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A PROJECT REPORT

A PROJECT REPORT

ON

ON

³Analysis of Housing Finance schemes of HDFC Bank, ICICI

³Analysis of Housing Finance schemes of HDFC Bank, ICICI

Bank, PNB & SBI Bank´

Bank, PNB & SBI Bank´

SUBMITTED IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE DEGREE OF SUBMITTED IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE DEGREE OF

MASTERS OF BUSINESS

MASTERS OF BUSINESS ADMINISTRATI

ADMINISTRATION

ON

IN IN

Dr. C. V. RAMAN UNIVERSITY

Dr. C. V. RAMAN UNIVERSITY

KARGI ROAD, KOTA, BILASPUR KARGI ROAD, KOTA, BILASPUR

SUBMITTED TO,

SUBMITTED TO,

MR. VIVEK BAJPAI

MR. VIVEK BAJPAI

H.O.D

H.O.D

DEPARTMENT OF COMMERCE & MANAGEMENT

DEPARTMENT OF COMMERCE & MANAGEMENT

GUIDED

GUIDED BY:

BY:

SUBMITTED

SUBMITTED BY:

BY:

SS.

SS. SWATI

SWATI JAIN

JAIN MAM

MAM

SMITA JAISWAL

SMITA

JAISWAL

ECTURER

ECTURER (M.B.A.)

(M.B.A.)

ROLL

ROLL NO.

NO. 395059

3950593

3

DEPARTMENT OF COMMERCE & MANAGEMENT  DEPARTMENT OF COMMERCE & MANAGEMENT 

SESSION 2010-2011

SESSION 2010-2011

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2 2

HOD CERTIFICATE

HOD CERTIFICATE

This is to certify that

This is to certify that smita jaiswalsmita jaiswal is a bonafide student of this institution studying in IV semester, MBA program of DR C.Vis a bonafide student of this institution studying in IV semester, MBA program of DR C.V RAMAN UNIVERSITY

RAMAN UNIVERSITY KARGI ROAD KOTKARGI ROAD KOTA BILASPRA BILASPR E (C.G) bearing Roll No- 3950E (C.G) bearing Roll No- 3950 593593

This is to certify that her project work entitled has

This is to certify that her project work entitled has ³³

Analysis of Housing Finance schemes of HDFC

Analysis of Housing Finance schemes of HDFC

Bank, ICICI Bank, PNB & SBI Bank

Bank, ICICI Bank, PNB & SBI Bank

´´ in partial fulfillment of the award of MBA degree of DR C.V RAMANin partial fulfillment of the award of MBA degree of DR C.V RAMAN UNIVERSITY under the guidance of Ms Swati Jain is his original work.

UNIVERSITY under the guidance of Ms Swati Jain is his original work.

This report does not form a part of any other degree/diploma of DR C.V RAMAN UNIVERSITY or any other university. This report does not form a part of any other degree/diploma of DR C.V RAMAN UNIVERSITY or any other university.

DATE-

DATE- 15

15 .04

.04 .11

.11

H.O.D

H.O.D

PLACE-

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GUIDE CERTIFICATE

GUIDE CERTIFICATE

This is to certify that

This is to certify that Ms smita jaiswalMs smita jaiswal bearing Roll No - 3950593, who is the student of IV semester of MBA program frombearing Roll No - 3950593, who is the student of IV semester of MBA program from DRDR C.V RAMAN UNIVERSITY

C.V RAMAN UNIVERSITY, has undertaken a , has undertaken a project title, hasproject title, has³³

Analysis of Housing Finance schemes of 

Analysis of Housing Finance schemes of 

HDFC Bank, ICICI Bank, PNB & SBI Bank

HDFC Bank, ICICI Bank, PNB & SBI Bank

´´ under my guidance.under my guidance.

This dissertation is the result of his original survey. I certify that, this report has not been submitted to

This dissertation is the result of his original survey. I certify that, this report has not been submitted to DR C.V RAMANDR C.V RAMAN UNIVERSITY

UNIVERSITY or any other University for the award of any degree/diploma.or any other University for the award of any degree/diploma.

DATE-

DATE- 15.

15. 04.

04. 2011

2011

Project

Project

Guide

Guide

PLAC-BILASPUR

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4 4

S S MITA JAI MITA JAI SW SW  AL AL

of IV semester of MBA, here declare that project entitled 

of IV semester of MBA, here declare that project entitled 

³

³

 Analysis Analysis

of Housing Finance schemes of HDFC Bank, ICICI Bank, PNB & SBI Bank of Housing Finance schemes of HDFC Bank, ICICI Bank, PNB & SBI Bank

´

´

submitted in partial fulfillment of the requirement of the degree of Masters Of 

submitted in partial fulfillment of the requirement of the degree of Masters Of 

Business Administration to DR. CV RAMAN UNIVERSITY, India, this is my original 

Business Administration to DR. CV RAMAN UNIVERSITY, India, this is my original 

work and not submitted for the award of any other degree, diploma or other 

work and not submitted for the award of any other degree, diploma or other 

similarities to any other university.

similarities to any other university.

Place: - BILASPUR 

Place: - BILASPUR 

Date:

Date:

--SMITA JAISWAL

SMITA JAISWAL

(Roll no. 3950593)

(Roll no. 3950593)

IV semester MBA

IV semester MBA

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ACKNOWLEDGEMENT 

ACKNOWLEDGEMENT 

Guidance, help and encouragement are the essential requirements for successful completion Guidance, help and encouragement are the essential requirements for successful completion of project. I own my gratitude to all those who have helped me in the preparation of this project report.

of project. I own my gratitude to all those who have helped me in the preparation of this project report.

I express my deepest gratitude to my project guide miss. Swati jain mam, for his valuable I express my deepest gratitude to my project guide miss. Swati jain mam, for his valuable guidance and help in completion of this project.

guidance and help in completion of this project. I feel obliged to all the

I feel obliged to all the respondentsrespondents, friends and other who , friends and other who have shared their valuable time and have shared their valuable time and opinion, for opinion, for  making significant contribution directly or indirectly in the project.

making significant contribution directly or indirectly in the project.

SMITA JAISWAL SMITA JAISWAL MBA IV SEMESTER MBA IV SEMESTER DR. CV RAMAN UNIVERSITY KARGI DR. CV RAMAN UNIVERSITY KARGI ROAD KOTA BILASPUR (C.G.) ROAD KOTA BILASPUR (C.G.)

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TABLE OF GRAPHS

TABLE OF GRAPHS

Sl.No

Sl.No

List

List of

of Tables

Tables and

and Graphs

Graphs

Page

Page

No.

No.

1

1

If you are make or purchase your own home

If you are make or purchase your own home

than are you like to take facility of Housing

than are you like to take facility of Housing

Finance?

Finance?

49

49

2

2

Which Housing Finance Bank you chose ?

Which Housing Finance Bank you chose ?

50

50

3

3

Are you aware all terms and conditions of home

Are you aware all terms and conditions of home

loans?

loans?

51

51

4

4

How do you come to know about the home loan

How do you come to know about the home loan

schemes of this bank?

schemes of this bank?

52

52

5

5

Your bank offer which type of services?

Your bank offer which type of services?

