CHAPTER – 1

INTRODUCTION

1
INTRODUCTION TO HOME LOANS

Home is a dream of a person that shows the quantity of efforts. sacrifices

luxuries and above all gathering funds little by little to afford one‘s dream. Home
is one of the things that everyone one wants to own. Home is a shelter to person
where he rests and feel comfortable. Many banks providing home loans whether
commercial banks or financial institutions to the people who want to have a home.
HDFC-(Housing Development And Finance Corporation) Home Loan. India have
been serving the people for around three decades and providing various housing
loan according to their varied needs at attractive & reasonable interest rates.
Owing to their wide network of financing. HDFC Housing Loans provides services
at your doorstep and helps you find a home as per your requirements.
Many banks are providing home loans at cheapest rate to attract consumers
towards them. The more customer friendly attitude of these banks. currently offer
to consumers cheapest loan over homes, in view of acute housing shortage in the
country. and keeping in mind the social economic role of commercial banks in the
present times. the RBI advised banks to encourage the flow of credit for housing
finance.
With the RBI reducing bank rate. the home loan market rates nose-diving
by 50 basis points. The HDFC Bank and Standard chartered bank has become the
first player in this sector to announce a housing loan for a 20 years period. No
doubt it will enhance the end cost people to plan their house over longer duration
now; it has been made easy for a person to buy that dream house which he dreamt
of long ago.
HDFC also provides with Home improvement Loan for internal and external
repairs and other structural improvements like painting, waterproofing, plumbing
and electric works, tiling and flooring, grills and aluminum windows. HDFC
finances up to 85% of the cost of renovation (100% for existing customers).
Current status is that HDFC reduced home loan rates by 50 basis points for
all its existing floating rate customers.

ADVANTAGES OF HOME LOANS :

The various benefits of home loans arising to the customers are:
(i) Attractive interest rates:
The various banks offer interesting rates to boost and help their customers. Many banks
provide loans on fixed and floating rates to facilitate consumers as per their needs.
(ii) Help in owing a home:
The home availed by a person with the help of banks, because they provide financial
assistance to customer for owing their dream home.

2
 (iii) No requirement of guarantor:
The commercial bank now a day, liberalize their laws regarding home loans. Some of
banks don’t even require guarantor to grant loan to their consumer. of banks don’t even require
the guarantor to grant loan to their consumers. They also make consumers free by reliving him
to find a guarantor to complete the proceedings of availing loan.

(iv) Door-step services:

These door to step services are provided from enquiry stage to the final disbursement
takes place such services are beneficial for customers in present busy life. Banks like lCICI
bank and standard chartered bank provide door to step services to customers to borrow loan.

(V) Loan period:

There are many banks which provide maximum loan tenures up to 15-20 years based
on the loan amount and the creditability of customers. This relieves the customers to repay loan
amount till a long period.

(vi) For accidental death insurance:

Some banks provide free accidental death insurance with housing loan which is also
beneficial for the customers.
These benefits or advantages of home loans are responsible for making than so popular
among customer that a person who don't have their home and want to buy. they do it with home
loan. Home loans help such persons in making their dream home.

DISADVANTAGES OF HOME LOANS:

The main disadvantages of home loans are high lightened as below:

(i) Delays in processing :

Many times. there are huge delays in processing of providing home loans
because various formulations to be fulfilled in this process. Due to these delays
customers feel mentally as well as financially weak
.
(ii) Fluctuating interest rates:
Some banks give home loans at floating rates. which fluctuate at Different intervals due
to some reasons. These changes sometimes. may lead to increase in interest rate which will
increase the cost of home loans to the customers

3
 (iii) High cost:
The public sector banks charge high processing cost for home loan’s sanctioning. They are
forced to pay serious charges at various stages to fultill the requirements. Some consumers
are not able to pay such charges so such people could not avail the benefits of home loan
schemes.
(iv) Problem in disbursement:
There are many problems in disbursement of home loan amount. There are some delay in
disbursement of loan amount to the customers due to legal formalities. This causes problems
to the customers.
These are limitations or disadvantages of home loans. But some times some banks charges high
installments to repay loan amount. Such also causes problem to customers. These limitations
can be removed by providing good and promote services to the customers.

DISBURSEMENT OF HOME LOANS:

The every bank has its own procedure to disburse the loan amount among customers. After
choosing your right home. the next step is disbursement of home loans. The loan amount is
disbursed after identifying and selecting the property or home that are purchased and submit
the requisite legal documents. In the disbursement of home loans a clear title and full
verification to ensure that a person has full rights on his house. The 230A clearance of seller
and or 371 clearances from the appropriate authority of income tax is also needed.
(i)Eligibility criteria:
However, if one is a resident or non-resident individual who is planning to buy a house in
India, one can apply for a home loan. If a person has decided to buy a property in the near
future, he she can apply for a loan before even selecting the property. Once the maximum
amount to put into the property has been decided. the Housing Finance Institutions or Banks
Will let the customer know that how much he’ she is eligible for this helps to plan out the
budget.
(ii) Conditions regarding co-applicants:
All Housing Finance institutions lay down conditions on who can be co-applicants. all co-
owners to the property, need to be co-applicants to the loan necessarily. These institutions do
not permit minors to join in as either crowner or as co-applicants because a minor is not eligible
to enter into a contact as per law. They do not permit even friends or relatives who are not
blood relatives to take a property jointly. However, Income of applicants can be clubbed
together to get higher loan eligibility. Given below is a Table that throw light on acceptable
relationship of a co-applicant for clubbing of income. Income Clubbing of Co-applicants:-It is
as follow:-
Combination Income Clubbing:-
 Husband-Wife: Income of husband-wife can be clubbed.

4
  Parent son: It can be clubbed if only son is there but not if any male sibling
exists.
 Brother-Brother: If they are currently staying together and intend to stay
together in the new property then only their income-can be clubbed for above
purposes.
 Brother-Sister: No clubbing is possible.
 Sister-Sister : No clubbing is possible.
 Parent-Minor Child: No clubbing is possible in this case also.

(iii) General terms and conditions:

The following are the terms and conditions applicable to the basic home loan
product only. These are likely to change on the basis of the variations of the
home loan product. Typically. in general home loans. the following conditions
are applicable :
1) The loan to value ratio (LTV) cannot exceed a particular percentage. This differs
from product to product and from one Housing Finance Institutional Bank (HFIB) to another.
The components of the value of the Property calculated here are covered under cost of property.

