Anjali Jabalpur Chintan

Student declaration
This is to certify that the summer training report titled “To

Increase Market Share in Mortgage Industry of
Fullerton and to Reduce Risk in Mortgage Industry”
carried out By MR. CHINTAN VADGAMA, Roll No. 13
conducted at Fullerton India Credit Company Ltd.,
Jabalpur relates to Finance stream of specialization is an
original work and was carried out under the guidance of
faculty and the corporate guide.
Signature
CHINTAN VADGAMA
Roll No-13
1
Acknowledgement
I would like to express my gratitude to all those

who gave me the possibility to complete this
project. I want to thank Omkarananda Institute
of Management and Technology, Rishikesh for
giving me an opportunity to work on this project.
This project has given me practical knowledge on
various HR activities being performed in the
organization.
I would like to extend my sincere gratitude to Mr.
Arvind Sahu (Branch Manager and Company
Guide), for providing me with an opportunity to
work under them and giving me valuable
suggestions and priceless guidance without which
my project would have been incomplete.
I am profoundly grateful to my Director & Faculty
Members for giving me their valuable suggestions
and instructions in completion of this project. It has
been a pleasure and wonderful experience to get
the opportunity to be guided by them.
2
table of contents
List of Abbreviations 5
Executive Summary 6
Introduction 9
Competitors Analysis 24
Research Methodology & Objective 53
Graphical Representation 57
Conclusion 76
Limitations 77
Recommendations 78
Bibliography 83
Annexure
3
list of abbreviations
$ Dollar
% Percent
@ at the rate of
ARM Adjustable Rate Mortgage
ATM Automated Teller Machine
EMI Equated Monthly Installments
FRM Fixed Rate Mortgage
FY Financial Year
GDP Gross Domestic Product
HDFC Housing Development Finance Corporation
Industrial Credit and Investment Corporation of
ICICI India
ITR Income Tax Return
LIC Life Insurance Corporation of India
LTV Loan to Value
N.A. Not Applicable
NBFC Non Banking Financial Corporation
NHB National Housing Bank
PAN Permanent Account Number
PFY Previous Financial Year
RBI Reserve Bank of India
Rs Rupee
SBI State Bank of India
TDS Tax Deducted at Source
US United States
YOY Year of Year
4
executive summary
What is Loan: A loan entails the redistribution of financial assets

over time, between the lender and the borrower. A loan is a type of
debt. The borrower initially receives an amount of money from the
lender, which they pay back, usually but not always in regular
installments, to the lender. This service is generally provided at a
cost, referred to as interest on the debt.
LOAN
SECURED UNSECURED
LOAN LOAN
PERSONAL
LOAN
ON
MOVABLE ON
IMMOVABLE
UNSECURED LOAN:
Unsecured loans are monetary loans that are not secured against
the borrowers assets. These may be available from financial
institutions under many different guises or marketing packages:
 credit card debt
 personal loans
 bank overdrafts
 credit facilities or lines of credit
5
 corporate bonds
SECURED LOAN:
A secured loan is a loan in which the borrower pledges some asset
(e.g. a car or property) as collateral for the loan. In today's world the
meaning of the term secured loan is better understood only when
we see that the maximum number of people purchases their homes
with a mortgage. The term mortgage industry which has flourished
the world's housing market is simply meant as a process by which
the individual and the business can purchase the residential and the
commercial property without paying the total value.
Mortgage is defined as a loan to an individual or a businessman for

purchasing a real estate. In this case the real estate also acts as
collateral for the loan.
PARTIES IN A MORTGAGE:
In a mortgage dealing with the borrower is called as the mortgagor
on the one hand and the lender is called as the mortgagee on the
other.
The collateral which is kept as a security can be of two

types:
1) MOVABLE PROPERTY: Movable property can be anything like
stock, machinery, vehicle, equity, insurance policy, fixed
deposits etc. All these properties which are kept as a
security for taking loan amount is considered to be a part of
secured loan.
2) IMMOVABLE PROPERTY: immovable property can be land,
building, house etc. All these properties which are kept as
security for loan are known as mortgage.
6
7
UNSECURED LOAN:
The which is taken without keeping any collateral and the amount
taken as loan can be used for any personal need. The interest
rate on unsecured loan is higher as compared to secured loan.
Example: loan taken for child’s marriage.
8
introduction
COMPANY PROFILE:
FULLERTON INDIA CREDIT COMPANY LTD.:

Fullerton provides a complete range of financial products and
solutions, customized to the requirements of mass market and low
income population segments. Fullerton follows a customer centric,
community based business model.
Fullerton India is a subsidiary of Fullerton Financial Holdings Ltd., a

wholly owned subsidiary of the US $80 Billion Temasek Holdings,
Singapore.
Fullerton operations commenced in January 2006, with a network of

branches across the country to source and service our customers.
FULLERTON OFFER:
Fullerton India- Parivaar and Vyapaar
Fullerton offer a range of financial products and solutions, tailor
made for salaried class and the small sized shop owners and
entrepreneurs.
FULLERTON-PARIVAAR
Parivaar loan covers following range of products:
 Unsecured Personal Loan
 Secured Loans
 Home Finance
 Home Equity Loans
9
FULLERTON-VYAPAAR
Vyapaar provide a aid to business man for further growth in
business, for renovation of shop .Fullerton India Vyapaar strives to
improve the business and lives of small business community.
PURPOSE OF THE PROJECT:

Purpose of doing this project is to know where Fullerton Credit India
stand against Mortgage players in Jabalpur and what Fullerton Credit
India should do so as to increase its market share and to reduce
defaults in comparison with other player’s in Jabalpur.
SCOPE AND OBJECTIVE OF PROJECT

SCOPE: The scope of the report is to review the mortgage
companies in Jabalpur. Few of the leading financial institutions who
provide mortgage loan have been selected for in depth analysis of
their business model; with a special emphasis on their lending
process/policies and the products provided by them. The report
aims to understand the product offerings and customized services
provided by the mortgage companies. It will also help to understand
the future prospects of mortgage companies in Jabalpur.
OBJECTIVE OF THE PROJECT:

“To Increase Market Share in Mortgage Industry of
Fullerton and to Reduce Risk in Mortgage Industry”
10
SALIENT CONTRIBUTIONS OF THE PROJECT:
Providing backbone to vertical Home Loan and Loan Against
Property and providing necessary inputs to company for increasing
market share and reducing default while dealing in Mortgage Loan
in Jabalpur.
OUTLINE OF THE PROJECT REPORT:

This project report aims at finding the scope of ‘Mortgage Industry’
in Jabalpur and also at finding ‘Risk faced by Mortgage Industry’ and
how can risk be reduced face by Mortgage Industry. The factors
looked into while doing the project were home loan Vs mortgages,
new business Vs existing business and contribution of salaried
employees. A detail study was done on the leader LIC and its reason
to be the leader.
11
OVERVIEW ON MORTGAGE LOAN:
A Mortgage Loan is offered on mortgage property which can range
from personal mortgage property to commercial or real estate
properties. Properties are kept under mortgage as a security for
paying off a loan. The term “mortgage” is often used in the same
breath as a “mortgage loan.”
Technically speaking, a mortgage is defined as the conditional

pledge to ones’ property secured against the performance of an
obligation or the repayment of a debt. According to investment and
economic parameters it is debt instrument secured by forwarding
any commercial or real estate as collateral which gives the creditor
conditional ownership over the asset which can be discharged only
upon repayment of the loan amount.
Mortgage loans are generally availed of in cases of acquiring

residential or commercial properties where the initial value is very
high. Mortgage loans are lower priced than other loans as value of
the property reduces the risk for the loan provider. In other words, a
mortgage loan is secured against the property intended to be
bought on the part by the borrower. Mortgage properties usually
entail certain restrictions on the use or disposal of the property such
as paying any outstanding debt before selling the property.
Investing in mortgage properties through loans has become the
accepted practice in the developed countries such as the USA and
UK. Mortgage loans are structured as long term loans based on the
formulae of time value of money.
SOME IMPORTANT PARTICIPATORS IN THE CONTEXT OF

