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A PRO1ECT REPORT

ON
HOME LOAN COMPARISON AND CREDIT RATING
AT
Karur Vysya Bank Ltd
SUBMITTED TO
UNIVERSITY OF PUNE
BY RUCHITA
SINGH MBA
(FINANCE) (2004-
2006)
VISHWAKARMA INSTITUTE OF MANAGEMENT
PUNE
TABLE OF CONTENTS
S.NO. TOPIC PAGE NO.
1. Executive Summary 1
2. Objective of the roject 2
!. "om#any rofi$e !%&
& 'ntroduction to the to#ic (ome Loan
and "ustomer )atin*
+%1,
+. (ome Loan Scheme of -he K.)/) V0S0.
B.1K Ltd.
12%13
,. (ome Loan Scheme of (45" Bank Ltd.6 '"'"' Bank Ltd.6
State Bank Of 'ndia6 Karur Vysya Bank Ltd6 Karnataka 27%!!
Bank Ltd. and South 'ndian. Bank Ltd.
2. S8O- .na$ysis of K.)/) V0S0. B.1K Ltd. !&%!+
9. "ritica$ .na$ysis !,%+7
3. "ustomer )atin* +1%+9
17. )ecommendation +3
11. "onc$usion ,7
12. Bib$io*ra#hy ,1
.
Executive Summary
EXECUTIVE SUMMARY
-hese days housin* finance is in the $ime$i*ht o$d #rivate sector banks6 ne: #rivate
sector banks and even #ub$ic sector banks have become extreme$y active in this fie$d6
there is no doubt :hat so ever that there is tremendous shorta*e of housin* in our
country. 8ith the interest rates on housin* $oans at historica$ $o: a$on* :ith sim#$ified
#rocedure of obtainin* it. ;any #eo#$e are :i$$in* to take home $oans today. 8ith the
ne: thrust in
the retai$ se*ment by the bankin* community on the :ho$e6 this sector has
become attractive both for the $enders and borro:ers.
"ustomers )atin* is carried by banks before sanctionin* $oan to customers. "ustomer
)atin* ref$ects the borro:er s accountabi$ity6 ex#ected ca#abi$ity and inc$ination to
#ay interest and #rinci#a$ in a time$y manner.
'n this #roject ' have studied in detai$ about (ome Loan scheme of banks and
then com#ared them :ith each other. ' have a$so studied in detai$ about customer
ratin* undertaken by -he /nited 8estern Bank Ltd.
.t the end ' have *iven su**estion to -he /nited 8estern Bank Ltd re*ardin* chan*es
:hich can be made in the (ome Loan scheme and activities :hich can be undertaken
to #romote this #roduct.
Objective Of -he roject
OB1ECTIVE OF THE PRO1ECT
-o understand the term (ome Loan.
-o understand the im#ortant factors re$ated to (ome Loan Scheme.
-o study the (ome Loan Scheme of -he Karur Vysya Bank Ltd a$on*
:ith other $eadin* banks.
-o study the "ustomer )atin* of -he Karur Vysya Bank Ltd. :ith reference
to
(ome Loan.
-o com#are the (ome Loan Scheme of $eadin* banks in 'ndia.
.
'ntroduction -o -he -o#ic
HOUSING FINANCE
Of $ate6 housin* finance has not on$y become #o#u$ar6 but the #rocedure for obtainin* a
$oan has become so sim#$ified that housin* $oans are easi$y avai$ab$e. -his may be
attributed to the chan*e in the housin* #o$icy of both the "entra$ and State *overnments.
. redeemin* feature of 'ndian housin* finance is the recent entry of commercia$ bankin*
in a bi* :ay.
(ousin* and $and deve$o#ment occu#y a #ecu$iar #osition in 'ndia so far as the state and
centra$ *overnment are concerned. Both the *overnments have the #o:er to make
enactments on the subject of housin* and $and. .s a resu$t6 the housin* #o$icy in 'ndia
has been :ide and varied.
HOUSING
(ousin* means the houses or conditions that #eo#$e $ive in .
HOUSING FINANCE
. set of a$$ financia$ arran*ements hat are made avai$ab$e by (ousin* 5inance
"om#anies<(5"s= to meet the re>uirements of housin* is ca$$ed housin* finance .
HOUSING FINANCE IN INDIA-GROWTH FACTOR
(ousin* finance has received a boost throu*h throu*h a combination of *ro:in* demand
and risin* affordabi$ity .:hi$e the demand for housin* has a$:ays been there and :i$$ be
for a $on* time to come6 its increase affordabi$ity has been the key to *ro:th. .ccordin*
to (45"6 every ru#ee s#ent on housin* $eads to 29 #aise increase in ?4.
BUDGETARY SUPPORT
-ax benefits6 a $o: interest rate re*ime and hi*h sa$ary $eve$s amon* certain sections
are chief$y res#onsib$e for fue$$in* fast *ro:th in the housin* financia$ servicin*
sector. -ax benefit for housin* finance contributes to housin* deve$o#ment. 5or this
#ur#ose )B' maintains a soft interest re*ime. -he bank rate of interest is constant$y
bein* s$ashed so that it acts as a stimu$ant for housin* demand.
Simi$ar$y6 a shar# increase in si@e of #ay #ackets has #$ayed an im#ortant ro$e in
makin* a house affordab$e. )e*ard$ess of sa$ary $eve$s6 if the cost of a house comes
do:n it :ou$d #e# u# the demand for housin* finance. -he is reason to be$ieve that
:e are :itnessin* a *radua$ movement to:ards $oosenin* the restrictions that
increase the cost of a house.
NEW DYNAMICS
.n im#ortant deve$o#ment in the housin* finance business has been the entry of ne:
#$ayers. -he re$ative$y $o: risk in a housin* #ortfo$io has s#urred a ne: entrance in
the $ast fe: years. .r*uab$y6 the most si*nificant entrant has been '"'"' (ome
5inance.
-he entry of ne: #$ayers and the conse>uent increase in com#etition has been
fo$$o:ed by an interestin* trend. -he interest rate of most housin* finance com#anies
<(5"= move in unison6 there by su**estin* that interest rate is not $ike$y to be a
com#etitive too$. -he hi*h $eve$ of com#etition has made it im#ossib$e for an (5"6
:ith branches across the country6 to char*e an interest rate hi*her than the
com#etition. "ommercia$ banks are an exce#tion to the ru$e6 in the sense that they
a$:ays char*e $o:er than the com#etition.
DISTINGUISHING SERVICE
"om#anies are tryin* to distin*uish themse$ves throu*h a difference in service
standards. 'ndustry officia$s em#hasi@e that service >ua$ity is the key to com#etitive
stren*th .. the moment6 there seems to be $itt$e to chose from amon* the to# housin*
com#anies :hen it comes to service ..ssumin* a$most simi$ar service standards
6future *ro:th is $ike$y to be decided by access to resources. . stron* brand name
such as (45" Bank Ltd6 '"'"' Bank Ltd6 and L'" is $ike$y to command access to a
$ot more resources and customers. -herefore the bi**er #$ayers are $ike$y to be more
dominant #$ayers.
HOUSING FINANCE ASSISTANCE-FACTORS
(ousin* finance com#anies consider the fo$$o:in* factors before makin* any financia$
assistance for housin*A
Loan amount
-enure
.dministrative and #rocessin* cost
re#ayment char*es
Services
Va$ue addition
Sources of finance $ike (5" s and banks
E;' ca$cu$ation methods
. THE LOAN AMOUNT
-he amount of $oan that any (5" decides to #rovide to a $oan seeker de#ends on the
fo$$o:in* variab$esA
"ustomers re#ayment ca#acity
)ate of interest char*ed
-erm of $oan
)e#ayment is done throu*h E;' 6 :hich inc$udes #rinci#$e and the interest . .s a ru$e 6
an (5" fixes the E;' bet:een !7 B&7 #ercent of the customer s *ross month$y income6
or +7 #ercent of the net month$y income.