53

53

According to you which of the following banks

According to you which of the following banks

 provides optimal or economical interest rate?

 provides optimal or economical interest rate?

54

54

Which feature of your scheme satisfied you to

Which feature of your scheme satisfied you to

take it ?

take it ?

55

55

How would you rate the overall quality of your 

How would you rate the overall quality of your 

relationship with banks of housing finance

relationship with banks of housing finance

considering all of your experiences with them?

considering all of your experiences with them?

Would you say it is««.

Would you say it is««.

5

5

9

9

On a scale of 1 to 5 where 1 represents

On a scale of 1 to 5 where 1 represents

³extremel

³extremely dissatisfied´ and 5

y dissatisfied´ and 5 represents ³

represents ³

extremely satisfied´ How would you rate your 

extremely satisfied´ How would you rate your 

level

level of satisfaction with

of satisfaction with banks of

banks of housing

housing

finance in regards to price?

finance in regards to price?

5

5

(8)

10

10

In the case of suitability of EMI, which bank 

In the case of suitability of EMI, which bank 

would you prefer?

would you prefer?

5

5

11

11

Are you satisfy by the time taken in sanctioning

Are you satisfy by the time taken in sanctioning

the loan?

the loan?

59

59

12

12

And, IN case of long term which bank would

And, IN case of long term which bank would

you choose?

you choose?

0

0

13

13

Have you face any difficulty during taking the

Have you face any difficulty during taking the

loan?

loan?

1

1

14

14

Are you agree with the after home loan services

Are you agree with the after home loan services

 provided by your bank are best as compare to

 provided by your bank are best as compare to

other bank?

other bank?

2

2

15

15

On a

On a scale of

scale of 1 to 5

1 to 5 where 1

where 1 represent

represents ³

s ³

extremely

extremely dissatisfied´ an

dissatisfied´ and 5

d 5 represents ³

represents ³

extremely satisfied´, Did you think the

extremely satisfied´, Did you think the

 processing system is?

 processing system is?

3

3

1

1

How likely are to recommend which bank of 

How likely are to recommend which bank of 

housing finance to a friend or relative ?

housing finance to a friend or relative ?

4

4

1

1

Which grade you want to give of home loan

Which grade you want to give of home loan

schemes of your bank?

schemes of your bank?

5

5

1

1

According to you , which positive aspect is

According to you , which positive aspect is

 playing more significant role in success of 

 playing more significant role in success of 

housing finance banks?

housing finance banks?

19

19

Any suggestion that you want to

Any suggestion that you want to

give«««««««

(9)

CHAPTER- 1

CHAPTER- 1

Page no Page no

INTRODUCTION

2

INTRODUCTION

2

1.1.1

1.1.1 INTRODUCTIO

INTRODUCTION

N OF

OF HOUSING

HOUSING FINANCE

FINANCE

3

3

1.1.2

1.1.2 INSTITUTIONAL

INSTITUTIONAL FRAMEWORK

FRAMEWORK

4

4

1.1.3 STRUCTURE OF HOUSING FINANCE

1.1.3 STRUCTURE OF HOUSING FINANCE

INDUSTRY

5

INDUSTRY

5

1.1.4

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10 10

INTRODUCTION

INTRODUCTION

Housing is one of the best human needs of the society. It is closely linked with the Housing is one of the best human needs of the society. It is closely linked with the  process of overall socio-economic development of a country. India, being a highly  process of overall socio-economic development of a country. India, being a highly  populated country, there is a great need and scope for the development of Housing  populated country, there is a great need and scope for the development of Housing

Sector. Unfortunately, for some reasons or t

Sector. Unfortunately, for some reasons or the other, the housing sector in India hashe other, the housing sector in India has remained underdeveloped in the past, however, it is hoped that there would be remained underdeveloped in the past, however, it is hoped that there would be improvement in the near future.

improvement in the near future.

Housing is a growing industry. There is substantial gap between

Housing is a growing industry. There is substantial gap between demand and supplydemand and supply and is persisting for a very long period. According to an estimate by the National and is persisting for a very long period. According to an estimate by the National Building Organization, the cumulative shortage of total dwelling houses in the Building Organization, the cumulative shortage of total dwelling houses in the

country by the end of 1991 was 31 million. It is further estimated by this organization country by the end of 1991 was 31 million. It is further estimated by this organization that the demand for housing will be around 4.5million units, leaving a gap of one that the demand for housing will be around 4.5million units, leaving a gap of one million housing units annu

million housing units annually. Hence, basally. Hence, based upon this estimate, the cumulativeed upon this estimate, the cumulative shortage of housing may reach to 41million units by the end of this century. shortage of housing may reach to 41million units by the end of this century. Presently, funds required per dwelling shelter are so high that

Presently, funds required per dwelling shelter are so high that the individual¶s savingthe individual¶s saving is not adequate to meet the expenditure of house building. As a result, there is great is not adequate to meet the expenditure of house building. As a result, there is great demand for external housing financ

demand for external housing finance.e.

Housing was given due priority only in 1988 when a National Housing Policy was Housing was given due priority only in 1988 when a National Housing Policy was announce. The policy reflected t

announce. The policy reflected the trust that housing was not merely consumptionhe trust that housing was not merely consumption expenditure but also a productive investment which

expenditure but also a productive investment which would provide economwould provide economic activityic activity in the country. Besides this, the policy also envisaged that an impetus given to

in the country. Besides this, the policy also envisaged that an impetus given to housing would stimulate economic development through creation of substantial housing would stimulate economic development through creation of substantial employmen

employment opportunities. Consequently, tt opportunities. Consequently, the institutional mechanism for he institutional mechanism for housinghousing was strengthened by the establishment of National Housing Bank (NHB) by the was strengthened by the establishment of National Housing Bank (NHB) by the Reserve Bank of India.

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1.1.1

1.1.1

INSTITUTIONAL FRAMEWORK 

INSTITUTIONAL FRAMEWORK 

The setting up of the National Housing Bank marked the new era in housing finance The setting up of the National Housing Bank marked the new era in housing finance as a new fund based financial service in t

as a new fund based financial service in the country. A large number of financialhe country. A large number of financial institutional/companies in the public, private and joint sector

institutional/companies in the public, private and joint sector entered in this field. Fentered in this field. For or  example, Life Insurance Corporation of India and General Insurance Corporation example, Life Insurance Corporation of India and General Insurance Corporation came with various schemes for financing the housing units. In 1970, Housing and came with various schemes for financing the housing units. In 1970, Housing and Urban Development Corporation (HUDCO), a

Urban Development Corporation (HUDCO), a wholly govwholly government owned enterprise,ernment owned enterprise, was setup with the objective of housing and urban development as well as

was setup with the objective of housing and urban development as well as infrastructure development. After that, in

infrastructure development. After that, in 1977, another Corporation named Housing1977, another Corporation named Housing Development Finance Corporation (HDFC) was set up in private sector.

Development Finance Corporation (HDFC) was set up in private sector.