2) The maximum tenure of the bank is nominally fixed by HFI 85. However. HFls 85
do provide for different tenures with different terms and conditions.
3) The installment that one pay is normally restricted to about-SO-per cent of the
monthly gross income of the candidate.
4) The total monthly outflow towards all the loans that have been availed of. including
the current loan is normally restricted to 50% of the gross monthly income.
5) One will be eligible for a loan amount which is the lowest as per one‘s eligibility.
This is calculated as per the LTV norms. the HR. norms and the FOlR norms as mentioned
above.
6) Most HFls Bs consider the profile before they judge the repayment capacity. The
judgement is based on age qualifications number of dependents. employment details. employer
credentials work experience, previous track record of repayment of any loans that have been
availed of occupation, the industry to which the candidate's business relates to. if he she is self-
employed, then the turnover in the last 3-4 years etc.
7) Some HFls Bs insists on guarantees from other individuals for the repayment of loan.
In such cases. the customers has to arrange for the personal guarantee before e disbursement of
the loan takes place.
8) The property should be technically clear before the HHS Bs disburses the loans
amount. Most of institutions and banks have a teams of technical experts who visit the site to
get a technical report before the disbursement of loan. This is also beneficial to the customer
as they check for the technical quality and compliance with local laws.
9) The property should be legally clear before one can avail of a disbursement of the
loan amount. Housing-Finance Institutions Banks (HFls Bs) take legal clearance from their

5
lawyers before the disbursement of amount. This proves to be beneficial to the customers as a
legal expert checks his; her documentation to ensure that he she get a proper title to the
property.
10) The disbursement of the loan is as per the progress of construction of the property
unless it is a ready property in which case the disbursement will be by one single cheque. PEMI
or simple interest on the loan amount disbursed to the customer in case ofa part disbursement
will be payable by the customer on the disbursement.
11) The disbursement in most cases will be favoring the builder or the seller or the
society or the development authority as the case may be. The disbursement will come in the
customer's favour under special circumstances only.
12) The repayment of loan can be made either through deduction against salary. post-
dated cheques. standing instructions or Auto debit instructions to bank.
13) The principle is amortized either on annual reducing or monthly reducing basis as
the case may be.
The above terms and conditions are generally true for most Housing finance Institutions
Banks with respect to the general Home Loans. However. the specific terms and conditions
vary with respect to special Housing Finance Institutions or Banks.
(iv) Charges applicable to home loans:
The different kinds of charges applicable to home loans are discussed below:
a)Proceeding fees:
First of all comes the process fee. This is a charge that is levied by most HFIs/Bs. This has to
be paid at the time ofsubmission of the application form. It's normally charged as a percentage
ofthe loan amount sanctioned. Some HFls also charge a flat fee based on the loan amount
instead of a percentage. When a lower amount is sanctioned the excess fees paid at the time of
submission ofthe application is adjusted with the charges. which one make to the HFI B
subsequently. Most HFls 35 refund the processing fee ifthe loan application is rejected.
b)Administrative fees:
This charge is again, normally, a percentage of the loan amount sanctioned. It is collected by
the HFI/ B for the maintenance of customer's records, issuing interest certiticates, legal charges,
technical charges, etc, though the tenure of the loan. It is payable by the customer when he she
accepts the offer letter given by the HFI/B. This payment has to be made before the availment
of the disbursement. The mode of collection of these fees varies from one HFl/B to another.
c) Rate of interest:
This is the rate of interest applicable on the loan amount through the tenure of the loan. It is
charged on the principal monthly reducing method. Most HFls/Bs give an option to select either
a fixed rate of interest or a variable rate of interest.
d) Legal Charges:

6
Some HFIS/Bs mainly Public Sector Banks levy legal charges that they incur on getting the
property documents vetted by their panel of lawyers.
e) Technical Charges:
These charges are also levied by certain Housing Finance Institutions Banks (HFIs/Bs) to meet
their expenses on the technical site visits to the customer‘s property. This ensures quality of
construction and construction within the norms as stipulated by the respective approval
authorities.
f) Stamp duty and registration charges:
HFls that go in for a registered mortgage pass these charges on to the customer. These are rather
heavy in certain states depending on the laws laid down by the state where one buy a property.

g) Personal guarantee from Charges:

Since the personal guarantee provided by the customer need to be stamped. these charges are
also recovered from the customer. They are charged to him by HFIs who demand for
Guarantees.
h) Cheque bounce charges:
In case the cheques through which one make a payment to HFls get dishonored, some minimum
charges are levied by the HFI. The same are recovered from the customer.
i) Delayed payment charges:
HFls/Bs charge delayed payment charges from the customer if he she delays the payment of
installments beyond the due date.
j) Additional charges:
These are levied as a percentage on the delayed payment charges by most HFls. They are levied
if one fail to pay the dues within the stipulated time after a delay has taken place.
(k) lncidcntal charges:
This is payable in case the HFI/B sends a representative from their organization to collect their
outstanding dues. It is normally charged at a flat rate per visit. These charges are levied by most
HFls/Bs.
l) Prepayment charges:
This is a penalty charged by HFls/Bs from when one makes either a part prepayment or a full
repayment of the loan. This charge is levied only on lump sum payments and not on the EMls
that one pays. This charge is levied on the amount prepaid by one and not on the entire
outstanding principal. These charges are gradually being discount. So. these are the charges
levied by most Housing Finance Institutions and Banks while granting home loan to the
customers. Now, the dectsion on the repayment capacity shall be talked about as follows.

7
v) Credit documentation:
Given below is the exhaustive list of credit documentsthat need to be submitted for a general
home loan product. The documents vary from one HFl/B to another based on one's employer.
qualifications experience etc, the general requirements are as follows
(a) Income documents:
For salaried slips for the last three months appointments letter-salary certificateretainership
agreement. if appointed as a consultant-Form 10 issued by the employer in customer's name
income document for self employee last three years profit and loss account statement duly
attested by Chartered Accountants. Last three years Balance Sheets duly attested by Chartered
Accountant, last three years Income Tax Retums with computation chart duly Filed and
certified by the Income Tax authorities.
b) Proof of employment:
Identify card issued by the employerVisiting card.
c) Employer's details ( In case of private companies):
Profile of employer on employers letterhead (to be signed by a senior person in the
organization) comprising
 Name of promoter directors
 Background of promoters/directors
 Nature of business activity of your employer
 Number of employees
 List of branches/factories
 List of suppliers
 List of clients/customers
 Turnover of employer
 Annual reports of the employer for the last two to three years.
(d) Proof of age (anyone of the following):
PassportVoter's ID card-PAN card-Ration card-Employer's identity card-School leaving
certificate-Birth certificate.
(e) Proof of residence (Anyone of the following):
Ration card-PassportPAN card-Rent agreement, if the customer is staying currently on
rentBank Pass book-Allotment letter from the company if he she is residing in company
quarter.
(f) Proof of name change(if applicable):
A copy of the official gazette A copy of a newspaper advertisement publicizing the name
change-Marriage cettiticates.
(g) Proof if investment (If required| :

8
Bank statement for the last six months of all operating and salary accounts Bank statements for
the last six months of all current accounts, if self-employed-any other photocopies of
investments held. if required by the HFC.

(vi) Legal documentation:

Legal Documentation the typical legal documents that need to be submitted to the HFC are
discussed here. Given below is a list of legal property documents that need to be submitted to
the HFC for mortgage of the property. The name and the list of documents vary from state to
state and also depend on the type of property being financed. A broad outline of the documents
required is given below.
a)Acceptance copy of the offer letter issued by the HFC/B.
b) Title documents of the property that include -sale agreement duly Registered-Own
contribution receipts Allotment letter-Registration receipt-Land documents indicating
ownership. if applicablePossession letter-Lease agreement, if applicable (Property bought from
a development authority) Mortgage deed ifthe HFC opts for a registered mortgage.
c) No Objection Certificate from the developer, society or development authority as applicable.
d) Personal Guarantees, if applicable.
e) In case of alternator additional securit, documents for the same depending upon the security
details.
f) Post dated cheques for the EMls.
The above documents are only indicative in nature and do not cover the entire list. It may also
be noted that in a resale case. the previous chain ofagreement also need to be taken.
(vii)The tax benefits that are applicable to housing loans for indiiiduals :
Currently Tax Benefits to individuals are available only for the Home Loans and Home
Extension Loans products. The benefits available are covered under these sections.

