A STUDY ON HOME LOANS AT CORPORATION BANK

CHAPTER 1 INTRODUCTION
INDIAN BANKING The Reserve Bank of India is the central bank of the country. Central banks are a relatively recent innovation and most central banks, as we know them today, were established around the early twentieth century. The Reserve Bank of India was set up on the basis of the recommendations of the Hilton Young Commission. The Reserve Bank of India Act, 1934 (II of 1934) provides the statutory basis of the functioning of the Bank, which commenced operations on April 1, 1935. The Bank began its operations by taking over from the Government the functions so far being performed by the Controller of Currency and from the Imperial Bank of India, the management of Government accounts and public debt. The existing currency offices at Calcutta, Bombay, Madras, Rangoon, Karachi, Lahore and Cawnpore (Kanpur) became branches of the Issue Department. Offices of the Banking Department were established in Calcutta, Bombay, Madras, Delhi and Rangoon. Burma (Myanmar) seceded from the Indian Corporation in 1937 but the Reserve Bank continued to act as the Central Bank for Burma till Japanese Occupation of Burma and later up to April, 1947. After the partition of India, the Reserve Bank served as the central bank of Pakistan up to June 1948 when the State Bank of Pakistan commenced operations. The Bank, which was originally set up as a shareholder's bank, was nationalized in 1949. An interesting feature of the Reserve Bank of India was that at its very inception, the Bank was seen as playing a special role in the context of development, especially Agriculture. When India commenced its plan endeavors, the development role of the

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A STUDY ON HOME LOANS AT CORPORATION BANK Bank came into focus, especially in the sixties when the Reserve Bank, in many ways, pioneered the concept and practice of using finance to catalyze development. The Bank was also instrumental in institutional development and helped set up institutions like the Deposit Insurance and Credit Guarantee Corporation of India, the Unit Trust of India, the Industrial Development Bank of India, the National Bank of Agriculture and Rural Development, the Discount and Finance House of India etc. To build the financial infrastructure of the country with liberalization, the Bank's focus has shifted back to core central banking functions like Monetary Policy, Bank Supervision and Regulation, and Overseeing the Payments System and onto developing the financial markets. COMMERCIAL BANK Amongst the banking institutions in the organized sector, the commercial banks are the oldest institutions having a wide network of branches, commanding utmost public confidence and having the lion shares in the total banking operations. Initially they were established as corporate bodies with share holdings by private individuals, but subsequently there has been a drift towards central ownership and control. Up to late sixties commercial banks were mainly engaged in financing organized trade, commerce and industry, but since then they are actively participating in financing agriculture, small business and small borrowers also. PROGRESS OF COMMERCIAL BANKING IN INDIA Banking in India on western lines had started from the beginning of 19th century. The first joint stock was established at Calcutta by the name of Hindustan and was under European management. But this bank failed at that time, the bank of Bengal (1806), bank of Bombay (1840) and bank of madras (1843) were started with the financial participation of the government. These banks were called as the presidency banks and were given the right of note issue in their respective regions. The first purely Indian joint

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A STUDY ON HOME LOANS AT CORPORATION BANK stock bank was the Oudh commercial bank which came into existence in 1889. The swadeshi movement of 1905 gave great stipules to the starting of the Indian Banks. The Indian banking system had gone through a series of crisis and consequent bank failures. Its growth was quite slow during the first half of this century. But after independence, the Indian banking system recorded rapid progress. This was due to planned economic growth, increase in money supply, growth of banking habit, control and guidance by the Reserve Bank and the nationalization of top banks etc. The nationalization of 10 top Banks in July 1969 gave banking a sense of direction and purpose. In 1980, there was another nationalization of six smaller banks. FUNCTIONS OF COMMERCIAL BANKS The business of a commercial Bank is primarily to hold deposits and make loans and investments with the object of securing profit for its shareholders. It performs the following functions: Receiving deposits from the Public Making loans and advances Use of the cheque system Transfer of funds

Other functions: 1. Issuing and operating credit cards (Visa, Master) etc. 2. Keep the valuable articles of customers in safe custody. 3. Making and receiving payments on behalf of its depositors.

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A STUDY ON HOME LOANS AT CORPORATION BANK INTRODUCTION ABOUT HOME LOANS Home is a shelter to person where he rests and feels comfortable. Many banks provide home loans, whether commercial banks or financial institutions to the people who want to have their own home, and among the banks Corporation Bank is also a major player in lending home loans. Many banks provide home loans at low interest rate to attract consumers towards them. In view of acute housing shortage in the country and the social economic role of commercial banks in the present times, the RBI advised banks to encourage the flow of credit for housing finance. Home is one of the things that everyone one wants to own. Home is a shelter to person where he rests and feels comfortable. Many banks provide home loans whether commercial banks or financial institutions to the people who want to have a home. Corporation Bank 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. Corporation bank 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. Corporation bank finances up to 85% of the cost of renovation (100% for existing customers). Current status is that corporation bank reduced home loan rates by 50 basis points for all its existing floating rate customers.

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A STUDY ON HOME LOANS AT CORPORATION BANK 1.2 ADVANTAGES OF HOME LOANS:The various benefits of home loans arising to the customers are:(i) Attractive interest rates:The various banks offer attractive interest rates to boost and help their customers. Many banks provide loans on fixed or floating rates to facilitate consumers as per their needs. (ii) Help in owning a home:The home availed by a person with the help of banks, because they provide technical and financial assistance to customers for owning their dream home. (iii) No requirement of guarantor:The commercial banks now a day, liberlise their laws regarding home loans. Some of banks dont 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 Credit appraisal takes place such services are beneficial for customers in present busy life. Banks like ICICI 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 upto 15-20 years based on the loan amount and the creatibility of customers. This relieves the customers to repay loan amount till a long period.

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A STUDY ON HOME LOANS AT CORPORATION BANK OVERVIEW OF THE INDUSTRY: 1.3 EFFECTIVENESS OF HOME LOANS :Every bank has its own procedure to disburse the loan amount among customers. After choosing your right home, the next step is Effectiveness 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 Effectiveness 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 and this helps to plan out the budget. (ii) Conditions regarding co-applicants: All Housing Finance Institutions lay down conditions on who can be coapplicants. 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 co-owner 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 co-applicants can be clubbed together to get higher loan eligibility. Given below is a Table that throw light on acceptable relationship of a coapplicant for clubbing of income.

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A STUDY ON HOME LOANS AT CORPORATION BANK Income Clubbing of Co-applicants:- It is as follows:Combination Income Clubbing: Husband-Wife: - Income of husband-wife can be clubbed. 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 (HFI/B) 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/Bs. However, HFls/Bs do provide for different tenures with different terms and conditions. 3) The installment that one pay is normally restricted to about-50-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 FOIR norms as mentioned above.

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A STUDY ON HOME LOANS AT CORPORATION BANK 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 HFIs/Bs insists on guarantees from other individuals for the repayment of the loan. In such cases, the customers has to arrange for the personal guarantee before the Credit appraisal of the loan takes place. 8) The property should be technically clear before the HFIs/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 Effectiveness of loan. This is also beneficial to the customer as they check for the technical quality and compliance with local laws. 09) The repayment of loan can be made either through deduction against salary, postdated cheques, standing instructions or Auto debit instructions to bank. 10) 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) Processing fees :First of all, comes the process fee. This is a charge that is levied by most HFls/Bs. This has to be paid at the time of submission of the application form. It's normally charged as a percentage of the loan amount sanctioned. Some HFls also charge a flat fee

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A STUDY ON HOME LOANS AT CORPORATION BANK based on the loan amount instead of a percentage. When a lower amount is sanctioned the excess fees paid at the time of submission of the application is adjusted with the charges, which one make to the HFI/B subsequently. Most HFls/Bs refund the processing fee if the 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 certificates, 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 Credit appraisal. The mode of collection of these fees varies from one HFI/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 HFIs/Bs give an option to select either a fixed rate of interest or a variable rate of interest. d) Legal Charges: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 authority.

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A STUDY ON HOME LOANS AT CORPORATION BANK f) Stamp duty and registration charges:HFIs 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) Incidental charge :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.

