PROJECT REPORTONHOME LOANS IN ICICI Project Report Submitted Towards The Partial Fulfillment For Award Of The Degree

Of Masters of Business Administration (2008-2010) Submitted To Submitted By SHARMA ROHITFaculty GuideMBA-4 th Sem ASIA PACIFIC 1 MATHURA ROAD, NEW DELHI CONTENTS Acknowledgement Executive Summary Chapter 1 IntroductionChapter 2 ProductsChapter 3 Objectives and Rationale of the ProjectChapter 4 Review of Literature4.1 Business Process 4.2 Types of Appraisal 4.3 Property Documentation 4.4 Know Your Customer Compliance 4.5 Repayment Track Record based lending Chapter 5 Research Methodology5.1 Research Design 3 5.2 Sample Design 5.3 Research Tools and Questionnaire 5.4 Analysisa)Porters five forces modelB)SWOT Analysisc)Comparative study of ICICI Bank Ltd and HDFC Chapter 6 Research FindingsChapter 7 Summary and ConclusionBibliography 4 ACKNOWLEDGEMENT I am obliged to all the people which includes my managers and mentors and mycolleagues for cooperation during the internship. My increased spectrum of knowledgein this field is the result of their content supervision and direction that has helped me toabsorb relevant and high quality information.I would like to thank my faculty guide Ms. sharma for her guidance and enriching mythoughts in this field from different perspectives.I would like to thank all my respondents without whose cooperation my study/projectwould not have been possible/complete.Last but not the least, I feel indebted to all those persons and organizations who/whichhave provided helped me directly or indirectly in successful completion of this study. rohit 5

Executive Summary Against the milieu of rapid urbanization and a changing socio-economic scenario, thedemand for housing has grown explosively. The importance of the housing sector in theeconomy can be illustrated by a few key statistics. According to the National BuildingOrganization (NBO), the total demand for housing is estimated at 2 million units per year and the total housing shortfall is estimated to be 19.4 million units, of which 12.76million units is from rural areas and 6.64 million units from urban areas. The housingindustry is the second largest employment generator in the country. It is estimated thatthe budgeted 2 million units would lead to the creation of an additional 10 million man-years of direct employment and another 15 million man-years of indirect employment.A year equates a century, knowledge compresses time and the information technologysweeps the world, gathering momentum with each new application, soaring towards freshgoal, rapidly opening vistas hitherto unknown. Here we are, in the 21 st century.Yearsthat catapults us towards new challenges at every stage of endeavor. It gives us goodreason for aiming high.Keeping the above philosophy in mind, this project is carried out with an objective toidentify the basic needs of the applicants and the process of Home Loans in ICICI Bank Ltd.The various areas covered in the report are: 6 Business Process of Home loans Types of Appraisal Property Documentation Know your customer compliances Repayment Track Record lendingThe final outcome of the report is to find out the number of the applicants who haveapplied for bank loans in the month of June and the analysis of the population applyingfor Home Loans through the sample size 40.The report includes the various products that are introduced by the bank such as HomeLoans, Loan against property, Land Loan, Property OD, Lease Rental Discounting,Balance Transfer, etc. It consists of questionnaire which helped to analyze the finaloutcome of the report. 7 Introduction ICICI Bank is Indias No. 1 Home Loans Provider. At ICICI Bank Home Loans, it offersunbeatable benefits to ensure that the customers get the best deal without any hassles.And ICICI Bank makes it extremely easy for them by offering Attractive loan interest rates Home loan amounts starting from Rs.2 lakhs Term loans up to 20 years Free Personal Accident Insurance Insurance options for your home loan at attractive premiumWith varied offering of house loans and home finance, ICICI Bank Home Loans gives anopportunity to select the perfect loan as per the needs of the customers who can choosefrom: Adjustable Rate Home Loan

Fixed Rate Home Loan Part fixed, Part Floating Rate Home Loan Smart fix Home Loan Money Saver Home Loan and also Balance Transfer of your existing home loan from other banks. 8 And the other categories that the customers can avail are : Land Loans Office Premises Loans Home Improvement Loan and Home Loan for NRI.Customers can also leverage their existing property to get Loan against Property Property Overdraft or Lease Rental Discounting.All of these are available on an adjustable rate or a fixed rate. Challenges in the growth path The housing finance industry is going to observe polarization of the playersFor survival, the Housing Finance Institution should have -: Good investment in people and system Should have strong Business Origination process in place Excellent Credit Appraisal Skills Monitoring the Systems in place Strong Collection mechanism in place HFIs survival can be at stake 9 ICICI Bank Sales Manager Credit Manager Area Operations Manager CollectionDMA / DSA CPA (Credit Customer Account Manager Manager(Direct marketing Processing Analyst DEO (Data Entry Operator)Agency/ direct salesAgent)Sales Department It basically search the customer who is in need of loan and pitchesthe different kinds of customer accordingly. Credit Department It is responsible for Credit Documentation, Profile check, Legaland Technical reports of the customer and his property.

10 Operations Department It is responsible for punching end to end. It does NDCaccording to the RBI norms and performs after sales services. It collects the Post DatedCheques. Collection Department It functions at the time when any customer is in default. 19 th February 1999The launch of ICICI Bank Home Loans Scenario then New to the business Formidable competition End to End delivery of the product through the DMA being done for the first time Ambitious growth plans Home loans Highlights Customer base (as on march 2005): Year-to-Date.276756 (Sanction cases) Life-to-Date..687364 (Sanction cases) Book Size (as on March 2005) Rs.33175.20 croresDisbursement (YTD).Rs.18871.00 crores 11 Now Year 2007 1000 + locations 845 + Direct marketing Agencies 10000 + FOS across the country Centralized Call Centers covering all major states and cities Leveraging corporate relationships Cross sell initiatives: leveraging customer centric data warehouse infrastructure. Polarization Future Scenario Weak HFI with high cost of funds & poor system would end up as DSA sourcing business in the market. HFIs with low cost of funds but poor system may turn out to be buyers of MBS HFI with good systems in place but with high cost of funds need to look atSecuritization. HFIs with Low cost funds and good systems would be the major players. Low margins & High delinquency can increase the lending rate tocover the cost of operations.

Can force the HFIs to re-look at its business model. 12 Products and Documentation Products: We Offer:Products Home Loan & XSELL 1. Home Loans (HL) & Variance MV Lending Smart Fixed Part Fixed & Part floating Fixed ROI with MMC EMI in under construction stage Max Money SURF2. Money Saver 3. Home Improvement Loan (HIL)4. Land Loans (LL)5. Office Premises Loan (OPL)6. Balance Transfer (BT)7. Top Up Loan 13 8. Cross Sell to Auto loans9. No Income Proof Loan (NIP) Products LAP / OD Loan Against Property (LAP) Property OD (Residential / Commercial) Income Surrogate Banking Product Lease Rental Discounting (LRD) New product introduced on June 4, 2007 Lap on Land Features :1.There must be a plot number. The plot must be properly demarcated by fencing or boundary wall. 14 2.There must be change in transaction within last 10 years. The title must bechanged.3.Land usage must be residential. Commercial, agricultural or industrialized land isnot considered.4.It should be DLA or Municipal approved.5.The loan amount can be between 7- 50 lakhsLow Loan To Value i.e., 16.25 % ROI on 30 % LTV16.50 % ROI on 35 % LTV6. Minimum Plot Area must be 800 square feetMaximum can be 10000 square feet.7. Tenure for repaying the loan would be 10 years.8. Case can be made on Income Basis or Repayment Track Record (RTR) of allkinds of loans i.e., auto loans, medical equipment loans, personal loans.9.LAP on Land can be given to all kinds of customers Salaried, Self Employed Non Professional (SENP) & Self employed Professional (SEP). 15 Home Loans : Key Features Purpose : To purchase, construct or extend new or existing flat / house