Property insurance:
Is it compulsory to insure the property? some HFls insist on a mortgage redemption life
insurance policy. In this case the customer gets a benefit of an interest rate reduction. Though
the HFI may not insist. it is better to go in for property insurance to safeguard the asset against
any sort of damage or loss. The customer can select the tenure for the property insurance. The
insurance premium is changed up front Most insurance companies prov ide for huge discounts
on the rate ot‘premium for larger tenures. The premium charged currently is seventy-seven for
every lakh ofpropeny for a year. So a customer has to fulfill various conditions to be eligible
for availing home loan from a Housing Finance Institution Batik After fulfilling these
conditions. a customer can avail loan at low interest rate i.e. fixed rate floating rate. A decision
on whether one should go in for a fixed-rate loan or a tloating-rate loan now is a function oftwo
factors i.e. One's perception of where interest rates in the economy are headed and one' capacity

9
to ride the interest rate changes. A floating-rate loan let one take advantage of further falls in
interest rates but one stand to loose if interest rate, rise again. However this decision is based
on the perception of the consumer.

OBJECTIVES OF THE STUDY

There is no strongest foundation for your dream home than a cheap loan. Home loans have
become that stronger foundations for people who want to own a home. The main objective of
the study are as follows;
1) The main objective of this study is to know the various aspects of home loan for different
categories of customers or according to slabs of home loan of HDFC bank with other banks.
Which help to choose the right home loan for purchase house.
2) To study the various home loan schemes of banks.
3) To compare MCLR Base rate of banks.
4) To know the processing fee charged by the banks.
5) To make comparative study of lowest EMI of home loans by Commercial banks.
6) To study the documents required for home loan.
7) To analyze the age limit of an individual for home loan.
8) To learn about various aspects of hdfc home loan ltd.

SCOPE OF THE STUDY

The Indian housing finance industry has grown by leaps and bound in few years. total home
loans disbursements by banks has risen which witnesses phenomenal growth from last 5 years.
There are greater number of borrowers of home loans, so by this study we can find out that
which bank is best for the customers of home loan.

10
 INTRODUCTION OF ORGANIZATION

HDFC (Housing Development Financial Corporation) Bank Limited is an Indian banking

and financial services company headquartered in Mumbai, Maharashtra. It has 84,325
employees and has a presence in Bahrain, Hong Kong and Dubai. HDFC Bank is India’s
largest private sector lender by assets. It is the largest bank in India by market capitalization as
of February 2016. It was ranked 69th in 2016 Brand Top 100 Most Valuable Global Brands.

HDFC Bank Limited

Type Public

Traded as BSE: 500180

NSE: HDFCBANK
NYSE: HDB
BSE SENSEX Constituent
CNX Nifty Constituent

Industry Banking, financial services

Founded August 1994

11
 Headquarters Mumbai, Maharashtra, India

Area served India

Key people Aditya Puri (MD

Products Credit cards, consumer

banking, corporate
banking, finance and
insurance, investment
banking, mortgage loans, private
banking, private equity, wealth
management[2]

Revenue ₹81,602 crore(US$12 billion)

(2017)

Operating ₹25,732 crore(US$3.9 billion)

income (2017)

Net income ₹14,550 crore(US$2.2 billion)

(2017)

Total assets ₹863,840 crore(US$130 billion)

(2017)

Number of 84,325 (March 2017)

employees

Website HDFCBank.com

History
In 1994 HDFC Bank was incorporated, with its registered office in Mumbai, India. Its first
corporate office and a full service branch at Sandoz House, Worli were inaugurated by the then
Union Finance Minister, Manmohan Singh.
As of June 30, 2017, the bank's distribution network was at 4,715 branches and 12,260 ATMs
across 2,657 cities and towns. The bank also installed 4.30 Lacs POS terminals and issued
235.7 Lacs debit cards and 85.4 Lacs credit card in FY 2017.

12
 Products and services.
HDFC Bank provides a number of products and services including wholesale banking, retail
banking, treasury, auto loans, two wheeler loans, personal loans, loans against property
and credit cards.
The latest entry in the league is 'Project AI', under which HDFC Bank, over the next few weeks,
would deploy robots at select bank branches. These robots will offer options such as cash
withdrawal or deposit, forex, fixed deposits and demat services displaying on a screen to
customers.

Listings and shareholding

The equity shares of HDFC Bank are listed on the Bombay Stock Exchange and the National
Stock Exchange of India. Its American Depository Shares are listed on NYSE and the global
depository receipt are listed on the Luxembourg Stock Exchange where two GDRs represent
one equity share of HDFC Bank.

Shareholding
Shareholders (as of 31 December
2015)

Promoter group (HDFC) 21.57%

Foreign institutional investors (FII) 32.4%
Individual shareholders 8.5%
Bodies corporate 7.5%
Insurance companies 5.38%
Mutual funds/UTI 8.65%
NRI/OCB/others 0.29%
Financial institutions/banks 2.75%
ADS/GDRs 18.78%

Awards and recognition

 Best Banking Performer, India in 2016 by Global Brands Magazine Awards.

Best Performing Branch Award for Best

in Microfinance among Performance in
private sector banks by Microfinance
NABARD, 2016

13
KPMG study of India's Best Bank of the year
Banks & best digital
banking initiative
award 2016
AIMA Managing India Business leader
Awards 2015 of the year-
Aditya Puri
BrandZ Rankings Most Valued
brand in India for
third successive
year
FinanceAsia poll on Asia's Best managed
Best Companies 2015 public company -
India
Barron's World's 30 Best
CEOs - Aditya
Puri
J. P. Morgan Quality Best in class
Recognition Award straight through
processing rates

14
CHAPTER – 2
REVIEW
15
 OF LITERATURE

Summary
 After going through pervious studies of Home loans I came to conclude that there is
growth of home loans after 2001.
 Home loans have an inverse relation with interest rates i.e. when interest rate low the
demand of home loans increase. (tha 1987)
 People are going more towards home loans than private mortgage insurance (Berstain
2008).
 Government taking various steps to encourage people to go toward home
loans(Haavio, Kauppi 2000)
 Growth of home loans are due to increase of living standard of people, shifting from
joint family to nuclear family (Lacourr, Micheal 2007)
 There are some problems also attach with these home loans such as time i.e filling of
application of loan to closing ,people have their own specified needs from these home
loans which are not fulfilling. (Lacour Micheal 2006).
 SBI provide a very low interest rate on home loans as compared to other banks. (831
May 2000)

Now after this conclusion the details of review are below:

Berstain David (2009) examined in his study taken from 2001 to 2008 that in this
period there is increase use of home loans as compared to private mortgage insurance

16
(PMI).he have divided his study into four sections. Section 1 describes why people are
going more for home loans than PM]. the main reason for this that now home loans
market provide Piggybank loans for those people who don’t have 20% of down
payment. Section 2 tells the factors responsible for the growth of home loans and the
risks on shitting toward home equity market without any PMl coverage. PM] can
protect lenders from most losses up to 80% of LTV and the absence of PMI will result
in considerable losses in an environment. Section 3 tells the measures in changes of
type of loans. For this he have taken the data from the 2001 and 2007 Al-IS a joint
project by HUD and Census The results of this analysis presented in Table One reveal
a sharp increase in the Prevalence of owneroccupied properties with multiple
mortgages among properties with Newly originated first mortgages Section 4 describe
the Financial status of single-lien and multiple-lien households and for this he have
taken the survey of consumer finance and show that financial position is more weaker
in multiple loans than the single loans.

