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INTRODUCTION

The State Bank of India has an unbroken tradition of more than 199 years of banking. In fact, the 200th Anniversary Celebrations commenced in June 2005. Its history is traced back to the Bank of Calcutta (1806), which received its charter as Bank of Bengal in 1809. There were two other Banks, Bank of Bombay (1840) and Bank of Madras (1843). These three banks were known as Presidency Banks. The Presidency Banks were authorized to conduct Government business and also issue currency notes. 1921: The three Presidency Banks amalgamated to from the Imperial Bank of India (70 branches) in 1921. The Imperial Bank was conducting government business exclusively. RBI was established only in 1935 pursuant to the recommendations of the Hilton Young Commission. After the formation of RBI, the Imperial Bank acted as its agent in doing government business exclusively. RBI was established only in 1935 pursuant to the recommendations of the Hilton Young Commission. After the formation of RBI, the Imperial Bank acted as its agent in doing government business and in maintaining currency chest and small coin depot. RBI was first established as a Private Bank in 1935 and nationalized later in 1949. The All India Rural Credit Survey Committee (Gorwala

Committee) recommended the formation of the State Bank of India. Accordingly, SBI was formed as a state partnered and state sponsored bank. It took over the Imperial Bank of India. The former state-owned/state-associated banks were
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integrated with it. The S.B.I. was formed under the State Bank of India Act 1955. The S.B.I. was established with the objective of taking banking to the interior and remote parts of India.

O B JE C T IV S
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OBJECTIVES
Our main objective is to make home loans customer friendly. Other objectives are as follows:
1.

SBI sole purpose is to target customers of all segment of the society. It performs this function by its varieties of home loan products. SBI home loan is introduced for stimulating growth in housing industries and has received an overwhelming response industry. The basic need for providing home loans by SBI is to facilitate basic need and necessity for very individuals. As India is a developing country, people of different and varied income group exist, and it is clear that everyone cannot afford the home for oneself. Therefore, to satisfy the purpose, SBI offers various categories of home loan products and also help the citizens by offering nominal interest on home loans. SBI facilitate the transactions by availing different from the market. Intense initiatives have enabled SBI to occupy the leadership place in home loan

2.

3.

4.

products to the customers which is suitable for them and tell them to invest so that they can be benefited in the near future. This generally applies to the rule of financial management.
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5.

Home loans mostly cover ideal principle of financial management. It includes how the finance resources can be best utilized or managed in the best optimum possible way. Different types of Individual are

6.

eligible for different product. And which product is most suitable for them, is conveyed to the customers by SBI in the best possible way.

7.

How finance would be managed effectively? This is answerable through the fact that, SBI has the major objective of retaining leadership through continuous product and process. Innovation has been decided to give incessant services to the customers.

8.

As with a view of stimulating growth, in residential real estate and related sectors in the economy, it has been decided to provide and enable the genuine needy buyer to buy the different home loan products.

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RESERARCH D E S IG N AND FO RM ULAT ON


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RESEARCH DESIGN FORMULATION


The project is concerned mainly about the home loans and its product in SBI. As research in common parlance is a research of knowledge. Here the research employed is exploratory research. Exploratory research follow case study methods or in depth approaches to reach basic casual relations. Such study usually goes deep into the cause of things or events that interests us, using every sample and very deep proving data gathering devices. The objective of exploratory research is the development of hypothesis rather than this testing. Thus in our project, there is exploratory research employed.

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DATA CO LLECT ON
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S B I H A P P Y L O A N - O F F E R (N E W P R O D U C T )
Eligibility All Home Loans 2009 to public on at or least including after 2nd partially

takeovers February

sanctioned and

disbursed on or before 30th April, 2009. Loans sanctioned under SBI Special Home Loan Scheme are also eligible. However takeover of loans is not permitted under SBI Special Home Loan scheme. Interest rate 8.00@p.a. (Fixed) upto 30th April, 2010.

Interest rate Freeze Period Terms of reset at the end of freeze period

Upto 30th April, 2010.

Regular contracted interest rate will be applicable, i.e. Spreads below/above SBAR as applicable on the date of sanction in case of floating rate, and applicable fixed rate on the date of sanction in case of Fixed interest rate loans. In the case of SBI Special Home Loan scheme interest rate and reset period will be the same as per extant instructions, i.e. reset period 5 years from the date of sanction and interest rates of 8.5%/9.25% p.a. as applicable
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depending on the loan amount. Repayment schedule If moratorium period is less than 12 months then EMI1 at 8% p.a. to be specified from the EMI1 start month upto 12th month. There after EMI2 at regular interest rate to be calculated on the basis of outstanding balance and remaining term of the loan. Moratorium period, no. of EMI1 no. EMI2 should add up to the total loan period. Eligible loan amount Eligible loan amount to be worked out on the basis of EMI2 mentioned above calculated at regular contracted rate. Processing fee Fully waived upto 30th April, 2009

This product is more in demand than any other product.

