Study of Housing Loan and Awareness of Top Up Loans

KARNATAK LAW SOCIETYS
INSTITUTE OF MANAGEMENT EDUCATION AND RESEARCH, BELGAUM.

(Affiliated to Karnatak University, Dharwad & Recognized by AICTE, New Delhi)
(2008-2010)
CERTIFICATE
This is to certify that Ms. Shilpa M. Bhagoji has satisfactorily
Completed her
Major Concurrent Project
AT
BELGAUM
Entitled
STUDY OF HOUSING LOAN AND AWARENESS OF TOP UP

LOANS
In partial fulfillment of the requirement for the award of
Masters Degree in Business Administration Awarded by Karnatak
University, Dharwad for the year 2009-2010.
Institute Guide Director

Prof. S. A.Deshpande. Dr. A B. Kalkundrikar
KARNATAK LAW SOCIETYS

INSTITUTE OF MANAGEMENT EDUCATION AND RESEARCH, BELGAUM.
(Affiliated to Karnatak University, Dharwad & Recognized by AICTE, New Delhi)
(2008-2010)
A PROJECT REPORT
ON
STUDY OF HOUSING LOAN AND AWARENESS OF TOP UP
LOANS
AT
Submitted To:
KARNATAK UNIVERSITY DHARWAD FOR PARTIAL FULFILLMENT
OF MASTER OF BUSINESS ADMINISTRATION
Submitted By:
SHILPA M. BHAGOJI
Reg No: MBA08003068. MBA IV semester
UNDER THE GUIDANCE OF
Institute Guide Organisation Guide

Prof. S. A. Deshpande Mr. M. G. Gore
Faculty Chief Manager, RASMECCC, SBI
ACKNOWLEDGEMENT
This project has been a unique experience for me, where I could learn practically the
working of an organization and interact with all the professionals and customers there.
It is my privilege to extend words of thanks to the people who have helped and
encouraged me in completing this study successfully.
My special thanks to Mr. Gore, Chief Manager, SBI RASMECCC, Belgaum under
whose guidance this project was completed. I remain obliged to him for taking off time from
his busy schedule to guide me in this project.
I would also like to thank our Director, Dr A B. Kalkundrikar for his whole hearted
support.
I am extremely thankful to my project guidance Prof. S. Deshpande, for his constant

and timely support and supervision during my concurrent project.
I owe a debt of gratitude to my Parents, the silent guides in my Life without their never-
ending support nothing would have been possible.
I also dedicate my sincere thanks to all Teaching & Non Teaching Staff Members for their
help.
Last but not the least I thank my friends and each & everyone who directly or indirectly
helped me in making my project successful.
SHILPA M. BHAGOJI
INDEX
Sl.No Particulars Page No
1 Executive summary
1
2 Introduction to SBI 4
3 Introduction to SBI Housing Loan

24
Schemes
4 Analysis & Interpretations 47
5 Hypothesis testing
58
6 Findings and Suggestions
68
7 Bibliography 72
8 Annexure 73
DECLARATION BY THE STUDENT
I Ms. Shilpa M. Bhagoji, hereby declare that the project entitled STUDY OF
HOUSING LOANS AND AWARENESS OF TOP UP LOANS at SBI RASMECCC,
Belgaum has been submitted to Karnatak University Dharwad, under the guidance of Prof. S.
Deshpande. As per the requirement of the curriculum of Masters of Business Administration
course of Karnatak University Dharwad.
This project report is submitted to the Institute of Management Education and Research,
Belgaum and also to SBI RASMECCC branch, Belgaum.
PLACE: BELGAUM Shilpa M. Bhagoji

DATE: Reg. No. MBA08003068
EXECUTIVE SUMMARY
The title of the project is STUDY OF HOUSING LOANS AND AWARENESS OF
DIFFERENT SCHEMES. Project is carried out at SBI RASMECCC (Retail Assets Small &
Medium Enterprises City Credit Centre), Belgaum. The main objective behind the study was to
understand the home loans provided by SBI and awareness of different schemes among
customers.
Objectives of the study:

To study the theoretical aspects of housing loans.
Home loan practices in SBI.
To know the awareness of customers about different schemes.
Statement of the problem:

Study has been taken in order to study the housing loan and awareness of different
schemes of housing loans among customers in SBI Belgaum.
Research Methodology:
Sampling method: - Deliberate Convenience Sampling. For selecting the sample for my
survey is randomly selected.
Sample size :- 50
Data collection method
Primary data
Questionnaire
Personal interview
Secondary data
Records of SBI
Journals
Websites
Scope of study
Channamma Nagar Branch, Belgaum.
Tools used for analysis

SPSS
Graphs and Charts
Limitations of study:
The limitation of the study is lack of information being provided by the staff of
the bank because of the privacy policy of the bank. The survey conducted is only to the
customers of Channamma Nagar Branch, Belgaum.
CHAPTER- 3
INTRODUCTION STATE BANK OF
INDIA
Housing scenario in India:

The housing scenario has certainly seen a lot of changes in recent years. The drop of interest
rates, stable real estate prices, and the attractive tax savings provided by the government have
together resulted in a high rate of growth, which is expected to continue.
Moreover, the mindset of the Indian customer, as far as taking a loan is concerned, has a
undergone a change. Unlike the cautious or even negative outlook on loans a few years ago,
the customer today has a far more positive and open outlook on taking a loan. He feels that
taking a loan enforces on him a sense of greater financial discipline, as he is bound to use a
part of his salary to pay the EMI, rather than spending on things on an adhoc basis. He also
prefers it to other options such as borrowing from friends and relatives, because in his mind,
taking a loan is about being self-reliant, and this gives him a greater sense of self-respect.
The growth rate of the economy might go up to levels of 6%, if the revival is kept up. Share
markets are not entirely looking up, though they are stabilizing levels, which can be termed as
reasonable. Industrial growth rate, which was wallowing at low of 1.5%, is now at around 5%.
In fact, industrial credit given out by banks which in normal times would be about 4-5 times of
bank credit given to housing, had in the last few years reduced to levels below advances to
housing loans.
The customer who is purchasing a house today has not only the options of competitively lower
rates of interest, but also choice of different types of loans starting from the house-purchase or
house-building loans to house-improvement loans, home equity loans, home-extension loans,
etc. It has never been better than this ever before.
The late 90s saw even housing go through a bad phase. But, then with that phase crossed, there
has been a steady revival and stabilization of the market at levels, which can be termed as
reasonable from the point of both the customers and those on the supply side. Housing is a
basic need and like any basic human need will be constantly in demand.
The housing industry is important because it directly addresses one of the basic needs of
society-shelter. Improvements in productivity and output in the housing sector, i.e, lower prices
and wider availability of affordable housing will therefore have a direct impact on the economy
of the country.
The industry plays an important role in the economic development of the country. Every rupee
invested in housing adds 78 paisa to the GDP. Over 269 industries are directly or indirectly
dependent on the housing sector. There is an estimated shortage of 20 million housing units in
the country with an estimated investment requirement of over 1500 billion. So it is important
to note that the organized Housing finance industry barely accounts for 30% of housing loan
disbursed in the country. The last few years have seen the housing loan market growing at
30%.
The housing finance industry is getting increasingly commoditized. Competition within the
sector is ensuring that players offer consumers flexibility and feature to choose form. Features
such as adjustable plans, lower processing fees, monthly rests, and low interest rates have
become common across the industry.
Thanks to economic liberalization and ensuing policy changes, the housing finance industry
has undergone a paradigm shift over the last decade. Gone are the days, when taking a loan
meant entering a labyrinth of documentation and dealing with condescending bank officials.
Today, in the backdrop of intense competition, housing finance companies are falling over each
other to woo potential customers. Housing finance being one of the safest lending avenues has
also contributed to the emergence of new players in the market.
The unique place that a house has in an individual's life plus the high proportion of the
customer's own money in the house provides considerable comfort for home loan companies.
In the present times, people are increasingly taking to credit, because of rising annual incomes
and the series of tax sops that have become an annual ritual in the Union Budget. With the
constant rise in demand for residential and commercial complexes, the growth of the real estate
sector in India has witnessed at an exponential rate over last five years.
Cut-throat competition among Indian housing finance companies has brought down the interest
rates by a few notches. The vast difference in interest rates across-the-board has all but
disappeared, and home loan companies are taking recourse to product innovation to stand out
in the burgeoning home loan market. Today, apart from the resident Indians, even NRI's can
apply for a home loan. An applicant applying for a loan can either opt for fixed or floating
rates. The loan rates of companies today are in between 7.50% to 12 %, depending on the
repayment years.
Banking History in India

Without a sound and effective banking system in India it cannot have a healthy economy. The
banking system of India should not only be hassle free but it should be able to meet new
challenges posed by the technology and any other external and internal factors.
For the past three decades India's banking system has several outstanding achievements to its
credit. The most striking is its extensive reach. It is no longer confined to only metropolitans or
cosmopolitans in India. In fact, Indian banking system has reached even to the remote corners
of the country. This is one of the main reason of India's growth process.
The government's regular policy for Indian bank since 1969 has paid rich dividends with the
nationalization of 14 major private banks of India.
Not long ago, an account holder had to wait for hours at the bank counters for getting a draft or
for withdrawing his own money. Today, he has a choice. Gone are days when the most efficient
bank transferred money from one branch to other in two days. Now it is simple as instant
messaging or dial a pizza. Money have become the order of the day.
The first bank in India, though conservative, was established in 1786. From 1786 till today, the
journey of Indian Banking System can be segregated into three distinct phases. They are as
mentioned below:
Early phase from 1786 to 1969 of Indian Banks

Nationalization of Indian Banks and up to 1991 prior to Indian banking sector Reforms.
New phase of Indian Banking System with the advent of Indian Financial & Banking
Sector Reforms after 1991.
To make this write-up more explanatory, I prefix the scenario as Phase I, Phase II and Phase
III.
PhaseI
The General Bank of India was set up in the year 1786. Next came Bank of Hindustan and
Bengal Bank. The East India Company established Bank of Bengal (1809), Bank of Bombay
(1840) and Bank of Madras (1843) as independent units and called it Presidency Banks. These
three banks were amalgamated in 1920 and Imperial Bank of India was established which
started as private shareholders banks, mostly Europeans shareholders.
In 1865 Allahabad Bank was established and first time exclusively by Indians, Punjab National
Bank Ltd. was set up in 1894 with headquarters at Lahore. Between 1906 and 1913, Bank of
India, Central Bank of India, Bank of Baroda, Canara Bank, Indian Bank, and Bank of Mysore
were set up. Reserve Bank of India came in 1935.
During the first phase the growth was very slow and banks also experienced periodic failures
between 1913 and 1948. There were approximately 1100 banks, mostly small. To streamline
the functioning and activities of commercial banks, the Government of India came up with The
Banking Companies Act, 1949 which was later changed to Banking Regulation Act 1949 as per
amending Act of 1965 (Act No. 23 of 1965). Reserve Bank of India was vested with extensive
powers for the supervision of banking in India as the Central Banking Authority.
During those days public has lesser confidence in the banks. As an aftermath deposit
mobilization was slow. Abreast of it the savings bank facility provided by the Postal
department was comparatively safer. Moreover, funds were largely given to traders.
PhaseII
Government took major steps in this Indian Banking Sector Reform after independence. In
1955, it nationalised Imperial Bank of India with extensive banking facilities on a large scale
especially in rural and semi-urban areas. It formed State Bank of India to act as the principal
agent of RBI and to handle banking transactions of the Union and State Governments all over
the country.
Seven banks forming subsidiary of State Bank of India was nationalised in 1960 on 19th July,
1969, major process of nationalisation was carried out. It was the effort of the then Prime
Minister of India, Mrs. Indira Gandhi. 14 major commercial banks in the country were
nationalised.
Second phase of nationalisation Indian Banking Sector Reform was carried out in 1980 with
seven more banks. This step brought 80% of the banking segment in India under Government
ownership.
The following are the steps taken by the Government of India to Regulate Banking Institutions
in the Country:
1949 : Enactment of Banking Regulation Act.