Vandell, Kerry D (2008) analysis the sharp rise and than suddenly drop down home
prices from the period 19982008. changes in prices are for the reasons as such
economic fundamentals , the problem was not sub prime lending per se, but the Fed‘s
dramatic reductions, then increases in interest rates during the earlymid-2000 , the
housing -boom was concentrated in those markets with significant supply-side
restrictions, which tend to be more price-volatile; he problem was not in the excess
supply of credit in aggregate, or the increase in sub prime per se, but rather in the
increased or reduced presence of certain other mortgage products.

La courr, Micheal (2007) analysis in his study the factors affected the increase in the
level of Annual percentages rates (APR) spread reporting during 2005 over 2004,
the three main factors are changes in lender business practices; (2) changes in the risk
profile of borrowers; and (3) changes in the yield curve environment. The result show
that after controlling for the mix of loan types, credit risk factors, and the yield curve,
there was no statistically significant increase in reportable volume for loans originated
directly by lenders during 2005, though indirect, wholesale originations did
significantly increase. Finally, given a model of the factors affecting results for 2004-
2005, we predict that 2006 results will continue to show an increase in the percentage
of loans that are higher priced when final numbers are released in September 2007.

La cour Micheal (2006) examined the home purchase mortgage product preferences
of LMI households. Objectives of his study to analysis the factors that determined
factors their choice of mortgage product , is different income groups have some
specified need to met particular product. The role pricing and product substitution play
in this segment of the market and do results vary when loans are originated through
mortgage brokers? For this they have use the regression analysis and the results are
high interest risk reduce loan value. Self employed borrower chooses reduce
documented loans than salaried workers.use of this product type seems to be more
prevalent among borrowers with substantial funds for down payment and better credit
scores. In case of pricing Multi families requires price premium and larger loans carry

17
lower rate. And the role of time, particularly, the time required for the loan to proceed
from application to closing it is find that government.
Lending taking the longest time and Nonprime loans the shortest time.Multi family
properties take longer time in closing. And during peak season take longer time to
close. And for last objective it is find that broker originated loans close faster.The effect
of mortgage brokers on pricing and other market outcomes is fertile ground for
additional research.

Dr. Rangarajan C. (2001) said that the financial system of India built a vast network
of financial institutions and markets over times and the sector is dominated by banking
sector which accounts for about two-third of the assets of organized financial sector.

Haavio, Kauppi (2000) stated that countries where a large proportion of the
population lives in owner occupied housing are experiencing higher unemployment
rates. Than countries where the majority of people live in private rental housing, which
might suggest that rental housing enhances labour mobility. In this paper, they develop
a simple inter temporal two region model that allow us to compare owner occupied
housing markets to rental markets and to analyze how these alternative arrangements
allocate people in space and time announced that it will offer loans for Rs. 2-10 lakh
at 12.5 percent the lowest rate offered by any housing finance provider, big brother
SBI has taken the rate war in the home loans category to new heights. This is because,
apart from the low rate, the interest on these loans is calculated on principal, which is
reduced every month unlike other housing finance companies which calculate interest
on annually reducing basis.

Narasimham Committee (1991) points out that although the banking system in our
country has made rapid progress during the last two decades, there is decline in
productivity and efficiency and erosion of profitability. The committee strongly make
indicatims of liberlising, deregulating economy to make Indian baking system more
competitive and efficient.

Ojha (1987) in his paper "modern international caparison of productivity and

Profitability of pubic sector banks of India" making Comparison on the basis of per
employee indicators and taking examples of state bank group and Punjab National bank
noted that Indian banks are the lowest in all accounts. However such international
comparison will not be fair for numbers of reasons.

Godse (1983) in his essay “looking a fresh at banking productivity” observe that
productivity aspect is only at the Conceptualization stage in banking industry. He
suggested improvement in productivity and procedures, costing of operations and
capital expenditure etc.

Farming (1982), while examining bank productivity of British banks observed that
although the productivity of the UK clearing banks is improving, they are still heavily
over manned as compared with similar banks else where.

18
Kulkarni (1979) in his study “Development responsibility and profitability of banks”
stated that while considering banks costs and profits, social benefits arising out of it
cannot be ignored. He suggested that while meeting social responsibility banks should
try to make developmental business as successful as possible.

Verde and Singh (I979) in a study "profitability of commercial banks" over 15 years
gave consideration to two types of factors that effects interest rates levels i.e. internal
factors (including operational and managerial efficiency of individual basis).

Banking Commission (1972) reviewed bank operating methods and procedures and
made recommendations for improving and modemizing these, particularly relating to
customers services, credit procedure and internal control systems. It observed that
present methods of working out branch profitability are not appropriate and an
integrated costing and financial reporting system is needed.

Department of Banking operations and development, RBI: Bombay observed that

the rapid expansion of banks activities since 1970 called for a phase of consolidations
to improve the quality of banks operational efficiency, productivity and customer
services.

CHAPTER – 3
19
 RESEARCH
METHODOLOGY

RESEARCH METHODOLOGY

 Research methodology that is used here was purely exploratory because a general
exploratory research design attempts to provide maximum information in minimum
time with least possible effort and money.
 This resistance also help full / use full for establishing priorities among research
questions and for learning about practical problems of carrying out the research.
 This kind of research is helpful in exploring the information for problems which have
not been defined precisely.

SOURCES OF DATA:
Secondary Data
Data collection was through literature survey. Literature survey includes the collection of
data from various sources like bank agreement and statement, handbooks as well as study

20
material. It includes collecting and evaluating facts and information already available about
the selected research problem.

Secondary sources
 Magazine
 Published information on finance
 Newspapers
 Company websites

DATA ANALYSIS
After data collection, I’m able to analyze different category customers wise rate of interest
provided by different banks in comparison of HDFC bank. In this the processing fee, lowest
EMI, age limit, MCLR Base rate of banks are also analyzed.

DATA INTERPRETATION
For easy interpretation of data tables and column charts are used with some quantitative
technique. Percentage is used mainly to determine comparison between HDFC and other
banks.

CLASSIFICATION AND CALCULATION OF DATA

The data thus collected were classified according to the categories, home loan slabs,
comparative statement. The table were of 2 dimensional or 3 dimensional.

