A

PROJECT REPORT ON

PUNJAB NATIONAL BANK

HOUSING FINANCE LIMITED

Comparative Customer Preference in Public and Private Sector: Home Loans

Submitted in Partial Fulfillment of the Requirement of

Master of Business Adminisuation (MBA)

Submitted by:
Vipul Beniwal
Roll No. 022147170X
MBA

Submitted to:
Mi Amit Gupta
Project Co-ordinatoi
MAIMS

Maharaj a Agrasen Institute of Management Studies

(Affiliated to Guru Gobind Singli Indraprastha University)

ACKNOWLEDGEMENT

Success is an effort bounded actively, involving the co-operation of all.

To create and foimulate this project report, I would be thankfiil to the entire
individual who
Served me as a true guide and epitome of knowledge.
I would like to thank Mr. AMIT GUPTA, MBA Project guide for anytime and
eveiy time guidance and continuous support. His experience and methodology of
providing training helps me not to perfoim the desired activity but to accomplish
creativity. I also like to thank my parents and my family members who are always
a support for me.
In the last, but not least, Dr. NK. Kakkar and other faculty members who are not
only the source of inspiration but a constant motivation.

DECLERATION
I, Vipul Beniwal, here by declare that I have canied out summer training project
on the topic ComparaLive CuEonier Preference in Public and PrivaLe
SecEor: Home Loans in Punjab NaLional Bank.
I fuither declare that project work is my original work and no part of this report
have been published to or submitted to anybody or university for award of any
other degree or diploma.

Mr. AMIT GUPTA

FaculEy- MBA

TABLE OF CONTENT
1. NATIONAL HOUSING BANK
PROFILE
OBJECTIVES
BUSINESS/ACTIVITIES
ORGANIZATION
OFFICES
PROCEDURE FOR AVAILING HOUSING LOAN
2. PUNJAB NATIONAL BANK
HERITAGE
LOGIC OF THE LOGO PROFILE
VISION & MISSION QUALITY
POLICY ORGANIZATIONAL
STRUCTURE
CENTRALIZATION BANKING SOLUTION
VARIOUS LOANS
3. ACHIEVEMENTS AND AWARDS
4. PNB SUBSIDIARIES
PNB GILTS LTD
BACKGROUD
OBJECTIVES
PRODUCTS & SERVICES

5. PNB HOUSING FINANCE LTD.

INTRODUCTION
PRODUCTS AND SERVICES
a. APNA GHAR YOJANA
b. GHAR SUDHARYOJANA
c.
LOAN AGAINST PROPERTY
d.
LOAN FOR COMMERCIAL PROPERTY
e.
FUTURE RENTAL SCRUTIZATION
t
LINE OF CREDIT FACILITY
BALANCE SHEET

6. RESEARCH METHODOLOGY
INTRODUCTION
MEANING OF RESEARCH RESEARCH PROBLEM RESEARCH
DESIGN
7. COMPARATWE STUDY
SAMPLE SELECTION
SCOPE OF STUDY
DELHI MARKET SEGMENT GRAPHS
8. CONCLUSION
SWOT ANALYSIS
LIMITATIONS
9. APPENDIX
QUESTIONNAIRE
BIBLIOGRAPHY

NATION
HOUSING
BANK

PROFILE
The National Housing Bank (NHB) was established on 9th July 19XX under an
Act of the Parliament viz, the National Housing Bank Act, 19X7 to fimction as a
principal agency to promote Housing Finance Institutions and to provide financial
and other support to such institutions. The Act, inter alia, empowers NHB to:
Issue directions to housing finance institutions to ensure their owth on sound
lines
>>

Make loans and advances and render any other form of financial assistance to
scheduled banks
and housing finance institutions or to any authority established by or under any
Cenual, State or Provincial Act and engaged in slum improvement and

>>

Formulate schemes for the puipose of mobilization of resources and extension

of credit for housing

>>

OBJECTIVES
NUB has been established to achieve, inter alia, the following objectives:
a. To promote a sound, healthy, viable and cost effective housing finance system
to cater to all segments of the population and to integrate the housing finance
system with the overall financial system.
b. To promote a network of dedicated housing finance institutions to adequately
serve vaiious regions and different income groups.
c. To augment resources for the sector and channelise them for housing.
d. To make housing credit more affordable.
e. To regulate the activities of housing finpnce companies based on regulatory and
supervisory authoiity deiived under the Act
f. To encourage augmentation of supply of buildable land and also building
mateiials for housing and to upgrade the housing stock in the county.
g. To encourage public agencies to emerge as facilitators and suppliers of serviced
land, for housing.

BUSINESS ACTIVITIES

NHB, as the Apex level financial institution for the housing sector in the county,
peifoims the following roles:

(a) Promotion and Development:

NHB operates as a multifunctional Development Finance Institution (DFI) for the
housing sector. The Banks policies are directed towards promotion and
development of housing finance institutions. NHB has flamed guidelines for
HFCs with a view to promoting their development on sound and healthy lines.
The guidelines are reviewed and modified from time to time in the light of
developments in the financial and housing sectors. All HFCs registered with the
National Housing Bank under sec. 29A of the National Housing Bank Act, 19X7
and inter alia having minimum net owned funds of RsJOA] crores are eligible for
refinance support. It has also contributed to the equity capital of five HFCs. NHB
has a dedicated Training Division which organises regular training programmes in
areas relating to housing and housing finance for development of management
capabilities of officials working in the sector. NHBs promotional endeavours are
also directed towards capacity building for the housing finance system besides
enlarging the credit absorption capacity.

(b) Regulation and Supervision:

NHB exercises regulatoiy and supervisoiy authority over the HFCs in the matter
of acceptance of deposits by them pursuant to the powers vested in it under the
Act. As per the amendments to certain provisions of the Act, which came into
effect from June 12, 2000, NHB is vested with powers to grant Certificate of
Registration to companies for commencing/cariying on the business of a housing
finance institution. Besides, NHB regulates the deposit acceptance activities in
accordance with the Housing Finance Companies (JHB) Directions, 2001,
amended from time to time, in the matter of ceiling on bonowings (including
public deposits, rate of interest, period, liquid assets, etc). NHB has also issued
Directions on prudential noims in regard to capital adequacy, asset classification,
concentration of credit, income recognition, provisioning for bad and doubtful
debts etc. NHB supervises the working of HFCs through on-site inspection and
off-site surveillance.

(c) Financing:
NHB raises resouices for the housing sector towards increasing new housing
stock and provides refinance to a huge set of retail lending institutions. These
include scheduled commercial banks, scheduled state cooperative banks,
scheduled urban cooperative banks, specialised housing finance institutions, apex
co-operative housing finance societies and agriculture and rural development
banks. Refinance is provided by NHB under various schemes, which are
foimulated taking into account, several aspects of the National Housing Policy,
the constraints facing the sector etc. NHB has also a window for direct lending to
Public Agencies such as, State Level Housing Boards and Area Development
Authorities for large scale integrated housing projects and slum redevelopment
proj ects. NHB is also operating a special window for extending financial
assistance to the people affected by natural calamities viz, earthquake, cyclone

(d) Reource of NHB

NHB raises resources from diversified sources, both domestic and external by
Issuing
Bonds/
debentures,
bonowing
from
RBI
and
financial
institutions/organizations etc. Under the Act, NHB is authorized to issue and sell
Bonds with 01. without the guarantee of the Central Government for the Purpose
of caiiying on its functions.

(e) Rural Housing:

NHB launched the Swarna Jayanti Rural Housing Finance Scheme to mark the
golden jubilee of Indias Independence. The Scheme seeks to provide improved
access to housing loans to bonowers for construction/acquisition! Up-gradation of
a house in rural areas of the countiy.

(1) Recent Initiatives

Securitization of mortgage loans of the retaillending institutions facilitates for
canalizing household savings into the housing sector is seen as a potentially viable
market oriented alternative. Support to Mortgage backed securitization is a major
policy initiative of the Government as manifested in its National Housing and
Habitat Policy announced in 199X. This policy emphasizes NHBs lead role in
mortgage-backed securitization and development of a secondaiy mortgage market
in the counfly. As the apex body in housing finance sector in India, NHB has been
playing a lead role in the sector in matters relating to policy environment as also
operational mechanism for the development of a secondaiy mortgage market in
India.