Housing was given due priority only in 1988 when a National Housing Policy was Housing was given due priority only in 1988 when a National Housing Policy was announced. The policy reflected the trust t

announced. The policy reflected the trust t hat housing was not merely consumphat housing was not merely consumptiontion expenditure but also a productive investment which

expenditure but also a productive investment which would provide economwould provide economic activityic activity in the country. Besides this, the policy also envisaged that an impetus given to

in the country. Besides this, the policy also envisaged that an impetus given to housing would stimulate economic development through creation

housing would stimulate economic development through creation of substantialof substantial employmen

employment opportunities. Consequently, the institutional mechat opportunities. Consequently, the institutional mecha nism for housingnism for housing was strengthened by the establishment of National Housing Bank (NHB) by the was strengthened by the establishment of National Housing Bank (NHB) by the Reserve Bank of India.

(12)

£  £  

1.1.2S

1.1.2ST

T

T

T

E

E OF HOUSING

OF HOUSING

FINANC

FINANCE

E INDUS

INDUST

T

Hous

Hous

ii

ii

Formal Sector 

Formal Sector   Informal Sector  Informal Sector 

 Household   Household  savings savings  Disposal of   Disposal of   Existing   Existing   properties  properties  Borrowings from  Borrowings from  friends, relatives  friends, relatives

and money lenders and money lenders

 Banking 

 Banking   Non-Banking  Non-Banking 

Central  Central  Govt.

Govt.  State StateGovt.Govt.  Public Public  Authorities  Authorities

Commercial  Commercial 

 Banks

 Banks CooperativeCooperative Banks Banks

Other  Other   Banks  Banks  HUDCO  HUDCO  Non-Banking   Non-Banking  Finance Finance Companies Companies (NBFCs) (NBFCs)  House Finance  House Finance Companies Companies (HFCs) (HFCs)  Non-Banking   Non-Banking   Housing   Housing  Finance Finance Companies Companies  Insurance  Insurance  LIC/GIC   LIC/GIC   Specialized   Specialized   Institution  Institution  HDFC   HDFC 

(13)

1.1.3HOME LOAN TYPES

1.1.3HOME LOAN TYPES

Owning a piece of land or property is a lifetime dream for every individual. There are

Owning a piece of land or property is a lifetime dream for every individual. There are

many home loans provider in the market to make your dream come true. But before

many home loans provider in the market to make your dream come true. But before

you opt for any hom

you opt for any home loan provider, you need to e loan provider, you need to consider certain factors related toconsider certain factors related to

 property that you are interested in buying and also about the salient features offered

 property that you are interested in buying and also about the salient features offered

 by a home loan provider and also study some Home Loans and Home Insurance

 by a home loan provider and also study some Home Loans and Home Insurance

FAQs which helps in applying a Home Loan in India.

FAQs which helps in applying a Home Loan in India.

And the most important thing is you should know about each and every term related

And the most important thing is you should know about each and every term related

with Home Loans before applying for a Loan. It is always advisable to consult a home

with Home Loans before applying for a Loan. It is always advisable to consult a home

loan expert or consultant before applying for a

loan expert or consultant before applying for a home loan or purchasing a prhome loan or purchasing a property.operty.

You can take different types of home loans like Bridge Loans, Home construction

You can take different types of home loans like Bridge Loans, Home construction

Loans, Home Equity Loans, Home Extension Loa

Loans, Home Equity Loans, Home Extension Loans, Home Improvement Loans,ns, Home Improvement Loans,

Land Purchase Loans etc for different schemes available in the market. There are

Land Purchase Loans etc for different schemes available in the market. There are

different types of home loans tailored to meet your needs.

different types of home loans tailored to meet your needs. y

y Home Purchase LoansHome Purchase Loans::These are the basic forms of home loans used for purchasingThese are the basic forms of home loans used for purchasing

of a new home.

of a new home. y

y Home Improvement LoansHome Improvement Loans::These loans are given for iThese loans are given for implementing repmplementing repair works,air works,

healing and renovations in a home that has already been purchased.

healing and renovations in a home that has already been purchased. y

y Home Construction LoansHome Construction Loans::These loans are available for the construction of a newThese loans are available for the construction of a new

home.

home. y

y Home Extension LoansHome Extension Loans::These loans are given for These loans are given for expandinexpanding or g or extending anextending an

existing home. For egg

existing home. For egg::addition of an extra raddition of an extra room etc.oom etc. y

y Home Conversion LoansHome Conversion Loans::These loans are available for tThese loans are available for those who have financed thehose who have financed the

 present home with a home loan and wish to purchase and move to another home for 

 present home with a home loan and wish to purchase and move to another home for 

which some extra funds are required. Through home conversion loan, the existing

which some extra funds are required. Through home conversion loan, the existing

loan is transferred to t

loan is transferred to the new home including the extra amount required, he new home including the extra amount required, eliminatingeliminating

the need of pre-payment of the previous loan.

the need of pre-payment of the previous loan. y

y Land Purchase LoansLand Purchase Loans::These loans are available for purchasing land for bothThese loans are available for purchasing land for both

construction and investment purposes.

construction and investment purposes. y

y BBridge Loansridge Loans::Bridge loans are designed for people who wish to sell the existingBridge loans are designed for people who wish to sell the existing

home and purchase another one. The bridge loans help finance the new home, until a

home and purchase another one. The bridge loans help finance the new home, until a

 buyer is found for the home.

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14 14

1.2

1.2

INDUSTRY PROFILE

INDUSTRY PROFILE

PAGE NO

PAGE NO

1.2.1

1.2.1 HOUSING

HOUSING FINANCE

FINANCE IN

IN INDI

INDIA

A

7-9

7-9

1.2.2 TAX

(15)

HOUSING FINANCE IN INDIA

HOUSING FINANCE IN INDIA

The Home loan sector in India is the pi-vital role player in the growth of the real The Home loan sector in India is the pi-vital role player in the growth of the real estate scenario in India. With tax incentives gi

estate scenario in India. With tax incentives given to the housing finance sector in tven to the housing finance sector in thehe annual budget of 2001, transactions related to buying and selling of residential

annual budget of 2001, transactions related to buying and selling of residential  properties increased considerably and was

 properties increased considerably and was much higher as compared to previousmuch higher as compared to previous years.

years.

Since the new class of buyers are relatively younger set of customers who are more Since the new class of buyers are relatively younger set of customers who are more aware about legal documentation and approvals, buyers are now more 'end-users' aware about legal documentation and approvals, buyers are now more 'end-users' rather than investors; the property market in India undergoes transformation to align rather than investors; the property market in India undergoes transformation to align itself with global standards with an increased emphasis on quality &

itself with global standards with an increased emphasis on quality & cost control andcost control and documentation methods. In the current econo

documentation methods. In the current economy of India, the real estate sector my of India, the real estate sector has thehas the maximum propensity to generate income and demand for

maximum propensity to generate income and demand for materials, equipment andmaterials, equipment and services. It can be said

services. It can be said that housing finance companies were formed for that housing finance companies were formed for coco-existing-existing with buyer's requirements of housing loans for investing in properties. Home loans are with buyer's requirements of housing loans for investing in properties. Home loans are made available by financial inst

made available by financial institutionitutions to s to both Indian and NRI customers at floatingboth Indian and NRI customers at floating and fixed rate of int

and fixed rate of interest and also at erest and also at attractive EMI options.attractive EMI options.

y

y For construction or buying a new homeFor construction or buying a new home y

y For home repairs aFor home repairs a nd renovationsnd renovations y

y For purchase of plotsFor purchase of plots y

y Against mortgage of propertyAgainst mortgage of property

 No tax benefits are a

 No tax benefits are available for NRI customers unless you file returns and therebyvailable for NRI customers unless you file returns and thereby  become eligible to avail

 become eligible to avail of the tax benefits.of the tax benefits.