TOOLS OF DATA ANALYSIS

 Table
 Charts
 Descriptive statistics
 Percentage

21
CHAPTER – 4

22
 DATA ANALYSIS
AND
INTERPRETATION

HDFC Home Loan

HDFC offers housing loan to people who want money to purchase a house, home renovation
and home extension etc. The house itself acts as a security to the loan. Taking a loan from
HDFC has the following benefits:
(I) Nil prepayment charges for floating rate home loans
(II) Affordable and attractive interest rates
(III) Counseling by legal and technical experts to make the right choice

Home Loan Interest Rates HDFC

HDFC home loan interest rates are in the range of 8.40% to 8.70%, with special discounted
rates for specific category of borrowers such as ladies borrowers for whom the bank offers
the lowest interest rate of 8.40%.

23
HDFC Bank Home Loan Interest Rate
HDFC Bank Home Loan Rates are benchmarked to PLR which is currently 16.35%. HDFC
Bank home loan interest rates that are offered to a customer are a function of its internal cost
of raising new funds and the occupation, income levels, type of property and repayment
capacity of its borrowers.

HDFC Home Loan Interest Rate Cut

Latest HDFC home loan rate starts from 8.40% , as applicable based on the PLR, last
announced on 05th Apr 18. Any change in HDFC benchmark PLR rate will translate into a
similar change in the bank’s home loan rate. For instance, if HDFC slashes PLR rate by
0.15%, its current home loan rate will be cut from 8.40% to 8.25%
HDFC home loan interest depends upon
 Loan amount: Housing loan rate in HDFC depends upon the loan amount you apply
for. Higher the loan amount, lesser will be the rate
 Your Salary: Income helps you in identifying your rate of interest. Bank's rate varies
with your monthly income. Higher the income, lesser will be the rate
 Type of loan opted for: HDFC also offers differential rates for women borrowers and
also under their fixed and floating rate schemes. The rate of interest may be higher or
lower under their special or popular loan product offers.
 Existing bank customers: HDFC offers one of the lowest home loan rates to its
existing bank account customers in view of their past relationship with the bank.
HDFC Home Loan Charges
In addition to interest rates, home loan from HDFC also carry some other charges which
include:
 Processing Fee - HDFC applies 0.50% processing charges to account for its
expenses incurred for conducting a credit appraisal and completing the lending
process.
 Technical and Legal Charges - HDFC also charges technical and legal charges
which are explained to the customer during the loan process. Once you go through
the loan application process, you will need to pay these charges based on HDFC
rules.
 Prepayment Charges: If you decide to foreclose or transfer your housing loan to
another bank, you need to submit an application for the same to HDFC. As per RBI
rules, banks are not allowed to charge prepayment penalty on floating rate home
loans. Hence, you can prepay your home loan with HDFC at Nil charges.

HDFC Housing Loan Details

 Purpose of Loan: HDFC house loan is taken to purchase, construct a home, renovate
your existing home.
 Key Features
a. Loan available for both salaried and self employed. Special rates for women borrowers.
b. Borrowers within the age group of 24 and 60 years.

24
 c. Security: Mortgage of property you are planning to purchase, renovate or construct.
d. Loan to Value Ratio of 90%.
e. Loan Tenure can range from 5 to 30 years.
f. Interest rates in the range of 8.40% to 8.70%.
g. Lowest EMI of Rs. 762 per lakh
 Processing Fees: 0.50% of loan amount Minimum Rs. 10,000 Maximum Rs. 10,000
 Special schemes: HDFC offers customised home loan interest rates and schemes for
special category of borrowers including women borrowers, senior citizens, NRIs etc.
Some of the special loan offers of HDFC are:
a. Adjustable Rate Home Loan
b. TruFixed Home Loan
c. HDFC Home Improvement Loans
d. HDFC Home Extension Loan
e. HDFC Plot Loans
f. HDFC Short Term Bridging Loan
g. Rural Housing Finance
h. HDFC Reach Home Loans
i. HDFC Home Loan Top Up

Housing Loan HDFC documents

For Salaried employees
(i) Filled up loan application form
(ii) 2 Passport Size Photo
(iii) ITR of last 2 years
(iv) Identity Proof - Passport/ Driving Licence/ Voter ID/ PAN
(v) Residential Address Proof - Leave and License/ Registered Rent Agreement/ Utility Bill
(upto 3 months old), Passport
(vi) Income Documents – 6 months payslip, 2 years Form 16, 6 months bank statement showing
salary credit and any EMI debit
(vii) Property Documents - Past title chain: Conveyance deed, Sales deed, Allotment letter,
Possession letter, Latest property tax receipt, Copy of approved plan for construction/
extension
For Self-Employed
(I) Filled up loan application form

25
(II) 2 Passport Size Photo
(III) Identity Proof - Passport/ Driving License/ Voter ID/ PAN
(IV) Residential Address Proof - Leave and License/ Registered Rent Agreement/ Utility Bill
(upto 3 months old), Passport
(V) Business proof such as VAT/ service tax registration, incorporation details in case of
companies, business address proof, profit and loss account and balance sheets certified by
CA, copy of partnership deed and proof of business existence and business profile
(VI) Property Documents - Past title chain: Conveyance deed, Sales deed, Allotment letter,
Possession letter, Latest property tax receipt, Copy of approved plan for construction/
extension.

HDFC HOME LOAN SCHEMES

Products Interest Rates
HDFC Home Loan 8.40% - 8.70%
Floating
Plot Loan Floating 8.65% - 8.95%
Rural Housing 8.65% - 9.25%
Finance Floating
HDFC Reach 10.55% - 11.55%
Home Loan
HDFC Home 8.40% - 8.70%
Improvement Loan
HDFC Home 8.40% - 8.70%
Extension Loan
HDFC Short Term 12.30%
Bridging Loan
HDFC Home Loan 8.60%
Top Up

Table – (i)

HDFC Fixed Rate Home Loans

26
 Home Loan HDFC Interest Rates
HDFC Home Loan 8.40% - 8.70%
TruFixed
Plot Loan TruFixed 8.65% - 8.95%
Rural Housing Finance 8.65% - 9.25%
TruFixed

Table – (ii)

MARGIN PAID ON LOAN

S. Loan Amount Margin

NO.
1 Up to Rs. 30 Lacs 10%
2 Above Rs. 30 Lacs to upto Rs. 20%
75 Lacs
3 Above Rs. 75 Lacs 25%

Table – (iii)

ICICI Bank Home Loan

ICICI Bank offers housing loan to people who want money to purchase a house, home
renovation and home extension etc. The house itself acts as a security to the loan. Taking a
loan from ICICI Bank has the following benefits:
 Nil prepayment charges for floating rate home loans
 Additional benefits to existing customers of the bank
 Simplified documentation and approval process

ICICI Home Loan Interest Rate Cut

Latest ICICI home loan rate starts from 8.45% , as applicable based on the 1 Year MCLR,
last announced on 01st Apr 18. Any change in ICICI Bank benchmark 1 Year MCLR rate
will translate into a similar change in the bank’s home loan rate. For instance, if ICICI Bank
slashes 1 Year MCLR rate by 0.15%, its current home loan rate will be cut from 8.45% to
8.3%
ICICI Bank home loan interest depends upon