LOAN COST
-he effective cost of the $oan de#ends on the ty#e of method used by banks or finance
com#anies. Based on the method6 the #rinci#a$ com#onent6 :hich is #aid month$y6 is
deducted from the outstandin* #rinci#a$ amount. -he t:o methods6 :hich banks and
finance com#anies *enera$$y fo$$o: areA
Monthly ret yte!
/nder this system6 the #rinci#a$ amount is deducted every month from the outstandin*
amount6 and the interest for the fo$$o:in* month is ca$cu$ated on the outstandin*
#rinci#a$.
Loan .mount
<)s.=
-enure
<0ears=
'nterest
<ercenta*e=
E;'
<)s.=
-ota$ ayment
<)s.=
16776777 + 1! 2622+ 16!,6+77
16776777 17 1! 16&3! 162361,7
16776777 1+ 1! 162,+ 26226277
Ann"#l ret yte!
/nder this system6 a$thou*h the #rinci#a$ amount is #aid every month6 it is accounted
on$y at the end of the year.
-his is i$$ustrated as fo$$o:sA
Loan .mount
<)s.=
-enure
<0ears=
'nterest
<ercenta*e=
E;'
<)s.=
-ota$ ayment
<)s.=
16776777 + 1! 26!27 16&26277
16776777 17 1! 16+!, 169&6!27
16776777 1+ 1! 16237 26!26277
-he above exam#$e i$$ustrates that for the same amount and for same rate of interest6 the
amount of E;' varies :ith the ty#e of method used.
FI$ED AND FLOATING RATES
"ustomers shou$d check :hether the rates offered are fixed or f$oatin* <varies :ith L)=.
5$oatin* rates are better in a fa$$in* rate scenario6 but ex#ensive in an increasin* rate
scenario. -he borro:er shou$d check :hether it is viab$e to shift the $oan from fixed rate
to f$oatin* rate in a decreasin* rate scenario by carryin* out cost benefit ana$ysis.
PREPAYMENT CHARGES
-his is an im#ortant factor to be considered6 es#ecia$$y in situations :here the abi$ity to
re#ay the $oan matters. -here are certain (5"s :hich char*es #re#ayment6 in case the
$oan is re#aid before schedu$e. -his #ushes u# the coat of the fund of the borro:er.
Borro:ers :ho are desirous of re#ayin* ahead of the schedu$e shou$d a##roach (5"s
:hich do not have a #re#ayment char*e.
VALUE ADDITION
-he va$ue addition inc$udes su##$ementary services that ("5s #rovide6 such as fast
disbursa$s of $oan6 $e*a$ services6 meetin* :ith brokers6 bui$ders and so on.
-hese days (ousin* 5inance is in the $ime$i*ht. 1ot $on* a*o the (ousin* 5inance meant
(45". 't is no more so. Virtua$$y a$$ banks $ed by 1e: rivate Sector Banks and even
ub$ic sector Banks have become extreme$y active in this fie$d. -here is no doubt
:hatsoever that there is tremendous shorta*e of housin* in our country. 8ith the interest
rates on housin* $oans at historica$ $o:6 many #eo#$e are :i$$in* to take $oans today. -he
banks on the other hand are f$ushed :ith funds due to $ess off take of credit by the
cor#orate sector6 due to the recessionary conditions #revai$in* for the #ast fe: years.
Second$y the rate of defau$t in this sector is #retty $o:6 makin* these $oans very attractive
for the banks. 8ith the ne: thrust in the retai$ se*ment by the bankin* community on the
:ho$e6 this sector has become attractive both for the $enders and the borro:ers. 8hat has
a$so he$#ed is that the rea$ estate rates seem to have stabi$i@ed.
-:o acts name$y the /rban Land "ei$in* .ct and the )ent "ontro$ .ct has a *reat
im#act on this sector.
-he /L"). :as enacted in 132, :ith the objective to make more $and avai$ab$e for the
construction of houses. -his :as sou*ht to be achieved by #reventin* concentration of
urban #ro#erty in the hands of fe:. But in fact this $e*is$ation ended u# in chokin* u# the
$and su##$y. .ccordin* to the ;inistry of /rban .ffairs out of the tota$ sur#$us $and of
26276,2& hector identified6 on$y 136777 hectors have been taken #ossession of by the
various state *overnments. -his has $ed to a scarcity of affordab$e $and for residentia$
construction. )ecent$y the "entra$ *overnment has re#ea$ed this act and has advised the
state *overnments to a$so do the same. (o:ever a$$ state *overnments have not acted on
this as yet.
-he )ent "ontro$ .ct a$so had a simi$ar adverse im#act on the housin* industry. -his $a:
favors the tenant6 and this discoura*es investment in housin* sector for $ettin* the
#ro#erty on rent or $ease. /nder this act the o:ner runs the risk of the #ro#erty bein*
taken over by the tenant at some sta*e. Some states have recent$y amended their )ent
"ontro$ .cts6 but a $ot sti$$ needs to be done. /n$ess the investor *ets market re$ated
returns on his investments in this sector and un$ess he has the ri*ht to re#ossess the
#ro#erty from the tenant6 the investor is not $ike$y to make investments in this sector.
(osin* finance is offered by many s#ecia$i@ed (ousin* 5inance "om#anies a##roved by
the re*u$ator 1ationa$ (ousin* Bank6 a subsidiary of the )eserve Bank of 'ndia. 't is a$so
offered by #ub$ic and #rivate sector banks a$on* :ith many co%o#erative banks.
-he 1(B s#ecifies various norms to be fo$$o:ed by the (5"s <(ousin* 5inance
"om#anies= and re*u$ates the industry. 't s#ecifies the interest rates to be fo$$o:ed in
$endin* and borro:in*6 income reco*nition and #rudentia$ norms6 borro:in* $imits and
audit to the hosin* finance com#anies. 't #rovides refinance faci$ity to the (5"s and
faci$itates #romotion of these com#anies on the s#ecified $ines.
Objectives of NHB:
1. -o #romote6 estab$ish6 su##ort or aid in the #romotion6 estab$ishment and su##ort
of housin* finance institutions.
2. -o make $oans6 advances or render any other form of financia$ assistance
:hatsoever to housin* finance institutions6 schedu$ed banks6 and to any authority
estab$ished under any centra$Cstate en*a*ed in s$um c$earance.
!. -o subscribe to or #urchase stocks share bonds debentures and securities of every
other descri#tion.
&. -o *uarantee the financia$ ob$i*ations of these institutions and under:rite their
issues of securities.
CUSTOMER RATING
-he main objective of this is to assess the a##$icants sustained re#ayment ca#acity over
the #eriod. -he main #oints that are considered areA
'ncome
.*e
.cademic back*round and Em#$oyment stabi$ity
5ami$y Back*round
.ssets and Liabi$ities
Servicin* record in res#ect of other institutiona$ borro:in*s
Savin* history and ca#acity
1umber of de#endents
'ncome and ex#enditure #attern
Documents Required for Scrutiny:
Salaried ClassA
Sa$ary certificate
"o#y of ration cardCe$ectricity bi$$
)ent recei#t if a##$icab$e.
For Self EmployedA
A brief introduction to business/profession
Ba$ance Sheet and rofit and Loss account6 du$y certified by a chartered
accountant.
'ncome tax C :ea$th tax return for the #ast three years.
"o#ies of cha$$ans of advance tax.
.ssessment orders.
Sho# and Estab$ishment .ct certificate of re*istration.
)ation card C E$ectricity bi$$ C )ent recei#t <if a##$icab$e=
Legal AppraisalA .fter "ustomer )atin* is done6 $e*a$ a##raisa$ is done :herein a$$
other documents $ike ori*ina$ tit$e deeds6 revenue recei#ts6 encumbrance <search=
certificates for the #ast !7 years are verified by a $a:yer to confirm that the :ithho$der
can create an e>uitab$e mort*a*e in favor of the (5" by sim#$e de#osit of tit$e deeds.
