households. Housing
policy in the United States has long supported homeownership, yet variation
persists across income groups. This article employs recent mortgage
origination data to focus on the revealed preferences of low- and moderate-
income (LMI) households in home purchase mortgage choice. I identify the
factors associated with conventional conforming, FHA, nonprime and specially
targeted programs. Empirical results show that individual credit characteristics
and financial factors, including pricing, generally drive product choice, with
some variation evident when loans are originated through brokers. Results also
indicate that targeted conventional programs effectively compete with
government-insured products in the LMI segment.

14) In 24 oct 2008 David C. Wheelock had studied about the Government
Response to Home Mortgage Distress: Lessons from the Great. They studied
about the The Great Depression was the worst macroeconomic collapse in U.S.
history. Sharp declines in household income and real estate values resulted in
soaring mortgage delinquency rates. According to one estimate, as of January
1, 1934, fully one-half of U.S. home mortgages were delinquent and, on average,
some 1000 home loans were foreclosed every business day. This paper
documents the increase in residential mortgage distress during the Depression,
and discusses actions taken by state governments and the federal government
to reduce mortgage foreclosures and restore the functioning of the mortgage
market. Many states imposed moratoria on both farm and nonfarm residential
mortgage foreclosures. Although moratoria reduced farm foreclosure rates in
the short run, they appear to have also reduced the supply of loans and made
credit more expensive for subsequent borrowers. The federal government took
a number of steps to relieve residential mortgage distress and to promote the
recovery and growth of the national mortgage market. The Home Owners Loan
Corporation (HOLC) was created in 1933 to purchase and refinance delinquent
home loans as long-term, amortizing mortgages. Between 1933 and 1936, the
HOLC acquired and refinanced one million delinquent loans totaling $3.1 billion.
The HOLC refinanced loans on some 10 percent of all nonfarm, owner-occupied
dwellings in the United States, and about 20 percent of those with an
outstanding mortgage. The Great Depression experience suggests how
foreclosures might be reduced during the present crisis.

33
15) In march 2001 Tullio Jappelli and Maria Concetta Chiuri had studied about the
Financial Market Imperfections and Home Ownership: A Comparative Study.
They explore the determinants of the international pattern of home ownership
using the Luxembourg Income Study (LIS), a collection of microeconomic data
on fourteen OECD countries. In most, the cross-section is repeated over time
and includes several demographic variables carefully matched between the
different surveys. This allows us to construct a truly unique international
dataset, merging data on more than 400,000 households with aggregate panel
data on mortgage loans and down payment ratios. After controlling for
demographic characteristics, country effects, cohort effects and calendar time
effects, we find strong evidence that the availability of mortgage finance - as
measured by outstanding mortgage loans and down payment ratios - affects
the age-profile of home ownership, especially at the young end. The results
have important implications for the debate on the relationship between saving
and growth.

16) In 10 dec 2007 Irina Paley and Chau Do had studied about the Explaining the
Growth of Higher-Priced Loans in HMDA: A Decomposition Approach. The
period 2004-2005 showed a significant increase in Home Mortgage Disclosure
Act (HMDA) rate spread reporting. Following the Oaxaca (1973), Blinder (1973),
and Fairlie (2005) decomposition techniques, this study identifies the fraction
of the increase due to the flattening of the yield curve. Even after controlling for
changes in borrower risk characteristics, the findings reveal that during 2004-
2006, the flattening of the yield curve explains a significant amount of the
increase in rate spread reportable loans. This is the case for both prime and
subprime originations.

17) In feb 1 2009 Vincent W. Yao and Eric Rosenblatt and Michael LaCour-Little had
studied about the unique paired loan dataset containing information on
multiple conventional conforming mortgage loans of households to examine
home equity extraction decisions over the period 2000-2006. The main question
addressed is how much households borrow when refinancing their current
mortgage debt in a cash-out transaction. We also provide estimates of the
marginal effect of certain borrower characteristics. Results contribute both to
the literature on refinancing behavior and the role of house price appreciation
in providing funds that may be used for consumer spending or other purposes.