27
  Loan amount: Housing loan rate in ICICI Bank depends upon the loan amount you
apply for. Higher the loan amount, lesser will be the rate
 Your Salary: Income helps you in identifying your rate of interest. Bank's rate varies
with your monthly income. Higher the income, lesser will be the rate
 Type of loan opted for: ICICI Bank also offers differential rates for women
borrowers and also under their fixed and floating rate schemes. The rate of interest
may be higher or lower under their special or popular loan product offers.
 Existing bank customers: ICICI Bank offers one of the lowest home loan rates to
its existing bank account customers in view of their past relationship with the bank.
ICICI Bank Home Loan Charges
In addition to interest rates, home loan from ICICI Bank also carry some other charges which
include:
(i) Processing Fee - ICICI Bank applies 1.00% processing charges to account for its expenses
incurred for conducting a credit appraisal and completing the lending process.
(ii) Technical and Legal Charges - ICICI Bank also charges technical and legal charges which
are explained to the customer during the loan process. Once you go through the loan
application process, you will need to pay these charges based on ICICI Bank rules.
(iii) Prepayment Charges: If you decide to foreclose or transfer your housing loan to another
bank, you need to submit an application for the same to ICICI Bank. As per RBI rules, banks
are not allowed to charge prepayment penalty on floating rate home loans. Hence, you can
prepay your home loan with ICICI Bank at Nil charges.

ICICI Housing Loan Details

 Purpose of Loan: ICICI house loan is taken to purchase, construct a home, renovate
your existing home.

 Key Features
a. Loan available for both salaried and self employed. Special rates for women borrowers.
b. Borrowers within the age group of 21 and 60 years.
c. Security: Mortgage of property you are planning to purchase, renovate or construct.
d. Loan to Value Ratio of 80%.
e. Loan Tenure can range from 5 to 30 years.
f. Interest rates in the range of 8.45% to 8.95%.
g. Lowest EMI of Rs. 765 per lakh

 Processing Fees: 1.00% of loan amount Minimum Rs. 5,000 Maximum Rs. 5,000
 Special schemes: ICICI offers customised home loan interest rates and schemes for
special category of borrowers including women borrowers, senior citizens, NRIs etc.
Some of the special loan offers of ICICI are:

28
 a. .Express Home Loan
b. ICICI Bank Saral Rural Housing Loan
c. ICICI Bank Extra Home Loan
d. Pradhan Mantri Awas Yojna
e. Land Loan for Self Construction
f. NRI Home Loan
g. PRAGATI HOME LOANS
h. ICICI Home Loan Balance Transfer
i. HOME IMPROVEMENT LOAN
j. ICICI Home Loan Top up

HOME LOAN SCHEMES OF ICICI BANK

Products Interest Rates

ICICI Home Loan 8.45% - 8.95%
Floating
Express Home 8.45% - 8.95%
Loan
Saral Rural 8.45% - 8.95%
Housing Loan
ICICI Extraa Home 8.45% - 8.95%
Loan
ICICI Pragati 8.45% - 8.95%
Home Loans
ICICI Home 8.45% - 8.95%
Improvement Loan
Home Loan 8.45% - 8.95%
Balance Transfer
ICICI Home Loan 8.45% - 8.95%
Top Up

Table – (iv)

ICICI Bank Fixed Rate Home Loans

29
Home Loan ICICI Bank Interest Rates
ICICI Home Loan Fixed 8.35% - 8.90%

Table – (v)

SBI Home Loan

SBI offers housing loan to people who want money to purchase a house, home renovation
and home extension etc. The house itself acts as a security to the loan. Taking a loan from
SBI has the following benefits:
 Special low interest rate offer for women applicants
 Person with 18 years age can also apply for home loan
 Nil prepayment charges for floating rate home loans

SBI Bank Home Loan Interest Rate

SBI Bank Home Loan Rates are benchmarked to 1 Year MCLR which is currently 8.15%.
SBI Bank home loan interest rates that are offered to a customer are a function of its internal
cost of raising new funds and the occupation, income levels, type of property and repayment
capacity of its borrowers.

30
SBI Home Loan Interest Rate Cut
Latest SBI home loan rate starts from 8.50% , as applicable based on the 1 Year MCLR, last
announced on 01st Apr 18. Any change in SBI benchmark 1 Year MCLR rate will translate
into a similar change in the bank’s home loan rate. For instance, if SBI slashes 1 Year MCLR
rate by 0.15%, its current home loan rate will be cut from 8.50% to 8.35%
SBI home loan interest depends upon
 Loan amount: Housing loan rate in SBI depends upon the loan amount you apply
for. Higher the loan amount, lesser will be the rate
 Your Salary: Income helps you in identifying your rate of interest. Bank's rate varies
with your monthly income. Higher the income, lesser will be the rate
 Type of loan opted for: SBI also offers differential rates for women borrowers and
also under their fixed and floating rate schemes. The rate of interest may be higher
or lower under their special or popular loan product offers.
 Existing bank customers: SBI offers one of the lowest home loan rates to its
existing bank account customers in view of their past relationship with the bank.
SBI Home Loan Charges
In addition to interest rates, home loan from SBI also carry some other charges which include:
 Processing Fee - SBI applies 0.50% processing charges to account for its expenses
incurred for conducting a credit appraisal and completing the lending process.
 Technical and Legal Charges - SBI also charges technical and legal charges which
are explained to the customer during the loan process. Once you go through the loan
application process, you will need to pay these charges based on SBI rules.
 Prepayment Charges: If you decide to foreclose or transfer your housing loan to
another bank, you need to submit an application for the same to SBI. As per RBI
rules, banks are not allowed to charge prepayment penalty on floating rate home
loans. Hence, you can prepay your home loan with SBI at Nil charges.

SBI Housing Loan Details

 Purpose of Loan: SBI house loan is taken to purchase, construct a home, renovate
your existing home.
 Key Features
a. Loan available for both salaried and self employed. Special rates for women
borrowers.
b. Borrowers within the age group of 18 and 70 years.
c. Security: Mortgage of property you are planning to purchase, renovate or
construct.
d. Loan to Value Ratio of 90%.
e. Loan Tenure can range from 5 to 30 years.
f. Interest rates in the range of 8.50% to 8.70%.
g. Lowest EMI of Rs. 769 per lakh
 Processing Fees: 0.50% of loan amount Minimum Rs. 10,000 Maximum Rs. 10,000

31
  Special schemes: SBI offers customised home loan interest rates and schemes for
special category of borrowers including women borrowers, senior citizens, NRIs etc.
Some of the special loan offers of SBI are:
a. SBI Maxgain
b. SBI Yuva Home Loan
c. State Bank of India Realty Home Loan
d. SBI Pal Home Loan
e. SBI Tribal Plus
f. SBI Gram Niwas Home Loan
g. Sahyog Niwas Home Loan
h. SBI Flexipay Home Loan
i. NRI Home Loan
j. SBI Privilege Home Loan
k. SBI Shaurya Home Loan
l. SBI Bridge Loan
m. Home Loan for Self Employed
n. SBI Home Loan Top Up
o. SBI Reverse Mortgage Loan