In order to resolve the twin problems of affordability and accessibility affecting

the growth of the housing finance business and the prospect of home ownership,
NHB has been entrusted with the responsibility of launching a Mortgage Credit
Guarantee Scheme for protecting the lenders against default.

ORGANISATION

NHB is an Officer Oriented Organization and has the following departments.

1. Regulation and Supervision
2. Board and CMD Secretariat

3. Legal
4. Infoimation Technology
5. Enabling Processes
6. Resource Mobilization and Management

7. Refinancing Operations
S. Project Finance
9. Development and Risk Management

OFFICES
Head Office:
National Housing Bank
Core 5A, India Habitat Cenue,
3id-5th floor, Lod.hi Road,
New Delhi -110003
Phone No- 011-24649031-35
FAX 011-246469XX,24649041
-

Regional Office:
National Housing Bank
Mumbai Life Building,
45, Veer Nariman Road,
Fort Mumbai 400 023
Phone No 22X51560-64
FAX 022-22X51555
-

PROCEDURES FOR AVAILING HOUSING LOANS

The appraisal officer attends to the queries of a prospective borrower.
Vaiious details. Eg, eligibility at al are discussed during this meeting.
You collect the application foim, which is generally available at the reception
counter.
You pay the processing fees, which is about 1% of the loan amount. The fees are
non-refimdable. Generally you are asked to pay the fees only if the chances of the
loan getting sanctioned aer eally good as per the Officers analysis.
The date of the personal interview is fixed up as per mutual convenience.
The appraisal Officer conducts the interview.
The Appraisal Officer prepares the file and discusses the case with the Branch
Manager. The Branch Manager should substantiate recommendations of the
Appraisal Officer. The file is then recommended for sanctioning by the competent
authority.
The competent authority concerned sanctions the loan proposal. In case there are
some quer es, the same have to answer by the Appraisal Officer to the satisfaction
of the sanctioning authority.
If approved, you collect the Loan Offer letter. You fill Property Details foim and
Acceptance Note and sign the same. This signifies your acceptance of the
proposal. Then, you are required to collect the disbursement within a month of the
acceptance of the offer letter failing which a Commitment Charge of generally 1%
on the loan is levied.
The Legal and Technical fees is generally 1% of the loan sanction is paid by the
borrower. The file is then nansfened to the Legal department. You submit the
legal documents to the Legal Officer. The Loan Agreement and the other
documents are signed. The Legal Officer then prepares the Legal report after
studying the legal documents in depth.
The Technical Officer visits the property and submits the technical Report. The
Technical officer as per the stage of completion recommends the amount for
disbursement.
The Disbursement Memo is prepared and is signed by the Appraisal, Legal and
Technical Officers, and countersigned by the Branch Manager.
The accounts department prepares the cheque which is then sent to the
authorized signatories. The Disbursement Memo is attached with important
documents like interview sheet, Legal Report, Technical Report, PEMI Status
Report applicable etc.

The PEMI cheque of the amount disbursed is collected before releasing the
disbuisement amount cheque. PEMI is the interest charged on the amount aheady
disbuised by the company
Consequent to the final disbursement of the EMI starts which amortizes the
inteiest and adjust the principle foi the tenuie allotted.
The documents moitgaged ac released on closuie of loan.

PU JAB
ATIO AL
BA

HERITAGE
Established in 1X95 at Lahore, undivided India, Punjab National Bank (PNB) has
the distinction of being the first Indian bank to have been started solely with
Indian capital. The bank was nationalized in July 1969 along with 13 other
banks. From its modest beginning, the bamk has grown in size and stature to
become a front-line banking institution in India at present.

A professionally managed bank with a successfiil track record of over

110 years.

Largest branch network in India 4062 branches and 447 Extension

Counters spread throughout the countiy.

Strategic business area covers the huge Indo-Gangetic belt and the
metropolitan centers.

Ranked as 323rd biggest bank in the world by Bankers Almanac (Januaiy

2006), London.

Strong conespondent banking relationships with more than 217

international bamks of the world.

More than 50 renovv lied international banks maintain their Rupee

Accounts with PNB.

Well equipped dealing rooms; 20 different foreign cunency accounts are

maintained at major centers all over the globe.

Rupee drawing anangements with M/s UAE Exchange Centre, UAE, M/s
Al Fardan Exchange Co. Doha, Qatar,M/s Bahrain Exchange Co, Kuwait,
Mis Bahrain Finance Co, BaInain,M/s Thomas Cook Al Rostamani
Exchange Co. Dubai, UAE, and M/ s Musandam Exchange, Ruwi,
Sultanate of Oman.

LOGIC OF THE LOGO

lished in 1X95 at Lahore, then undivided India, Punjab National

Bank (PNB) has the distinction of being the first Indian bank to have been staited
solely with Indian capital. The bank was nationalized in July 1969 along with 13
other banks. From its modest beginning, the bank has grown in size and statuie to
become a front-line banking institution in India at present. It has more than 4000
branches and over 400 extension counters. Strong conespondent banking
relationship, which it maintains with over 200 leading international banks all over
the world, enhances its capabilities to handle transactions worldwide. More than
50 renowned international banks maintain their Rupee Accounts with PNB.
With its presence virtually in all the important centers of the countiy, PNB offers a
wide variety of banking services which include corporate and personal banking,
industrial finance, agricultural finance, financing of trade and international
banking. The huge presence and vast resource base have helped the bank to build
strong links with trade and industiy. At the same time, the bank has been
conscious of its social responsibilities by financing agriculture and allied activities
and small-scale industries.
The bank is committed to maintaining the highest standards of service and will be
covering more offices under this quality movement titled Alliance with Quality.

PROFILE
With its presence virtually in all the important centres of the countiy, Punjab
National Bank offers a wide variety of banking services which include corporate
and personal banking, industrial finance, agricultuial finance, financing of trade
and international banking. Among the clients of the Bank are Indian
conglomerates, medium and small industrial units, exporters, non-resident Indians
and multinational companies. The large presence and vast resource base have
helped the Bank to build strong links with trade and industiy.
Punjab National Bank is serving over 15 crore customers through 4062 branches
and 447 extension counters hugest amongst Nationalized Banks. The Bank was
recently ranked 21st amongst top 500 companies by the leading financial daily,
Economic Times. PNBs attempts at providing best customer service has earned it
9th place among Indias Most Tiusted top 50 service brands in Economic
TimesAC Nielson Survey. PNB is also ranked 36X amongst the top 1000 banks
in the world according to The Banker London.
-

At the same time, the bank has been conscious of its social responsibilities by
financing agriculture and allied activities and small scale industries (SSI).
Considering the importance of small scale industries bank has established 31
specialised branches to finance exclusively such industries.
Strong conespondent bamking relationship which Punjab National Bank maintains
with over 200 leading international bamks all over the world enhances its
capabilities to handle transactions world-\vide. Besides, bank has Rupee Drawing
Anangements with 15 exchange companies in the Gulf and one in Singapore.
Bank is a member of the SWIFT and over 150 branches of the bank are connected
through its computer-based teiminal at Mumbai. with its state-ofart dealing rooms
and well-trained dealers, the bank offers efficient forex dealing operations in
India.
The bank has been focussing on expanding its operations outside India and has
identified some of the emerging economies which offer huge business potential.
Bank has set up representative offices at Almaty: Kazakhistan, Shanghai: China
and in London. Besides, Bank has opened a full fledged Branch in Kabul,

Afghanistan.
Keeping in tune with changing times and to provide its customers more efficient
and speedy service, the Bank has taken major initiative in the field of
computerization. All the Branches of the Bank have been computerized. The
Bank has also launched aggressively the concept of Any Time, Any Where
Banking though the introduction of Centralized Banking Solution (CBS) and
over 2000 offices have aheady been brought under its ambit.
PNB also offers Internet Banking services in the countiy for Corporates as wen as
individuals. Internet Banking services are available through all Branches of the
Bank networked under CBS. Providing 24 hours, 365 days banking right from the
PC of the user, Internet Banking offers world class banking facilities like anytime,
anywhere access to account, complete details of transactions, and statement of

account, online information of deposits, loans overdraft account etc. PNB has
recently introduced Online Payment Facility for railway reservation through
IRCTC Payment Gateway Project and Online Utility Bill Payment Services which
allows Internet Banking account holders to pay their telephone, mobile,
electricity, insurance and other bills anytime from anywhere from their desktop.
Another step taken by PNB in meeting the changing aspirations of its clientele is
the launch of its Debit caid, which is also an ATM card. It enables the card holder
to buy goods and services at over 99270 merchant establishments across the
countly. Besides, the card can be used to withdraw cash at more than 11000
ATMs, where the Maestro logo is displayed, apait from the PNBs over 600
ATMs and tie up arrangements with other Banks.

