A SUMMERE TRAINING PROJECT ON

PUNJAB NATIONAL BANK HOME LOAN

SUBMITTED TO:JIWAJI UNIVERSITY GWALIOR FOR THE PARTIAL FULFILLMENT OF BACHELOR OF BUSINESS ADMINISTRATION
2011-14 SUBMITTED TO: MR.HARI KRISHNA SHARMA (Fa !"#$ %!&'() SUBMITTED BY:ARBIND KUMAR BBA V S(*(+#(,

B-+#-. C-""(%( F-, P,-/(++&-.a" S#!'&(+ G0a"&-,

1

DECLARATION
This is to declare that the Summer Training Report has been accomplished by me and being submitted in partial fulfillment of requirement for the award of the Degree of Bachelor of Business Administration B-+#-.

C-""(%( F-, P,-/(++&-.a" S#!'&(+ G0a"&-, from J&0a1& U.&2(,+&#$3

G0a"&-, The work has not been submitted by me anywhere else for the award of any degree or diploma. All source of information are based on my on training e perience and learning.

Date: Place:

ARBIND KUMAR BBA V SEMESTER

CERTIFICATE
!

This is to certify that MR. ARBIND KUMAR of BBA V S#!'&(+ G0a"&-, has successfully

student his

Semester of B-+#-. C-""(%( F-, P,-/(++&-.a" completed

Summer Training dated from 45 days and this report is submitted by Her for the completion of the training requirement under my guidance and supervision.

Date : Place:

MR.HARI KRISHNA SHARMA

(Fa !"#$ %!&'()

"

ACKNO

LED!EMENT

#t is great pleasure for me to put on record my appreciation and gratitude towards $lacement and Training %oordinator of B-+#-. C-""(%( F-, P,-/(++&-.a" S#!'&(+ G0a"&-,. &y special thanks to my respected faculty MR.HARI KRISHNA SHARMA for him 'aluable support and suggestions for the e ecution of Summer Training. # thank her for the right direction and pro'iding inputs for the completion of my summer training pro(ect.

Date: Place:

ARBIND KUMAR BBA V SEMESTER

PREFACE
&odern organi*ations are highly comple ad dynamics systems. They operate under 'ery turbulent social economic and political en'ironment. They are required to reconcile se'eral incompatible goals. %onflicting roles and di'ergent interest they are also fraught with the use risk and uncertainties+ hence tactful management of such organi*ation to plan to e ecute guide+ coordination and control the performance of people to achie'e predetermined goals. &anagement has to keep the organi*ation 'ibrant mo'ing and in equilibrium. #t has to achie'e goal which themsel'es are changing it is therefore a problem highly comple and ticklish. T hi s i nf or m at i on wi l l be asset t o m ar ket i ng m anager i n m aki ng eff ect i 'e deci si ons. The r esear ches ar e used t o acqui r e and anal yse i nf or m at i on and t o m ake suggest i ons t o m anagem ent as t o how m ar ket i ng pr obl em s shoul d be sol 'ed. T he m ar ket i ng resear ch i s t he pr ocess whi ch l i nks t o m anuf act ur er + deal er s and i ndi 'i dual s thr ough inf or m at i on i n i m por t ant par t of cur r i cul um of &.B.A. pr ogr am m e i s pr o( ect t aken by the st udent s t o i nst i t ut e under whi ch he or she i s st udyi ng+ af t er com pl et i on of t hi r d sem est er of t he pr ogr am m e. T he ob( ect i 'e of t hi s pr o( ect i s t o enabl e t he st udent s t o under st and t he appl i cat i on of t he academ i cs i n t he real busi ness l if e. # am f ul l y conf i dent t hat t hi s pr o( ect r epor t wi l l be e t r em el y usef ul t o t he m anagem ent .

TABLE OF CONTENTS Acknowledgement Preface CHAPTER 1: Overv ew of !ank ng nd"#tr$ n %nd a CHAPTER &: A Saga of Bank ng E'cellence n Bank ng (P)N*AB NAT%ONAL BAN+, CHAPTER -: Performance of t.e PNB CHAPTER /: Organ #at onal Str"ct"re CHAPTER 0: Home Loan CHAPTER 1: PNB Home Loan CHAPTER 2: S"gge#t on# 3 Tro"!le#.oot ng T 4# CHAPTER 5: B !l ogra4.$

 TYPES OF BANKS BANKS IN INDIA

OVERVIEW OF BANKING INDUSTRY IN INDIA

The ma(or participants of the #ndian financial system are the commercial banks+ the financial institutions /0#s1+ encompassing term2 lending institutions+ in'estment institutions+ speciali*ed financial institutions and the state2le'el de'elopment banks+ 3on2Bank 0inancial %ompanies /3B0%s1 and other market intermediaries such as the stock brokers and money2lenders. The commercial banks and certain 'ariants of 3B0%s are among the oldest of the market participants. The 0#s+ on the other hand+ are relati'ely new entities in the financial market place. Bank of 4industan+ set up in 15.6+ was the earliest #ndian Bank . Banking in #ndia on modern lines started with the establishment of three presidency banks under $residency Bank7s act 15.- i.e. Bank of %alcutta+ Bank of Bombay and Bank of &adras. #n 18!1+ all presidency banks were amalgamated to form the #mperial Bank of #ndia. #mperial bank carried out limited central banking functions also prior to establishment of RB#. #t engaged in all types of commercial banking business e cept dealing in foreign e change. Reser'e Bank of #ndia Act was passed in 18") 9 Reser'e Bank of #ndia /RB#1 was constituted as an ape bank without ma(or go'ernment ownership. Banking Regulations Act was passed in 18)8. This regulation brought Reser'e Bank of #ndia under go'ernment control. :nder the act+
5

RB# got wide ranging powers for super'ision 9 control of banks. The Act also 'ested licensing powers 9 the authority to conduct inspections in RB# #n 18,,+ RB# acquired control of the #mperial Bank of #ndia+ which was renamed as State Bank of #ndia. #n 18,8+ SB# took o'er control of eight pri'ate banks floated in the erstwhile princely states+ making them as its 166; subsidiaries. RB# was empowered in 18-6+ to force compulsory merger of weak banks with the strong ones. The total number of banks was thus reduced from ,-- in 18,1 to 5, in 18-8. #n <uly 18-8+ go'ernment nationalised 1) banks ha'ing deposits of Rs.,6 crores 9 abo'e. #n 1856+ go'ernment acquired - more banks with deposits of more than Rs.!66 crores. 3ationalisation of banks was to make them play the role of catalytic agents for economic growth. The 3arsimham %ommittee report suggested wide ranging reforms for the banking sector in 188! to introduce internationally accepted banking practices. The amendment of Banking Regulation Act in 188" saw the entry of new pri'ate sector banks. Banking Segment in #ndia functions under the umbrella of Reser'e Bank of #ndia 2 the regulatory+ central bank. This segment broadly consists of= %ommercial> Banks %o2operati'e Banks

C-**(, &a" Ba.4+

The commercial banking structure in #ndia consists of=

Scheduled %ommercial Banks :nscheduled Banks Scheduled commercial Banks constitute those banks which ha'e been

included in the Second Schedule of Reser'e Bank of #ndia/RB#1 Act+ 18"). RB# in turn includes only those banks in this schedule which satisfy the criteria laid down 'ide section )! /-6 of the Act. Some co2operati'e banks are scheduled commercial banks albeit not all co2operati'e banks are. Being
8

a part of the second schedule confers some benefits to the bank in terms of access to accomodation by RB# during the times of liquidity constraints. At the same time+ howe'er+ this status also sub(ects the bank certain conditions and obligation towards the reser'e regulations of RB#. This sub sector can broadly be classified into= 1. $ublic sector !. $ri'ate sector ". 0oreign banks.