HOME LOAN SCHEMES OF SBI BANK

Products Interest Rates

SBI Home Loan 8.50% - 8.70%
Floating
SBI Flexipay 8.50% - 8.70%
Home Loan
SBI Realty 8.50% - 8.70%
SBI Pal 8.50% - 8.70%
SBI Tribal Plus 8.50% - 8.55%
SBI Gram Niwas 8.50% - 8.70%
SBI Sahyog 8.50% - 8.55%
Niwas
SBI Home Loan 8.50% - 8.70%
Balance Transfer
SBI Bridge Loan 8.50% - 11.60%
SBI NRI Home 8.50% - 8.70%
Loan
SBI Privilege 8.50% - 8.70%
Home Loan
SBI Shaurya 8.50% - 8.70%
Home Loan

32
 SBI Home Loan 8.50% - 8.70%
for Self Employed
SBI Top Up Loan 8.55% - 9.35%
SBI Reverse 10.90%
Mortgage Home
Loan

Table – (vi)

COMPARATIVE STATEMENT OF HOME LOAN

Particulars HDFC ICICI SBI

Rate of interest Up to 30 lakh – Up to 30 lakh Upto Rs. 30
8.40% – 8.50% Lakh
From 30 lakh– 75 From 30 8.55%
lakh – 8.60% lakh– 75 lakh Rs. 30 Lakh -
From 75 lakh – 2 – 8.75% 75 Lakh
cr. – 8.70% From 75 lakh 8.55%
Above 2 cr. – – 5 cr. – Rs. 75 Lakh -
8.70% 8.80% 1 Cr
Above 5 cr. – 8.65%
8.90% Above Rs. 1
Cr
8.65%
Processing fee 0.50% 1.00% min. - 0.35% min.-
Min. -2000, max.- 5000, max. - 2000, max. -
11800 5000 10000
Tenure 30 years 30 years 30 years
Minimum age 24 21 18

33
 Maximum age 65 65 70
Lowest EMI Rs.762 per lakh Rs.765 per Rs.769 per
lakh lakh

Table – (vii)

4.1 HDFC v/s ICICI v/s SBI - RATE OF INTEREST (SALARIED

(WOMEN))

Table 4.1
Particulars HDFC ICICI SBI
Up to 30 8.40% 8.45% 8.50%
lakhs
from 30 8.55% 8.75% 8.50%
lakhs to 75
lakhs
Above 75 8.65% 8.80% 8.60%
lakhs

8.90%

8.80%
8.80% 8.75%

8.70% 8.65%
Rate of interest

8.60%
8.60% 8.55%
8.50% 8.50%
8.50% 8.45%
8.40%
8.40%

8.30%

8.20%
Up to 30 lakhs from 30 lakhs to 75 lakhs Above 75 lakhs

HDFC ICICI SBI

CHART-4.1

INTERPRETATION:

34
  In this Y axis is the rate of interest and X axis is the name of banks.
 In this graph HDFC, ICICI, and SBI bank has been compared with the floating rate of
interest of home loan for salaried women category customers.
 As in the above graph home loan interest rate 8.40% of HDFC bank is lowest in a slab
up to 30 lakh.
 Whereas at a slab of 30 -75 lakh and above 75 lakh SBI provide lowest interest rate as
8.50% and 8.60%.
 This results in that HDFC try to manages to keep their old customer in their hand and
attracted their new customer by giving less interest with their rival banks.

4.2 HDFC v/s ICICI v/s SBI – RATE OF INTEREST (SALARIED

(OTHERS)
Table 4.2
Particulars HDFC ICICI SBI
Up to 30 lakhs 8.45% 8.50% 8.55%
from 30 lakhs to 75 lakhs 8.60% 8.80% 8.55%
Above 75 lakhs 8.70% 8.85% 8.65%

8.90% 8.85%
8.80%
8.80%

8.70%
8.70% 8.65%
Rate of interest

8.60%
8.60% 8.55% 8.55%
8.50%
8.50% 8.45%

8.40%

8.30%

8.20%
Up to 30 lakhs from 30 lakhs to 75 lakhs Above 75 lakhs

HDFC ICICI SBI

CHART-4.2

35
INTERPRETATION:
 In this Y axis is the rate of interest and X axis is the name of banks.
 In this graph HDFC, ICICI, and SBI bank has been compared with the floating rate of
interest of home loan for salaried other than women category customers.
 As in the above graph home loan interest rate 8.45% of HDFC bank is lowest in a slab
up to 30 lakh.
 Whereas at a slab of 30 -75 lakh and above 75 lakh SBI provide lowest interest rate as
8.55% and 8.65%.
 This results in that HDFC try to manages to keep their old customer in their hand and
attracted their new customer by giving less interest with their rival banks.

4.3 HDFC v/s ICICI v/s SBI – RATE OF INTEREST ( SELF-EMPLOYED

(WOMEN))
Table 4.3
Particulars HDFC ICICI SBI
Up to 30 lakhs 8.55% 8.60% 8.65%
from 30 lakhs to 75 lakhs 8.70% 8.75% 8.65%
Above 75 lakhs 8.80% 8.85% 8.75%

36
 8.90%
8.85%
8.85%
8.80%
8.80%
8.75% 8.75%
8.75%
8.70%
Rate of interest

8.70%
8.65% 8.65%
8.65%
8.60%
8.60%
8.55%
8.55%

8.50%

8.45%

8.40%
Up to 30 lakhs from 30 lakhs to 75 lakhs Above 75 lakhs

HDFC ICICI SBI

CHART-4.3

INTERPRETATION :
 In this Y axis is the rate of interest and X axis is the name of banks.
 In this graph HDFC, ICICI, and SBI bank has been compared with the floating rate of
interest of home loan for self-employed women category customers.
 As in the above graph home loan interest rate 8.55% of HDFC bank is lowest in a slab
up to 30 lakh.
 Whereas at a slab of 30 -75 lakh and above 75 lakh SBI provide lowest interest rate as
8.65% and 8.75%.
 This results in that HDFC try to manages to keep their old customer in their hand and
attracted their new customer by giving less interest with their rival banks.

4.4 HDFC v/s ICICI v/s SBI – RATE OF INTEREST (SELF-EMPLOYED

(OTHERS))
Table 4.4
Particulars HDFC ICICI SBI
Up to 30 8.60% 8.75% 8.85%
lakhs
From 30 to 8.65% 8.80% 8.95%
75 lakhs

37
Above 75 8.70% 8.70% 8.80%
lakhs

9.00%
8.95%

8.90%
8.85%
8.80% 8.80%
8.80%
Rate of interest

8.75%
8.70% 8.70%
8.70%
8.65%
8.60%
8.60%

8.50%

8.40%
Up to 30 lakhs From 30 to 75 lakhs Above 75 lakhs

HDFC ICICI SBI

CHART-4.4

INTERPRETATION :
 In this Y axis is the rate of interest and X axis is the name of banks.
 In this graph HDFC, ICICI, and SBI bank has been compared with the floating rate of
interest of home loan for salaried women category customers.
 As in the above graph home loan interest rate 8.60% of HDFC bank is lowest in a slab
up to 30 lakh.
 Whereas at a slab of 30 -75 lakh and above 75 lakh SBI provide lowest interest rate as
8.70% and 8.80%.
 This results in that HDFC try to manages to keep their old customer in their hand and
attracted their new customer by giving less interest with their rival banks.