1955 : Nationalization of State Bank of India.
1959 : Nationalization of SBI subsidiaries.
1961 : Insurance cover extended to deposits.
1969 : Nationalization of 14 major banks.
1971 : Creation of credit guarantee corporation.
1975 : Creation of regional rural banks.
1980 : Nationalization of seven banks with deposits over 200 crore.
After the nationalisation of banks, the branches of the public sector bank India rose to
approximately 800% in deposits and advances took a huge jump by 11,000%.
Banking in the sunshine of Government ownership gave the public implicit faith and immense
confidence about the sustainability of these institutions.
PhaseIII
This phase has introduced many more products and facilities in the banking sector in its
reforms measure. In 1991, under the chairmanship of M Narasimham, a committee was set up
by his name which worked for the liberalization of banking practices.
The country is flooded with foreign banks and their ATM stations. Efforts are being put to give
a satisfactory service to customers. Phone banking and net banking is introduced. The entire
system became more convenient and swift. Time is given more importance than money.
The financial system of India has shown a great deal of resilience. It is sheltered from any
crisis triggered by any external macroeconomics shock as other East Asian Countries suffered.
This is all due to a flexible exchange rate regime, the foreign reserves are high, the capital
account is not yet fully convertible, and banks and their customers have limited foreign
exchange exposure.
PURPOSE OF CREATION OF SBI:

Extension of banking facilities on a large scale, more particularly in rural and semi urban
areas, and for diverse other public purposes and to transfer it to undertaking of the Imperial
Bank of India and provide for other matters connected there to or incidental thereto.
VISION STATEMENT OF SBI:
a) Premier Indian Financial Services Group, with global perspective, world class
standards of efficiency and professionalism and core institutional values.
b) Retain its position in the country as a pioneer in development banking.
c) Maximize share holder value through high sustained earnings per share.
d) An institution with a culture of mutual care and commitment. A satisfying and exciting
work environment and continuous learning opportunities.
MISSION STATEMENT OF SBI:

To retain the Banks position as the Premier Indian Financial Services Group, with world
class standards and significant global business, committed to excellence in customer service,
share holder and employee satisfaction and to play a leading role in the expanding and
diversifying financial services sector, while continuing emphasis on its development banking
role.
CORE VALUES OF SBI:
1. Excellence in customer service.
2. Profit orientation.
3. Belongingness and commitment to Bank.
4. Fairness in all dealings and relations.
5. Risk taking and innovation.
6. Team playing.
7. Learning and renewal.
8. Integrity.
OVERVIEW OF SBI
State Bank of India is the largest and one of the oldest commercial bank in India, in existence
for more than 200 years. The bank provides a full range of corporate, commercial and retail
banking services in India. Indian central bank namely Reserve Bank of India (RBI) is the
major share holder of the bank with 59.7% stake. The bank is capitalized to the extent of
Rs.646bn with the public holding (other than promoters) at 40.3%. SBI has the largest branch
and ATM 44 network spread across every corner of India. The bank has a branch network of
over 14,000 branches (including subsidiaries). Apart from Indian network it also has a network
of 73 overseas offices in 30 countries in all time zones, correspondent relationship with 520
International banks in 123 countries. In recent past, SBI has acquired banks in Mauritius,
Kenya and Indonesia. The bank had total staff strength of 198,774 as on 31st March, 2006. Of
this, 29.51% are officers, 45.19% clerical staff and the remaining 25.30% were sub-staff. The
bank is listed on the Bombay Stock Exchange, National Stock Exchange, Kolkata Stock
Exchange, Chennai Stock Exchange and Ahmadabad Stock Exchange while its GDRs are
listed on the London Stock Exchange. SBI group accounts for around 25% of the total business
of the banking industry while it accounts for 35% of the total foreign exchange in India. With
this type of strong base, SBI has displayed a continued performance in the last few years in
scaling up its efficiency levels. Net Interest Income of the bank has witnessed a CAGR of
13.3% during the last five years. During the same period, net interest margin (NIM) of the
bank has gone up from as low as 2.9% in FY02 to 3.40% in FY06 and currently is at 3.32%.
Background
The State Bank of India is the oldest and largest bank in India, with more than $250 billion
(USD) in assets. It is the second-largest bank in the world in number of branches; it opened its
10,000th branch in 2008. The bank has 84 international branches located in 32 countries and
approximately 8,500 ATMs. Additionally, SBI has controlling or complete interest in a number
of affiliate banks, resulting in the availability of banking services at more than 14,600 branches
and nearly 10,000 ATMs. SBI traces its heritage to the 1806 formation of the Bank of Calcutta.
The bank was renamed the Bank of Bengal in 1809 and operated as one of the three premier
"presidency" banks (the presidency banks had the exclusive rights to manage and circulate
currency and were provided capital to establish branch networks). In 1921, the government
consolidated the three presidency banks into the Imperial Bank of India. The Imperial Bank of
India continued until 1955, when India's central bank, the Reserve Bank of India, acquired the
majority interest in the bank and changed its name to the State Bank of India (SBI).In 1959, the
Indian government passed the State Bank of India Act, resulting in the acquisition (majority
shareholding) of eight state affiliated banks and the creation of the State Bank of India Group
(SBI Group). The SBI itself is now majority owned by the Indian government, which
purchased the shares held by the Reserve Bank of India.
Evolution of SBI
The origin of the State Bank of India goes back to the first decade of the nineteenth century
with the establishment of the Bank of Calcutta in Calcutta on 2 June 1806. Three years later,
the bank received its charter and was re-designed as the Bank of Bengal (2 January 1809). A
unique institution, it was the first joint-stock bank of British India sponsored by the
Government of Bengal. The Bank of Bombay (15 April 1840) and the Bank of Madras (1 July
1843) followed the Bank of Bengal. These three banks remained at the apex of modern
banking in India till their amalgamation as the Imperial Bank of India on 27 January
1921.Primarily Anglo-Indian creations, the three presidency banks came into existence either
as a result of the compulsions of imperial finance or by the felt needs of local European
commerce and were not imposed from outside in an arbitrary manner to modernize India's
economy. Their evolution was, however, shaped by ideas culled from similar developments in
Europe and England, and was influenced by changes occurring in the structure of both the
local trading environment and those in the relations of the Indian economy to the economy of
Europe and the global economic framework.
Establishment
The establishment of the Bank of Bengal marked the advent of limited liability, joint-stock
banking in India. So was the associated innovation in banking, viz. the decision to allow the
Bank of Bengal to issue notes, which would be accepted for payment of public revenues within
a restricted geographical area. This right of note issue was very valuable not only for the Bank
of Bengal but also its two siblings, the Banks of Bombay and Madras. It meant an accretion to
the capital of the banks, a capital on which the proprietors did not have to pay any interest.
The concept of deposit banking was also an innovation because the practice of accepting
money for safekeeping (and in some cases, even investment on behalf of the clients) by the
indigenous bankers had not spread as a general habit in most parts of India. But, for a long
time, and especially up to the time that the three presidency banks had a right of note issue,
bank notes and government balances made up the bulk of the ingestible resources of the banks.
The three banks were governed by royal charters, which were revised from time to time. Each
charter provided for a share capital, four-fifth of which were privately subscribed and the rest
owned by the provincial government. The members of the board of directors, which managed
the affairs of each bank, were mostly proprietary directors representing the large European
managing agency houses in India. The rest were government nominees, invariably civil
servants, one of whom was elected as the president of the board.
Business
The business of the banks was initially confined to discounting of bills of exchange or other
negotiable private securities, keeping cash accounts and receiving deposits and issuing and
circulating cash notes. Loans were restricted to Rs. One lakh and the period of accommodation
confined to three months only. The security for such loans was public securities, commonly
called Company's Paper, bullion, treasure, plate, jewels, or goods 'not of a perishable nature'
and
no interest could be charged beyond a rate of twelve per cent. Loans against goods like opium,
indigo, salt woolens, cotton, cotton piece goods, mule twist and silk goods were also granted
but such finance by way of cash credits gained momentum only from the third decade of the
nineteenth century. All commodities, including tea, sugar and jute, which began to be financed
later, were either pledged or hypothecated to the bank. Demand promissory notes were signed
by the borrower in favor of the guarantor, which was in turn endorsed to the bank. Lending
against shares of the banks or on the mortgage of houses, land or other Real properties was,
however, forbidden. Indians were the principal borrowers against deposit of Company's paper,
while the business of discounts on private as well as salary bills was almost the exclusive
monopoly of individuals Europeans and their partnership firms. But the main function of the
three banks, as far as the government was concerned, was to help the latter raise loans from
time to time and also provide a degree of stability to the prices of government securities.
Establishment of RASMECCC goes back to December, 2005.

