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Researchjournalis Journal of Commerce

Vol. 1 | No. 2 December| 2013



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Mrs.S.Rajalakshmi
AssistantProfessorofcommerce,GovindammalAditanar
collegeforwomen,Tiruchendur,ThoothukodiTamilnadu

Mrs.C.Pappeswari
AssistantProfessorofcommerce,GovindammalAditanar
collegeforwomen,Tiruchendur,ThoothukodiTamilnadu

Mr.A.venkatesh
AssistantProfessorofcommerce,AmbaiArtscollege
,TirunelveliDistrict,Tamilnadu

A STUDY ON
HOUSING LOAN
BORROWERS OF
PUBLIC AND
PRIVATE SECTOR
BANKS IN
THOOTHUKUDI
AREA
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Abstract
Housing is a primary human need next in importance only to food and clothing. A first priority for a
youngster who beings life is therefore to plan for a house. This takes precedence over other household
expenditure and creature needs. Housing, however, is a major expenditure and cannot be funded out of a
familys normal monthly income or savings. The prospective homeowner must look for a loan substantial in
size and so structured that he can repay it over a longer period of time, in many cases almost ones entire
working life. Loan is offered to a borrower to purchase or build a new house on the basis of his/her eligibility
and the banks lending rules. One of the important basic human needs is shelter. House is the ultimate dream
of every middle class family. Government gave encouragement for house finance subsidiaries by offering
number of tax concessions to individuals with the overall encouragement given to this sector, a number of
players entered in housing finance. One of the most important benefits of taking a home loan is the interest
rate that is allowed on the home loan. Fixed and variable interest rate options are also available for home
loans. Many financiers also offer home improvement loans at the same interest rate as they offer the home
loans.

Keywords: Housing loan, Types of housing loan, Attitude of housing loan borrowers.

1. Introduction
Every human being aspires to have his own house to live in. After food and clothing, housing is the third
most important human requirement. On an average a person spends almost two-thirds of his life in a house
which is his sanctuary in his old age. Adequate housing is therefore a fundamental need of human beings and
an essential pre-requisite for physical, intellectual and mental development. Blessed are those who live in
their own house and fortunate are those who have the money to buy one. But all are not privileged to buy a
house of their own. For many such less privileged, buying a house has become possible in modern times
through housing loans.

Though shelter was enshrined as a fundamental right in the constitution, housing did not get the attention it
reserved. This was perhaps due to the fact that at that time nobody expected the problem of housing to
assume the present gigantic proportions. Proper housing, even at a lower scale, has never kept pace with the
minimum requirements of the people. The housing backlog has been compounded by the high rate of
population growth. Inadequate housing facilities have led to the rapid growth of slums and unauthorized
settlements, poor quality of services, housing land prices and increasing costs of construction. In rural areas
the situation is even more alarming. The Government and some public sector undertakings have been trying
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to tackle the problem but their efforts do not much even the fringe of the problem. The central and state
governments cannot solve this problem.So the Life Insurance Corporation of India and housing societies
entered the field of housing loans for their customers. Today these are 350 housing finance companies
registered with the registrar of companies, of these 29 have been approved by National Housing Bank for
financial assistance. The housing finance industry has been borrowing at the rate of nearly 35% for the last
two years.Over the last 3 years Commercial banks and Private sector banks have been playing an important
role in housing finance. All Commercial banks and Private sector banks are now emerging as lenders in the
segment, taking a slew initiatives in the form of opening dedicated outfits/cells to cater to the ever-increasing
demand for housing loans, offering competitive interest rates with fixed/ variable options, Waiver of
processing fee, Free additional attractive packages and flexibilities in housing loan Schemes. Generally the
traditional trend of the term Housing Loans or Housing Finance means finance for buying or modifying a
property. Hence Housing Finance may be defined as the financial resources for an individual or a group of
persons used facially for the purpose of housing.

A study of the housing loan schemes offered by public sector banks and private sector banks would pave the
way taking certain policy decisions for improving these housing loan schemes.

2. Public Sectors Banks
Banks which are owned by government are known as public sector banks. At present in India, there are 26
largest public sector banks. Under this study only deals with three kinds of public sector banks. That is
a) SBI
b) CB
c) IOB

2.1 State Bank Of India (SBI)
The state bank of India was established on 18
th
July 1955, under the state bank of India act to take over the
business of the imperial bank of India. SBI is owned by the government of India and is the largest bank in the
India sub continent. SBI is the second largest bank in the world. SBI has been awarded The Most Preferred
Home Loan Provider by AWAAZ Consumer Awards. SBI home loans give concession on interest rates on
GREEN HOMES under its environment protection program. SBI offers SBI-optima additional home loans
and SBI-Home line special personal loans for existing home loan borrowers who have a repayment record
of 3years, etc.
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State bank of India housing finance offers loan for construction and renovation of houses at the lowest interest
rates which range from10.05% & goes up to 10.20 %p.a.
Highlights


Interest Rates







2.2 Canara Bank (CB)
The canara bank is a government of India undertaking, and carries on all banking business. The bank was
brought into existence by an ordinance passed on the 19
th
July 1969 by the Central Government. In terms of
the ordinance the undertaking of the Canara bank was rested to and transferred to the new bank. This
ordinance was replaced by the banking companies (Acquisition and Transfer of Undertaking) Act, 1969. This
act was declared null & void by the Supreme Court on the 10
th
of February 1970 and subsequently the
ordinance was promulgated. Then the banking companies act, 1970 was passed and it was made effective
retrospectively from 19
th
July 1969.

For construction, purchase, repairs, additions, renovations of residential house, flat include the Purchase of
land and construction there on. For taking over of the housing loan liability with other recognized housing
finance companies, housing boards, co-operative banks, co-operative societies and commercial banks at our
prevailing low rate on interest. Canara bank of housing finance offers loan for construction and renovation of
houses at the lowest interest rates which range from 10.25% & goes up to 10.50% p.a.