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O TH ER HO M E LO AN PRO DUCTS
HOUSING LOAN
Rational/Objecti ve/ Purpose Bulk Business: More than 25 applicants with check off. Pre-EMI Interest to be addressed suitably so that actual outstanding will always remain within limit, for this Addl. HL may be granted obtaining suitable security doc. Under Platinum Age Limit (PAL) Sch Max Age 75 Yrs. for repayment. Eligibility Individuals 18 to 70 yrs. of age with steady income, including Agriculturist 2 loans can be given to an individual if he has the capacity to repay. Max eligible expected rent accrual as part of income subject to NMI of Co-borrower Amount of Loan For purchase of land/repairs, etc., max loan in Rs. 10 lacs. Age criteria since withdrawn. Amount of loan now decided on EMI/NMI RATIO -> Up to Rs. 2 lacs 40%, Rs. 2-5 lacs 50%, Rs. Above Rs. 5 lacs 55% For Teacher Plus: Loans for 45 Yrs. & below 72 NMIs & for above 45 yrs 60 NMIs. Reimbursement investment from own sources for cons/per/repair during last 12m at 25% margin & lower value of
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investment for market price. Margin 20% of cost incl registration etc. for house (up to Rs. 1 crore) & 25% for above Rs. 1 Cr.; 30% for land, 20% for repairs Home Loan to Businessman - Making profit in last 3 years. - Income: Latest IT Return

Depreciation or 5% of sales. - Min Loan: Rs. 25 lacs. Margin : 30%, ROI : Card Rate - TL, Maxgain (OD) not allowed Repayment/Inte rest Up to 35 Yrs. of Age: Max of 25 year >35 to 45 yrs. of Age: Max of 20 years Over 45 years of age : Max. of 15 years (In case of joint borrowing, for 25 year loan, NMI of Borrower of 35 yrs should constitute at least 75% of the joint NMI) Security Change in HL Documents : (1) Increase Int. rate without any change in SBAR, (2) Recall entire advance in free security in case of default of any or more installments etc., (3) Authorize to share information to CIBIL, (4) Vesting absolute right to assign in favor of Securitizing Co., (5) Penal Interest for delayed repayment, (6) Option to capitalize pre-EMI interest, (7) Acceptance of other securities in lour of mortgage, (8) Hypothecation of consumer durables and
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furnishings, (9) Publication of Defaulters details/photographs in any manner. Other Features For loans above Rs. 5 crores, prior

administrative Clearance is required Fixed Int. rates offered only up to 1 Cr. Under Tailor Made Housing loan, customer can fix up his repayment schedule to suit his repayment capacity. Existing borrower can switch over to floating interest rate on payment of 1% fee on the outstanding -> 2% penalty on the amt. prepaid in excess of normal EMI to be levied on pre-closure of HL before expiry of half of original tenure.

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SBI CREDIT KHAJANA Rational/Objecti ve/ Purpose - It takes care or entire loan needs of financially package. - Hassle Eligibility free additional loan on concessional rate of interest and margin. Individuals incl joint owners who have - Availed Housing loan with E.M. - Satisfactory serviced TL for 1 year after moratorium. - With margin 15% (house) / 30% (Land) Amount of Loan Under the package one or more loans as eligible under individual schemes Car Loan, Secom, Education Loan (for one dependant), Personal Loan, Tractor Loan, Any other Plus scheme. Margin Scoom 5% (if check off), Tractor & Car 10%, Repayment/Inte rest (See Page : Latest Interest Rate) Security Education & Personal as per individual sch. Repayment As per individual schemes ROI Concession of 0.25% for all loans other than housing loan under this package. Security as applicable EM of HL will extend for addl loans insurance of asset, Life from
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disciplined

customer

as

SBI Other Features

Life,

Free

accident

cover

as

per cross

individual scheme. - An selling. - Help in retention of existing customers - Reduce transaction cost of acquiring new Customers excellent opportunity for

SBI SHOPPE PLUS (P Segment)


EARNEST MONEY
Rational/Objecti ve/ Purpose Loan for EARNEST MONEY for allotment of a house/plot Agencies) Eligibility Over 18 Yrs. with steady source of income (no min. income criterion) Amount of Loan Loan amount at least of 90% of (sold by Govt. Housing

application amount or 12 times of NMI or Rs. 10 lacs. Margin Repayment/Inte rest (See Page : Latest Interest Rate) Security 10% ROI applicable in HL Disbursement directly to Govt. Housing Agency Repayment Direct refund to the loan A/c. in rejection. Adjustment against regular HL for successful ones. 3rd PG (waived of 110% tangibles)