QUALITY POLICY
To effectively meet customers requirements and endeavor to achieve total
customer satisfaction.
To gain consistent faith and confidence of customers and potential customers
regarding the quality of services rendered.
To puisue excellence through continuous improvement in all areas
distinguish ourselves by the quality of our services.
To achieve
profitability.

operational

efficiency

by

attaining

better

and to

productivity

and

To work and act in such a manner that all services rendered in due course of
banking lead to excellence and improved credibility and image of the Bank.

ORGANISATIONAL STRUCTURE
Bank has its Corporate Office at New Delhi and 25 Zonal Offices which in turn
supervise 4X Regional Offices under which the branches fimction. The delegation
of powers is decenalised upto the branch level to facilitate quick decision making.

BOARD OF DIRECTORS
Sini sc. Gupta
Sini K. Raghuraman
Dr. KN. Rajan
Sini P K. N ayar
Sini Mohan Lal Bagga
Sini AS. Agaiwal
Dr. Harsh Mahajan
Sini Mohanjit Singh
Sini Prakash Agaiwal

Chaiiman & Managing Diiectoi

Executive Diiectoi
RBI Nominee Diiectoi
Officer Employee Diiectoi
Woikmen Employee Diiectoi
Non Executive Diiectoi
Shareholder Diiectoi
Shareholder Diiectoi
Shareholder Diiectoi

CENTRALISED BANKING SOLUTION

Welcome to the new age of banking convenience with PNB.

PNB now brings to you Centralized Banking Solution (CBS). An inter branch
networking and data sharing platform, which makes Anytime Anywhere banking a
reality. With over 1000 branches to be networked in the near thture, the status of
costumers is changing from Customer of the branch to Customer of the bank.
CBS- BENEFITS

TO CUSTOMERS

Instant fimd transfers

Cheques collectionldeposit across cities.
Cheques can be deposited at the center where it is drawn
Interconnected ATMs
Access of accounts through any CBS connected branch
SWIFT remittance facility
Instant generation of statement of accounts
PNB Puident Sweep- Scheme for Saving Fund A/C Holders
PNB Smart Roamer- Scheme for Cunent A/C Holder (Sweep in and Sweep
out facility.
-

At present CBS facility is available in 1229 Service Outlets.

DIFFERENT TYPES OF LOAN PROVIDED BY PNB

CONSLLWE]? LOAN

Q. Who

can avail Consumer Loan?

A. Any Individual with a monthly income of minimum Rs5000/-

Q. What

type of consumer durable can be financed?

A. New consumer durable such as Refrigerator, Television, Air conditioner, Microoven, Cooking Range, Washing Machine, Music System, Furniture, Personal
Computer, etc.

Q. How

the loan i dibured?

A. The amount of loan shall be paid directly to the supplier of goods along with the
margin of the bonower.

Q. What will

be the total loan amount?

A. 90% of the cost of consumer durable, subject to maximum of Rs.l lac. However,
the minimum amount of loan shall be Rs.I0000/-

Q. What i the repayment period?

A. Amount of loan together with Interest shall be repayable maximum in 60 equal
monthly installments.
Q. What

i the rate of Intereil charged?

A. At present Interest rate is 15 % (minj. This is subject to change.

Q. Whether Intereil applicable i at a flat rate or at reducing balances?

A. Interest is charged on reducing balances.
Q. What

formalities are to be completed for availing the facility?

Perfoima Invoice of consumer durable(s) to be purchased.
Proof of residence
Proof of Income
Details of guarantor.

CAI?LOAN

Q Who

can avail Car Loan?

A. Individuals and Business Concerns.

Q Whether

finance i aho available for used cars?

A. Finance is also available for puichase of used cars not older than 3 years.

Q How much loan

can be availed under the scheme?

A For individuals, loan amount shall be 25 times the Net Monthly Salaiy /Income,
subject to maximum of Rs7MO lac or XO% of the cost of the vehicle whichever is
less. In case of business concerns, loan amount can be need based and is not
subject to any ceiling.

Q Whether

the income of the poue i aho taken into account for determining
the amount of loan?
A Yes, income of the spouse can also be taken into account for deteimining the
amount of loan. In such cases, the spouse shall stand a guarantor.

Q What will be the repayment period?

A. Amount of loan together with interest shall be repayable maximum in X4 equal
monthly installments. However, for old car, loan together with interest is to be
repaid maximum in 60 equal monthly installments.
QA.What

the rate of intereil charged?

Q WlieEher inEereE

applicable i haL raLe or aL reducing balance?

A. Interest is charged on reducing balance.

Q WhaL forma1iLie are Lo be compleLed for availing the facility?

A. The following documents ale required to be submitted:
Profoima Invoice of Cai to be puichased.
Proof of residence
Proof of Income
Details of guarantor.

PR OFESSJONAL LOAN

Q. Who

i eligible to get loan under the scheme?

A. The following categories of professionals are eligible to get loan under the
scheme:
Persons aheady practicing 01. new enflants in various professionals, having
licenses issued under Central or State Legislations
Associations of persons engaged in a single profession provided that each
member of such an association is qualified and duly licensed to practice in the
-

profession;

and

The qualified professionals will be required to produce a certified copy of the

license for the record at the bank.

Q. What

i the purpose for which advance i sanctioned?

A. Loans under this scheme may be anted for the purpose of financing puichase
of equipment used by the bonowers, business premises, consunction, making
alterations or renovation of business premises/nursing homes or for working capital
requirements, in their professions.

Q. How many

loans can be availed under this scheme?

A. Amount of loan : Need based on meiits within the overall peimissible limits as
under: Meuo/ Urban SUrbanlRural Area
I. Medical practitioners 100 lac 100 lac
2. Other professionals 100 lac 100 lac
3. Margin: Nil up to Rs15000/-. 25% Above Rs15000j-

What i the rate of Intereil char ed?

Details
Rate Of Intereil (% P.a
U to Rs. 2 Lakh &Workin Ca ital
1115
U tol&2Lakh&TeimLoan
1L75
Upto Rs. 10 Lakh for Medical
1L75
-

Practitioners
Above Rs. 10 Lakh for Medical
Practitioners
Others Working Capital
Others Term Loan

Q. SMiat nih

1175
1315
1375

be the repayment period for the tenu loan?

A. Repayment will be in equal monthly installments within the following
peiiods:- Loans up to RS.50000/- 4X months Loans beyond Rs.50000/- 60
months

Q. Wia is the

procedure for disbursenien of the loan?

A. Payment will be made direct to the suppliers dealers. In case of construction

of the premises, the loan may be disbursed in phases after veriiing the end use in
teims of the plan as also at the spot.

EDUCATIONLOAN

Q. What

are the Eype of education for which education loans are given?

A. Education loans are given for pursuing all types

professional, technical and vocational courses.

of education viz. general,

Q. Which

cot are financed under the scheme?

A. The scheme enables the needy students to meet the following costs for studies in
India as well as abroad: admission fees, books & stationeiy, insunments required
for the course, monthly fees, examination fees, insurance premium for policy on
life of the bonowing student, caution deposit/ building fiind/refimdable deposit
supported by bills/ receipts, expenses like study tours/ project work] thesis etc.
required to complete the course, boarding and lodging expenses, and travel
expenses/ passage money including air fare forjoining the course abroad.

Q. Who

i eligible to get loan under the scheme?

A. The following is the eligibility criteria for getting loan under the scheme:
Indian nationals, in the age group of 16-40 years. For part time computer
courses, applicants in the age group of 16-45 years are eligible.
Students who have scored pass marks in their last qualifying examination and
have secured admission in the courses mentioned above.
The parents/ guardian should have regular source of income to the extent that
they are able to repay the loan in case of need/ unforeseen circumstances.
Employed persons intending to better their prospects can also availlOan for
improving their educational qualifications and! 01. receive training in modern
technology in India/ abroad.

Q. How much loan amount

can I avail?

A. This is co-related to expenses involved in taking up the course and the expected
earnings after qualifying, subject to a maximum of:
For studies in India: Rs. T50 lacs
For studies abroad: RsA500 lacs

Q.