Technical AppraisalA -he -echnica$ officer :i$$ verify the ori*ina$ documents and
counter check a$$ the furnished information. 5o$$o:in* documents are *enera$$y re>uiredA
Layout $an
.##roved $an
1o%encumbrance certificate
"$earance under /rban Land cei$in* .ct
"ommencement certificate
. detai$ estimate of cost of construction.
EXPLANATION OF TERMS
EMI
E;' <E>uated ;onth$y 'nsta$$ment= is the amount #ayab$e to the $endin* institution every
month6 ti$$ the $oan is #aid back in fu$$. 't consists of a #ortion of the interest as :e$$ as
the #rinci#a$.
EMI calculation
E;' 5ormu$aA $ x r D<1Er= n C <1Er= n%1F x 1C12
$ G $oan amount
r G rate of interest
n G term of the $oan
Eligibility conditions for a Home Loan
-o >ua$ify for a home $oan6 most of the $endin* institutions in 'ndia re>uire you to beA
a= .n 'ndian resident or 1)'
b= .bove 21 years of a*e at the commencement of the $oan
c= Be$o: ,+ :hen the $oan matures
d= Either sa$aried or se$f em#$oyed
The interest rates offered for Home Loans. (Daily Reducing, Monthly Reducing and
Yearly Reducing)
'nterest rates are different from institution to institution and *enera$$y ran*e from about
2.2+H to around 17.2+ H. -he interest on home $oans in 'ndia is usua$$y ca$cu$ated either
on month$y reducin* or year$y reducin* ba$ance. 'n some cases6 dai$y reducin* basis is
a$so ado#ted.
Ann"#l re%"&'n(
'n this system6 the #rinci#a$6 for :hich you #ay interest6 reduces at the end of the year.
-hus you continue to #ay interest on a certain #ortion of the #rinci#a$ :hich you have
actua$$y #aid back to the $ender. -his means the E;' for the month$y reducin* system is
effective$y $ess than the annua$ reducin* system.
Monthly re%"&'n(
'n this system6 the #rinci#a$6 for :hich you #ay interest6 reduces every month as you #ay
your E;'.
D#'ly Re%"&'n(
'n this system6 the #rinci#a$6 for :hich you #ay interest6 reduces from the day you #ay
your E;'. E;' in the dai$y reducin* system is $ess than the month$y reducin* system.
Fixed rate of interest
Some institutions have a fixed rate of interest6 :hich means the rate of interest remains
unchan*ed for the entire duration of the $oan. -his means you do not benefit6 even if rates
of interest dro# in the market.
Floating rate of interest
-his is the rate of interest that f$uctuates accordin* to the market $endin* rate. -his means
you stand the risk of #ayin* more than you bud*eted for in case the $endin* rate *oes u#.
The other costs that usually accompany a Home Loan
(ome $oans are usua$$y accom#anied by the fo$$o:in* extra costsA
Processing ChargeA 't s a fee #ayab$e to the $ender on a##$yin* for a $oan. 't is
either a fixed amount not $inked to the $oan or may a$so be a #ercenta*e of the
$oan amount. -he $oan amount re>uired by you cannot be $ess than the #rocessin*
fee.
Pre-payment PenaltiesA 8hen a $oan is #aid back before the end of the a*reed
duration6 a #ena$ty is char*ed by some banksCcom#anies6 :hich is usua$$y
bet:een 1H and 2H of the amount bein* #re%#aid.
Commitment FeesA Some institutions $evy a commitment fee in case the $oan is
not avai$ed of :ithin a sti#u$ated #eriod of time after it is #rocessed and
sanctioned.
Miscellaneous CostsA 't is >uite #ossib$e that some $enders may $evy a
documentation or consu$tant char*es.
The repayment period
)e#ayment #eriod is the #eriod durin* :hich $oan is to be re#ayed.)e#ayment o#tions
ran*e *enera$$y from + to 27 years.
Loan amount /Quantum Of Loan
/sua$$y6 most banks and financia$ institutions *ive u# to a maximum of 9+H of the cost
of the house. -he 1+H6 sometimes ca$$ed seed money 6 :i$$ have to be #rovided by the
$oan a##$icant. -he amount6 for :hich the a##$icant is e$i*ib$e6 is determined by the a*e6
income6 number of de#endents6 month$y out*oin* and re#ayment ca#acity. -his varies
from case to case.
Securities required for home loans
'n most cases6 the #ro#erty to be #urchased itse$f becomes the security and is mort*a*ed
to the $endin* institution ti$$ the entire $oan is re#aid. Some institutions may ask for
additiona$ security such as $ife insurance #o$icies6 54 recei#ts and share or savin*s
certificates.
Guarantor to get a Home Loan
Some institutions ask for 1 or 2 *uarantors6 others re>uire no *uarantor at a$$.
TAX BENEFITS OF HOME LOAN
Both #rinci#a$ as :e$$ as interest of home $oans attract tax benefits. 8ith effect from 1st
.#ri$ 277+ <i.e. assessment year 277+%72= under section 97" of the 'ncome -ax .ct
13,+A
rinci#a$ amount of re#ayment of $oan a$on* :ith other savin*s such as 56 56 Life
'nsurance remium etc u# to a maximum of )s 16 776777C% :i$$ be e$i*ib$e for deduction
from *ross income.
'nterest #aid on $oan after com#$etion of construction :i$$ be deductib$e from income
from #ro#erty
a. 5or se$f occu#ied 'ncome :i$$ be treated as ni$ and interest #ayment :i$$ be
treated as minus income :hich :i$$ be adjusted a*ainst other income.
b. 5or renta$ #ro#erty 't :i$$ be adjusted a*ainst renta$ income
'nterest #aid on $oan before com#$etion of construction :i$$ be a$$o:ed as deduction
from income at 27H #er year for the next five years.
"om#any rofi$e
Karur Vysya Bank is a #rivate%sector 'ndian bank6 head>uartered in Karur in -ami$ 1adu.
't :as set u# in 131, by ;. .. Venkatarama "hettiar and .thi Krishna "hettiar.
-he bank a$so offers 'nternet Bankin* and ;obi$e Bankin* faci$ities to its customers.
History
IThe )#r"r Vyy# B#n* L'!'te%+6 #o#u$ar$y kno:n as KVB :as set u# in 131, by ;r
;.. Venkatarama "hettiar and ;r .thi Krishna "hettiar6 to ca#ita$ise on the #revious$y
unex#$oited market of traders and a*ricu$turists in and around Karur6 a to:n in -ami$
1adu. Ori*insA
-hou*h the bank started :ith a seed ca#ita$ of 1 $akh6 .s :ith most banks6 the seed
ca#ita$ has *ro:n6 as have the services so$d. -he bank is mana*ed and *uided by the Board
of 4irectors dra:n from different fie$ds.
)ea$isin* that there is more money e$se:here6 the bank ex#anded out of Karur and
estab$ished a##roximate$y +,! branches in other States and /nion -erritories in order to
*ain a #an%'ndia #resence.
Shri K.K. Ba$u :as a##ointed as an .dditiona$ 4irector of the Bank on 22 January 2712.
Branch and ATM Network
't has I565' Branches and net:ork of 1558 ATM's as on 01-1anuary-2014.
KVB tota$ business ti$$ SEPTEMBER 2013 :as around 76000 crore
Technological Details
% KVB markets services throu*h mu$ti#$e channe$s6 inc$udin*A
% .ny Branch Bankin*
Dclarification neededF
% ;u$ticity .ccount faci$ities
% 'nternet Bankin*
% /n$ockin* of 'nternet Bankin* user id throu*h S;S.