 Loan to value (LTV) ratio is 85 %. This includes stamp duty, registration chargesand amenities. Amenities on Stamp paper : We can add Maximum of 20% of Agreement value. Maximum Tenor : 20 years (15 years for SENP retail & non retail) Only for first sale builder properties. Loan amount : From Rs.2 lac to Rs. 3 Crore Validity of Loan Approvals : 6 months from the date of Sanction Letter. LTV Norms In case of Resale :A)If COP = MV, Loan Amount = 85% of COP (LTV 85%)B)If COP > MV, Loan Amount = 85% of MV (LTV 85%)Example : COP : Rs.25 Lacs & MV : Rs.20 lacsLoan Amount : Rs.17 lacsC)If COP < MV, Loan Amount = 80% of MV subject to 100% of COPExample : COP : Rs.20 lacs & MV : Rs.25 lacsLoan Amount : Rs.20 lacs 16 LTV Norms > Rs.100 lacs Cap based on COP For Property value > Rs.100 lacs & <=Rs.200 lacs, the max LTV will be 80 %. Property value > Rs.200 lacs, the max LTV will be 75%Cap based on MV For Property value > Rs.100 lacs & <= Rs.200 lacs, the max LTV will be 75% Property value > Rs.200 lacs, the max LTV will be 70%Also Valuation will be mandatory for all cases > Rs. 100 lacs. 17 MV Lending LTV Norms MV Lending To bridge customers requirements between circle rates specified by sub-registrar andtransaction value. For example transaction in certain sectors are as given belowLocation % of MVDelhi 25 40 %Banglore 60 65 %LTV Based on the lower of the two : In case of purchase in ready / resale cases1.Lower of the TWO1. 80 % of the Market Valuation if the property is valued up to Rs.50 lacs65 % of the Market Valuation if the property is valued at more than Rs.50 lacs(Lower of 2 valuations done will determine market valuation).2.100 % of agreement value / sale deed (with stamp duty paid) + stamp duty +registration + society transfer charges + state electricity board connection charges +amenities agreement (without stamp duty ) The cost of Amenities should not exceed 200 % of (Agreement Value / Sale Deed +Stamp Duty + Registration charges). 18 If Amenities Agreement is not on stamp paper, then that component of the loan amountwould be done as Top Up loan with norms of Home Loans.However, the overall restriction of 80 % / 65 % or 100 %, as mentioned, would apply. 03 Years Fixed Smart Fixed 03 Years fixed gives option to customer to look at fixed rate for the first 03 years andsubsequently the product moves into floating reference rates

Fixed from the first date of disbursement based on weighted average rate of interst. At the end of 03 years it will move to FRR on immediate reset date which could be 03 years to 03 years and 03 months.Products : Home Loan & BT + Top-up & MV lending possibleMargins for FRR set at the time of Sanction. 19 Part Fixed & Part Floating Customer can opt for combination of them. 02 separate tranches would be given on the same date. Amount under each category decided at the time of sanction itsef. Combination of two should be minimum of Rs.1 lac and each tranch should be of Rs.50000/ Products : HL / LL / NRI / OPL / HIL / LAP (R&C) Not applicable to MV Lending or all loans with two tranches. Process 02 separate application forms 02 LAN numbers for the loans Common Sanction Letter Common HLD Common I/T certificate on cross linking of files. Prepayment on each tranche possible but foreclosure on completion of both theloans. Eligibility Based on the combination of the loan EMI for the other loan would be consideredas FOIR for calculation purpose. 20 Fixed with MMC A new product variant for Home Loans with a variation in Fixed rate of interest withMoney Market Conditions (Fixed MMC)Salient features : Fixed MMC rates can be offered for Home Loans & Balance Transfer of HomeLoans only. Fixed MMC rates can be offered only to Resident Indians. Thus, Home Loanswith Fixed MMC rate cannot be offered to NRIs The Fixed MMC rate can be offered only for new sanctions. Conversion fromfixed ROI to Fixed MMC rate and vice versa would not be allowed. All Fixed MMC rate loans would be booked under the following scheme Finnone/APS :a)Individual Home Loan with Fixed MMC b)BT of HL with Fixed MMC

New format of the sanction letter for Home loans with Fixed MMC A new Home Loan Document (agreement) with the following mentioned on thetop cover With Money Market Condition Clause for Fixed Rate of Interest. 21 EMI Under Construction Purpose : Commence EMI in under Construction Project. Target Segment : Home Loans to Resident Indian Features : Offered to APF Projects. Customers pay EMI from the first disbursement on total sanctioned amount. EMI remains constant with term changing Disbursed amount keeps changing Disbursed amount not more than Sanctioned amount. Subsequent disbursement would be at the end of the month. EMI Under Construction : Example Sanctioned amount Rs. 10.00 lacsROI7.5 %Tenor240 monthsEMIRs.8056/-1 st DisbursementRs.5 lacsReduced Tenure79 monthsPrincipal O/s At the end of 03 monthsRs.485114.002 nd Disbursement after 03 monthsRs.2 lacsBalance Tenure240 3 = 237O/s principal = Rs. 485114.00 + 200000.00 = 685114/22 EMIRs.8056.00Revised Tenure124 monthsFull & Final after 03 monthsBalance Principal O/s673721 + 300000 = 973721/-Revised Tenure233 monthsMaximum Tenure240 6 = 234 23 Step Up Repayment Facility (SURF) Concept SURF The tenor is divided in three parts ; viz.a)Primary b)Secondaryc)Tertiary The installments will increase beginning from the least in Primary & the highestin Tertiary. Installment in Primary period to cover interest, in the current rate scenario Rs.625/-per lacs Types of SURF Category I Category IICategory I

Monthly Income > Rs.25000/ Applicant is employee of Select Corporate (i.e., Category 0 and Category 1worksite list) Should NOT be employee of Pvt. Ltd Companies, Prop. Concerns, Trusts. Should NOT be a Self Employed Non- Professional. 24 Category II Monthly Income > 15000/ Should NOT be employee of Pvt. Ltd Companies, Prop. Concerns, Trusts. Should NOT be a Self Employed Non- Professional Benefits :SURF Enhanced EligibilityOpting for SURF could raise the eligibility by up to 30% above the eligibility in anormal repayment pattern.Ex. Term 20 yrs , ROI 7.5% , Income pm 25000/- , Normal eligibility Rs.17.07 lacs , Enhanced Eligibilty Rs.22.14 lacs & Increase in Eligibility 30%. Easy Installments in Primary period, lower strain on cash flows. 25 Features : SURF Eligible Entities (Only Individuals)a)Salaried b)Self Employed Professional Eligible not Eligible Products:a)Only Home Loans (Top Ups not permitted) b)BT of Home Loans shall also not be permitted SURF Term possible 15-20 years (both terms included) Not Eligible :a)Self Employed Non Professional b)Employees of Pvt. Ltd Companies, Prop. Concerns, Trusts. Rate of Interest Only Adjustable Rate Loans Deviations / Re schedulementsa)No Deviations permitted b)No Re Schedulements permitted. Documents SURF Sanction Letter Automated Sanction Letter capable of generating SURF letter. Agreementsa)Normal loan Agreement b) Amendatory Agreement 26 Income Tax Benefits IT Certificate to show both ; Interest payable & Actual Interest paid. In case if Negative Amortization :a)No IT benefit available on capitalized interest Sec 24 (b)

b)No IT benefit available on re-payment on capitalized interest sec 80C Part Pre-Payments Adjustments will be made first towards the capitalized portion. 27 Land Loans : Key Features Purpose : To acquire a site / plot of land for residential use Maximum Tenor : 20 years (15 years for SENP retail & 10 years for SENP non-retail) LTV Ratio : 85% of the cost, if allotment is directly from Development Authority75%of the cost, if purchase from Development / Resale / Society Fee : Same as Home Loan Amount of Loan : Rs.2 lacs to 50 lacs In HUB & Spoke Locations Land Loans + ConstructionLTV would be 85% of Land + Estimated ConstrucctionProvided land has been purchased in last one year OR 100% of estimated construction based on technical report which is lower. 28 In Spoke Loactions Only land loan would not be financed. Land Loan + Construction would be considered. First disbursement would happen only after the construction has reached plinthlevel. 75% of land cost can be given provided land has been purchased in the last 01year. In HUB locations for Land + Construction Disbursement for land would be done. Case would be Pre EMI In case the applicant avoids construction the scheme ID should be changed To avoid giving I/T benefits certificate on the case 29 Office Premises Loan : Key Features Purpose : To purchase / construct office premises Maximum Tenor : Resident IndianSENP Retail = 15 years.SENP Non Retail = 10 years. LTV Ratio :