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A STUDY ON HOME LOANS AT CORPORATION BANK 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 decision on the repayment capacity shall be talked about as follows. (v) Judgement regarding repayment capacity on the basis of income :To understand how the income of a customer is considered to arrive at his repayment capacity, it is first necessary to classify customers into salaried and self employed individuals. a) The income of the salaried individual is considered in the following manner:Gross monthly income as it appears on the salary slip Less:- Any non regular variable income appearing on the salary slip (including overtime, etc.) Add : - 50 per cent of the average variable income of the last six months. Add: - Any fixed cash/voucher payments for which proof can be submitted. Add: - 50 per cent of the average variable cash/voucher payments with proof like traveling reimbursement etc. Add :- HRA receivable if not being received already in the salary slip. The above income calculated for the calculation of eligibility using IIR and FOIR norms. For calculation of FOIR, the installments of all the loans that one has availed of currently

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A STUDY ON HOME LOANS AT CORPORATION BANK for which repayment is being made is taken into account as well. The lower of the two eligibilities is considered as the maximum repayment capacity. b) To consider income of Self-employed individuals we further classify them into Professionals and non-professionals . Professionals:- Comprising doctors, chartered accountants, lawyers, architects, etc. For calculation of eligibility of professional's income is computed by most HFIs using the gross professional receipts instead of the Net profit as in the case of self-employed non-professionals. Non-Professionals: - The income of non-professionals is normally calculated by HFIs in the following manner: Average of the net profits of last 2 years as it appears in the profit and loss account (Returns need to be filed for the same. They should be filed regularly before the due date is over). Less: - Any income, which is unusual and non-recurring in nature like sale of some asset, etc which affects profits substantially, Add: - Any expense that is unusual and non-recurring in nature like repairs and maintenance that has not been capitalized and effect profit adversely. Add: - 50 per cent of the average depreciation of the last two years. The above income is calculated for the calculation of eligibility using IIR and FOIR norms. For calculation of FOIR the installments of all the loans that one has availed of currently for which repayment is being made is taken into account and the eligibility is worked out. The lower of the two eligibilities is considered as the maximum repayment capacity. (vi) 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 HFI/B to another based on one's employer,qualifications experience etc. the general requirements are as follows:-

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A STUDY ON HOME LOANS AT CORPORATION BANK (a) Income Documents : For salaried slips for the last three months appointments letter-salary certificateretainership agreement, if appointed as a consultant-Form 16 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 Returns with computation chart duly filed and certified by the Income Tax authorities. b) Proof of employment : Identify card issued by the employer- Visiting card. (c) Employer's details (In case of private limited 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) : - Passport- Voter's ID card-PAN cardRation card-Employer's identity card-School leaving certificate-Birth certificate.

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A STUDY ON HOME LOANS AT CORPORATION BANK (e) Proof of residence (Anyone of the following) : Ration card-Passport- PAN card-Rent agreement, if the customer is staying currently on rent- Bank Pass book-Allotment letter from the company if he/she is residing in company quarters. (f) Proof of name change (If applicable) : A copy of the official gazette A copy of a newspaper advertisement publicizing the name change-Marriage certificates. (g) Proof if investment (If required) :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. (vii) Legal documentation :Legal Documentation the typical legal documents that need to be submitted to the HFC arc 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 applicable- Possession letter-Lease agreement, if applicable (Property bought from a development authority) - Mortgage deed if the HFC opts for a registered mortgage.

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A STUDY ON HOME LOANS AT CORPORATION BANK c) No Objection Certificate from the developer, society or development authority as applicable. d) Personal Guarantees, if applicable. e) In case of alternator additional security, 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 of agreement also need to be taken. (viii) The tax benefits that are applicable to housing loans for individuals :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 provide for huge discounts on the rate of premium for larger tenures. The premium charged currently is seventy-seven for every lakh of property for a year. So a customer has to fulfill various conditions to be eligible for availing home loan from a Housing Finance Institution/Bank 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 floating-rate loan now is a function of two factors i.e. One's perception of where interest rates in the economy are headed and one' capacity to ride the interest rate changes.

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A STUDY ON HOME LOANS AT CORPORATION BANK CHAPTER 2 RESEARCH DESIGN TITLE: STUDY ON THE HOME LOANS OFFERED BY CORPORATION BANK WITH SPECIAL REFERENCE TO ZONAL OFFICE, BANGALORE. STATEMENT OF PROBLEM: Banking is a relatively large concept and thus involves colonial volumes of customers and funds. Loans are one of the major financial products that are provided by the banks and housing loans to the customers in need of it, it is essential that this product is handled with utmost professionalism and essentially within a well defined set of guidelines. So this study is conducted to know how essentially Corporation bank is managing to cater this particular need of the potential customer of the bank. SCOPE OF THE STUDY: This study is limited to the customers of the Corporation bank only. It pertains to the Corporation bank housing loan scheme and the study was conducted to find out the effectiveness of the Corporation bank housing loan scheme. OBJECTIVES OF THE STUDY: The purpose of the study is to discover the answers to question through the application of scientific procedures. The main aim of this research is to find out the truth which is hidden and which has not been discovered as yet. Through each research study has its own specific purpose; we may think research objectives as falling into the following broad groups.

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A STUDY ON HOME LOANS AT CORPORATION BANK OBJECTIVES OF THE STUDY To understand the features and working of home loans offered by Corporation bank. To understand the performance of Home Loans offered by Corporation bank for a period of Three Years. To determine the Consumer Satisfaction towards Home Loans offered by Corporation bank. To study the factors influencing the choice of home loans. To give suitable recommendations.

OPERATING DEFINITIONS: BANKING: The Indian Companies Act defines the term bank as the accepting for the purpose of lending or investment of deposits of money from the public, repayable on demand or otherwise and withdraw able by cheque, draft, order or otherwise HOME LOAN: Home loan is a loan advanced to a person to assist in buying or constructing a house/flat or a plot. METHODOLOGY: Methodology is a way of systematically solving the research problem. It explains the various steps that are generally adopted by researcher in studying the research problems along with logic behind them. TYPE OF STUDY: As we are making an attempt to describe the existing situation more clearly through this study, this study is more a descriptive study. There is not much of an analysis being made using the data.

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A STUDY ON HOME LOANS AT CORPORATION BANK

RESEARCH DESIGN: A research design is a method and procedure for acquiring information needed to solve the problem. A research design is the basic plan that helps in data collection or analysis. It specifies the type of information to be collected is relevant to the objectives to be achieved. In the present study survey method is followed. Primary Analytical Method has been adopted to gather primary data. Questionnaire can be used to gather data. SOURCES OF DATA: The primary data is collected through direct interviews with the help of structured questionnaire. The secondary data is collected from the official documents of the bank and different websites. SAMPLING PLAN Sampling technique Simple random sampling method has been adopted for the purpose of the study. Sampling size Sample sizes of 80 customers in random of various professions have been taken for the collection of primary data.

STATISTICAL TOOLS: Simple percentage method Ranking method Graphs and Charts

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A STUDY ON HOME LOANS AT CORPORATION BANK LIMITATIONS OF THE STUDY: The study is only confined to one financial institution namely Corporation Bank. Only the Zonal Office of Corporation bank was taken for the study. The findings of the study will be closely related to the current period only. Time is one of the major limitations because of which an exhaustive research could not be conducted. The findings, conclusions and suggestions are based on the data provided by the Institution and hence it may be biased. This study cannot be considered for any decision making because of its limited reliability.

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A STUDY ON HOME LOANS AT CORPORATION BANK

CHAPTER 3 OVERVIEW OF INDUSTRY

THE HISTORY OF INDIAN HOME LOANS:Home loans in India have made people Buy Property in India in spite of the skyrocketing prices. Today, we find considerable Real Estate Investment in India, either in the field of Residential Property in India or Commercial Properties in India. Home Loans in India are disbursed by many Banks as Loan Banking is on of the most important function of the Financial Services in India. Property Dealers and Real Estate Consultants in India usually recommend that we undertake appropriate Home Loan or Mortgage Loan counseling so that we can Buy Apartment in India at an affordable Mortgage Rate.Purchasing the home of your dreams is not an easy task. Especially when you plan to buy a home on loan. Home loan means that you buy a house on installments. In simpler terms when you want to own a home and cant afford to pay the amount in lump sum, you can pay it in monthly installments with an interest rate. The interest rates of home loans are expected to go down even further according to analysts who foresee a cut down in the rates by the RBI in the wake of the decision taken by US Federal Reserve to cut its rates by a significant margin. There are number of companies offer cheap home loans at a low interest rate. You can avail loan against existing house for renovation or expansion etc. There are many nationalized banks that offer finance for affordable housing. India Housing has put together a comprehensive data to provide you with the cheapest Home Loans available in the market. We have listed all the important housing finance institutes and some of the top home finance banks providing lowest interest rates. In the last few years, housing loan scenario in India has changed drastically. It has taken a front seat and people are looking forward to owning their own houses. It is no more a dream that required lifetime saving and a difficult decision to make.

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A STUDY ON HOME LOANS AT CORPORATION BANK Today the new home purchase loan is much easily available and is much cheaper than what was available earlier. Banks are now everywhere and the schemes are implemented even in villages and smaller towns. The housing loans are popular there too, however, the activity of building flats is little slow. It would not be wrong to say that there has been a boom in the home loan market and with this boom; there is also a boom in the Number of home loans mortgage brokers in India. The main reason for this boom in home loan market is the change in government policies. It is our governments motivation that the home loan interest rates in India have fallen considerably. Lot many banks are offering home loans and this is available at low EMIs (Equated monthly Installments). High EMIs are now a thing of past. Today lending rate is in the range of 7.5 to 15 %. Again, there are different types of home loans available today. The interest rate available is also of two different types. One is the fixed rate loan and the other is the floating rate loan. In the fixed rate loan, whatever interest is fixed on the start of loan is carried on for the complete period. However, in the other one, the interest rate is not fixed and as the interest rate goes up or low the effect is directly transferred to the person who is taking the loan. In the last few years the floating interest rate has been a favorite among most of the people taking home loans. There is also a trend to opt for home construction loan. This loan is available to those who want to design their homes according to their requirement and taste. In other words, this loan is meant for those who themselves want to construct their new home. As shared earlier, taking a loan is not a difficult task. However, before taking a loan, one must realize that the relationship with the bank will be for a longer period usually 15 to 20 years so one must ensure faith and integrity in bank. Apart from low rate of interest, the bank should also provide some value added services. The other thing is to look into is the property that is to be brought. Making sure that the builder has all sanctions and facility to build a good building is very important.