% On$ine -ax ayments throu*h 'nternet Bankin*
% On%$ine uti$ity bi$$ #ayments and sho##in* faci$ities
% On $ine ayment of E$ectricity Bi$$ in -ami$ 1adu <-1EB= throu*h 1et Bankin*
% E%"ommerce faci$ities6 uti$isin* IVerified by V'S.I
% ;obi$e Bankin*
% 'nter%bank transfer of funds throu*h 'nter%bank ;obi$e ayment Services of 1"'.
% oint of sa$e machines
% )ea$ -ime ?ross Sett$ement <)-?S= and 1ationa$ E$ectronic 5unds -ransfer <1E5-=
faci$ities at a$$ branches
% V'S. and ;aster"ard 4ebit cards
% On%Line -rain -icket and .ir -icket Bookin* usin* KVB V'S. 4ebit "ard
% V'S. enab$ed ?ift and -rave$ "ard
% Visa KVB SB' ")E4'- ".)4
% "ard to "ard and "ard to account transfer of funds throu*h KVB .-;s
% ayment of institutiona$ fees throu*h .-;s
% 2& K 2 to$$ free #rofessiona$ he$# desk services for a$$ .-;6 'nternet Bankin*6 ;obi$e
Bankin* and e%commerce transactions.
% .-; "ash de#osit ;achine
Banking and Para Banking Services
4e#osit and $oan #roducts
1)E C 5"1) de#osits and remittance services tar*etin* 1)'s.
?enera$ insurance #o$icies in association :ith Bajaj .$$ian@ ?enera$ 'nsurance
Life insurance #o$icies #rovided by Bir$a Sun Life 'nsurance
-he distribution of ;utua$ 5und #roducts of /-'6 SB' ;56 )e$iance ;56 Sundaram B1
aribas ;56 Bir$a Sun$ife ;56 5rank$in -em#$eton ;5 and L'" ;5
-he Bank is a 4e#ository artici#ant throu*h 1S4L and o#ens demat accounts .SB.
faci$ity avai$ab$e.
Off%$ine and on%$ine tradin* faci$ity is avai$ab$e to the demat customers enab$ed throu*h a
tie%u# :ith ;Cs )e$i*are Securities Ltd and ;Cs '4B' "a#s res#ective$y.
KVB is $e*a$$y authorised o#en accounts under the 1e: ension Scheme.
KVB OS termina$ faci$ity is avai$ab$e at merchant estab$ishments.
KVB se$$s #ure 2& carat .ssay certified ?o$d "oins and bars and si$ver coins and bars.
KVB tie u# :ith SB' "ards for a co%branded credit card
External links
-he officia$ site of -he Karur Vysya Bank Limited
v
t
e
Banking in India
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Related
topics
Bankin* "odes and Standards Board of 'ndia
.-; usa*e fees in 'ndia
4e%;ateria$isation <4E;.-=
5orei*n Exchan*e <5O)EK=
'ndian 5inancia$ System "ode <'5S"=
List of banks in 'ndia
1ationa$ E$ectronic 5und -ransfer <1E5-=
1ationa$ ayments "or#oration of 'ndia
)ea$ -ime ?ross Sett$ement <)-?S=
Structured 5inancia$ ;essa*in* System <S5;S=
re#aid ayment 'nstruments in 'ndia
"ate*oriesA
Banks of 'ndia
Banks estab$ished in 131,
(ome Loan Scheme Of
KARUR VYSYA BANK
Ltd.
THE KARUR VYSYA BANK LIMITED.
HOUSING LOAN SCHEME
-he united :estern bank brin*s to #eo#$e vastu#urti #urti a uni>ue housin* $oan scheme
that trans$ates their dream.
Purpose of Loan
Loan for "onstruction and #urchase of houseCf$at inc$udin* #urchase of $and.
)enovationCExtensionCre#air of Existin* house Cf$at.
5or takin* over of housin* $oans from other banks C (ousin* finance com#anies.
5or furnishin*.
5or #urchasin* durab$e *oods a$on* :ith $oans for the #urchase and construction
of houseC f$at.
5or #urchase of house Cf$at on resa$e.
Eligibility
.ny 'ndividua$ :ith re*u$ar source of income either sin*$y or joint$y :ith hisC her
s#ouse.
.*e of #erson shou$d be at $east 21 years.
Quantum
.n amount based on the re#ayment ca#acity of the a##$icant subject to A
&+ times of net income earners or & times of annua$ income for business C
#rofessiona$s.
;aximum amount )s 2+ $akhs.
97H to 9+H of the cost of house f$at de#endin* on $oan amount.
Loan amount6 the insta$$ment of :hich does not exceed +7H of month$y income
;inimum of above :i$$ be the $oan amount
5or re#airs renovation6 modification of existin* house u# to )s 2$akhs.
Rate of interest
5ixed for the first five years M 9.+H and then f$oatin* as #er the #revai$in* rates after +
years :hich :ou$d be L)% !H #er annum.resent #rime $endin* rate is 11.+H #er
annum.
Repayment period
5or construction of ne: house Cf$at <19years=
5or #urchase of ne: houseCf$at. <19 years=
5or #urchase of houseCf$at on resa$e. <19years=
5or additiona$ construction of house <2 years=
5or re#airs6 renovation6 extension <2years=
5or takin* over of housin* $oan from other banks C housin* finance
com#anies. <19 years=
5or furnishin*. <2years=
Security
;ain security for $oan :i$$ be mort*a*e of #ro#erty to be #urchased out of $oan.
Processing fees
7.+H u#front. ;aximum )s 1777.
Commitment charges
years.
1H commitment char*es on outstandin* ba$ance if $oan is re#aid :ithin first +
Margin
1+H for $oan u# to + $akhs and 27H above + $akhs.
EMI
)s 27+2 for first + years and after that accordin* to f$oatin* rates #revai$in* at that time.
Repayment holiday
)e#ayment ho$iday of 19 months.
4etai$s .bout Other Leadin*
Banks
BANKS IN INDIA
PUBLIC SECTOR , NATIONALISED BAN)S-
.$$ahabad Banks
Bank of 'ndia
Bank of ;aharashtra
"anara Bank
"entra$ Bank of 'ndia
"or#oration Bank
4ena Bank
unjab 1ationa$ Bank
Syndicate Bank
/"O Bank
/nion Bank of 'ndia.
OTHER PUBLIC SECTOR BAN):
'4B' Bank
OLD PRIVATE SECTOR BAN)S-
Bank of )ajasthan Ltd.
J B K Bank Ltd.
Karur Vysya Bank Ltd.
South 'ndian Bank Ltd.
/nited 8estern bank Ltd.
NEW PRIVATE SECTOR BAN)S-
(45" Bank Ltd.
'"'"' Bank Ltd.
/-' Bank Ltd.
STATE BAN) OF INDIA AND ITS ASSOCIATES-
State Bank Of 'ndia
-he to# (ome Loan #roviders in 'ndia are (45" Bank Ltd6 '"'"' Bank Ltd and State
Bank Of 'ndia. resent$y -he /nited 8estern bank Ltd cannot com#ete :ith these banks
as they have vast resources and ex#ertise at their dis#osa$. -hey are bi**er in si@e than
-he /nited 8estern bank Ltd.
On the other hand Karur Vysya Bank Ltd6 South 'ndian Bank Ltd .nd Karnataka Bank
Ltd is a$most e>ua$ to -he /nited 8estern Bank Ltd in terms of resources and ex#ertise.
-he /nited 8estern Bank Ltd faces stiff com#etition from these banks. -herefore it is
necessary to study in detai$ the (ome Loan scheme of a$$ these Banks.
8hi$e a##$yin* for a (ome Loan fo$$o:in* factors are considered by a##$icants.
-he various #ur#oses for :hich (ome Loan is *iven.
E$i*ibi$ity for *ettin* a (ome Loan.