Interest Rate 10.20%
Loan Amount

Minimum `5,00,000
Maximum `30,00,000
Tenure

Minimum 5 years
Maximum 30 years
Time to Process Loan 7 days
Tenure
Interest
Type
Interest
Rate
Offer
1-30 years Floating 10.20%
Regular
(up to `5Lakhs-10.05%
Above`3 Lakhs-10.20% )
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Highlights
Interest Rate 10.50%
Loan Amount

Minimum ` 1,00,000
Maximum ` 10,00,000
Tenure

Minimum 5 years
Maximum 25 years
Time to Process Loan 7 days

Interest Rates
Tenure
Interest
Type
Interest
Rate
Offer
1-25 years Floating 10.50%
Regular
(up to`30 Lakhs - 10.25 %
Above `75 Lakhs - 10.50 %)

2.3 Indian Overseas Bank (IOB)
The IOB bank ltd was established in 1937. It was founded as an institution to provide quality banking
services using state of the art technology. IOB Banking Corporation Ltd, the first bank in the country to go in
for Internet banking. The Bank Proposes to bring credit cards to the large, under -served population in rural
and semi-urban areas. Introduces first home loan securitization scheme of `58 core. IOB bank of housing
finance offers loan for construction and renovation of houses at the lowest interest rates which range from
10.30 % & 10.60% p.a.
Highlights
Interest Rate 10.60%
Loan Amount Minimum ` 1,00,000
Maximum ` 15,00,000
Tenure Minimum 1 years
Maximum 35 years
Time to Process Loan 7 days


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Interest Rates
Tenure
Interest
Type
Interest
Rate
Offer
1-35 years Floating 10.60%
Regular
(up to `1,00,000 Lakhs - 10.30%
Above ` 15,00,000 Lakhs - 10.60%)

3. Private Sector Banks
Private sector banks are owned by private individuals or corporations. That is, the commercials which are
not owned by the government of India are known as private sector banks. These banks are under the control
of Reserve Bank of India. Under this study only deals with three kinds of private sector banks. That is
a) HDFC
b) FDB
c) TMB

3.1 Housing Development Finance Corporation (HDFC)
HDFCa household name that Indians proudly reckon with Housing Development Finance Corporation
Limited (HDFC Ltd) was established in 1977 with the primary objective of meeting a social need was
encouraging home ownership by providing long-tem finance to households. Over the last three and a half
decades, HDFC has turned the concept of finance for the growing middle class in India into a world class
enterprise with excellent reputation for professionalism, and impeccable service. HDFC of housing finance
offers loan for construction and renovation of houses at the lowest interest rates which range from 10.40% -
10.65% p.a.
Highlights
Interest Rate 10.65%
Loan Amount

Minimum ` 5,00,000
Maximum ` 15,00,000
Tenure Minimum 5 years
Maximum 35 years
Time to Process Loan 7 days


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Interest Rates
Tenure
Interest
Type
Interest
Rate
Offer
1-35
years
Floating 10.60%
Regular
(up to `5,00,000 Lakhs - 10.40%
Above` 15,00,000 Lakhs- 10.65%)

3.2 Federal Bank (FDB)
In the year 1931, Travancore federal bank was inaugurated at Sedum Purim, near Thiruvalla, Kerala. The 14
founders included. In 1947, the banks name was shortened from Travancore federal bank to federal bank. In
1970, the bank became a scheduled Commercial bank. Recently, it opened a representative office in Dubai.
Federal bank offers housing loan scheme assists borrowers for construction of house, acquisition of land &
construction of house, repairs, renovation, remodeling, extension of house, purchase of flat, purchase of house
plot for subsequent construction of house etc. The home borrowed loans interest rate of 10.25% - 10.75%
provided the Federal bank.
Highlights
Interest Rate 10.75%
Loan Amount

Minimum ` 1,00,000
Maximum ` 15,00,000
Tenure

Minimum 1 years
Maximum 30 years
Time to Process Loan 7 days

Interest Rates
Tenure
Interest
Type
Interest
Rate
Offer
1-30 years Floating 10.75%
Regular
(up to `1,00,000 Lakhs - 10.25%
Above ` 15,00,000 Lakhs - 10.75%)

3.3 Tamilnadu Mercantile Bank (TMB)
Tamilnadu Mercantile Bank Ltd (TMB) was established on 11
th
May 1921. The thought of establishing a
bank for the Nadar business community was first proposed at the annual meeting of the Nadar Mahajana
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Sangam held at Thoothukudi in 1920. Originally known as the Nadar Bank Ltd., it changed its name to
Tamilnadu Mercantile Bank Ltd., provides commercial banking products and housing loan in India. The
borrowed home loans interest rate of 10.35%-11.10% provided the Tamilnadu Mercantile Bank.
Highlights
Interest Rate 11.10%
Loan Amount

Minimum ` 5,00,000
Maximum ` 15,00,000
Tenure

Minimum 1 years
Maximum 35 years
Time to Process Loan 7 days

Interest Rates
Tenure
Interest
Type
Interest
Rate
Offer
1-35 years Floating 11.10%
Regular
(up to `5,00,000 Lakes - 10.35%
Above ` 15,00,000 Lakes - 11.10%)

4. Statement Of The Problem
In recent times, banks vie with one another in organizing loan melas with prior arrangement with the ultimate
of reaching new heights in the area of disbursal of loans. In the falling interest rate scenario it is quite
understandable that every bank in its pursuit of capturing the market is exploring all avenues to offer a
competitive rate to bring more and more customers in its fold. The home loan segment has received much
impetus and is balances stupendous growth. The recent budget offers welcome initiatives toward
infrastructure development.