Besides home loans, Commercial property loans are also a

Besides home loans, Commercial property loans are also a vailable and differentvailable and different financial institutions in India provide commercial loans at different rates and different financial institutions in India provide commercial loans at different rates and different upper limits.

upper limits.

Real estate loans are a

Real estate loans are available to builders, promoters and real estate developers. Thevailable to builders, promoters and real estate developers. The experience and financial standing of the builders is taken into

experience and financial standing of the builders is taken into account before the loanaccount before the loan is granted which is to be returned with the minimum installments.

is granted which is to be returned with the minimum installments.

Today, the amount of money that a city dweller spends on rent is roughly the same, or  Today, the amount of money that a city dweller spends on rent is roughly the same, or  only slightly less than the a

only slightly less than the amounmount he pat he pays as an EMI on a ys as an EMI on a housing loan. Earlier thehousing loan. Earlier the home loan sector in India was solely dependent on nationalized and public sector  home loan sector in India was solely dependent on nationalized and public sector   banks, but the entry of public sector banks into the housing finance business marked  banks, but the entry of public sector banks into the housing finance business marked

the beginning of the first round of interest rate

the beginning of the first round of interest rate cuts. And this reduction in intercuts. And this reduction in interestest rates has enhanced the borrowing power of customers. Moreover, HFCs are offering rates has enhanced the borrowing power of customers. Moreover, HFCs are offering incentives to attract investors like

incentives to attract investors like

y

y Some companies sanction the housing loan without requiring you to identify propertySome companies sanction the housing loan without requiring you to identify property

as a pre-requisite for eligibility as a pre-requisite for eligibility

y

y Free accident insurance & property insuranceFree accident insurance & property insurance y

y Waiving of pre-payment penaltyWaiving of pre-payment penalty y

(16)

1 1¤  ¤  

There are a few

There are a few documents which the finance companies require for setting updocuments which the finance companies require for setting up

CRITERIA FOR ELIGI

CRITERIA FOR ELIGIBBILITY OF HOME LOANSILITY OF HOME LOANS..

The realty boom in India has given a new dimension to the finance sector in India The realty boom in India has given a new dimension to the finance sector in India - both in Home Loans and Home Insurance segments. This has not only given a  both in Home Loans and Home Insurance segments. This has not only given a

competitive edge to the finance companies to pr

competitive edge to the finance companies to provide attractive options to customersovide attractive options to customers  but has also contributed to the

 but has also contributed to the increased investments in the real estate sector. This hasincreased investments in the real estate sector. This has resulted in 13 new institutions foraying into the housing finance business in the last resulted in 13 new institutions foraying into the housing finance business in the last three years.

three years. Salaried

Salaried Employee Employee Self-employedSelf-employed The latest salary slip showing

The latest salary slip showing statutory deductions

statutory deductions

Computation of income for the Computation of income for the  previous two years, certified  previous two years, certified  by a Chartered Accountant  by a Chartered Accountant Form 16 (showing tax

Form 16 (showing tax deducted at source by deducted at source by employer)

employer)

Profit & Loss Account and Profit & Loss Account and Balance Sheet for the previous Balance Sheet for the previous two years, certified by a

two years, certified by a Chartered Accountant Chartered Accountant Proof of age (birth

Proof of age (birth certificate/voter identity certificate/voter identity card/passport/school-leaving card/passport/school-leaving certificate/valid driving license certificate/valid driving license

Proof of age (birth Proof of age (birth certificate/voter identity certificate/voter identity card/passport/school-leaving card/passport/school-leaving certificate/valid driving certificate/valid driving license) license) Proof of residence (phone

Proof of residence (phone  bill/electricity bill/ration card).  bill/electricity bill/ration card).

Proof of residence (phone Proof of residence (phone  bill/electricity bill/ration card).  bill/electricity bill/ration card).

Major Home Loan Providers Major Home Loan Providers Banks & Banks & Public Sector  Public Sector  Housing Housing Finance Finance Companies Companies

State Bank of India, Corporation Bank, Punjab State Bank of India, Corporation Bank, Punjab  National Bank, Central Bank, Dena

 National Bank, Central Bank, Dena Bank,Bank, Allahabad Bank, Bank of Mahara

Allahabad Bank, Bank of Maharashtra, Bank of shtra, Bank of  Baroda Housing Finance, Can Fin Homes, GIC Baroda Housing Finance, Can Fin Homes, GIC Housing Finance, LIC Housing Finance, PNB Housing Finance, LIC Housing Finance, PNB Housing Finance, SBI Home Finance, Cent Housing Finance, SBI Home Finance, Centbank bank  Home Finance, HUDCO, LIC, etc.

Home Finance, HUDCO, LIC, etc. Financial Financial Institutions Institutions HDFC, ICICI Ltd, Citibank, HSBC, HDFC, ICICI Ltd, Citibank, HSBC,

StandardChartered- Grindlays, IDBI Bank, etc StandardChartered- Grindlays, IDBI Bank, etc

(17)

SWOT ANALYSIS

SWOT ANALYSIS

STRWNGTHS STRWNGTHS 1) An active mainstream 1) An active mainstream sector . sector . 2) Effective regulatory 2) Effective regulatory framework. framework.

3) Extensive network of  3) Extensive network of  regional bank microfinance regional bank microfinance institution, cooperatives institution, cooperatives credit unions and rural credit unions and rural bank.bank.

WEAKNESSES WEAKNESSES

1)

1) Interest rate war persistentInterest rate war persistent 2)

2) Dilution in due diligence on partDilution in due diligence on part of leaders is a often seen.

of leaders is a often seen. 3)

3) Lack of uniformity of norms.Lack of uniformity of norms. 4)

4) Increase in default rates.Increase in default rates.

OPPORTUNITIES OPPORTUNITIES

1

1) Increasing urbanization.) Increasing urbanization. 2) Housing microfinance 2) Housing microfinance has potential.

has potential.

3) Tax rebates on house 3) Tax rebates on house loan.

loan.

4) Falling interest rates. 4) Falling interest rates.

THREATS THREATS

1)

1) Lower transaction levels in realtyLower transaction levels in realty sector.

sector. 2)

2) High switching costs of High switching costs of  customers.

customers. 3)

3) Higher cost of home ownershipHigher cost of home ownership is mainly depending the demand is mainly depending the demand at other end.