'nterest )ates
E;' of $oan
Nuantum of $oan
;ar*in
)e#ayment #eriod
rocessin* fees
re#ayment char*es
Other incentives #rovided by banks etc.
Banks and 5inancia$ institutions shou$d consider these factors :hi$e decidin* a (ome
Loan scheme or :hi$e makin* chan*es in the existin* (ome Loan scheme.
HDFC Bank Ltd.
Purpose of Loan
"onstructionC#urchase of houseCf$at
Extention6 )enovation and )e#air of Existin* house Cf$at.
5or takin* a home $oan from any other bank and financia$ institution.
Quantum
For ."r&h#e,&ontr"&t'on-
Loan u# to 9+H of #ro#erty.
Repayment period
/# to 27 years.
Margin
1+H of the tota$ cost in case of houseCf$at .
Interest rates ()
Lenders name /#to + years ,%17 years 11%1+ years 1,%27years
5ixed 9.2+ 9.2+ 9.2+ 9.2+
f$oatin* 2.2+ 2.2+ 2.2+ 2.2+
Equated monthly installment per lakh (Rs.)
Lenders name /#to + years ,%17 years 11%1+ years 1,%27years
5ixed 27,& 12+7 33, 997
5$oatin* 271! 1277 3&2 921
Processing fees
5ixed 7.+7H
f$oatin* 7.+7H
Pre-payment charges
1i$
ICICI Bank Ltd.
Purpose of Loan
5or constructionC#urchase of houseCf$at
5or renovationCextentionCre#air of Existin* house Cf$at.
5or #urchase of #$ot for construction of houseCf$at.
Quantum
/# to )s. ! crore.
Repayment period
/# to 27 years.
Margin
1+H in case of #urchase and construction of houseCf$at.
2+H in case of #urchase of $and for construction of houseCf$at.
Interest rates ()
Lenders name /#to + years ,%17 years 11%1+ years 1,%27years
5ixed 9.+7 9.+7 9.+7 9.+7
f$oatin* 9.77 9.77 9.77 9.77
Equated monthly installment per lakh (Rs.)
Lenders name /#to + years ,%17 years 11%1+ years 1,%27years
5ixed 27+2 12&7 39+ 9,9
5$oatin* 2729 121& 3+, 9!2
Processing fees
5ixed :aived
f$oatin* :aived
Prepayment charges
1i$
State Bank Of India
Purpose of Loan
"onstructionC#urchase of houseCf$at
)enovationCextentionCre#airCa$teration of existin* house Cf$at.
5or takin* a (ome Loan from any other bank6 financia$ institution.
Quantum
/# to ,7 times the net month$y income :i$$ be sanctioned de#endin* u#on a*e of
customer.
Repayment period
/# to 27 years.
Margin
2+H for ne: houseCf$at.
27H for o$d houseCf$at.
27H of the cost for renovationCre#air.
Interest rates ()
Lenders name /#to + years ,%17 years 11%1+ years 1,%27years
5ixed 9.+7 3.77 3.77 3.2+
f$oatin* 9.77 9.+7 9.+7 9.2+
Equated monthly installment per lakh (Rs.)
Lenders name /# to + years ,%17 years 11%1+ years 1,%27years
5ixed 27+2 12,2 171& 31+
5$oatin* 2729 12&7 39+ 99&
Processing fees
5ixed 7.2+H
f$oatin* 7.2+H
Pre-payment charges
2H
Karnataka Bank Ltd.
Purpose of Loan
"onstructionC#urchase of houseCf$at
)enovationCremode$in*Cre#air of Existin* house Cf$at.
Eligibility
'ndividua$s :ho are residents of 'ndia.
Sa$aried #ersons a*ed 21 years and above :ho are in confirmed service :ith a
minimum service of ! years and a minimum *ross month$y sa$ary of )s ,777C%.
BusinessmenCrofessiona$sC se$f em#$oyed #ersons a*ed 21 years and above6 :ith
a minimum ex#erience of ! years and a minimum *ross annua$ income of )s
,76777C%.
Quantum
For ."r&h#e,&ontr"&t'on-
,7 times of $atest month$y take home <net= sa$ary in case of sa$aried #ersons.
+ times of $atest annua$ net income Ede#reciation #rovided6 if any6 as #er and L
.Cc in case of traders C #rofessiona$s C se$f em#$oyed #ersons.
)s +7 $akh. 8hichever is $o:er.
Reno/#t'on #n% re.#'r-
/# to )s 17 $akh or &7H of the va$ue of the houseCf$at6 :hichever is $o:er.
Repayment period
/# to 1+ years. )e#ayment ho$iday u#to 19 months considered. )e#ayment #eriod :ithin
27 years of a*e.
Margin
2+H of the tota$ cost in case of houseCf$at u# to + years o$d.
!7H of the tota$ cost in case of houseCf$at more than + years o$d and u# to 27
years o$d.
)eduction in mar*in by and u# to 17Hconsidered on s#ecia$ conditions.
!7H of the cost for renovationCre#air.
Interest rates ()
Lenders name /#to + years ,%17 years 11%1+ years 1,%27years
5ixed 9.2+ 9.2+ 3.77
f$oatin*
Equated monthly installment per lakh (Rs.)
Lenders name /#to + years ,%17 years 11%1+ years 1,%27years
5ixed 27&7 12+! 171&
5$oatin*
Processing fees
5ixed 7.2+H
f$oatin*
Pre-payment charges
1i$
The Karur Vysya Bank Ltd.
Purpose
-o #urchase a ready bui$t 5$at C (ouse <ne: and a$so existin* not o$der than 17
years=.
-o #urchase a #$ot and construction of house.
5or re#airs C renovation C additiona$ construction.
5or takin* over (ousin* Loan $iabi$ity from other Banks B reco*ni@ed (ousin*
5inance "om#anies.
Quantum
Loan avai$ab$e u# to )s 1+6 776777C%
Repayment period
)e#ayment of $oan u# to 1+ years :ith ho$iday #eriod 12 months
Margin
2+H
Interest Rate ()
-y#e of Loan /# to +yrs ,%17yrs 11%1+yrs 1,%27yrs
5ixed 17.+7 17.+7 17.2+
5$oatin* 17.77 17.77 17.2+
EMI per Lakh (Rs.)
-y#e of Loan /# to +yrs ,%17yrs 11%1+yrs 1,%27yrs
5ixed 21&3 1!&3 1121
5$oatin* 212+ 1!22 1737
Processing fees
5ixed 1.77H
5$oatin* 1.77H
South Indian Bank Ltd
Purpose
urchase of 5$at or (ouse
"onstruction of 5$atC(ouse
5or major re#air6 renovation6 extension or im#rovement of 5$atC(ouse
-akeover of (L from other BanksC re#uted housin* finance com#anies
urchasin* $and B constructin* a house.
Quantum
Loan for new construction/purchase/ take over etc
;axA )s.+7 $acs.
For renovations/ additions/ major repair, improvement etc
;axA )s.+ $acs.
Margin
urchasin* $and B constructin* a house !7 HA o$d (ouseCrenovation.
Repayment Period
;inimum + years B ;aximum 27 years.
Interest Rate ()
-y#e of Loan /# to +yrs ,%17yrs 11%1+yrs 1,%27yrs
5ixed 3.77 3.+7 3.+7 3.+7
5$oatin* 9.77 9.+7 9.+7 9.+7
EMI per Lakh (Rs.)
-y#e of Loan /# to +yrs ,%17yrs 11%1+yrs 1,%27yrs
5ixed 272, 123& 17&& 3!2
5$oatin* 2729 12&7 1723 9,9
Processing fees
5ixed 7.2+H
5$oatin* 7.2+H
Prepayment Charges
2H
"ritica$ .na$ysis
INTEREST RATES ()
Lenders Name Type of
Loan
Upto 5 yrs 6-10 yrs 11-15 yrs 16-20 yrs.