18) In aug 2004 Mark Carey and Greg Nini had studied about the Is the Corporate
Loan Market Globally Integrated? A Pricing Puzzle. We offer evidence that
interest rate spreads on syndicated loans to corporate borrowers are
economically significantly smaller in Europe than in the U.S., other things equal.
Differences in borrower, loan and lender characteristics associated with
equilibrium mechanisms suggested in the literature do not appear to explain
the phenomenon. Borrowers overwhelmingly issue in their natural home market
and bank portfolios display significant home "bias." This may explain why
pricing discrepancies are not competed away, but the fundamental causes of
the discrepancies remain a puzzle. Thus, important determinants of loan
origination market outcomes remain to be identified, home "bias" appears to be
material for pricing, and corporate financing costs differ in Europe and the U.S.

19) In july 2005 Gwilym B.J. Pryce and Patric H. Hendershott had studied abot the
The Sensitivity of Homeowner Leverage to the Deductibility of Home Mortgage
Interest.Mortgage interest tax deductibility is needed to treat debt and equity
financing of homes equally. Countries that limit deductibility create a debt tax penalty
that presumably leads households to shift from debt toward equity financing. The
greater the shift, the less is the tax revenue raised by the limitation and smaller is its

34
 negative impact on housing demand. Measuring the financing response to a
legislative change is complicated by the fact that lenders restrict mortgage debt to the
value of the house (or slightly less) being financed. Taking this restriction into account
reduces the estimated financing response by 20 percent (a 32 percent decline in debt
vs a 40 percent decline). The estimation is based on 86,000 newly originated UK
loans from the late 1990s.

20) In 1 nov 2007 Marsha Courchane studied about The Pricing of Home Mortgage
Loans to Minority Borrowers: How Much of the APR Differential. The public
releases of the 2004 and 2005 HMDA data have engendered a lively debate over
the pricing of mortgage credit and its implications regarding the treatment of
minority mortgage borrowers. We provide a unique empirical assessment of
this issue by using aggregated proprietary data provided to us by lenders and
an endogenous switching regression model to estimate the probability of
taking out a subprime mortgage, and annual percentage rate ("APR")
conditional on getting either a subprime or prime mortgage. We find that up to
90 percent of the African American APR gap, and 85 percent of the Hispanic
APR gap, is attributable to observable differences in underwriting, costing and
market factors that appropriately explain mortgage pricing differentials.
Although any potential discrimination is problematic and should be addressed,
our analysis suggests that little of the aggregate differences in APRs paid by
minority and non-minority borrowers are appropriately attributed to differential
treatment.

21) In 1991 Susan M. Wachter and Paul S. Calemhad studied about the Community
Reinvestment and Credit Risk: Evidence from an Affordable Home Loan
Program.This study examines the performance of home purchase loans
originated by a major depository institution in Philadelphia under a flexible
lending program between 1988 and 1994. We examine long-term delinquency in
relation to neighborhood housing market conditions, borrower credit history
scores, and other factors. We find that likelihood of delinquency declines with
the level of neighborhood housing market activity. Also, likelihood of
delinquency is greater for borrowers with low credit history scores and those
with high ratios of housing expense to income, and when the property is
unusually expensive for the neighborhood where it is located.

35
CHAPTER 4

INTERPRETATION:

SBI: NO.50

1) What is your occupation?

Business man 15
Student 0
Government Employee 22
Other 0
House wife 9

25

20
Series1
15
Series2
10
Series3
5

0
STUDENT

OTHER
BUSINESS

GOVERNMENT

HOUSE WIFE
EMPLOYEE
MAN

Interpretation:-

o Total Number of Respondents was 46.

o 0 of our Respondents was Students.
o 22 of the Respondents were into government employees
o 15 of our Respondents were Businessman.
o 9 of our Respondents were Housewives.
o None of our Respondent belonged to the category of others.
o 4 respondents did not answer.

36
2) From how many years you are associated with this bank?

