idbi A PROJECT REPORT ON “Housing Loan: A Comparative Study” Submitted in partial fulfillment of the requirement of Bachelor of Business Administration 1 idbi Certificate This is to certify that Mr.DEEPAK PARWANI has proceeded under my supervision his research project report on “Housing Loan: A Comparative Study”. The work embodied in this report is original and is of the standard expected of an BBA student and has not been submitted in part or full to this or any other university for the award of any degree diploma he has completed all requirements of guidelines for project report and the work is fit for evaluation. 2 idbi UNDERTAKING I hereby declare that total work of this project entitled “Housing Loan: A Comparative Study. ”. In “Investmentpoint.com is an original work of mine is done during the month May-June as part of Summer training under the guidance of Mr VIRENDER GUJAR. To the best of my knowledge and beliefs the facts mentioned in the report are true. DEEPAK PARWANI BBA PART III 3 idbi ACKNOWLEDGEMENT I express my sincerest gratitude and thank to hon’ble Mr. VIRENDER GUJAR for whose kindness I has the precious opportunity of attainting of allainting training at Investment point.Under his brilliant untiring guidance I could complete the project being undertaken on the“Housing Loan: A Comparative Study. ” successfully in time. His meticulous attention and valuable suggestion have helped me in simplifying the problem involvem in the work.I would also like to thanks the overwhelming support of all the people who gave me an opportunity to learn and gain knowledge about the various aspects of the industy. Last but not least I am thanking to the APEX FINANCE PVT. LTD.Faculty member for enhancing me theoretical as well as pratical knowledge in the field of marketing research. For their constant encouragement and valuable suggestion without which this project would not been successfully completed. 4 idbi PREFACE To maintain and cope up with the growing competition from the various Online Trading Providers. Share needs to find potential clients, also the new investors to satisfy their needs. The broad objective of the project is to equip the trainees with all the qualities which are essential to face any circumstances which can arise while providing service to the clients. This project will accomplish to understand how people interact with technology Savy products and if they are ready for doing all the trading through internet. All these steps helped me to understand how to cope up with different types of people and their diversified needs and satisfaction level. 5 idbi Content Organisation:IDBI Bank Objective Of The Project Banking And Finance In India Structure Of Indian Banking Sector Credit Tree Of A Bank Constituents of Indian Finance System Categories of Bank Introduction to finance Loans Constituents of the Barclays Group Product of Housing loan of Barclays Bank Research Methodology Why take a Home Loan? Eligibility Tabulation Analysis Of Data Procedure for getting Approval of Home Loan Limitation Of Study Suggestion Conclusion Bibliography Questionnaire 6 idbi Project Title: Housing Loan: A Comparative Study. Organisation: IDBI Bank . The successful development in the banking business has become a complex process in the world of competition today. The development of marketing og a new service, the complexity of a new and different product, their market and therefore their process through which they developed, dictates that a number of different people, each which there own role, work together to create the service. The project represents a information regarding company’s/banks performance and the service for the home loans to the all sections of society. The main objective of the project is to understand/study the different product of a housing loan, the rate of interest of housing loan the days for sanctioning of a housing loan. This will help us to select the appropriate bank of financial institution which will have less interest rate and maximum repayment period. For the execution of the project, the methodology adopted is the collection of information through primary and secondary data collection method, questionnaire, processing and analyzing data. The banks collected for comparison of a housing loan are the main stream banks in Jodhpur city i.e. state bank of India, bank of Maharashtra , one schedule and one co- operative bank. The above group represents the total population of Jodhpur city. The IDBI Bank is very good service provider in the banking sector. The bank has recently completed 100 years, in its quest to become a world class bank with global best practice. The area of project work is Jodhpur city as it is the fast developing city in Marathwada region and the city has very good prospect in future. 