Otherwise, Tangible collateral at least 50%


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of loan. Other Features Security waived for permanent employee of reputed PSU/Govt. with check off

HOUSING LOAN FOR NRI Rational/Objecti ve/ Purpose Eligibility Max eligible expected rent accrual in joint applicant 36 expected monthly rental if >45 yrs. 48EMR if <45 yrs of age NRIs with valid India passport of PIOs with a foreign passport & employed abroard for at least Amount of Loan 2 yrs. and holding a valid job contract/work permit. Minimum: Rs. 3 lacs, Maximum: Age <45 yrs 60 NMI or 5 NAI, > yrs 48 NMI or 4 NAI, Subject tc repayment obligation <50% NMI/NAI If loan is for purchase of land or for repairs, etc., max. Loan in Rs. 20 lacs. Max. Amt for consumer durables: 10% of Project cost. Margin Repayment/Inte rest Same as in Housing Loan except purchase of land 15%. Repayment <45 yrs Max 20 yrs., >45 yrs. maxes 15 yrs (Subject to liquidation of loan by 60 yrs. or retirement).
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Security

As in Housing Loan Comprehensive Insurance for the full value in joint names of Bank and Borrower. Take Over from the banks allowed

Other Features

Processing Fee: 0.5% of the loan amount Interest as to Housing Finance to residents. 2% penalty on the amt. prepaid in excess of normal EMI to be levied on pre- closure of HL before expiry of half of original tenure.

GRAM NIWAS
Rational/Objecti ve/ Purpose Eligibility EMI/NMI Ratio 25% for Avg. of last 2 yrs Income Upto Rs. 40000, 45% for >40000-2 lacs, 55% for >2 lacs, 60% for > Rs. 5 lacs. - All Rural/SU Areas population <50000 - All Individuals with satisfactory Deposit / Advance A/c. with us. - Age 18 to 50 yrs. (>50, guarantee by all legal heirs) Amount of Loan when

5 times of Avg. Annual Income from all sources incl spouce income. Max 5 lacs for cons/pur 2 lacs (repair), 1 lacs (land). NABARD Model Sch Toilet-cum-Bath room in Rs. 8600

Margin Repayment/Inte rest

10% of the Project cost Rs. 50000, 15% for 50000 5 lacs 20% for Rs. 5 lacs. Facility : TL/OD with ATM cum-Debit Card Repayment Max 15 years (Moratorium
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max 18m of first Instatement or 2 months of completion of house). ROI 0.25% below card rate. Gr Insurance from SBI Life, Per Accident Insurance cover at Banks cost. Security Other Features Primary EM/RM or 100% tangibles incl. agl land. - Processing fee waived, Empanelled Lawyers fee max Rs. 500 from Borrower - Permit for construction by local auth to be submitted with approval plan - Classified under Priority Sect Advance

SAHYOG NIWAS (P S Advance)


Rational/Objecti ve/ Purpose Eligibility To finance Self Help Groups/members for housing in rural & Semi Urban areas - Do - SHG with good track record for 2 yrs. Amount of Loan 10 times of saving corpus subject to max. 50000 per member for new house, 25000 for land/repair/rencv. Margin Repayment/Inte rest --Facility: TL/OD with ATM cum-Debit Card Repay ment Max 15 years (Moratorium max 18m of first Instatement or 2 months of completion of house). ROI 0.25% below card rate. Gr Insurance from SBI Life, Per Accident Insurance cover
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at Banks cost. Security Primary EM/RM or 100% tangibles incl. agl land. (0.50 lac 3rd P G instead of Mortgage) Collateral SARFAESI Act prevent, but take where available. Other Features - Processing fee waived; legal fee max Rs. 200/- for scrutiny etc.

SPECIAL RURUAL HOUSING SCHEME


Rational/Objecti ve/ Purpose Eligibility Any individual to construct new house or for repairs or addl. Construction in rural area. Amount of Loan Max : Rs. 5 lacs for house; Rs. 1 lac for repairs Margin 20% - 20000, 25% - 200000 to 50000, 30% - 50000 & upto Rs. 1 lac, 35% -> Rs. 1 lac. Repayment/Inte rest Security Other Features As Above (a) NHB formulated the scheme &
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Only for New House

Max : 15 years

gives refinance upto Rs. 5 lacs (b) Loan is not for buying

old/existing house.