Less than 1 year 10

1-5 years 24
More than 5 12

30

25

20
Series1
15 Series2

10

0
Less than year 1-5 year more then 5

Interpretation:-

o Total Number of Respondents was 46

o 10 persons are associated less than 1 year
o 24 persons are associated from 1-5 years.
o 12 persons are associated from more than 5 years.
o

3) How do you come to know about the home loan schemes of that bank?

News paper 18
Television 14

37
Internet 10
other resources 4

20
18
16
14
12
Series1
10
8 Series2
6
4
2
0
News paper Television Internet Other
resources

Interpretation:-

o Total Number of Respondents was 46

o 18 persons came to know from newspaper
o 14 persons came to know from television
o 10 persons came to know from internet
o 4 persons came to know from other resources

4) Are you aware of these type of home loans?

Home purchase loan 9

Home construction loan 18
Home improvement loan 6
Home equity loan 4
Land purchase loan 9

38
 20
18
16
14
12
10 Series1
8
6
4
2
0

Interpretation:-

o Total Number of Respondents was 46

o Only 4 persons know home equity loan.
o Many of peoples know home construction loan.
o 9 peoples know home purchase loan.
o 6 peoples knowhome improvement loans.

5) Are you aware all terms and conditions of home loans?

Yes 40
No 6

39
 45
40
35
30
25
Series1
20
15
10
5
0
Yes No

Interpretation:-

o Total Number of Respondents was 46.

o Many of persons know all terms and conditions of home loan i.e. 40.
o 6 persons had not know properly about all terms and conditions.

6) Are you satisfy with the interest rate charges by your bank?

Strongly agree 12
Agree 30
Disagree 4
strongly disagree 0

40
 16
14
12
10
8 Series1
6
4
2
0
Strongly agree Agree Disagree strongly
disagree

Interpretation:-

o Total Number of Respondents was 46

o 12 among all consumers are strongly agreed by interest rate of the bank.
o 30 among all consumers are agreed by interest rate of the bank
o 4 among all consumers are disagreed by interest rate of the bank
o 0 among all consumers are strongly disagreed by interest rate of the
bank

7) Your bank offer which type of services?

Mobile banking 24
Net banking 15
Forex banking 7

41
 30

25

20

15 Series1

10

0
Mobile banking Net banking Forex banking

Interpretation:-

o Total Number of Respondents was 46.

o 24 persons said that bank offer mobile banking services.
o 15 said that bank offer net banking services.
o Only 7 persons said that bank offer forex banking services.

8) Do you agree that your bank loan processing is fast?

Strongly agree 8
Agree 26
Disagree 9
strongly disagree 3

42
 30

25

20

15 Series1

10

0
Strongly agree Agree Disagree strongly
disagree

Interpretation:-

o Total Number of Respondents was 46.

o 8 persons strongly agree that bank home loan processing is fast.
o 26 persons agree that bank home loan processing is fast.
o 9 persons disagree that bank processing is fast.
o 3 persons strongly disagree that bank processing is fast.

9) Do you satisfy with the after home loan services provided by your bank are
best as compare to other bank?

Strongly agree 12
Agree 30
Disagree 4
strongly disagree 0

43
 35

30

25

20
Series1
15

10

0
Strongly agree Agree Disagree strongly
disagree

Interpretation:-

o Total Number of Respondents was 46

o 12 among all consumers are strongly agreed by after sale services of
the bank.
o 30 among all consumers are agreed by after sale services of the bank
o 4 among all consumers are disagreed by after sale services of the bank
o 0 among all consumers are strongly disagreed by after sale services of
the bank

10) Does the cost of home loan is appropriate, according to your demand?

Yes 33
No 13

44
 35

30

25

20
Series1
15

10

0
Yes No

Interpretation:-

o Total Number of Respondents was 46.

o 33 persons said that home loan is appropriate according to their
demand.
o 13 persons said that home loan is not appropriate according to their
demand.

11) Are you satisfy with the employees behaviour of the bank?