85% of the cost of property for doctors. 60% of the cost of property for others. Fee : Processing and Administrative fee of 0.5% each Amount of Loan : From 2 lacs to 1 crore. Eligible Entities : Professionally Qualified Self Employed Individuals & only Qualified Chemist NRIs Other Norms : Minimum 3 years Experience as Practicing Professional Loan available for improvement of office premises 30 Maximum of 30% of the cost of the property. LAP / Home Equity Loan Loan Against Property : Key FeaturesPurpose : For Marriage, Business, Education, Medical Treatment, Purchase of Property,etc. Maximum Tenor : 15 years (10 years for SENP) LTV Ratio : 45% for commercial and 60% for Residential LTV + FOIR (Non retail) : Subject to maximum of 120% for residential and 105% for commercial with no LTV deviation. FOIR for Salaried : 50% & SENP Retail : 55% Amount of Loan : From Rs. 5 lacs to 100 lacs Eligible Entities : Salaried, SEP & SENP Minimum value of property : Rs. 7 Lacs across all cities. Other norms : Loan can be availed only against the self occupied property. 31 Balance Transfer Balance Transfer : Key FeaturesPurpose : Take over of housing loans taken from other HFC / Bank at a higher rate thancurrent rate. Tenor : Maximum term not to exceed as applicable under product category OR Residual age of property as determined by the site engineer LTV : 85% Fee : Same as Home Loan Amount of Loan : Outstanding principal amount of the existing loan + prepaymentcharges + fee payable to ICICI

HFC subject to applicable LTV norm, calculated on thecost of property.Disbursal to be in favor of HFCs / Banks whose loan is being prepaid.Repayment track record for the last twelve months to be verified. Documents Required : Pre Sanction 32 Outstanding Principal statement from existing HFC / Bank Declaration-cum-Undertaking of legal documents submitted with earlier HFC /Bank Legal verification Letter to the builder / society / DA as per letter drafted by ICICI HFC Documents Required : Pre Disbursal Letter of Authority & Power of Attorney in favor of ICICI representative tocollect original docs & mortgage release letter from HFC / Bank. Cases Pending with Sub Registar : BT applications where property titledocuments are pending will not be accepted. Documents Required : Post Disbursal Original receipt required from HFC / Bank for the amount disbursed Mortgage release letter & No dues letter required. Original title deeds as per list provided. Acknowledged copy of notice sent by the legal agency of ICICI to thelandowner.BT OF EMPLOYER LOAN WOULD BE RESTRICTED TO CENTRAL % STATEGOVERNMENT. 33 Top Up Loan Purpose : To purchase of Consumer Durable, Vehicle, Furnishing of Home, FamilyVacation, Daughters Marriage, Childs Education Or any other personal requirement of the borrower. Maximum Tenor : as per individual product norms Fee : Same as Home Loan Amount of Loan : Rs.50000 to 20 lacs Validity of loan approval : 3 months from date of sanction. Entitled Borrowers : Borrowers for the Top up loan must be the same as the existingICICI loan Security of Loan : Extension of mortgage on the property financed.Top Up Loan is offered on following products : Home loan Balance Transfer Home Loans

 Balance Transfer NRP NRP(Loan available on fully disbursed cases & NIL post disbursement pending documents)

35 Home Improvement Loan Purpose : Improvement of residential premises. Maximum Tenor : 15 years LTV Ratio : 70% of the estimate subject to45% of the market valuation of property prior to fianancing Fee : Same as Home Loan Amount of Loan : From Rs.1 lac to 50 lacs Eligible Entities : Salaried SEP SENP Eligible Improvements : Being completed within 12 months from the date of firstdisbursementProperty has to be occupied by at least 1 applicant to the loan. 36 Lease Rental Discounting Purpose : Enable the consumer to raise funds (and increase liquidity) against futureexpected funds from property leased out by him. Maximum Tenor : 9 years (subject to balance lease period) LTV Ratio : 50% of market valuation subject to 85% of the NPV of furure expected rentals discounted at the applicable ROI( net of TDS) Eligible Entities : Salaried SEP SENP (Non Retail) Amount of Loan : From Rs.10 lacs to 1 crore 37

No Income Proof Loan Purpose : To purchase, construct or extend new or existing flat / house Eligible Entities : Self Employed Individuals only Fee : Admin fee of 0.5% & proc fee of 0.5% Amount of Loan : from Rs.2 lac to 50 lacs LTV Ratio : For loan amount > Rs.25 lacs, LTV 60% of COP or 65% of MV (whichever is lower)For loan amount < Rs.25 lacs, MethodIIIIIIIVMV (%)40506065COP (%)75706560Documentation : Proof of continuity of business 05 years Bank Statements 6 months (verification required)a)Current Account b)Savings Account Out Cheque returns not more than 06 in 06 months. Stop Payment returns 02 in least 06 months 38 Maximum number of transactions 10 per month EMI not to exceed 10% of the average monthly bank credits for the last 06months Average balance on 10 th , 20 th & 30 th for last 06 months should be greater than 02times EMI. Client / Supplier References -2 Copy of title document RTR of 12 months if EMI of existing loan is more than 25% of the proposedEMI OCR : By Cheque prior to disbursement & No PDD No deviations permitted. 39 Income Surrogate Banking Product Purpose : Surrogate product for Home Equity LoanTarget customers with good banking record. Lap Income Surrogate Banking Product 1.Approved Borrower Entities Resident Indians (SEP & SENP)2.Loan Amount

Min. Rs.5 lacs Max. Rs.30 lacs3.Term Max.10 years (Term should not exceed propertys residual age)4.Loan type Fixed and Floating.5.Min Property Value Rs. 15 lacs (as per technical valuation)across allcities.6.LTVi)Residential property 35%ii)Commercial property 25%7.Bank Statementi)Photocopies of updated bank statements for the last one year from current a/c of the firm / company.ii)Photocopies of updated bank statements for the last one year from current a/c / savings a/c of the individual applicants and co-applicants.8.Client reference required 3 large creditors. 40 9.Business to have continuity for the last 3 years.10.Personal discussion is mandatory.11.CC accounts EMI to be less than or equal to 10% of the inward flow intothe bank a/c in last 6 months.12.Other accounts EMI to be less than or equal to 15% of the inward flowinto the bank a/c and average balance to be more than 1.5times the EMI inthe last 6 months. 41 Adjustable Rate Home Loan Purpose : Facility of variable ROI Eligible Entities : Existing and new customers Eligible Products : Home loan Land Loan NRI OPL LAP BT Top Up Max. term of Loan : 20 years for Salaried and SEP15 years for SENP Monthly reducingDate of change : 1 st day of each quarter (as per calendar year) EMI shall remain constant, except in the following three instances : 42 1. Negative amortization 2. Term of loan exceeding : 30 yrs for salaried & self employed20 yrs for SENP 3.

Term of loan exceeding : Retirement age for salaried. 65 years for self employed applicants whose income isconsidered for eligibility.Switching of Rates BetweenSwitch fees ICICI Bank PortfolioOthersFixed to fixed1.75%1.75%Fixed to floating1.75%1.75%Floating to fixed1.75%1.75%Floating to floating0.5%1.75%Change in ROI on accountof change in Tenor Fixed tofixed1.75%1.75% 43 THIRD PARTY PRODUCT Icici Home Finance Loan Shield with ICICI Lombard Loan Shield For Resident IndianLoan Shield for a period of 05 years. Loan care Insurance Property Insurance offered free one year in case of commercial property.Maximum Cover : Rs.1050000Minimum Age : 20 yearsMaximum Age : 50 years ( loan cover ends at 55 years)Loan Care is maximum of 05 yearsProperty Insurance : Same Tenure & cover commences after completion of work Feature : Based on Medical declaration no medical check up.Loan ShieldLoan Care Features : Salaried & Self Employed1.Default due to Death : Principal o/s paid2.Permanent disability due to accident : Principal o/s repaid3.Critical illness leading to hospitalization and loss of incomeIn case of Salaried only 12 EMIs would be covered 44 Unemployment due to retrenchment1.Closure of unit due to financial health or M&A2. Closure due to action by Public Authority.3.Termination from job due to ill health.Any illness pre-existing or repoted within 90 days or loss of job within 90 days notcovered.Salaried employees would be paid maximum of 03 monthly EMIs in case of default.Policy ends on attaining at the age of 55 yearsPolicy ends with closure of loan account. No refund of premium on part prepaymentPart Premium refund in case of full closureClaim settlement in 21 days. 45 Home Assure Prudential (Group Policy) Customer Segment : Individuals opting for Single premiumAge Group : 18 to 60 years ( Maximum on attaining 70 yrs)Sum Assured : Rs. 25000/-To Home Loan schemeProduct Feature No medical examination upto Rs.15 lakhs Death Cover : principal o/s as per the sanction letter Part / Under Construction : Cover can take 0/1/2 + tenure of the loan.Joint Cover Possible provided both are earningCover would cease on Full closure or BTSurrender Value : 70% of single Premium ( Balance Term / Policy Term)Exclusions : No claim within 45 daysNo claim due to suicide within 01 year 46 OBJECTIVES AND RATIONALE OF THE PROJECT Main objective: To find out the utility of Home Loans in general public and analyze the number of customers applying for Home Loans in ICICI. To learn the process of Home Loans.