The purpose of establishment of RASMECCC is,
Scrutiny of loan application by experts and taking decisions by senior officials.
To monitor the loan accounts professionally.
Prompt recovery of loans and prompt legal processes.
Customer satisfaction to highest level.
Single window concept.
The turnaround time for housing loan sanction is 6 days.
Procedure for Housing Loan Sanction:

Branch receives application from applicant.
Scrutiny of application at branch is done.
Submit the application to RASMECCC.
Processing Officers will scrutiny again and also seek clarification from branches if
necessary.
Process the application with the help of Dream Home Package and appraisal to
sanctioning authority.
Sanctioning authority scrutiny the application and appraise.
Sanction loan if in order and submit for control to higher authority.
Higher authority will control loan if in order.
Appraisal will be informed about the sanction of the loan. Applicant will visit the
branch and sign the loan agreement and loan amount will be disbursed.
Stages for Housing Loan:
Plinth Level
Lentil Level
RCC Level
Interior
Recovery Process of Loans:

There are three methods followed by bank to recover the loan amount.
First stage of recovery:
1. By cheque: By taking post dated cheques.
2. If the account is existing, and if customer is salaried person, amount is recovered by
standing instructions.
3. Direct remittance by borrower in branch.
Second stage of recovery: In case of non recovery of loan amount from above sources, the
following procedure is followed.
Contact borrower over phone.
Notice is sent to borrower.
Issue legal notice to the borrower.
File a suit in court for the recovery.
Execution procedure.
Ceasing of property and sale of same in the public auction.
Recovery by compromise: Bank will give some concession to borrower in interest and in
principle amount also( in case of genuine loss only).
No compromise for willful defaulters.
The various products available at the RASMECCC Belgaum are:-
SBI Housing Loan
SBI Car Loan
SBI Education Loan
SBI Personal Loan
Loan against mortgage of property
Loan against Shares & Debentures
SBI Loan for Pensioners.
AGM
Organization Structure of RASMECCC:
Manager (Maintenance)
CM (Sanction)
CM (Recovery)
Process Officer 1 Division Manager1 Deputy

Manager1
Division Manager2
Process Officer 2 Division Manager3 Retail Deputy
Manager2
Division Manager4 Manager
Division Manager5
Division Manager6
Division Manager7 SME
Division manager8 Manager
Division manager9
All chief managers have four assistants in hierarchy.

Introduction to Housing Loan
schemes
SBI HOUSING LOAN SCHEME:

DIRECT FINANCE TO INDIVIDUALS:
Eligibility Individual(s) of 18 years and above with steady source of income
including persons engaged in agriculture and allied activities.
[PBBU/HL/AX/18 dt.01.03.06]
Purpose 1. To purchase/ construct a new house/ flat.
2. To purchase an existing (old) house/flat or
3. To extend an existing house
4. Repair/ renovate an existing house/ flat
5. Reimbursement of investment made in housing [for items 1-4]
from own resources.
6. Purchase furnishings/consumer durables as part of the project
cost.
7. One or more loans may be granted to an individual if he has the
capacity to repay.
Maximum Loan The actual loan amount is determined on the basis of borrowers
income, repayment capacity, age, assets and liabilities and cost of
house/flat.
Maximum Permissible Loan Amount(MPLA) is subject to:
Borrowers up to 45 years:[ with independent assured income] 60
times net monthly income (NMI) for salaried persons 5 times Net
Annual Income(NAI) in case of others OR up to a period generating
EMI<57.5% of NMI
Whichever is less.
Borrowers over 45 years of age[where all borrowers with an
independent assured income are over 45 years] 48 times net
monthly income for salaried persons 4 times Net Annual
Income in case of others OR Up to a period generating
EMI<50% of NMI
Whichever is less.
Joint Borrowers: if anyone with independent assured income
is below 45 years:[PBBU/HL/AX/06.05.06]
For borrower up to 45 years :60 times NMI/5times NAI. Borrower aged
45 years & above : 48 times NMI/4 times NAI MPLA is subjected to
following monetary ceilings:
For repairs/renovation: Rs10 lacs [loans above RS10 lacs
require prior administrative clearance of network GM]
For furnishings and consumer durables: 10% of the project
cost or Rs.3 lacs whichever is less where check off facility or
additional security or 3rd party guarantee good for the amount is
available.
Income of spouse/son/unmarried daughter and expected rental
of proposed house can be clubbed [subject to conditions]
Regular income from other sources (with proof) can be
considered.
Total project cost to include cost of land, additional amenities,
insurance premium, stamp duty & registration charges for
purchase/construction of new or old property.
Prior Administrative Not required for loans up to Rs.1 crore: For purchase/
Clearance construction of new house/flat or purchase of old house not
more than 15 years old.
Required for following categories: Loans above Rs.1 crore: for
purchase/construction of a house/flat.
Houses/flats more than 15 years old.
Loans against paripassu/second charge over property.
Margin i. Loans up to Rs.1 crore 15%
ii. Loans above Rs.1 crore 25%
iii. Repair/renovation of existing house/flat 20%
Security Equitable or Registered Mortgage of property. If neither is possible,
then sanctioning authority may accept at its discretion tangible security
of adequate value like Insurance Policies, GPN, Shares, Debentures,
Gold Ornaments or any tangible security of adequate value. (These are
to be valued with a margin as stipulated in the various schemes for
finance against the securities concerned.)
Processing Fee 0.50% of loan amount with a cap of Rs. 10000/- [inclusive of service
(Upfront) tax][PBBU/HL/AX/8 dt 02.06.06]
Interest Loans at fixed/floating rates and combination of fixed and floating
rates. Loans above Rs. 1 crore available at floating rates only.
Pre-EMI interest One time irrevocable option to be given to pay as & when applied OR
capitalize it within the overall loan eligibility.
Type of loan Term Loan[or OD under Max-gain]
Disbursement As far as possible to be made directly to the suppliers/builders as per
the progress of the work only after complete execution of documents
and creation of valid mortgage.
Repayment Period Maximum period including moratorium:
For borrowers up to 45 years of age 20 years.
For borrowers over 45 years of age 15 years.
For short term Housing Loan 5 years.
Starting from the month following the month of full disbursement of
the loan.
Mode Through EMI. If check-off is not available, PDCs should be obtained.
Flexible repayment options available in Tailor made Housing loans.
Customized repayment options through equated installments at
monthly/quarterly/half yearly/ yearly intervals through PDCs/SI for
agriculturists.
Moratorium For construction of new house/flat or purchase of house/flat on
installments, a Moratorium Period (repayment holiday) till 2 months
after completion of construction or 18 months from the disbursement of
1st installment of loan, whichever is earlier, may be permitted at the
request of the borrower.
Insurance Compulsory insurance of property. Optional life cover from SBI life
& free accident insurance cover for borrower available.
The house/flat to be insured against the risk of
fire/riots/earthquakes/lightning/floods etc. in the joint names of the
borrower and Bank for the actual project cost after netting off the cost
of land (including undivided share of land in case of flats), stamp duty
and registration charges.
To encourage borrowers to insure property for the entire loan tenure,
the lump sum premium can be considered as part of the project cost.
[PBBU/HL?AX/21 dt. 7.08.06]
Inspection For standard assets:
Initial inspection(s) at the time of disbursement/release of
installments during construction.
Thereafter once every 3 years.
If repayments are in arrears for two successive months,
inspection should be conducted immediately
For NPAs: at half-yearly intervals
Inspections should be recorded in Inspection Register.
Features:
Eligibility:
Minimum age: 18 years as on the date of sanction
Maximum age: limit for a Home Loan borrower is fixed at 70 years, i.e. the age by which the
loan should be fully repaid, subject to availability of sufficient, regular and continuous source
of income for servicing the loan repayment.
Loan Amount:
Actual loan amount will be determined taking into consideration such factors as applicants
income and repaying capacity, age, assets and liabilities, cost of the proposed house/flat etc. To
enhance loan eligibility you have option to add:
1) Income of your spouse/ your son/ daughter living with you, provided they have a steady
income and his/ her salary account is maintained with SBI.
2) Expected rent accruals (less taxes, cess, etc.) if the house/ flat being purchased is
proposed to be rented out.
3) Depreciation, subject to some conditions.
4) Regular income from all sources.
Security:
Equitable mortgage of the property
Other tangible security of adequate value like
NSCs, Life Insurance policies etc., if the
property cannot be mortgaged
Margin:
Loan Amount Margin (Min.) Maximum LTV Ration (Max.)
Upto Rs. 75 Lacs 20% 80%
Above Rs. 75 Lacs. 25% 75%
*LTV ratio - Loan to value ratio.

Interest rates:
FEES:
Home Loans Processing Fee
The revised processing fee structure (including service tax) from 9th November 2009 is as
under:
Loan Amount Processing Fee(Revised)

Upto Rs.5 Lac Rs.1000/-
Above Rs.5 Lac and upto Rs.10 Lac Rs.2000/-
Above Rs.10 Lac and upto Rs.20 Lac Rs.5000/-
Above Rs.20 Lac and upto Rs.50 Lac Rs.7,000/-
Above Rs.50 Lac and upto Rs.1 Cr Rs.8,000/-
Above Rs.1 Cr and upto Rs.5 Cr Rs.10,000/-
Above Rs.5 Cr Rs.20,000/-
NOTE
1) 75 % of the processing fee may be refunded in the following cases:
(a) Rejection of loan application on account of unsatisfactory pre-sanction survey report.

(b) Rejection of loan application on account of unsatisfactory legal/valuation reports.
In cases where applications are sanctioned or rejected after complete loan processing, fee will
not be refunded.
2)Actual charges for the following will be payable by the customer in addition to the
processing fee:
a) Pre-sanction
(i) Advocate's fee for property search and the title investigation report.
(ii) Valuer's fee for valuation report.
b) Post-sanction
(i) Stamp duty payable for Loan agreement & mortgage.
(ii) Property insurance premium.
Pre-closure Penalty
No penalty if the loan is pre-closed from own savings/windfall gains for which documentary
evidence is produced by the customer.
INTEREST RATES:
Interest will be charged at the rates prescribed by the Bank from time to time.
Borrowers availing loans upto Rs. 75 lacs can opt for paying interest either at fixed rate or
floating rate.
Interest on individual loans for over Rs. 75 lacs must be charged only at the floating rate
interest linked to SBAR.
HOME LOANS - INTEREST RATES