The UW Bank
Ltd.
9.+H for the first five yrs and then f$oatin* rate as #er L)
South Indian
Bank Ltd.
5ixed
5$oatin*
3
9
3.+
9.+
3.+
9.+
3.+
9.+
Syndicate
Bank
5ixed
5$oatin*
9
2.2+
9.+
2.2+
9.2+
9
3
9.2+
Union Bank
5ixed
5$oatin*
9.2+
9
3
9.2+
3.+
3.2+
3.+
3.2+
United Bank of
India
5ixed
5$oatin*
9.+
3.+
3
3.+
3.2+
3.+
3.2+
3.+
UTI Bank Ltd
5ixed
5$oatin*
3.2+
2.2+
17.2+
9
17.2+
9
17.2+
9
ICICI Bank
Ltd
5ixed
5$oatin*
9.+
9
9.+
9
9.+
9
9.+
9
IDBI Bank
5ixed
5$oatin*
9.+
9 9 9 9
1ammu &
Kashmir Bank
Ltd
5ixed
5$oatin*
9
2.2+
9.+
9.2+
3.2+
3
3.2+
3.+
Karnataka
Bank
5ixed
5$oatin*
9.2+ 9.2+ 3
Karur Vysya
Bank Ltd
5ixed
5$oatin*
17.+
17
17.+
17
17.2+
17.2+
Punjab
National Bank
5ixed
5$oatin*
3.2+
2.2+
17.2+
9
17.+
9.2+
17.+
9.2+
Allahabad
Bank
5ixed
5$oatin*
9.2+
2.2+
9.2+
2.2+
9.2+
2.2+
3.2+
9.2+
Andhra Bank
5ixed
5$oatin*
2.2+
2.2+
9.+
9
9.2+
9.2+
9.2+
9.2+
INTEREST RATES ()
Lenders Name Type of
Loan
Upto 5 yrs 6-10 yrs 11-15 yrs 16-20 yrs.
Bank of
Baroda
5ixed
5$oatin*
3
9
3.+
9.+
17
9.+
17
9.2+
Bank of India
5ixed
5$oatin*
9.+
2.2+
3.2+
9
3.2+
9.+
3.2+
9.+
Bank of
Maharashtra
5ixed
5$oatin* 9 9.+ 9.2+ 9.2+
Bank of
Rajasthan
5ixed
5$oatin*
9.2+
2.+
9.2+
9
3
9.2+
Canara Bank
5ixed
5$oatin*
9
2.+
3
9.2+
3.2+
9.+7
3.2+
9.+7
Central Bank
of India
5ixed
5$oatin*
9.+
9
3
9.+
3.+
3
3.+
3
Corporation
Bank
5ixed
5$oatin*
9.2+
2.+
9.+
9
9.+
9.2+ 9.2+
Dena Bank
5ixed
5$oatin*
9.2+
2.2+
3.2+
2.2+
3.+
9
3.+
9
HDFC Bank
5ixed
5$oatin*
9.2+
2.2+
9.2+
2.2+
9.2+
2.2+
9.2+
2.2+
EQUATED MONTHLY INSTALLMENT PER LAKH (Rs)
Lenders Name Type of
Loan
Upto 5 yrs 6-10 yrs 11-15 yrs 16-20 yrs.
The UW Bank
Ltd.
27+2 for the first five years and then accordin* to f$oatin*
'nterest rates.
South Indian
Bank Ltd.
5ixed
5$oatin*
272,
2729
123&
12&7
17&&
1723
3!2
9,9
Syndicate
Bank
5ixed
5$oatin*
2729
1332
12&7
1277
333
3+,
377
9+2
Union Bank
5ixed
5$oatin*
27&7
2729
12,2
12+!
17&&
17+3
3!2
31,
United Bank of
India`
5ixed
5$oatin*
27+2
27+2
12,2
12,2
1723
1723
31,
31,
UTI Bank Ltd
5ixed
5$oatin*
2112
271,
1!!+
121!
1121
3+,
171+
9!,
ICICI Bank
Ltd
5ixed
5$oatin*
27+2
2729
12&7
121&
39+
3+,
9,!
9!2
IDBI Bank
5ixed
5$oatin*
27+2
2729 121& 3+, 9!2
1ammu &
Kashmir Bank
Ltd
5ixed
5$oatin*
2729
271,
12&7
1222
1723
171&
3&3
3!2
Karnataka
Bank
5ixed
5$oatin*
27&7 12+! 171&
Karur Vysya
Bank Ltd
5ixed
5$oatin*
21&3
212+
1!&3
1!22
1121
1737
Punjab
National Bank
5ixed
5$oatin*
2727
2777
1!27
1277
1737
3,7
337
3+7
Allahabad
Bank
5ixed
5$oatin*
27&7
1332
12+&
1277
1777
3&1
31,
9+2
EQUATED MONTHLY INSTALLMENT PER LAKH (Rs)
Lenders Name Type of
Loan
Upto 5 yrs 6-10 yrs 11-15 yrs 16-20 yrs.
Bank of
Baroda
5ixed
5$oatin*
272,
2729
123&
12&7
172+
397
3,+
99!
Bank of India
5ixed
5$oatin*
27+1
277&
1297
121!
1723
39+
31+
9,9
Bank of
Maharashtra
5ixed
5$oatin* 2729 12&7 333 99&
Bank of
Rajasthan
5ixed
5$oatin*
27!2
277&
12+7
121!
171&
321
Canara Bank
5ixed
5$oatin*
272+
2771
12,&
122&
172+
391
311
9,&
Central Bank
of India
5ixed
5$oatin*
27+2
2729
12,2
12&7
17&&
171&
3!2
377
Corporation
Bank
5ixed
5$oatin*
27!2
2772
12!2
1211
392
3,2 9&3
Dena Bank
5ixed
5$oatin*
27,2
271!
1297
1277
17&&
3+,
3!2
9!,
HDFC Bank
5ixed
5$oatin*
27,&
271!
12+7
1277
33,
3&2
997
921
PROCESSING FEES
Lenders Name Type of Loan Percentage
The UW Bank Ltd
7.+7H
South Indian Bank Ltd.
5ixed
5$oatin*
7.2+H
7.2+H
State Bank Of India
5ixed
5$oatin*
7.2+H
7.2+H
Syndicate Bank
5ixed
5$oatin*
7.+7H
7.+7H
Union Bank
5ixed
5$oatin*
8aived
8aived
United Bank Of India
5ixed
5$oatin*
8aived
8aived
UTI Bank Ltd
5ixed
5$oatin*
1.77H
1.77H
Bank Of Rajasthan
5ixed
5$oatin*
7.+7H
7.+7H
Andhra Bank
5ixed
5$oatin*
7.+7H <:=
7.+7H <:=
Central Bank Of India
5ixed
5$oatin*
1.77H
1.77H
Corporation Bank
5ixed
5$oatin*
1.77H
1.77H
Dena Bank
5ixed
5$oatin*
1.77H
1.77H
HDFC Bank Ltd.
5ixed
5$oatin*
7.+7H
7.+7H
Bank Of India
5ixed
5$oatin*
7.2+H <:=
7.2+H <:=
PROCESSING FEES
Lenders Name Type of Loan Percentage
Bank Of Maharashtra
5ixed
5$oatin* 8aived
Bank Of Rajasthan
5ixed
5$oatin*
7.+7H
7.+7H
Canara Bank
5ixed
5$oatin*
7.+7H <:=
7.+7H <:=
HDFC Bank Ltd.
5ixed
5$oatin*
7.+7H
7.+7H
ICICI Bank Ltd
5ixed
5$oatin*
8aived
8aived
IDBI Bank
5ixed
5$oatin* 7.2+H
1ammu & Kashmir
Bank Ltd.
5ixed
5$oatin*
7.2+H
7.2+H
Karnataka Bank Ltd.