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1 1¦  ¦  

TAX

TAX

BB

ENEFITS ON HOME LOANS

ENEFITS ON HOME LOANS

As

As the Indian real estate market makes an upward swing, and investors opt for the Indian real estate market makes an upward swing, and investors opt for  housing finance or home loans, tax benefits obtained from them is a lucrative option. housing finance or home loans, tax benefits obtained from them is a lucrative option. Customers availing of Home Loans can claim a certain portion of the interest and Customers availing of Home Loans can claim a certain portion of the interest and  principal that they pay t

 principal that they pay towards the loan installments for reducing tax liaowards the loan installments for reducing tax lia bility.bility. Resident Indians are eligible for

Resident Indians are eligible for certain tax benefits on principal and interestcertain tax benefits on principal and interest components of a loan under the Income Tax Act, 1961. Moreover, an added tax components of a loan under the Income Tax Act, 1961. Moreover, an added tax

 benefits under Sec 80 C on repayment of principal amount up to Rs. 1,00,000 p.a. can  benefits under Sec 80 C on repayment of principal amount up to Rs. 1,00,000 p.a. can  be availed that ca

 be availed that can further reduce your tax liability by about Rs. 30,000 p.a.n further reduce your tax liability by about Rs. 30,000 p.a. Tax benefits can be claimed on both the principal and interest components of the Tax benefits can be claimed on both the principal and interest components of the home loan as per the Income Tax

home loan as per the Income Tax Act, 1961. These deduAct, 1961. These deductions are available tctions are available too assesses, who have taken a loan to either buy or build a house, under Section 24(b). assesses, who have taken a loan to either buy or build a house, under Section 24(b). Interest on borrowed capital is deductible up to Rs 150,000 if the following conditions Interest on borrowed capital is deductible up to Rs 150,000 if the following conditions are satisfied

are satisfied::

y

y Capital is borrowed on or after April 1, 1999 for acquiring or constructing a property.Capital is borrowed on or after April 1, 1999 for acquiring or constructing a property. y

y The acquisition/construction should be completed within 3 years from the end of theThe acquisition/construction should be completed within 3 years from the end of the

financial year in which capital was borrowed. financial year in which capital was borrowed.

y

y The person, extending the loan, certifies that such interest The person, extending the loan, certifies that such interest is payable in respect of tis payable in respect of thehe

amount advanced for a

amount advanced for a cquisition or construction of the housecquisition or construction of the house

y

y A loan for refinance of tA loan for refinance of the principle amount outstandhe principle amount outstanding under an earlier loan takening under an earlier loan taken

for such acquisition or

for such acquisition or construction.construction.

If the conditions stated above are not fulfilled, then the interest on borrowed capital is If the conditions stated above are not fulfilled, then the interest on borrowed capital is deductible up to Rs 30,000 though

deductible up to Rs 30,000 though the folthe following conditions have to be satisfiedlowing conditions have to be satisfied ::

y

y Capital is borrowed before April 1, 1999 for purchase, construction, reconstructionCapital is borrowed before April 1, 1999 for purchase, construction, reconstruction

repairs or renewal of a house property. repairs or renewal of a house property.

y

y Capital should be borrowed on or after April 1, 1999 for reconstruction, repairs or Capital should be borrowed on or after April 1, 1999 for reconstruction, repairs or 

renewals of a house property. renewals of a house property.

y

y If the capital is borrowed on or after April 1, 1999, but construction is not completedIf the capital is borrowed on or after April 1, 1999, but construction is not completed

within 3 years from the end of the year, in which capital is borrowed. within 3 years from the end of the year, in which capital is borrowed.

In addition to the above, principal repayment of the loan/capital borrowed is

In addition to the above, principal repayment of the loan/capital borrowed is eligibleeligible for a deduction of up to Rs 100,000 under Section 80C from assessment year 2006-07. for a deduction of up to Rs 100,000 under Section 80C from assessment year 2006-07.

Terms and conditions for availing Tax benefits on Home Loans

Terms and conditions for availing Tax benefits on Home Loans

1.

1. Tax deductions can be claimed on housing loan interest payments, subject to an upper Tax deductions can be claimed on housing loan interest payments, subject to an upper  limit of Rs 150,000 for a financial year. Interest on the fresh loan can be claimed as a limit of Rs 150,000 for a financial year. Interest on the fresh loan can be claimed as a deduction, subject o the stated upper limit.

deduction, subject o the stated upper limit. 2.

2. An additional loan for An additional loan for extension/addition to the same house and the person'sextension/addition to the same house and the person's

deductions on the existing loan are less than Rs 150,000; he can claim further benefits deductions on the existing loan are less than Rs 150,000; he can claim further benefits from the additional loan taken, subject to the upper limit of Rs 150,000 for a financial from the additional loan taken, subject to the upper limit of Rs 150,000 for a financial year.

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3.

3. Tax benefits under Section 24 and deduction under section 80C of the Income TaxTax benefits under Section 24 and deduction under section 80C of the Income Tax Act can be claimed only when the payment is made. If a person fails to make EMI Act can be claimed only when the payment is made. If a person fails to make EMI  payments, he cannot claim tax benefits for t

 payments, he cannot claim tax benefits for the same.he same. 4.

4. According to the Income Tax Act, only the person who has taken the loan can claiAccording to the Income Tax Act, only the person who has taken the loan can clai mm tax rebates.

tax rebates. 5.

5. The interest on home loans taken for The interest on home loans taken for repairs, renewals or reconstructionrepairs, renewals or reconstruction, also qualifies, also qualifies for the deduction of Rs 150,000.

for the deduction of Rs 150,000. 6.

6. A husband and wife, both of whom are tax-payers with independent income sources,A husband and wife, both of whom are tax-payers with independent income sources, get tax deduction benefits, with respect to the sa

get tax deduction benefits, with respect to the sa me housing loan; to the extent of tme housing loan; to the extent of thehe amount of loan taken

amount of loan taken in their own respective name.in their own respective name. 7.

7. If a person buys a house and sells it within the same year/after 3 years, and if anyIf a person buys a house and sells it within the same year/after 3 years, and if any  profit is made, then a capital gains tax liability arises on the same for which the  profit is made, then a capital gains tax liability arises on the same for which the

individual is liable to pay short-term ca

individual is liable to pay short-term capital gains tax since the sale took place in thepital gains tax since the sale took place in the same year. But, if the sale had taken place after 3 years, then a long-term capital gains same year. But, if the sale had taken place after 3 years, then a long-term capital gains tax liability would have arisen.

tax liability would have arisen. 8.

8. If it is proved that the home loan is simply an arrangement between the loan-seeker If it is proved that the home loan is simply an arrangement between the loan-seeker  and the builder or with a t

and the builder or with a third party for the purpose of claihird party for the purpose of clai ming tax benefits, then taxming tax benefits, then tax  benefits will not be allowed and benefits, previously claimed, will be

 benefits will not be allowed and benefits, previously claimed, will be clubbed to theclubbed to the income and taxed accordingly.

income and taxed accordingly.

9.

9. Tax benefits on interest on housing loans are allowable only for the original loan andTax benefits on interest on housing loans are allowable only for the original loan and

for a second loan taken t

for a second loan taken to repay the first loan and o repay the first loan and not for subsequent loans. Thisnot for subsequent loans. This means that if you have already availed of

means that if you have already availed of one loan to refione loan to refinance the original loan andnance the original loan and want to no avail a third loan to r

want to no avail a third loan to r efinance the second loan, tax rebate on interestefinance the second loan, tax rebate on interest  payments will not be permissible. This is because the Section 24 (1) only talks of the  payments will not be permissible. This is because the Section 24 (1) only talks of the second loan and not of subsequent loans. Even if you take the second loan at a rate of  second loan and not of subsequent loans. Even if you take the second loan at a rate of  interest higher than the original loan, you will be eligible for a tax rebate on the

interest higher than the original loan, you will be eligible for a tax rebate on the second loan.