CREDIT CUM SUBSIDY SCHEME OF RURAL HOUSING Rational/Objecti ve/ Purpose Eligibility For those below Poverty Line & above it up to annual income of 32000 who are nondefaulters Amount of Loan Max : Rs. 40000 Ceiling of Subsidy Rs. 10000 Margin Loan arrived at after reducing subsidy from project cost. Repayment/Inte rest Security 5 to 8 years depending upon repayment capacity Interest: SBAR at half yearly rests. As Above
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Only for New House

Other Features

Type of Loan : Term Loan Rural areas 20 kms. Away from Metro/Large and 5 kms away from small/medium towns.

SBI TRIBAL PLUS Home Loan Purpose In many Tribal/Hilly areas granting of HL rendered difficult due to No cadastral survey, no land patta, legal transfer from a tribal to non-tribal not possible and ownership of the land lies with the community chief of the village, this scheme obviate the

problems. Eligibility 1. Individual with age 18 to 60 years.


2.

Permanent employee of Central/State

Govt./ PSUs/ reputed Pvt. Sectors with min 5 yrs. service, subject to availability of
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check off or Professionals / Self employed / businessman / Agriculturists with 5 yrs experience and having satisfactory deposit a/c with avg. balance Rs. 5000 or Standard loan a/c both for last 2 yrs. Amount of Loan 36 NMIs for Employee, Self-employed, 2 NAIs for

Professionals,

businessman

and agriculturists, subject to max Rs. 10 lacs. Margin 15% (Construction/purchase of new/existing house/ flat), 20% (Repairs/renovation/addition) Type of Loan Security Term Loan Third Party Guarantee of other employee or Group Guarantee, Lien on PF (may be waived by DGM if check off), lie Insurance policy for a sum equal to the loan amount which should be assigned by the Bank, liquids (Salaried 30%, others 50%) in form of TDs, Lice Policies, (Liquids NSCs, may KVPs, be shares, Govt. provided equitable Promissory Notes. Other FDs, Gold ornaments waived offers of Borrower/Guarantor the value of loan). Disbursement In phased manner (construction of

mortgage of immovable at other centre equal

house)/one-time (out right purchase).


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Repayment

EMIs not to exceed 15 years or remaining yrs. of service (Salaried) or 65 yrs of age (others) Interest rate, Pre-payment penalty & Penal Interest, Free accident cover, optional Gr. Insurance and Processing Fee as in HL Scheme.

Inspection

Half

yearly

(SA),

Monthly in

(NPA) of

Comprehensive

Insurance

name

Borrower & Bank for the market for the market value of the property.

SBI FLEXI HOUSING LOANS


Name of the Scheme In wake of intense market competition & with view to meeting emerging market demand To build in value added & Customer friendly features to our H loans. To increase our H L product profile. Eligibility & Amount of Loan - All HL borrowers who avail loans of Rs. 5 lacs and above 3 options % of Loan on Floating Interest 50 % of Loan on Fixed Interest Rate 50
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II III Margin Eligibility,

60 75 Margin, Interest,

40 25 Repayment

tenure, Processing Fee as per instructions on HL-2 HL a/cs to be opened one on Floating & other on Fixed Int. Repayment/Inte rest (Floating) Disbursement undertaking to Irrevocable be obtained letter from of the

borrower regarding the options. Repayment Undertaking may be obtained which will clearly show EMI of both the loan a/cs. Security Documentation 1. Arrangement Letter, 2. Memorandum of Housing T loan, 3. Guarantee Agreement Other Features - 2% penalty on the amount prepaid in excess of normal EMI to be levied on preclosure of HL before expiry of half of original tenure - Processing Fee 0.5% of the loan amount max Rs. 10000 Other charges like valuation, search report actual basis. Construction of House 2 yrs.

DISTINGUISHING FEATURES OF THE SCHEME

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(1)

It is a housing loan with a combination of fixed and floating interest rates.

(2)

The facility is available to prospective housing loan borrowers who avail loan of Rs. 5 lacs and above.

(3)

It

extends

one

time

irrevocable

option

to

the

prospective borrower to choose a combination of floating interest rate under noted 3 customized combinations of fixed and floating interest rates.

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SBI REALTY
Rational/Objecti To tap effectively the market potential of ve/ Purpose HLs for purchase of land for housing construction more appearing our H L product profile. Eligibility Individuals over 18 years of age with steady source Loan of TL income, Max including Rs. persons 1 Crore engaged in agl & allied activities. Type of Loan Permissible EMI/NMI Ratio 30% upto Rs. 2 lacs of NAI 40% for 2 lacs 5 lacs 45% for 5 lacs 10 lacs and 60% for Rs. 10 lacs. Margin 15% of cost of land, Development,

Registration, Stamp duty (2% penalty on the amt prepaid, as in HL) Repayment / Rate of Interest Security Max. 180 months starting from the month following the month of disbursement of loan. EM of Personal & Interim Guarantee good for loan amt. Other Features Processing Fee 0.5% of the loan amt max Rs. 10000. Other charges like valuation, search report actual basis. - Construction of House <2 Yrs.