MORTGAGE LOANS ARE:
12
The creditor is an individual or institution who has legal rights to the
debt secured by the mortgage and often makes a loan to an
individual of the purchase money for the property. In terms of
institutions, the creditor can be banks, insurers or other financial
institutions. He maybe called as mortgagee or lender.
The debtor is the person who takes the mortgage loan from the
creditor and must meet the mortgage conditions imposed by the
creditor in order to avoid the creditor enacting provisions on the
mortgage to recover the debt. Usually a debtor can be an
individuals, landlords or businesses. The debt issued on the
mortgage is also referred to as hypothecation which will use the
services of a hypothecary to assist in the process. He is also known
as mortgagor, borrower or obligor.
Some other terms in this context may be noted as conveyance or

the legal document facilitating the transfer of ownership of
unregistered land, a freehold meaning the ownership of land and
the property, the title recording the ownership of the property and
land and a mortgage deed which specifies that the mortgagee or
creditor has a legal charge over the ownership of the property. This
essentially signifies the transfer of conditional ownership or interest
over the asset.
SOME OF THE COMMON TYPES OF MORTGAGE RATES ARE:
 FIXED RATE MORTGAGE

 ADJUSTABLE RATE MORTGAGE
13
FIXED RATE MORTGAGE:
The FRM rates on mortgages remain the same over the tenure of
the debt which with interest rates a bit higher than 30 year treasury
bonds at the time the mortgage is issued. The debtor is required to
pay the interest on the mortgage or the mortgage rate and a little
bit of the principal with the interest on the principal falling over
time. In case of the ARM, the mortgage rate may change in
response to the Treasury Bill rate or the Prime Rate.
ADJUSTABLE RATE MORTGAGE:

ARM is structured so as to follow market rates with a maximum
ceiling rate which cannot be exceeded. ARM’s generally start with
lower mortgage rates in order to accommodate future risks out of
interest rate fluctuations.
Lastly, it can be noted in this context that home loans or home

mortgage loans is gaining increasing popularity in India with the
Home Financing sector contributing to the immense growth of the
mortgage financing industry in recent years. The mortgage rates are
set on a fixed or floating rate basis varying between institutions in
the range of 12.5% to 16% with loans being offered for 15 years
although some of the mortgage companies extend the mortgage
tenure up to 20 years or more.
The leading mortgage loan providing banks in the case of India are
HDFC, LIC HOUSING FINANCE, ICICI and SBI.
PRODUCTS IN MORTGAGE LOAN:

HOME LOAN: Home loan is a financial activity needs finance,
which is essential for medium to long term. Various financial
institutions have emerged for house building activity. Banks,
14
NBFC’s, corporative institutions are the main source for finance for
the housing sector .Home loans connotes finance for meeting the
various needs relating to housing namely:
 Purchase of flat or house
 Acquisition of a plot and construction of a house
 Construction of house
 Extension of house
 Repairs ,renovation and upgradation of a house/ flat
 Taking over home loan from other banks / housing finance
companies.
LOAN AGAINST PROPERTY:

Loans are provided against the security of the house property for
any purpose not necessarily for the construction/ purchase of
houses
EMI CALCULATION
The loan in Equated Monthly Installments (EMIs) comprising

principal and interest. Repayment by way of EMI commences from
the month following the month in which you take full disbursement.
EMI's Calculation
Where
r = Interest rate at which customer have taken the
loan
n = tenor of the loan
15
EMI are calculated on monthly reducing balance. This means
that customer are charged interest only on the outstanding principal
every month.
Eligibility Calculation
Loan Amount =
• Average ITR of three years x LTV %

12
EMI
16
Definition of Mortgage Company:
A mortgage company can be defined as a company specializing in
offering mortgage services such as free mortgage quotes,
calculators and guides and unmatched customer services such as
instant approval of mortgage loan applications.
Basically a mortgage company helps its client to avail the facility of

taking loan against some property. Mortgage company provide only
secured loan.
Mortgage companies can offer both FRM (Fixed Rate Mortgage) and
ARM (Adjusted Rate Mortgage) schemes to borrowers. While ARM
means that the mortgage rates will not remain the same over the
tenure of the loan, interest rates will usually remain stable in case of
FRM.
Mortgage companies offer the best quality of customer services

such as refinancing at a lower mortgage rate, getting a new home
mortgage or a home equity loan or second mortgage. As previously
mentioned mortgage companies offer a mortgage refinance
calculator, which can calculate the refinance rate that you can avail
depending on your past refinance circumstances, the property you
want to buy and whether it has a good possibility of appreciating in
value over time, its location and above all, your credit rating.
Mortgage companies do not want to offer high risk borrowers loans
even if they exhibit sufficient liquidity in recent times.
THE KEY FEATURES OF MORTGAGE COMPANIES:

 Debt consolidation service
 Home equity loans
 Real estate lending
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 New home loans
 Mortgage refinancing
Most importantly, free online loan application facilities giving instant
approval can boost the popularity of the mortgage company a great
deal.
SOME OF THE BEST KNOWN MORTGAGE COMPANIES IN INDIA

ARE:
 LIC HOUSING FINANCE
 ICICI HOME LOAN FINANCE
 FULLERTON INDIA CREDIT COMPANY LTD.
 SBI
 HDFC
OVERVIEW ON MORTGAGE IN INDIA:

Mortgage Financing industry, which is also known as the
housing finance industry in India was estimated approximately at
US $ 18 billion. A significant change in the structure of the mortgage
industry is being marked in the recent years. Presently the banks
are gaining market share in direct housing finance segment. From
estimation it is found that the share of commercial banks in the
direct housing finance segment has increased tremendously.
Though the housing finance industry in India is growing
for the past few years still financing through the organized sector
continues to account only for 25% of the total housing investment in
India (Source: LIC Housing Finance).
TOP PLAYERS IN THIS INDUSTRY ARE:

 Housing financial companies
 Commercial (local as well as foreign) banks
 Cooperative banks
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 NBFC’s
Presently Housing Development Finance Corporation (HDFC) is the

market leader followed by State Bank of India (SBI). The Industrial
Credit and Investment Corporation of India (ICICI) Bank and the Life
Insurance Corporation (LIC) Housing Finance Limited also have
significant market share.
The industry sources has reported that, 8 to 10 percent of the

market share that foreign-owned banks have in the industry,
Citibank has 5 percent share, followed by Standard Chartered and
HSBC with about the 3 to 5 percent.
Housing Finance Disbursement In India

Here the table gives us a clear picture on the trend in organized
housing finance disbursements in India.
US $ Billion FY 03 FY 02
Housing Finance Companies 3.91 3.24
Banks Direct 5.24 1.91
Banks Indirect 1.51 1.26
Total Direct 9.15 5.15
Growth Rate % 77.6 27.5
Sources: All figures in the above table are calculated and Industry
estimates.
Housing finance disbursements have increased at a compound

annual growth rate of 45.6% in the recent years with FY 2003
reporting a phenomenal 78% growth.
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Home Loan Disbursement In India
The home loan disbursement by the banks and housing finance
companies has increased from Rs.29359.29 Crores in 2001-02 to
Rs.51672 .7 Crores in 2002-03.
Home Loan Disbursement (Rs.In Crores)
Years HFC's Banks
1999-00 9812.03 9911.35
2000-01 12637.85 9787.24
2001-02 14614.44 14744.85
2002-03 17832.17* 33840.53
Sources: -National Housing Bank
The share of banks in total home loan disbursement has increased

from 43.6% in the year 2000-01 to 65.5% in 2002-03.
Mortgage To GDP Ratio In India

The Mortgage to GDP Ratio (ratio of outstanding home loans to GDP)
in India is very insignificant in comparison to the other countries. In
the developed countries the ratio varies from 25% to 60%. For the
year 2001,the mortgage to GDP ratio in India was at 2.5%.
RECENT SCENARIO OF MORTGAGE IN JABALPUR:

There are number of mortgage players in Jabalpur. Their Ranking in
Jabalpur is:
 LIC Housing Finance
 HDFC Bank
 ICICI Bank
 SBI
 Other Banks and NBFC’s
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Besides all nationalized bank/private banks/NBFC, there are some
local money lenders all which provide mortgage loan to common
people.
DETAILED INFORMATION ABOUT LOCAL MONEY LENDER’S
1) NAGOD JEWELERS :
PURPOSE: For any reason
DOCUMENTATION: No documents required (based on trust
bases)
INTEREST CHARGED: 3% per month @ flat rate
SECURITY: Gold and Silver
VALUATION OF FUNDING: Based on market value of gold
and silver
TENURE: 3 years
NOTE: - All local jewelers is having license from Municipal