(Revised SBAR w.e.f from 29.06.2009 = 11.75% p.a.)
1.
SBI HI-FIVE LOAN - FOR LOAN AMOUNT UPTO Rs. 5 Lacs
Interest Rates
8% p.a. Fixed interest rate during first 60 months.
61st month Onwards - floating at 2.75% below SBAR
(OR)
Fixed interest at 1.25% below SBAR
2.
SBI EASY HOME LOAN FOR LOAN AMOUNT UPTO Rs. 50 Lacs
Interest Rates
Interest rate during the first year (i.e. till first anniversary date from the date of first
disbursement) is fixed at 8% p.a.
Interest rate during next two years is fixed at 8.5% p. a
Interest rate after three years may be Fixed or Floating as per the borrowers choice made
at the time of sanction. If floating rate option is chosen, then the rate will be 2.75% below
SBAR. If fixed rate option is chosen, then the rate will be 1.25% below SBAR prevailing
on the third anniversary date from the date of first disbursement, and shall have a reset
frequency of 5 years from the third anniversary date of the loan. Fixed interest rate shall
be subject to force-majeure clause.
3.
SBI ADVANTAGE HOME LOAN FOR LOAN AMOUNT ABOVE Rs. 50 Lacs
Frequency Percent Valid Percent Cumulative
the first year (i.e. till first anniversary date from the date of first Percent
next two years is fixed at 9% p. a

ree years may be Fixed or Floating as per the borrowers choice made
on. If floating rate option is chosen, then the rate will be 1.75% below
option is chosen, then the rate will be 0.75% below SBAR prevailing
sary date from the date of first disbursement, and shall have a reset
s from the third anniversary date of the loan. Fixed interest rate shall
uments applicable to all applicants:
to copies of Voters ID card/ Passport/ Driving license/ IT PAN card)

hoto copies of recent Telephone Bills/ Electricity Bill/
Passport/ Voters ID card)
ress for non-salaried individuals
count/ Pass Book for last six months
on from present bankers
iabilities statement
erever applicable):
iabilities Statement
on from his/her present bankers

s required for salaried persons :
icate from employer
rm 16 or copy of IT Returns for last two financial years, duly
s required for Professionals/self- employed/ other IT assesses:

s of three years I.T. returns/ Assessment Orders.
ns evidencing payment of Advance Income Tax.
AN FOR LOAN AMOUNT UPTO Rs. 50 Lacs

me has become easier with SBI Easy Home Loan. With low interest
der Rs. 50 lakhs category, SBI Easy ensures that you are not burdened
our home loan. Plus with over 12000 SBI branches nationwide you can
ccount parked at a branch nearest to your present or proposed
ring the first year (i.e. till first anniversary date from the date of first
ring next two years is fixed at 8.5% p. a

er three years may be Fixed or Floating as per the borrowers choice
anction. If floating rate option is chosen, then the rate will be 2.75%
d rate option is chosen, then the rate will be 1.25% below SBAR
anniversary date from the date of first disbursement, and shall have a
ars from the third anniversary date of the loan. Fixed interest rate shall
evised processing fee structure (including service tax) from 9th
Processing
Fee(Revised)
Rs.1000/-
Rs.5 Lac and upto Rs.10 Lac Rs.2000/-
Rs.10 Lac and upto Rs.20 Lac Rs.5000/-
Rs.20 Lac and upto Rs.50 Lac Rs.7,000/-
E HOME LOAN FOR LOAN AMOUNT ABOVE Rs. 50

ome Loan with competitive rates of interest is available for home
0 lakhs. Plus with over 12000 SBI branches nationwide you can
oan account parked at a branch nearest to your present or
terest rate during the first year (i.e. till first anniversary date from
sbursement) is fixed at 8% p.a.
te during next two years is fixed at 9% p. a
te after three years may be Fixed or Floating as per the borrowers
e time of sanction. If floating rate option is chosen, then the rate
low SBAR. If fixed rate option is chosen, then the rate will be
AR prevailing on the third anniversary date from the date of first
d shall have a reset frequency of 5 years from the third
of the loan. Fixed interest rate shall be subject to force-majeure
ssing fee structure (including service tax) from 9th November
Processing
Loan Amount
Fee(Revised)
Above Rs.50 Lac and
Rs.8,000/-
Above Rs.1 Cr and upto

Rs.10,000/-
Above Rs.5 Cr Rs.20,000/-
RODUCT VARIANTS
S AN OVERDRAFT
d customer-friendly product to enable you to earn optimal yield on
minimize interest burden on Home Loans, with no extra cost.
ed as an Overdraft facility with the added flexibility for you to
me Loan Account like your SB or Current Account.
es to minimize your interest cost by enabling you to park your
SBI-Maxgain (with the benefit to withdraw the surplus funds
quire), specially in the wake of low yields from other deposit/
mount: Rs.5 lacs
product designed for customers who are on the look out for a
for a property they want to invest in without mortgaging the
e to do is pledge any financial security that you have and you will
for your dream home.
hose who do not want to pay stamp duty for mortgage of their
ough the hassles of creation of mortgage.
option to take the loan by way of mortgage of the property and

ecurities in lieu of margin money.
ghly customized, giving you the option to repay through regular

maturity proceeds of the securities pledged.
FOR PURCHASE OF PLOT OF LAND FOR THE PURPOSE

TION OF A DWELLING UNIT
if you are on the lookout for a loan
ction. The loan is available for a maximum amount of Rs.1 crore*
rtable repayment period of upto 15 years.
so eligible to avail another Housing Loan for construction of
ot financed above with the benefit of running both the loans
on should commence within 2 years from the date of availment of
conditions as applicable to regular Home Loans)

idered on case to case basis)
WITH A COMBINATION OF FIXED AND FLOATING
h an option to choose a combination of floating interest rate and

in a pre determined ratio.
mount Rs.5.00 lacs.
oduct designed to enable borrowers to hedge their Home Loan
le movement in interest rates. The product gives you a onetime
n to choose one of the three customized combinations of fixed and
ates and also to choose the order in which the fixed and floating
TO NON RESIDENT INDIANS (NRIs) AND PERSONS OF

N (PIOs HOLDING A FOREIGN PASSPORT)
18years of age with a steady source of income who

Non Resident Indians (NRIs) holding a valid Indian passport.
persons of Indian origin(PIOs) holding a foreign passport.
nimum employment tenure in India/abroad not less than 2 years.
is to be determined on the basis of repayment capacity taking into

age, assets and liabilities, qualifications, stability of occupation,
prospects on return. The loan amount is subject to the following:
mum permissible loan amount would be determined by EMI/NMI

applicable to regular Home Loans scheme for Resident Indian
is 40% for Net Annual Income (NAI) upto Rs.2 Lac, 50% for
Lac and upto Rs.5 Lac, 55% for NAI above Rs.5 Lacs.
alue added products extended to existing Home loan borrowers

y repayment record of 3 years and whose loan is Standard Asset,
nforce the customer loyalty and to maintain long term relationship
rs. In case of take-over of Home Loans from other Banks/HFCs,
ould have fulfilled the above conditions with the present
LOAN SCHEME FOR HILLY/TRIBAL AREAS

a Special Scheme designed for Hill/Tribal areas for
al assistance to individuals in such areas to :
nstruction of a new house / flat (without mortgage of land)
existing (old) house / flat which is not more than 10 years old (In
tion report from our empanelled valuer and a certificate on the
house to be given by a structural engineer or Govt. approved
tion/extension of an existing house or flat.
TO FARMING AND POOREST OF THE POOR IN RURAL
rs all rural and semi-urban centers. Rural Area for the purpose
the area comprised in any village including the area comprised in
pulation of which does not exceed 50000 as per 2001 census. The
provide home loans to farming and poorest of the poor in rural
urpose of purchase or construction of a house, repairs and
ase of plot for the purpose of construction of a house/shed etc.
LOANS TO SELF HELP GROUPS

as scheme has been instituted to finance the self help groups with
ayment record for 2 years, for on lending to members for housing
ering the following purposes.
e or construction of a house exclusively or including the housing
carried by them. ( Dairy shed, tailoring shed/shop, grocery stores
ion or repair of an existing house / shed

se of a plot of land for the purpose of house construction.
ion of existing house / work space to existing house / shed.
py Home Loans
Home Loans scheme enables the genuine needy buyers to buy

freezing interest rate at 8% p.a. for a period of one year from the
ment on new Home Loans including SBI Special Home Loans
en Home Loan
dia has adopted a Green Banking Policy with an objective of
ards the fight against the adverse climate change. One of the
ed by the Board for this purpose is incentivizing customers who
Projects, i.e. those projects which reduce Carbon Emissions and
ble Energy. Green Housing or Green Home is one of the types
ied for this purpose. At present State Bank of India the only Bank
supporting the cause of Green Buildings by offering a 5%
rgin, 0.25% concession in interest rate and waiver of processing
sting home loan products to customers who go in for Green
OP-UP PRODUCTS
Special Personal Loans come with inbuilt provision to sanction

home loans borrowers with a satisfactory repayment record of 3
interest charged on these personal loans is only 50 bps above the
est rate applicable to the repayment tenure opted by the borrower
ly), prevailing as on the date of sanction of SBI-Home Line
s scheme is launched for granting personal loans to the banks

mers against the security of their house property. All home loans
a satisfactory repayment record of at least one year and who
s bank or current account with us.
used for any purpose, viz. extension/repair of house, purchase of
rables, education / medical expenses of family members, personal
ere will be no need to obtain documentary evidence for the end-
wever a certificate from the customer in the application to the
used for speculative purposes
T LIFE STYLE NEEDS OF HOME LOANS CUSTOMERS

ndia launched the SBI Life Style Loans to help home loan
any short term expenditure, (Vacation travel, purchase of Gold,
except speculative investments, which adds comfort to the life
ower with satisfactory repayment record. SBI has tie up with
ravel houses, lifestyle product companies for discounts to our
ME LOAN PRODUCTS
Money Deposit (EMD) Scheme
nt agencies, like Urban Development Authorities and Housing
ally come out with schemes for sale of plots/houses, wherein
o submit 10-20% of the cost of plot/house as Earnest Money
nd allotments are made by draw of lots.
scheme is designed for financing against earnest money for
ouse/plot. Individuals above 21 years of age and with a steady
are eligible to avail loans under this scheme.
Mortgage Loan
LFARE OF SENIOR CITIZENS IN INDIA
ortgage Loan Enables house-owning Senior Citizens having
e to meet their financial needs for renovation/repairs to house,
personal purposes. There is no compulsion for the borrower to
ing his or her lifetime or till such time he or she continues to stay
ntinues to retain ownership of the house. Also, the borrower will

o prepay the loan at any time during the loan tenure and there will
Asset: An
immovable
property or
movable
property which
can be used as
the security
against which
credit can be
offered.
Cost of
Property: This
refers to the
total cost of
property
including
various
charges. This
normally
includes the
agreement
value of
property, stamp
duty
registration
charges,
society transfer
charges, garage
charges for
parking cars,
and water
connection
charges. This
will also
include
additional
furnishing
done by
developer. The
cost of
property,
however does
not include any
cash
transaction s
involved in the
purchase of
house over and
above those
mentioned in
agreement.
Eligibility:
This is the loan
amount that
you get based
on your
repayment
capacity. Your
eligibility
depends on the
norms set.
EMI: The loan
can be repaid
by paying a
fixed amount
every month,
known as
Equated
monthly
Installment.
Processing
Fee: A one-
time fee, which
is normally
non-refundable
and payable
along with
your initial
loan
application.
Rates can vary
from 1-2% of
loan amount.
Down
Payment:
Housing
companies
would
normally give
a loan upto 80-
85% of the
value of the
property. The
remaining
amount would
j=have to be
paid by the
buyer as s
down payment
before he
draws the loan
amount.
Standing
Instructions:
The
instructions to
a bank are to
debit a fixed
amount from
your account
and pay your
financier.
Monthly
Rests: This is
also called as
the Monthly
Reducing
Balance of
Principal. The
EMI is broken
up every
month to arrive
at the opening
balance of
principal for
the next month.
Commitment
Fees: This is
the interest
charged if you
do not draw the
sanctioned loan
within a period
of 6-9 months.
The rate of
interest is
usually about
1-2% per
month.
Tenure: This
is the term
used to
represent the
number of
years for which
the loan is
given. The loan
amount gets
amortized over
the period of
the loan.
Stamp Duty:
Government
levies a duty
on certain legal
documents and
financial
contracts.
Calculation of
EMI:
Emi is
calculated with
the help of
following
formula:
EMI =
1/12*[Lr(1-
r)^n]
[(
1+r)^(n-1)]
Where,
L Loan
Amount
r Rate of
interest
n Period of
loan (in Years)
An
aly
sis
and
Inte
rpr
etat
ion
1. Have
you
availed
for
housing
loan?
Valid Yes 50 100.0 100.0 100.0

Obj100
Interpretation:
The above diagram interprets that the sample size of 50 has availed the housing loan facility
from SBI.
2. Are you aware of different schemes available in housing loans?