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SBI MAXGAIN H L as overdraft Rational/Objecti H L as overdraft Focus on HNI, Mass ve/ Purpose Affluent Segment, Highly paid Professionals & Executives Rationales 1. To provide an exclusive, innovative & value added HL product to tap significant potential market. 2. To improve Banks HL product profile. Type of Loan Overdraft, Eligibility, Purpose, Loan

Amount, Margin, Security, Interest Rate, Pre-Payment penalty, Processing Fee, Pre & Post sanction process, Repayment As per Housing Loan Scheme. Special Features For new HL of Rs. 5 lacs & above, Borrower to maintain SB or CA with min Rs. 5000.

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SBI FREEDOM Home Loans Rationales To extend value added option to meet the latent needs of the niche customer group comprising HNIs, Affluent, NRIs, Highly paid executives, leading professionals etc. Background Many prospective HNI & Mass borrowers are keen to avail HL to the max extent to draw optimal IT Benefit. Special Features
1.

Waiver of Mortgage of the property

financed and in lieu thereof obtains pledge of liquid securities TDs, NSCs, KVPs, LIC Policies. Loan amount to the extent of 90% of the Security incl accrued interest,

subject to max 100% of Project Cost. Further liquid securities may be accepted in lieu of cash margin.
2.

Repayment : Normal repayment as in

regular HL, subject to renewal of the securities pledged on maturity till

liquidation of loan or Repayment of the loan out of the proceeds of the securities offered, as an when they mature.

Borrowers to arrange to pay monthly


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interest.
3.

Agreement to

to

Mortgage

to

be the

obtained securities. Marketing Tips

further

strengthens

1. To offer 100% financing of the project cost. 2. To effectively meet the latent needs and tap the business potential emanating from high societies with bright prospects to tap their deposits and opportunity to cross sell other products. 3. As entire loan/margin secured by liquid securities, bank may fully hedge the risks against the possible dip in real estate prices. 4. Acceptance of out TDs incl FCNB

Deposits, enable us to retain deposits to boost Home Loans portfolio and to

reinforce the loyalty.

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SBI OPTIME ADDITIONAL HOME LOANS


Purpose To meet expenditure towards major repair, renovation and addition to their residential house/flat as also for purchase of furniture and fixtures and consumer durable etc. Eligibility Home Loan borrowers with a satisfactory repayment record of 3 years and whose loan in Standard Asset with the present Bank/HFC. Eligible Loan Amount a. 18 times NMI for salaried persons or 1 times NAI of the borrower in respect of professional/self employed / businessman / agriculturists, with provision to club income or his/her spouse. (Net income after netting income-tax and EMIs of the existing Housing Loan & other P-Segment Loans) Or b. 25% of the original project cost of house/flat or c. 85% of the cost of repair, renovation
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and addition (based on Architects or Civil Engineers estimates). Or d. The gap between 85% of the current market price of the flat/house and the actual outstanding loan dues Whichever is lowest The aggregate EMI of the existing Home Loan, other P-Segment Loan(s) and the proposed Additional Home Loan(s) to NMI should not exceed 60%. Copy of approved plan and approval from Appropriate Authority to be obtained in loans involve additional construction. Type of Loan Disbursement Term Loan In stages in respect of additional construction and in lump sum in other cases Repayment Repayment for maximum period up to the residual maturity of the existing Home Loan, by way of check-off facility/post-dated cheques, to commence from 2 months after date of final disbursement or completion of the work whichever is earlier. Rate of Interest Processing Fee Security Extension of charge over the property
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Home Loan Interest rate as applicable to the repayment tenure opted by the borrower. 0.50% of the loan amount (incl. service tax)

mortgage to Bank for the existing Home Loan. Up to date Non-Encumbrance Certificate will be obtained. Third Part guarantee of person(s) who

guaranteed the existing Home Loan. Inspection Every 3 years after initial inspection(s) at the time of disbursement. Should repayments fall into arrears for two successive months, inspections to be done immediately