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20 20

CHAPTER-2

CHAPTER-2

PAGE NO. PAGE NO.

RESEARCH DESIGN

RESEARCH DESIGN

2.1

2.1 PRO

PRO

BB

LEM

LEM STATEMENT

STATEMENT

13

13

2.2

2.2 O

O

BJBJ

ECTIVE

ECTIVE

13

13

2.3

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RESEARCH DESIGN

RESEARCH DESIGN

The formidable problem that follows the task

The formidable problem that follows the task of defining the research problem is theof defining the research problem is the  preparation of the research proj

 preparation of the research project popularly knoect popularly known as the research wn as the research design.design. y

y

PRO

PRO

BB

LEM STATEME

LEM STATEMENT

NT--

The main purpose of doing this project is helpsThe main purpose of doing this project is helps toto

choose the right home loan schemes for purchase house.

choose the right home loan schemes for purchase house. Various public aVarious public and privatend private

institutions have entered in this field. These institutions have initiated various house financing institutions have entered in this field. These institutions have initiated various house financing schemes to cater the diversified needs of this sector.

schemes to cater the diversified needs of this sector. So So that I am that I am analanalysis of ysis of HousingHousing Finance schemes of HDFC Bank, ICICI Bank, PNB & SBI Bank.

Finance schemes of HDFC Bank, ICICI Bank, PNB & SBI Bank.

y

y

O

O

BJBJ

ECTIVE

ECTIVE

o

o To study how to choose the right housing finance bank.To study how to choose the right housing finance bank. o

o To study how do get loan for construction of residential houses.To study how do get loan for construction of residential houses. o

o To discuss housing credit more affordable.To discuss housing credit more affordable. o

o To know To know the some othe some of f housing finance schemes.housing finance schemes. o

o To discuss some tip for buying house.To discuss some tip for buying house. o

o To study oTo study of f terms and condition of terms and condition of home loan.home loan. o

o To find oTo find out that ut that how people to how people to constructconstruction of houses bion of houses by y attraattractive EMI systems.ctive EMI systems.

y

y

SCOPE OF STUDY

SCOPE OF STUDY

This study is analysis of housing finance schemes of HDFC, ICICI, PNB AND SBI This study is analysis of housing finance schemes of HDFC, ICICI, PNB AND SBI  banks. It is helpful in analyzing the home loan

 banks. It is helpful in analyzing the home loan Schemes service provided to tSchemes service provided to thehe customer and

customer and their comparistheir comparison. This on. This study was study was conducted by conducted by the researcher inthe researcher in

BILASPUR, because of constraints of time and money study could not be extended to BILASPUR, because of constraints of time and money study could not be extended to other cities. As BILASPUR being a popular and among the good cities of India is a other cities. As BILASPUR being a popular and among the good cities of India is a good market of financial products & also here customers of different classes like good market of financial products & also here customers of different classes like  business segment, service segment, and professional segment are in

 business segment, service segment, and professional segment are in excess. Since theexcess. Since the report aims at finding the potential for financia

report aims at finding the potential for financial products at BILASPUR itself takingl products at BILASPUR itself taking into consideration certain limits and problems, the area was chosen on the basis of  into consideration certain limits and problems, the area was chosen on the basis of  coverage of product no. of respondents

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22 22

CHAPTER- 3

CHAPTER- 3

Page no. Page no.

3.1 A COMPNY PROFILE OF FOUR 

3.1 A COMPNY PROFILE OF FOUR BBANKS WHICHANKS WHICH

PROVIDE

PROVIDE HOUSING HOUSING FINANCE:- FINANCE:- 15-1815-18 3.1.1

3.1.1 HOME LOAN OF HDFCHOME LOAN OF HDFCBBANK ANK 

SWOT

SWOT ANALYSIS ANALYSIS 19-2519-25

3.1.2

3.1.2 HOME LOAN OF PNHOME LOAN OF PNBB BBANK ANK 

3.1.3

3.1.3 SWOT SWOT ANALYSIS ANALYSIS 26-2826-28 3.1.4

3.1.4 HOME LOAN OF SHOME LOAN OF SBBIIBBANK ANK 

SWOT

SWOT ANALYSIS ANALYSIS 29-3429-34

3.1.5

3.1.5 HOME LOAN OF ICICIHOME LOAN OF ICICI BBANK ANK 

SWOT

SWOT ANALYSIS ANALYSIS 35-4435-44

3.2 COMPARE HOUSING LOAN OF DIFFERENT

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HDFC

HDFC

BB

ANK 

ANK 

HDFC Bank was incorporated in 1994 by Housing Development Finance HDFC Bank was incorporated in 1994 by Housing Development Finance

Corporation Limited (HDFC), India's largest housing finance company. It was among Corporation Limited (HDFC), India's largest housing finance company. It was among the first companies to receive an

the first companies to receive an 'in principle' approval from the Reserve Bank of 'in principle' approval from the Reserve Bank of  India (RBI) to set up a bank in the private sector. The Bank started operations as a India (RBI) to set up a bank in the private sector. The Bank started operations as a scheduled commercial bank in

scheduled commercial bank in January 1995 under the RBI's liberalization policies.January 1995 under the RBI's liberalization policies. Times Bank Limited (owned by Bennett, Coleman & Co. / Times Group) was merged Times Bank Limited (owned by Bennett, Coleman & Co. / Times Group) was merged with HDFC Bank Ltd., in 2000. This was the first merger of two private banks in with HDFC Bank Ltd., in 2000. This was the first merger of two private banks in India. Shareholders of Times Bank received 1 share of HDFC Bank for every 5.75 India. Shareholders of Times Bank received 1 share of HDFC Bank for every 5.75 shares of Times Bank.

shares of Times Bank.

In 2008 HDFC Bank acquired Centurion Bank of Punjab taking its total branches to In 2008 HDFC Bank acquired Centurion Bank of Punjab taking its total branches to more than 1,000. The amalgamated bank emerged with a ba

more than 1,000. The amalgamated bank emerged with a base of about Rs. 1,22,00se of about Rs. 1,22,0000 crore and net advances of a

crore and net advances of about Rs.89,00bout Rs.89,000 crore. The balance sheet siz0 crore. The balance sheet size of thee of the combined entity is more than Rs. 1,63,000 crore.

combined entity is more than Rs. 1,63,000 crore.