Corporation, Jabalpur for lending money on mortgage bases.
LIST OF LOCAL PLAYER’S WHO QUIT FROM MORTGAGE LOAN

ARE:-
1) SAMDARIYA INVESTORS
2) SATYAPRAKASH INVESTORS
3) SHEERNAGRIK BANK
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REASONS FOR QUITTING FROM MORTGAGE LOAN ARE:-
1) COMPETITION: - Entry of Private Bank and from NBFC’S in

the market brought competition in the market.
2) INTEREST RATE CHARGED:- There was a much difference in
interest rate charged. Private Player’s were charging
less interest rate than local player’s.
3) DEFAULT:- Number of default cases is the main reason
behind closing of mortgage loan by local players. Local
players cannot bear all the losses if the cases become
default whereas a Private Player’s can bear the loss easily.
4) VALUATION MISTAKE’S:- Valuation of land not done
properly also helped in increasing default cases. (Valuation
include property checking, location of property, document
checking)
22
MARKET SHARE OF MORTGAGE PLAYER’S IN JABALPUR:
CONSOLIDATED MARKET SHARE OF MORTGAGE PLAYERS IN

JABALPUR IN PAST THREE MONTHS (APRIL, MAY AND JUNE)
COMPANY FUNDING AMOUNT

NAME (IN CRORES)
LIC Housing Finance 11.73
ICICI Home Loan Finance 9.28
HDFC LTD. 10.75
Fullerton India Credit Ltd. 0.35
Citi Financial 4.19
SBI Bank 9
Other Players 8.5
LIC Housing Finance
ICICI Home Loan

8.5, 16% 11.73, 21% Finance
HDFC LTD.
9, 17% Fullerton India Credit

Ltd.
9.28, 17% Citi Financial
4.19, 8%
0.35, 1% SBI Bank
10.75, 20%
Other Players
BRIEF REVIEW OF FEW OF THE PROVIDERS OF MORTGAGE

LOAN IN JABALPUR
23
LIC HOUSING FINANCE
LIC Housing Finance Ltd. is one of the largest Housing Finance

company in India. Incorporated on 19th June 1989 under the
Companies Act, 1956, the company was promoted by LIC of India
and went public in the year 1994. The Authorized Capital of the
Company is Rs.1500 Million (Rs.150 Crores) and its paid up
Capital is Rs.850 Millions (Rs.85 Crores). The Company is recognized
by National Housing Bank. The main objective of the Company is
providing long term finance to individuals for purchase /
construction / repair and renovation of new / existing flats / houses.
The Company also provides finance on existing property for
business / personal needs and gives loans to professionals for
purchase / construction of Clinics / Nursing Homes / Diagnostic
Centres / Office Space and also for purchase of equipments.
PRODUCTS
LIC HOME LOAN
PURPOSE:
 For purchase of land
 For purchase of house/flat/row house
 For construction of house on existing land
ELIGIBILITY:
 Minimum age should be 24 years at the time of sanction of
loan.
 Loan provided to salaried as well as to self-employed .
DOCUMENTATION:
24
FOR SALARIED:
 Pay slip for last 3 months
 Bank statement for last 6 months
 PAN CARD Xerox
 Form 16
 Address proof
FOR SELF-EMPLOYED:
 Income tax return
 Identity proof
 Address proof
LOAN AMOUNT:
 Minimum Rs.3 lakh
 Maximum: Unlimited based on debtor’s capability
 Margin: 85% of property value
INTEREST CHARGE: 10.50% @ floating rate

TENURE: Maximum: 20 Years
PROCESSING CHARGES: .5% of loan amount (including legal
charges)
SECURITY: Registry papers
STAMP CHARGES: .5% of loan amount
CHEQUE BOUNCE CHARGE: 2% of EMI amount
NUMBER OF DAYS FOR SANCTIONING OF LOAN:

 Minimum: 1 day
 Maximum: 7 days
25
LIC LOAN AGAINST PROPERTY
PURPOSE:
 For any purpose
ELIGIBILITY:
loan.
 Loan provided to salaried as well as to self-employed
DOCUMENTATION:
FOR SALARIED:
 PAN CARD Xerox
 Form 16
 Address proof
FOR SELF-EMPLOYED:
 Income tax return
 Identity proof
 Address proof
LOAN AMOUNT:
 Margin: 60% of property value
PROCESSING CHARGES: .5% of loan amount
LEGAL SEARCH CHARGES: NIL
26
CHEQUE BOUNCE CHARGE: 2% of EMI amount
NUMBER OF DAYS FOR SANCTIONING OF LOAN:

 Minimum: 1 day
 Maximum: 7 days
LIC HOUSING FINANCE FY 2008 net profit rises by 39% to 398

crores. The Outstanding Mortgage Portfolio as on March 31, 2008
was Rs.21936 crores as against Rs.17563 crores on March 31, 2007,
thus registering a growth of 25%.
27
ICICI BANK
ICICI Bank is India's second-largest bank with total assets of

Rs. 3,997.95 billion (US$ 100 billion) at March 31, 2008 and profit
after tax of Rs. 41.58 billion for the year ended March 31, 2008.
ICICI Bank offers wide variety of Loans Products to suit our
requirements coupled with convenience of networked
branches/ ATMs and facility of E-channels like Internet and Mobile
Banking. Select any of ICICI loan product and provide your details
online and ICICI representative will contact you for getting loans.
PRODUCT
ICICI HOME LOAN:
PURPOSE:
 For purchase of land
 For purchase of house/flat/row house
 For construction of house on existing land
 For extension of current living space
ELIGIBILITY:
loan.
 Loan provided to salaried as well as to self-employed and also
to NRI who are salaried
DOCUMENTATION:
FOR SALARIED:
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 PAN CARD Xerox
 Form 16
 Address proof
 Track record of existing loan
FOR SELF-EMPLOYED:
 Income tax return/auditor report
 Bank statement for last 6 months from operating account
 Identity proof
 Office/residence address proof
 Passport size photograph
LOAN AMOUNT:
 Margin: 85% of property value(including registry cost)


LEGAL CHARGES: Rs.400
STAMP CHARGES: .5% of loan amount + Rs.30 for stamp
CHEQUE BOUNCE CHARGE: Rs.225 per cheque bounce
CHARGES FOR CHANGING RATES: Rs.500
NUMBER OF DAYS FOR SANCTIONING OF LOAN
 Maximum: 10 to 12 days after submission of documents
29
ICICI LOAN AGAINST PROPERTY
PURPOSE:
• For expanding business
• For child marriage
• For children education
• For traveling
• For renovation of house
ELIGIBILITY:
• Minimum age should be 21 years at the time of
sanction of loan.
• Loan provided to salaried as well as to self-
employed
DOCUMENTATION:
FOR SALARIED:
• Pay slip for last 3 months
• Bank statement for last 6 months
• PAN CARD Xerox
• T.D.S. Form 16
• Address proof
• Back link property paper
• Map
FOR SELF-EMPLOYED:
• Income tax return/auditor report
• Bank statement for last 6 months from operating
account
• Identity proof
• Office/residence address proof
30
• Passport size photograph
31
LOAN AMOUNT:
• Minimum Rs.10 lakh
• Maximum: Unlimited based on debtor’s capability
• Margin: 60% value of residential property/45% of
commercial property
TENURE: Maximum: 20 Years for salaried and 15 years for self-
employed
LEGAL CHARGES: Rs.400
SECURITY: Property papers
STAMP CHARGES: .5% of loan amount + Rs.30 for stamp
CHARGES FOR CHANGING RATES: Rs.500
• Maximum: 10 to 12 days after submission of
documents
32
HDFC BANK
HDFC Bank was incorporated in august 1994 and currently has

an nationwide network of761 branches and1977 ATM’s in 327 Indian
towns and cities. HDFC provide a easy way for its customer to build
their dream house by providing home loan and loan against
property to his clients.
PRODUCT
HDFC HOME LOAN
PURPOSE:
• For purchase of land
• For purchase of house/flat/row house
• For construction of house on existing land
• For extension of current living space
ELIGIBILITY:
sanction of loan.
employed
DOCUMENTATION:
FOR SALARIED:
• PAN CARD Xerox
• Form 16
33
• Address proof
• Track record of existing loan
FOR SELF-EMPLOYED:
account
• Identity proof
LOAN AMOUNT:
• Margin: 85% of property value(including registry
cost)
INTEREST CHARGE: 10.25 % @ floating rate + reducing rate