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A STUDY ON HOME LOANS AT CORPORATION BANK Taking home loans these days has become simpler. With the RBI regularly bring down interest rates; taking home loans have become extremely easy. Housing loans which were 16.5% to 18% a few years ago fell by 11.5% to 13%. With interest rates going down, people increasingly number apply to take these loans. Some of the leading banks offering home loans in India, including Corporation Bank, ICICI Bank, IDBI Bank, HDFC Bank , Bank of Baroda, SBI, Standard Chartered Bank and Axis Bank . Recent trends of home loan in India:In order to understand the recent trends we need to know or understand various factors. These factors play vital role in Indian home loan market. These include interest rate on which banks provide home loan, tax rebate on home loan and its impact. Apart from this to understand the recent trend we need to compare the trends of home loan of different years. Here we have compared the interest and other market trends of year 2009 with 2007-08. This kind of comparison gives the result which helps us to understand the trends of market of any industry. Apart from the impact of present and past economic ups and down also affect the trends. Today the US slowdown is the major issue which has affected almost all the industry. So we have also discussed this issue in terms to define trend of home loan market in India. Impact of slowdown on home loan market in India:The fear of a recession looms over the United States. And as the clinch goes, whenever the US sneezes, the world catches a cold. This is evident from the way the Indian markets crashed taking a cue from a probable recession in the US and a global economic slowdown. U.S slowdown has affected almost all sectors not only in US but to all over the world. Indian economy has also been affected by this slowdown because India is a growing country and almost in all sectors various multinational companies have major contribution. So the role of this slowdown is a major issue to be discussed while talking about Home Loan Market in India.

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A STUDY ON HOME LOANS AT CORPORATION BANK Bankers who were earlier falling over each other to dole out home loans, even for soft furnishings, have suddenly become choosy. Banks like SBI, ICICI Bank, UTI Bank, IDBI Bank and leading mortgage firm Corporation are now apparently making a conscious attempt to curb their aggression in the home loan market situation is like that if a customer who recently approached a private sector bank for a home loan of about Rs 10 lakh for a tenure of 15 years found, to his shock, that the eventual loan disbursement was just Rs 5 lakh. Most bankers aren't willing to confirm any slowdown in their home loan portfolio. On record, they attribute the marginal dip in home loan disbursements to the recent hike in interest rate. Privately, however, they have a different story to tell. "The slowdown in the home loan market for select players like ICICI Bank was evident from January. ICICI Bank's average home loan disbursement in a month is around Rs 2,500 crore in a month, which has come down to almost Rs 2,000 crore in March," said a private sector banker. ICICI Bank officials denied any slowdown in their home loan portfolio and they say that the recent dip in interest rates has had some impact on disbursals. However, in absolute terms, it is still low. Even this slowdown the deposit growth for the sector as a whole is around 17%, while credit is growing at almost 28%, forcing banks to become selective. Institutions now charge a floating rate of 8 to 8.25 per cent on home loans above Rs 20 lakh. Initial estimates by bankers suggest that the increase in rate for home loans and other segments would be around 25-50 basis points (0.25% to 0.5%). Even as the provisioning requirement has gone up around 60 basis points, the hike in interest rates may be lower as the impact would be felt for the first year. It would also depend on how well capitalized the banks are as the rise in provisioning and risk weightage would affect the return on equity for banks. Weaker banks and banks with a large portfolio of these loans are likely to be more affected and may hike rates first. Home loan growth of disbursals were at 20 per cent in 2007-08 according to a study by the credit rating agency CRISIL, a Standard & Poors company. This rate is lower than the 30 per cent annual increase seen in the past three years, but in absolute terms represents a substantial expansion. The slower growth reflects the impact of rising property prices and interest.

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A STUDY ON HOME LOANS AT CORPORATION BANK Types of home loans: Housing loans offered by banks are of different types:

Home Purchase Loans Home Construction Loans Home Improvement Loans Home Extension Loans Home Conversion Loans Land Purchase Loans Stamp Duty Loans Bridge Loans Balance Transfer Loans Refinance Loans Loans to NRIs

Home purchase loans:This is the basic home loan for the purchase of a new home. If you want to buy a flat in some society or some already built house, banks and HFCs sanction you home purchase loans for this process. Home construction loans:This loan is available for the construction of a new home on a said property. The documents that are required in such a case are slightly different from the ones you submit for a normal Housing Loan. If you have purchased this plot within a period of one year before you started construction of your house, most HFCs will include the land cost as a component, to value the total cost of the property. In cases where the period from the date of purchase of land to the date of application has exceeded a year, the land cost will not be included in the total cost of property while calculating eligibility.

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A STUDY ON HOME LOANS AT CORPORATION BANK Home improvement loans:These loans are given for implementing repair works and renovations in a home that has already been purchased, for external works like structural repairs, waterproofing or internal work like tiling and flooring, plumbing, electrical work, painting, etc. One can avail of such a loan facility of a home improvement loan, after obtaining the requisite approvals from the relevant building authority. the following are coming under the home improvement loans: External repairs Tiling and flooring Internal and external painting Plumbing and electrical work Waterproofing and roofing Grills and aluminum windows Waterproofing on terrace Construction of underground/overhead water tank Paving of compound wall (with stone/tile/etc.) Bore well

Home extension loans:An extension loan is one which helps you to meet the expenses of any alteration to the existing building like extension/ modification of an existing home; for example addition of an extra room etc. One can avail of such a loan facility of a home extension loan, after obtaining the requisite approvals from the relevant municipal corporation.

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A STUDY ON HOME LOANS AT CORPORATION BANK Home conversion loans:This is available for those who have financed the present home with a home loan and wish to purchase and move to another home for which some extra funds are required. Through a home conversion loan, the existing loan is transferred to the new home including the extra amount required, eliminating the need for pre-payment of the previous loan. Land purchase loans:This loan is available for purchase of land for both home construction or investment purposes. Stamp duty loans:This loan is sanctioned to pay the stamp duty amount that needs to be paid on the purchase of property. Bridge loans:Bridge Loans are designed for people who wish to sell the existing home and purchase another. The bridge loan helps finance the new home, until a buyer is found for the old home. Balance- transfer loans:Balance Transfer is the transfer of the balance of an existing home loan that you availed at a higher rate of interest (ROI) to either the same HFC or another HFC at the current ROI a lower rate of interest.

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A STUDY ON HOME LOANS AT CORPORATION BANK Refinance loans:Refinance loans are taken in case when a loan for your house from a HFI at a particular ROI you have taken drops over the years and you stand to lose. In such cases you may opt to swap your loan. This could be done from either the same HFI or another HFI at the current rates of interest, which is lower. NRI home loans:- This is tailored for the requirements of Non-Resident Indians who wish to build or buy a home or property in India. The HFCs offer attractive housing finance plans for NRI investors with suitable repayment options. On would be entitled for home loans in the range of Rs 5 lakh to a maximum of Rs 1 crore, based on the repayment capacity, previous credit history and the cost of the property. The bank may provide a maximum of 85% of the cost of the property or the cost of construction as applicable and 75% of the cost of land in case of purchase of land. The repayment capacity is calculated taking into account factors such as: Age Income/Salary Qualifications Dependant/(s) Assets/Liabilities Credit History Stability / continuity of your employment/business Income of co-applicant/(s)

Taking home loans these days has become simpler. With the RBI regularly bring down interest rates; taking home loans have become extremely easy. Housing loans which were 16.5% to 18% a few years ago fell by 11.5% to 13%. With interest rates going down, people increasingly number apply to take these loans. Some of the leading banks offering home loans in India, including Corporation Bank, ICICI Bank, IDBI Bank, HDFC Bank State Bank, Bank of Baroda, Kotak Bank, SBI, Standard Chartered Bank and Axis Bank.

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A STUDY ON HOME LOANS AT CORPORATION BANK THE MILESTONES OF INDIAN BANKING INDUSTRY ARE: 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 Nationalisation 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.

Phase I 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.

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A STUDY ON HOME LOANS AT CORPORATION BANK Phase II Government took major steps in this Indian Banking Sector Reform after independence. In 1955, it nationalized 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 Corporation and State Governments all over the country. Seven banks forming subsidiary of State Bank of India was nationalized in 1960 on 19th July, 1969, major process of nationalization was carried out. Second phase of nationalization 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 : Nationalisation of State Bank of India. 1959 : Nationalisation of SBI subsidiaries. 1961 : Insurance cover extended to deposits. 1969 : Nationalisation of 14 major banks. 1971 : Creation of credit guarantee corporation. 1975 : Creation of regional rural banks. 1980 : Nationalisation of seven banks with deposits over 200 crore. After the nationalisation of banks, the bank 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.

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A STUDY ON HOME LOANS AT CORPORATION BANK /Phase III This phase has introduced many more products and facilities in the banking sector in its reforms measure. In 1991, under the chairmanship of M Narasimhan, 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. Present scenario: During 2009-10, money supply growth decelerated from over 20% at the beginning of the financial year to 16.8% by March 2010. Aggregate deposits also witnessed the same trend. The growth of 17% was less than the growth rates of 19.9% and 22.2% in the preceding two years. Rs.16500 crore would be provided as capital infusion to select public sector banks to ensure that the PSBs are able to maintain a minimum of 8% tier 1 capital by 31st march 2011. Higher capital will help banks , especially those with government holding already near 51%, to get additional capital for growth of assets . Indian Budget 2010-11 has mentioned new banking licenses, which means we will see new players and hence more competition, and better savings and lending rates, which is better for the consumers and borrowers .