5ixed
5$oatin*
7.2+H
Karur Vysya Bank Ltd
5ixed
5$oatin*
1.77H
1.77H
Punjab National Bank
5ixed
5$oatin*
7.2+H
7.2+H
INTEREST RATE () COMPARISON
12
10
8
United
Western Bank
6 Karur Vysya
Bank
South Indian
Bank
4
Karnataka
Bank
2
0
interest
rate
Lenders Name Interest Rate () Up to 5yrs
United Western Bank Ltd 8.50
Karur Vysya Bank Ltd 10.50
South Indian Bank Ltd 9.00
Karnataka Bank Ltd 8.25
EMI PER LAKH (Rs)
2160
2140
2120
2100
2080
2060
2040
2020
United
Western Bank
Karur Vysya
Bank
South Indian
Bank
Karnataka
Bank
2000
1980
!I "#
L$K%&#s'
u( to ) yrs
Lenders Name EMI Per Lakh(Rs) Up to 5yrs
United Western Bank Ltd 2052
Karur Vysya Bank Ltd 2149
South Indian Bank Ltd 2076
Karnataka Bank Ltd 2040
PROCESSING FEES ()
1
0.9
0.8
0.*
0.6
0.)
0.4
0.+
United
Western Bank
Karur Vysya
Bank
South Indian
Bank
Karnataka
Bank
0.2
0.1
0
"ro,essin-
.ees
Lenders Name Processing Fees()
United Western Bank Ltd 0.50
Karur Vysya Bank Ltd 1.00
South Indian Bank Ltd 0.25
Karnataka Bank Ltd 0.25
Quantum of Loan
Lenders Name For Purchase and Construction of
House/Flat
he !nited "estern #ank Ltd$ %up to &' yrs of age(
,7 times of net month$y income. Or6
+ times of net annua$ income.
%a)ove &' yrs of age(
&9 times of net month$y income. Or6
& times of net annua$ income and Sa$ary.
#ank of *ajasthan Ltd$ +7 $acs
!$C$+$ #ank +7 $acs
,ammu - .ashmir #ank Ltd$ &7 times net month$y income and sa$ary
#ank of /ndia +7 $acs
Canara #ank +7 $acs
0ena #ank 177 $acs
Punja) 1ational #ank 97H of #urchase
2yndicate #ank +7 $acs
2outh /ndian #ank Ltd +7 $acs
/0#/ #ank 32H of #ro#erty
/C/C/ #ank Ltd$ 177 $acs
2tate #ank +f /ndia !pto age of &'3
,7 times of net month$y income. Or6
+ times of net annua$ income.
4)ove &' years3
&9 times of net month$y income. Or 6
& times of net annua$ income
Corporation #ank +7 $acs
2yndicate #ank For 2alaried Person3
;aximum of 22 months *ross sa$ary
For +thers3
;aximum of , times avera*e annua$
income
2tate #ank of Mysore !p to age of &'3
,7 months net sa$ary
4)ove &' years
&9 months net sa$ary
50FC #ank Ltd$ /# to 9+Hof the #ro#erty
Quantum of Loan
Lenders Name For Purchase and Construction of
House/Flat
!nion #ank +7 $acs
!/ #ank Ltd$ For 2alaried Person3
;aximum )s.+7 $acs or6
&9 times of net month$y sa$ary.
Loan amount is $east of the t:o above.
For #usinessmen3
'ncome be$o: )s.2.&7 $acs #.a. $oan
amt. -o be restricted to 2.+ times of
av*.annua$ income.
'ncome above )s.2.& $acs #.a.$oan
amt to be restricted to !.7 times of
the av*.annua$ income.
4llaha)ad #ank & times of annua$ *ross income
#ank of #aroda For 2alaried Person3
&7 times of month$y *ross sa$ary.
For +thers3
& times the annua$ avera*e <$ast ! years= net
taxab$e income #$us de#reciation.
#ank of Maharashtra For 2alaried Person3
&7 times of *ross sa$ary. or6
9+H of cost of house inc$udin*
re*istration on mort*a*e6 e$ectricity
de#osit.
Loan amount :hichever is $ess.
For #usinessmen3
!!.! -imes of av*.tota$ income of
$ast ! years.
9+H of cost of #urchase of hCf and
2+H of cost of o$d hCf
Loan amount :i$$ be :hich ever is $o:er.
4ndhra #ank For 2alaried Person3
!, times month$y *ross income.
For #usinessmenA
! times the *ross annua$ income
!nited #ank of /ndia 177 $acs
Maximum Repayment Period of Home Loan
Lenders Name Years
he !nited "estern #ank Ltd$ 19 yrs
Central #ank of /ndia 27 yrs
0ena #ank 27 yrs
2outh /ndian #ank Ltd$ 27 yrs
.arnataka #ank Ltd$ 1+ yrs. )e#ayment #eriod u#to 27 yrs of
a*e.
#ank of Maharashtra 27 yrs
50FC #ank Ltd$ 27 yrs
4llaha)ad #ank 27 yrs
#ank of #aroda 2+ yrs
4ndhra #ank 27 yrs
/0#/ #ank 27 yrs
/C/C/ #ank Ltd$ 27 yrs
2tate #ank of /ndia 27 yrs
Corporation #ank 2+ yrs
2yndicate #ank 2+yrs
2tate #ank of Mysore 27 yrs
!nited #ank of /ndia 27 yrs
!nion #ank 27 yrs
#ank of /ndia 27 yrs
Canara #ank 27 yrs
Punja) 1ational #ank 2+ yrs
,ammu - .ashmir #ank Ltd$ 27 yrs
#ank of *ajasthan Ltd$ 27 yrs
!$C$+$ #ank 27 yrs
#ank of #aroda 2+ yrs
MARGIN
Lenders Name Margin of Home Loan
!nited "estern #ank Ltd$ 1+H for $oan u# to + $acs B 27H for $oan
above + $acs
4llaha)ad #ank For 2alaried Person3
'f $oan is tied u# :ith sa$ary%1i$
'f tie u# is not avai$ab$e%17H
For +thers3
27H
4ndhra #ank 17H for #urchase and construction of
houseCf$at.
#ank of /ndia 5or $imits unto )s.17 $acs%1+H
5or $imits more than 17 $acs%27H
#ank of Maharashtra )an*in* u# to 2+H
#ank of *ajasthan 1+H in case of #urchase6 construction6
re#air and renovation of houseCf$at.
Canara #ank
1e: houseCf$at 1+H
O$d houseCf$at $ess than 2+H
o$d houseCf$at beyond 27 yrs o$d
&7H
Central #ank of /ndia
17H for construction
27H for re#airsCrenovation of
existin* houseCf$at.
Corporation #ank
5or "onstruction of houseCf$at $ess
than 17 yrs o$d 27H
5or #urchase of houseCf$at beyond
17 yrs mar*in ran*es from 27%2+H
5or re#airs or renovation%27H
2outh /ndian #ank ltd !7H for #urchase and construction of
houseCf$at.
2tate #ank +f /ndia
1+H for ne: houseCf$at
27H for o$d houseCf$at
27H for re#airs and renovation
2yndicate #ank
2+H of tota$ #roject cost for
constructionC#urchase of ne:
f$atCu# to + yrs
!7H for ac>uirin* house :hich is
above + yrs o$d
!7H of the estimated cost of
additionCextensionCre#airsCrenovatio
n.
Len%er N#!e Margin
!nion #ank 1+H for #urchaseCconstruction
5or re#airs !7H of cost of re#air
1+H for #urchase of #$ot
!nited #ank of /ndia 1+H for #urchase and construction of
houseCf$at.
!/ #ank
1+H in case of norma$ #roduction
2+H in case of
im#rovementCrenovation
$oans
+7H in case of $oans of existin*
#ro#erty.