PROCESSING CHARGES:
• Current offer (.25%+ service tax) of loan amount
• Actual: (.5%+service tax) of loan amount
LEGAL CHARGES: N.A., client has to get it done by self

CHARGES FOR CHANGING RATES: 1% of outstanding principle
amount
34
• Maximum: 8days after submission of documents
35
HDFC LOAN AGAINST PROPERTY
PURPOSE:
• For traveling
ELIGIBILITY:
sanction of loan.
employed
DOCUMENTATION:
FOR SALARIED:
• PAN CARD Xerox
• Form 16
• Address proof
FOR SELF-EMPLOYED:
account
• Identity proof
36
LOAN AMOUNT:
cost)
INTEREST CHARGE: 12.75 % @ floating rate

PROCESSING CHARGES:
• (.5%+service tax) of loan amount
LEGAL CHARGES: N.A., client has to get it done by self

SECURITY: Registry and property papers
amount

• Maximum: 8 days after submission of documents
37
AXIS BANK
Axis Bank was the first of the new private banks to have begun
operations in 1994, after the Government of India allowed new
private banks to be established. The Bank today is capitalized to the
extent of Rs. 358.56 crores with the public holding (other than
promoters) at 57.60%. Presently, the Bank has a very wide network
of more than 701 branch offices and Extension Counters. The Bank
has a network of over 2854 ATMs providing 24 hrs a day banking
convenience to its customers. This is one of the largest ATM
networks in the country. Axis Bank allows it client to prevail the
facility of taking home loan and loan against property for purchasing
house/land.
PRODUCT
AXIS HOME LOAN
PURPOSE:
• For purchase of plot
• For purchase of new house
• For takeover of existing loan
ELIGIBILITY:
sanction of loan.
employed
38
DOCUMENTATION:
FOR SALARIED:
• PAN CARD Xerox
• Form 16
• Address proof
FOR SELF-EMPLOYED:
account
• Identity proof
LOAN AMOUNT:
• Minimum: Rs.1 lakh
• Maximum: Rs.50 lakh
cost)
INTEREST CHARGE: 10 % @ reducing rate
PROCESSING CHARGES:
• 1% of loan amount + service tax i.e.12.36%
39
LEGAL CHARGES: Rs.400-600
STAMP CHARGES: 1% of loan amount + Rs.310 stamp
CHEQUE BOUNCE CHARGE: Rs.500 per cheque bounce + Rs.63 as
Service tax
amount
AXIS LOAN AGAINST PROPERTY
PURPOSE:
• For traveling
ELIGIBILITY:
sanction of loan.
employed
DOCUMENTATION:
FOR SALARIED:
40
• PAN CARD Xerox
• Form 16
• Address proof
FOR SELF-EMPLOYED:
account
• Identity proof
LOAN AMOUNT:
cost)
INTEREST CHARGE:
• For residential: 12.75 % @ reducing rate
• For commercial:13.75% @ reducing rate
TENURE: Maximum: 20Years

PROCESSING CHARGES:
• 1% of loan amount + service tax i.e.12.36%
LEGAL CHARGES: Rs.400-600

STAMP CHARGES: 1% of loan amount + Rs.310 stamp
CHEQUE BOUNCE CHARGE: Rs.500 per cheque bounce + Rs.63 as
Service tax
41
amount
42
SBI BANK
SBI Bank is a one of the largest nationalized bank in India. This bank
is actively involved since 1973 in non profit activity called
Community Service Banking. SBI Bank helps common man to fulfill
their dream of making his own house into reality by providing wide
range of loan products.
PRODUCT
SBI HOME LOAN
PURPOSE:
• For purchase of plot
• For purchase of new house
• For takeover of existing loan
ELIGIBILITY:
sanction of loan.
• Maximum 70 year is fixed at which borrower should
the loan should be fully repaid
employed
43
DOCUMENTATION:
FOR SALARIED:
• PAN CARD Xerox
• Form 16
• Address proof
• Voter id/ driving license\
• Copy of approved plan
FOR SELF-EMPLOYED:
account
• Identity proof
LOAN AMOUNT:
• For purchase/construction 15% for loan up to Rs.1
Cr and 20% for loan above Rs.1 Cr
• For repairs/ renovation :15%
INTEREST CHARGE: 13.75 % @ floating rate
TENURE: Maximum: 20 Years for age up to 45 year

Maximum: 15 Years for age over 45 year
44
PROCESSING CHARGES:
• .50% of loan amount (including service tax)
LEGAL CHARGES: NIL

SECURITY: Registry papers/insurance paper( if property cannot be
Mortgage)
STAMP CHARGES: 1% of loan amount
CHARGES FOR CHANGING RATES: NIL
FORECLOSURE CHARGES: 2% on outstanding principle
2.5.2 SBI LOAN AGAINST PROPERTY

PURPOSE:
• For traveling
Loan against property can be taken for any purpose but if the loan
amount exceeds Rs.25 lakh then the reason or the purpose of taking
loan should be mention.
ELIGIBILITY:
sanction of loan.
• Maximum age limit-60 year
employed and to engaged in agriculture activities
45
• For salaried net monthly income should exceed
Rs.12000 or net annual income exceed
Rs.150000
DOCUMENTATION:
FOR SALARIED:
• PAN CARD Xerox
• Form 16
• Address proof
FOR SELF-EMPLOYED:
account
• Identity proof
• Land/building tax paid receipt
• Sales deed
• Agreement of sales
• Non encumbrance certificate
LOAN AMOUNT:
• Minimum amount: Rs.25000
46
• Maximum amount: Rs.1 Cr
cost)
INTEREST CHARGE: 13% @ floating rate
TENURE: Maximum: 20Years
PROCESSING CHARGES:
• .50% of loan amount
• Minimum charge: Rs.500
• Maximum charge: Rs.10000
LEGAL CHARGES: NIL


amount

FORECLOSURE CHARGES: 2% on outstanding principle
47
SBI REVERSE MORTGAGE LOAN
PURPOSE:
• Supplementing income
• Any personal expenses
• House repairs
ELIGIBILITY:
• No. of borrowers: Single or jointly with spouse in
case of a living spouse
• Age of first borrower :Above 60 years
• No. of surviving spouses on the date of sanction of
loan: Should not be more than one. Borrowers
will have to give an undertaking that they will
not remarry during the currency of the loan. If the
borrowers choose to remarry, the loan will be
foreclosed.
• Age of spouse: Above 58 years
• Residence: Borrower should be staying at self-
acquired and self owned house /flat against which
loan is being raised, as his permanent primary
residence.
• Title of the Property: Case– Title in single name
and loan availed jointly with spouse. Title holder
should make a Will in favour of the other spouse.
The Will should confirm that this is the last Will and
that it supercedes all earlier wills, if any. The
borrower to undertake that no fresh Will shall be
made during the currency of the loan.
48
• Encumbrances: The property should be free from
any encumbrances. However in case of property
purchased by availing Home Loan from SBI and
mortgaged to SBI, it will be considered for
RML, subject to closure of the Home Loan account
out of the proceeds of RML.
DOCUMENTATION:
• Property papers
• Map sanctioned
• Back linking paper of land
LOAN AMOUNT:
• Minimum amount: Rs.3 lacs
• Maximum amount: Rs.1 Cr
• Margin- 90% of the property value
INTEREST RATE: 10.75% @ floating rate

TENURE: Age of the younger borrower between 58 and up to 68
years: 15
Years /age of the younger borrowers above 68 years: 10 years
PROCESSING CHARGES:
• .50% of loan amount
• Minimum charge: Rs.500
• Maximum charge: Rs.10000
LEGAL CHARGES: NIL

SECURITY: Mortgage of residential property.
49
amount
50
FORE CLOSURE CHARGES: 2% on outstanding principle
51
SOURCING PROCEDURE BY DIFFERENT FINANCIAL
INSTITUTIONS IN JABALPUR
COMPANY NAME SOURCING METHODS
D.S.A., home loan agents, customer
LIC Housing relationship associates, direct dealing with
Finance customers through net, advertisements.
ICICI Home Loan Individual sourcing, reference, specialized
Finance marketing team, contacting builders.
Campaign, contacting builders,
advertisements, telephone directory,
HDFC LTD. references.
Fullerton India sales zoning, pre-marketing activities,
Credit Ltd. references
Individual sourcing, reference, contacting
Citi Financial through net, directory, advertisements.
Campaign, contacting builders,
advertisements, telephone directory,
SBI Bank references.
Other Players references, contacting builders
BEARK-UP’S OF DIFFERENT FINANCIAL INSTITUTIONS IN