Percent
Valid Yes 41 82.0 82.0 82.0
No 9 18.0 18.0 100.0
Total 50 100.0 100.0
Obj101
Interpretation:
The diagram and above data represent that 82% of the sample size is aware about the different
schemes available and 18% of sample size is not aware. This indicates that most of the
customers know about the products provided by SBI.
3. Are you aware of Top-Up loans?

Percent
Valid Yes 14 28.0 28.0 28.0
No 36 72.0 72.0 100.0
Total 50 100.0 100.0
Obj102
Interpretation:
The above data reveals that only 28% of sample size knows about the Top-Up loans and the
remaining 72% of the sample does not know about the Top-Up loan facility provided by the
SBI.
4. If yes in question three, have you availed for the same?

Percent
Valid Yes 10 20.0 71.4 71.4
No 4 8.0 28.6 100.0
Total 14 28.0 100.0
Missing System 36 72.0
Total 50 100.0
Obj103
Interpretation:
The above diagram shows that the 20% of the people who know about the Top-Up loan facility
has availed the facility and the remaining 8% of them has not availed this facility.
5. Reason/s for choosing present bank

Percent
Valid Image of Bank 3 6.0 6.0 6.0
Options a, b & 47 94.0 94.0 100.0
d
Total 50 100.0 100.0
Obj104
Interpretation:
It is understood from the diagram that the 94% of the sample size has chosen the SBIs housing
loan facility for convenience, quick service and low interest rate and only 6% of them has
chosen the SBI for the banks image.
6. Extent to which you are satisfied with services provided by bank

Percent
Valid Very satisfied 14 28.0 28.0 28.0
Satisfied 30 60.0 60.0 88.0
Dissatisfied 6 12.0 12.0 100.0
Total 50 100.0 100.0
Obj105
Interpretation:
From this diagram and data we come to know about that more than 50% i.e. exactly 60% of the
sample size are satisfied with the services provided by the bank and 28% people are very much
satisfied and the only 12% people are dissatisfied.
7. What other benefits you expect from bank?

Percent
Valid Reduction in 8 16.0 16.0 16.0
rate of interest
Concession for 35 70.0 70.0 86.0
prompt
payment
Concession on 7 14.0 14.0 100.0
remittance
Total 50 100.0 100.0
Obj106
Interpretation:
The above diagram shows that the maximum people i.e. 70% of the sample size expect the
other benefits like concession for prompt payment of installment.
8 . How many times you visited bank to get the loan sanctioned?

Percent
Valid 3 times 5 10.0 10.0 10.0
4-6 times 5 10.0 10.0 20.0
More than 6 40 80.0 80.0 100.0
times
Total 50 100.0 100.0
Obj107
Interpretation:
This diagram shows that during the survey 80% of the sample size had told that they had
visited the bank for more than 6 times to get the loan sanctioned. This shows that the SBI
people will not sanction the loan until the applicant produces the necessary documents
properly.
9. Would you recommend others about the housing loan facility of your bank?

Percent
Valid Yes 35 70.0 70.0 70.0
No 15 30.0 30.0 100.0
Total 50 100.0 100.0
Obj108
Interpretation:
This data tell us about the satisfaction level of the customers of SBI that, 70% of the sample
size has told that they will recommend others about the housing loan facility provided by SBI.
10. How easy it was to get loan sanctioned from SBI?

Percent
Valid Easy 14 28.0 28.0 28.0
Difficult 20 40.0 40.0 68.0
Very Difficult 16 32.0 32.0 100.0
Total 50 100.0 100.0
Obj109
Interpretation:
During my survey it was found that the maximum sample size i.e. 40% people told that they
found it difficult to get loan sanctioned and 32% of the people told that it was very difficult to
get the loan from SBI.
Hypothesis Testing
Hypothesis test:
As Statistical calculations give us more appropriate and accurate results for any
survey, I have used Z test, as my sample size is more than 30.
The formula used is :

Zobs = p - Po ~ N (0, 1)
Po - Qo
n
where ,
p = Population proportion
Po = Sample Proportion
Qo = 1 - Po
n = Sample size
1.TESTING OF HYPOTHESIS:
This hypothesis is tested with the help of Questionnaire. The testing is done to find
out the satisfaction level of customers. A pre- assumption was made that more than 60%
of the customers are satisfied with the services provided by SBI. As per the data collected,
44 out of 50 respondents have stated that the services provided by SBI are Satisfactory.
(Testing at 5% level of significance)

Po = 0.60
Qo =1 Po
= 1 - .060 = 0.40
n = 50
p = 44 = 0.88
50
Null hypothesis (Ho) : The claim is invalid. ( p 0.60)
Hypothesis (H1) : The claim is valid. ( p > 0.60)
Calculation of Hypothesis Using Z - Test
Zobs = p - Po ~ N (0, 1)
Po *Qo
50
Zobs = 0.88 - 0.60
0.60 * 0.40
50
= 0.18
0.00979
= 18.386
Decision Making:
Here we are testing Ho : P 0.60 v/s H1 : P > 0.60 where we
can reject Ho at 5% level of significance if Zobs is greater than Z (Zobs > Z )
Assume = 5%
1 = 1 0.05
= 0.95
Z = 1.645 ( Table Value)
Here Zobs = 18.386 is greater than Z = 1.645 (Zobs > Z )

Therefore we can accept H1 at 5% level of Significance.
CONCLUSION:
From the above Hypothesis we can conclude that the claim made is valid.
Therefore the respondents have stated that the services provided by SBI are Satisfactory.
Hypothesis test:

Zobs = p - Po ~ N (0, 1
Po * Qo
n
where ,
Qo = 1 - Po
n = Sample size
2 TESTING OF HYPOTHESIS:
out the easiness to customers in availing home loans at SBI. A pre- assumption was made
that more than 60% of the customers find it easy in availing loans at SBI. As per the data
collected, 14 out of 50 respondents have stated that the it is easy in availing loans at SBI.
Po = 0.60
Qo =1 Po
= 1 - .060 = 0.40
n = 50
p = 14 = 0.28
50
Zobs = p - Po ~ N (0, 1)
Po * Qo
n
Zobs = 0.28 - 0.60
0.60 * 0.40
50
= - 0.32
0.00979
= - 32.686
Decision Making:

Assume = 5%
1 = 1 0.05
= 0.95

Here Zobs = - 32.686 is not greater than Z = 1.645 (Zobs< Z )
Therefore we can reject H1 and accept Ho at 5% level of Significance.
CONCLUSION:
From the above Hypothesis we can conclude that the claim made is invalid
and the customers dont find it easy to avail loans at SBI.
Hypothesis test:

Zobs = p - Po ~ N (0, 1)
Po - Qo
n
where ,
Qo = 1 - Po
n = Sample size
3.TESTING OF HYPOTHESIS:
out the satisfaction level of customers. A pre- assumption was made that more than 65%
of the customers are satisfied with the services provided by SBI. As per the data collected,
41 out of 50 respondents have stated that the services they have awareness of different
schemes of housing loan.

Po = 0.65
Qo =1 Po
= 1 - .65 = 0.35
n = 50
p = 41 = 0.82
50
Zobs = p - Po ~ N (0, 1)
Po *Qo
50
Zobs = 0.82 - 0.65
0.65 * 0.35
50
= 0.17
0.00954
= 17.819
Decision Making:
Assume = 5%
1 = 1 0.05
= 0.95
Here Zobs = 17.819 yis greater than Z = 1.645 (Zobs > Z )

Therefore we can accept H1 at 5% level of Significance.
CONCLUSION:
From the above Hypothesis we can conclude that the claim made is valid
and more than 65% of the customers have awareness about different schemes.
FINDINGS AND SUGGGESTIONS

Findings:
Lack of awareness among customers about the availability of Top-Up loans.
It is found that many of the customers have chosen t he bank for the convenience, quick
service and interest rate.
Through survey it is found that, still people expect for the concession on prompt
payment.
Customers has visited bank more than 6 times to get loan sanctioned.
Most of the customers are satisfied with the services provided by SBI.
Customers found it difficult to get the loan sanctioned.
Many of the customers have the awareness of different schemes available in housing
loan provided by SBI.
Suggestions:
Awareness should be created about top-up loans among customers through advertising.
They can also send letters to customers about its availability.
The level of providing services should be improved, so that the customers get delighted
by the service provided.
Time and visit of customers to avail loans should be reduced by a significant way so
that customers do not switch to other competitors.
The bank should provide for concessions in payments.
During survey most of the customers have said that they found it difficult to get loan
sanctioned. So they suggested that there should be some lenience in sanctioning loan and allow
them to submit documents later.
Conclusion:
To conclude about the project, the study has brought me a good amount of practical exposure. I
came to know about the feasibility of Housing Loan by SBI. The study also has brought some
facts related to the problems faced by customers in availing loans. Thus, in brief we can
conclude that the organization has to take necessary steps to increase the customer satisfaction
level by implementing the above suggestions. The study has also revealed that customers have
awareness about the different schemes provided by SBI.
Bibliography:-
1. Websites
www.sbi.co.in
www.wikipedia.com
2. Books
Market Research - Tull and Hawkins
3. Journals, articles and Registers of the bank.
The journal of banking studies
SBI Circulars
ANNEXURES
Questionnaire:
Name:
Address:
Occupation:
1. Have you availed for Housing Loan?

a) Yes
b) No
2. Are you aware of different schemes available in housing loans?

a) Yes
b) No
3. Are you aware of Top-up loans?(If No then go to Q. No.5 )

a) Yes
b) No
4. If yes, have you availed for the same?

a) Yes
b) No
5. Are you aware of the present rate of interest that you are paying?
a) Yes
b) No
6. Reason/s for choosing present bank

a) Convenience
b) Quick service
c) Image of bank
d) Interest rate
e) Relatives working
f) Options a, b & d.
7. Extent to which you are satisfied with services provided by bank

a) Very satisfied
b) Satisfied
c) Dissatisfied
d) Very dissatisfied
8. What other benefits you expect from bank?

a) Reduction in rate of interest
b) Concession for prompt payment
c) Concession on remittance
d) Any other
9. How many times you visited bank to get the loan sanctioned?
a) 3 times ______
b) 4- 6 times
c) More than 6 times
10. Would you recommend others about the housing loan facility of your bank?
a) Yes
b) No
11. How easy it was to get loan sanctioned from SBI?