4.5 HDFC v/s ICICI v/s SBI - AGE LIMIT (SALARIED)

Table 4.5
Particulars HDFC ICICI SBI
Min. age 24 21 18
Max. age 60 60 70

38
 80
70
70
60 60
60

50
age limit

40

30
24
21
18
20

10

0
Min. age Max. age

HDFC ICICI SBI

CHART-4.5

INTERPRETATION :
 In the above graph, the minimum and maximum age limit criteria for salaried
category of banks have been compared, As Y axis indicates agr limit and X axis
indicates banks.
 As in the above graph it explains that the age limit criteria of customer that are
attracted towards these banks.
 Minimum age limit of HDFC, ICICI and SBI is 24, 21 and 18 but maximum age limit
of HDFC and ICICI is 60, whereas SBI age limit is 70 years old.
 As the customer attracts towards the banks because of their age limit criteria, in this
case SBI had done a good job where they manage to attract lower age limit criteria
but in case other banks they do not because of their high age limit criteria.

4.6 HDFC v/s ICICI v/s SBI – AGE LIMIT (SELF-EMPLOYED)

Table 4.6

39
Particulars HDFC ICICI SBI
Min. age 24 21 18
Max. age 65 65 70

80
70
70
60 60
60

50
Age limit

40

30
24
21
18
20

10

0
Min. age Max. age

HDFC ICICI SBI

CHART-4.6
INTERPRETATION :
 In the above graph, the minimum and maximum age limit criteria for self-employed
category of banks have been compared, As Y axis indicates agr limit and X axis
indicates banks.
 As in the above graph it explains that the age limit of customer that are attracted
towards these banks.
 Minimum age limit of HDFC, ICICI and SBI is 24, 21 and 18 but maximum age limit
of HDFC and ICICI is 65, whereas SBI age limit is 70 years as same as salaried
category.
 As the customer attracts towards the banks because of their age limit criteria, in this
case SBI had done a good job where they manage to attract lower age limit criteria
but in case other banks they do not because of their high age limit criteria.

4.7 HDFC v/s ICICI v/s SBI – PROCESSESING FEE (% of a loan amount)

40
Table 4.7
BANKS PERCENTAGE (%)
HDFC 0.50%
ICICI 1.00%
SBI 0.35%

1.20%

1.00%
1.00%

0.80%
Percentage

0.60%
0.50%

0.40% 0.35%

0.20%

0.00%
HDFC ICICI SBI
Banks

CHART4.7

INTERPRETATION
 In the above graph X axis indicate banks and on Y axis indicate % of processing fee.
 In which SBI processing fee is 0.35% of loan amount, min. Rs.2000 and
max.Rs.10000, Whereas HDFC and ICICI has 0.5% and 1.00%.

4.8 HDFC v/s ICICI v/s SBI – MCLR BASE RATE

41
  MCLR (Marginal Cost of Fund based Lending Rate) is the internal
benchmark rate for banks used for benchmarking floating rate loans
effective from 1st April 2016
 MCLR is based on cost of funds for banks and is derived as sum of
marginal cost of funds, negative carry on account of CRR, operating costs
of banks and tenor premium
 As MCLR is closely linked to repo rate, it will improve the transmission of
RBI’s repo rate cut to the end borrower
 Banks publish MCLR for at least five durations which are overnight MCLR,
1 month MCLR, 3 month MCLR, 6 month MCLR and 1 year MCLR.
However banks may publish MCLR base rates for more than five periods.
The banks may revise the MCLR rate every month.
 Interest rate on each floating rate loan would be reset on based on the
duration of the MCLR to which it is linked

Table 4.8
Banks HDFC ICICI SBI
MCLR BASE 8.85% 8.85% 8.70%
RATE

8.90%

8.85% 8.85%
8.85%

8.80%

8.75%

8.70%
8.70%

8.65%

8.60%
MCLR BASE RATE

HDFC ICICI SBI

42
 CHART4.8

INTERPRETATION
 In the above graph, the MCLR base rate have been compared. As Y axis indicates
percentage and X axis Banks.
 Among these SBI have lowest MCLR base rate.

4.9 HDFC v/s ICICI v/s SBI – LOWEST EMI

Table 4.9
BANKS LOWEST EMI (in Rs.per
lakh)
HDFC 762
ICICI 758
SBI 769

770 769

768

766

764
762
762

760
758
758

756

754

752
HDFC ICICI SBI

LOWEST EMI (in Rs.per lakh)

CHART-4.9

INTERPRETATION:

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 In the above graph x axis indicate banks and y axis indicate EMI.
 In this it explain us about the lowest EMI of home loan
 In which ICICI has lowest EMI of rs.758 per lakh.
 HDFC should also reduce its lowest EMI to attract more customers.

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 CHAPTER – 5
CONCLUSION AND
SUGGESTIONS

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CONCLUSION:

1. In my study, we came to know about the various aspects of home loan by HDFC in
comparison of other banks say ICICI and SBI. It is now become easy to understand
benefits of HDFC home loan.

2. Among the four categories, the lowest rate of interest is charges for the woman
(salaried) category of home loan customers.

3. There are several schemes of home loan by HDFC in which different rate of interest is
applicable for the convenience of customers.

4. The interest rate of HDFC is also some what high when compare to other banks.

5. The lowest EMI of HDFC bank is some what higher only by Rs.4 per lakh than ICICI.
Where ICICI gets advantage of lowest EMI among three banks.

6. Processing fee of HDFC bank is up to 0.50% of home loan amount (min.10000,

max.10000).

7. MCLR base rate of banks may revise every month. Interest rate on each floating rate
loan would be reset on based on the duration of the MCLR to which it is linked.

8. Transparent dealing, No hidden charges.

9. Flexible loan repayment options.

SUGGESTIONS ARE DISCUSSED BELOW:

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1. The interest rates on specific norms, yet customers seek less interest rate which can
lower their cost of house. So banks should try to lower their interest rates. Needles to
say, that the bank which is having lower interest rates, have the maximum clients for
loans.

2. HDFC LTD provide loan according to the repaying capacity of the customer and his/her
eligibility. Due to which, some customers are not able to get amount of loan needed by
them. So, the HDFC LTD should softened their norms regarding the loan amount.

3. HDFC should also decrease it’s lowest EMI to compete with its rival banks.

4. The company also has to reduce charges as administration and mortality charges.

5. The company has to reduce their interest rates on home loan product and services.

6. Company should consider the present competition and should act according to the
customer needs.

7. Above are the main suggestions provided to the HDFC LTD. By considering these
suggestions, the HDFC LTD can strengthen their customer base in home loans sector.
They should improve their services and reduce legal proceedings. All this will be
helpful to satisfy their customers.

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 BIBLIOGRAPHY

MAGAZINE:
Barking Finance, Editor R.G Agarwal and Associates march 2013.

NEWSPAPER :
Business standard, economic Times.

WEBSITES:
www.HDFCbank.com

www.SBl.com

www.ICICI.com

www.myloancare.in

Search engine www.goggle.com

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