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A STUDY ON HOME LOANS AT CORPORATION BANK COMPANY PROFILE BACKGROUND AND INCEPTION OF THE COMPANY Corporation Bank is the oldest banking institution in the erstwhile undivided Dakshina Kannada District of Karnataka and one of the oldest banks in India, was founded in 12th March 1906 in the Temple Town of Udupi .The need to start this bank was felt because there was no such facility at Udupi, an important trading centre next to Mangalore in D.K. District. The indigenous banking was largely in the hands of a few rich private individuals and something had to be done to provide relief to the common man from the clutches of the money lenders who held full sway.

Corporation Bank came into being as Canara Banking Corporation (Udupi) Limited, by the pioneering efforts of a group of visionaries. The Bank started functioning with just Rs.5000/- as its capital and at the end of the first day, the resources stood at 38 Rupees-13 Annas-2 Pies.

The Founder President is Khan Bahadur Haji Abdullah Haji Kasim Saheb Bahadur. The first branch of the Bank was opened at Kundapur in 1923, followed by

the second in Mangalore in 1926. The Bank stepped into the then Coorg State in 1934 by opening its seventh branch at Madikeri. In 1937 the Bank was included in the second schedule of Reserve Bank of India Act, 1934. In 1939, the Banks name changed from Canara Banking Corporation (Udupi) Ltd., to Canara Banking Corporation Ltd.,. The second change in the name of the Bank occurred in 1972, from Canara Banking Corporation Ltd. to Corporation Bank Limited. and finally Corporation Bank following its nationalization on 15th April, 1980. Started as a common mans bank, it changed with the times to meet the aspirations of the people but never swerved from its motto- Sarve Janah Sukhino Bhavantu meaning Prosperity for All.

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A STUDY ON HOME LOANS AT CORPORATION BANK It endeavoured and succeeded in striking a right balance between traditional values and innovative approach, personalized service and professional outlook and commercial considerations and public concern. Corporation Bank has recorded Rs. 2,00,000 Crore mark in business and even far more, with over 5111 service outlets across the nation, served by committed and dedicated 13,000 plus Corp bankers. Nationalised in 1980, Corporation Bank was the forerunner when it came to evolving and adapting to the financial sector reforms. Corporation Bank is a public sector bank, which has been silently creating waves among the domestic Banks in India for 106 years now. It is one of the Nationalized Banks in India. The bank withstood the challenges of the financial sector reforms and has emerged as one of the financially and fundamentally strong, well-capitalized, technologically sophisticated, efficient, effective and one of the most profitable Banks in India. Today, with the most modern technology-driven products and services and nationwide bank and ATMs, Corporation bank stands tall among the private sector banks in the country and is hailed as one among the well managed public sector banks with excellent track record in all the key parameters of banking. The bank is one among those banks that has a largest ATM network in the public sector. The core banking solution (CBS) has been implemented in more than 87% of the business of the bank. Wide area network (WAN) connecting all the computerized bank being a prerequisite for core banking to be operational. All the functional units of the bank are linked through e-mail network. The bank has transferred itself from traditional banking system to the cutting edge technology banking with the implementation of better infrastructural facilities.

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A STUDY ON HOME LOANS AT CORPORATION BANK NATURE OF THE BUSINESS CARRIED Corporation bank is mid-sized public sector bank. It performs various types of the banking activities. Corporation bank deals with money and credit. It accepts deposits from the public, makes funds available to those who need them and helps in the remittance of money from one place to another. Corporation bank mobilizes savings in the urban areas and makes them available to large and small industries and training units mainly for the working capital requirement. Corporation bank being a public sector bank also works towards the economic development of the country. The bank is bounded by the guidelines of RBI to provide credit to the priority sectors. The priority sector consists of farmers, artisans, and small scale industries. Corporation bank has diversified into new areas such as credit card, merchant banking, hire purchase and releasing and electronic remittance services. Corporation bank is one among the few banks in the country to take up principal membership of visa international and master card international. VISION, MISSION AND QUALITY POLICY Corporate vision " The Most Preferred Bank With Global Standards " Corporate Mission To become a provider of World - Class Financial Services To meet Customer expectations through Innovation and Technological Initiatives To maintain leadership in inclusive banking To enhance stakeholders' value To fulfill national and social obligations To create an environment, intellectually satisfying and professionally rewarding to the employees. To emerge as a role model for ethical values and Good Corporate Governance.

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A STUDY ON HOME LOANS AT CORPORATION BANK PRODUCT/ SERVICE PROFILE PRODUCT PROFILE a. Demand Deposit schemes Savings Bank Account

Saving deposit is available to all individuals, non trading organizations, permitted institutions, etc. Minimum balance can be fixed as per requirements. Corp Classic Account

Its a combination of savings bank and term deposit account features. Any person who is eligible to open a savings bank account (except minors and NRIs )can open this account. Corp Payroll Account

It is a special scheme for Corporate / Institutions for disbursement of salaries to a minimum number of 25 employees, through a bank account. Corp NewGen

It is a savings bank account for students, with reduced average balance requirements and with certain value added facilities. Current Account-Ordinary

A running account maintained for the purpose of undertaking financial transactions in a business, wherein the number of deposits/ withdrawals are not restricted.

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A STUDY ON HOME LOANS AT CORPORATION BANK b. TERM DEPOSIT SCHEMES Fixed Deposit

The high returns deposit-it is a high return term deposit scheme and interest can be paid at regular intervals viz. monthly, quarterly, half yearly or yearly at the option of the depositor. It is an ideal deposit scheme for those who want to plan for regular income. Kshemanidhi Cash Certificates-KCC

KCC is a money multiplier deposit - it is a reinvestment Term Deposit scheme that can be opened for a period ranging from 6 months to 10 years. It is a money multiplier deposit where the deposit amount grows rapidly as interest is compounded quarterly. The rate of interest depends on the period of deposit. Money Flex Deposit

The flexible Term Deposit - it is a friendly, flexible fixed deposit scheme that won't block your money for the full term of the deposit. The minimum deposit is Rs. 5,000. Additional deposits can be made in multiples of Rs.1,000. The rate of interest depends on the period of deposit. Recurring Deposit

Every drop counts - An ideal way to plan for future needs. Best suited to the salaried class, you can save a fixed sum every month for a period ranging from 12 months to 120 months. You get a lump sum amount on maturity. Minimum amount of deposit is Rs 50/- p.m. in Rural and Semi - Urban places and Rs 100/- p.m. in all other places and thereafter in multiples of Rs 25/-. There is no maximum limit. Corp Recur Deposit

The depositor pays the Bank a minimum stipulated amount of money every month for 3 years, at the end of which the accumulated deposit together with interest is repaid to him/her. Minimum amount of deposit is Rs 500/- p.m. and thereafter in multiples of

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A STUDY ON HOME LOANS AT CORPORATION BANK Rs 100/-. There is no maximum limit. The rate of interest will be payable at the rate decided by the Bank from time to time. Corp Tax Saver Deposit Scheme

Corporation Bank introduces Corp Tax Saver, a new tax saving term deposit scheme. Amount invested up to Rs. 1 lakh for a fixed period of 5 years is eligible for deduction from income under Section 80 (C) of Income Tax Act.

SERVICES PROFILE Corp Companion

Its a any branch banking facility which allows the customers to operate their account from any of the core connected branches of corporation bank. SMS Banking Facility

Customers can now access their bank accounts and carry out variety of banking transactions through the concept of SMS functionality available in their mobile phones. Corp Net

Its an internet banking facility. A technology enabled product which enables access to the account anytime from anywhere in the world. it is offered free of charge. Customers can use the facility not only for banking transactions but also for booking train tickets, premium payment of LIC of India policies etc. Corp Dial

It is banking through telephone from customers home, work place or office, 24hours a day and 7 days a week.

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A STUDY ON HOME LOANS AT CORPORATION BANK Corp Bank International Credit Card

It is banks own Credit card offered to its customers in association with VISA International. Corp Bank ATM

A vast network of 1,262 on-line interconnected ATMs covering all major locations in the country. .Corp Convenience Gold Card

It is an international Gold Debit cum ATM Card. The card will be offered only to customers maintaining minimum Quarterly Average Balance of Rs.25, 000 in their savings bank account. Corp E-Rail

A customer enjoying Corp Net-Internet Banking facility (and also holding Corp Convenience Debit Card), can now book Railway tickets through internet from the comforts of his home or office. Corp Any-Time-Premium

This allows the Payment of LIC Premium at the convenience of customer through the Banks ATM. Corp Mobile Recharge

It is useful in instant recharge of pre-paid mobile phones through any of the corporation bank ATMs across the country, or even with an SMS from the mobile phone. Corp Power Cheque

It is a multi city cheque facility where in the customer can issue cheques drawn at the base branch and payable at selected remote centers.