CO-OPERATIVE BANKS
There are two main categories of the co2operati'e banks. /a1 S5-,# #(,* "(.'&.% -,&(.#(' ---6(,a#&2( Ba.4+ 2 within this category there are three sub categories of banks 'i* state co2operati'e banks+ District co2operati'e banks and $rimary Agricultural co2 operati'e societies. /b1 L-.% #(,* "(.'&.% -,&(.#(' ---6(,a#&2( Ba.4+ 2 within the second category there are land de'elopment banks at three le'els state le'el+ district le'el and 'illage le'el. The co2operati'e banking structure in #ndia is di'ided into following main , categories= (V&+&# !+ a%a&. /-, '(#a&"+ -/ (a 5 a#(%-,$) 1. $rimary :rban %o2op Banks= !. $rimary Agricultural %redit Societies= ". District %entral %o2op Banks= )+ State %o2operati'e Banks= ,. ?and De'elopment Banks=

16

BANKS IN INDIA
+ S. N. P!7"& S( #-, Ba.4+
1. !. ". ). ,. -. .. 5. 8. 16. 11 1!. 1". 1). 1,. 1-. 1.. 15. 18. !6. !1. Allahabad Bank Andhra Bank Bank of Baroda Bank of #ndia Bank of &aharashtra %anara Bank %entral Bank of #ndia %orporation Bank Dena Bank #ndian Bank #ndian @'erseas Bank @riental Bank of %ommerce $un(ab and Sind Bank P!.1a7 Na#&-.a" Ba.4 Syndicate Bank :%@ Bank :nion Bank of #ndia :nited Bank of #ndia Ai(aya Bank #DB# Bank

P,&2a#( S( #-, Ba.4+

Bank of $un(ab ?td. %enturion Bank ?td. De'elopment %redit Bank ?td. 4D0% Bank ?td. #%#%# Bank ?td. #ndus#nd Bank ?td. Botak &ahindra Bank ?td. :T# Bank ?td. Ces Bank ?td Bank of Ra(asthan ?td. Dhanalakshmi Bank ?td. 0ederal Bank ?td #3D Aysya Bank ?td. <ammu and Bashmir Bank ?td. Barnataka Bank ?td Barur Aysya Bank ?td Ratnakar Bank ?td SB# %ommercial and #nternational Bank ?td South #ndian Bank ?td :nited Eestern Bank ?td

F-,(&%. Ba.4+
AB32A&R@ Bank 3.A Abu Dhabi %ommercial Bank ?td American F press Bank ?td. B3$ $aribas %itibank 3.A DBS Bank ?td 4SB% ?td. Standard %hartered Bank

11

 ABOUT PUNJAB NATIONAL BANK HISTORY OF PNB VISION & MISSION

1!

A SAGA OF EXCELLENCE IN BANKING

Established in 158, at ?ahore+ undi'ided #ndia+ $un(ab 3ational Bank /$3B1 has the distinction of being the first #ndian bank to ha'e been started solely with #ndian capital. The bank was nationali*ed in <uly 18-8 along with 1" other banks. 0rom its modest beginning+ the bank has grown in si*e and stature to become a front2line banking institution in #ndia at present A professionally managed bank with a successful track record of o'er 116 years. ?argest branch network in #ndia 2 )--5 @ffices including !"5 F tension %ounters spread throughout the country. Strategic business area co'ers the large #ndo2Denetic belt and the metropolitan centres. Ranked as !)5th biggest bank in the world by Bankers Almanac+ ?ondon. Strong correspondent banking relationships with more than !1. international banks of the world. &ore than ,6 renowned international banks maintain their Rupee Accounts with $3B.
1"

Eell equipped dealing rooms> !6 different foreign currency accounts are maintained at ma(or centres all o'er the globe. Rupee drawing arrangements with &Gs :AF F change %entre+ UAE3 &Gs Al 0ardan F change %o. Doha+ 8a#a,+ &Gs Bahrain F change %o+ K!0a&#3 &Gs Bahrain 0inance %o+ Ba5,a&.+ &Gs Thomas %ook Al Rostamani F change %o. D!7a&3 UAE3 and &Gs &usandam F change+ R!0&3 S!"#a.a#( -/ O*a..

1)

ABOUT PUNJAB NATIONAL BANK

Eith o'er "5 million satisfied customers and )--5 offices+ $3B has continued to retain its leadership position among the nationali*ed banks. The bank en(oys strong fundamentals+ large franchise 'alue and good brand image. Besides being ranked as one of #ndia7s top ser'ice brands+ $3B has remained fully committed to its guiding principles of sound and prudent banking. Apart from offering banking products+ the bank has also entered the credit card 9 debit card business> bullion business> life and non2life insurance business> Dold coins 9 asset management business+ etc. Since its humble beginning in 158, with the distinction of being the first #ndian bank to ha'e been started with #ndian capital+ $3B has achie'ed significant growth in business which at the end of &arch !668 amounted to Rs "+ -)+)-" crore. Today+ with assets of more than Rs !+ )-+866 crore+ $3B is ranked as the "rd largest bank in the country /after SB# and #%#%# Bank1 and has the !nd largest network of branches /)--5 including !"5 e tension counters and " o'erseas offices1.During the 0C !665268+ with "8; share of low cost deposits+ the bank achie'ed a net profit of Rs "+681 crore+ maintaining its number @3F position amongst nationali*ed banks. Bank has a strong capital base with capital adequacy ratio as per Basel ## at 1).6"; with Tier # and Tier ## capital ratio at 5.85; and ,.6,; respecti'ely as on &archH68. As on &archH68+ the Bank has the Dross and 3et 3$A ratio of only 1...; and 6.1.; respecti'ely. During the 0C !665268+ itsH ratio of priority sector credit to ad(usted net bank credit at )1.,"; 9
1,

agriculture credit to ad(usted net bank credit at 18..!; was also higher than the respecti'e national goals of )6; 9 15;. $3B has always looked at technology as a key facilitator to pro'ide better customer ser'ice and ensured that its I#T strategyH follows the IBusiness strategyH so as to arri'e at JBest 0itK. The bank has made rapid strides in this direction. Along with the achie'ement of 166; branch computeri*ation+ one of the ma(or achie'ements of the Bank is co'ering all the branches of the Bank under %ore Banking Solution /%BS1+ thus co'ering 166; of itHs business and pro'iding IAnytime AnywhereH banking facility to all customers including customers of more than !666 rural branches. The bank has also been offering #nternet banking ser'ices to the customers of %BS branches like booking of tickets+ payment of bills of utilities+ purchase of airline tickets etc. Towards de'eloping a cost effecti'e alternati'e channels of deli'ery+ the bank with more than !1,6 AT&s has the largest AT& network amongst 3ationalised Banks. Eith the help of ad'anced technology+ the Bank has been a frontrunner in the industry so far as the initiati'es for 0inancial #nclusion is concerned. Eith itHs policy of inclusi'e growth in the #ndo2Dangetic belt+ the BankHs mission is JBanking for card based technology enabled 0inancial #nclusion with the help of Business %orrespondentsGBusiness 0acilitators /B%GB01 so as to reach out to the last mile customer. The B%GB0 will address the outreach issue while technology will pro'ide cost effecti'e and transparent ser'ices. The Bank has started se'eral inno'ati'e initiati'es for marginal groups like rickshaw pullers+ 'egetable 'endors+ diary farmers+ construction workers+ etc. The Bank has already achie'ed 166; financial inclusion in !1+)65 'illages.
1-