ICICI

ICICI

BB

ANK 

ANK 

ICICI Bank is India's second-largest bank with total assets

ICICI Bank is India's second-largest bank with total assets of Rs. 3,744.10 billionof Rs. 3,744.10 billion (US$ 77 billion) at December

(US$ 77 billion) at December 31, 2008 and profit after tax 31, 2008 and profit after tax Rs. 30.14 billion for theRs. 30.14 billion for the nine months ended December 31, 2008. The Bank has a network of 1,416 branches nine months ended December 31, 2008. The Bank has a network of 1,416 branches and about 4,644 ATMs in India and presence in 18 countries. ICICI Bank offers a and about 4,644 ATMs in India and presence in 18 countries. ICICI Bank offers a wide range of banking products and financial services to

wide range of banking products and financial services to corporate and retailcorporate and retail customers through a variety of delivery channels and through its specialised customers through a variety of delivery channels and through its specialised subsidiaries and affiliates in the areas of investment banking, life and non-life subsidiaries and affiliates in the areas of investment banking, life and non-life insurance, venture capital and ass

insurance, venture capital and asset management. The Bank currentet management. The Bank currently ly has subsidiarieshas subsidiaries in the United Kingdom, Russia and Cana

in the United Kingdom, Russia and Cana da, branches in Unitda, branches in United States, Singapore,ed States, Singapore, Bahrain, Hong Kong

Bahrain, Hong Kong, Sri Lanka, Qatar and Dubai Internat, Sri Lanka, Qatar and Dubai International Finance Centre andional Finance Centre and representative offices in Unit

representative offices in United Arab Emirates, China, South Afred Arab Emirates, China, South Africa, Bangladesica, Bangladesh,h, Thailand, Malaysia and Indonesia. Our UK subsidiary has established branches in Thailand, Malaysia and Indonesia. Our UK subsidiary has established branches in Belgium and Germany. ICICI Bank's equity shares are listed in India on Bombay Belgium and Germany. ICICI Bank's equity shares are listed in India on Bombay Stock Exchange and the National Stock Exchange of India L

Stock Exchange and the National Stock Exchange of India Limited and its Americanimited and its American Depositary Receipts (ADRs) are listed on the New

Depositary Receipts (ADRs) are listed on the New York Stock ExchangeYork Stock Exchange

(NYSE).ICICI Bank was originally promoted in 1994 by ICICI Limited, an Indian (NYSE).ICICI Bank was originally promoted in 1994 by ICICI Limited, an Indian financial institution, and

financial institution, and was its wholly-owned subsidiary.was its wholly-owned subsidiary.

ICICI's shareholding in ICICI Bank was reduced to 46% through a public offering of  ICICI's shareholding in ICICI Bank was reduced to 46% through a public offering of  shares in India in fiscal 1998, an equity offering in the form of ADRs listed on the shares in India in fiscal 1998, an equity offering in the form of ADRs listed on the  NYSE in fiscal 2000, ICICI Bank's acquisition of Bank of Madura Limited

 NYSE in fiscal 2000, ICICI Bank's acquisition of Bank of Madura Limited in an all-in an all-stock amalgamation in fiscal 2001, and secondary market sales by ICICI to

stock amalgamation in fiscal 2001, and secondary market sales by ICICI to institutional investo

institutional investors in fiscal rs in fiscal 2001 and fiscal 20022001 and fiscal 2002. ICICI was for. ICICI was formed in 1955 at themed in 1955 at the initiative of the World Bank, the Government of India and representatives of Indian initiative of the World Bank, the Government of India and representatives of Indian industry

industry. The principal . The principal objective was to create a objective was to create a developmendevelopment financiat financial institution for l institution for   providing medium-term and long-term project financing to

 providing medium-term and long-term project financing to Indian busineIndian businesses. In thesses. In the 1990

1990s, ICICI transformed s, ICICI transformed its business from a development financial its business from a development financial institutioninstitution offering only project finance t

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24 24

variety of products and servic

variety of products and services, both directly and tes, both directly and through a number of subsidiarieshrough a number of subsidiaries and affiliates like ICICI Bank. In 1999, ICICI become the first Indian company and and affiliates like ICICI Bank. In 1999, ICICI become the first Indian company and the first bank or financial institution from non-Japan Asia to be listed on the NYSE. the first bank or financial institution from non-Japan Asia to be listed on the NYSE. After consideration of various corporate structuring alternatives in the context of t After consideration of various corporate structuring alternatives in the context of t hehe emerging competitive scenario in the Indian ba

emerging competitive scenario in the Indian banking indunking industry, and the move towardsstry, and the move towards universal banking, the managements of ICICI and ICICI Bank for

universal banking, the managements of ICICI and ICICI Bank for med the view thatmed the view that the merger of ICICI with ICICI Bank would be the optimal strategic alternative for  the merger of ICICI with ICICI Bank would be the optimal strategic alternative for   both entities, and would create t

 both entities, and would create t he optimal legal structure for the ICICI group'she optimal legal structure for the ICICI group's universal banking strategy. The merger would enhance value for ICICI shareholders universal banking strategy. The merger would enhance value for ICICI shareholders through the merged entity's access to low-cost

through the merged entity's access to low-cost deposits, greater opportundeposits, greater opportunities for ities for  earning fee-based income and the ability to participate in the payments system and earning fee-based income and the ability to participate in the payments system and  provide transaction-banking services. The merger would enhance va

 provide transaction-banking services. The merger would enhance va lue for ICICIlue for ICICI Bank shareholders through a large capital base and scale of

Bank shareholders through a large capital base and scale of operations, seamlessoperations, seamless access to ICICI's strong corporate relationships built up over five decades, entry into access to ICICI's strong corporate relationships built up over five decades, entry into new business segments, higher market share in various business segments,

new business segments, higher market share in various business segments,  particularly fee-based services, and access to the vast talent

 particularly fee-based services, and access to the vast talent pool of ICICI and itspool of ICICI and its subsidiaries. In October 2001, the Boards of Directors of ICICI and ICICI Bank  subsidiaries. In October 2001, the Boards of Directors of ICICI and ICICI Bank  approved the merger of ICICI and two of its

approved the merger of ICICI and two of its wholly-owned retail finance subsidiaries,wholly-owned retail finance subsidiaries, ICICI Personal Financial Services Limited and ICICI Capital Services Li

ICICI Personal Financial Services Limited and ICICI Capital Services Li mited, withmited, with ICICI Bank. The merger was approved by shareholders of ICICI and ICICI Bank in ICICI Bank. The merger was approved by shareholders of ICICI and ICICI Bank in January 2002, by the High Court of Gujarat at Ahmedabad in March 2002, and by the January 2002, by the High Court of Gujarat at Ahmedabad in March 2002, and by the High Court of Judicature at Mumbai and the Reserve Bank of India in April 2002. High Court of Judicature at Mumbai and the Reserve Bank of India in April 2002. Consequent to the merger, the ICICI group's financing and banking operations, both Consequent to the merger, the ICICI group's financing and banking operations, both wholesale and retail, have been integrat

wholesale and retail, have been integrated in a single entity.ed in a single entity.

PUN

PUN

JJ

A

A

BB

NATIONAL

NATIONAL

BB

ANK 

ANK 

With over 37 million satisfied customers and over 4589 offices, PNB has continued to With over 37 million satisfied customers and over 4589 offices, PNB has continued to retain its leadership position among the nationalized banks. The bank enjoys strong retain its leadership position among the nationalized banks. The bank enjoys strong fundamentals, large franchise value and good brand image. Besides being ranked as fundamentals, large franchise value and good brand image. Besides being ranked as one of India's top service brands, PNB has remained fully committed to its guiding one of India's top service brands, PNB has remained fully committed to its guiding  principles of sound and prudent banking. Apart from offering banking products, the  principles of sound and prudent banking. Apart from offering banking products, the  bank has also entered the credit card & debit card business; bullion business;

 bank has also entered the credit card & debit card business; bullion business; insurance business; Gold coins &

insurance business; Gold coins & asset management business, etc.asset management business, etc.