The basic necessity of general public is food, clothing and SHELTER. So , for thefulfillment of the last need ICICI has introduced many products according to thestatus of the applicant. Economic Growth of the country is predicted by its Infrastructure and Real Estate . Therefore, ICICI has made easy by granting loans by easy methods and normalrates. Home loans are of big amounts therefore, it comprises of many importantdocuments and deeds which have to be studied with due importance. Government is concentrating on one important aspect that every person shouldhave his/ her own house through home loans which facilitates deduction inIncome Tax. All the NBFCs are interested in granting Home Loans because it is of largeamount . It is the only type of loan which is coordinated and continued from the time of money lenders to NBFCs. 47 Personal Objective : I choose this project in order to have the detailed study of the topic Home Loansas it comprises of many formalities and legal deeds. To have the practical knowledge because in future every second person will be inneed of Home Loans ICICI Bank specializes in Home Loans so to gain knowledge regarding career prospects. It helps in calculating Income and eligibility of the customer, Study of ITRs,Legal and Technical study of any property and even profile check. 48 REVIEW OF LITERATURETHE BUSINESS PROCESS THE ICICI WAY Business model ICICI HFC currently functions through four sales channels :a)DMA Network b)Counselor Teamsc)Relationship Managersd)ICICI bank Branches All channels function independently of each other Processing and appraisals are done in house and on-site to reduce TATs Role of the DMA / DME / COUNSELOR The face of ICICI Bank Home Loans Representing everything that ICICI HFC promisesa)Superior service b)Excellent productsc)End to end solutions The person who has to ensure that we fulfill every promise that we make to thecustomer A consultant and guide to the customer

49 Risk Containment Unit (RCU) Process Purpose Control frauds entering the systema)Pre-Sanction Stage b)Pre-Disbursement Stage Pre sanction stage verifies files based on triggers. The files are either a)Screened No triggers found. Allowing credit process to continue b)Sampled Implying verification required with source of documentc)Credit Referred Based on Credit Manager request Pre Disbursement Stage verifies property document. Field Investigation (FI) Process Purpose Collection process of ensuring customer verificationa)Residence FI b)Employment FIc)Tele FI of both residence and office Property verificationThis FI Shoot is done of all the applicants and co-applicants. The office FI isdone of all the co applicants whos income is considered. Operation Process

50 Sanction Process b)NDC Check c)Data Entry in Finnoned)Storage of sanctioned files Disbursement Processa)NDC Check b)Date Entry in Finnonec)Preparation of Chequed)Storage of Dockets Sanction Process Normally, it would take 4-7 days for the sanction process from the date of receipt of all the documents at IHFC The customer calls the bank Banks representative visits the customer and explains the loan product Now customer provides the bank with Income and Personal documents aslisted in the brochure Again the representative visits the customer to validate information Documents are credit appraised and decision taken on the sanction of the loan Bank delivers the offer letter along with a list of legal documents required. 51

Disbursement Process Normally, it would take 4-7 days for the disbursement process from the date of receipt of all the documents at IHFC The customer calls the bank for disbursement

Banks representative visits the customer and collects the Legal Documents.Loan Documents and PDCs from the customer. An IHFC lawyer vets the legal documents. An IHFC Site Engineer visits the property to verify stage of construction. Disbursement cheque is prepared. The disbursement cheque is delivered to the customer. 52 CUSTOMER DMA/COUNSELLOR BSMRO FIRE FIFI AGENCY RECEIVES FIRCUDED UPBCMCOPS 53 Firstly, starts the work of Relationship OfficerPurpose : To provide Single Point contact to the customer and handhold him through the process of Enrolment, Sanction and Disbursement. Enrolment Ensure entry of new DME leads and updation of existing leads in CMS Make Welcome Call to customers for all new logins Ensure Welcome Letter is sent to all new customers at the time of login. Sanction Resolve with customer all enquiries raised by CPA / BCM on the Sanction file Make Sanction Call to all customersand inform them regarding all disbursementdocuments required and take DID. Attach Annexure containing list of disbursement documents with all SancctionLetters Disbursement Ask the customer regarding Express Disbursement during Welcome Call Inform customer about the pending documents, if any, as per the legal report andset DME appointment. Make a Disbursement call to customer to inform him that the disbursementcheque is ready Introduce Call Centre to the customer during the disbursement call 54 Next is Branch Credit ManagerPurpose : To provide credit decision for snction and disbursement in order that thecommitment to the customer on turnaround time is fulfilled

Sanction Check the Sanction file for Credit compliance and eligibility norms and authorizesanction Coordinate with the higher authority for the cases that require approval Disbursement Scrutinize complete docket and DM and authorize disbursement Ensure completion and clearing of dockets put on hold by branch operations Coordinate with the outsourced agency for collection of PDDs Impart training to Back office and DMEs regarding policy and process changes 55 What is Contact Management System ? It is a Lead Management System. It appointments the Scheduler. Records all touch points with customer. Acts as a reminder for all follow ups. 56 Flowchart Add ContactLeads With DMAFix AppointmentRemainder for CustomerTake a Print of ScheduleDME MeetsTheCustomerCustomerInterestedDME Collects Documents and Returnsthe DSR to the Back OfficeAllDocumentsCollectedSanction ProcessNOUpdate DiaryCloseNOYESYESNOYES 57 Benefits of CMS Availability of Information Structured Planning Ensures no loss of leads Online feedback to Call Center and Marketing Manager Increase in Productivity Better service to the customer. Introduction to Credit Why is Credit essential ?It is important to evaluate cases for credit so as to have a quality portfolio, remove frauds,have control checks to see the performance of the portfolioWhom do we

want to fund ?Anyone who will Repay all the installments Repay installments on time 58 Things to look at in creditAbility to Pay Intention to Pay How do we judge it ? Industry TrendsIncome received by the customer Background of IndividualDisposable Income Previous RepaymentsOther sources of income a) Car loansPossibility of Cash income b) Housing loansPetrol pump owners, doctors, etc. c) Credit cards loansd) Cellular repayments Income can always be window dressedIncome Document Analysis 59 In case of salaried look at Fixed & Variable Income Compare Gross Income and Net Income Savings in Social Security Funds b)Mandatory contributionc)Additional Contributiond)Withdrawals in Social Security Funds Contribution towards other savings Deduction or payment of all obligations Look at Form 16 for Annual benefits & any obligations too.In case of Self Employed / Non Proffesional Comprehensive look at ITRs of last 3 years Computation of Income Balance Sheet and P& L certified by C.A Stability of Income In case of Salaried Look at the Organization employed with The Industry in which it operates Skill set and Educational Qualification No. of years in the Organization / Industry 60 In case of Self Employed Family business or start-up

Business volume vis a vis Industry Standard Understanding of industry structure/ Forces operating Health of Bank Statement Verification of Bank Statement In salary case, number of credits to be checked Fixed & Variable In business case, check the average balance for liquidity Large credit or debit entries Recurring debits on account of loan repayment b)Inward Cheque bouncesc)Outward Cheque bouncesd)Verify with debtors or creditors list to knowe)The impact on business Stop Payment Instruction Minimum Balance charges 61 Family Background Family No. of dependents Age of dependents to understand the expenses Additional earnings of family members cash flow Dependence of parents / family members staying in hometown Any ancestral or self owned property Family dependent on salary income or diversified income i.e., rental, agriculture, business, small savings Family reference / Business reference As per the norms maximum should be 5 Applicants Lifestyles match between Income & Savings & Expenses Habits like excessive drinking Reference check Family members with medical history b)Claims made under various Income Tax Benefitc)Any banking transaction showing paymentsd)Information provided by FOS / FI / Personal Visit Appreciation of Insurancea)Family medical cover is a good indication b)Life Insurance Planning for the Future of the family 62 Geographical Restrictions Customer Residence / Property not in Negative Area. Customer does not belong to Negative

Profile category. Customer Residence / Property not beyond Geographicallimits.In case customer working outside Geo limit Property to be purchased should be within Goe limits Immediate family member to be within Geo limit & to be taken as co- applicant PDC to be issued from Bank Account to be in Geo limit Waiver of FI subject to positive office tele check & residence FI of familymember (within Geo limit 63 Customer Profile Where applicant and co-applicants income are combined, the minimum income per applicant should be Rs.4000/- pm Work site is further classified as : Category 0 & Category 1 Employees working with Trust should be approved & noted by the Policy & Risk. Employees working with Private Ltd.Companies AGEa)Minimum Age 21 years b)Maximum Age 65 years OR retirement, whichever is Earlier. (Themaximum age at the time of completion of loan) There will be cases where the co-applicant who is the owner of the property doesnot fit into the above categories. In these situations the age criteria is relaxed asfollows:a)Min Age 18 years (At Loan origination ) b)Max Age 70 years at application or 80 yrs (at loan maturity ) 64 Customer ProfileSALSEPSENPNRIWORK SITEOTHERSCASHPvt.Ltd Income not below 7K in other cities.Income not below 9K in Metrotown.(Banglore, Delhi, Chennai,Mumbai) Age Proof Passport Driving license Life Insurance Policy Birth Certificate Election ID School leaving certificate Employee ID (only for PSU / Govt.employees) PAN Card