a) Very Easy
b) Easy
c) Difficult
d) Very Difficult
--THANK YOU--
EXECUTIVE SUMMARY
EXECUTIVE SUMMARY
The title of the project is STUDY OF HOUSING LOANS AND AWARENESS OF
TOP UP LOANS. Project is carried out at SBI RASMECCC (Retail Assets Small & Medium
Enterprises City Credit Centre), Belgaum. The main objective behind the study was to
understand the housing loans provided by SBI and awareness of top up loans among
customers.
Objectives of the study:

To study the theoretical aspects of housing loans.
Home loan practices in SBI.
To know the awareness of Top Up loans among customers.
Statement of the problem:

Study has been taken in order to study the housing loan and awareness of Top Up loans
among customers in SBI Belgaum.
Research Methodology:
Sampling method: - Deliberate Convenience Sampling. For selecting the sample for my
survey is randomly selected.
Sample size :- 50
Data collection method
Primary data
Questionnaire
Personal interview
Secondary data
Records of SBI
Journals
Websites
Scope of study
Channamma Nagar Branch, Belgaum.
Tools used for analysis

SPSS
Graphs and Charts
Limitations of study:
The limitation of the study is lack of information being provided by the staff of
the bank because of the privacy policy of the bank.
CHAPTER- 3
INTRODUCTION STATE
BANK OF INDIA
Housing scenario in India:

The housing scenario has certainly seen a lot of changes in recent years. The drop of interest
rates, stable real estate prices, and the attractive tax savings provided by the government have
together resulted in a high rate of growth, which is expected to continue.
Moreover, the mindset of the Indian customer, as far as taking a loan is concerned, has a
undergone a change. Unlike the cautious or even negative outlook on loans a few years ago,
the customer today has a far more positive and open outlook on taking a loan. He feels that
taking a loan enforces on him a sense of greater financial discipline, as he is bound to use a
part of his salary to pay the EMI, rather than spending on things on an adhoc basis. He also
prefers it to other options such as borrowing from friends and relatives, because in his mind,
taking a loan is about being self-reliant, and this gives him a greater sense of self-respect.
The growth rate of the economy might go up to levels of 6%, if the revival is kept up. Share
markets are not entirely looking up, though they are stabilizing levels, which can be termed as
reasonable. Industrial growth rate, which was wallowing at low of 1.5%, is now at around 5%.
In fact, industrial credit given out by banks which in normal times would be about 4-5 times of
bank credit given to housing, had in the last few years reduced to levels below advances to
housing loans.
The customer who is purchasing a house today has not only the options of competitively lower
rates of interest, but also choice of different types of loans starting from the house-purchase or
house-building loans to house-improvement loans, home equity loans, home-extension loans,
etc. It has never been better than this ever before.
The late 90s saw even housing go through a bad phase. But, then with that phase crossed, there
has been a steady revival and stabilization of the market at levels, which can be termed as
reasonable from the point of both the customers and those on the supply side. Housing is a
basic need and like any basic human need will be constantly in demand.
The housing industry is important because it directly addresses one of the basic needs of
society-shelter. Improvements in productivity and output in the housing sector, i.e, lower prices
and wider availability of affordable housing will therefore have a direct impact on the economy
of the country.
The industry plays an important role in the economic development of the country. Every rupee
invested in housing adds 78 paisa to the GDP. Over 269 industries are directly or indirectly
dependent on the housing sector. There is an estimated shortage of 20 million housing units in
the country with an estimated investment requirement of over 1500 billion. So it is important
to note that the organized Housing finance industry barely accounts for 30% of housing loan
disbursed in the country. The last few years have seen the housing loan market growing at
30%.
The housing finance industry is getting increasingly commoditized. Competition within the
sector is ensuring that players offer consumers flexibility and feature to choose form. Features
such as adjustable plans, lower processing fees, monthly rests, and low interest rates have
become common across the industry.
Thanks to economic liberalization and ensuing policy changes, the housing finance industry
has undergone a paradigm shift over the last decade. Gone are the days, when taking a loan
meant entering a labyrinth of documentation and dealing with condescending bank officials.
Today, in the backdrop of intense competition, housing finance companies are falling over each
other to woo potential customers. Housing finance being one of the safest lending avenues has
also contributed to the emergence of new players in the market.
The unique place that a house has in an individual's life plus the high proportion of the
customer's own money in the house provides considerable comfort for home loan companies.
In the present times, people are increasingly taking to credit, because of rising annual incomes
and the series of tax sops that have become an annual ritual in the Union Budget. With the
constant rise in demand for residential and commercial complexes, the growth of the real estate
sector in India has witnessed at an exponential rate over last five years.
Cut-throat competition among Indian housing finance companies has brought down the interest
rates by a few notches. The vast difference in interest rates across-the-board has all but
disappeared, and home loan companies are taking recourse to product innovation to stand out
in the burgeoning home loan market. Today, apart from the resident Indians, even NRI's can
apply for a home loan. An applicant applying for a loan can either opt for fixed or floating
rates. The loan rates of companies today are in between 7.50% to 12 %, depending on the
repayment years.
Banking History in India

Without a sound and effective banking system in India it cannot have a healthy economy. The
banking system of India should not only be hassle free but it should be able to meet new
challenges posed by the technology and any other external and internal factors.
For the past three decades India's banking system has several outstanding achievements to its
credit. The most striking is its extensive reach. It is no longer confined to only metropolitans or
cosmopolitans in India. In fact, Indian banking system has reached even to the remote corners
of the country. This is one of the main reason of India's growth process.
The government's regular policy for Indian bank since 1969 has paid rich dividends with the
nationalization of 14 major private banks of India.
Not long ago, an account holder had to wait for hours at the bank counters for getting a draft or
for withdrawing his own money. Today, he has a choice. Gone are days when the most efficient
bank transferred money from one branch to other in two days. Now it is simple as instant
messaging or dial a pizza. Money have become the order of the day.
The first bank in India, though conservative, was established in 1786. From 1786 till today, the
journey of Indian Banking System can be segregated into three distinct phases. They are as
mentioned below:
Early phase from 1786 to 1969 of Indian Banks

Nationalization of Indian Banks and up to 1991 prior to Indian banking sector Reforms.
New phase of Indian Banking System with the advent of Indian Financial & Banking
Sector Reforms after 1991.
To make this write-up more explanatory, I prefix the scenario as Phase I, Phase II and Phase
III.
PhaseI
The General Bank of India was set up in the year 1786. Next came Bank of Hindustan and
Bengal Bank. The East India Company established Bank of Bengal (1809), Bank of Bombay
(1840) and Bank of Madras (1843) as independent units and called it Presidency Banks. These
three banks were amalgamated in 1920 and Imperial Bank of India was established which
started as private shareholders banks, mostly Europeans shareholders.
In 1865 Allahabad Bank was established and first time exclusively by Indians, Punjab National
Bank Ltd. was set up in 1894 with headquarters at Lahore. Between 1906 and 1913, Bank of
India, Central Bank of India, Bank of Baroda, Canara Bank, Indian Bank, and Bank of Mysore
were set up. Reserve Bank of India came in 1935.
During the first phase the growth was very slow and banks also experienced periodic failures
between 1913 and 1948. There were approximately 1100 banks, mostly small. To streamline
the functioning and activities of commercial banks, the Government of India came up with The
Banking Companies Act, 1949 which was later changed to Banking Regulation Act 1949 as per
amending Act of 1965 (Act No. 23 of 1965). Reserve Bank of India was vested with extensive
powers for the supervision of banking in India as the Central Banking Authority.
During those days public has lesser confidence in the banks. As an aftermath deposit
mobilization was slow. Abreast of it the savings bank facility provided by the Postal
department was comparatively safer. Moreover, funds were largely given to traders.
PhaseII
Government took major steps in this Indian Banking Sector Reform after independence. In
1955, it nationalised Imperial Bank of India with extensive banking facilities on a large scale
especially in rural and semi-urban areas. It formed State Bank of India to act as the principal
agent of RBI and to handle banking transactions of the Union and State Governments all over
the country.
Seven banks forming subsidiary of State Bank of India was nationalised in 1960 on 19th July,
1969, major process of nationalisation was carried out. It was the effort of the then Prime
Minister of India, Mrs. Indira Gandhi. 14 major commercial banks in the country were
nationalised.Second phase of nationalisation Indian Banking Sector Reform was carried out in
1980 with seven more banks. This step brought 80% of the banking segment in India under
Government ownership.
The following are the steps taken by the Government of India to Regulate Banking Institutions
in the Country:
1949 : Enactment of Banking Regulation Act.

1955 : Nationalization of State Bank of India.
1959 : Nationalization of SBI subsidiaries.
1961 : Insurance cover extended to deposits.
1969 : Nationalization of 14 major banks.
1971 : Creation of credit guarantee corporation.
1975 : Creation of regional rural banks.
1980 : Nationalization of seven banks with deposits over 200 crore.
After the nationalisation of banks, the branches of the public sector bank India rose to
approximately 800% in deposits and advances took a huge jump by 11,000%.
Banking in the sunshine of Government ownership gave the public implicit faith and immense
confidence about the sustainability of these institutions.
PhaseIII
This phase has introduced many more products and facilities in the banking sector in its
reforms measure. In 1991, under the chairmanship of M Narasimham, a committee was set up
by his name which worked for the liberalization of banking practices.
The country is flooded with foreign banks and their ATM stations. Efforts are being put to give
a satisfactory service to customers. Phone banking and net banking is introduced. The entire
system became more convenient and swift. Time is given more importance than money.
The financial system of India has shown a great deal of resilience. It is sheltered from any
crisis triggered by any external macroeconomics shock as other East Asian Countries suffered.
This is all due to a flexible exchange rate regime, the foreign reserves are high, the capital
account is not yet fully convertible, and banks and their customers have limited foreign
exchange exposure.
STATE BANK OF INDIA
OLDEST, LARGEST AND PREMIER BANKING UNIT
INTRODUCTION:
The origins of State Bank of India date back to 1806 when the Bank of Calcutta (later
called the Bank of Bengal) was established. In 1921, the Bank of Bengal and two other
Presidency banks (Bank of Madras and Bank of Bombay) were amalgamated to form the
Imperial Bank of India. In 1955, the controlling interest in the Imperial Bank of India was
acquired by the Reserve Bank of India and the State Bank of India (SBI) came into existence
by an act of Parliament as successor to the Imperial Bank of India. Today, State Bank of India
(SBI) has spread its arms around the world and has a network of branches spanning all time
zones. SBI's International Banking Group delivers the full range of cross-border finance
solutions through its four wings - the Domestic division, the Foreign Offices division, the
Foreign Department and the International Services division.
The SBI was formed in 1955, through nationalization of imperial banks in India.
The imperial bank of India has bee formed by the amalgamation of three existing presidency
banks. With the nationalization of imperial bank in India, all its assets and liabilities were
transferred to the state bank of India.
It was converted into SBI on 1/07/1955 on the recommendations of the committee
for All India Rural Credit Survey, headed by Shri. A.D. Gorwala (the committee recommended
the establishment of one strong, integrated, state sponsored, state partnered commercial
banking institution). At that time SBI had three circles, Bombay, Calcutta and Madras besides a
central office at Bombay, SBI was the first bank to set up as the public sector.
Bank of Bengal
Margin (Min.) Interest will be charged at the rates prescribed by the Bank from time to time.
- Loan to value ratio.
s Processing Fee
processing fee structure