Backed by strong domestic performance+ the bank is planning to reali*e its global aspirations. #n order to increase its international presence+ the Bank continues its selecti'e foray in international markets with presence in 4ong Bong+ Dubai+ Ba*akhstan+ :B+ Shanghai+ Singapore+ Babul and 3orway. A second branch in 4ong Bong at Bowloon was opened in the first week of AprilH68. Bank is also in the process of establishing its presence in %hina+ Bhutan+ D#0% Dubai+ %anada and Singapore. The bank also has a (oint 'enture with F'erest Bank ?td. /FB?1+ 3epal. :nder the long term 'ision+ Bank proposes to start its operation in 0i(i #sland+ Australia and #ndonesia. Bank continues with its goal to become a household brand with global e pertise. Amongst Top 1666 Banks in the Eorld+ IThe BankerH listed $3B at !,6th place. 0urther+ $3B is at the 11--th position among )5 #ndian firms making it to a list of the worldHs biggest companies compiled by the :S maga*ine I0orbesH.

1.

HISTORY OF PUNJAB NATIONAL BANK

9:;<9;=>9;?;9;>@-

$3B established in ?ahore by La"a La16a# Ra&. $3B established branches in Barachi and $eshawar. $3B acquired Bhagwan Dass Bank ?imited. $artition of #ndia and $akistan at #ndependence. $3B lost its premises in ?ahore+ but continued to operate in $akistan.

9;A=9;A99;A?2

$3B amalgamated #ndo2%ommercial Bank ?imited /established in 18""1 in a rescue. $3B acquired :ni'ersal Bank of #ndia. The Do'ernment of Burma nationali*ed $3B7s branch in Rangoon /Cangon1.

9;A<2

After the #ndo2$ak war the go'ernment of $akistan sei*ed all the offices in $akistan of #ndian banks+ including $3B7s head office+ which may ha'e mo'ed to Barachi. $3B also had branches in Fast $akistan /Bangladesh1.

15

9;A;-

The Do'ernment of #ndia nationali*ed $3B and 1" other ma(or banks on 18th <uly+ 18-8.

9;@:9;::-

$3B opened a branch in ?ondon. $3B acquired 4industan %ommercial Bank ?imited in a rescue.

9;;?-

$3B acquired 3ew Bank of #ndia+ which the Do'ernment of #ndia had nationali*ed in 1856.

9;;:B==?2

$3B set up a representati'e office in Almaty+ Ba*akhstan. $3B took o'er 3edungadi Bank /established the bank in 15881+ the oldest pri'ate sector bank in Berala. #t was incorporated in 181" and in 18-, had acquired selected assets and deposits of the %oimbatore 3ational Bank. At the time of the merger with $3B+ 3edungadi Bank7s shares had *ero 'alue+ with the result that its shareholders recei'ed no payment for their shares.

18

VISION

CT- 7( a L(a'&.% G"-7a" Ba.4 0&#5 Pa. I.'&a /--#6,&.#+ a.' 7( -*( a 5-!+(5-"' 7,a.' &. #5( I.'--Ga.%(#& P"a&.+ 6,-2&'&.% (.#&,( ,a.%( -/ /&.a. &a" 6,-'! #+ a.' +(,2& (+ !.'(, -.( ,--/C

MISSION

CBa.4&.% /-, #5( !.7a.4('

!6

 FINANCIAL PERFORMANCE OF PNB AWARDS & RECOGNITION PEST ANALYSIS SWOT ANALYSIS

!1

Financial P !"#!$anc #" %& Ban'

$un(ab 3ational Bank continues to maintain its frontline position retained its NUMBER ONE position among the nationali*ed banks in terms of number of branches+ Deposit+ Ad'ances+ total Business+ operating and net profit in the year !665268. The impressi'e operational and financial performance has been brought about by BankHs focus on customer based business with thrust on S&F+ Agriculture+ more inclusi'e approach to banking> better asset liability management> impro'ed margin management+ thrust on reco'ery and increased efficiency in core operations of the Bank. The performance highlights of the bank in terms of business and profit are shown below=

$arameters @perating $rofitL 3et $rofitL Deposit Ad'ance Total Business /Rs.%rores1

&ar76. "-1. 1,)6 1"85-6 8-,8. !"-),-

&ar765 )66!6)8 1--),. 118,6! !5,8,8

&ar768 ,.)) "681 !68.-6 1,).6" "-))-"

%RAR !-.6! )1.-. !!.). !-.,, !).1,

Respecti'e figure for the corresponding financial year

!!

AWARDS & RECOGNITIONS

CB(+# IT T(a* -/ #5( Y(a, A0a,'CAt the #DRBT Banking Technology awards for the year !66,26-. SKOTCH C5a""(.%(, A0a,'0or %hange &anagement for the year !66,26-

B(+# IT U+(, &. Ba.4&.% D F&.a. &a" S(,2& (+ I.'!+#,$ E B==> By 3ASS%@& in partnership with Fconomic Times.

G-"'(. P(a - 4 A0a,'0or F cellence in %orporate Do'ernance 2 !66, by #nstitute of Directors.

FICCIF+ R!,a" D(2("-6*(.# A0a,'0or F cellence in Rural De'elopment M !66,

S4-# 5 C5a""(.%(, A0a,' /-, EG(*6"a,$ !+( -/ T( 5.-"-%$ 0or becoming a pioneer in $ublic Banks M !66, G-"'(. P(a - 4 Na#&-.a" T,a&.&.% - B==> D B==<
!"

By #nstitute of Directors

Na#&-.a" A0a,' /-, EG (""(. ( &. SSI L(.'&.% Ranked !nd for ) consecuti'e years 2 !66!+ !66"+ !66) 9 !66,

Ba.4&.% T( 5.-"-%$ A0a,'+ B==> R!..(, !6 &. FB(+# IT T(a* -/ #5( Y(a, A0a,' B==<F <ointly Ad(udged by #BA+ 0inacle 9 T0%#

M-.($ O!#"--4 A0a,' - B==> R!..(, !6 &. FB(+# Ba.4 (6!7"& S( #-,) -/ #5( $(a, A0a,'F EB==< N&,$a# Ba.'5! G-"' T,-65$ 0or e cellence in e port performance for " consecuti'e years !661+ !66! 9 !66" by 0ederation of #ndian F porters @rgani*ation /0#F@1

B9+# A*-.%+# T-6 <== C-*6a.&(+ By the leading 0inancial Daily the Fconomic Times+ <une !66,

;#5 a*-.%+# I.'&aF+ T-6 <= M-+# T,!+#(' A.% 3ielson Sur'ey+ The Fconomic Times Dec !66) S(,2& ( B,a.'+ ?,' Ra.4 a*-.%+# Ba.4&.% S( #-, &. I.'&a ?B?,' Ra.4 &. #5( W-,"' The Bankers7 Almanac+ <anuary !66!)