 SSC / HSC Admit Card SSC / HSC Mark Sheet 65 School / College passing Certificate (printed format with personal details of theapplicant handwritten are acceptable) Salary slip (if date of birth is mentioned) Domicile certificateAge proof is waived for all applicants whose income is not considered for eligibility.However, age proof is mandatory for applicants below 20 years age & above 65years, even if his/her income is not considered for eligibility. Negative Profile Daily wage laborers / Mathadi Workers Drivers and conductors of SRTC/ Taxi drivers/ Auto Rickshaw Drivers/Commercial Vehicles Drivers HUF Anti Social Elements Politicians Mine and Quarry workers Firma engaged in parcel movement Plantation / Time Share Companies Employees of Chit fund/ Stock Broking/ Investment Companies Class 4 employees 66 Garment Exporters Employees of BIFR Companies Watchmen Security Services- Companies and their Employees Stock Brokers Real estate agents Tour Operators

 Cable Operators Employees of NBFCs below AA rating Film stars Employees of Dot Com Companies Bar Owners Builders Additional Documentation for Specific Cases Cash salary One Additional Proof required Form 16/ ITR/ PF Statement / Appointment Letter / Increment Letter Job confirmation proof for applicants less than 23 years If Existing Loans are not being considered proof for the same. Annual benefits - Form 16 / Appointment Letter / Increment Letter / Employer certificate. 67 Documents Required Salaried Application Form with photo 6 months Bank statements ( 3 months for work site ) Not more than 02 or 01 cheque bounces in case of normal and worksite casesrespectively KYC Documentation (Address / Identity / Signature) Age Proof Latest Salary Slip / Certificate 4 salary slips for variable salary Form16 Processing Fee Cheque Mode of Repayment EMI Post Dated Cheques Auto Debit ECS Deduction at Source (only for salaried)Pre EMI

Post Dated Cheques Auto Debit 69 Payment Cycle 1 st and 10 th of every month Now the work starts in Operations Department: The file logins from the Credit Department to Operations Department with 2 typesof documentsa)Customer related documents b)Bank related Documents / Mandatory Documents Customer Documents consist of his Bank Statements, latest ITRs, FinancialStatements, PAN No., Id Proof, DOB Proof, etc. Bank related documents area) Application form In Application Form all compulsory fields should befilled up by the customer with no overwriting.All the data entry should be done by the DEO. b) Dedup It is a software which has all the past data of all the customerswho have applied for home loans previously which helps trace anydefaulter.c) FI / TVR This is done by the bank to verify the residence and telephonenumber of the applicant in order to avoid any fraud beforehand. 70 NDC is done by the DEO as per the NDC checklist. Final NDC is done by CAM If there is any discrepancy the file is sent to Credit Department for re-credit withreasons of hold. Publishing of hold cases is done in MIS at the end of every day. If the file is clear and there is no discrepancy, then the data is entered in finnone by DEO. (Finnone is a software based on oracle which is the master of storing allthe entries and transactions done on daily bases) Now, CAM authorizes the transaction i.e., Maker Checker which means theCAM will check the transactions and authorize them finally. Finally when the case is clear, a Loan Account Number (LAN) is generated whichis the primary key to identify the case for the bank. Now, at the end of the day the files are dispatched to Regional Operations. After sales services performed by Operations Department:

 Request of Statement of Accounts. Request for Repayment Schedule. Swap of Cheques. Conversion (condition change in agreement) Foreclosure Part Payment 71 NOC + Document Collection At the time of Sanction: When the file reaches the Regional Operations it is login at two places:a)Processing Cell b)Storage Cell In processing cella) Firstly, the processing cheque is pulled out.b) Banking of Cheque is donec) Finally the cheque is released.If the cheque is clear, entry is done in the account otherwise, the case is rejected. In Storage Cell, the papers are divided in two typesa) Customer papers which are retained till the term of loan is completed.b) Bank papers are shedded after some time i.e.,3 years or so. Now the sanction is clear and processing fee is released. At the time of Disbursement: The docket is login from Credit to Operations Department. Docket is an importantenvelop containing different papers. Types of Disbursement: a) Full & Final Disbursement - Eg. Applicant sanctioned loan of amount 5 72 lacs and disbursement is done as and when the PF cheque is released.b) First & Subsequent Disbursement Eg. Applicant first Sanctions for purchase and then subsequently for construction so, the amount isgranted in installments.c) Enhancement / Reduction Eg. Applicant if in future decides toincrease or decrease the amount of loan sanctioned, then again thefile of increased amount has to be sanctioned. And in case of reductionthe amount id directly deducted.d) Back to Back Disbursement Eg. It is done in the case of High NetIndividual (HNI) who takes loan more than 20 lacs. In this type of Disbursement the file and docket both are done side by side. Contents of Docket : Loan Agreement There are 2 copies of loan agreement, one for the abnk and thesecond for the customer (including the stamp papers with stamp duty as per respective State Stamp Act. Disbursement Memo It captures the entry of all financial details & entry is donein Finnone. Legal & Technical Deviation Sheet This is signed by the person who takes allthe liabilities regarding the loan granted.

73 Cheque Submission Form It is for the acknowledgment taken from the customer as per how many cheques have been issued and received and the entries are doneso as to avoid any future misunderstanding between the bank and the customer. Disbursement Request Form It is necessary as to know on whose name the loanis applied and granted. And where to pay. Pop Sheet It contains all the contents of the docket to avoid misplacement of any important paper. And entry is done again. Over The Counter Sheet (OTC) It is to exchange the deed with the cheque. PDC Pouch / Pre EMI Pouch It contains all the entries of cheque details. Cheque Acknowlegement Its purpose is to take cheque acknowledgement fromthe customers. Legal Report It consists of Non Encumbrance Certificate (NEC) + record of 13years of the property which is mortgaged. Technical Report It shows the valuation of the property and the estimate taken by the architecture. Punching Process: Financial details are entered by Disbursement Memo. Property Details are entered with the help of Legal Report. Technical Details by Technical Report, And all other contents are checked, verified and entered with the help of PopSheet. Finally the cheque is cut and directly handover to the customer or through Over 74 the counter (OTC)And the Docket is dispatched to Regional Operations (RO) / CentralOperations (CO). Post Disbursal Documents: Banking of Cheques Realization of Cheques. 75 Types of Appraisals There are basic two types of appraisals done to investigate about the cases that are loggedinto the bank: Technical AppraisalConstruction Structure Load Bearing Wall Structure Entire Load on Walls Cost of Construction Lower

 Prevalent in Small TownsRCC Frame Structure Reinforced Concrete Cement Entire Load on Columns and Beams Construction of Commercial and Residential Complex High Usage of EquipmentMixed Structure An Overview Methods of Valuation Approach for Valuation 76 Market Income CostMethods of Valuation Method of Comparison Income Approach to Valuation Summation or Cost Method Residual Method Method of Comparison Property Rate is worked out on other similar properties that have been sold in near past. Circle Rates are compared. Broker Feedback is compared. No Standard Formula to work out value of property. Factors vary from locality to locality. 77 Things to Observe while visiting a site: Distance from Bus Stop and Railway Station Accessibility of Site, Infrastructure Facility Availability of Municipal Transport. Development of Surrounding Area. Building wise details of Construction.

Look out for Deviations. Check Quality of Construction & Structural soundness. Verify Amenities & Assess their True Value through Materials at site. How Do We Fund ? Structure Basea) Load Bearing or RCCb) Bungalow or Flat Builder a) Track Recordb) Projects Completedc) Category A,B,C (Matrix) Lendinga) Stage of Constructionb) Cost Involvedc) Security 78 Adherence to Process Technical Executive Check on the progress of the work. Check on activity levels on or Not Arrive at cost incurred by Seeing Completed Structures. Amenities in and around the Site. Quality of Construction Accessibility Negative Area Plan Validationa) Check Fraudsb) Set Back Check measure from Plinth (Has to measure) c) Check whether it Confirm Building Plans Authentic Valuation of the property (to be dealt in details) What is to be checked at the Site and From whom Building Rules Critical Rules (please provide hand outs of the critical buildingrules) 79 APF ProcessRevised APF ProcessSourcing DMA / BSMTechnical ManagerFire Legal APF Process Advantages Entire legal and technical due diligence is done in one single stroke. Monitoring is on project wise unlike unit wise. It is a win win situation for the developer customer bank.