JABALPUR
NEW
HOME: SALARIED: BUS:
COMPANY NAME LAP SELF EMPLOYED OLD BUS.
LIC Housing Finance 70:30 60:40 80:20
ICICI Home Loan Finance 35:65 20:80 96:04
HDFC LTD. 80:20 75:25 99.5:.05
Fullerton India Credit
Ltd. 65:35 100:00 100:00
Citi Financial 5:95 20:80 99:01
SBI Bank 55:45 50:50 80:20
Other Players 75:25 35:65 60:40
OVERVIEW ON RISK IN MORTGAGE LOAN :
52
INTRODUCTION
Risk is a concept involving negative impact to value that may arise
from a future event, or we can say that "Risks are events or
conditions that may occur, and whose occurrence, if it does take
place, has a harmful or negative effect. Risk is also considered as an
uncertain event that can lead to certain losses in future. An event to
the consequences of uncertainty constitutes a risk. In everyday
usage, risk is often used synonymously with the probability of a
known loss.
RISK CAN BE CALCULATED AS:

RISKS INVOLVED IN MORTGAGE LOAN ARE:
Risk is an uncertain event that can create losses in future. Basically,
risk is involved everywhere. Mortgage loans are also surrounded by
certain kind of risk.
TYPES OF RISK IN MORTGAGE LOAN:

There are two type of risk faced by mortgage industry. They are:-
• Credit risk
• Interest rate risk
• Circumstantial Risk
• Intentional Risk
CREDIT RISK: The credit risk affects the fund based activities of
the financial services .this risk arises in evaluating the proposals for
lending. Credit risk involves over-funding by the financial services
to their debtors and underestimating liabilities of the debtor.
INTEREST RATE RISK: The interest rate risk arises when there are
frequent changes in the interest rates in the market. Though we
had a fairly stable interest rate regime prior to the economic and
53
financial sector reforms, the interest rates are volatile in the past
five years. These rates keep on fluctuating as per the changes made
by RBI in their fiscal policy i.e. CRR . According to the present
scenario RBI has increased the cash reserve ratio which inturn
affects the prime lending rate offered by different financial
institutions.
CIRCUMSTANTIAL RISK: Circumstantial risks are those risk which

are generated because of the situation through which a debtor
cannot cope up. Following are the situation in which circumstantial
risk arises are:
a) Medical problem: Debtor who have taken a loan mortgage
falls into a situation where there is some medical problem
going on in his/her home due to which his liability has
increased which deviate debtor’s to become default and
he/she is unable to repay the debt amount.
b) Sudden death of the debtor: Sudden death of debtor also
generates circumstantial risk which in turn leads to create
default for mortgage company. If a debtor is not having any
insurance then it is very difficult for company to recover the
debt from debtor’s family.
c) Natural calamity: Destruction of property owned by debtor,
which is kept as a security for mortgage loan can also be a
reason for circumstantial risk. This also results in increasing
default cases for Mortgage Company.
d) Suspension of debtor’s from job: Debtor’s suspension from
his/her job because of any reason is unable to repay the
debt to mortgage company increases default which
leads to certain losses to mortgage company.
INTENTIONAL RISK:
54
Intentional risk is those risk in which debtor obtain loan
amount from fraud, forgery. Debtor with pre-determined intension
get their fraud documents made same as original documents like
showing illegal property document as legal property document,
showing fraud PAN CARD, giving wrong address proof etc.
Intentional risk can be eliminated whereas circumstantial risk can
only be mitigated not eliminated.
55
EXPLANATION OF MULTIPLE CAUSE DIAGRAM FOR DEFAULT
IN MORTGAGE INDUSTRY:
Default is considered to be the main effect that results in
winding up of any financial institution. Default is considered as a
situation where a company is unable to recover its debt amount
from its customers.
The above diagram gives a holistic view or picture of cause and
effect of default in mortgage industry. There are many causes which
results in default of case .The main causes which results in default
are:
1) Over Funding: Over funding is again became an effect
which are caused by property valuation mistake and
by unchecked liability.
2) Wrong document assessment : When the documents of
customer are not valuated properly results in default
which are in turn caused by employee carelessness
and by malafied intentions of employee.
3) Circumstances: Circumstances are the situation which
arises because of some unpredictable situations in
future. These can be as follows:-
a) Debtor’s Suspension
b) Death of debtor’s
c) Natural Calamity
d) Medical Problem
4) Fraud: Fraud can be termed as a intentional risk which

results in default . Fraud may arise from Fake
documentation and securing illegal property for
mortgage.
56
All the above points reflect us cause and effect of resulting in
default of cases in financial institutions.
RESEARCH METHODLOGY
MEANING OF RESEARCH
Research Methology is a way to systematically solve the
research problem. It may be understood as Science of studying how
research is done, Scientifically in it we study the various steps that
generally adopted by a reseacher in studying his reseach problem
along with the logic behind them. “Accuracy of the study depends
on the systematic application of the method.” The researcher has to
decide the method to be used that helps him to get a desired
direction in a systematic way.
Definitions
According to Clifford Woody
“Research comprises defining and redefining problems,
formulating or hypothesis or suggested solutions collecting:
organizing and evaluating data making deductions and reaching
conclusions to determine whether they fit the formulating
hypothesis.”
Thus, Research Methodology is a strategy that guides a
researcher in providing answers to research questions and for this
research survey is being done.
Research in common parlance refers to a search for
knowledge. In fact research is an act of scientific investigation.
57
Steps of Research process
The seven major steps
Determine or define the problem or

opportunity that is faced
Specify what information is needed
Identify the sources of the information.
Decide on the techniques for accruing the

information
Gather and process the information
Analyze and interpret the meaning.
Present the findings to the decision makers.
58
OBJECTIVE-
 To estimate the market share of mortgage loan in Jabalpur.
 To understand customers need for mortgage loan and the
lenders
 There preferred rates and problem faced by them while taking
loan
 Reducing risk in mortgage loan
Sampling Design-
Sampling is the selection of some part of aggregate or totality
on the basis of which a judgement or inference about the aggregate
or totality is made.
Sampling Unit-
The sampling unit of my survey includes the existing and non
existing customer required loan for their automobile. This suvery
was done with the help of proper questionnaire.
Sampling Size-
In my survey,I have used a sample unit of 250 salaried
respondents.
Sampling Method-
In my survey,I have used Simple Random Sampling Method.In
this I administered a structured questionaire and personal interview.
Data Collection-
Data Collection was done in two ways they were-
1. Primary Data Collection
2. Secondary data Collection
59
Primary Data Collection –
Primary Data was collected by using structured questionaire and by
taking interviews of the respondents.A structured questionaire was
formulated after conducting a pilot Survey.
Analysis and Interpretation-

Data collected was compiled up and on the basis of percentage
method depicted through bar diagrams Interpretation was done and
recommendations was given..
CLASSIFICATION OF DATA: Data has been classified into 3

parts:
1) For those who have already taken mortgage loan
2) For those who are not interested in taking mortgage loan
3) For those who have not yet taken but are planning to take
mortgage loan in future.
60
PROCESSING AND ANALYSIS OF DATA WITH THEIR
INTERPRETATION:
ANALYSIS OF THAT SAMPLE WHO ARE ALREADY HAVING

MORTGAGE LOAN:
CHART REPRESENTING PERCENTAGE DISTRIBUTION WITHIN A

SAMPLE SIZE
Chart representing percentage distribution

among sample size in mortgage industry
15% Already Having Loan
17%
Not Interested
68% Not Yet Taken but