/C/C/ #ank Ltd$ 1+H for #urchase and construction of
houseCf$at.
/0#/ #ank 9H for #urchase and construction of
houseCf$at.
,ammu and .ashmir #ank Ltd$
5or urchaseC"onstruction 1+H
5or )e#airs B )enovation 2+H
Karnataka Bank Ltd. 2+H for #urchase and construction of
houseCf$at.
Karur Vysya Bank Ltd. 2+H for #urchase and construction of
houseCf$at.
unjab 1ationa$ Bank 27H for #urchase and construction of
houseCf$at.
Customer Rating
CUSTOMER RATING
"ustomer )atin* ref$ects the borro:er s accountabi$ity6 ex#ected ca#abi$ity and
inc$ination to #ay interest and #rinci#a$ in time$y manner. . "ustomer )atin* is a
sim#$e number :hich many $enders use to determine :hether or not they :i$$ *ive a $oan
or $ine of credit to an individua$.
-he main objective of this is to assess the a##$icants sustained re#ayment ca#acity over
the #eriod. -he main #oints that are considered areA
'ncome
.*e
.cademic back*round and Em#$oyment stabi$ity
5ami$y Back*round
.ssets and Liabi$ities
Servicin* record in res#ect of other institutiona$ borro:in*s.
Savin* history and ca#acity.
1umber of de#endents
'ncome and ex#enditure #attern
Documents Required for Scrutiny:
Salaried ClassA
Sa$ary certificate.
"o#y of ration cardCe$ectricity bi$$.
)ent recei#t if a##$icab$e.
For Self EmployedA
A brief introduction to business/profession
Ba$ance Sheet and rofit and Loss account6 du$y certified by a chartered
accountant.
'ncome tax C :ea$th tax return for the #ast three years.
"o#ies of cha$$ans of advance tax.
.ssessment orders.
Sho# and Estab$ishment .ct certificate of re*istration.
)ation card C E$ectricity bi$$ C )ent recei#t <if a##$icab$e=
-here are certain #rocedura$ as#ects6 :hich are re>uired to be com#i$ed :ith before
disbursement of (ome Loan in -he /nited 8estern Bank Ltd takes #$ace. ' am therefore6
main$y focusin* on com#$iance of such #rocedura$ #art by the borro:er. -here are certain
forms6 :hich are re>uired to be submitted by the a##$icant of the $oan. "ustomer )atin*
form is one such form. 't is accom#anied by "ustomer rofi$e form. -his form contain a$$
necessary information about the borro:er that he$#s the bank in *rantin* $oan to the
a##$icant. -his information is beneficia$ for the bank as it he$#s in #ro#er scrutiny of
a##$icant s ca#acity to re#ay the amount of $oan. Bank checks the information to its
satisfaction before *rantin* $oan to the a##$icant. -his form contains a$$ necessary
information about the a##$icant s financia$ #osition and a$so the detai$ information about
the #ro#erty.
Both the "ustomer rofi$e 5orm and "ustomer )atin* 5orm are desi*ned in an exce$$ent
:ay by -he /nited 8estern Bank Ltd.
Customer Profile form contains the following information:
1ame of the a##$icant.
.ddress
hone number
4ate of birth
Nua$ification
Occu#ation
eriod of service
1ame<s= of de#endent<s=
.nnua$ income <as #er income taxCsa$ary certificate
Sum tota$ of a$$ deductions <inc$udin* taxes6 re#ayments etc=
.nnua$ income of s#ouse <as #er income taxCsa$ary certificate=
Sum tota$ of a$$ deductions <inc$udin* taxes6 re#ayments etc=of s#ouse.
-y#e of accommodation of the a##$icant.
.ssets o:ned by the a##$icant.
4etai$s of bank account<s= of the a##$icant.
4etai$s of bank account :here sa$ary is credited.
4etai$s of $oans and advances taken so far.
Si*nature of the a##$icant
Information contained in Customer Rating form are as follows:
1ame of the a##$icant.
.ddress
hone number.
4ate of birth
Nua$ification
Occu#ation
eriod of service
1o of de#endents
0ear$y income <as #er income taxCsa$ary certificate=
'ncome of s#ouse
-y#e of accommodation of the a##$icant.
.ssets o:ned by the a##$icant
4etai$s about a$$ bank accounts of the a##$icant
.vera*e ba$ance in savin* bank account for one year
4e#osits6 if any :ith -he /nited 8estern Bank Ltd
4etai$s about any $oan taken ear$ier
4etai$s about re#ayment of ear$ier $oans
resent month$y ob$i*ation6 if any<as #ercenta*e to sa$ary or month$y income=
.##$icants are *iven #oints on the information *iven by them and if the tota$ #oints
scored by the a##$icant is satisfactory and other forma$ities are a$so com#$eted then
(ome Loan is sanctioned by bank.
Recommendation
RECOMMENDATION
Bank shou$d decrease #a#er :ork re*ardin* sanction of (ome Loan .'t shou$d
a$so com#$ete the paper work and legal re6uirement re$atin* to sanction of (ome
$oan on beha$f of a##$icant s thus minimi@in* a##$icant s :ork.
Loan sanction period shou$d be decreased to suit a##$icant s re>uirements.
-he processing fees or pre-payment rates shou$d be decreased or either of them
shou$d be :aived for fe: years.
Bank shou$d *o for corporate tie-up6 :here it :ou$d #rovide $oans to em#$oyees
of that com#any at a rate $o:er than banks #revai$in* rates.
0oor-2tep services shou$d be #rovided by banks. -his kind of service is
a##reciated by #eo#$e and can he$# bank in increasin* its business.
Bank shou$d promote product <(ome Loan=. 't shou$d set u# sta$$s in different
#arts of cities for fe: days. Sta$$s shou$d a$so be set u# in #ro#erty exhibitions.
.dvertisement shou$d be *iven in ne:s#a#ers :ith Bank s #hone number6
because it is necessary to make #eo#$e a:are about the (ome Loan Scheme.
Bank has $ess #resence in other states a#art from ;aharashtra. #ranches shou$d
be o#ened in im#ortant cities as most #eo#$e in other states are sti$$ not a:are
about the existence of this bank.
Conclusion
CONCLUSION
?ro:th in #o#u$ation and income $eve$ had $ead to increase in the
demand for (ome Loan to meet the *ro:in* housin* needs of #eo#$e. .ffordab$e interest
rate and easy $oan sanction by Banks and 5inancia$ 'nstitutions have increased the
demand of (ome Loan in 'ndia.
5rom the detai$ study and com#arison of (ome Loan schemes of different banks6 '
observed that fe: chan*es are re>uired in the (ome Loan Scheme of -he /nited 8estern
Bank Ltd.
. decrease in existin* #a#er:ork re>uirements a$on* :ith decrease in the Loan sanction
#eriod is must.
Bank shou$d a$so decrease its #rocessin* fees or its #re%#ayment rates. 't shou$d a$so *o
for cor#orate tie u#s and shou$d a$so undertake some #romotion :ork for its Loan
#roduct i.e. (ome Loan Scheme.
"ustomer )atin* form desi*ned by -he /nited 8estern Bank Ltd. contains a$$ necessary
information about the a##$icant that he$#s the bank in *rantin* $oan to the a##$icant. .fter
studyin* this form ' observed that the information contained in it is beneficia$ for the
bank as it he$#s in #ro#er scrutiny of a##$icant s ca#acity to re#ay the amount of $oan.
Bank checks the information to its satisfaction before *rantin* $oan to the a##$icant. -his
form contains a$$ necessary information about the a##$icant s financia$ #osition and a$so
the detai$ information about the #ro#erty.
Bib$io*ra#hy
BIBLIOGRAPHY
Prof. Anil Agashe Merchant Banking and Financial
services .
BanknetIndia.com
Website htt#sACC:::.kvb.co.in
Dr S Gurusamy Financial services and markets .