Retrieval of project details is easy. Total Value of the property and amount of constructed area coming up in themarket is known. Market Share of ICICI and project wise market share can be evaluated. Tracking of property prices becomes easier Exposure level per project can be evaluated. Double funding on the project can be reduced Better control Better TAT Generating huge database of property rates across India. 80 Turn Around Time / Amenities Valuation For Normal Technical Report 24 hours For APF reports 05 days Communication should be perfect, in case plans not received. No site visits without building plans No amenities valuation unless actually verified at the site. Valuation not to include Stamp Duty and Registration Charges or Water andElectricity Charges. Legal AppraisalAppraisal for Home Finance Appraisal Process for Home Finance has two distinct stages:Sanction Stage Relates to Credit Appraisal for the individuals.Disbursement Stage Legal appraisal of the property financed 81 Technical appraisal of the property financed. Legal Appraisal Transfer of Property Living person conveys his interest , right or title to one or more person(s) Person includes Individual, Association of persons, Partnership, Company or Trust. Transfer of property must be done by a written registered document. Sale for a value exceeding Rs.100/- requires registration.Transfer of Property may happen by

Inheritance Gift Government Allotment Purchase Exchange Partition ReleaseTransfer of Tiltle Deed Sale Deed 82 Agreement for Sale Allotment letter Lease deed Gift Deed Probated Will Develop Agreement Deed of Exchange Deed of partition Release DeedConcept of Contract There has to be an offer and acceptance Creation of an agreement To be valid contract there should be NO coercion, undue influence, fraud,misrepresentation or mistake.Competence to Contract The person should not be a minor. He should be of sound mind. Minor to be represented by Guardian and can transfer property with the permission of Court. 83 Property DocumentationClassification into two parts:1.Types of Transactions2.Classification of DocumentsTransaction type

Builder Society Development Boards / Authorities Self Construction Resale TransactionClassification of Documents Land Related Documents Government Land Records Plans and Permissions Individual Title Documents 85 Property Documentation Situation : Purchase from Builder Land Related DocumentsSale Deed / Partnership Deed / DevelopmentAgreement, POAGovernment Land RecordsExtracts from Registrars office, Mutation EntriesPlans And PermissionsApproved Plans and Permission, ULCA permission,Tax receipts, Commencement certificate, Occupationcertificate, Land use certificate, Building permission.Individual Title DocumentsAgreement for Sale, RR, Letter to Sub Registrar, NOCto mortgage, OCR Situation : Allotment from Development Authority Land Related DocumentsNAGovernment Land RecordsNAPlans & PermissionNAIndividual Title DocumentsAllotment Letter, OCR, NOC / PTM from DA, UnitLayout, Sale Deed / Lease Deed Situation : Purchase from Society Land Related DocumentsSale / Lease Deed in favor of Society, Bye Laws,Society Registration Certificate.Government Land RecordsExtracts from Registrars officeMutation EntriesPlans & PermissionApproved plans, NA permission, ULCA permission,Tax Receipts, CC, OC, Land use certificate, Building permission.Individual Title DocumentsAllotment Letter, agreement for Sale, RR, Letter toSub registrar, NOC from Society, OCR, ShareCertificate. 86 Situation : Self Construction Land Related DocumentsSame as individual title documentsGovernment Land RecordsExtracts from Registrars officeMutation EntriesPlans & PermissionApproved plans, NA permission, ULCA permission,Tax Receipts, Commencement Certificate, OccupationCertificate, Land use certificate, Building permission,Possession Certificate, Location Certificate.Individual Title DocumentsSale Deed of the land, RR, Letter to Sub registrar previous title documents, Land Layout. Situation : Purchase on Resale Land Related DocumentsAs per the applicable transactionGovernment Land RecordsExtracts from Registrars officeMutation EntriesPlans & PermissionAs per the applicable transactionIndividual Title DocumentsSale Deed , RR, Letter to the Sub registrar, Prior Deeds, NOC to Mortgage, OCR, Share Certificate. 87 Know Your Customer (KYC) compliance(A) The matrix of the documents that are required to be collected for residentindividual borrowers is

as below, any one document from each of the documentcategory would be required :Document CategorySalariedSEP & SENPResidence AddressProof Passport Driving license Election Id card Utility bill (not more than 3months old) Latest (not more than 3months old)statement of account / passbook maintained with anyscheduled bank, dulycertified by the bank confirming the address Letter from the existingBanker (scheduledcommercial bank) inoriginal verifying the nameand address on the banksletterhead. Copy of registered lease /leave and licenseagreement which are notexpired along with theutility bill in the name of the landlord / owner confirming address. Residential Certificateissued by Municipalcorporation / local self government bodiesconfirming address. Latest premium receipt of general/ life insurancecompany (not more than 12months old in case of annual premium receipt) True Copy of Gas Passport Driving license Election Id card Utility bill (not more than3 months old) Latest (not more than 3months old)statement of account / passbook maintained with anyscheduled bank, dulycertified by the bank confirming the address Letter from the existingBanker (scheduledcommercial bank) inoriginal verifying thename and address on the banks letterhead. Copy of registered lease /leave and licenseagreement which are notexpired along with theutility bill in the name of the landlord / owner confirming address. Residential Certificateissued by Municipalcorporation / local self government bodiesconfirming address. Latest premium receipt of general/ life insurancecompany (not more than12 months old in case of annual premium receipt) True Copy of Gas 88

connection book. Certificate issued by WardOfficer maintainingelection roll certifyingaddress of the applicant. Letter from employer certifying residentialaddress. Name andDesignation of the issuingauthority must be clearlymentioned.connection book. Certificate issued byWard Officer maintainingelection roll certifyingaddress of the applicant.@ The passport $ driving license as above should be current i.e., the same should not beexpired. Clarification : A single document can be accepted provided it serves the requirement for multiple proofsand the current residential address is same as on the proof submitted for individuals.Thus, the preferred document for the Photo Id, Residence Address & Age Proofs isPassport / Election Id / Driving License.For reference the list of documents accepted as Age Proof is given below Salaried SEPSENPAge Proof Passport Driving license Election ID PAN Card Life InsurancePolicy Birth Certificate School leavingcertificate Employee Id(only for PSU /Govt. employees SSC / HSC AdmitCard SSC / HSC Mark Sheet School / college passing certificate(Printed format with Passport Driving license Election ID PAN Card Life InsurancePolicy Birth Certificate School leavingcertificate Employee Id(only for PSU /Govt. employees SSC / HSC AdmitCard

SSC / HSC Mark Sheet School / college passing certificate(Printed format with Passport Driving license Election ID PAN Card Life InsurancePolicy Birth Certificate School leavingcertificate Employee Id(only for PSU /Govt. employees SSC / HSC AdmitCard SSC / HSC Mark Sheet School / college passing certificate(Printed format with 89

personal details of theapplicant handwritten areacceptable) Salary Slip (if date of birth ismentioned) Domicilecertificate Ration Card personal details of theapplicant handwritten areacceptable) Salary Slip (if date of birth ismentioned) Domicilecertificate Ration Card personal details of theapplicant handwritten areacceptable) Salary Slip (if date of birth ismentioned) Domicilecertificate Ration Card (B) Documents required for individual NRI / PIO borrowersDocument categoryIdentity ProofIn case the customer is a NRI a.Photocopy of the relevant pages of the passport wherethe customers name, address, date of birth, date & placeof issue, expiry date, photograph, signature & stampregarding stay outside India appear. b.Photocopy of valid work permit / employment visa. Incase of expired visas, duly acknowledged petitions madeto the Visa Authorities for renewal of Visas will beaccepted as a valid document.