MAXIMUM NUMBER OF OCCASIONS TO AVAIL THE LOANS DURING THE TENURE OF THE EXISTING HOME LOAN
Eligibility After 5 years & up to 10 years of existing loan After 10 years & up to 15 years of existing loan After 15 years and upto 20 years of One (In addition to the SBI Optima, if any availed after 5 years up to 10 years. One (In addition to the SBI Optima, if any availed after 5 yrs. up to 10 yrs.
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Maximum Number of Occasions One

existing loan

and above 10 years and upto 15 yrs., if any

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IMPORTANT DETAILS
LOAN ACCOUNTS TO BE OPENED ON INTEREST RATE BASIS ARE Two Housing Loan accounts be opened in the same memo level, one in respect of loan availed on floating interest rate basis and the other for loan availed on fixed interest rate basis. DISBURSEMENT TO BE MADE FROM THE TWO ACCOUNT ARE Irrevocable letter of authority on the specified format should be obtained from the borrower(s) at the time of documentation conveying the borrower(s) option to debit either Fixed Interest Rate Loan or Floating Interest Rate Loan, towards earlier disbursements and with an undertaking to avail disbursement from the second loan account only after utilization of the full amount from the first account so chosen. REPAYMENT PROCEDURE FOR THE TWO LOAN ACCOUNTS ARE Our extent check-off authority/undertaking may be obtained which should clearly show EMI obligations of both the loans separately and the amount recovered should be credited to the account accordingly. Where the loan are secured by obtaining post dated cheques, such cheques may be obtained for the aggregate EMI obligations of both the loan accounts and proceeds should be credited to the respective loan accounts. DOCUMENTATION TO BE OBTAINED ARE
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The following as per specified format are to be obtained : Arrangement Letter Housing Loan Agreement Guarantee Agreement Irrevocable Letter of Authority A consolidated stamped affidavit sworn before notary public /magistrate containing relevant clauses as obtained for normal HLs.

DIRECT FINANCE TO INDIVIDUALS


Eligibility Individual(s) of 18 years and above with steady source of income including persons engaged in agriculture & allied activities. Purpose 1. To purchase/construct a new house/flat 2. To purchase an existing (old) house/flat or 3. To extend an existing house 4. Repair/Renovate an existing house/flat 5. Reimbursement of investment made in housing from own resources 6. Purchase furnishings/consumer durables as part of the project cost. 7. One or more loans may be granted to an individual if he has the capacity to repay. Maximum Loan The actual loan amount is determined on the basis of borrowers income, repayment capacity, age, assets & liabilities and cost of house/flat. Maximum Permissible Loan Amount (MPLA) is subject to : Borrowers upto 45 years 60 times net monthly income (NMI) for salaried persons 5 times Net Annual Income (NAI) in
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case of other OR upto a period generating EMI <50% of NMI whichever is less. Borrowers over 45 years of age [where all borrowers with an independent assured income are over 45 years] 48 times net monthly income (NMI) for salaried persons 5 times Net Annual Income (NAI) in case or other OR upto a period generating EMI <50% of NMI whichever is less. Joint Borrowers : if any one with

independent assured income is below 45 years, For borrower upto 45 years, 48 times NMI/4 times NAI Borrower aged 45 years & above 48 times NMI/4 times NAI MPLA is subject to following monetary ceilings : For Repairs/Renovation : Rs. 10 lacs [loan above Rs. 10 lacs require prior administrative clearance of network GM]

For

Furnishings

and

consumer

durables : 10% of the project cost or Rs. 3 lacs whichever is less where check off facility or additional security or 3rd part guarantee available. Income house can of be spouse/son/unmarried clubbed [subject to good for the amount if

daughter and expected rental of proposed conditions] Regular income from other sources
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(with proof) can be considered. Total Project cost to include cost of land, additional amenities, insurance premium, stamp duty & registration of charges or for old purchase/construction property. Prior Administrative Clearance Not required for loans upto Rs. 1 crore : For purchase/construction of new house/flat or purchase of old house not more than 15 years old. Required for following categories : Loans above Rs. 1 crore : for purchase/construction of a house/flat. Houses/Flats more than 15 years old. Loans against paripassu/second charge over property Margin (i) Loans up to Rs. 1 Crore 15% (ii) Loans above Rs. 1 Crore 25% (iii) Repair or Renovation house/flat 20% Security Equitable property. discretion or If Registered neither is of existing of then new