In the liberalized economy both private and public sector banks are entering retail banking in the market. In
developed countries such as the U.S. and the U.K the credit parameters of a borrower are readily available and
hence, a scoring model is used to decide the credit worthiness of the borrowers. In India, since data is not
some readily available on the credit behavior a borrower, loan underwriting standard have evolved keeping in
mind the current environment.
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In the midst of the information explosion, borrowers sometimes find it difficult to decide on the right lender.
It is a common phenomenon that people want to live in their own houses. People try to fund their finance the
rough borrowing from their provident fund or their employer or friends and relatives or selling other personal
assets. Thoothukudi area has many colleges and many schools. A number of teachers work in these
institutions. These are a number of sub urban areas like SPIC, saguburam, veerapandiyanpattanam,
tiruchendur which are now developing.

Thoothukudi is rich in resources like cultivable soil. Naturally it is trading center for several agricultural
products. Other business interests also thrive. Even people from other areas come into the area for trading and
other professional interests. The people in this flourishing area find housing facilities inadequate in the
specific areas they desire and with their requirements and choice. Those who have a reasonably steady income
and other backing want to construct houses if easy loans are available from reliable institutions. Social
security and status have also largely contributed to higher demand for housing units of Thoothukudi area
people.

The present study is an attempt to evaluate the housing finance provided by public sector and private sector
banks in Thoothukudi area.

5. Review Of Previous Studies
K.L. Srinivasan (2000)
1
in his thesis entitled A project on Housing Finance How SBI can establish
leadership has concluded that simplification of the documentation process, careful and friendly approach
systems and procedures, good customer service and non insistence in collateral securities are the most
important variable in the marketing of housing loan schemes by banks.

DePaul Singh (2001)
2
in his study entitled consumer Behavior and Bank Retail products an Analysis Stresses
that the borrowers attitude is an important factor for the improvement of housing loan schemes.

R.R.Krishna and V.S.Krishna Mouthy (1999)
3
stress in their article entitled Trend and policy Issues of
Housing finance in India, that simplified procedures and speedy sanction of housing loans will give a boost
to the constructing houses.


1. K.L.Srinivasan, A project on Housing Finance How SBI can Establish Leadership. SBI, STC paramour.
2. Deepak Singh, Consumer Behavior & Banking Retail products an Analysis, Banking finance, may 2001.
3. R.R.Krishna and V.S.Krishna Mouthy, Trend and policy Invest of Housing Finance in India. Southern Economist, April 1 &
15,1999,
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Rajesh Kumar stood (2003)
4
in his article entitled :Housing Loan Portfolio of ASCB
s
Growth Drives
Associated Risk and mitigation strategies, has concluded that banks should review the housing loan
portfolio at periodical intervals for capturing new markets and to avoid risk in the housing loan schemes.

Maheswari and Govindarajan.k
5
in their article entitled, housing loan borrower in banks: A Micro Study.
They concluded that adoption of modern banking technology as a means to improve housing loan borrowers.

Uma Shankar Mishra
6
in her article entitled Housing Loan Quality Attributes Affection Borrowers
Satisfaction In Banking Sector Of India, explored structural equation model is formulated to indicate the
impact of the relationship between borrowers satisfaction and loan attributes.

G.Visalatchi
7
in her article entitled A comparative study on the housing loan borrowers of public and private
sector banks in Thoothukudi area. Explored that three component service quality model and concluded that
the survival and growth of a bank does not depend on the size of funds, rather it depends on its ability to
provided qualitative to its borrowers on sustained basics.

6. Scope Of The Study
The study has been undertaken mainly to highlight the features of housing loans offered by public and private
sector banks in Thoothukudi area. All kinds of borrowers like Businessmen, Agriculturists, Professionals,
government employees, Private employees and self employed people have been included in this study. It has
been undertaken from the stand point of borrowers, and banks are excluded from the study. Only individual
borrowers have been taken and other are excluded from the study.

7. Objectives Of The Study
1. To study the socio-economic profile of the respondents.
2. To study the housing loan borrowers for availing of such loan from public and private sector banks.
3. To study the corporate culture about the home loan.
4. To analyze public & private home loan market and its growing trends.

4. Rajesh Kumar stood-Housing Loan Portfolio of ASCB- Growth Privets Associated Risks and mitigation Strategies IBA
Bulletin, June 2003.
5. Maheswari.V and Govindarajan.K Horsing Loan Borrowers in Banks : A micro study, Sothern economist, vol. XXXI,No.3
Dec 2009,PP.19-23.
6. Uma Shankar Mishear, Housing Loan attributes affecting Borrowers satisfaction in banking sector of India. European
Journal of Economics ISSN 1450-2275 Issue 24(2010),PP.88-97.
7. G.Visalatchi, A comparative study on the Housing Loan Borrowers of Public and Private Sector Banks in Thoothukudi
Area.
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5. To analyze various methods of operating a home loan.
6. To gain knowledge about various home loan products.
7. To know various rates available while providing home loan.
8. To offer suggestions for the improvement of housing loan schemes in public and private sector banks.
9. To understand current scenario of the India Housing Finance.
10. Make comparative analysis of SBI, CB, IOB (Public sector bank) and HDFC, TMB, Federal Bank
(Private sector banks).

Hypothesis To Be Tested
In order to study the relationship between the personal profile of the respondents and their level of perception
towards the housing loan borrowers of banks, the following hypotheses were framed.
1. The level of perception is independent of the gender of the respondents.
2. The level of perception is independent of the age of the respondents.
3. The level of perception is independent of the educational qualification of the respondents.
4. The level of perception is independent of the occupational status of the respondents.
5. The level of perception is independent of the monthly family income of the respondents.
6. The level of perception is independent of the marital status of the respondents.
7. The level of perception is independent of the size of the family of the respondents.
8. The level of perception is independent of the nature of family of the respondents.
9. The level of perception is independent of the place of residence of the respondents.

Geographical Coverage
The present study has been carried out in Thoothukudi area which covers SPIC, Saguburam,
veerapandiyanpattanam, Tiruchendur.