Strongly agree 19
Agree 23
Disagree 4
strongly disagree 0

45
 25

20

15
Series1
10

0
Strongly agree Agree Disagree strongly
disagree

Interpretation:-

o Total Number of Respondents was 46.

o 19 persons very satisfied with the employee behaviour of the bank.
o 23 persons satisfied with the employee behaviour of the bank.
o 4 persons disagree with the employee behaviour of the bank.
o No one is disagree with the employee behaviour of the bank.
o

12) Does the bank give any discount upon loan services?

Yes 40

No 6

46
 45
40
35
30
25
Series 1
20
15
10
5
0
Yes No

Interpretation:-

o Total Number of Respondents was 46.

o 40 persons said that bank give discount upon loan services.
o Only 6 persons said that bank does not give any discount upon loan
services.

13) Are you satisfy by the time taken in sanctioning the loan?

Yes 34
No 12

47
 40

35

30

25

20 Series1
15

10

0
Yes No

Interpretation:-

o Total Number of Respondents was 46.

o 34 persons are satisfied by the time taken
o 12 persons are not satisfied by the time taken

14) Have you face any difficulty during taking the loan?

Yes 39
No 7

48
 45
40
35
30
25
Series1
20
15
10
5
0
Yes No

Interpretation:-

o Total Number of Respondents was 46.

o 39 persons face difficulty during taking the loan.
o Only 7 persons does not face any difficulty during taking the loan.

15) Which grade you want to give of home loan schemes of the bank?

Excellent 24
Good 18
Average 4
below average 0

49
 30

25

20

15 Series1

10

0
Excellent Good Average below
average

Interpretation:-

o Total Number of Respondents was 46.

o 24 persons give excellent grade of the bank.
o 18 persons gove good grade to the bank.
o Only 4 persons give average grade to the bank.
o No none give below average grade to the bank.

PNB: NO.50

1) What is your occupation?

Business man 17
Student 0
Government Employee 23
Other 0
House wife 7

50
 25
20
15
Series1
10
5
0

Interpretation:-

o Total Number of Respondents was 47.

o 0 of our Respondents was Students.
o 23 of the Respondents were into government employees
o 17 of our Respondents were Businessman.
o 7 of our Respondents were Housewives.
o None of our Respondent belonged to the category of others.
o 3 respondents did not answer.

2) From how many years you are associated with this

bank?
3)

Less than 1 year 17

1-5 years 19
More than 5 11

51
 20
18
16
14
12
10 Series1
8
6
4
2
0
Less than 1
1-5 years More than 5
year

Interpretation:-

o Total Number of Respondents was 47

o 17 persons are associated less than 1 year
o 19 persons are associated from 1-5 years.
o 11 persons are associated from more than 5 years.

3) How do you come to know about the home loan schemes of that bank?

News paper 12
Television 22
Internet 9
other resources 4

52
 25

20

15
Series1
10

0
News Television Internet other
paper resources

Interpretation:-

o Total Number of Respondents was 47

o 12 persons came to know from newspaper
o 22 persons came to know from television
o 9 persons came to know from internet.
o 4 persons came to know from other resources.

4) Are you aware of these type of home loans?

Home purchase loan 9

Home construction loan 19
Home improvement loan 9
Home equity loan 2
Land purchase loan 8

53
 20
18
16
14
12
10 Series1
8
6
4
2
0

Interpretation:-

o Total Number of Respondents was 47.

o Only 2 persons know home equity loan.
o Many of peoples know home construction loan.
o 9 peoples know home purchase loan.
o 9 peoples knowhome improvement loans.

5)Are you aware all terms and conditions of home loans?

Yes 34
No 13

54
 40

35

30

25

20 Series1
15

10

0
Yes No

Interpretation:-

o Total Number of Respondents was 47.

o Many of persons know all terms and conditions of home loan i.e. 34.
o 13 persons had not know properly about all terms and conditions.

6)Are you satisfy with the interest rate charges by your bank?