Mortgage possible, of

sanctioning authority may accept at its tangible security adequate value like Insurance Policies, GPN, Shares, Debentures, Gold ornaments or any other tangible security or adequate value. (These are to be valued with a margin as stipulated in the various schemes for finance against
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the securities concerned). Processing Fee 0.50% of loan amount with a cap of Rs. (Upfront) 10000/-. Interest Loans at fixed/floating rates and combination of fixed and floating rates. Loan above Rs. 1 crore available at floating rates only. See Interest Rates Annexure for current rates. Pre-EMI Interest One time irrevocable option to be given to pay as & when applied OR capitalize it within the overall loan eligibility. Type of Loan Disbursement Term Loan [or OD under Max-gain] As far as possible to be made directly to the suppliers/builders as per the progress of the work only after complete execution of documents and creation of valid mortgage. Repayment Period Maximum Period including moratorium : For borrowers upto 45 years of age years For borrower over 45 years of age years For Shot Term Housing Loan years 20 15 5

Starting from the month following the month of full disbursement of the loan. Mode Through EMI, If check off is not available, PDCs should be obtained. Flexible repayment options available in Tailor made Housing loans. through Customized equated repayment options at installments

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monthly/quarterly/half

yearly/

yearly

intervals through PDCs/SI for agriculturists. Moratorium For construction of of new on house/flat or

purchase

house/flat

installments,

Moratorium Period (repayment holiday) till 2 months after completion of construction or 18 months from the disbursement of 1st Installment of loan, whichever is earlier, may be permitted at the request of the borrower. Insurance Compulsory insurance of property. Optional life cover from SBI life & free accident insurance cover for borrower available. The house/flat to be insured against the risk of fire/riots/earthquakes/lightning/floods etc. in the joint names of the borrower and Bank for the actual project cost after netting off the cost of land (including undivided share of land in case of flats), stamp duty and registration charges. To encourage borrowers to insure property for the entire loan tenure, the lump sum premium can be considered as part of the project cost. Inspection For Standard assets :

Initial

inspection(s) /release

at of

the

time

of

disbursement

installments

during construction. Thereafter once every 3 years


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If repayments are in arrears for two successive months, inspection should be conducted immediately for NPAs at half yearly intervals inspections should be recorded in Inspection Register.

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ELIGIBILITY AND PURPOSE


A Prospective buyer apply for a housing loan even before selecting the property Prospective buyers can apply for loan even before identifying a specific property. In such a case in principle approval on standard format is to be given which helps applicants decide their budget. This inprinciple approval is valid for 30 days from the date of issue, with a further provision that at least a partial disbursement of the loan is made before the expiry of the validity period. The actual sanction depends upon their furnishing of identification, income and property related documents and fulfillment of the eligibility criteria. NUMBER OF LOANS Loans may be granted to an individual provided he fulfills the income criteria as also EMI/NMI ratio after netting off the repayment obligations of existing loans and subject to satisfactory conduct of existing loan(s) for a minimum period of one year Persons already owning one house are also eligible in the same or a different town for use by self or for letting out. The loans may be given simultaneously or at different times either for purchase/construction and subsequent repair/renovation properties. PROPERT AT A DIFFERENT LOCATION In cases where location of the property proposed to be purchased/ constructed and place of residence of applicant are different. HLs should be
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of

a repair/

single

property / of

or

for

purchase/construction/

renovation

different

granted by a branch at the centre where the employee works (the facility is limited to employees of PSUs/reputed corporate / Govt. and preferably with check-off facility and account should move along with him. The mortgage should however be created by a branch where the property is located. However a one time option can be extended to the prospective borrowers while submitting loan application to avail HLs either at the place of construction or place of employment/profession/ business activity, by securing the loan repayment through check-off or PDCs.

OLD HOUSE / FLAT Additional Instruction relating to loan proposals for purchase of old house flat are
(a) In

addition to the usual prescribed documents for Housing finance, the under noted 2 documents should be obtained, the expenses of which should be borne by the borrower

(i) (ii)

Valuation Certificate from a Government approved valuer. Certificate from the Government approved architect/ structural engineer certifying the condition of the house/flat. The conditions of the house should be such that the security cover for Banks Loan remains unaffected till full repayment of the loan.

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(b)

Further, if the house/flat is more than 15 years old, administrative clearance of the next higher authority should be obtained where the sanctioning authority is DGM Module/Branch or an official or lower grade.

SECURITY
Type of Mortgage should be obtained as security is (i) Equitable Mortgage (by deposit of Title Deeds) is to be obtained normally considering the legal expenses involved in registered mortgage. (ii) Registered Mortgage may be obtained where Title Deeds of the property in question do not or where Title Deeds of the property in question do not exist or where the sanctioning authority considers it necessary to do so. (iii) The documents of the landed property/flat/house, etc. should be examined by the Banks advocate and a search report obtained to the effect that the title is clear, valid, marketable, legal and free from all encumbrances (iv) If Equitable Mortgage or Registered Mortgage is available the branch may not insist on any additional tangible security/III Party Guarantee. Housing Loan be given against pari-passu/second
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charge over the property are If the property is already