Period Of Study
The researcher herself carried out the field work for this study. It was conducted during the period from June
2013 to July 2013. The researcher have used interview schedule for collecting the data. The Study was
collected on Sundays and holidays. Care was taken to ensure completeness and accuracy in the interviews.

Methodology And Tool
This section describes the methodology which includes the collection of data, the construction of interview
schedule, f-test, t-test, garrets ranking, field work and data collection, frame work of analysis.

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Collection Of Data
This study is compiled with the help of both primary and secondary data. The primary data were collected
directly from the respondents with the help of interview schedule. Secondary data were collected from the
books, journals and websites.

Construction Of Interview Schedule And Pre-Test
Interview schedule in this study has been structured by the researchers themselves. The variables to be studied
have been identified in the preliminary interview schedule with some respondents. The variables thus
identified have been converted in to appropriate questions. A pre-test was conducted. The interview schedule
was pre-test and revised in the light of the experience gained from the pre-test.

Sampling Design
With a view to study, A Study on housing loan borrowers of public and private sector banks in Thoothukudi
area. 60 respondents from public sector banks and 60 respondents from private sector banks. The
respondents were selected by adopting convenient sampling technique.

Scheme Of Analysis
The information collected through the interview schedule was analyzed and tabulated. Opinion regarding the
housing loan product of commercial banks.

F-test is also used to find out the housing loan f-test between the mean and standard deviation. To test the
relationship between the level of housing loan borrowers of banks and socio-economic profile of the
borrowers f-test and t-test is used.

Limitations Of The Study
Every researcher suffers from errors and limitations. Some of these are inherent in the research design while
some others become parts of the study during various stages of operation. The present study is subject to the
following constraints and limitations. The following limitations of the study:
The convenience sampling method is followed in selecting the respondents. So that results of the study
may be biased.
As the study was conducted for a short duration of 3 months, it was difficult to study in depth about the
various aspects.
Time, cost and other resources were constraints for a fully comprehensive study.

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8. Data Analysis And Interpretation
8.1 Kind of difficulties of getting the home loan from public and private sector banks
There are number of difficulties of getting the home loan from bank borrowers of public and private sector
banks.
Table1: Kind of difficulties of getting home loan from (public sector banks)
Source: Primary data
From table 1, shows that kind of difficulties of getting the home loan from public banks, lack of transparency
was ranked first, delay in sanctioning was ranked second, delay in disbursement was ranked third, improper
response from officials was ranked fourth, lack of information was ranked fifth, ambiguous documentation
was ranked sixth, poor post purchase attitude was ranked seventh, government policy/RBI regulations was
ranked eight, unfair charges was ranked nine and the remaining lengthy procedures was ranked tenth.


S.NO
Kind of
difficulties in
getting loan
N o. o f r e s p o n d e n t s
Total
Score
Mean
Score
Rank
I II III IV V VI VII VIII IX X
1.
Lengthy
Procedures
3
(30)
5
(45)
3
(24)
2
(14)
3
(18)
5
(25)
6
(24)
6
(18)
2
(4)
25
(25)
2,263 37.72 X
2.
Government
Policy/RBI
regulations
3
(30)
3
(27)
5
(40)
2
(14)
4
(24)
9
(45)
3
(12)
2
(6)
28
(56)
1
(1)
2,541 42.35 VIII
3.
Ambiguous
documentation
9
(90)
3
(27)
5
(40)
6
(42)
5
(30)
2
(10)
4
(16)
22
(66)
1
(2)
3
(3)
2,993 49.88 VI
4.
Improper
response from
officials
2
(20)
9
(81)
6
(48)
10
(70)
5
(30)
2
(10)
18
(72)
3
(9)
2
(4)
3
(3)
3,070 51.2 IV
5.
Delay in
sanctioning
6
(60)
8
(72)
10
(80)
5
(35)
11
(66)
13
(65)
1
(4)
2
(6)
3
(6)
1
(1)
3,363 56.1 II
6.
Delay in
disbursement
13
(130)
7
(63)
6
(48)
6
(42)
7
(42)
14
(70)
3
(12)
2
(6)
-
2
(2)
3,169 52.8 III
7.
Lack of
transparency
9
(90)
9
(81)
6
(48)
10
(70)
5
(30)
1
(5)
18
(72)
1
(3)
1
(2)
- 3,435 57.25 I
8.
Lack of
information
5
(50)
3
(27)
12
(96)
7
(49)
6
(36)
7
(35)

-
18
(54)
-
2
(2)
2,995 49.92 V
9.
Poor post
purchase
attitude
5
(50)
9
(81)
2
(16)
10
(70)
3
(18)
3
(15)
5
(20)
1
(3)
20
(40)
2
(2)
2,890 48.2 VII
10. Unfair charges
5
(50)
4
(36)
5
(40)
2
(14)
11
(66)
4
(20)
2
(8)
3
(9)
3
(6)
21
(21)
2,531 42.18 IX
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Table1: Kind of difficulties of getting home loan from (private sector banks)
Source: primary data
Table 1 shows that kind of difficulties of getting the home loan from private banks, ambiguous documentation
was ranked first, improper response from officials was ranked second, lack of information was ranked third,
lengthy procedures was ranked fourth, poor post purchase attitude was ranked fifth, delay in disbursement
was ranked sixth, delay in sanctioning was ranked seventh, government policy/RBI regulations was ranked
eighth, lack of transparency was ranked nine and the remaining unfair charges was ranked tenth.
Garrentt ranking conversion table for difficulties in getting the housing loan borrowers of
public and private sector banks
Throuch Ranking Techniques
Garrett Ranking =