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A STUDY ON HOME LOANS AT CORPORATION BANK Corp Bullet

Corp Bullet is a remittance facility, which enables customers to transfer funds from one bank to another between RTGS enabled bank branches across the country. Card to Card Transfer (VISA Money transfer)

Corp Card 2 Card Transfer facility is a technology enabled remittance facility that allows customers to transfer funds from the corporation bank account linked to debit card to any other VISA credit or debit card issued by any bank in India. NRI Schemes NRI Products / Services 1. Corp Quick Remit It is an online Remittance Service available to the Non-Resident Indians based in the United States of America and Canada, facilitating to remit their earnings Online, to the beneficiaries/ recipients in India, in a quick, secure, convenient and cost effective manner. 2. Corp Express Money With a view to facilitate the NRIs based in the Gulf and Middle East to transfer their earnings back home swiftly, corporation bank has launched this new product. The maximum amount that can be remitted per transaction is equivalent to USD 2500. 3. Speed Cash/ Speed Remittance With a view to facilitating the NRIs based in the Gulf and Middle East to transfer their earnings back home swiftly, this new product has been launched. The maximum amount that can be remitted per transaction is equivalent to Rs. 50000.

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A STUDY ON HOME LOANS AT CORPORATION BANK 4. Deposit Schemes for NRIs Different types of deposit schemes available for NRIs are as follows: current account, savings bank account, fixed deposits, cash certificates, money flex deposits, and recurring deposits. 5. Forex Facilities for NRIs The Facility is available to Non-Resident Indians / Persons of Indian Origin for investments in India. 3rd Party Products / Services It has been the endeavor of corporation bank to bring out new innovations and value added products / services to its customers. The bank is aiming to become a financial supermarket where its customers are able to purchase a wide range of quality financial products under one roof like: NRI Services 1. Corp Jeevan Raksha It is a unique product by corporation bank in association with LIC for providing group insurance coverage to all its account holders. The bank acts as a Master Policy holder for and on behalf of the members. 2. Corp Mediclaim It is a health insurance plan from New India Assurance Company and designed to take care of all expected medical expenses due to hospitalization. 3. Corp Jeevan Griha Raksha This scheme is in association with LIC of India. Offers decreasing life cover under LICs group Mortgage Redemption Assurance Scheme to the banks Corp home loan borrowers (including existing borrowers).

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A STUDY ON HOME LOANS AT CORPORATION BANK 4. Corp Demat (Depository Services) The following services are being offered: account opening, dematerialization, and rematerialization, buy/ sell transactions, off market buy and sell transactions, custody, pledge/ hypothecation etc. 5. Tax collection services Corporation bank has been authorized by various government departments to handle the business like collection of direct taxes, sales tax, custom duty , central excise and service tax, and collection of telephone bills for BSNL/ MTNL in various states. 6. Mutual Fund Products The bank now offers a wide range of mutual fund products de it equity-diversified or sectoral, debt or liquid or for that matter balanced funds depending on the risk appetite.

AREA OF OPERATION The area of operation of corporation bank was initially confined to regional area. After the nationalization of the bank its operation spread over nationally, recently the bank is expanding its operations to global level by establishing its representative offices in Dubai and Hong Kong. The purpose of opening representative offices abroad is to reach out to other countries and expand its area of operation considerably in other countries in phased manner. Corporation bank has its operation spread from the metropolitan cities and towns to the remote corners of our country. Presently, the bank has a network of 5,111 functional units comprising of 1,361 bank, 1,250 ATMs and 2,500 branchless banking units across the country. Out of which 206 bank, 105 ATM units and 1300 Branchless Banking Units opened during the year 2010-11.

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A STUDY ON HOME LOANS AT CORPORATION BANK

OWNERSHIP PATTERN

Category of shareholders Government of India Insurance companies Indian financial institutions and banks Mutual funds and UTI Bodies corporate FIIs, Resident and individuals

No. of shares held 86692554 39776876 247206

% of total holding 58.52 26.85 0.17

5291608 2868737 7477286 5285891

3.57 1.94 5.05 3.57

Non resident Indians Others

451399 492196

0.30 0.33

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A STUDY ON HOME LOANS AT CORPORATION BANK

ownership ownership pattern, FII's, pattern, mutual funds 5.05%, 5% and uti, 3.58%, 4% ownership pattern, financial institutions and banks, 0.17%, 0% ownership pattern, insurance companies, 26.85%, 28% ownership pattern, bodies corporate, 1.94%, 2%

ownership pattern, Govt of India, 58.52%, 61%

Ownership pattern
The Corporation bank is a public sector bank. The majority of shares are held by government of India and other institutions and minority of shares are held by individuals. Corporation Bank shares are listed at Bombay Stock Exchange and National Stock Exchange. INFRASTRUCTURAL FACILITY The Bangalore zonal office is located in the heart of the city that is in M.G.road. The office is situated in the premises of Nitesh Times Square. The building is fully air conditioned. The Bank has meeting halls and conference rooms where the video conferring facility is available. Each employee in the office is provided with separate computer which is facilitated with internet and intranet, also there are electronic circulars and inter call facilities which are been provided for the speedy communication among various other departments of the bank and for easy and smooth flow of work. Even there is a transportation facility like cars for the executives of the bank with the ample parking facility for staffs and visitors vehicle.

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ACHIEVEMENT AND AWARDS

AWARDS Best Bank Award for Excellence in Banking Technology from Institute for Development and Research in Banking Technology (IDRBT), Hyderabad (2001) Best Bank Award for Delivery Channels from Institute for Development and Research in Banking Technology (IDRBT), Hyderabad (2003) Runner-up Awards in the Best Online and Multi-channel Banking Team and Outstanding achiever of the year-corporate categories in recognition of outstanding achievement in Banking Technology for 2004, instituted under the aegis of Indian Banks Association and Trade Fairs & Conferences International.

MAJOR RECOGNITIONS One among the Best 200/100 companies in Asia/Pacific and Europe having turnover under a billion US $ -Forbes Global, Hong kong dated 1st November, 2004 India's Best Bank Award - FE, 2007 IDRBT Best Bank Award of Banking Technology Award, 2008 - For Use of Technology for Financial Inclusion Banking Technology Awards, 2008 - Runner Up Award - For Best On Line and Multi Channel Banking Team Banking Technology Awards 2009 for its efforts in implementing innovative technologies in its business initiatives under the auspices of the Indian Banks Association [IBA], Finacle and the Trade Fairs & Conference International SKOCH Challenger Award, 2009 - Financial Inclusion Champion of the Year

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A STUDY ON HOME LOANS AT CORPORATION BANK

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FUTURE GROWTH AND PROSPECTUS Started about 105 years ago in 1906, with an initial capital of just Rs. 5000, Corporation Bank has recorded Rs. 2,00,000-crore mark in business. This is a safe investment with good prospects for appreciation. Corporation Bank, a public sector bank, was the forerunner when it came to evolving and adapting to the financial sector reforms. In 1997, it became the second public sector bank in the country to enter capital market, and the IPO was oversubscribed by 13 times. The bank has many firsts to its credit - cash management services, gold banking, m-commerce, online approvals for educational loans, 100 per cent CBS compliance and, more recently, Business Correspondent model of low-cost branchless banking to take banking to remote villages. The bank has been paying dividends without interruption since its inception. The rate was 200 per cent for 2010-11. For the half year ended September 2011, the net profit rose by 10 per cent to Rs. 752.56 crore on the back of a 12 per cent rise in the net total income to Rs. 2139.58 crore. Gross advances grew by 17 per cent to Rs. 81,633.9 crore and deposits by 24.4 per cent to Rs. 120,613 crore as on 30 September 2011. However, in view of its exposure to the corporate sector, the bank has been hit by the economic slowdown and margin pressure on corporate which has impacted its asset quality. With more and more companies unable to service their loans, the gross NPAs jumped by 45.9 per cent y-o-y to Rs. 1079.98 crore, whereas net NPAs shot up by 176.4 per cent to Rs. 745.01 crore. As a result of the surge in loans turning bad, the proportion of gross NPAs as per centage of total advances increased to 1.32 per cent from 1.05 per cent a year ago and that of net NPAs to 0.91 per cent from 0.39 per cent. The capital riskweighted adequacy ratio also declined to 13.58 per cent from 14.48 per cent a year ago. The provision coverage ratio, however, improved to 84.72 per cent against 78.51 per cent.

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A STUDY ON HOME LOANS AT CORPORATION BANK However, the Book Value per share has shot up to Rs. 532.67 as on 30 September against Rs. Rs. 450.39 a year ago. At the current price of Rs. 344, P/BV works out to just 0.67. Even if one deducts the entire net NPAs and 25 per cent of restructured assets, adjusted book value works out to Rs. 418 and at current price, P/adjusted BV is just 0.9. In 2011-12, we expect the bank to register an EPS of Rs. 99.1. The share trades at Rs. 344. P/E works out to just 3.5. In view of the difficult phase for banking, the price may decline to around Rs. 300. The shares are worth buying at every decline. Analysis Loan to Value Ratio Property Value Loan available subject to credit discretion

Above Rs. 1 Cr. And below Rs. 2 Cr. Above Rs. 2 Cr. And below Rs. 3 Cr. Above Rs. 3 Cr.

75% 70% 65%

Few banks ar0e more lenient when it comes to loan to value ratio. Tenure Maximum tenor under fixed rate loans is restricted to 20 years for salaried class and 15 years for other category of borrowers. Housing loans under fixed rate of interest is offered upto 20 years only. The rate of interest will be reset at the discretion of the Bank once in 5 years. Under floating interest rates, the maximum tenor can be extended upto 25 years.