Planning in Future
INTERPRETATION:-
Approximate population of Jabalpur is 8 lakh out of which
approximately 50% are from the salaried class . Taking average size
of 5 member in 1 family i.e. 80000 family in whole Jabalpur town are
from the salaried class. According to survey, the percentage
distribution who have already taken a mortgage loan tells us that
around 54400 family are there who has already taken mortgage
loan where as 17% of the total family i.e.13600 family are not
interested in taking a mortgage loan and around 15% of the total
family in Jabalpur i.e.12000 family have not yet taken mortgage
loan but they are planning to take loan in future.
61
According to this survey, we can say that there are still 12000
houses untouched in Jabalpur for mortgage loan .Hence, we can say
that there is a market of around 12000 in mortgage loan who are
planning for the loan where as around 10% i.e.1360 houses from the
family who are not interested in taking mortgage loan can be
converted into taking loan by using some marketing strategy.
CHART REPRESENTING ACTUAL LENDER FOR THE SAMPLE

SIZE WHO HAS ALREADY TAKEN MORTGAGE LOAN
Chart representing actual lenders
39, 23% 44, 26%
14, 8%
18, 11% 33, 19%

23, 13%
SBI LIC ICICI HDFC CITI FINANCIAL OTHERS
INTERPRETATION :
This chart represents the percentage distribution of actual
lenders from which the sample have taken mortgage loan. As we
can see that the maximum percentage is of SBI and this can be
due to the following reason:
1. SBI covers a large area having many branches in town and in
surrounding villages
2. Policy and norms are lenient as compared to others.
62
3. Many customers prefer to take loan in which they have bank
account
Others contributes the second highest share as it comprises
many small financial institutes like Allahabad bank, Canara Bank,
Punjab National Bank and local players also. LIC shows the third
highest share as a actual lender because its policy are lenient .
63
CHART REPRESENTING PURPOSE FOR TAKING A LOAN BY THE
SAMPLE WHO HAS ALREADY TAKEN A MORTGAGE LOAN
Chart representing purpose of loan taken
15, 7% 49, 24%

34, 17%
17, 8%
45, 22%
46, 22%
Purchase of new land purchase of house

for construction for renovation
for extension of existing house other
INTERPRETATION:
As we can see from the chart , purchase of new land
contributes as the highest share as a purpose for those who have
already taken mortgage loan. The following may be the reason for
the purchase of land:
1. As a investment tool
2. For fulfilling existing need for construction of house on that
land
Purchase of house shows a second highest share in the chart
stating the facts such as:
 As an investment tool
 For an immediate need of a house.
64
CHART REPRESENTING RANGE OF AMOUNT OF LOAN TAKEN
BY THE SAMPLE WHO HAS ALREADY TAKEN A MORTGAGE
LOAN
Chart showing amount of loan
76
80
70 61
60
No. of people
50
40
30
17 17
20
10
0
Less then 5 Lac 5 to 10 Lacs 10.1 to 15 Lacs 15.1 & above
Amount Range
INTERETATION:
As we have calculated above that out of total family i.e.80000 only
54400 family have taken loan .So we can conclude from the above
chart that 36% of the family have taken amount less than 5 lacs i.e.
19584 family whereas 44% of the family ranges in 5-10 lacs i.e.
23936 family .Amount range from 10.1-15 lacs and 15.1 and above
have 10% family individually i.e.5440 family in both the ranges.
Here we can analyse that the maximum amount preferred by the

customer are in the range of 5-10 lacs.
65
CHART REPRESENTING MAXIMUM RANGE OF INTEREST RATE
AT WHICH THE SAMPLE WHO HAS ALREADY TAKEN A
MORTGAGE LOAN
Chart showing interest rates
60 55
50 45
39
No. of people
40
31
30
20
10
0
5-7.5% 7.5-10% 10-12.5% 12.5-15%
Range
INTERPRETATION:
From the above chart we can depict that maximum range in which
the customer charged interest rate comes under 10-12.5% and the
second highest range of charging interest rate by customer is
between 12.5-15%.The reason why customer prefer to go for higher
interest rates is due to the following reasons:
1. Unable to get Loan from preferred rates and from desired
lender
2. The customer which are ranging from 5-7.5% generally belong
to government sector and prefer to take loan from heir
department . But department generally don’t provide them
desired amount of loan due to which they take remaining
amount of loan from some other financial institution at higher
rate.
66
3. Time taken to get loan by financial institution results in
switching to institution who offer them loan amount at higher
rates.
4. Needy based customers prefer to take loan at higher rate
offered by financial institution.
CHART REPRESENTING MAXIMUM TENURE PREFERED BY THE
SAMPLE SIZE WHO HAS ALREADY TAKEN MORTGAGE LOAN
Chart representing tenure of loan
90 81
80
70 59
no. of people
60
50
40
30
14 17
20
10
0
5-10 11-15 16-20 21 & above
range
INTERPRETATION:
This chart help us to analyze the maximum tenure preferred
by customer for repaying the whole loan amount with interest who
have already taken mortgage loan. Maximum Tenure preferred by
the customer ranges from 16-20 years is highest i.e.47% of family
because maximum lenders offer loan at interest rate between 10-
12.5% .
11-15 years of tenure is the second preferred range by the
customer i.e.35% because of the following reason:
1. Less interest rate offered by the financial institution
2. Less amount of loan taken by customer
67
Tenure ranging from 5-10 year comprises only 8% of the total
family who have taken mortgage loan. This has a lesser share
because of higher EMI, customer taken loan for tax rebate.
Tenure above 21 & above has 10% of share i.e. only 10% of
total family preferred loan tenure to be above 21 & above because
of the following reason:
1. Prime lending Rate have been increased which in turn affects
the EMI paid by the customer. So, generally customer take longer
tenure to Reduce the EMI.
2. This category also includes customer who have taken loan of
higher amount.
68
CHART REPRESENTING NUMBER OF PEOPLE FACING
PROBLEMS WHILE TAKING MORTGAGE LOAN
Chart representing no. of people facing problems

while taking loan
24, 14%
147, 86%
INTERPRETATION:
This chart clearly tells us about the percentage distribution of
the number of people who have already taken a loan and have
faced problem while getting mortgage loan. Out of 171 family 147
family have not face any problem while getting loan. The rest 24
family have faced problem for getting loan because of following
reason:
1. Number of days taken by institution to sanction the loan
2. Slow processing of documents
3. Strict policy of institution
69
CHART REPRESENTING PEOPLE WHO OWN PROPERTY AT THE
TIME OF TAKING LOAN BY A SAMPLE SIZE WHO HAVE
ALREADY TAKEN A MORTGAGE LOAN
Chart representing No. who owned property at

the time of loan taken
74, 43%
YES
NO
97, 57%
INTERPRETATION:
From this pie chart we can see that there are 97 family out of
171 family who have taken mortgage loan and have already
property owned by them at the time of taking mortgage loan .This
can be interpreted from the above data that these family took loan
for some personal reason i.e. Loan Against property is preferred
here by the customer whereas 74 family have no property owned by
them at the time of taking loan that helps us to analyze that these
family prefer to taken home loans may be for their existing need or
to fulfill their investment need .
70
CHART REPRESENTING EARNINGS OF INDIVIDUALS WHO
HAVE TAKEN A MORTGAGE LOAN
Chart showing earnings of the individuals
60 52 53
50 45
no. of people
40
30
20
20
10
0
5000-15000 15001-25000 25001-35000 35001-above
range
INTERPRETATION:
This chart represents earnings/month of individuals who have
taken loan. The maximum range varies between 15001-25000 and
25001-35000. Financial institutions should prefer this category
because of their efficient earnings which help them to pay the EMI
on regular basis and reduces the chance of case getting default.
Range between 5000-15000 earnings/month also provide a good
contribution to the sanctioned loan .Therefore this category need to
touched but should check their liability before giving loan to these
category. Individuals whose earnings/month belongs to 35001-
above generally prefer loan only for tax rebate not as their
requirement so only 20 family out of 171 family prefer to taken
loan .Basic focus of institution should be on these 3 range after
checking their liability because these are the most prospect
customer for financial institutions.
71
CHART REPRESENTING NUMBER OF PEOPLE WORKING IN A
FAMILY WHO HAVE ALREADY TAKEN A MORTGAGE LOAN
Chart representing no. of people working in a

family who have taken loan
140 117
total no. of families
120
100
80
60 40
40
20 10 4
0
1 2 3 4
no. of people working
INTERPRETATION:
This graph helps us to check the financial liability of the
customer before sanctioning of loan amount. Through this graph
we can interpretate that maximum customer having only 1 earning
member in their family while taking loan .It implies that the
customer earning/month is good enough to repay the EMI on regular
basis and to their liability is least .
72
ANALYSIS OF THAT SAMPLE WHO HAS NOT YET TAKEN BUT
ARE PLANNING TO TAKE MORTGAGE LOAN IN FUTURE:
CHART REPRESENTING PURPOSE OF TAKING LOAN FOR