Calculated Table
Value value
I Rank =

= 5 = 81

S.
No
Kind of
difficulties in
getting loan
N o. o f r e s p o n d e n t s
Total
score
Mean
score
Ran
k
I II III IV V VI VII VIII IX X
1.
Lengthy
Procedures
4
(40)
5
(45)
7
(56)
4
(28)
3
(18)
6
(30)
4
(16)
10
(30)
6
(12)
11
(11)
3,004 50.07 IV
2.
Government
policy / RBI
regulations
14
(14
0)
1
(9)
7
(56)
3
(21)
7
(42)
5
(25)
5
(20)
5
(15)
8
(16)
5
(5)
2,930 48.83 VIII
3.
Ambiguous
documentation
9
(90)
9
(81)
6
(48)
4
(28)
3
(18)
6
(30)
5
(20)
7
(21)
8
(16)
3
(3)
3,101 51.68 I
4.
Improper
response from
officials
7
(70)
12
(108)
5
(40)
13
(91)
5
(30)
3
(15)
7
(28)
2
(6)
3
(6)
3
(3)
3,088 51.47 II
5.
Delay in
sanctioning
2
(20)
9
(81)
5
(40)
9
(63)
7
(42)
8
(40)
3
(12)
4
(12)
8
(16)
5
(5)
2,957 49.28 VII
6.
Delay in
disbursement
4
(40)
-
10
(80)
9
(63)
11
(66)
8
(40)
7
(28)
5
(15)
2
(4)
4
(4)
2,977 49.62 VI
7.
Lack of
transparency
1
(10)
4
(36)
1
(8)
12
(84)
14
(84)
6
(30)
9
(36)
4
(12)
4
(8)
5
(5)
2,840 47.33 IX
8.
Lack of
information
2
(20)
3
(27)
13
(104)
2
(14)
5
(30)
10
(50)
6
(24)
12
(36)
4
(8)
3
(3)
3,042 50.7 III
9.
Poor post
purchase
attitude
2
(20)
14
(126)
3
(24)
2
(14)
1
(6)
4
(20)
11
(44)
6
(180
13
(26)
4
(4)
2,992 49.87 V
10 Unfair charges
15
(15
0)
3
(27)
3
(24)
2
(14)
4
(24)
4
(20)
3
(12)
5
(15)
4
(8)
17
(17)
2,789 46.48 X
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II Rank =

= 15 = 70

III Rank =

= 25 = 63

IV Rank =

= 35 = 57

V Rank =

= 45 = 52

VI Rank =

= 55 = 47

VII Rank =

= 65 = 42

VIII Rank =

= 75 = 36

IX Rank =

= 85 = 29

X Rank =

= 95 = 18

8.2 Level Of Perception
Table 2 clearly shows the level of perception of the respondents.
Table2: Level of perception
Level of perception
Public banks Private banks
No. of
respondents
Percentage of
total
No. of
respondents
Percentage of
total
High 10 17 11 18
Medium 45 75 34 57
Low 5 8 15 25
TOTAL 60 100 60 100
Source: Primary data
From the above Table 2, it was clear that out of 60 respondents from public banks, 10 (17 percent)
respondents were in the category of high level perception, 45 (75 percent) respondents were in the category of
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medium level perception, 5 (8 percent) respondents were in the category of low level perception towards the
housing loan borrowers.

Out of 60 respondents from private banks, 11 (18 percent) respondents were in the category of high level
perception, 34 (57 percent) respondents were in the category of medium level perception, 15 (25 percent)
respondents were in the category of low level perception towards the housing loan borrowers.

8.3 Relationship Between The Gender And Level Of Perception
The Gender wise classification of the respondents on the basis of their level of perception towards housing
loan is shown in Table- 2.1
Table 2.1: Gender and level of perception
Gender
Level of perception Level of perception
Public banks Private banks
High Medium Low Total High Medium Low Total
Male 3 (30) 24 (53) 2 (40) 29 7 (64) 20 (59) 8 (53) 35
Female 7 (70) 21 (47) 3 (60) 31 4 (36) 14 (41) 7 (47) 25
TOTAL 10 45 5 60 11 34 15 60
Source: Primary Data

From the above Table-2.1, it was clear that out of 60 respondents from public banks, 10 respondents have
perceived high level perception in which 3 (30 percent) respondents were male and the remaining 7 (70
percent) respondents were female. 45 respondents have perceived medium level perception in which 24 (53
percent) respondents were male and the remaining 21 (47 percent) respondents were female. 5 respondents
have perceived low level perception in which 2 (40 percent) respondents were male and remaining 3 (60
percent) respondents were female.

Out of 60 respondents from private banks, 11 respondents have perceived high level perception in which 7
(64 percent) respondents were male and the remaining 4 (36 percent) respondents were female. 34
respondents have perceived medium level perception in which 20 (59 percent) respondents were male and the
remaining 14 (41 percent) respondents were female. 15 respondents have perceived low level perception in
which 8 (53 percent) respondents were male and the remaining 8 (53 percent) respondents were female.

Ho - There is no significant relationship between the gender and the level of perception.
The results of ANOVA are given in Table 2.1.1
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Table 2.1.1: Gender of the respondents and their level of perception results of anova
Public Banks
Source of variation
Sum of
squares
Degrees of
freedom
Mean sum
of squares
Ratio of
F
Table value
Between level of
perception
2.33 2 1.17 5.29 19
Between gender
0.63 1 0.63 9.83 199.50
Error
12.37 2 6.19 - -

Private Banks
Source of Variation
Sum of
Squares
Degrees of
Freedom
Mean Sum
of Squares
Ratio of
F
Table value
Between level of
perception
6.33 2 3.17 1 19
Between gender
16.33 1 16.63 5.21 18.513
Error
6.37 2 3.19 - -

It could be seen from the public banks table 2.1.1 that, they obtained F values 5.29 and 9.83 were less than
the table values (19 and 199.50) at 5% level of significance. Hence, the null hypothesis There is no
significant association between gender of the respondents and their level of perception was accepted. As
such, it is concluded that the level of perception of different gender of the respondents do not differ
significantly.