service tax) from 9th
is as under:
Lac and upto Rs.10 Lac

0 Lac and upto Rs.20 Lac
0 Lac and upto Rs.50 Lac
0 Lac and upto Rs.1 Cr
Cr and upto Rs.5 Cr
NOTE
1) 75 %
of the
processi
ng fee
may be
refunde
d in the
followin
g cases:
(a)
Rejectio
n of
loan
applicati
on on
account
of
unsatisf
actory p
re-
sanction
survey
report.
(b)
Rejectio
n of
loan
applicati
on on
account
of
unsatisf
actory
legal/val
uation
reports.
In cases
where
applicati
ons are
sanction
ed or
rejected
after
complet
e loan
processi
ng, fee
will not
be
refunde
d.
2)Actua
l
charges
for the
followin
g will
be
payable
by the
custome
r in
additio
n to the
processi
ng fee:
a) Pre-
sanction
(i)
Advocat
e's fee
for
property
search
and the
title
investig
ation
report.
(ii)
Valuer's
fee for
valuatio
n report.
b) Post-
sanction
(i)
Stamp
duty
payable
for Loan
agreeme
nt &
mortgag
e.
(ii)
Property
insuranc
e
premiu
m.
Pre-
closure
Penalty
No
penalty
if the
loan is
pre-
closed
from
own
savings/
windfall
gains
for
which
docume
ntary
evidenc
e is
produce
d by the
custome
r.
INTER
EST
RATES
:
Borrowers availing loans upto Rs. 75 lacs can opt for paying interest either at fixed rate or
floating rate.
Interest on individual loans for over Rs. 75 lacs must be charged only at the floating rate
interest linked to SBAR.
HOME LOANS - INTEREST RATES

1.
SBI HI-FIVE LOAN - FOR LOAN AMOUNT UPTO Rs. 5 Lacs
Interest Rates
8% p.a. Fixed interest rate during first 60 months.
61st month Onwards - floating at 2.75% below SBAR
(OR) Fixed interest at 1.25% below SBAR
2.
Interest Rates
disbursement) is fixed at 8% p.a.
be subject to force-majeure clause.
3.
SBI ADVANTAGE HOME LOAN FOR LOAN AMOUNT ABOVE Rs. 50 Lacs
Interest rate during next two years is fixed at 9% p. a

List of papers/ documents applicable to all applicants:
Proof of identify (photo copies of Voters ID card/ Passport/ Driving license/ IT PAN card)
Proof of residence (photo copies of recent Telephone Bills/ Electricity Bill/
Property tax receipt/ Passport/ Voters ID card)
Proof of business address for non-salaried individuals
Statement of Bank Account/ Pass Book for last six months
Signature identification from present bankers
Personal Assets and Liabilities statement
For guarantor (wherever applicable):

Personal Assets and Liabilities Statement
Signature identification from his/her present bankers
Additional documents required for salaried persons :

Original Salary Certificate from employer
TDS certificate on Form 16 or copy of IT Returns for last two financial years, duly
Additional documents required for Professionals/self- employed/ other IT assesses:

Acknowledged copies of three years I.T. returns/ Assessment Orders.
Photocopies of challans evidencing payment of Advance Income Tax.
Getting your dream home has become easier with SBI Easy Home Loan. With low interest
rates for home loan under Rs. 50 lakhs category, SBI Easy ensures that you are not burdened
with high interest for your home loan. Plus with over 12000 SBI branches nationwide you can
get your Home Loan account parked at a branch nearest to your present or proposed

Interest rate after three years may be Fixed or Floating as per the borrowers choice
made at the time of sanction. If floating rate option is chosen, then the rate will be 2.75%
below SBAR. If fixed rate option is chosen, then the rate will be 1.25% below SBAR
prevailing on the third anniversary date from the date of first disbursement, and shall have a
reset frequency of 5 years from the third anniversary date of the loan. Fixed interest rate shall
The revised processing fee structure (including service tax) from 9th
Above Rs.5 Lac and upto Rs.10 Lac

SBI ADVANTAGE HOME LOAN FOR LOAN AMOUNT ABOVE Rs. 50

SBI Advantage Home Loan with competitive rates of interest is available for home
loans above Rs.50 lakhs. Plus with over 12000 SBI branches nationwide you can
get your Home Loan account parked at a branch nearest to your present or
Interest rate during the first year (i.e. till first anniversary date from
the date of first disbursement) is fixed at 8% p.a.
Interest rate during next two years is fixed at 9% p. a
Interest rate after three years may be Fixed or Floating as per the borrowers
choice made at the time of sanction. If floating rate option is chosen, then the rate
will be 1.75% below SBAR. If fixed rate option is chosen, then the rate will be
0.75% below SBAR prevailing on the third anniversary date from the date of first
disbursement, and shall have a reset frequency of 5 years from the third
anniversary date of the loan. Fixed interest rate shall be subject to force-majeure
Processing Fee
The revised processing fee structure (including service tax) from 9th November
Loan Amount
Above Rs.50 Lac and
Above Rs.1 Cr and upto
Above Rs.5 Cr
HOME LOAN PRODUCT VARIANTS
HOME LOAN AS AN OVERDRAFT

An innovative and customer-friendly product to enable you to earn optimal yield on
your savings and minimize interest burden on Home Loans, with no extra cost.
The loan is granted as an Overdraft facility with the added flexibility for you to
operate your Home Loan Account like your SB or Current Account.
The product serves to minimize your interest cost by enabling you to park your
surplus funds in SBI-Maxgain (with the benefit to withdraw the surplus funds
whenever you require), specially in the wake of low yields from other deposit/
Minimum Loan Amount: Rs.5 lacs
A revolutionary product designed for customers who are on the look out for a
source of finance for a property they want to invest in without mortgaging the
same. All you have to do is pledge any financial security that you have and you will
get a Home Loan for your dream home.
A must-take for those who do not want to pay stamp duty for mortgage of their
property or go through the hassles of creation of mortgage.
You also have an option to take the loan by way of mortgage of the property and
pledge financial securities in lieu of margin money.
Repayment is highly customized, giving you the option to repay through regular
EMIs or through maturity proceeds of the securities pledged.
HOME LOANS FOR PURCHASE OF PLOT OF LAND FOR THE PURPOSE

OF CONSTRUCTION OF A DWELLING UNIT
A unique product if you are on the lookout for a loan
for house construction. The loan is available for a maximum amount of Rs.1 crore*
and with a comfortable repayment period of upto 15 years.
Customers are also eligible to avail another Housing Loan for construction of
house on the plot financed above with the benefit of running both the loans
concurrently.
(House construction should commence
(Other terms and conditions as applicable to regular Home Loans)

(* relaxation considered on case to case basis)
HOME LOANS WITH A COMBINATION OF FIXED AND FLOATING
Home Loans with an option to choose a combination of floating interest rate and
fixed interest rate, in a pre determined ratio.
Minimum Loan Amount Rs.5.00 lacs.
A customized product designed to enable borrowers to hedge their Home Loan
against unfavorable movement in interest rates. The product gives you a onetime
irrevocable option to choose one of the three customized combinations of fixed and
floating interest rates and also to choose the order in which the fixed and floating
HOME LOANS TO NON RESIDENT INDIANS (NRIs) AND PERSONS OF

INDIAN ORIGIN (PIOs HOLDING A FOREIGN PASSPORT)
Individual(s) over 18years of age with a steady source of income who

Are Non Resident Indians (NRIs) holding a valid Indian passport.
Are persons of Indian origin(PIOs) holding a foreign passport.
Minimum employment tenure in India/abroad not less than 2 years.
The loan amount is to be determined on the basis of repayment capacity taking into
account income, age, assets and liabilities, qualifications, stability of occupation,
and employment prospects on return. The loan amount is subject to the following:
Maximum permissible loan amount would be determined by EMI/NMI

ratio criteria as applicable to regular Home Loans scheme for Resident Indian
customers, which is 40% for Net Annual Income (NAI) upto Rs.2 Lac, 50% for
NAI above Rs..2 Lac and upto Rs.5 Lac, 55% for NAI above Rs.5 Lacs.
Innovative and value added products extended to existing Home loan borrowers
with a satisfactory repayment record of 3 years and whose loan is Standard Asset,
with a view to reinforce the customer loyalty and to maintain long term relationship
with the borrowers. In case of take-over of Home Loans from other Banks/HFCs,
the borrower should have fulfilled the above conditions with the present
SPECIAL HOME LOAN SCHEME FOR HILLY/TRIBAL AREAS
a Special Scheme designed for Hill/Tribal areas for
extending financial assistance to individuals in such areas to :
Purchase or construction of a new house / flat (without mortgage of land)
Purchase of an existing (old) house / flat which is not more than 10 years old (In
such cases, valuation report from our empanelled valuer and a certificate on the
condition of the house to be given by a structural engineer or Govt. approved
Repair /Renovation/extension of an existing house or flat.
HOME LOANS TO FARMING AND POOREST OF THE POOR IN RURAL
The Scheme covers all rural and semi-urban centers. Rural Area for the purpose
of the Scheme is the area comprised in any village including the area comprised in
any town, the population of which does not exceed 50000 as per 2001 census. The
scheme seeks to provide home loans to farming and poorest of the poor in rural
areas for the purpose of purchase or construction of a house, repairs and
renovation, purchase of plot for the purpose of construction of a house/shed etc.
RURAL HOME LOANS TO SELF HELP GROUPS

The Sahyog Niwas scheme has been instituted to finance the self help groups with
a good track of payment record for 2 years, for on lending to members for housing
in rural areas, covering the following purposes.
For the purchase or construction of a house exclusively or including the housing
needs of activities carried by them. ( Dairy shed, tailoring shed/shop, grocery stores
For the renovation or repair of an existing house / shed

For the purchase of a plot of land for the purpose of house construction.
For the extension of existing house / work space to existing house / shed.
SBI Happy Home Loans
The SBI Happy Home Loans scheme enables the genuine needy buyers to buy
dwelling units by freezing interest rate at 8% p.a. for a period of one year from the
date of disbursement on new Home Loans including SBI Special Home Loans
SBI Green Home Loan