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A STUDY ON HOME LOANS AT CORPORATION BANK Interest Rate Fixed Rate: Loan Tenor Up to Rs.30 lakhs Above Rs.30 lakhs Above Rs.50 lakhs & up to Rs.50 lakhs Up to 5 years Above 5 & upto 15 years 11.00% 11.00% 11.50 % 11.50 % 11.50 % 11.50% 11.50% 11.50 %

Above 15 years & up to 20 11.00% years Above 20 & upto 25 years 11.00%

11.50 %

11.50 %

Floating Rate: Loan Tenor Up to Rs.30 lakh Above Rs.30 lakh & upto Rs.50 lakh Up to 5 years Above 5 & upto 15 years Above 15 years & upto 20 years Above 20 & upto 25 years 10.25 % 10.75% 11.00% 8.75 % 9.50 % 9.75 % 9.50% 10.00% 10.50% 10.00% 10.50% 10.75% Above Rs.50 lakh

Prepayment Charges On prepayment of the loan, 0.5% on loan amount is charged under the floating rate option whereas, 1% on loan amount is charged under the fixed rate option. This is among the lowest charges in the industry.

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A STUDY ON HOME LOANS AT CORPORATION BANK Processing Charges Up to Rs.5 lakh Above Rs.5 lakh & upto Rs.15 lakh Above Rs.15 lakh & upto Rs.20 lakh Above Rs.20 lakh 0.50% of loan subject to min Rs.10,000/- & max.Rs.50,000/ 0.50% of loan subject to min Rs.7,500/-& max.Rs.10,000/0.50% of loan subject to min Rs.1000/- & max. Rs.2500/0.50% of loan subject to min Rs. 2500/- & max.Rs.7500/-

The above mentioned processing fee bracket gives tough competition to IDBI Banks offering charged @ 0.5% or Rs. 11, 000. Published on August 5, 2010 Filed under: Corporation Bank Home Loan;

COMPETITORS INFORMATION Corporation Bank is a nationalized bank having network all over the country. All the banks which are operating in the country like nationalized banks, scheduled banks, private banks and foreign banks are the competitors of Corporation bank in the market. Every such competitor is a threat to the bank who introduces their new product in to the market for the benefit of the public. The bank is facing tough competition from Nationalized Banks like State Bank of India, Allahabad Bank, Bank of India, Punjab National Bank, Vijaya Bank, Canara Bank and Syndicate Bank and also from Private Banks like ICICI Bank, HDFC Bank, UTI Bank, ING Vysya Bank. INTEREST RATES PROVIDED BY VARIOUS BANKS The below table illustrates the comparison between the interest rates from various Housing Finance Companies and banks. It can be seen that if one wishes to go for floating loans, the bank which gives the best deal as far as the interest rate is concerned.

IMS, BANGALORE

Page No.48

A STUDY ON HOME LOANS AT CORPORATION BANK

Loan Period (in years) EMI / Lakh (INR) EMI / Lakh (INR)

Finance Institution

Fixed

Floating

Up to 5 Bank of Baroda 6 to 10 11 to 15 16 to 20

9.00 9.25 9.50 9.50

2076 1230 1044 932

8.00 8.25 8.25 8.50

2028 1227 970 868

Up to 5 State Bank Of India 6 to 10 11 to 15 16 to 20

9.50 9.75 -

2100 1300 -

8.75 9.25 9.25 9.75

2064 1280 1029 949

Up to 5 HDFC 6 to 10 11 to 15 16 to 20

11 11 11 11

2175 1375 1137 1033

9.50 9.50 9.50 9.50

2101 1294 1045 933

Up to 5 ICICI Bank 6 to 10 11 to 15 16 to 20

10.75 10.75 10.75 10.75

2162 1364 721 1016

9.50 9.50 9.50 9.50

2101 1294 1045 933

Up to 5 LIC Housing Finance 6 to 10 11 to 15 16 to 20

10.50 11 11 11

2149 1373 1137 1032

9.50 9.50 9.50 9.50

2100 1294 1044 932

Up to 5 PNB Housing Finance 6 to 10 11 to 15 16 to 20

9.00 9.00 9.25 9.50

2076 1267 1030 933

10.50 10.50 10.50 10.50

2150 1350 1106 999

IMS, BANGALORE

Page No.49

A STUDY ON HOME LOANS AT CORPORATION BANK

CHAPTER 4: DATA ANALYSIS AND INTERPRETATION

4.1 Table showing occupation of the respondents:

Sl. No 1 2 3 4

Occupation Public sector Private sector Self-employed Total

No. of respondents 47 07 26 80

Percentage(%) of respondents 59% 09% 32% 100%

SOURCE: Primary Data Question no.1 ANALYSIS: The respondents are categorized into three groups namely public sector employees, private sector employees and self employed. It is clear that 59% of the total respondents are public sector employees and out of the rest 32% of them are self employed and 9% is private sector employees.

IMS, BANGALORE

Page No.50

A STUDY ON HOME LOANS AT CORPORATION BANK 4.1 Graph showing Occupation of the Respondents

No. of respondents
50 45 40 35 30 25 20 15 10 5 0 Public sector Private sector Self-employed 7 26 47

INTERPRETATION:

It is inferred that Corporation bank prefers salaried public sector employees to any other for sanctioning the home loans. Other than that fair preference is given to self employed customers as well. It is inferred that Corporation bank has given less importance to the private sector employees.

IMS, BANGALORE

Page No.51

A STUDY ON HOME LOANS AT CORPORATION BANK 4.2 Table showing the Gross Annual Income of the respondents: Sl. No 1 2 3 4 Gross Annual Income Less than 1,00,000 Rs.1,00,000 Rs.3,00,000 Rs.3,00,000 & above Total No. of respondents 05 66 9 80 Percentage(%) of respondents 06% 83% 11% 100%

SOURCE: Primary Data Question no.2

ANALYSIS: When consider about the gross annual income of the customers, out of the total respondents, 6% of them are earning less than Rs.1,00,000 annually while 83% of the respondents gross annual income falls between Rs.1,00,000 and Rs.3,00,000. Remaining 11% of them are earning above Rs.3,00,000 per annum.

IMS, BANGALORE

Page No.52

A STUDY ON HOME LOANS AT CORPORATION BANK 4.2 Graph showing the Gross Annual Income of the respondents.

No. of respondents

5 Less than 1,00,000 Rs.1,00,000 Rs.3,00,000 66 Rs.3,00,000 & above

INTERPRETATION: It is inferred that majority of the respondents gross annual income ranges between Rs.1,00,000 Rs.3,00,000. Further it is inferred that very less percentage of the Respondents earn less than Rs.1,00,000 and above Rs.3,00,000.

IMS, BANGALORE

Page No.53

A STUDY ON HOME LOANS AT CORPORATION BANK 4.3 Table showing the ownership of a House.

Sl. No 1 2 3 4

Ownership of a House Purchased Constructed Rented Total

No. of respondents 38 25 17 80

Percentage(%) of respondents 48% 31% 21% 100%

SOURCE: Primary Data Question no.3

ANALYSIS: It is identified that 79% of the respondents own a house and out of those respondents who have their own houses 48% of them have purchased a house while other 31% of them have constructed a new house. Remaining 21% of the total respondents have rented the houses.

IMS, BANGALORE

Page No.54

A STUDY ON HOME LOANS AT CORPORATION BANK 4.3 Graph showing the ownership of a House.

No. of respondents
17 38 Purchased Constructed 25 Rented

INTERPRETATION: Most of the respondents who have availed a housing loan from corporation bank have taken it for the purpose of purchasing their houses. Moderate number of respondents have availed the corporation bank home loans for the purpose of constructing a new house for them.

IMS, BANGALORE

Page No.55

A STUDY ON HOME LOANS AT CORPORATION BANK 4.4 Table showing the Income Tax position of the respondent. Sl. No 1 2 3 Income Tax assesse Yes No Total No. of respondents 75 05 80 Percentage(%) of respondents 94% 06% 100%

SOURCE: Primary Data Question no.4 ANALYSIS: It is clear that 94% of the total respondents are income tax assesses while the remaining 6% are not paying the income tax.

4.4 Graph showing the income tax assessment status of the respondent.

No. of respondents
80 60 40 20 5 0 Yes No 75

INTERPRETATION: It is inferred that all most all the respondents are income tax assesses.

IMS, BANGALORE

Page No.56

A STUDY ON HOME LOANS AT CORPORATION BANK 4.5 Table showing how respondents came to know about the Corporation Bank. Sl. No

Source of information about home loans

No. of respondents

Percentage(%) of respondents

1 2 3 4

Advertisement & brochures Word of mouth Others Total

25 45 10 80

30% 57% 13% 100%

SOURCE: Primary Data Question no.5

ANALYSIS: Out of the total respondents 30% of them have come to know about the Corporation Bank through Advertisement and Brochures. 57% of them got to know about the bank through word of mouth while remaining 13% of the respondents came to know through other ways.

IMS, BANGALORE

Page No.57

A STUDY ON HOME LOANS AT CORPORATION BANK 4.5 Graph showing how respondents came to know about the Corporation Bank.

No. of respondents
10

25 Advertisement & brochures Word of mouth

45

Others

INTERPRETATION: It is clear that most of the respondents have come to know through word of mouth. Some of them have got to know about Corporation bank through advertisements and brochures. Least of the respondents has got their knowledge about the Corporation bank through others ways.

IMS, BANGALORE

Page No.58

A STUDY ON HOME LOANS AT CORPORATION BANK 4.6 Table showing the purpose of availing the housing loan.