How much loan amount can I avail for pursuing part time computer

coure?
A. In case of part time computer courses, the extent of loan should not exceed Rs.
50,000/ per annum or fee fixed by the particular institution (as per prospectus less
concession, if any), whichever is less.
-

Q. What i the security required by the bank?

A. The following additional secuaity in addition to the personal liability of the
bonower is required:
Loan up to Rs. 100 lacs: Co-obligation of either or both parent(s) or
guardian(s) and the LIC Policy for equivalent to the amount of loan.
Loan above Rs. 100 lacs: Co-obligation of parent(s) or guardian(s) and
Collateral Security or third party guarantee acceptable to the bank equivalent to
100% of the amount of loan.
Loan above Rs. 500 lacs: Co-obligation of parent(s) or guardian(s) and
Collateral Security or third party guarantee acceptable to the bank equivalent to
100% of the amount of loan
Q. What i

AMOUNT

the rate of intereil charged in the loan?

UNDER FLOATING
UNDER FINANCIAL

RATE OF INTEREST
OPTION (% p.a)
1L75

BASKET

Upto Rs. 4 Lacs

1115
Above Rs. 4 Lacs & Upto 1175
1115
Rs. 15 Lacs
The Interest rates are subjected to change from time to time.

Q. What

i the method of application of intereil in the loan?

A. The interest shall be charged at simple rate from the date of disbursement till the
commencement of repayment of loan. Thereafter, compound interest is charged on
reducing balance.

Q. When

does the repayment of loan commence?

A. Repayment Will commence after two years of the completion of studies by the
bonower or one month after his/ her getting employment, whichever is earlier.

Q. What

i the repayment schedule?

A. Principal and interest is repayable in X4 monthly installments.

Is there any ilipulation about ceiling on annual income of parent/

guardian?
A. No, there is no stipulation of ceiling on annual income of the parents/ guardians.

Q.

KRJSHI CARD

Q.

Can I raise loan under this scheme for activities

other than Agriculture?

A. Yes, for other ruial household requirements such as education, consumable
items, medical expenses, etc. up to 25% of the limit or Rs25,ooo/- whichever is
lower.

Q. Do I need minimum qualification to be eligible under the scheme?

A. No.
Q. If I have 5 acre of un irrigated land, am I eligible under the scheme?
A. Yes.
Q.

Can I take the payment from the other branches aho?

A. Yes, but within the same district whereas the illiterate cardholders will avail the
facility from the issuing branch only.

Q. Do I have

to pay any additional fee/charge for withdrawing cash from other

than the iuing branch?

A. Yes, if you withdraw cash from the branch other than the issuing branch a
commission (d2% is charged and the same is deducted from the cash withdrawn.

Q. If I want

to renew my Krihi Card what formalities are required?

A. You should approach the issuing branch one month before the expiiy of the card
with a written request for the same.

Q. Is there any concept of the margin under the scheme?

A. For limits up to Rs. 2,00,000/-, the margin requirements are nil. For limits above
Rs200,000/- up to Rs. 3,00,000/-, margin requirement is 10%.
Q. In case of lo

of card/pabook what are the formalities?

A. Infoim the card issuing branch by quickest means and a new card is re-issued on
payment of nominal charges of Rs200/-.

Q. How

do you work out the eligible limit?

A. The limit is worked out on the basis of your total income from faim as well as
non-faim activities, extent of land holding, acreage and average yield of crops
grown, price realizations etc.

Q. How do I repay

the amounE raised againE the card?

A. Aggregate credits into the account duiing the 12/iS months period as the case
may be, should at least be equal to the maximum outstanding in theaccount. The
cardholder will also have to maintain his/her cash credit account in credit balance
for at least one week once a yeal. However, the consumption loan portion shall be
adjusted within a period of three years. An the repayments.deposits by the
cardholder shall be made at the caidissuing branch only.

ACIIEVE E TS
AD
A ARDS

 Change Management for the year

NASSCOM in partnership With
Times
Iden Peacock Award
CCIs Rural Development Award

Excellence in Corporate
ctors
hr Excellence in Rural Development

hr becoming a nioneer in Public Banks

by Institute of Directors
ed 2nd for 4 consecutive years
2002, 2003, 2004 &

ointly Adjudged by IBA, Finacle &

r excellence in export perfoimance

i. 3 consecutive
ears 200L 2002 & 2003 by Federation
ganization (FIEO)
by the leading Financial Daily The
onomic Times, June
005
C Nielson Survey, The Economic

he Bankers Almanac, Januaiy 2006

heBanker LondonJ

2005

PU JAB
ATIO AL
BA
S
UBSDIARIES

PNB Guts LTD

A Subsidiay of Pun] ab National Bank which was amongst the first ones to get the

license for undertaking activities in the Government Security market, as a primaiy

dealer in 1996. The company received ISO 9002 certification from Br tish Standard
Institution, making it as the first primaiy dealer in India to achieve this certification

for its quality systems and proceduies. This certificate has been anted to the
company as a whole including its corporate and branch offices.

MISSION

BACKGROUND
In the year 1996 Reserve Bank of India introduced the system of Primaiy Dealers
with a view to strengthen the institutional infrastructure of Government Securities
market. Six entities were anted licenses of which PNB Gilts was one. The
Company was established as a wholly owned subsidiay of PUNJAB NATIONAL

BANK with an initial paid up capital of Rs50 crores which is also the minimum
capital requirement for a Prima
Dealer.

600

500

The net-worth of the Company has increased from Rs50 crs to Rs54L33 crs in a
span of S years.
RBI, New Delhi, anted its certificate of regisuation vide its letter dated 10th
Februaiy 199X, to canyon the business of a Non-Banking Finance Company. The
Company decided to expand its capital base & came with an IPO of Rs35 crore
shares at an offer prce of Rs 30/- per share aggregating RsJO5 crore in July :woo.
This increased the paid up capital of the Company to Rs 13101 crores and reduced
the holding of Punjab National Bank to 74A]7%.

OBJECTIVES

The objectives of the Company are inline with objectives laid down by RBI for the
Primay Dealers:
Strengthen the infrastructure in the government securities market in order to
make it vibrant, liquid and broad based.
Ensure the development of underwriting and market making capabilities for
Government Securities.
Improve secondaiy market trading system, which would contribute to price

discoveiy, enhance liquidity and turnover and encourage voluntaiy holding of

Government securities amongst a wider investor base.
Become an effective conduit for conducting open market operations.

Besides the above, the Company has been pioneer in retailing of Government
Securities contributing to a deep and broad-based market. The Marketing
Department specifically caters to select segments viz. Provident Funds, Trusts,
Regional Rural Banks, Co-operative Banks, Corporate & Individuals to create
awareness and encourage healthy investment practices.

PRODUCTS & SERVICES

Being a primaly dealer in the Government Secuiities Market the company

undertakes more than 90% of its operations in Government Securities. The range of
product and services offered by the company includes:
Treasuiy Bills
Central Government Dated Securities
State Government Securities
PSU Bonds
Inter-Corporate Deposits
CSGL accounts
Money market instruments
Merchant Banking
Mutual Fund Distribution

In addition to the above, we also offer advisoiy services to our clients to manage
the government securities portfolio.
The Company has well-defined systems and procedures. The Internal Control &
Management systems are in place and are in accordance with the guidelines issued
By the Regulatory Authorities.
The Company has a lean staff of 3X employees spread over the Counny with 31
employees in the Head Office in New Delhi & rest in our branches at Mumbai,
Chennai, Kolkata, Ahmedabad and Bangalore.
During the years the Company has emerged as a leading Primary Dealer in the
countly. We have to our credits
The first stand alone Primary Dealer to come with an IPO & get listed.
The first PD to achieve ISO 900 1:2000 certification.
The first to obtain a PH rating from CRISIL for its short-teim bonowing
program. At present the rating from CRISIL is for bonowing up to Rs 250 crore.
The company has achieved a turnover of Rs.11646X crores during 2003-2004,
making it one of the largest debt traders in the countly.

fbJOjIJflUOUJjbJj

117

13 vii
9 181101

vii

7V OilY
E[Vf lid

This is a wholly owned subsidiaiy of Punjab National Bank, is engaged in

providing housing loans for purchase, consunction and up adation of a dwelling
unit. The company offers Loans for construction or for purchase of house/flat from
development authorities and also from private builders/ oup housing societies as
well as for renovation/ repairs Lompany also provide finance for construction of
residential projects. Loans to NRIs are also provided for purchase/ consunction of
house/ flat along with a resident/ non-resident co-bonower.