In case the customer is a PIO a.Copy of the relevant pages of his current passport. b.Copy of his PIO cardOr Copy of past Indian passport of self / parent / grand-parentalong with a self declaration as ICICI format duly notarizedand stamped for requisite value. Adress ProofA copy of at least one of the following Address proog outsideor within India : a . Utility Bill b. Driving licensec. Residential Permit (Government Issued Identity Card)d. Credit Card Billse. Rent Receiptf. Overseas / Indian bank Statement 90

The address proof must match with the communication addressmentioned on the application form. (C) Documents required for non individual borrowers :Document categoryID proof Partnership Firm Partnership Deed Company Articles of Association, Memorandum of Association, Certificate of Incorporation. Office Address Proof Any one of the following documents: Latest (not more than 3 months old) Utility Bill likeTelephone Bill, Electricity Bill confirming address. Letter from the existing Banker (scheduled commercial bank) in original. Existing banker must verify the nameand address of the entity on the banks letterhead Latest (not more than 3 months old) statement of account / passbook maintained with any scheduledcommercial bank, duly certified by the bank confirmingthe address. Copy of registered lease / leave and license agreementwhich are not expired along with the utility bill in thename of the landlord / owner confirming address. Certificate issued by Municipal Corporation / local self government bodies confirming address. Latest available Income Tax Assessment order confirming address. Latest available Wealth tax Assessment order confirming address. Sales Tax registration certificate confirming address. Valid Shops and Establishment Certificate confirmingaddress. Factory registration certificate confirming address. Latest Premium receipt of general / life insurancecompany (not more than 12 months old in case of annual premium receipt)In case of non individual applicants, KYC will also be required for the partners /directors / promoters who would be required as the co applicants and also all authorizedsignatories. 91

Repayment Track Record Based lending Auto loansIntroduction of RTR based product Capitalize on Repayment History of applicant Focused on Auto Loan Customers Auto Loan Customers of a)ICICI Bank b)Other lenders Product Highlights Opportunities to give home loans to approved list of auto loan customers Should have serviced for a minimum period of 12 months Or RTR should not have been closed before 12 months back Product can be offered for a) Home loansb) Home premises only for doctorsc) HL for SEP & SENP Minimum Maximum Loan : Rs.5 Rs.25 lacs Product Features RTR of commercial vehicles not acceptablea) Scorpio / Qualisb) Sumo / Tata Indicab Multiple lending on same RTR not acceptable Lending to Directors / Partnersa) Based on RTR of the firm / Pvt Ltd. companyb) Director / Partner > 76% should come as Co-applicant / Guarantor c) Stake to be verified by CA / CS or Returns of ROC Loan To Value as per product norms All other norms as per the product category Customer Segment Resident Indian1.Salaried2.Self Employed Professionals3.Self Employed Non ProfessionalTransporters / Taxi fleet Operators Not acceptable 92

Target SegmentProduct WorkingEligibility1.Minimum Seasoning12 months2.SeasoningEMI Multiplier>12 months1 times of the current EMI for Autoloan>18 months 1.25 times of the current EMI for Autoloan Parameters1. EMI in arrears (current)Nil2.Defaults Peak not more than 30 days RTR HealthFor 12 months RTR0 Cheque bounces in 12 monthsFor 24 months RTRMaximum 02 cheque bouncesFor 36 months RTRMaximum 03 cheque bouncesLoan Amount based on RTR workingLoan Amount in lacsAuto loan EMI *1.25/ EMI factor per lacfor the loan tenureExample 1Mr. Rakesh has Accent loan paying EMI Rs.15000/-Loan Amount in lacs15000*1.25 / 927 = Rs.20.22 lacs 94 SalariedSelf EmployedProfessional /NonProfesional

Already having Auto Loans with ICICI Bank and otherInstitutions PROCESS OF RTR PROCESS 96 RESEARCH METHODOLOGY Research Design: The Research Design can be grouped under 2 sectors i.e., Primarysource and secondary sources.Other than these primary and secondary sources the study of various cases of theapplicants by going through the files guided to make an analysis and findings regardingthe status of Home Loans in the current scenario. Even by assisting the Credit ProcessingAnalyst, the analysis and findings were approved by them. Sample Design: Research Tools and Questionnaire:QUESTIONAIRE: 1. NAME OF THE APPLICANT: AGE:2. PROFESSION:3. LOAN AMOUNT:4. TENURE:5. PRODUCT APPLIED FOR:6. MODES OF PAYMENT:(a) ECS (b) PDCs (c) DAS (d) SI (e) Any other 7. PROPERTY MORTGAGED:8. ANY OTHER LOAN TAKEN ON SAME PROPERTY:9. PREFFERED BANK FOR HOME LOANS:(a) ICICI (b) HDFC (c) SBI (d) PNB (e) Allahabad Bank 10. LOAN TAKEN FROM ANY OTHER BANK, IF YES WHICH BANK AND FOR

Analysis: In last 10 years the rate of growth in the number of applicants have been at a faster pace because the individuals have vast knowledge about the benefits of Home Loans.YearNo. of Applicants2002-037,73,5622003-049,65,2912004-0513,42,0972005-0615,27,94520060717,95,0482007-0819,84,164(These figures are of a particular state)Secondly, the applicants applying for Home Loans were of young age as compared to past 10 years. Then the applicants ranging above 45 years were more in number applying but now there are applicants of even 2530 years. The tenure to repay the loan has alsodecreased because of the increase in Income Obligation ratio.But since last 1-2 years there is a stable percentage of individuals applying for it becauseof the increase in the rate of interest and strict norms of RBI. They are as follows:a) Rate of Interest will be less for people in minority. b) Applicants applying for more than 50 lacs who are High Net Individuals (HNI) are provided with some percentage of rebate.c) Applicants taking loan for the second time for Home loans are under strict supervisionand verification.

FIVE FORCES OF PORTERS MODEL OF ICICI

Supplier Power Increased Dependence on IPOs There is a growing dependence of corporates on broking houses with the rising number of IPOs coming to the market.

Barriers to Entry Entry of Foreign Players New forms of trading including T+2 settlement system, dematerialization etc arestrengthening the retail brokerage market and attracting foreign companies to enter theIndian industry. Threat of Substitutes Alternative Investment Options Various alternative forms of investment including fixed deposits with banks and postoffices etc act as substitutes to retail broking products and services.

SWOT ANALYSIS Strength Advanced Technology Providing innovative products and technology Leverage technology to satisfy customer demands.

 Add value to share holders. Weakness: Too many subsidiaries High cost of funds Opportunities: Higher capital base First mover advantages Threats: Competition from other industry rivals like HDFC. Concern over NPA despite provisioningThus, ICICI has been able to use technology to provide value added service to itscustomers during the last few years. For ICICI, technology is an integral part of their business. However, their overall progress could have been smoother but for certaininternal and extraneous factors and also a pressure on spreads due to a competitivemarket.101 Comparative study of ICICI Bank Ltd. and HDFC Bank

Even their offices reflect their attitudes. ICICI Bank's headquarters in suburban Mumbai is a huge,imposing edifice in glass and granite. HDFC Bank's office in central Mumbai is comparativelysmaller and more sedately furnished. The two banks have carried forward their style statement intheir approach to business. ICICI Bank thinks big, is all for growth and hungry for market share.HDFC Bank is more conservative and cautious, grows at a measured pace, without taking anyundue risks.ICICI Bank's assets in the retail space stand at Rs 56,000 crore (Rs 560 billion). In comparison,the tally for HDFC Bank is Rs 18,000 crore (Rs 180 billion). ICICI Bank also leads HDFC Bank inalmost every segment they are present in. But that's just the current update. The DNA of the strategy ICICI Bank began its retail banking venture in mid-1999. By January 2000, it had moved on tointroducing home loans, car loans, personal loans and credit cards. Realising the need for abigger retail deposit base, the bank started building a branch and an ATM network. Theacquisition of Bank of Madura in March 2001 added 263 branches, many of them in cities whereICICI Bank did not have a presence.The merger of the erstwhile financial institution ICICI Limited with the bank in April 2002, gave it aready-made corporate clientele. The flip side was that ICICI Bank had Rs 10,000 crore (Rs 100billion) of restructured assets for which it had to make provisions.On the other hand, HDFC Bank kick started its operations in 1995 with a focus on corporatebanking, targeting the top-end of the market.HDFC Bank ventured into retail lending in 1998, ayear before ICICI Bank. But in products like credit cards, it was slow to get off the mark. For instance, its credit cards were launched only two years ago. By then ICICI Bank had beenpresent in the credit card business for nearly three years.However, HDFC Bank was handicapped because it could not sell home loans (because itsparent HDFC was in the business), though it has been originating them in the past one-and-a-half years. For ICICI Bank, home loans are 46 per cent of its retail assets.A banking consultant observes that ICICI Bank is far more aggressive. Though ICICI executivesdo not admit it, industry sources observe that ICICI's pricing has been far more competitive, whichprobably brought it more customers.According to some industry experts, growth for ICICI Bank may have come at the cost of quality.ICICI Bank denies this. Calling the customer