?A: a*-.%+# T-6 9=== G"-7a" Ba.4+ The Banker+ ?ondon <uly !66,

PEST ANALYSIS

!,

SWOT ANALYSIS

O71( #&2( Analysis of PNB

S#,(.%#5s Eide network ?arge no. of customers 0ast adaptability to technology Brand recognition F cellent Training 4ome to home banking ser'ices Di'ersification towards other field Dlobali*ation

W(a4.(++(+

O66-,#!.&#&(+ 0ast growing #ndian economy 4igh growth in banking sector ?iberal markets &icro financing T5,(a#+ ?arge no. of market players

Decentrali*ed decision making Awards 9 #ncenti'es

$ro'iding better ser'ices Building long term customer relationships

0ast Decision making %ompetiti'e edge %hanging culture

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 STRUCTURE OF THE ORGANISATION HIERARCHY MANAGEMENT OF PNB ABOUT M(D( & CHAIRMAN SINCE INCEPTION

!.

ORGANISATIONAL STRUCTURE

Bank has its %orporate @ffice at 3ew Delhi and super'ises ,5 %ircle @ffices under which the branches function. The delegation of powers is decentralised upto the branch le'el to facilitate quick decision making. HEAD OFFICE
.+ Bhikha(i %ama $lace+ 3ew Delhi21166!-

%D& @00#%FS

%#R%?F @00#%FS

BRA3%4FS

!5

HIERARCHY

%hairman

F ecuti'e Director/FD1

%hief Deneral &anagers /%D&1

Deneral &anagers /D&1

Deputy D&

Assistant D&

%hief &anagers

Senior &anagers

&anagers

@fficers

!8

%lericalG Subordinates

MANAGEMENT OF PNB

Na*( M V Ta.4+a"( Na%(+5 6$a'5 S*#. Ra2.((# 4a!, L.M F-.+( a S. R. K5!,a.a P.K. Na&, M-5a. La" Ba%%a M!+5#aH A A.#!"a$ Ga!#a* P. Ka.'("0a" V&.-' K!*a, M&+5,a T,&75!0a. Na#5 C5a#!,2('& D(2&.'(, K!*a, S&.%"a G R S!.'a,a2a'&2("
"6

D(+&%.a#&-.
EG( !#&2( D&,( #-, EG( !#&2( D&,( #-, G-2#. -/ I.'&a N-*&.(( D&,( #-, RBI N-*&.(( D&,( #-, D&,( #-, ,(6. C.A. Ca#(%-,$ O//& (, E*6"-$(( D&,( #-, W-,4*(. (*6"-$(( D&,( #-, Pa,# E#&*( .-. O//& &a" D&,( #-, Pa,# E#&*( .-. O//& &a" D&,( #-, Pa,# E#&*( .-. O//& &a" D&,( #-, S5a,( H-"'(, D&,( #-, S5a,( H-"'(, D&,( #-, S5a,( H-"'(, D&,( #-,

NAMES OF CHAIRMAN D MANAGING DIRECTORS ALONG WITH THEIR TENURE SINCE THE INCEPTION OF PUNJAB NATIONAL BANK

Na*(+ -/ C5a&,*a. D Ma.a%&.% D&,( #-, SGShri Sardar Dyal Singh &a(ithia R.B. ?al %hand Bhagat #shwar Dass R.B. ?al %hand R.B. ?ala Sukh Dayal Bhagat #shwar Dass Dr. 4ira ?al ?ala Dhanpat Rai Dr. &ahara( Brishna Bapur R.B. Dewan Badri Das ?ala Codh Ra( Shriyans $rasad <ain Shanti $rasad <ain Ram 3ath Doenka Bamalnayan Ba(a( Somesh %handra Trikha $rakash Tandon T.R. Tuli

P(,&-'

1 ! " ) , . 5 8 16 11 1! 1" 1) 1, 11. 15

"1

158, 2 1585 1585 M 186, 186, M 1816 1811 M 181! 181! 2 181" 181" 2 181, 181. M 18!6 18!1 M 18"1 18"1 M 18". 18"5 2 18)! 18)" M 18," 18," M 18,) 18,) M 18,8 18-6 M 18-) 18-) M 18-. 18-5 M 18.! 18.! M 18., 18., M 18..

18 !6 !1 !! !" !) !, !-

@.$. Dupta S.?. %hopra S.?. Balu(a <.S. Aarshneya Rashid <ilani S.S. Bohli S.%. Dupta Dr. B.%. %hakrabarty

18.. M 1856 1856 M 1851 1851 M 185, 185, M 1858 1886 2 !666 !666 M !66, !66, 2 !66. !66. M !668

"!

 FEATURES OF HOME LOAN HOME LOAN INDIA TYPES OF HOME LOAN WHY TAKE A HOME LOAN CHECK LIST FOR HOME LOAN RBI DIRECTIVES FOR HOME LOAN

HOME LOAN
4ome loans are pro'ided based on the market 'alue+ mainly estimation gi'en by banks or the registration 'alue of the property. A'ailing 'arious types of house loans to suit your indi'idual needs at the lowest rates 9 easy financing can now fulfill the need for a house of your own. 4ome loan is not a one2time decision> do re'iew the market periodically
""

before a'ailing them. Today there are unlimited numbers of banks in the country wanting to gi'e out 4ome loans. Di'en this scenario+ it may seem easy getting yourself a loan. But is it reallyNN Buyers tend to make mistakes while entering into deals+ which may not be beneficial for them+ so better compare all the 'ariables before signing a loan agreement by different banks. 4owe'er the loan agreement should be finali*ed only after reading the terms and conditions carefully. Cou can apply for a 4ome loan e'en before you select your property. The loan amount would be sanctioned or appro'ed for you+ based on your repayment capability.

F(a#!,(+ -/ 5-!+( "-a.: O $urpose= 0or purchase of house from builder G resale and construction G e tension of e isting house. O ?oan amount= Cou can a'ail for 4ome loans need based depending on your eligibility+ income and repayment capacity.

")

O Security= 4ome loan is a secured loan wherein collateral are required. O ?oan tenor= The ma imum loan tenure is !, years.

P"a..&.% #- a2a&" a 5-*( "-a.3 $-! *!+# a'5(,( !.'(,.(a#5 6-&.#+: 0irstly+ take your own time and e'aluate your e penses and do a market sur'ey about the property buying process. Buying a house+ which is way beyond your range+ could affect you financially> banks help in financing your dream home 'ia home loans.

1. E"&%&7&"&#$ Banks determine your eligibility based on your repayment capacity and discuss about the loan amount up front. The eligibility for acquiring a home loan is augmented by clubbing income of your fatherGspouseGmotherGson+ by clearing your outstanding debts+ by stretching your loan tenure+ Salaried indi'iduals can increase their eligibility by showing their performance linked income or bonus earned.

Secondly+ Do your own analysis and check the impact of your repayment of home loan on your monthly e penditure+ as a thumb rule+ it "s recommended to make sure the F&# of your home loan do not e ceed more than ,6; of your gross monthly income.