Strongly agree 11
Agree 34
Disagree 2
strongly disagree 0

55
 40
35
30
25
20 Series1
15
10
5
0
Strongly Agree Disagree strongly
agree disagree

Interpretation:-

o Total Number of Respondents was 47.

o 11 among all consumers are strongly agreed by interest rate of the bank.
o 34 among all consumers are agreed by interest rate of the bank
o 2 among all consumers are disagreed by interest rate of the bank
o 0 among all consumers are strongly disagreed by interest rate of the
bank

7) Your bank offer which type of services?

Mobile banking 26
Net banking 13
Forex banking 8

56
 30

25

20

15 Series1

10

0
Mobile Net banking Forex banking
banking

Interpretation:-

o Total Number of Respondents was 47.

o 26 persons said that bank offer mobile banking services.
o 13 said that bank offer net banking services.
o Only 8 persons said that bank offer forex banking services.

8)Do you agree that your bank loan processing is fast?

Strongly agree 4
Agree 21
Disagree 13
strongly disagree 9

57
 25

20

15
Series1
10

0
Strongly Agree Disagree strongly
agree disagree

Interpretation:-

o Total Number of Respondents was 47.

o 4 persons strongly agree that bank home loan processing is fast.
o 21 persons agree that bank home loan processing is fast.
o 13 persons disagree that bank processing is fast.
o 9 persons strongly disagree that bank processing is fast.

9) Do you satisfy with the after home loan services provided by your bank are
best as compare to other bank?

Strongly agree 14
Agree 29
Disagree 4
strongly disagree 0

58
 35
30
25
20
Series1
15
10
5
0
Strongly Agree Disagree strongly
agree disagree

Interpretation:-

o Total Number of Respondents was 47.

o 14 among all consumers are strongly agreed by after sale services of
the bank.
o 29 among all consumers are agreed by after sale services of the bank
o 4 among all consumers are disagreed by after sale services of the bank
o 0 among all consumers are strongly disagreed by after sale services of
the bank

10) Does the cost of home loan is appropriate, according to your demand?

Yes 29
No 18

59
 35

30

25

20
Series1
15

10

0
Yes No

Interpretation:-

o Total Number of Respondents was 47.

o 29 persons said that home loan is appropriate according to their
demand.
o 18 persons said that home loan is not appropriate according to their
demand.

11)Are you satisfy with the employees behaviour of the bank?

Strongly agree 16
Agree 25
Disagree 6
strongly disagree 0

60
 30

25

20

15 Series1

10

0
Strongly Agree Disagree strongly
agree disagree

Interpretation:-

o Total Number of Respondents was 47.

o 16 persons very satisfied with the employee behaviour of the bank.
o 25 persons satisfied with the employee behaviour of the bank.
o 6 persons disagree with the employee behaviour of the bank.
o No one is disagree with the employee behaviour of the bank.

12)Does the bank give any discount upon loan services?

Yes 35

No 12

61
 40

35

30

25

20 Series1
15

10

0
Yes No

Interpretation:-

o Total Number of Respondents was 47.

o 35 persons said that bank give discount upon loan services.
o Only 12 persons said that bank does not give any discount upon loan
services.

13)Are you satisfy by the time taken in sanctioning the loan?

Yes 30
No 17

62
 35

30

25

20
Series1
15

10

0
Yes No

Interpretation:-

o Total Number of Respondents was 47.

o 30 persons are satisfied by the time taken
o 17 persons are not satisfied by the time taken

14)Have you face any difficulty during taking the loan?

Yes 43
No 4

63
 50
45
40
35
30
25 Series1
20
15
10
5
0
Yes No

Interpretation:-

o Total Number of Respondents was 47.

o 43 persons face difficulty during taking the loan.
o Only 4 persons does not face any difficulty during taking the loan.

15)Which grade you want to give of home loan schemes of the bank?

Excellent 18
Good 20
Average 8
below average 1

25

20

15
Series1
10

0
Excellent Good Average below
average

64
Interpretation:-

o Total Number of Respondents was 47.

o 18 persons give excellent grade of the bank.
o 20 persons gove good grade to the bank.
o Only 8 persons give average grade to the bank.
o 1 person give below average grade to the bank.