It could be seen from the private banks table 5.3 that, the obtained F values and 5.21 were less than the table
values (19 and 18.513) at 5% level of significance. Hence, the null hypothesis There is no significant
association between gender of the respondents and their level of perception was accepted. As such, it is
concluded that the level of perception of different gender of the respondents do not differ significantly.

8.4 Relationship Between The Age And Level Of Perception
The age wise classification of the respondents on the basis of their level of perception towards housing loan is
shown in Table 1.3
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Table 1.3: Age and level of perception
Age
Level of perception Level of perception
Public banks Private banks
High Medium Low Total High Medium Low Total
Below 25 years 2 (20) 2 (4) 2 (40) 6 3(27) 20 (59) 5(33) 28
26-35 Years 3 (30) 21 (47) 1 (20) 25 3(27) 10 (29) 4(27) 17
36-45 Years 2 (20) 17 (38) 1 (20) 20 3 (27) 2 (6) 3(20) 8
Above 45 Years 3 (30) 5 (11) 1 (20) 9 2 (19) 2 (6) 3(20) 7
TOTAL 10 45 5 60 11 34 15 60
Source: Primary data

From the above Table 1.3, it was clear that out of 60 respondents from public banks, 10 respondents have
high level perception in which 2(20 percent) respondents were in the age group of below 25 years, 3 (30
percent) respondents were in the age group between 26-35 years, 2(20 percent) respondents were in the age
group of in the age group between 36-45 years and the remaining 3(30 percent) respondents were in the age
group of above 45years. 45 respondents have medium level perception in which 2(4 percent) respondents
were in the age group of below 25 years, 21 (47 percent) respondents were in the age group between 26-35
years, 17 (38 percent) respondents were in the age group between 36-45 years and the remaining 5 (11
percent) respondents were in the age group of above 45 years.

5 respondents have low level perception in which 2(40 percent) respondents were in the age group of below
25 years, 1 (20 percent) respondent was in the age group between 26-35 years, 1(20 percent) respondent was
in the age group between 36-45 years and the remaining 1(20 percent) respondent was in the age group
between above 45 years. Out of 60 respondents from private banks, 11 respondents have high level perception
in which 3 (27 percent) respondents were in the age group of below 25 years, 3(27 percent) respondents were
in the age group between 26-35 years, 3(27 percent) respondents were in the age group between 36-45 years
and remaining, 2 (19 percent) respondents were in the age group of above 45 years.

34 respondents have medium level perception in which 20 (59 percent) respondents were in the age group of
below 25 years, 10 (29 percent) respondents were in the age group between 26-35 years, 2 (6 percent)
respondents were in the age group between 36-45 years, and the remaining 2 (6 percent) respondents were in
the age group of above 45 years. 15 respondents have low level perception in which 5(33 percent) respondent
was in the age group of below 25 years, 4(27 percent) respondent was in the age group between 26-35 years,
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3 (20 percent) respondent was in the age group of 36-45 years of age and the remaining 3(20 percent)
respondent was in the age group of above 45 years.

Ho- There is no significant relationship between age and the level of perception. The results of ANOVA are
given in Table- 1.3.1

Table: 1.3.1 Age of the respondents and their level of perception results of anova
Public Banks
Source of variation
Sum of
squares
Degrees of
freedom
Mean sum
of squares
Ratio of
F
Table value
Between level of
perception
210.3 2 105.15 3.63 5.1433
Between age
80.6 3 26.87 1008 8.9406
Error
173.8 6 28.97 - -

Private Banks
Source of variation
Sum of
squares
Degrees of
freedom
Mean sum
of squares
Ratio of
F
Table value
Between level of
perception
88.2 2 44.1 1.68 4.7374
Between age
95.3 3 57.65 1.82 4.7374
Error
183.5 6 26.21 - -

It could be seen from public banks, the table 1.3.1 that, the obtained F values 3.63 and 1.08 were less than
the table values ( 5.1433 and 8.9406) at 5% level of significance. Hence, the null hypothesis There is no
significant association between age and level of perception was accepted. As such, it is concluded that the
level of perception of different age group of the respondents do not differ significantly.

The private banks table 5.5 that, the obtained F values 1.68 and 1.82 were less than the table values (4.7374
and 4.7374) at 5% level of significance . Hence, the null hypothesis There is no significant association
between age and level of perception was accepted. As such , it is concluded that the level of perception of
different age group of the respondents do not differ significantly.

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8.5 Relationship Between Educational Qualification And Level Of Perception
The educational qualification of the respondents on the basis of their level of perception towards housing
loans is shown in Table 1.4.

Table: 1.4 Educational qualification and level of perception
Educational
qualification
Level of perception Level of perception
Public banks Private banks
High Medium Low Total High Medium Low Total
No formal
education
3 (30) 8 (9) 1(20) 8 3(27) 6(18) 3(20) 12
Up to SSLC 1 (10) 4 (19) 1 (20) 6 2(18) 6 (18) 2(13) 10
Higher Secondary 1 (10) 8 (18) 1 (20) 10 2 (18) 4 (12) 2(13) 8
Graduate 3 (30) 21 (46) 1 (20) 25 3 (27) 7 (21) 3(20) 13
Post Graduate 2 (20) 8 (18) 1 (20) 11 1 (10) 11 (31) 5(34) 17
TOTAL 10 45 5 60 11 34 15 60
Source: Primary data

From the above the table 1.4, clear that out of 60 respondents from public banks, 10 respondents have high
level perception in which 3 (30 percent) respondent was no formal education , 1(10 percent) respondents
have studied up to SSLC, 1 (10 percent) respondent has studied higher secondary, 3(30 percent) respondents
have completed graduates and the remaining 2 (20 percent) respondents have completed post graduates.
45 respondents have medium level perception in which 4 (9 percent) respondent was no formal education, 4
(9 percent) respondents have studied up to SSLC, 8 (18 percent) respondents have studied higher secondary,
21 (46 percent) respondents have studied graduates and remaining 8 (18 percent) respondent have studied post
graduates.