Sl. No

Purpose of availing loan

No. of respondents

Percentage(%) of respondents

1 2 3 4

Construction Purchases Extension Repair, Renovation and Up gradation

52 24 00 04

65% 30% 00% 05%

5 6

Purchase of residential site Total

00 80

00% 100%

SOURCE: Primary Data Question no.6

ANALYSIS: It is cleared that 65% of the respondents have availed the housing loan for the purpose of constructing a house while 30% of the total respondents have availed it for the purpose of purchasing the house. Remaining 5% of them have availed the housing loan for repair/renovation or up-gradation. None of the respondents taken up the loan for the purpose of extension or purchase of a residential site.

IMS, BANGALORE

Page No.59

A STUDY ON HOME LOANS AT CORPORATION BANK 4.6 Graph showing the purpose of availing the housing loan.

No. of respondents
60 50 40 30 20 10 0 24 0 4 0 52

INTERPRETATION: It is inferred that majority of the respondents have taken up the housing loan for the purpose of constructing of a house. Moderate number of customers have availed the home loan for the purpose of purchasing a house while least number of the respondents have taken the loan for the purpose repair/renovation or up-gradation. Further it is inferred that rarely the customers wants to take home loans for the purpose of extension or purchase of a residential site.

IMS, BANGALORE

Page No.60

A STUDY ON HOME LOANS AT CORPORATION BANK 4.7 Table showing the parameters to take up the loan Sl. No 1 2 3 4 5 Parameters Low Interest Quick sanction Recovery options Others Total No. of respondents 26 49 05 00 80 Percentage(%) of respondents 33% 61% 06% 00% 100%

SOURCE: Primary Data Question no.7

ANALYSIS: Out of the total respondents 33% of them have considered Low interest as the parameter while 61% of them have considered quick sanction as their parameter. Remaining 6% of the respondents have considered about the recovery options mostly. 0% of the respondents considered others factors as the parameters.

IMS, BANGALORE

Page No.61

A STUDY ON HOME LOANS AT CORPORATION BANK 4.7 Graph showing the parameters to take up the loan.

No. of respondents
50 40 30 20 26 10 5 0 Low Interest Quick Sanction Recovery Options 0 Others 49

INTERPRETATION: Majority of the respondents have considered quick sanction as their main factor while availing a housing loan. Some consider about low interest while least of the respondents consider recovery options as the parameter to take up the home loan from Corporation Bank.

IMS, BANGALORE

Page No.62

A STUDY ON HOME LOANS AT CORPORATION BANK 4.8 Table showing the period of the loan.

Sl. No 1 2 3 4

Period of the loan Less than 5 Years 5 10 Years 10 Years and above Total

No. of respondents 08 19 53 80

Percentage(%) of respondents 10% 24% 66% 100%

SOURCE: Primary Data Question no.8

ANALYSIS: 10% of the customers preferred to take up the loan for a period less than 5years where as 24% of them preferred to take loan for period of 5 10years 66% would like to opt the loan for a period of 10years and above.

IMS, BANGALORE

Page No.63

A STUDY ON HOME LOANS AT CORPORATION BANK 4.8 Graph showing the period of the loan.

No. of respondents
60 50 40 30 20 10 0 Less than 5 Years 5 10 Years 10 Years and above 8 19 53

INTERPRETATION: It is inferred that most of the respondents have the choice of long term repayment period. Even some respondents prefer taking loans for a period of 5 10years. Least of them prefer taking up the housing loans for a period less than 5years.

IMS, BANGALORE

Page No.64

A STUDY ON HOME LOANS AT CORPORATION BANK 4.9 Table showing the security for the housing loan.

Sl. No 1 2 3 4 5

Security Mortgage of Land Mortgage of House Mortgage of Flats Others Total

No. of respondents 27 34 07 12 80

Percentage(%) of respondents 33% 43% 09% 15% 100%

SOURCE: Primary Data Question no.9

ANALYSIS: 33% of the total respondents have mortgage a land for availing a housing loan while 43% of them have mortgage a house. Out of the remaining respondents 9% of them have mortgage a flat and 15% of the total respondents have kept some other securities for the purpose of availing a housing loan from Corporation bank.

IMS, BANGALORE

Page No.65

A STUDY ON HOME LOANS AT CORPORATION BANK 4.9 Graph showing the security for the housing loan.

No. of respondents
40 35 30 25 20 15 10 5 0 34 27

12 7

Mortgage of Land

Mortgage of House

Mortgage of Flats

Others

INTERPRETATION: The bank prefers mortgage of house while providing housing loan to the customers rather than mortgage of land, mortgage of flat or mortgage of any other property for sanctioning a housing loan.

IMS, BANGALORE

Page No.66

A STUDY ON HOME LOANS AT CORPORATION BANK 4.10 Table showing the margin of contribution while availing a housing loan.

Sl. No 1 2 3 4

Margin 10% 20% 30% and Above Total

No. of respondents 41 31 08 80

Percentage(%) of respondents 51% 39% 10% 100%

SOURCE: Primary Data Question no.10

ANALYSIS: 51% of the total respondents have contributed 10% while availing a housing loan. Out of 80 respondents 39% have contributed 20% at the time of availing a housing loan. Remaining 10% of the total respondents have contributed 30% at the time of availing the housing loan.

IMS, BANGALORE

Page No.67

A STUDY ON HOME LOANS AT CORPORATION BANK 4.10 Graph showing the margin of contribution while availing a housing loan.

No. of respondents
50 40 30 20 10 0 10% 20% 30% and Above 41 31 8

INTERPRETATION: It is inferred that most of the respondents prefer to contribute 10% while availing the housing loan. Another considerable number of respondents prefer to contribute 20% as the margin of contribution while least of them willing to contribute 30% and above as the margin of contribution while availing home loan from Corporation Bank.

IMS, BANGALORE

Page No.68

A STUDY ON HOME LOANS AT CORPORATION BANK 4.11 Table showing the respondents opinion on rate of interest.

Sl. No 1 2 3 4

Interest rates High Low Moderate Total

No. of respondents 00 24 56 80

Percentage(%) of respondents 00% 30% 70% 100%

SOURCE: Primary Data Question no.11

ANALYSIS: 70% of the total respondents think that the interest rates of the Corporation bank are moderate while 30% of the total respondents think the interest rate is low. None of the respondents think that the interest rates of the Corporation bank are high.

IMS, BANGALORE

Page No.69

A STUDY ON HOME LOANS AT CORPORATION BANK 4.11 Graph showing the respondents opinion on rate of interest.

No. of respondents
60 50 40 30 20 10 0 High Low Moderate 0 24 56

INTERPRETATION: It is inferred that majority of the customers think that the interest rates for the housing loan scheme in Corporation Bank is moderate. Some of them feel interest rates in Corporation bank are low but none of them feel the interest rates of Corporation bank are high. So it is inferred that Corporation banks interest rates are really low compared to other bank.

IMS, BANGALORE

Page No.70

A STUDY ON HOME LOANS AT CORPORATION BANK 4.12 Table showing the mode of payment. Sl. No 1 2 3 4 Mode of payment Principal + Interest Principal Interest Total No. of respondents 80 00 00 80 Percentage(%) of respondents 100% 00% 00% 100%

SOURCE: Primary Data Question no.12 ANALYSIS: 100% of the respondents prefer the principal + interest method as the mode of repayment of the loan availed. 0% of the total respondents prefer to pay principle or interest separately. 4.12 Graph showing the mode of payment.

No. of respondents
80 60 40 20 0 Principal + Interest 0 Principal 0 Interest 80

INTERPRETATION: Almost all the respondents prefer to pay principle and the interest together as the mode of payment rather than paying the principle and interest separately.

IMS, BANGALORE

Page No.71

A STUDY ON HOME LOANS AT CORPORATION BANK 4.13 Table showing the interval of repayment of the loan.

Sl. No 1 2 3 4 5

Repayment period Annually Half Yearly Quarterly Monthly Total

No. of respondents 00 21 00 59 80

Percentage(%) of respondents 00% 26% 00% 74% 100%

SOURCE: Primary Data Question no.13

ANALYSIS: 74% of the respondents prefer to repay the installments monthly while 26% of the respondents prefer to pay it half yearly. None of the respondents wanted to repay the loan annually or quarterly.

IMS, BANGALORE

Page No.72

A STUDY ON HOME LOANS AT CORPORATION BANK 4.13 Graph showing the interval of repayment of the loan.

No. of respondents
60 50 40 30 20 10 0 0 Annually Half Yearly 21 0 Quarterly Monthly 59

INTERPRETATION: Majority of the respondents prefer repaying the installments monthly. Hence we can assume that all these respondents fall under the salaried group. But some of the respondents were willing to repay the installments half yearly. None of them were willing to repay it annually or quarterly.

IMS, BANGALORE

Page No.73

A STUDY ON HOME LOANS AT CORPORATION BANK

4.14 Table showing the consumer satisfaction towards the services provided by Corporation bank.

Sl. No

Consumer satisfaction

No. Of Respondents

Percentage(%) of respondents

1 2 3 4

Fully satisfied Satisfied Not so satisfied Total

24 53 3 80

30% 66% 4% 100%

SOURCE: Primary Data Question no.14

ANALYSIS: 30% of the respondents are fully satisfied with the services provided by
the Corporation bank while 66% of the respondents are satisfied with the services. Only 4% of the customers are not so satisfied with the services provided by the Corporation bank.