Both players targeted the same customer -- the upper-middle class. The marketing channelsused by both, including direct sales agents (DSAs), were the same. Yet, there was a difference.In the past two years, the bank has spent less than Rs 100 crore (Rs 1 billion) on advertising andpublicity (In comparison, ICICI has spent Rs 185 crore). HDFC Bank says that its spends havealways focused on other channels such as direct sales and phone banking rather thanmainstream advertising. 102Better pick-up The numbers tell the story. ICICI Bank's retail deposits are nudging Rs 60,000 crore (Rs 600billion) and in FY06, it grew its deposits by 47 per cent compared with the industry deposit growthof 14 per cent. HDFC Bank's retail deposits are about Rs 23,000 crore (Rs 230 billion). Even inhome loans, ICICI Bank commands 30 per cent of the market, having eaten into housing financepioneer, HDFC's share. Share of the wallet Mar-05HDFCBank ICICIBank Branches467565ATMs1,1472,000Cities211371Retail assets (Rscrore)18,00056,000Deposits (Rs crore)38,00099,800Car loans (Rs crore)2,50011,500Credit cards (Mn)1.33Retail customers(Mn)6.413.7Cost of deposits (%)3.24.5Net interest margin(%)3.22.4Net NPLs (%)0.22 Even in the number of customers ICICI Bank leads by a distance (See table: Share of thewallet ). Nearly 14 million customers bank with ICICI Bank, while the number for HDFC Bank isless than half (6.4 million). ICICI Bank has issued 3 million credit cards -- that is more than twicethe number of HDFC Bank's credit card users. However, industry observers point out that ICICIBank's effective users for credit cards may not be high.Nonetheless, they concede that even with a discounted customer base, the numbers will still bestrong. Even in businesses like online trading where the risks are relatively low, ICICI Bankcommands a two-thirds marketshare. 'Tell all' street The stock market has always valued HDFC Bank at a huge premium -- at the current price of Rs585, HDFC Bank is valued at 3.5 times price to forward book (valuation based on estimated bookvalue in FY 06 of Rs 165). The multiple for ICICI Bank that quotes at Rs 415, is just 2.1(estimated book value Rs 194). The reason: the impeccable quality of HDFC Bank's balancesheet. With NPLs of less than 0.2 per cent, compared with 2 per cent for ICICI Bank, its booksare definitely in far better shape.HDFC Bank's operations are also more profitable -- its net interest margin at 3.2 per cent is wayhigher than that of ICICI Bank's 2.4 per cent. Also, it is able to access deposits at a lower cost.On an average, it pays an interest of 3.2 per cent while ICICI Bank shells out 4.5 per cent.But round one of the banking sweepstakes has clearly gone to ICICI Bank. 103 RESEARCH FINDINGS: The data collected through questionnaires with the help of Direct Sales Agent and DirectMarketing Agencies has been of great importance to analyze many details regarding allthe captions that are there in the questionnaire of sample size 40. They are as follows: Age: The applicants ranging between the age of 30 - 45 years are the ones whohave applied for Home Loans large in number, it is because they are financiallystable and sound. But now a days customers ranging between 25 30 are evenapplying for Home Loans because they are aware of the benefits that can beavailed by applying for Home Loans. Profession: Mostly, the Self Employed Non Professionals i.e., business personswho are involved in their family business apply for Home Loans. Salaried are lessin number. Tenure & Loan Amount : The tenure which the bank and the customer finallyarrives at is according to the eligibility of the applicant in consideration to hisa) Age As the bank itself assumes that is the person capable enough physicallyand financially that hell be able to repay the loan in the fixed tenure.b)

Profession either the person is salaried which shows he has a fixed income per month and thus the installments will be on time, if the applicant is SEP or SENPthen there can be any gain or loss and so the tenure and amount of loan is fixedaccordingly. Product applied for: The most preferred products in Home Loans are: Home Loan It is specially for the purpose of construction and purchase.Benefits of Home loans Cheaper Rates RBI has given a margin of 0.75% which deductsfrom the current prevailing rates. Easily granted. Amount of loan granted 50% of the salary in case of salariedclass. Rebate / deduction in Income Tax. Land Loan It is normally given for the purpose of purchase of land for Investment for future.Benefits of Land Loans Normal rates As it is granted for the purpose of investment soRBI has not given any deduction of margin because it is not beneficial for the government and is merely for the personal benefit of the customer. There is no rebate in Income Tax. LAP (Loan Against Property) It is given for different purposes against any property which is mortgaged with the bank and is released when the loan isover.Benefits of LAP Rates at which the loan is granted is above margin It is also known as Mortgage Loan. Modes of Payment : After the whole analysis, the final conclusion is thatmore than 60% of the applicants repay the loan through PDCs. Property Mortgaged : Applicants can mortgaged any free property whichthey own. Free property includes: Residential ( commercial and non-commercial) Commercial Any other loan taken for the same property: Out of sample size 40, mostlyhave not applied for any other loan simultaneously but through CreditInformation Bureau of (India) limited (CIBIL) and DEDUP records show thatat time of applying for HL customers itself take a check that they havealready repaid their dues of other loans. Preferred bank for Home Loans: According to the survey throughquestionnaire shows that ICICI Bank Ltd. is the most preferred bank but this is because questionnaires have been filled by the applicantsapplying in ICICI. Otherwise, HDFC is second market leader in Home Loans. Loan from any other bank: Out of sample size of 40 customers mostly havenot applied in any other bank but some number of applicants are customers of any other bank. Sources of information for the various home loan plans:

Features launched by the bank in different plans of HL is outsourced through Direct Sales agentsand agencies. And even some customers or can say general public prefers bank as the most reluctant source of availing information. 99% of the applicants in sample size are satisfied by the services providedby ICICI Bank Ltd.

SUMMARY AND CONCLUSION: The report made on ICICI Home Loans concludes by findings of various benefits to thecustomer, government, builders and HFCs / Banks.There is a growing tendency of investing at a younger age, increase in NRI demand inreal estate, increased urbanization, owning property now more economical than renting.Government committed to simplifying Mortgaged Backed Securitization andReconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI)Act 2002. There is tax benefit to the customers and rationalization of stamp duty.Builders are now a days focusing on end users rather than Investors and there isimprovement in quality of constructions. The final outcome of the report gives the following data: JUNE 2008 FILES LOGIN100( Ist Disbursement)49 ( Sub Disbursement)52 ( Final Disbursement)FILES CLEAR46 ( Ist Disbursement) 26 ( Sub Disbursement)47 ( Final Disbursement)The graphs below shows the market leadership of ICICI as compared to HDFC and SBI. Market leadership Sanctions (in Rs.Crore) 0500010000150002000025000300002004 2005 2006 2007ICICIHDFCSBI 106 2005 2006 2007 2008

SUMMARY AND CONCLUSION: The report made on ICICI Home Loans concludes by findings of various benefits to thecustomer, government, builders and HFCs / Banks.There is a growing tendency of investing at a younger age, increase in NRI demand inreal estate, increased urbanization, owning property now more economical than renting.Government committed to simplifying Mortgaged Backed Securitization andReconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI)Act 2002. There is tax benefit to the customers and rationalization of stamp duty.Builders are now a days focusing on end users rather than Investors and there isimprovement in quality of constructions. The final outcome of the report gives the following data: JUNE 2008 FILES LOGIN100( Ist Disbursement)49 ( Sub Disbursement)52 ( Final Disbursement)FILES CLEAR46 ( Ist Disbursement) 26 ( Sub Disbursement)47 ( Final Disbursement)The graphs below shows the market leadership of ICICI as compared to HDFC and SBI. Market leadership Sanctions (in Rs.Crore) 0500010000150002000025000300002004 2005 2006 2007ICICIHDFCSBI 106 2005 2006 2007 2008 SUMMARY AND CONCLUSION: The report made on ICICI Home Loans concludes by findings of various benefits to thecustomer, government, builders and HFCs / Banks.There is a growing tendency of investing at a younger age, increase in NRI demand inreal estate, increased urbanization, owning property now more economical than renting.Government committed to simplifying Mortgaged Backed Securitization andReconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI)Act 2002. There is tax benefit to the customers and rationalization of stamp duty.Builders are now a

days focusing on end users rather than Investors and there isimprovement in quality of constructions. The final outcome of the report gives the following data: JUNE 2008 FILES LOGIN100( Ist Disbursement)49 ( Sub Disbursement)52 ( Final Disbursement)FILES CLEAR46 ( Ist Disbursement) 26 ( Sub Disbursement)47 ( Final Disbursement)The graphs below shows the market leadership of ICICI as compared to HDFC and SBI. Market leadership Sanctions (in Rs.Crore) 0500010000150002000025000300002004 2005 2006 2007ICICIHDFCSBI 106 2005 2006 2007 2008