PRODUCTS AND SERVICES

APNA GHAR YOJANA

GHAR SUDHAR YOJANA
LOANAGAINSTPROPERTY
LOAN FOR COMMERCIAL PROPERTY
FUTURE RENTAL SECURITISATION
LINE OF CREDIT FACILITY

APNA GIJARYOJANA
We provide housing finance to individuals tbr consLucdon or tbr
acxiuisidon/ nuahase of house/tiat from develoonrnt authorities such

asDD
A/PUD
etc. andalsofromprivate
builders/goups housing societies. We consider enhancenrnt in loan
ainiunt in the event of escalations in cosL

EHGIBWHY:
a) Individuals in penmnent service or having their owibusiness
(Resident or non -resident).
b) Age of the applicant should not be nvre than 60 years in case
of service class and 65 years in case of businessmin or self

employed;

LOAN AMOuNT:
a)
loan amunt would be Rs.50,000/- and mixinium loan
nunt depends entirely on the repayntnt capacity of the
bo1Toxwr).
b) Actual loan eligibility shall be on the basis of repaynrnt capacity
as detnmined be PNBHFL ialdng into account inconr,
age, qinlification and occupation
c) Incont of bonoxwr( )j co-bonoxwr(s) shall be clubbed together
for calculation of loan eligibility / the level of financein case
ofjoint applirntion

M4RGIN:
The bonoxwrs conthbution shall be minimum 20% of the total cost
of project, including stamp duty and regisiration charges.
T RATFS: (Effective from 1.07.2006)

PERIOD

FLOATING RATE OF
INTEREST(%)

3-YEARLY FIXED
RATE OF INTEREST

1-10 Years
1115Yeais

900

1050

925

1050

1620 Years

950

L50

/0

SECURITY:
Security for the loan is first charged by way of equitable/registered mortgage of the
property to be financed and! or such other collateral securities as may be necessary.
Loans to allottees of flats/houses of development authorities 01. members of co-op.

housin

societies or reouted orivate builders can be considered on the basis of

tripartite agreement andlor interim seculity. With respect to property wider

construction, interim seculity may be required. Collateral/interim security may be
assignment of Life Insuiance Policies, guarantees from sound and solvent
guarantors, pledge of marketable shares and such other investments acceptable to
PNBHF.

LOAN DISBURSEMENT:
For outright purchase of house/flat, the loan amount will be paid in lump-sum to
the vendor at the time of registration after satisiing that the bonower has
paidlprovided for the balance amount. For houses/flats under construction, the loan
amount will be disbursed in stages based on the progress of construction.
Disbursement win be made after the property has been technically appraised and all
legal documentation has been completed. The bonower has to invest his
proportionate share of the cost, prior to disbursement of loan.
The loan can be disbursed either in lump sum or installments according to the
requirement of the development authority/society/ private builder.

LOAN REPAYMENT:
Loan repayment shall noimally be in Equated Monthly Installments (EMI)
comprising of principal and interest over a maximum period of 20 years. The table
below shows the EMI for a loan of Rs. 1,00,000/- at different rates of interest.

05

2076

2088

2101

2113

2125

2138

2150

2162

2175

218

07
10
15
20

1609
1267
1015
900

1622
1281
1030
916

1635
1294
1045
933

1648
1308
1060
949

1661
1322
1075
966

1674
1336
1090
982

1687
1350
1106
999

1700
1364
1121
1016

1713
1378
1137
1033

172
139
115
105C

SPECIAL REPAYMENT PLANS

In deseiving cases, installments may be fixed in incieasing/decieasing order 01. in
lump sum or even linked to Life Insurance Policies, under PNB Housing Finances
special repayment plans like:

Graduated repayment plan

Decreasing repayment plan
LIC linked repayment plan
Balance payment facility

GHAR SUDHAR YOJANA

Under Ghar Sud.har Yojna, we make available housing finance to individuals for
up adation, renovation 01. repair of house/flat. It includes among others, internal
& external repairs, water proofing, roofing, flooring, electrical, woodwork etc.

ELIGIBILITY:
Individuals who are in peimanent service or self employed or have their own
business. Age of the applicant should not be more than 60 years.

LOAN DETAILS:
Loan Amount
Minimum amount of loan is Rs. 50,000. Maximum amount of oan shall not exceed
Rs. 10,00,000. Bonowers minimum contribution will be 25% of the estimated cost
of repairs/renovations. Actual loan amount shall be calculated on the basis of
repayment capacity of the bonower as deteimined by PNBHFL.
INTEREST RATES (With effect from L0T2006)

Upto 15 Years

1LOO

Upto 10 YRS rate of interest is 9 %

SECURITY:
Noimally, the secuiity for the loan shall be first charge by way of
Equitable/Registered mortgage of the property. However, PNB Housing Finance at
its discretion, can sanction a loan on the basis of:
Paii-passulsecond charge in the case of Central/State GovL/Public
Sector/Nationalized Bank employees and other similar bodies or
Other securities such as assiiment of LIC policies (sunender value at least
equivalent to the amount of loan), pledge of marketable shares and such other
investments acceptable to PNBHF. Besides this, personal guarantee from sound
and solvent guarantors may be asked for.

LOAN DISBURSEMENT:
A loan will be disbursed in lump sum 01. in stages (not more than three) based on
the progress of renovationlrepair. Disbursement will be made after the property has

been technically appraised and all legal documentation and other foimalities have
been completed. The bonower has to invest his share of the cost in
pror to
disbursement of the loan. The bonower is expected to complete the
repair/renovation within six months.

flu

REPAYMENT:
Loan repayment shall noimally be in Equated Monthly Installments (EMI)
comprising of principal and interest over a maximum period of 10 years.

8746

8757

8769

8780

X792

XXO4

XX15

XX27

XX39

XX5O

4569

4580

4592 4603

4615

4627

463X

4650

4661

4673

3180

3192

3204 3215

3227

3239

3251

3263

3274

32X6

2489

2501

2513

2525

2537

2549

2561

2573

25X5

2597

2076

2088

6
7
8
9
10

1803
1609
1466
1355
1267

1815
1622
1479
1368
1281

2101
1828
1635
1492
1381
1294

2113
1841
1648
1505
1395
1308

2125
1X53
1661
iSiS
140X
1322

213X
1X66
1674
1531
1422
1336

2150
1X7X
16X7
1545
1436
1350

2162
1X91
1700
1SSX
1449
1367

2175
1904
1713
1571
1463
137X

21X7
1917
1726
1SXS
1477
1392

LOAN AGAINST PROPERTY

We provide loans to individuals against mortgage of their existing residential

immovable property situated in urban/semi-urban/meno centies. Finance would be
made available for personal requirements of bonowers such as education, maniage
of children, family function, foreign navel, medical expenses, firniishing the house,
buying a computer 01. other consumer durables, etc. by mortgaging their existing
immovable property.

ELIGIBILITY:
Any individual having regular source of income can apply for the loan. Age of the
applicant should not be more than 55 years.

LOAN AMOUNT:
Minimum loan amount would be Rs. 50,0001-. Maximum Loan Amount would be
50 % of the market value of the property as certified by PNBHFs approved valuer
OR actual loan eligibility as deteimined on the basis of repayment capacity of the
bonower, whichever is less. In case other eaiting family members are offered as
co-bonowers, their income can also be clubbed with that of the bonower for
computation of eligible loan amount.

INTEREST RATES: (With effect from 1.07.2006)

Interest rate for individuals will be 11.50% and for builders (floating rate) will be
1100%

SECURITY:
We shall require Equitable I Registered Mortgage of property against which loan is
being sought. Guarantee of one/ two persons will be required as per existing
guidelines of the company.

LOAN DISBURSEMENT
The loan would be disbursed directly to the bonower in lump sum through his bank
account. Disbursement will be made after the property has been technically and
legally appraised and legal documentation has been completed.

LOAN REPAYMENT
The loan would be repaid by way of Equated Monthly Installments(EMI5)
consisting of principal and interest within a maximum period of 15 years.
Repayment will commence in the month subsequent to the month in which loan
has been disbursed.