!. I.#(,(+# ,a#(+
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An important factor that goes into your F&# calculations is the interest rates+ which may 'ary from bank to bank+ so do compare them. Also do a complete and detailed analysis of the 'arious options like the interest rates i.e. fi ed and floating rate of interest. Thirdly+ if two banks gi'e you the same amount of loan but at different interest rates do your math and work out what7s best for you. a1 F&G(' &.#(,(+# "-a.+ %harge an interest+ which remains the same through out the tenure of the loan. This means that the consumer is immune to market risk or the possible upward mo'ement in the interest rates. 4ence+ fi ed rate is a good option when the interest rates are e pected to mo'e up in the future.

b1 F"-a#&.% ,a#( "-a.+ A consumer is e posed to market risk and his gain or loss depends on the interest rate condition pre'ailing in the market. 0loating rate is beneficial if the interest rate falls in the future. A floating rate is considered non2 transparent and is also known as 7ad(ustable rate7. 0ourthly+ if you decide to opt for a fi ed rate loan+ you can still switch to a floating rate loan in the future and 'ice 'ersa as and when rates go in your fa'our and if you do decide to switch+ you should take into account the cost of doing so and the interest rate benefits of switching.
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0or a gi'en interest rate+ loan with a daily or monthly reducing balance is better than an annual reducing balance loan. #nterest rates 'ary depending on the tenure of the loan+ the amount of the loan and your personal profile. ". I.+!,a. ( -2(,+ (a. a''(' -+#) Also+ many banks may insist on getting your home insured to safeguard their interest. There are 'arious kinds of insurance co'ers a'ailable for you. Apart from getting the mandatory ones you should try to get insurance as per your circumstances. Cou also ha'e a choice of getting insured from another company without any ob(ection from your bank.

). O#5(, -+#+ The interest rates and F&#s are not the only cost factor. Rs. 1",6G documentation charges and 6.86; P ser'ice ta . $rocessing fees+ administration fees+ 'aluation fee+ legal fee+ is to be paid when you apply for a loan and other fees paid at closing. &ake sure you work out as to how much these other costs add up to. So e'en though the interest rate may be lower+ it usually adds up to being e pensi'e. #f the F&#s may come out a lot more than what you can afford on a monthly basis> try to redo the math with changes in the tenure and loan amount /if possible1. <. A'2a. ( EMI

".

Ad'anced F&# is the number of equated monthly installments in the form of post dated cheques+ paid out in ad'ance at the time of disbursement of loan.

A. D- !*(.# ,(H!&,(' &ost importantly+ all deals and offers agreed upon are supported by rele'ant papers. Self employed and salaried require different documents to support the deal. So make sure you always ask for a letter on the banks letterhead mentioning the likes of+ e act rate of interest+ processing fees+ pre2payment charges along with interest2schedule. Before signing the documents+ make sure you recheck all terms and conditions. Do make sure you understand and agree with each of the clauses in the documents. Do not sign any blank documents. F'en if it takes you a few hours to fill2up the form+ please do so. Do not lea'e anything for the e ecuti'e to fill2up. #t7s always better to get a legal opinion from someone on your loan papers. Do not under any circumstance gi'e any false information. This may amount to fraud and could land you in trouble.

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@. P(.a"#&(+ @nce you ha'e recei'ed the loan do your best to pay it back as quickly as possible. But this early payment might in'ite a pre2payment clause. Banks make their money off the interest they charge and the sooner you pay back a loan the less money you will ha'e to pay in interest. Ehen it comes to 4ome loans+ penalties are binding+ like if you chose to pay up your entire money before the tenure+ a $re2payment penalty is charged. So you should know about such penalties beforehand to a'oid future misunderstanding between you and the bank.

:. H-*( "-a. %"-++a,$ %onfused in the H-*( L-a. (argonN @ur glossary will help you in understanding the basic home loan related terms. Browse through the glossary or search for a term through the menu to resol'e any doubts. G"-++a,$ -/ H-*( L-a. #(,*+ A B C D E F G H I J K L M

N O P 8 R S T U V W I Y J

;. A (6#a. ( L(##(, Acceptance letter is the letter that a borrower or applicant pro'ides on reading the terms of the issue> and communicate his willingness to accept the loan by way of an acceptance letter within a particular time frame which
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'aries between 12" months from the date of the sanction letter and also pay the requisite administrati'e fee.

HOME LOAN IN INDIA

#t is definitely one of the ma(or things that you can board on in your lifetime. The bad news is= howe'er is that not e'eryone in this globe is like

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you+ loaded enough /financially+ of course1 to be able to build a house as soon as he wants to. Ehether you are 3on Resident #ndian or Resident of #ndia+ and you are thinking to start your (ourney of buying a new house+ looking to mo'e to a new house+ in'esting in property or are looking forward to refinance+ %onsider answering these questions to yourself=

Ehich type of home loan should # preferN Eill it be the best scheme that will be fitting my budgetN %an any insurance plan co'er for an unpaid monthly dueN #s there a fine or penalty or e'en some reward as well if the whole amount of loan is paid ahead of the due dateN

These are (ust a dash of the questions to be answered when considering taking the plungeQinto the loan (ourney. The different home loan types are hereby presented to you to make your (ourney that more smoother or step by step+ safer and comfortable. Cet+ Dot a fi on fi ed rate or 'ariable rates+ offset accounts+ lines of credit or bridging loansRR And we ha'e co'ered the basics of your (ourney here. Doing back to you future house owner+ ha'e you got the answers to your questionsN Start answering them now and take the plungeR Eith so many real estates sites coming up in #ndian market+ finding an ideal house isn7t that big a issue nowadays+ when you can 'irtually see all across the home you need to purchase by the 'arious real estate simulation programs and 'ideos a'ailable+ but you still need to purchase it+ rightN 2 To really say SownS it. A home loan+ also popularly identified as a mortgage+ is
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an easier financial option to own a house. @nce you7'e decided to endea'or on a home loan+ there are so many things that you need to be informed with. 3ot only is it going to be an emotional e perience+ it is also going to be a 'ery informati'e monetary (ourney+ as you will be dealing with the whole caboodle of the mortgage process along the way. There are thousands of home loan companies waiting to pro'ide you with your financial needs. $art of the success of this whole financial mo'e is partly in your hands+ the greater part relies on the efficiency of your chosen mortgage company.

TYPES OF HOME LOAN

)!

@wning a piece of land or property is a lifetime dream for e'ery indi'idual. There are many home loans pro'ider in the market to make your dream come true. But before you opt for any home loan pro'ider+ you need to consider certain factors related to property that you are interested in buying and also about the salient features offered by a home loan pro'ider and also study some 4ome ?oans and 4ome #nsurance 0ATs which helps in applying a 4ome ?oan in #ndia. And the most important thing is you should know about each and e'ery term related with 4ome ?oans before applying for a ?oan. #t is always ad'isable to consult a home loan e pert or consultant before applying for a home loan or purchasing a property. Cou can take different types of home loans like Bridge ?oans+ 4ome construction ?oans+ 4ome Fquity ?oans+ 4ome F tension ?oans+ 4ome #mpro'ement ?oans+ ?and $urchase ?oans etc for different schemes a'ailable in the market. There are different types of home loans tailored to meet your needs.

H-*( P!, 5a+( L-a.+: These are the basic forms of home loans used for purchasing of a new home. H-*( I*6,-2(*(.# L-a.+= These loans are gi'en for implementing repair works+ healing and reno'ations in a home that has already been purchased.