State Bank of India has adopted a Green Banking Policy with an objective of
contributing towards the fight against the adverse climate change. One of the
initiatives approved by the Board for this purpose is incentivizing customers who
go in for Green Projects, i.e. those projects which reduce Carbon Emissions and
promote Renewable Energy. Green Housing or Green Home is one of the types
of projects identified for this purpose. At present State Bank of India the only Bank
in the country supporting the cause of Green Buildings by offering a 5%
concession in margin, 0.25% concession in interest rate and waiver of processing
fees, on the existing home loan products to customers who go in for Green
HOME LOAN TOP-UP PRODUCTS
SBI Home Line Special Personal Loans come with inbuilt provision to sanction
personal loans to home loans borrowers with a satisfactory repayment record of 3
years. The rate of interest charged on these personal loans is only 50 bps above the
Home Loan interest rate applicable to the repayment tenure opted by the borrower
(floating rates only), prevailing as on the date of sanction of SBI-Home Line
SBI Home plus is scheme is launched for granting personal loans to the banks
home loans customers against the security of their house property. All home loans
customers with a satisfactory repayment record of at least one year and who
maintain a Savings bank or current account with us.
The loan can be used for any purpose, viz. extension/repair of house, purchase of
car/ consumer durables, education / medical expenses of family members, personal
expenses, etc. There will be no need to obtain documentary evidence for the end-
use of funds. However a certificate from the customer in the application to the
used for speculative purposes
LOANS TO MEET LIFE STYLE NEEDS OF HOME LOANS CUSTOMERS

State Bank Of India launched the SBI Life Style Loans to help home loan
customers meet any short term expenditure, (Vacation travel, purchase of Gold,
Lifestyle goods) except speculative investments, which adds comfort to the life
style of the borrower with satisfactory repayment record. SBI has tie up with
various reputed travel houses, lifestyle product companies for discounts to our
RELATED HOME LOAN PRODUCTS

Earnest Money Deposit (EMD) Scheme
Many Government agencies, like Urban Development Authorities and Housing
Boards, periodically come out with schemes for sale of plots/houses, wherein
applicants have to submit 10-20% of the cost of plot/house as Earnest Money
Deposit (EMD) and allotments are made by draw of lots.
The SBI EMD scheme is designed for financing against earnest money for
allotment of a house/plot. Individuals above 21 years of age and with a steady
source of income are eligible to avail loans under this scheme.
SBI Reverse Mortgage Loan
LOAN FOR WELFARE OF SENIOR CITIZENS IN INDIA
SBI Reverse Mortgage Loan Enables house-owning Senior Citizens having
inadequate income to meet their financial needs for renovation/repairs to house,
medical & other personal purposes. There is no compulsion for the borrower to
repay a RML during his or her lifetime or till such time he or she continues to stay
The borrower continues to retain ownership of the house. Also, the borrower will
have the option to prepay the loan at any time during the loan tenure and there will
Asset
immovable
property or
movable
property which
can be used as
the security
against which
credit can be
offered.
Cost of
Property
refers to the
total cost of
property
including
various
charges. This
normally
includes the
agreement
value of
property, stamp
duty
registration
charges,
society transfer
charges, garage
charges for
parking cars,
and water
connection
charges. This
will also
include
additional
furnishing
done by
developer. The
cost of
property,
however does
not include any
cash
transaction s
involved in the
purchase of
house over and
above those
mentioned in
agreement.
Eligibility
This is the loan
amount that
you get based
on your
repayment
capacity. Your
eligibility
depends on the
norms set.
EMI
can be repaid
by paying a
fixed amount
every month,
known as
Equated
monthly
Installment.
Processing
Fee
time fee, which
is normally
non-refundable
and payable
along with
your initial
loan
application.
Rates can vary
from 1-2% of
loan amount.
Down
Payment
Housing
companies
would
normally give
a loan upto 80-
85% of the
value of the
property. The
remaining
amount would
j=have to be
paid by the
buyer as s
down payment
before he
draws the loan
amount.
Standing
Instructions
The
instructions to
a bank are to
debit a fixed
amount from
your account
and pay your
financier.
Monthly
Rests
also called as
the Monthly
Reducing
Balance of
Principal. The
EMI is broken
up every
month to arrive
at the opening
balance of
principal for
the next month.
Commitment
Fees
the interest
charged if you
do not draw the
sanctioned loan
within a period
of 6-9 months.
The rate of
interest is
usually about
1-2% per
month.
Tenure
is the term
used to
represent the
number of
years for which
the loan is
given. The loan
amount gets
amortized over
the period of
the loan.
Stamp Duty:
Government
levies a duty
on certain legal
documents and
financial
contracts
Calculation of
EMI:
Emi is
calculated with
the help of
following
formula:
EMI =
1/12*[Lr(1-
r)^n]
[(
1+r)^(n-1)]
Where,
L Loan
Amount
r Rate of
interest
n Period of
loan (in Years)
Anal
ysis
and
Inter
preta
tion
Valid
Obj110
Interpretation:
The above
diagram
interprets that
the sample
size of 50 has
availed the
housing loan
facility from
SBI.
Valid
Obj111
Interpretation:
The diagram
and above data
represent that
82% of the
sample size is
aware about
the different
schemes
available and
18% of sample
size is not
aware. This
indicates that
most of the
customers
know about the
products
provided by
SBI.
Valid
Obj112
Interpretation
:
The above
data reveals
that only 28%
of sample
size knows
about the
Top-Up loans
and the
remaining
72% of the
sample does
not know
about the
Top-Up loan
facility
provided by
the SBI.
Valid
Missing
Total
Obj113
Interpretation:
The above
diagram
shows that the
20% of the
people who
know about
the Top-Up
loan facility
has availed the
facility and the
remaining 8%
of them has
not availed
this facility.
5.
Reason/s for
choosing
present bank
Valid
Obj114
Interpretation:
It is
understood
from the
diagram that
the 94% of the
sample size
has chosen the
SBIs housing
loan facility
for
convenience,
quick service
and low
interest rate
and only 6%
of them has
chosen the
SBI for the
banks image.
Valid
Obj115
Interpretation:
From this
diagram and
data we come
to know about
that more than
50% i.e.
exactly 60% of
the sample size
are satisfied
with the
services
provided by
the bank and
28% people
are very much
satisfied and
the only 12%
people are
dissatisfied.
Valid
Obj116
Interpretation:
The above
diagram
shows that the
maximum
people i.e.
70% of the
sample size
expect the
other benefits
like
concession
for prompt
payment of
installment.
8 . How
many times
you visited
bank to get
the loan
sanctioned?
Valid
Obj117
Interpretation:
This diagram
shows that
during the
survey 80% of
the sample size
had told that
they had
visited the
bank for more
than 6 times to
get the loan
sanctioned.
This shows
that the SBI
people will not
sanction the
loan until the
applicant
produces the
necessary
documents
properly.
9. Would you
recommend
others about
the housing
loan facility of
your bank?
Valid
Obj118
Interpretation:
This data tell
us about the
satisfaction
level of the
customers of
SBI that, 70%
of the sample
size has told
that they will
recommend
others about
the housing
loan facility
provided by
SBI.
10. How easy it

was to get loan
sanctioned from
SBI?
Valid
Obj119
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I
h
a
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o
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m
o
n
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c
u
s
t
o
m
e
r
s
.
Bi
bli
og
ra
ph
y:-
4.
Websi
ww.sbi
.co.in
ww.wi
kipedi
a.com
5.
Books
Market
Research -
Tull and
Hawkins
6.
Journ
he
journal
of
bankin
g
studies
BI
Circul
ars
A
N
N
E
X
U
R
E
S
Q
u
e
s
t
i
o
n
n
a
i
r
e
:
N
a
m
e
:
ddr
ess
:
O
c
c
u
p
a
t
i
o
n
:
12.
Ar
c)
d)
13.
Ar
c)
d)
14.
If
c)
d)
15.
Re
g)
h)
i)
j)
k)
l)
16.
Ext
e)
f)
g)
h)
17.
W
e)
f)
g)
h)
18.
Ho
d)
e)
f)
19.
Wo
c)
d)
20.
Ho
e)
f)
g)
h)
--THANK
YOU--

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KARNATAK LAW SOCIETYS

INSTITUTE OF MANAGEMENT EDUCATION AND RESEARCH, BELGAUM.

STUDY OF HOUSING LOAN AND AWARENESS OF TOP UP

Institute Guide Director

KARNATAK LAW SOCIETYS

UNDER THE GUIDANCE OF

Institute Guide Organisation Guide

I am extremely thankful to my project guidance Prof. S. Deshpande, for his constant

Sl.No Particulars Page No

3 Introduction to SBI Housing Loan

4 Analysis & Interpretations 47

PLACE: BELGAUM Shilpa M. Bhagoji

Objectives of the study:

Statement of the problem:

Tools used for analysis

Housing scenario in India:

Banking History in India

Early phase from 1786 to 1969 of Indian Banks

1949 : Enactment of Banking Regulation Act.

PURPOSE OF CREATION OF SBI:

MISSION STATEMENT OF SBI:

Establishment of RASMECCC goes back to December, 2005.

Procedure for Housing Loan Sanction:

Recovery Process of Loans:

Process Officer 1 Division Manager1 Deputy

All chief managers have four assistants in hierarchy.

SBI HOUSING LOAN SCHEME:

*LTV ratio - Loan to value ratio.

Loan Amount Processing Fee(Revised)

(a) Rejection of loan application on account of unsatisfactory pre-sanction survey report.

HOME LOANS - INTEREST RATES

next two years is fixed at 9% p. a

uments applicable to all applicants:

to copies of Voters ID card/ Passport/ Driving license/ IT PAN card)

on from his/her present bankers

s required for Professionals/self- employed/ other IT assesses:

AN FOR LOAN AMOUNT UPTO Rs. 50 Lacs

ring next two years is fixed at 8.5% p. a

evised processing fee structure (including service tax) from 9th

E HOME LOAN FOR LOAN AMOUNT ABOVE Rs. 50

Above Rs.1 Cr and upto

Above Rs.5 Cr Rs.20,000/-

mount: Rs.5 lacs

option to take the loan by way of mortgage of the property and

ghly customized, giving you the option to repay through regular

FOR PURCHASE OF PLOT OF LAND FOR THE PURPOSE

on should commence within 2 years from the date of availment of

conditions as applicable to regular Home Loans)

h an option to choose a combination of floating interest rate and

TO NON RESIDENT INDIANS (NRIs) AND PERSONS OF

18years of age with a steady source of income who

is to be determined on the basis of repayment capacity taking into

mum permissible loan amount would be determined by EMI/NMI

alue added products extended to existing Home loan borrowers

LOAN SCHEME FOR HILLY/TRIBAL AREAS

tion/extension of an existing house or flat.

TO FARMING AND POOREST OF THE POOR IN RURAL

LOANS TO SELF HELP GROUPS

ion or repair of an existing house / shed

Home Loans scheme enables the genuine needy buyers to buy

Special Personal Loans come with inbuilt provision to sanction

s scheme is launched for granting personal loans to the banks

T LIFE STYLE NEEDS OF HOME LOANS CUSTOMERS

ntinues to retain ownership of the house. Also, the borrower will