LOAN FOR COMMERCIAL PROPERTY

We provide loans to individuals against mortgage of their existing residential

immovable property situated in uiban.semi-uiban.metro centers. Finance would be
made available for personal requirements of bonowers such as education, maniage
of children, family function, foreign travel, medical expenses, furnishing the house,
buying a computer or other consumer duiables, etc. by mortgaging their existing
immovable property.

ELIGIBILITY:
Any individual having regular soulce of income can apply for the loan, Age of the
applicant should not be more than 55 years.

LOAN AMOUNT:
Minimum loan amount would be Rs. 50,000/-. Maximum Loan Amount would be
50 % of the market value of the property as certified by PNBHFs approved value
OR actual loan eligibility as deteimined on the basis of repayment capacity of the
bonower, whichever is less. In case other earning family members are offered as
co-bonowers, their income can also be clubbed with that of the bonower for
computation of eligible loan amount.

INTEREST RATE: (Vith effect from 1.07.2006) Interest rate both fbi individuals
and builders will be 12.00%.

SECURITY:
We shall require Equitable/Registered Mortgage of property against which loan is
being sought. Guarantee of one.. twu persons vill be required as per existing
guidelines of the company.

LOAN DISBURSEMENT
The loan would be disbursed directly to the bonower in lump sum through his bank
account. Disbuisement will be made after the property has been technically and
legally appraised and legal documentation has been completed.

LOAN REPAYMENT
The loan would be repaid by way of Equated Monthly Installments(EMI5)
consisting of principal and interest within a maximum period of 10 yeals.
Repayment will commence in the month subsequent to the month in which loan
has been disbursed.

FUTURE RENTAL SECURITISATION

For the convenience of ow bonowers, we have started innovative scheme wherein

we provide loan against assured rental receivable for their owned property which
has been let out to reputed/ govt. companies.

ELIGIBILITY:
Property owners having properties at Metro/Urban/Semi-uiban areas who have let
out their properties to Public Sector Undertakings/Government/Semi government
and reputed corporate, banks, financial institutions and multinational companies
can avail loan against thture rental receivable.

LOAN AMOUNT:
Maximum Loan Amount would be SO % of the total thture rent receivable within
the un-expired period of lease deed subject to a maximum per od of 10 years. Loan
amount will be restricted to a maximum of X0% of the market value of the
property.

INTEREST RATE: (With effect from L0T2006) The rate of interest will be
1L50%.

MARGIN:
Minimum contribution of the bonower would be 20% of the thtuie rent receivable
with the loan period.

SECURITY:
We shall require Equitable Registered Mortgage of the property against the rental
of which the loan is being sought.

LOAN DISBURSEMENT
In case of puichase of the property, the loan
bonower, in lump sum 01. as pci demand there
loan would be disbursed in stages (maximum
construction. Disbuisement will be made after
appiaised and all legal documentation has been
made only after bonower contribution has been

LOAN REPAYMENT

would be disbursed directly to the

from. In case of consunction, the
being 3) based on the piogiess of
the property has been technically
completed. Disbuisement would be
invested in fill.

The loan would be repaid by way of Equated Monthly Insti IIment (EM!)
consisting of principal and interest within a maximum peiiod of 10 years.
Repayment wil commence in the month subsequent to the month in which loan
has been disburse
In case of constraction repayment will commence with effect from the mon
subsequent to the month in which last instIIment of loan is released and till th
time Pre-EME Interest will be charged.

LINE OF CREDIT FACILITY

We offer corporate bodies a special facility of Line of Credit (LoC) facility which
facilitates Home Ownership among its employees. The scheme facilitates a
company to build its human resouice by providing financial assistance to its
employees for owning a house. The company can also save the ftnds otherwise
required for building accommodation for their staff Employees when they get an
accommodation oftheir choice would contribute a great deal towards building an
organisation. The loans sanctioned are liberal and disbuisements under this facility
faster. Employees are assisted in eveiy ways and need not take time off from work
for complying with various formalities. A LOC facility granted to a company can
be utilised to give loans to their employees for the purchase, constructionor
extension of residential units anywhere in India. A company can apply in the
prescribed Corporate Application Form available at our offices along with the
information/documents mentioned in the application form. After a LOC is
sanctioned and the offer accepted, disbursement will be made after completion of
legal and technical formalities.

AMOUNT OF LOC
A company can apply for an LOC under both the schemes based on the anticipated
demand for housing loans from its employees within the next one year. When this
LOC is filly utilized, the Company can apply for another LOC as and when
additional demand for housing loans arises.

INDIVIDUAL LOANS UNDER THE LOC

The maximum individual loan per employee is X0% to 90% of the cost of the
dwelling unit subject to a maximum of Rs. 30 lacs. The amount of loan available
for bonowers is the amount recommended by the company and as determined by
PNBHF.

RATE OF INTEREST
The company is requested to confirm oui current applicable rate of interest. Interest
is calculated on the basis of annual rests. PNBHF reserves the rght to vaiy the rate
of interest at any time in response to changes in money market conditions oi if a
levy, tax on inteiest 01 any othei charge oi burden is imposed oi levied by any
Government Authority.

FEES AN]) CHARGES

(a) Processing and administrative fee is 1.5% of the LOC applied for and is payable
at the time of submission of the application.
(b) A commitment charge of 1% pci annum on the undrawn amount of the LOC
sanctioned is payable commencing six months from the date of acceptance of offer.
(c) On prepayment of the loan, in part oi fun, PNBHF might charge an early
redemption charge of 2 % of the amount being prepaid.
LOAN REPAYMENT

The company shall deduct the Equated Monthly Instalments (EMIs) from the
monthly salaiy of each of the employee bonowers and remit a consolidated
cheque/draft of EMIs comprising principal and interest. Pending final disbursement
ofloan, interest on the disbuised portion of the loan caned Pre-EMI interest is
payable eveiy month from the date of each disbursement upto the date of
commencement of EM!. The details on security, disbursement, repayment teims
and commencement of repayment are given under respective types of LOC.

TYPES OF LOC
Our company offers LOC under the following two schemes:
LOC TO

LOC THRU

Under this scheme finds are provided to

the company for onward lending to its
employees.The security for the loan is
mortgage of dwelling units financed
and/or any other security as acceptable
to PNBHF, including bank guarantee.
Since the company is the bonower and
the employees of the company obtain
loans from the company, the LOC is a
direct liability of the company.

Under the scheme loans are sanctioned

to individual employees nominated by
a company with the company
guaranteeing the loans. The security for
the loan is a guarantee from the
company and mortgage of dwelling
units financed. Individual employees
recommended by a company are the
bonowers. Therefore, the company has
a contingent liability to the extent of
the guarantee provided.

LINE OF CREI)IT TO
Loan application can be made by a company which has an approved HBA
scheme and is engaged in any business except in real estate promotion
and development.
a) Period
The terms of the LOC would be subject to the weighted average
repayment terms offered by the company under its housing loan scheme
for employees covered under this facility subject to a maximum term of
15 years.
b) Security
The main seculity is mortgage of the dwelling units financed. Our
company can also ask for a bank guarantee and/ or anyother security as
may be mutually acceptable. The title deeds may be held either by
PNBHF or by the bonower company on behalf of PNBHF.

c) Disbursement
Disbursement will be made to the company on the basis of a statement indicating
peiiodic disbursements of housing loans made.

d) Repay men
A company availing of an LOC would start paying Equated Monthly Instalments
in the month following the month in which final disbursement of the LOC is made
to the company. Pending final disbuisement, the company is required to pay
interest on the disbursed portion of loan, called PreEMI interest and is payable
eveiy month from the date of each disbursement up to the date of commencement
of EMI. In the event of an employees superannuation, resi1ation, discharge from
services or death, the amount of the housing loan outstanding in his account shall
immediately be repaid by the company to PNBHF.

LINES OF CRED1T THRU

As stated in the foregoing paiagraphs, loans will be sanctioned to
individual employees nominated by the company.
(a) Period
The loans availed under this scheme will be repaid in over a maximum period of
20 years or up to the age of retirement of the employees, whichever is earlier.