IMS, BANGALORE

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A STUDY ON HOME LOANS AT CORPORATION BANK

4.14 Graph showing the consumer satisfaction towards the services provided by Corporation bank.

Amount
13986000 14000000 12000000 10000000 8000000 6000000 4000000 2000000 0 2008-2009 2009-2010 2010-2011 5398000 3993000

INTERPRETATION:
It is inferred that most of the respondents are satisfied with the services provided by the Corporation bank even though least of them are not satisfied much with the services provided by the Corporation bank.

IMS, BANGALORE

Page No.75

A STUDY ON HOME LOANS AT CORPORATION BANK

4.15 Table showing the comparative Loan Disbursement

Sl. No

Years
2008-2009 2009-2010 2010-2011

Total loan disbursed(000s) Total home loans(000s)

8845 11233 39029 7052 3993 30460

1 2 3

ANALYSIS:
It is clear that the total loan disbursed have gone up from 8845000-11233500 during 2009-2010.Also there is an increment in the total amount during the year 20102011, which is 27,795500. Along with it there is an increment I home loan disbursement.

4.15 Graph showing the comparative Loan Disbursement

13986000 14000000 12000000 10000000 8000000 6000000 4000000 2000000 0 2008-2009 2009-2010 2010-2011 5398000 3993000 Amount

INTERPRETATION: The total loan disbursement made by the bank is increasing,

but in the year 2009-2010 there is a decrement in the loan disbursement. Even the total home loans provided by the bank have increased expect the year 2009-2010 where there was a decrement.

IMS, BANGALORE

Page No.76

A STUDY ON HOME LOANS AT CORPORATION BANK

CHAPTER 5

FINDINGS

It was found that the home loan segment has a better increasing trend in coming since it has a high rate of demand in the current market. The customers of Corporation bank include public, private and self-employed and among them the percentage of the public sector employees is high. Most of the customers are earning an income from Rs. 1,00,000 to 3,00,000 per annum. The majority respondents are residing in their own house, which have been purchased or constructed. Many of the customers have taken the loan for the purpose of constructing a house and some have availed the loan for the purpose of purchasing a house. It was found that many of them came to know about the corporation bank through word of mouth and some through advertisements. It is clear that quick sanction and low interest are the major parameters that have considered while availing the housing loans from the corporation bank. Majority of the respondents who have availed housing loan prefer for long-term repayment, that is 10 years and above. Lots of customers have taken the housing loans by mortgage of house or land as security. Hence it can be observed that the bank prefer mortgage of house or land as security.

Most of the respondents contribute fewer margins of 10% and 20% rather than contributing a margin of 30% and above. All the respondents prefer to repay their installment along with both the principle and interest together.

IMS, BANGALORE

Page No.77

A STUDY ON HOME LOANS AT CORPORATION BANK Out of the total respondents majority of them preferred to repay their loans in monthly installments. Hence it is observed that almost all the respondents fall under the salaried group. Majority of the respondents are satisfied with the service provided by the Corporation bank while least of them are not so satisfied. Most of the customers have personally said that the main reason for their high level of satisfaction with the services provided by the bank is the co-operative behavior of the staff working in it.

IMS, BANGALORE

Page No.78

A STUDY ON HOME LOANS AT CORPORATION BANK

CONCLUSION

Human beings are no more constraint to the basic necessities in their lives. Their needs have diversified through the ages placing an increase demand on resources. The economic boom in the country have wide open the new challenges and opportunities to the people. This has necessitated timely and easy availability of funds to meet the requirements of institutions and individuals in meeting their goals. Thus to keep up with the pace of this increase demand, the banking industry have come forward with credit portfolio to provide funds on relatively easier terms and conditions. Today, banks are committed towards providing more and more number of people with finance with a view to make their lives better. Nowadays almost all the banks are offering housing loans with its own effective interest rates and there by making the market highly competitive. From the overall study it is found that in such competitive market Corporation bank is performing well in almost in every respect. It is also found that the satisfaction levels in customers were high in almost all parameters. However it is concluded that most of the respondents prefer Corporation home loans, instead of competitors, with a slight consideration in interest rate and quick sanction from the bank. Moreover the profitability of this particular industry is expected to take a positive track in the future ahead.

IMS, BANGALORE

Page No.79

A STUDY ON HOME LOANS AT CORPORATION BANK

RECOMMENDATIONS

It is recommended that the Corporation bank should not only concentrate on the public sector but also on other self-employed and private sector employees so that they can increase their business. The housing loan of the corporation bank is not communicated well enough to customers. Hence, it is suggested to make additional efforts and concentrate more on the advertisement to increase the awareness level about the housing loans provided by the bank. As the majority of the customers have considered Quick sanction as the top most priority for taking housing loans from the bank, it is recommended to the bank to maintain its quick sanction process or try to accelerate as it is mentioned one advantage of opting housing loan from Corporation bank from respondents. Other main factor considered for taking housing loans from the bank is low interest rate. Therefore the bank should try to continue the same initiative in their interest rates. The bank should adopt attractive and competitive rate of interest in order to induce customers to take housing loans and to attain more shares from its competitors. This is also one of the critical factors for selecting home loans from the Corporation bank. Service level provided by the bank should be more efficient and effective for the customers. The customers are very keen on the service provided by the bank. They would rate it as one of the important factor while selecting the housing loans.

IMS, BANGALORE

Page No.80

A STUDY ON HOME LOANS AT CORPORATION BANK From the survey it was found that majority of the respondents were satisfied by the service provided by the bank. This shows that in the eye of the customers the bank has good image. Hence the bank should provide excellent service to keep up that image. It should also try to train its staff on all related areas so as to make the atmosphere more amicable both to the staff and to the customers. Good Bankercustomers relationship should be its priority. Since all the banks are providing housing loans with same features, it is recommended that the bank should offer some unique features to its housing loans to acquire strong identity and can be easily distinguished.

IMS, BANGALORE

Page No.81

A STUDY ON HOME LOANS AT CORPORATION BANK BIBLIOGRAPHY

1. B.B.Padhiari, P.Ch.Misra, 2004,Rural housing finance,Discovery Publishing House,(First Edition),Delhi.

2. Know Your Banking-IV-HOME LOANS , Indian Institute Of Banking Finance (IIBF)

WEBSITE 1. www.rbi.org.in 2. www.corporationbank.com

IMS, BANGALORE

Page No.82

A STUDY ON HOME LOANS AT CORPORATION BANK

ANNEXURE
A STUDY ON BANK WITH SPECIAL REFERENCE TO HOUSING LOANS IN CORPORATION BANK, ZONAL OFFICE, BANGALORE

Dear Sir/Madam, I am pursuing MBA in CMR Institute of Management Studies(Autonomous), Bangalore University. I have undertaken a project work on Home Loan in Corporation Bank and conducting a survey in this regard. Kindly spare some of your valuable time to fill up the following questionnaire which will help me to complete my work successfully. The information collected will be used only for academic purpose.

Name: Age: a) Below 30 c) 40-50 Sex: a) Male ( ) b) Female ( ) ( ) ( ) b) 30-40 d) 50-60 ( ) ( )

Address for communication:

1. Occupation: a) Public sector employee b) Private sector employee c) Not employed ( ) ( ) ( )

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A STUDY ON HOME LOANS AT CORPORATION BANK

2. Gross annual income a)Less than Rs.1,00,000 b)Rs.1,00,000 to Rs.3,00,000 c)Rs.3,00,000 and above 3. Do you own a house? a)Yes If Yes a)Purchased ( ) b)Constructed ( ) ( ) b)No ( ) ( ) ( ) ( )

4. Are you Income Tax assesse? a) Yes ( ) b)No ( )

5. How did you come to know about home loans of the Corporation Bank? a)Advertisements and Brochures b)Word of mouth c)Others ( ) ( ) ( )

6. For which of the following purpose you availed the Corporation bank housing loan? a) Construction ( ) b) Purchase d) Extension ( ) ( )

c) Repair/Renovation/Up-gradation ( ) e) Purchase of a residential site ( )

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A STUDY ON HOME LOANS AT CORPORATION BANK

7. Based on which parameter you took up this loan a) Low Interest ( ) b) Quick sanction ( ) d) Others ( )

c) Recovery options ( )

8.For what period would you like to opt for the loan? a) Less than 5years b) 5 to 10years ( ) ( )

c) 10years and Above ( ) 9.In case you have availed a housing loan, specify the security a)Mortgage of Land c)Mortgage of flat ( ) ( ) b) Mortgage of House d) Others ( ) ( )

10.At the time of availing the loan what was your margin of contribution? a) 10% ( ) b)20%( ) c) 30% and above ( )

11.What do you feel about the interest rates at Corporation Bank? a) High ( ) b) Low ( ) c) Moderate ( )

12.Specify the mode of payment a) Principal+ Interest b) Principal ( ) c) Interest ( ) ( )

13.How would you like to pay your installment amount? a) Annually ( ) c) Quarterly ( ) b) Half yearly ( ) d) Monthly ( )

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A STUDY ON HOME LOANS AT CORPORATION BANK

14. Are you satisfied with the service provided by Corporation Bank? a) Fully Satisfied b) Satisfied c) Not so satisfied ( ) ( ) ( )

15. Suggestions [if any] Please specify below ___________________________________ ___________________________________

Thank you for your kind information and cooperation

Date: Place: Signature

IMS, BANGALORE

Page No.86