65
CHAPTER 5

5.1 Section

CONCLUSION:
All the people are availing loan facility from both the banks. No. of respondents of
SBI were 46 and 47 of SBI Bank. Peoples are relating with PNB more satisfy with
the interest rate as compare to SBI. SBI peoples much know about home loans
then PNB. Both PNB and SBI mostly offer mobile banking services. Processing
of SBI is fast then PNB. After home loan services of PNB is good as compare to
SBI. Peoples related with SBI is more satisfy with the employee behaviour as
compare to PNB.People are more satisfied by SBI for time taken for sanctioning
the loan. From all this I conclude that SBI bank provide good home loan services
as compare to PNB and many peoples are very satisfied from SBI.

5.2 Section

LIMITATIONS
Although best of the efforts were made to conduct a prefect survey but still it faces
certain limitation. Following were certain limitation of this project.

1.The survey was conducted only on 100 respondents.

2.Some of the respondents did not answer all the questions, which could hamper
the final results to a certain extent.

3.The study confines itself to the respondents of “NAWANSHAHAR”

region only. Hence findings would not be relevant to other cities.

66
CHAPTER 6

REFERENCES:

• Craig, Ben R. and Thomson, James B.,Federal (August 2001). Home Loan
Bank Lending to Community Banks: Are Targeted Subsidies Necessary? FRB
of Cleveland Working Paper No. 01-12. Available at SSRN:
http://ssrn.com/abstract=282410 or DOI: 10.2139/ssrn.282410

• Singh, Fulbag and Sharma, Reema,(December 2006) Housing Finance in India:

A Case Study of LIC Housing Finance Limited. ICFAI Journal of Financial
Economics, Vol. 4, No. 4, pp. 63-74, December 2006. Available at
SSRN: http://ssrn.com/abstract=959359

• LaCour-Little, (May 18, 2007) Michael,Economic Factors Affecting Home

Mortgage Disclosure Act. SSRN: http://ssrn.com/abstract=992815

• Borde, Stephen F. May/June 1991 ,Is the Savings and Loan Industry Facing
Extinction?The Secured Lender,Vol.47.
SSRN:http://ssrn.com/abstract=151018

• Rosner, Joshua (June 29, 2001).,Housing in the New Millennium: A Home

Without Equity is Just a Rental with Debt,Available at
SSRN: http://ssrn.com/abstract=1162456

• Jacoby, Melissa B.( dec 2006) Home Ownership Risk Beyond a Subprime
Crisis: The Role of Delinquency Management. Fordham Law Review, Vol. 76,
2008; UNC Legal Studies Research Paper No. 1074442. Available at
SSRN: http://ssrn.com/abstract=1074442