(b) Securib
The LOC will be secuied by mortgage of the dwelling units financed. The
mortgage will be created by the deposit of the title deeds. The title deeds will be
held by PNBHF. The repayment of the loan will also be guaranteed by the
company. The Corporate Body will therefore have a contingent liability to the
extent of the guarantee provided. The loan aeement shall be executed by the
employee bonower and countersigned by the employer gualanteeing repayment.
PNBHF might ask the employer company to provide any other security and
execute any other documents as required in this behalf.
(c) Disbursements
Disbursements to individuals under this facility will be made on the basis of
the recommendation made by the company.
(d) Rep aymen
The employer shall deduct loan installments from the employees salaiy and
remit to PNBHF on a monthly basis. EMIs for individual employees would
commence from the month following the month in which the loan is fully
disbursed. Pending final disbursement, the individual is required to pay interest
on the disbuised portion of the loan called PreEMI interest which is payable
eveiy month from the date of each disbursement up to date of commencement of
EMI.

RESEAR CI
ETI ODOLOGY

INTRODUCTION

The procedure adopted for conducting the research requires a lot of attention as it
has direct bearing on accuracy, reliability and adequacy of results obtained. It is
due to this reason that research methodology, which we used at the time of
conducting the research, needs to be elaborated upon. Research Methodology is a
way to systematically study & solve the research problems. If a researcher wants to
claim his study as a good study, he must clearly state the methodology adopted in
conducting the research so that it may be judged by the reader whether the
methodology of work done is sound or not.

The research method here inc1ude:1.

2.
3.
4.
5.
6.
7.

Meaning of research
Research problem
Research design
Sampling desii
Data collection method
Data analysis and interpretation
Recommendations

Meaning of Research
Research is defined as a scientific & systematic search for pertinent intbrmation
on a specific topic. Research is an art of scientific investigation. Research is a
systematized effort to gain new knowledge. It is a careflil investigation or inquiiy
especially through search for new facts in any branch of knowledge.
Research is an academic activity and this term should be used in a technical sense.
Research coin prices defining and redefining problems, formulating hypothesis or
suggested solutions; making deductions and reaching conclusions to determine
whether they fit the formulating hypothesis. Research is thus, an original
contribution to the existing stock of knowledge making for this advancement. The
search for knowledge through objective and systematic method of finding solution
to a problem is research.

Rese arch Problem

The first step while conducting research is careflil definition of research problem.

Research design
A research design is the anangement of conditions for collection and analysis of
data in a manner that aims to combine relevance to the research purpose with
economy in procedure. Research design is the conceptual structure within which
research is conducted. It constitutes the blue print for the collection measurement
and analysis of data. Research design includes an outline of what the researcher
will do from writing the hypothesis and its operational implications to the final
analysis of data.

A research design is a framework for the study and used as a guide in collecting
and analyzing the data. It is a strategy specifying which approach will be used for
gathering and analyzing the data. It also includes the time and cost budget since
most studies are done under these two constraints.

Research design can be categorized a:

Exploratoiy research
Descriptive
Diagnostic research
Experimental research

Sampling Design
Sampling is necessay because it is almost impossible to examine the entire parent
population (Le. the entire universe) various factors such as time available, cost,
purpose of study etc make it necessaiy for the researchers to choose a sample. It
should neither be too small nor too big. It should be manageable.

Data Collection Method

After the sample has been taken the type of infoimation to be sought was decided
upon, the next step is to collect the data. As the data collected is to be the base of
what we plan to find out, the relevant care should be taken that the enors in
methods of collection of data involved are minimized. The factors of availability of
time, cost and human involvement come to effect the reliability of the data
collected. Broadly there are two types of data:
Primay data
Secondaiy data
Secondaiy data means the statistics not gathered for the immediate study at hand
but for some other data. It is the data collected by some one for purposes other than
solving the problem being investigated. On the other hand primaly data are
generated in a study specifically designed to accommodate the data needs of the
problem at hand.

ANALYSIS AND INTERPRETATION OF DATA AND

RECOMMENDATIONS

The data collected in the atbresaid manner have been tabulated in condensed foim
to draw the meaningfiil result. The different techniques are adopted to analyze a
data.

All the data and the material is ananged through internal resources and the last part
of the project consist of the conclusions drawn from the report, a brief summaiy
and recommendations and giving the final touch to the reports by stating a
conclusion.

CO PA TIVE
C USTO ER
PREFERE CE
A ALYSIS
10 ELOA
SECTOR

The LiEle of Ehi reporE i COMPARATIVE CUSTOMER PREFERENCE

ANALYSIS IN HOME LOAN SECTOR. The ubjecE wa cIioen Lo gather
informaLion abouL the percepLion of people Eoward home loan / ecEor.

Marketing is essential for each and eveiy organization for its successful operation.
It forms the basis of all other functions.

Marketing is human activity directed at satisiing needs and wants through

exchange processes.

Therefore marketing is a social and managerial process by which individuals and

groups obtain what they need and want through creating, offering and exchanging
products of value with others is an act or operation or service by which original
project and the final consumers ale linked together in between these two points i.e.
producer and consumer. Hence eveiy activity facilitating the movement of goods
and services, including market and marketing research e covered under the term
marketing.

Marketing of a product involves a variety of activities of which selling is merely

one of them.

This project provided the important data regarding the demand and awareness of
ICICI Banking home loan sector.

SAMPLE SELECTION
The universe of the study as mentioned below in scope of the project is kept to the
people in Delhi city.

The sample size was chosen to be 100.

Sample was chosen based on Convenience method of sampling but all care was
taken to make it more representative by including people of different occupation.

SCOPE OF THE STUDY

The present study was conducted by the researcher in Delhi covering some main
and popular markets of Delhi because of consflaints of time and money study could
not be extended to other cities. As Delhi being a popular and among the good cities
of India is a good market of financial products & also here customers of different
classes like business segment, service segment, and professional segment are in
excess. Since the report aims at finding the potential for financial products at Delhi
itself taking into consideration certain limits and problems, the area was chosen on
the basis of coverage of product no. of respondents.

DELHI MARKET SEGMENT

The market of Delhi mainly compr ses of the rural & urban people with population
of around 15 million. The literacy rate is fairly high and there are around 65%
males & 35% females.
This data clearly indicates the emergency of a middle class at Delhi. As is
elsewhere, this class is the harbors of modern facilities. Apait from other
contribution, it is this class for its money. These demands exhibits a vigilant
customer & financial products have been on their toes to return them to pay the
least if not attract the other ones.
Besides Delhi also boasts of a large financial market. It has an upcoming phaimacy
distribution network & lots of Govt. institutions. There is increasing use of Cybei
Cafe Internet & cable connection. The market size of the city is around 2 lacks, a
significant chunk of which is occupied by the upcoming middle classes.
Besides, there is good number of industries.
Apart from this, there are many management and engineering coneges and
universities. The much roaming growth of such institutions shows the presence of
many high nets worth individual is Delhi.

For the puipose of the study the respondents were selected from all corners oil
Delhi minIy popular colonies and for gathering infonnation about the trends
demands & brands available in finpncial products.
The data was collected through questionnaires. The question consisted of 10
questions along with the infoimation regarding the occupation of the respondent.
The number of respondents were kept to 100. The graphs of all the findings
question wise are given below along with the tables of the data collected.

The quecthin nicefindingv aleeprecnskdnal

AWARENESS ABOUT HOME LOANS

YES
NO

Awarene about home 1oan

Yes

Percenta e
92

No

INTERPRETATI

The above Pie chart depicts that 92% of total sample size is aware about the home
loans and only X% are unaware.

EASE OF GETTING HOME LOAN

El

Ease

Of Gettin Home Loan

Yes
No

Percenta e
51
49

INTERPRETATION

51% of the sample size finds easy to get the home loan while 49% finds it difficult
The ratio is more or less same.

PREFERENCE OF TAKING HOME LOAN

Preference of [akin Home Loan

Percen ta e

Yes
No

76
24

INTERPRETATION
The above aph depicts that maximum percentage of the sample size prefers to go
for home loan.

LOAN RECEIVED

Loan Recieved

Percenta e

Yes
No

67
33

INTERPRETATION

It has been found from the aph that 67% of the sample size has gone for the
home loan.

BANK PREFERENCE

PREFERENCE OF BANK

ICICI
PNBHF
LICHF
HDFC
OTHERS

PERCENTAGE

36
lx
10
35
1

INTERPRETATION
The above graph depicts that oniy iS % of the sample size has prefened to take
home loan from PNB and maximum percentage of the sample size prefened to take
home loan either from ICICI 01. HDFC and veiy few that is only one percent has
the preference of othei financial institutes.