THOSE SAMPLES WHO ARE PLANNING TO TAKE MORTGAGE
LOAN IN FUTURE
chart representing purpose of taking loan
3, 8% 6, 17%
6, 17%
4, 11% 10, 28%

7, 19%
Purchase of new land purchase of house

for renovation for construction
for extension of existing house other
INTERPRETATION:
As we have already observed from the above percentage
distribution chart which represents number of family who have
already taken mortgage loan or those family who are not interested
in taking loan as well as those family who are planning to take loan
in future.
As we have calculated that there are around 12000 families in
Jabalpur town who are planning to take loan in future. As per the
survey those sample size i.e. 37 sample gave their purpose for
taking loan in future. This graph represents the proposed purpose
for which they are planning to take mortgage loan. 28% of total
12000 families i.e.3360 family are planning to take loan for
purchase of house where as 2280 families are planning to take loan
73
for the purpose of renovation of their existing house and around
2040 families are planning to take loan for purchase of new land.
From this survey we can say that basically the untouched market is
keener in home loan whereas only 960 families are there who are
planning to take loan against property for some other reason.
74
CHART REPRESENTING PREFERRED LOAN AMOUNT BY THOSE
SAMPLES WHO ARE PLANNING TO TAKE MORTGAGE LOAN IN
FUTURE
chart representing loan amount range
30 26
25
no. of people
20
15
10 8
5 1 2
0
Less then 5 Lac 5 to 10 Lacs 10.1 to 15 Lacs 15.1 & above
amount range
INTERPRETATION:
From this chart we can say that maximum number of sample
size i.e. from 37, 26 sample belong to the range amount of 5-10
lacs whereas only 5 sample belong to less than 5 lacs and only 1&
2 belong to 10.1-15 lacs and 15.1 & above range respectively.
75
CHART REPRESENTING PREFERRED LENDER FOR TAKING
LOAN BY THOSE SAMPLES WHO ARE PLANNING TO TAKE
MORTGAGE LOAN IN FUTURE
chart representing preferred lender
12 10
10
no. of people
8 7 7
6
6 5
4 2
2
0
L
I
S
C
FC
I
IC
IA
SB
ER
LI
IC
C
HD
AN
TH
O
IN
T IF
lender
CI
INTERPRETATION:
Here in this chart maximum sample prefer to take loan from SBI,
second preferred lender is LIC where as other institutes also holds
second preferred lender because it include all small institutes like
Allahabad bank, Canara bank , Dena bank etc. reason for SBI
preference are as follows:
1) Many branches of SBI in town
2) Many customer prefer to take loan from the bank where they
have their personal account.
76
CHART REPRESENTING PREFERRED INTEREST RATE AT
WHICH SAMPLES ARE PLANNING TO TAKE MORTGAGE LOAN
IN FUTURE
chart representing preferred rate
20
16
14
15
no. of people
10
7
5
0
0
5-7.5% 7.5-10% 10-12.5% 12.5-15%
rate range
INTERPRETATION:
As from the above result we can say that most preferred interest
rate at which sample wants to take loan is 7.5-10% and 5-7.5%. Its
will always preferred by customer to pay less interest on their loan
amount.
77
CHART REPRESENTING WHAT WILL ATTRACT MORE WHILE
TAKING THE LOAN IN FUTURE BY SAMPLES WHO ARE
PLANNING TO TAKE LOAN IN FUTURE
chart representing customer priority for taking

loan
20
15
no. of people
15
11 11
10
0
INTEREST RATE COMPANY BRAND SERVICE PROVIDED
priority
INTERPRETATION:
This chart helps us to indicate the preference of customer who
wants to go for mortgage loan in future. From this chart we can see
that maximum number of customer gets attracted towards
institutes who offer less interest rate on mortgage loan. Company
brand and service provided are the second preferences of the
customer. Both showing equal share in this chart.
78
CHART REPRESENTING DECISION OF THOSE SAMPLES WHO
ARE PLANNING TO TAKE MORTGAGE LOAN IN FUTURE
FOR TAKING LOAN WHEN LENDING RATE INCREASES
chart showing delay in thier decision of taking

loan
15, 41%
YES
NO
22, 59%
INTERPRETATION:
This chart helps us to know customer decision when institutes
increase their lending rate or interest rate. According to this chart
we can say that around 59% of 37 sample will delay their decision
for taking loan whereas around 41% of 37 sample will not delay
their decision of taking loan.
79
conclusion
a) From survey we have predicted that there are 12000 houses

which are untouched who are planning to take mortgage loan
which can give total business of Rs.900 Crores in mortgage
industry in Jabalpur .
b) From the above market share chart of different financial
institutions who are involved in mortgage loan we can see
that share of Fullerton Credit Ltd. Is only 1% in Jabalpur. Therefore
as per survey results if Fullerton Credit Ltd alone do a business of
only about 10% of untouched market can help Fullerton to have a
business of Rs. 90 Crores in mortgage industry in Jabalpur
alone.
II) Every business is facing some kind of Risk but mortgage
industry is having higher risk of cases becoming defaults. In this
case, Mortgage players must take some precautions before and
after funding its borrowers.
SALIENT CONCLUSION FROM THE WORK: Fullerton India Credit

Company Ltd should increase its market share and also use some
precautions for case getting a chance of becoming default in
Jabalpur by using some strategies.
Do all the good you can,

by all the means you can,
in all the ways you can,
in all the places you can,
at all the times you can,
to all the people you can,
as long as ever you can.
80
limitations of the project
1) Sample which was surveyed was not comfortable while

providing their personal data regarding loan.
2) While doing the project we were not allowed to use the
company name in survey.
81
recommendations
Strategy to be used to increase the market share of Fullerton in

Jabalpur.
Lower EMI's
Lower EMIs for repayment for loan may be considered by way
of lower rate of interest and or extended period of repayments.
EMI may be considered to vary as per the repaying capacity of the
customers from time to time basis. As per the survey
conducted we came to know that the interest rates
preferred by the customers are between 7.5-10% and 10-12.5%
while the those of Fullerton are quite higher as compared to
others .Therefore they must emphasize on its rates.
Discounts/Incentives
Today we are living in a world of discounts and incentives. By
offering more discounts and incentives to the customers,
Fullerton will be branded as a market leader.
Must show aggressiveness on mortgage loans

Company must show aggressiveness for mortgage loans as
the future scope for mortgage industry is much higher and is
expected to rise as the data reveals.
Liberalized policy
Company must adopt a liberalized policy while providing
loans. It doesn’t mean that it should be too liberal so that there
might be many loop holes but liberal enough so that a
customer can get loan without much trouble. They should
also provide a higher loan sanction amount limit to their branch
82
managers so that they don’t have any problem to provide
loan of higher amount.
Focus on certain salaried class

As per the survey of the sample it says that mostly salaried
class employees between Rs.10000 to 20000 earnings/month are
higher in number who take mortgage loans, therefore the
company must concentrate on these sector.
Focus on home loan:

From the survey conducted we have analyzed that out of
12000 family who are planning to take mortgage loan in future
there are 7680 families who prefer to take home loan. If we take
an average ticket size of Rs.7.5 lacs than it will give a total
business of Rs.57.6 crores.
Mass Marketing
In this highly competitive world there is a need to do mass
marketing to tell the potential customers about the services
been offered by the Fullerton, it would definitely help increase the
customer base. More promotion activities should be
undertaken.
Market penetration:
While indulging in the mortgage loan, company should
remember that housing sector has great economic significance for
the country and taking the Jabalpur region, to increase its
share it has promote its products as well as the company’s name.
It should also concentrate to cover a larger area since taking
into consideration the physical boundaries of Jabalpur since
Fullerton has a very less branches.
83
Opportunity Strategy
It is well know fact that high non performing assets, poor
services and slow technology adoption by the financial
institutions is making the customers to think twice whether to
continue or otherwise with such institutes. By overcoming these
shortcoming, there is a need to evolve opportunity strategies for
providing better services/facilities to gain the confidence of
present and prospective customers with the sole aim of the
making them satisfied and delighted, thereby increasing the
standard of living of the people as well as increasing the standard
of living of the people as well as increasing their financial
status. This will serve as long term gains for the nations economy
and will enhance the permanency of the customers towards
Fullerton.
II) Precautions to be taken to reduce default cases in

mortgage loan:
Transparency among co-workers and customer
Company must adopt transparency in their working and also
to the customer before sanctioning of loan amount.
Reducing malpractice
Establishing a good and healthy relationship with co-workers
by motivating them through different ways and providing
them a feeling of togetherness and cohesiveness so that they
do not indulge in any type of wrong intensions which might be
hazardous for the enterprise.
Precautions during valuation of documents