H-*( C-.+#,! #&-. L-a.+: These loans are a'ailable for the construction of a new home.

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H-*( EG#(.+&-. L-a.+: These loans are gi'en for e panding or e tending an e isting home. 0or e.g.= addition of an e tra room etc.

H-*( C-.2(,+&-. L-a.+: These loans are a'ailable for those who ha'e financed the present home with a home loan and wish to purchase and mo'e to another home for which some e tra funds are required. Through home con'ersion loan+ the e isting loan is transferred to the new home including the e tra amount required+ eliminating the need of pre2payment of the pre'ious loan.

La.' P!, 5a+( L-a.+= These loans are a'ailable for purchasing land for both construction and in'estment purposes.

B,&'%( L-a.+: Bridge loans are designed for people who wish to sell the e isting home and purchase another one. The bridge loans help finance the new home+ until a buyer is found for the home.

W5$ #a4( a H-*( L-a.K

Ehat7s an a'erage middle class #ndian7s most cherished dreamN A date in world trips in islands with Aishwarya Rai in complete solitude. This would
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seem to be the answer from the ma imum number of episodes of Baun Banega %rorepati /BB%1+ despite recently of course+ when she has decided to change her fortunes first with AbhishekR <okes apart+ purchasing and mo'ing into a dream house would generally rank among the top three things on the wish list of most people. After all itHs what been pro'ed by &aslowHs ?aw of 4ierarchy as well. That entire house hunting e'ery few years+ grumpy landlords+ killing rents would be a thing of the past. 4ey+ you e'en get to use nails to hang your fa'orite paintings and pictures. DonHt youNNN Taking a home loan nowadays has become 'ery simpler. The RB# has been regularly slashing interest rates+ with the result that housing finance loans that came at an interest rate of 1-.,; to 15; four years ago are now a'ailable at 11.,; to 1"; or lower. Fach year the 0inance &inister7s generosity during the Budget seems to be solely concentrated for the housing sector and construction sector. The Budget !6667s allowed interest payment up to Rs 1 lakh and principal payment of Rs !6+666 to be e empted from income ta . To top it all+ the 4ousing 0inance %ompanies /40%s1 are aggressi'ely wooing customers. 3ow+ when the sun shines+ itHs the best time to make hay. #snHt itN

C5( 4 "&+# /-, H-*( L-a.+

),

#f you ha'e arri'ed here by the help of search engine+ we pre assume that you are seeking some home loans to purchase a home or on the look out for some information related to 4ome loans or 4ome ?oan Types or you must read some 4ome ?oan Articles. 4ereby+ we present to you the 5-*( "-a. '- !*(.#+ 5( 4"&+# that you need to ensure is with you+ before you apply for a home loan. A basic checklist for home buyers like proper and clear title and correct proposition will help you make a safe and informed purchase. There are other 5-*( "-a. #--"+ like a" !"a#-,+ suitably de'ised to assist you. C-./&,*a#&-. -/ I. -*(

#f you are a salaried person+ please pro'ide two recent consecuti'e pay slips or a copy of your employment contract or a letter from your employer. #f you are self2employed+ please pro'ide copies of your last two 0inancial Accounts as prepared by your accountant. Appointment ?etter Salary %ertificate Retainer ship Agreement+ if appointed as a consultant 0@R& 1- issued by the employer in your name. ?ast three years income ta returns duly filed and certified by the #ncome Ta Authorities Similar Document 2separately for each co2applicant.

E*6"-$*(.# P,--/

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#dentity card issued by your employer Aisiting card

A%( P,--/

$assport Aoter7s #D card $A3 card Ration card Fmployer7s #dentity card School lea'ing certificate Birth certificate

R(+&'(. ( P,--/

Ration card $assport $A3 card Rent agreement+ if you are staying currently on rent Bank $ass book Allotment letter from your company if you are residing in company quarters.

Na*( C5a.%( P,--/ (I/ A66"& a7"() A copy of the official ga*ette b. A copy of a newspaper ad'ertisement publici*ing the name change c. &arriage certificate

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I.2(+#*(.# P,--/ (I/ A66"& a7"()

Bank statement for the last si months of all operating and salary accounts Bank statements for the last si months of all current accounts+ if self2 employed. Any other photocopies of in'estments held+ if required by the Bank

P,-6(,#$ T&#"( P,--/

@riginal Sale agreement with BuilderGDe'eloper duly registered+ Registration receipt Tripartite agreement from builderGde'eloper ?and documents indicating ownership+ e.g.2 $hotocopies of title deeds+ if applicable A certificate by the legal ad'isor of the builder to the effect that the builder has a good reputation and it is free from encumbrance and other charges. A certificate from builder7s %hartered Accountant certifying that the builder has not mortgaged the property anywhere else. %ertified true copy of appro'ed plan. %opies of receipts of payments made to builderGde'eloper. Allotment letter $ossession letter ?ease agreement+ if applicable /$roperty bought from a de'elopment authority1 &ortgage deed if the Bank opts for a registered mortgage.

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3o @b(ection %ertificate from the de'eloper+ society or de'elopment authority as applicable $ersonal Duarantees+ if applicable. #n case of alternate or additional security+ documents for the same depending upon the security details. 0or self2construction= Appro'ed plans and clearance certificates along with estimates $ost dated cheques for the F&#s.

C-./&,*a#&-. -/ R(.#a" I. -*( %opy of the e isting tenancy agreement+ or a rental appraisal+ from a local real estate agent signed by branch manager+ or rental manager. D(6-+&# -, I.2(+#*(.#+

F'idence of your deposit or in'estment funds+ i.e. a bank statement or term deposit receipt. 0or low equity loans /,218; deposit1+ copy of your sa'ings account statements o'er the last si months.

Sa"( a.' P!, 5a+( A%,((*(.#

#f you are planning to buy a property+ please pro'ide a copy of the successful sale and purchase agreement signed by both you and the 'endor. #f you are planning to sell or ha'e already sold your e isting property+ please pro'ide a copy of that property7s sales and purchase agreement.

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N(0 C!+#-*(, #- #5( 7a.4+ -/ I.'&a

#f you are refinancing from another bank please pro'ide copies of your loan statements co'ering the last si months. $lease pro'ide copies of your account statements co'ering the last si months from your current bank. $lease pro'ide copies of your identification and if you ha'e arri'ed in the country within the last , years+ please pro'ide a copy of your passport.

G-2(,.*(.# Va"!a#&-. a.' ,a#&.% S$+#(* A copy of the latest Do'ernment or Ratings Aaluation is to be pro'ided. Depending on the age and 'alue indicated in con(unction with the amount required to borrow+ the Bank may require a Registered Aaluation and your Banker will ad'ise you

New RBI Directive for Home Loans

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The Reser'e Bank of #ndia /RB#1 has in the latest directi'e asked the #ndian banks to be more Sfair and transparentS while signing their agreements with the consumers. This has come following complaints from 'arious consumer sections regarding home loans. #t has emphasi*ed on the fact that while gi'ing a home loan+ the banks should not tie their loans with their own prime lending rates /$?R1 which often results in pro2bank and against consumer interest.

4ouseholds should get credit counseling before signing any loan agreement. #n such case+ banks should gi'e credit counseling to customer before gi'ing a loan. Any non2go'ernmental organi*ation can also gi'e independent credit counseling to small borrowers.