Since its humble beginning in 1895 with the distinction of being the first Indian bank  Since its humble beginning in 1895 with the distinction of being the first Indian bank  to have been started with Indian capital, PNB has achieved significant growth in to have been started with Indian capital, PNB has achieved significant growth in  business which at the end of

 business which at the end of March 2008 amounted to Rs 2,85959 crore. Today, withMarch 2008 amounted to Rs 2,85959 crore. Today, with assets of more tha

assets of more than Rs 1,99,0n Rs 1,99,000 crore, PNB is ra00 crore, PNB is ranked as the 3rd largest bank nked as the 3rd largest bank in thein the country (after SBI and ICICI Bank) and has

country (after SBI and ICICI Bank) and has the 2nd largest network the 2nd largest network of branchesof branches (4589 including 322 extension counters).During the FY 2007-08, with 43% share of  (4589 including 322 extension counters).During the FY 2007-08, with 43% share of  low cost deposits, the bank achieved a net profit of Rs 2,049 crore, maintaining its low cost deposits, the bank achieved a net profit of Rs 2,049 crore, maintaining its number ONE position amongst its peers. The bank¶s Return on Assets at 1.15% was number ONE position amongst its peers. The bank¶s Return on Assets at 1.15% was also the highest. During the FY 2007-08,its¶ ratio of pr

also the highest. During the FY 2007-08,its¶ ratio of pr iority sector credit to iority sector credit to net bank net bank  credit at 44.11% & agriculture credit t

credit at 44.11% & agriculture credit t o net bank credit at o net bank credit at 18.94% was also higher 18.94% was also higher  than the respective national goals of 40% & 18%.

than the respective national goals of 40% & 18%.

PNB has always looked at technology as a key facilitator to provide better customer  PNB has always looked at technology as a key facilitator to provide better customer  service and ensured t

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at ³Best Fit´. The bank has

at ³Best Fit´. The bank has made rapid strides in this direction and achieved made rapid strides in this direction and achieved 100%100%  branch computerisation. A pioneering effort of the bank in the use of IT is the  branch computerisation. A pioneering effort of the bank in the use of IT is the

implementation of Core Banking Solution (CBS) which facilitates ³any ti

implementation of Core Banking Solution (CBS) which facilitates ³any ti me, anyme, any where´ banking. PNB has implemented CBS in 3503 service outlets at around centers where´ banking. PNB has implemented CBS in 3503 service outlets at around centers to facilitate "anytime, anywhere" banking to its clients. The bank has also been

to facilitate "anytime, anywhere" banking to its clients. The bank has also been offering Internet banking services to the customers of CBS branches like booking of  offering Internet banking services to the customers of CBS branches like booking of  tickets, payment of bills of utilities, purchase of a

tickets, payment of bills of utilities, purchase of a irline tickets etc.irline tickets etc. Towards developing a cost effective alternative

Towards developing a cost effective alternative channels of delivery, the bank haschannels of delivery, the bank has installed more than 1516 ATMs and entered into ATM sharing arrangement with installed more than 1516 ATMs and entered into ATM sharing arrangement with other banks & IDRBT, making available a pool of additional 21,500 ATMs other banks & IDRBT, making available a pool of additional 21,500 ATMs throughout the country to its customers.

throughout the country to its customers.

Backed by strong domestic performance, the bank is planning to realize its global Backed by strong domestic performance, the bank is planning to realize its global aspirations

aspirations. In order to increase its internat. In order to increase its international presence, the bank has already set upional presence, the bank has already set up representative offices at Almaty (Kazakhstan), Dubai (UAE) & Shanghai (China) ; a representative offices at Almaty (Kazakhstan), Dubai (UAE) & Shanghai (China) ; a  branch at Kabul (Afghanistan) and a

 branch at Kabul (Afghanistan) and a subsidiary at London (UK) and a branch atsubsidiary at London (UK) and a branch at Hongko

Hongkong. Work on assessing poteng. Work on assessing potential at other ntial at other international centers is international centers is progressing.progressing. The bank also has a joint venture with Everest Bank Ltd. (EBL), Nepal, with 20 per  The bank also has a joint venture with Everest Bank Ltd. (EBL), Nepal, with 20 per  cent equity participation. With PNB¶s management, EBL has become one of the cent equity participation. With PNB¶s management, EBL has become one of the leading banks in Nepal. As a tribute to its consistent business growth, improved assets leading banks in Nepal. As a tribute to its consistent business growth, improved assets & attractive returns to shareholders in the joint venture, PNB has won µBank of the & attractive returns to shareholders in the joint venture, PNB has won µBank of the Year¶ Award in Nepal (2006) by µThe Banker¶, a publication of the London based Year¶ Award in Nepal (2006) by µThe Banker¶, a publication of the London based Financial Times.

Financial Times.

Amongst Top 1000 Banks in the World, µThe Banker¶ listed PNB at 255th place. Amongst Top 1000 Banks in the World, µThe Banker¶ listed PNB at 255th place. Further the leading international Credit Rating index provider, Standard & P Further the leading international Credit Rating index provider, Standard & P oor¶soor¶s (2006) listed PNB, amongst the 300 World companies & 7 Indian companies, which (2006) listed PNB, amongst the 300 World companies & 7 Indian companies, which are expected to emerge as

are expected to emerge as challengers to the world¶s leading blue chip companies.challengers to the world¶s leading blue chip companies. Financial Performance

Financial Performance::

Punjab National Bank continues to maintain

Punjab National Bank continues to maintain its frontline position in the Indianits frontline position in the Indian  banking industry. In particular, the bank has

 banking industry. In particular, the bank has retained its NUMBER ONE positionretained its NUMBER ONE position among the nationalized banks in terms of number of branches, operating and net profit among the nationalized banks in terms of number of branches, operating and net profit in the year 2006-07. The performance highlights of the bank in terms of business and in the year 2006-07. The performance highlights of the bank in terms of business and  profit are shown below

 profit are shown below::

(Rs Crore) (Rs Crore) Para

Parameters meters March05 March05 March06 March06 March07 March07 CAGR CAGR (%)(%) Gross

Gross Profit Profit 2404, 2404, 2917, 2917, 3231, 3231, 15.9115.91

  Net

  Net Profit Profit 1410, 1410, 1439, 1439, 1540, 1540, 4.504.50 Deposits Deposits 103167, 103167, 119685, 119685, 139860, 139860, 16.4316.43 Advanc Advances es 60413, 60413, 74627, 74627, 96597, 96597, 26.4526.45 Business Business 163580, 163580, 194312, 194312, 236457, 236457, 20.2320.23 Recognition

Recognition:: In recognition of its efforts in various areas, the bank has receivedIn recognition of its efforts in various areas, the bank has received various recognitions.

various recognitions.

 National Award for Excellence

 National Award for Excellence in lending to SSI and tiny sector for in lending to SSI and tiny sector for the year 2004-05the year 2004-05 and 2005-06 respectively.

and 2005-06 respectively. Golden Peacock Nat

Golden Peacock National Training Award for tional Training Award for three successive years (2004, 200hree successive years (2004, 2005 &5 & 2006

References

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