5 respondents have low level perception in which 1(20 percent) respondent was no formal education , 1 (20
percent) respondent has studied up to SSLC, 1 (20 percent) respondent has studied higher secondary , 1 (20
percent) respondent has completed graduates and the remaining , 1 (20 percent) respondent has completed
post graduate. Out of 60 respondents from private banks, 11 respondents have high level perception in which
3 (27 percent) respondent was no formal education, 2 (18 percent) respondents have studied up to SSLC, 2(18
percent) respondents have studied higher secondary, 3 (27 percent) respondents have completed graduate, and
the remaining 1 (10 percent) respondent has completed post graduate.
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34 respondents have medium level perception in which 6 (18 percent) respondent was no formal education, 6
(18 percent) respondents have studied up to SSLC, 4 (12 percent) respondents have studied higher secondary,
7 (21 percent) respondents have studied graduates, 11 (31 percent) respondents have completed post
graduates. 15 respondents have low level perception in which 3 (20 percent) respondent was no normal
education, 2(13 percent) respondents have studied up to SSLC, 2 (13 percent)respondents have studied
higher secondary, 2 (13 percent) respondents have completed graduates and the remaining 5 (34 percent)
respondents have completed post graduates.
Ho There is no significant relationship between educational qualification and the level of perception. The
results of ANOVA are given in table 1.4.1

Table: 1.4.1 Educational qualification of the respondents and their level of perception -results of anova
Public Banks
Source of variation
Sum of
squares
Degrees of
freedom
Mean sum of
squares
Ratio of
F
Table value
Between level of
perception
70 2 35 2.24 4.4590
Between educational
qualification
75.2 4 18.8 1.21 3.8378
Error 124.8 8 15.6 - -

Private Banks
Source of variation
Sum of
squares
Degrees of
freedom
Mean sum of
squares
Ratio of
F
Table value
Between level of
perception
9.73 2 4.87 1.91 4.4590
Between educational
qualification
15.23 4 3.81 1.49 3.8378
Error
20.37 8 2.55 - -

It could be seen from the public banks table 1.4.1 that, the obtained F values 2.24 and 1.21 were less than
the table values (4.4590 and 3.8378) at 5% level of significance. Hence, the null hypothesis There is no
significant association between educational qualification and level of perception was accepted. As such, it is
concluded that the level of perception of different educational qualification of the respondents do not differ
significantly.
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It could be seen from the private banks table 5.7 that, the obtained F values 1.91 and 1.49 were less than the
table values (4.4590 and 3.8378) at 5% level of significance. Hence, the null hypothesis There is no
significant association between education qualification and level of perception was accepted. As such, it is
concluded that the level of perception of different educational qualification of the respondents do not differ
significantly.

8.6 Consolidated Results Of F Test
The Consolidated results of F test are given Table 1.5

Table: 1.5 Consolidated results of f test
S.
No
Personal
Factors
Public Banks Private banks
Degrees
of
freedom
Calculated
value
Table
value
Association
Degrees
of
freedom
Calculated
value
Table
value
Association
1 Gender C = 2
R = 1
5.29
9.83
19
199.50
Not
significant
C = 2
R = 1
1
5.21
19
18.513
Not
significant
2. Age C = 2
R = 3
3.63
1.08
5.1433
8.9406
Not
significant
C = 2
R = 3
1.68
1.82
4.7374
4.7374
Not
significant
3. Educational
qualification
C = 2
R = 4
2.24
1.21
4.4590
3.8378
Not
significant
C = 2
R = 4
1.91
1.49
4.4590
3.8378
Not
significant

The preference of the housing loan borrowers of public and private sector banks towards the level of
perception has not significant association with their personal profiles such as gender, age, educational
qualification,

8.7 Student T Distribution
The following are some of the examples to illustrate the way in which the student distribution is generally
used to test the significance of the various results obtained from small samples.

To Test The Significance Of The Mean Of Random Sample
In determining whether the mean of a sample drawn from a normal population deviates significantly from a
stated value (the hypothetical value of the populations mean), when variance of the population is unknown we
calculated the statistics

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t=
s
n x

Where
x = the mean of the sample
= the actual or hypothetical mean of the population
n = the sample size
s = the standard deviation of the sample
=


(or)
S =



Where
D = Deviation from the assumed mean
If the calculated value of (t) exceeds t 0.05, we say that the difference between x and is significant at 5%
level, if it exceeds t 0.01 the difference is said to be significant at 1% level. If /t/ < t 0.05, we concluded that
the difference between x and is not significant and hence the sample might have been drawn from the
population with mean = .

Fiducial Limits Of Population Mean
Assuming that the sample is a random sample from a normal population of unknown mean the 95% fiducially
limits of the population
mean () are :

And 99% limits are
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8.8 Level Of Satisfaction Towards Home Loan Products
The data presented in Table1.7 shows the level of satisfaction towards home loan products.

Table: 1.7 Level of satisfaction towards home loan products public and private sector banks

Public banks significant at 0.05 level. Table value at 0.05 level for degrees of
freedom = (n - 1) = 6 1 = 5, 2.571

Private bank significant at 0.05 level. Table value at 0.05 level for degree of
freedom = (n - 1) = 6 1 = 5, 2.571
level of satisfaction towards
home loan products
Public banks
Mean
score

Co
efficient T test Rank
Interest rate 22 139.36 633.45 0.75 I
Mode of payment 22 142.24 646.55 0.73 III
Formalities 22 141.45 642.95 0.74 II
Grievances hand link 22 144.19 655.95 0.73 V
Approved by employees 22 143.54 652.45 0.73 IV
Financial Support 22 144.54 657 0.72 VI
Level of satisfaction towards
home loan products
Private banks
Mean
score

Co
efficient T test Rank
Interest rate 26 166 638.46 0.76 I
Mode of payment 26 169.28 651.08 0.74 II
Formalities 26 170.26 654.85 0.74 IV
Grievances hand link 26 172.66 664 0.09 V
Approved by employees 26 174.83 672 0.72 VI
Financial Support 26 170 654 0.74 III

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Table 1.7 shows that the public banks co efficient of variation for the variables Interest rate was the least
score (633.45) and it was ranked first followed by Formalities (642.95) Mode of payment (646.55),
Approved by employees (655.41), Grievances hand link (655.41), Financial support (657).