%onsumers often complain of not recei'ing benefits of falling interest rates as banks tie their floating rate loans with its $?R and e'en when rates fall+ the banks kept the $?R unchanged. But when interest rates are hiked+ the banks increase the benchmark rate+ thus making customers pay a higher rate and consequently increase the number of F&#s too. The RB# has asked the banks to mend rules for the same.

#ndi'idual borrowers should ask for the e act tenure and F&# while taking a fi ed rate loan. The RB# has also resol'ed to look into all consumer complaints if it is bought to the regulator7s notice.

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The #RDA /insurance regulator1 has powers to take action against banks if a customer feels cheated while buying an insurance product. @n its regulatory role+ the RB# is trying to maintain a balance between the e tent of freedom granted to the banks and the ob(ecti'es of go'ernance.

RB# has made it mandatory for all banks 2 including pri'ate and foreign banks 2 to offer a passbook to their customers with the address and telephone number of the nearest branch.

%ustomers ha'e often been harassed by banks7 call centers where there is no accountability of the query made. The Sdo not callS registry has also been flouted by banks as customers are bombarded with unnecessary product offerings. The RB# has directed the #ndian Banks7 Association to come out with a single Sdo not callS registry or when a customer adds his name to a single bank registry it should then stop unsolicited calls from all banks.

@n rising credit card frauds and wrong statements gi'en by the banks+ the RB# has asked the customers to approach the ombudsman to redress their problems. This way the RB# feels would inculcate more consumer friendly practices among #ndian banks.

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C5--+&.% #5( ,&%5# 5-*( "-a.

#f you are planning to buy home+ you need to know about home loans processes+ troubleshooting and how to choose the right home loan for house that falls within your budget. There are 'arious types of home loans offered

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by different financial institutions. Cou need to figure out which type of home loan is beneficial for you. T$6(+ -/ H-*( L-a.+ A2a&"a7"(:

4ome Fquity ?oans 4ome F tension ?oans 4ome #mpro'ement ?oans 4ome $urchase ?oans ?and $urchase ?oans &ortgage ?oans

&any banks and financial companies offer home loans. But before choosing any home loan option+ consider few points as mentioned below. P,-6(,#$ T$6(+: Cou should know more about type of property in lieu of which you seek loan. There are loans offered by banks to Resident #ndians and 3R#s for ready property+ under construction property+ self2construction and home impro'ement. L-a. T(.!,(: The loans pro'ided by financial institution are offered in tenures or period of years. Cou should check out the tenure for loans a'ailable in the market. There are loan tenures a'ailable for upto !, years. R(6a$*(.# O6#&-.+ 2 Cou need to choose between fi ed and floating rate home loans. &any banks and financial institutions will pro'ide you with the option of switching from a floating rate home loan to a fi ed rate home loan once a year at no e tra cost. But you need to check out the facts first with the loan pro'iding firm.
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N- P(.a"#$ -6#&-. 2 There are also no penalty option offered by few finance companies. #n this mode+ you can opt to pre2pay up to !,; of your loan e'ery year. $re2payment is permitted after a minimum of - months following loan disbursal. TaG B(.(/&#+ 2 Cou should know the right of your ta benefits on home loans. Resident #ndians are eligible for certain ta benefits on principal and interest components of a housing loan under the #ncome Ta Act+ 18-1.UU L&+# -/ P,(*&!* Ba.4+ O//(,&.% H-*( L-a.+:

#%#%# Bank 2 #%#%# Bank 4ome ?oan 4D0% Bank 2 Ad(ustable Rate 4ome ?oan Bank of #ndia 2 Star 4ome Scheme Standard %hartered 2 4ome Assist State Bank of #ndia 2 SB# :nique 4ousing Scheme Bank of Baroda 2 4ousing @ffer %itibank2 Building 9 Reno'ation of 4ouse

Always check with a financial home loan e pert or financing company to understand home loan processes and to a'ail the best bargain on your home purchase.

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 ELIGIBILITY DOCUMENTATION EXTENT OF LOAN RATE OF INTEREST REPAYMENT & SECURITY FEATURES & CONDITIONS OF PNB HOME LOAN PNB HOME LOAN

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$un(ab 3ational Bank pro'ides its customers with 'arious 4ome loan policies and features at highly competiti'e rates. They know the needs of the #ndian customers that they ha'e to deal with+ on a regular basis+ and pro'ide the policies accordingly. The $3B 4ome ?oan cater mainly to the requirement of the middle class indi'iduals of #ndia+ as $nb itself is one of the leading public Msector banks of the nation. The $3B 4ome loans are 'ery easily a'ailable+ and ha'e an e'en easier process of repayment that is gi'en o'er a prearranged time period. This period of time is determined+ when the $3B 4ome loans are being finali*ed and along with the loans+ the buyers get the opportunity of ha'ing a life insurance co'ered against him. The basic grounds on which the $3B 4ome loans are pro'ided are= F tending+ repairing+ modification and e'en reno'ating of an already e isting building or flat. $urchase or building of a new house or flat. The basic interest of the $3B 4ome loans may be around 8.,;+ and the time period may 'ary from a minimum of , years to a ma imum of !, years. 4owe'er there is a certain limitation of the loan amount that an indi'idual may take from the bank. The ma imum amount of the loan amount sanctioned under $3B 4ome loans is need based. #t generally takes around . days to process the $3B 4ome loans+ from the day it has been finali*ed with the bank. Apart from all these details+ the $3B 4ome loans also enable us to choose between fi ed and floating rates that may be applicable from time to time+ and keep 'arying from one time period to another. As far as the eligibility is
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concerned+ a person between the age group of 15 to -6 years may be qualified to apply for the $3B 4ome loans. Along with this+ it has also to be noted that the annual income of the indi'idual+ who is applying for the loan+ must be greater than or equal to 1.! ?ac #3R.

Eligibility
Age of the applicant must be less than -6 years. F isting home loan borrower can also apply pro'ided their loan account is regular and no #R irregularity persist.

Documents Nee e
1. $roof of identity !. $roof of income ". $roof of residence ). Bank statement or $ass Book where salary or income is credited. ,. Fducation %ertificate -. $hotos .. Salary slip 9 form 15. #ncome ta return last " years along with balance sheets. 8. Assets liabilities statements. 16. Documents of property. 11. Fstimate of construction. 1!. Duarantor

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F!ee"ol #n $e#se"ol %!o&e!ty

1. The loan can be granted both for freehold and leasehold property. !. #n case of leasehold+ loan can be granted on the basis of power of attorney basis from original allotee where DDAG$:DAG4:DA permit con'ersion of leasehold into freehold property otherwise ad'ance is not permitted against plot purchased on $ower of Attorney basis.

E'tent o( lo#n
0or constructionGpurchased of houseGflat .,; of the cost of construction or purchase of houseGflat. 0or carrying out repairsGreno'ationGadditionsGalternation= 2 .,; of the estimated cost sub(ect to ma imum of Rs. !6 lacs. ?oan upto Rs. !6 lacs for purchase of landGplot ?oan is a'ailable ma imum upto Rs. ! lacs for furnishing.