PROVISION OF OPTIMAL/ECONOMICAL INTEREST RATE

PROVI

Provision Of Optimal/Economical
Intereil Rate

ICICI
PNBHF
LICHF
HDFC
OTHERS

Percentage

32
24
13
27

INTERPRETATION
The above graph shows that according to the 32 percentage of total sample size,

ICICI provides the optimal/economical interest rate. The next preference is given
to HDFC and PNBHFL has received the third preference for providing the optimal
interest rate. And only 13 percent of the sample prefened LICHF.

SUITABLE EM!

Preference of bank in case of

uitabi1i
of EMI

ICICI
PNBHF
LICHF
HDFC
OTHERS

Percentage

32
24
13
27

INTERPRETATION

The above graph shows that according to the 32 percentage of total sample size,
ICICI provides suitable EML The next preference is given to HDFC and PNBHFL
has received the third preference for providing suitable EML And only 13 percent
of the sample prefened LICHF.

LONG TERM PREFERENCE

Lon Term Preference

ICICI
PNBHF
LICHF
HDFC
OTHERS

Percenta e
27

24
25
20
4

INTERPRETATION
The above pie chart depicts that maximum number of people has prefened ICICI
bank for long teim loans and only 24 percent of sample size has given preference
to PNBHF and only 4% has given preference to other financial institutes.

CUSTOMER FRIENDLINESS

Customer Friendliness
ICICI
PNBHF
LICHF
HDFC
OTHERS

Percenta e
26
lx
24
17
15

INTERPRETATION

The above pie chart shows that maximum number of people finds ICICI more
customer friendly than other banks.

PROMPT SERVICE

BANK I

ICICI
PNBHF
LICHF
HDFC
OTHERS

Prom t Service

Percenta e

45
13
23
14
5

INTERPRETATION

ICICI bank has found

to be quickest in sanctioning the loan among

other financial institutes by maximum number of people.

POSITIVE ASPECT FOR SUCCESS OF PNBHF

POSITIVE ASPECT FOR

SUCCESS OF PNBHF
SALCS PROMOTION &
BRAND
CUSTOMCR FRICNDLY
HOMC LOAN SCHCMCS
CASY SANCTIONING OF
THC HOMC LOANS
LOWCR INTCRCST RATCS
LOWCR CMrS

Positive Aspect For Success Of

PNBHF
SALES PROMOTION & BRAND
Customer Friendly Home Loan
Schemes
Easy Sanctioning Of The Home
Loans
Lower Interest Rates
Lower Emis

Percentage
25
35
10
15
15

INTERPRETATION

The above graph depicts that customer friendly home loan schemes are the main
aspect for the success of PNBHF.

LAGGING AREA

La in Area
Confined Oni In Urban Areas
Non Effective Advertisements
Dela In Processin

Percenta e
12
78
10

INTERPRETATION

The above Pie chart shows that Non effective Advertisement is the lagging area of
PNBHFL in comparison to other home loan banks.

CO CL SlO
AD
SOT
A ALYSIS
AD
LI ITATIO S

SWOT ANALYSIS

STRENGTHS
Brand name of Pun] ab National Bank (PNB) is established over the years.
Single window clearance a single employee provides wide variety of
facilities to the bonower, minimizing the hassle of wastage of time.
Appraisal techniques are used.
Specialized softwares are big assets.
There is no penalty for prepayment from bonowers own service.
-

WEAKNESSES
High interest rates as compared to other housing finance institutions.
Top management takes huge amount of time to approve high value
seeking loan bonowers. No publicity.
No marketing managers work, only through dsas (direct sales agent).

People are not aware of wide variety of schemes offered by the company;
tend to think the company as only providing home loans.
There is the shortage of staff at almost all branches which does not ensure
easy addressable of the customers problems.
Delegation of authority and responsibility is not proper.

OFF OR TUNITIES
Special rates of interest are offered during exhibitions.
Special rates of interest can be introduced for employees of PSUS &
reputed national or multinational companies
Product life cycle is to be reviewed.
The growing category of the builders ensure that good, high value
& qualitative projects, providing them home loans with the new and
innovative schemes can lead to over all development of the company.

THREATS
The competition in market is veiy high due to the private players.
The rates of interest of other players are quite low.
Innovative schemes with home loan from other players.
The processing process is quite slow which leads to low housing finance.

A fraud case involving 32 cases worth Rs.3 crores at the one branch of
PNB Housing Finance Limited in year 2002 leads decreasing brand name.

LIMITATIONS OF THE STUDY

There are always present some limitations under which researcher has to work.
Here following are some limitations under researcher had to work:

SAMPLE SIZE
The sample size surveyed was limited over 100 respondents which not may be
filly representative of the universe. A large sample size could not be taken due tu
time & cost consflaints.

NON- COVERAGE OF CERTAINASPECTS

There is wide range of perimeters affecting consumer behavior but only a few
questions relating to those deteiminants have been endorsed in schedule.

TIME CONSTRAINT
We had limited time for conducting this survey report. In this short period of all
the respondents had to be personally contacted for the purpose of survey & then
their responses had to be analysed So, some shoitfalls may be present.
-

LIMITATIONS OF SAMPLING TECHNIQUES

Limitations & biasness of convenience & judgment sampling used in the present
study to some extent.

MONEY
Available with the researcher also imposed a limitation on the comprehensive of
this research.

APPE DI

QUESTIONNAIRE

DEAR RESPONDANT,
AS A PART OF BBA (B&I) CURRICULUM, I AM CONDUCTING A STUDY
ON COMPARATIVE CUSTOMER PREFERENCE IN PUBLIC AND PRIVATE
SECTOR: HOME LOANS. YOU ARE REQUESTED TO PLEASE
COOPERATE BY PROVIDING RELEVANT INFORMATION. I ASSURE YOU
THAT INFORMATION WILL KEPT CONFIDENTIAL AND WILL BE USED
FOR STUDY PURPOSE ONLY.

THANK YOU
YOURS FAITHFULLY
PRJYANKA GUPTA

Q.1 DO YOU FIND EASY TO GET HOME LOANS?

YES
NO

Q.2 DO YOU PREFER TO GO FORA HOME LOAN?

YES
NO

Q-3 HAVE U EVER TAKEN A HOME LOAN?

IF YES FROM WHERE

YES
NO

Q.4 RANKS THE FOLLOWING BANKS, DEALING IN HOME LOANS

ACCORDING TO YOUR PREFERENCES.

ICIC.I
PUNJAB NATIONAL BANK HOUSING FINANCE LIMITED. (PNBHFL)
HDFC
LIFE INSURANCE IN INDIA HOSING FINANCE
OTHERS

Q.5 ACCORDING TO YOU WHICH OF THE FOLLOWING BANKS PROVIDES

OPTIMAL /ECONOMICAL INTEREST RATE?

ICICI PNBHFL
HDFC
LICHJ
OTHERS

Q.6 IN THE CASE OF SUITABILITY OF EMI, WHICH BANK WOULD YOU

PREFER?

ICICI
PNBHFL
HDFC
LICHF
OTHERS

Q-7 IN CASE OF LONG TERM WHICH BANK WOULD YOU PREFER?

ICICI
PNBHFL
HDFC
LICHF
OTHERS

Q.8 IN CASE OF CUSTOMER FRIENDLINESS, WHICH BANK WOULD YOU

PREFER?

ICICI
PNBHFL
HDFC
LICHF
OTHERS

Q.9 IN TERMS OF SANCTIONING OF THE HOME LOAN, ACCORDING TO YOU

WHICH BANK IS QUICKER?

ICICI
PNBHFL
HDFC
LICHF
OTHERS

Q.1O ACCORDING TO YOU, WHICH POSITIVE ASPECT I PLAYING MORE

SIGNIFICANT ROLE IN SUCCESS OFPNBHFL?

SALES PROMOTION & BRAND

CUSTOMER FRIENDLY HOME LOANS SCHEMES
LOWER INTEREST RATES
LOWER EMIS
EASY SANCTIONING OF THE HOME LOAN

Qil IN COMPARISON TO OTHER HOME LOAN BANK ACCORDING TO YOU

PNBHFL IS LAGGING IN WHICH PARTICULAR AREA

CONFINED ONLY URBAN AREAS

UNEFFECTIVE ADVERTISEMENT
DELAY IN PROCESSING

BIBLIOGRAPHY