7 idbi OBJECTIVE OF THE PROJECT: The objective of the project on Home – Loans is to compare the home loan schemes of different banks and financial institutions in the Jodhpur City only. This will help us to select the appropriate bank of financial institution, which will have less interest rate and maximum repayment of period with easy documentation. Main objectives include: • Comparison of interest rate of different banks for Home-Loans. • Share of home loans in all loans disbursed by that particular bank. • Profitability & Cost of a loan proposal from the customer point of view and lenders point of view. Profitability and cost of the loan proposal decides the financial position of the bank and its survives. And it also helps to banks to decide which type of loans gives them more benefits for the long period. 8 idbi BANKING AND FINANCE IN INDIA The Indian money market is classified in to : the organized sector(comprising private, public and foreign owned commercial banks and cooperative banks, together known as scheduled banks); and the unorganized sector(comprising individual or family owned indigenous bankers or money lenders and non banking financial companies (NBFCs)). The unorganized sector and micro credit and still preferred over traditional banks in rural and sub-urban areas, especially for non-productive purposes, like ceremonies and short duration loans. Early History Banking in India originated in the first decade of 18th century. The first banks were The General Bank of India, which started in 1786, and Bank of Hindustan, both of which are now defunct. The oldest bank in existence in India is the State Bank of India, which originated in the "The Bank of Bengal" in Calcutta in June 1806. This was one of the three presidency banks, the other two being the Bank of Bombay and the Bank of Madras. The presidency banks were established under charters from the British East India Company. They merged in 1925 to form the Imperial Bank of India, which, upon India's independence, became the State Bank of India. For many years the Presidency banks acted as quasi- central banks, as did their successors. The Reserve Bank of India formally took on the responsibility of regulating the Indian banking sector from 1935. After India's independence in 1947, the Reserve Bank was nationalized and given broader powers. Post-independence The partition of India in 1947 adversely impacted the economies of Punjab and West Bengal, paralyzing banking activities for months. India's independence marked the end of a regime of the Laissez-faire for the Indian banking. The Government of India initiated measures to play an active role in the economic life of the nation, and the Industrial Policy Resolution adopted by the government in 1948 envisaged a mixed economy. This resulted into greater involvement of the state in different segments of the economy including banking and finance. The major steps to regulate banking included: 9 idbi In 1948, the Reserve Bank of India, India's central banking authority, was nationalized, and it became an institution owned by the Government of India. In 1949, the Banking Regulation Act was enacted which empowered the Reserve Bank of India (RBI) "to regulate, control, and inspect the banks in India." The Banking Regulation Act also provided that no new bank or branch of an existing bank may be opened without a license from the RBI, and no two banks could have common directors. However, despite these provisions, control and regulations, banks in India except the State Bank of India, continued to be owned and operated by private persons. This changed with the nationalization of major banks in India on 19th July, 1969. Nationalization By the 1960s, the Indian banking industry has become an important tool to facilitate the development of the Indian economy. At the same time, it has emerged as a large employer, and a debate has ensued about the possibility to nationalize the banking industry. Indira Gandhi, the-then Prime Minister of India expressed the intention of the GOI in the annual conference of the All India Congress Meeting in a paper entitled "Stray thoughts on Bank Nationalization." The paper was received with positive enthusiasm. Thereafter, her move was swift and sudden, and the GOI issued an ordinance and nationalized the 14 largest commercial banks with effect from the midnight of July 19, 1969. Jayaprakash Narayan, a national leader of India, described the step as a "masterstroke of political sagacity." Within two weeks of the issue of the ordinance, the Parliament passed the Banking Companies (Acquisition and Transfer of Undertaking) Bill, and it received the presidential approval on 9th August, 1969. A second dose of nationalization of 6 more commercial banks followed in 1980. The stated reason for the nationalization was to give the government more control of credit delivery. With the second dose of nationalization, the GOI controlled around 91% of the banking business of India. After this, until the 1990s, the nationalized banks grew at a pace of around 4%, closer to the average growth rate of the Indian economy.