)#!gin
?andG$lot %onstructionGrepairGaddition )6; !,;

R#te o( Inte!est
/Fffecti'e from 1st &ay !668 M B$?R 11.66;1

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H-!+&.% /&.a. ( #I.'&2&'!a"+ &. "!'&.% NRILS MF"(G&7"( H-!+&.% S 5(*(

F&G(' -6#&-. /-, "-a.+

F"-a#&.% -6#&-. /-, "-a.+

U6#- B= La +. /i1 upto , years /ii1 Abo'e , years 9 upto 16 years /iii1 Abo'e 16 years 9 upto !6 years /i'1 Abo'e !6 years 9 upto !, years 8.!,; 16.66; 16.,6; 16..,;

A7-2( B= La +. 16.66; 16.!,; 16..,; 11.66;

U6#- B= "a +. 5..,; 8.66; 8.!,; 8.,6;

A7-2( B= La +. 8.,6; 8.,6; 8..,; 16.66;

The interest rate can be fi ed or floating @ption can be changed from fi ed to floating and 'ice 'ersa with flat charges of !; fee on balance outstanding. 0i ed interest rate be reset after a block of , year in respect of loans disbursed on or after 1.65.!66-

Document#tion c"#!ges
Rs. 1",6 P Ser'ice Ta

U&(!ont Fee
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6.86; of the loan amount P Ser'ice Ta 9 Fducation %ess

Re&#yment
&a imum !, years. #nstallment can be fi ed upto ma imum age of -, years. The income of spouse and earning children can be taken into account pro'ided they are made co2borrower. 0atherG&other can also be made co2borrower in cases property is in single name of his Gher son and also clubbing of their income is permitted for determining eligibility criteria. &inimum !) ad'ance cheque should be obtained as and when+ cheques remain+ fresh lot to be obtained out of !)+ !" cheques should be of the amount equal to the balance. ?oan is to be repaid in F&# within a period of !, years or before the borrower attains the age of -, years.

Secu!ity
FquitableGRegistered mortgage of immo'able property. Tripartite agreement be e ecuted amongst 4ousing BoardG De' Authority G %oop Society G Builder the borrower and the bank where mortgage cannot be created immediately. Fquitable mortgage of other immo'able property or pledge of 3S% etc. upto 1!,; of loan amount if property is being purchased from 1 st $GA holder and where there is delay in the e ecution of Tripartite agreement.
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 Aerification of security is required once in ! years.

Fe#tu!es
?oan can be sanctioned by branchGhub near to the present place of workGposting Gresidence of the borrower. ?oan can be sanctioned e'en if property is in the name of wifeGparents pro'ided that the owner is made co2borrower. ?oan can be granted for !nd house in the same city. ?oan can be granted for purchase of house for rental purpose 0or take o'er+ permission of higher authority is not required.

Im&o!t#nt *on itions

Loan cannot be granted: 0or construction in :n2authori*ed colonies. #f property is to be used for commercial purpose. Eithout appro'ed &ap.

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 SUGGESTIONS D RECOMMENDATIONS TROUBLESHOOTING TIPS FOR WOULD BE HOME LOAN BUYERS

SUGGETIONS D RECOMMENDATIONS

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There are some suggestions+ which # would like to gi'e the pri'ate banks+ which # noticed in my pro(ect. This are2 o Banks should impro'e the quality of their products /Specially 4ome loan1. o &ost of the pri'ate banks and public banks are much aggressi'e about home loan than $3B. So+ $3B should also be focus and aggressi'e about its home loan products. o #n my pro(ect period # notice that many of the hidden costs are accumulate with the ser'ices+ which are not informed to the customers at the first time+ and then customers suffer many of the problems. So+ banks should disclose all the fee structure+ terms 9 conditions regarding the product before making sale. o #n the bank premises front office e ecuti'es are not co2operati'e with the customers. So+ higher authority should keep control o'er theses types of acti'ities. o &ost the banks belie'e in large sales force than the quality sales force+ which are more competiti'e. So+ banks should impro'e their quality sales force+ which include the competiti'e sales personnel.

T!#)*l +&##%in, Ti-+ "#! W#)l. B H#$ B)/ !+

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$ast few years ha'e witnessed a paradigm shift in the scenario for home loan seekers. 4owe'er+ things for the consumers were fairly good till mid2 !66). $roperty prices ha'e been steady and the interest rates were at historic lows. :ndoubtedly+ the picture has much changed now. Real estate in #ndia is going through its own boom+ with property prices going higher and higher as there is no tomorrow. Also+ there is no sign that this rise in underlying property prices is going to slow down soon. This has widened the gap between ha'e and ha'e not for a home loan consumer. Though+ there has been a great progress in the financial status of different income groups but there are many other hassles along the way to add to the woes of an interested home buyer. Eith an increase in loan interest rates+ it has been noticed that a consumer gi'es away a ma(or portion of his increased income as the down payment and later as F&#. This is a story with e'ery ne t typical consumer in a metropolitan city. 3o wonder that the dream for owning a home is on the 'erge of turning into a mirage for most middle class. S- 05a# a,( #5( -6#&-.+ "(/# 0&#5 a 6,-+6( #&2( 5-*( "-a. -.+!*(,K

#f you are planning to purchase a home for the purpose of your own residence+ then don7t make your search a wild goose chase by trying and wasting time in the market. #f your dream house requires you to hunt a treasure to buy it+ you may consider a smaller property in the same area.

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But+ if you are deciding to buy a house with the intention of selling it for quick profits+ then ne'er fasten the process. Eait for the o'erheated property market to cool. &eanwhile+ work out your budget and ad'antages before treating the property as an in'estment.

L(#F+ 2&(0 #5( #-6 /-!, 6,-7"(*+ /a (' 7$ 5-*( "-a. -.+!*(,+ '!,&.% #5( 6,(-'&+7!,+(*(.# 6,- (++ a+ 0("" a+ #,-!7"(+5--#&.% #&6+: P,-7"(* I: &ost times+ the desired home loan amount is not a'ailable or if a'ailable+ then getting a fi ed rate of interest is (ust like stri'ing for impossible. &oreo'er+ there are a few financial institutions that pro'ide the home loan consumers with a promising interest rate. 2 Get a promise that if you don't receive the home loan amount offered you can press for a refund of your processing fee. Don't rely on words but take it in writing or by mail. P,-7"(* II: Denerally+ there is no guarantee that you will get your processing fee back if the loan is not sanctioned or if the loan is sanctioned then the indi'idual does not want it. 2The situation seems a little complex unless promised in writing or in advance. P,-7"(* III: At times+ loan amount gets restricted after being sanctioned due to lower 'aluation of the property by the bank. 2 ou may ask your lender to get a valuation done before the sanction of the loan so that this does not come as a surprise afterwards. !lse" the bank will evaluate it at one figure and you will be purchasing it at another. #or that
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reason" it is always recommend buying a property from a well known builder. P,-7"(* IV: 3on a'ailability of title documents andG or 3@%s in the format desired by the bank. @r+ problems with any other legalG title document. 2 $ost banks go through your legal documents with a discerning eye if they are submitted along with a home loan application form. ou are re%uired to check with the concerned builder& society& authority about the format of the '() that plays a critical role in the procedure. *f they have a different format" get that cleared from the bank to avoid messy disputes and headaches later.

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BIBLIOGRAPHY

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EFB S#TFS= www.pnbindia.com www.guide!homeloan.com www.google.com

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