Table 1.7 shows that the private banks co efficient of variation for the variables Interest rate(638.46)
Mode of payment (651.08), Financial support (654), Grievances hand link (654.85), Approved by
employees ( 672).

9. Findings Of The Study
From the analysis carried out the above said objectives and hypothesis the following are the major findings of
the study.
- From public banks majority of the respondents were female and in the case of private banks
respondents were male.
- 42 percent of the respondents were in the age group between 25-35 years from public banks and
incase of private banks 47 percent of the respondents were in the age group of below 25 years.
- 42 percent of the respondents were graduates from public banks and in the case of private
banks 28 percent of the respondents were post graduates.
- By the application of F-test it was clear that incase of public sector banks level of perception
regarding the housing loan of gender, age, educational qualification, were dependent.
- In case of private banks level of perception regarding the housing loan ,gender, age, educational
qualification were dependent.

10. Suggestions
- Peoples who are opt home loans for courtesy as the main feature Traditionally bankers and
financiers have been too proud of their position as lenders. So the field staff helps the borrowers
in filling up the application form and which other matters. All the advertisements should be
focused on the place of execution in addition to the courteous behavior evinced by the
employees of the service provider.
- The bank should review the housing loan portfolio at periodical intervals for capturing the new
market to avoid risk and for updating their schemes.
- Branches can obtain suitable banners and print the banners in an attractive way and display
them in the banking hall for the benefit of the customers.
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- Branches can arrange customers meeting to popularize these lend schemes.
- The banks can think of opportunities marketing agents for housing loans as is being done by
financial institutions. At the apex level a lot of publicity can be given on the advantages of bank
loans.
- Opening a special housing branch and posting field officers for housing finance in intensive
areas with a view to tap the business potential and to serve the clientele on a Continuous basis
may be helpful.
- Attractive incentives are to be given to borrowers.
- All employees should be familiar with the details of the housing loan schemes of their banks.
- Incentive and recognition should be given to banks and employees closing special work in this
field.
- The system of changing a reduced rate of interest based on the credit rating of the borrowers
may be introduced in housing loan schemes.
- All information regarding housing loans should be available on the website of banks in an
interactive mode.
- Loan application forms should be simplified.

11. Conclusion
The home loan market in India has grown at a rapid and alarming rate of over 40% over the period of the last
four years. And from the reports from one of the industry experts, it is evident that these is very little chance
that these will be any significant decline in growth rates in the future. There fore it becomes important at this
point in time to examine the key factors that have been instrumental in triggering this high growth period.
These are several reasons that can be considered as having attributed to the growth of the home loan market.
On the demand side, the first and the most important factor for the growth has been faster rise in incomes as
compared to property prices, thus making housing more affordable. Most of the housing finance companies in
India have introduced several new home loan products in order to meet the needs of a wide variety of
customers. The various home loan schemes have market. The customer can choose those schemes which he
feels is good for him and have the capacity to repay it on that specified time period.

12. References
Books
1. Agawam, H.N.1980. A portrait of Nationalized Banks, Delhi: Inter India Publication.
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2. Bandyapaduyay, R.1984. Emerging challenges of Indian Banking and Policy.
3. Facts, figures and Analyses 1947 -1997. India at 50. Express publications (Madurai) Ltd.
4. Henry. E. Gazette and Reword Worth. Statistics psychology and Education, vehicles Feiffer and Simons private
ltd., Bombay 1981, P.329.
5. Nephis 1999. How to Borrow from Banking and Financial Institutions, (10
th
ed.) New Delhi: A Nephi
publications,
6. Santos Kumar Adhikari, The lending Banker, Calcutta: J.N.Ghash and sons.
7. Thane lingam, N.1985 Research methodology, Rainbow publications, Coimbatore.
8. Versgney, P.N.1997. Banking Law and Practices. (34
th
ed) New Delhi: Sultan Chan & Sons.
9. P.N.VARSHNEY and D.K.MITTAL.2003 Indian Financial system, Chennai
10. D.JOSEPH Anabas, V.K.Boominathan, P.Manoharan and G.Gnanaraj. 2010. Financial Service.
11. M.Y. Khan, 3
rd
Edition, financial institutions and markets structure, growth and Innovations.

Reports And Projects
1. Sinivasan K.L.2000. A Project on Housing Finance, How SBI can Establish Leadership. SBI STC paramour
Chennai.
2. Palanisamy. K.2000. A Project on challenges Ahead. SBI STC Paramour Chennai.
3. Pradeep Kumar Sharma. C.H.Bhabha scholarship project Report 2003. IBA Bulletin, June 2003.
4. Dr.S.Hasanbanu and V.Jeya shree, A comparative study on factors influencing Housing loan Borrowers of public
and private sector Banks in Uthanapalayam Talus. K.K.R.H. Colleges Uthamapalayam. Tamilnadu.
5. M.Vijayakumar and Dr.B.Subburaj, Housing Finance An Analysis of post purchase Behavior of consumers.
Gandhi gram Rural University, Indigo, TamilNadu.

Websites
www.sbi.org.in
www.canara.org.in
www.iob.org.in
www.icici.org.in
www.hdfc.org.in
www.federal.org.in
www.Housing loan borrowers @ yahoo.co.in
www.Housing loan @ google.co.in
www.private sector bank @ google.com.in
www.hdfc.loan borrowers of public and private banks @yahoo.co.in
www.hdfc instant home loans.com