Cross checking of documents especially, salary slips,
residential proofs, ID Cards & driving license.
84
Local Valuer:
Valuer is a person who does technical assessment of property,
therefore that person should belong to local region so that he
can properly evaluate the property and the client itself.
Understanding the customer

The most important way to reduce the default cases are to
understand the customer and his environment as well as to be
in touch with him even after disbursement of loan. Regular
meeting with customer will provide company to get the idea
about customer intensions of repaying the debt. This is considered
as a Post- Precautions step for reducing default.
Providing extra benefits:

Company should provide extra benefits to its clients like
insurance policy so that defaults like circumstantial risk i.e. death
of debtor or natural calamity etc can be reduced and the
borrowers can repay the debt amount by using these benefits.
If the product of Fullerton is clubbed with the facility of

insurance coverage can attract the favorable attention of the
prospective customer in general and socially backward areas
in particular against looses contingencies.
85
GUIDELINES FOR THE IMPLEMENTATION BASED ON
CONCLUSIONS:
From the conclusion we can clearly see that if Fullerton
increases its share it can do a business of 90 crores. We can
suggest them to increase there branches in Jabalpur so that they
can cover a larger area as well as to sharpen there policy and
structure for the mortgage loans.
EXPECTED OUTCOME FROM THE RECOMMENDATION:

It is clear from the conclusion that company can earn a lot
from this sector and from the recommendation we can expect a
greater share for them, which can give a good competition to other
players in market.
SCOPE FOR FUTURE WORK:

As per survey we can say that total business in mortgage
industry in Jabalpur town alone is approximately Rs.900 Crores .If
Fullerton alone can do 10% of total business, which can help
Fullerton to fund around Rs.90 Crores in Jabalpur. So, we can easily
say there is a very good prospect in mortgage industry for Fullerton
India Credit Company Ltd.
86
bibliography
Websites referred:
1) mortgage encyclopedia-jack guttentag
1) www.nhb.com
2) www.fullertonindia.com
3) www.guidetohomeloans.com
4) www.wikipedia.com
87
annexure
A) This survey focuses on mortgage loan industry and the

questionnaire should be filled by respondents who have
taken a mortgage loan.
 Who is your mortgage loan lender?
____________________________
 Which of the institutions you had approached for your

mortgage loan.
 Citi financial  HDFC home loans
 ICICI home loans  SBI
Others __________________
 Purpose of taking mortgage loan

For purchase of new land For renovation of existing
house
For construction Purchase of new house
Others
 Mortgage loan amount

__________________________
 What is the interest rate on the mortgage loan?

a) 5-7.5% b) 7.5-10%
c) 10-12.5% d) 12.5-15%
 Tenure of mortgage loan?

a) 5-10 years b) 11-15 years
c) 16-20 years d) 20 years & above
88
 Have you faced any problem while getting the
mortgage loan?
a) Yes b) No;
If yes, then specify the problem:
_______________________________________________________________
 Did you have any property owned by you at the time

of taking mortgage loan?
a) Yes b) No
 What were your monthly earnings when you took the

mortgage loan?
a) Rs.5000-10000 b) Rs.10000-20000
c) Rs.20000-50000 d) more than Rs. 50000
 Occupation _________________________________
 Number of working people in your home __________
B) This survey focuses on mortgage loan industry and the

questionnaire should be filled by respondents who have not
yet taken but are planning to take mortgage loan in future.
 Are you planning to take mortgage loan in future?
a) YES b) NO
 Purpose of taking mortgage loan

a) Purchase of new land
b) For renovation of existing house
c) For construction
d) Purchase of new house
89
e) Others
 Expected amount of loan to be taken

a) Less than 5 lacs b) 5 to 10 lacs
c) 10.1 to 15 lacs d) 15.1 lacs & above
 Who will be your preferred lender

a) SBI b) ICICI
c) LIC d) HDFC
e) CITI FINANCIAL f) OTHERS
 What will be your preferred interest rate for taking loan?

a) 5-7.5% b) 7.5-10%
c) 10-12.5% d) 12.5-15%
 What will attract you more while taking mortgage loan?

a) Company brand b) Interest rate
c) Service provided
 If, interest rates charged by institutes increases would you

delay your plan for taking loan?
a) YES b) NO
90

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Student declaration

This is to certify that the summer training report titled “To

I would like to express my gratitude to all those

Research Methodology & Objective 53

What is Loan: A loan entails the redistribution of financial assets

Mortgage is defined as a loan to an individual or a businessman for

The collateral which is kept as a security can be of two

Example: loan taken for child’s marriage.

FULLERTON INDIA CREDIT COMPANY LTD.:

Fullerton India is a subsidiary of Fullerton Financial Holdings Ltd., a

Fullerton operations commenced in January 2006, with a network of

PURPOSE OF THE PROJECT:

SCOPE AND OBJECTIVE OF PROJECT

OBJECTIVE OF THE PROJECT:

OUTLINE OF THE PROJECT REPORT:

Technically speaking, a mortgage is defined as the conditional

Mortgage loans are generally availed of in cases of acquiring

SOME IMPORTANT PARTICIPATORS IN THE CONTEXT OF

Some other terms in this context may be noted as conveyance or

SOME OF THE COMMON TYPES OF MORTGAGE RATES ARE:

 FIXED RATE MORTGAGE

ADJUSTABLE RATE MORTGAGE:

Lastly, it can be noted in this context that home loans or home

PRODUCTS IN MORTGAGE LOAN:

LOAN AGAINST PROPERTY:

The loan in Equated Monthly Installments (EMIs) comprising

• Average ITR of three years x LTV %

Basically a mortgage company helps its client to avail the facility of

Mortgage companies offer the best quality of customer services

THE KEY FEATURES OF MORTGAGE COMPANIES:

SOME OF THE BEST KNOWN MORTGAGE COMPANIES IN INDIA

OVERVIEW ON MORTGAGE IN INDIA:

TOP PLAYERS IN THIS INDUSTRY ARE:

Presently Housing Development Finance Corporation (HDFC) is the

The industry sources has reported that, 8 to 10 percent of the

Housing Finance Disbursement In India

Housing finance disbursements have increased at a compound

The share of banks in total home loan disbursement has increased

Mortgage To GDP Ratio In India

RECENT SCENARIO OF MORTGAGE IN JABALPUR:

DETAILED INFORMATION ABOUT LOCAL MONEY LENDER’S

NOTE: - All local jewelers is having license from Municipal

LIST OF LOCAL PLAYER’S WHO QUIT FROM MORTGAGE LOAN

1) COMPETITION: - Entry of Private Bank and from NBFC’S in

CONSOLIDATED MARKET SHARE OF MORTGAGE PLAYERS IN

COMPANY FUNDING AMOUNT

LIC Housing Finance

ICICI Home Loan

9, 17% Fullerton India Credit

BRIEF REVIEW OF FEW OF THE PROVIDERS OF MORTGAGE

LIC Housing Finance Ltd. is one of the largest Housing Finance

INTEREST CHARGE: 10.50% @ floating rate

NUMBER OF DAYS FOR SANCTIONING OF LOAN:

NUMBER OF DAYS FOR SANCTIONING OF LOAN:

LIC HOUSING FINANCE FY 2008 net profit rises by 39% to 398

ICICI Bank is India's second-largest bank with total assets of

INTEREST CHARGE: 10.50% @ floating rate

PROCESSING CHARGES: .5618% of loan amount

INTEREST CHARGE: 13.75% @ floating rate

TENURE: Maximum: 20 Years for salaried and 15 years for self-

PROCESSING CHARGES: .5618% of loan amount

LEGAL CHARGES: Rs.400