• Moriizumi, Yoko,Current Wealth, (dec 1999) Housing Purchase and Private

Housing Loan Demand in Japan. Journal of Real Estate Finance and

67
 Economics, Vol. 21, Issue 1. Available at
SSRN: http://ssrn.com/abstract=237815

• http://ideas.repec.org/p/fip/fedcwp/9015.html

• http://ideas.repec.org/p/fip/fedgfe/2004-27.html

• Hillebrand, Eric T. and Koray, Faik,Interest Rate Volatility and Home

Mortgage Loans. Applied Economics, Forthcoming. Available at SSRN:
http://ssrn.com/abstract=923358
• Lin, Emily Y. and White, Michelle J. (November 2000),Bankruptcy and the
Market for Mortgage and Home Improvement Loans. Michigan Law and
Economics Research Paper No. 00-013. Available at SSRN:
http://ssrn.com/abstract=252699 or DOI: 10.2139/ssrn.252699
• Bernstein, David P. (October 14, 2008) ,Home Equity Loans and Private
Mortgage Insurance: Recent Trends & Potential Implications. Available at
SSRN: http://ssrn.com/abstract=1277353
• LaCour-Little, Michael,The Home Purchase Mortgage Preferences of Low-
and Moderate-Income Households. Real Estate Economics, Vol. 35, No. 3, pp.
265-290, Fall 2007. Available at SSRN: http://ssrn.com/abstract=1007862 or
DOI: 10.1111/j.1540-6229.2007.00190.x
• Wheelock, David C(October 24, 2008)..,Government Response to Home
Mortgage Distress: Lessons from the Great Depression.Federal Reserve Bank
of St. Louis Working Paper No. 2008-038A. Available at
SSRN: http://ssrn.com/abstract=1289440
• Chiuri, Maria Concetta and Jappelli, Tullio, (March 2001) Financial Market
Imperfections and Home Ownership: A Comparative Study. CEPR Discussion
Paper No. 2717. Available at SSRN: http://ssrn.com/abstract=264399
• Do, Chau and Paley, Irina,Explaining the Growth of Higher-Priced Loans in
HMDA: A Decomposition Approach. Journal of Real Estate Research, Vol. 29,
No. 4, 2007. Available at SSRN: http://ssrn.com/abstract=1030058
• LaCour-Little, Michael, Rosenblatt, Eric and Yao, Vincent W.(February 1,
2009).,Home Equity Extraction by Homeowners: 2000-2006. Journal of Real
Estate Research, 2009. Available at SSRN: http://ssrn.com/abstract=1336049
• Nini, Greg and Carey, Mark, (August 2004) Is the Corporate Loan Market
Globally Integrated? A Pricing Puzzle. FRB International Finance Discussion
Paper No. 813. Available at SSRN: http://ssrn.com/abstract=585742
• Hendershott, Patric H. and Pryce, Gwilym B.J. (July 2005).,The Sensitivity of
Homeowner Leverage to the Deductibility of Home Mortgage Interest.NBER
Working Paper No. W11489. Available at
SSRN: http://ssrn.com/abstract=762768

68
• Courchane, Marsha, (November 1, 2007). The Pricing of Home Mortgage
Loans to Minority Borrowers: How Much of the APR Differential Can We
Explain? Available at SSRN: http://ssrn.com/abstract=1374872
• Calem, Paul S. and Wachter, Susan M. (Nov 1, 1999),Community
Reinvestment and Credit Risk: Evidence from an Affordable Home Loan
Program. Real Estate Economics, Vol. 27. Available at SSRN:
http://ssrn.com/abstract=145360

69
 CHAPTER 7

QUESTIONNAIRE:

Name

Qualification

Age 18-25  25-35  35-40  Abov e

Gender

16) What is your occupation?

Business man  Government employee 

House wife  Student 

Other 

17) From how many years you are associated with this bank?

Less than 1 year  1-5 

More than 5 year 

3) How do you come to know about the home loan schemes of this bank?

News paper  Television 

Internet  Other resources 

4) Are you aware of these type of home loans?

Home purchase laon  Home construction loan 

Home improvement loan  Home extention loan 

Home equity loan  Land purchase loan 

5) Are you aware all terms and conditions of home loans?

Yes  No 

6) Are you satisfy with the interest rate charges by your bank?

Strongly agree  Agree 

70
 Strongly disagree  Disagree 

7) Your bank offer which type of services ?

Mobile banking  Net banking 

Forex banking 

8) Do you agree that your bank loan processing is fast?

Strongly agree  Agree 

Strongly disagree  Disagree 

9) Do you satisfy with the after home loan services provided by your bank are best
as compare to other bank?

Strongly agree  Agree 

Strongly disagree  Disagree 

10) Does the cost of home loan is appropriate, according to your demand?

Yes  No 

11) Are you satisfy with the employees behaviour of the bank?

Strongly agree  Agree 

Strongly disagree  Disagree 

12) Does the bank give any discount upon loan services?

Yes  No 

13) Are you satisfy by the time taken in sanctioning the loan?

Yes  No 

14) Have you face any difficulty during taking the loan?

Yes  No 

If yes then specify

15) Which grade you want to give of home loan schemes of your bank?

Excellent  Good 

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 Average  Below average 

16) Any suggestions that you want to give

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