held as security with another financing agency, housing loan in such cases can be given on the basis of pari-passu/second charge for which administrative approval must be obtained from the Network General Manager. The USPs of the guidelines on tie-up with builders is Powers vested with DGM of the Module/Branch to approve builders who fulfill the eligibility norms, to reduce the response time. Built in provision for approval or projects pending abstention of search report/mandatory legal clearance to enable the Bank to associate with the project right from the period of launch. Single consolidated search report and valuation report, the cost of which will be borne by the Bank. Powers vested with DGM of the Module/branch to reduce margin upto 10%. Sharing of joint publicity expenditure, subject to a maximum of 30% of the expenditure incurred, with a cap of 0.30% of the business directed to us in the respective projects. Interim security waived with regard to certain category of builders. DISBURSEMENT Precautions to be taken while disbursing the loan are To prevent misuse of funds, disbursement should be made only in phases correlating to the actual progress made in the construction evg. At stages like completion of plinth, intel level,
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roof etc. Before disbursements, the proper end-use of funds should be ensured by visits to the sites. Branches may insist on a certificate from engineer/architect of the borrower confirming stage wise completion of the project. Reimbursement permitted are of Investment Loan made be in housing for

Home

may

sanctioned

reimbursement of investment made by the borrower in housing from own resources during the preceding 12 months subject to the following conditions (i) Reimbursement will be restricted to investment made by the borrower from own resources of in construction/repair/renovation/ purpose. (ii) Small expenditure like furnishing, wood work will not be considered. (iii) Quantum of reimbursement will be based on (a) the present market value of the property as per the values certificate or (b) the investment made by the borrower, whichever is lower. Expenditure receipts should be obtained and kept on record. (iv) A higher margin of 25% will be insisted upon. REPAYMENT Repayment schedule customized for purchase property

including registration fee and stamp duty paid for the

agriculturists are Since income of agriculturists is seasonal, the repayment schedule in their case will be aligned of installments cash flow to reduce chances of default in a/cs. The periodicity of installments to be decided upon the merits of
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each case, on a realistic basis, coinciding with the generation of income from ancillary agriculturists activities pursued by the borrower. Pre-EMI Interest : is Interest to be paid or can it be deferred during the Moratorium Suitable clause to be incorporated in Home Loan application form which makes it mandatory for the applicants to exercise either of the following options. EMI Should EMI be altered with every Interest Rate Fluctuation are In case of Floating Rate option, the EMI need not be altered should interest rates rise or fall. The net effect of interest rate fluctuations is accounted for by way of increase in the number of installments.

EMI Reset downwards during the tenure of the loan are (a) Under Floating Rate option, in case there is a decline in rate of interest, the sanctioning authority may refix the EMI downwards (for select customers) upon written request of the borrower, only if (i) the downward revision in rate of interest is 1% or more as compared to the original rate of interest at which the loan was given, (j) (k) the original loan was of Rs. 5 Lac or more, the a/c is a Standard Asset and its conduct has been satisfactory.
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(b)

Under both the Fixed Rate as well as Floating Rate options, since part payments and ballon payments are permitted, in case the borrower pays 20% or more of the outstanding in one instance and requests for downward resetting of the EMIs.

REPAYMENT

PERIOD

We

guide

customer

who

approaches for a 25 year HL are Some of out competitors are offering loans with repayment period of 25 years. However, our Bank is not in favour of increasing maximum repayment period from 20 years to 25 years as it unnecessarily increases interest burden of the borrower without any significant decrease in EMI. If repayment period of a Rs. 1 lac loan is increased from 20 to 25 years, the EMI goes down by only Rs. 60/- whereas interest burden of the borrower goes up by more than Rs. 36000/-. If the customer is guided with theses facts, it is likely to generate goodwill for the Bank.

RATE OF INTEREST : Penal Interest levied on Irregular Loans are To Instill financial discipline among borrowers, penal interest is charged @2% on the entire loan outstanding for the period default when an EMI is not paid for any reason, including a bounced cheque or when an overdraft a/c becomes irregular. Letters to be sent to all borrowers

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FIXED INTEREST RATES SUBJECT TO Fixed Rate of Interest does not normally change with the changes in SBAR. However, fixed rate loans are subject to (i) Force Majeure clause, in terms of which the bank has the option to alter the fixed interest rates applicable suitably and prospectively in the event of major volatility in interest during the period of the loan agreement. (ii) An Interest Rate Reset clause, whereby fixed interest may be reset at the end of every 2 years on the basis of fixed interest rates prevailing then (to effectively hedge the interest rate risk due to the long tenure of loan).

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DATA IN T E R P R A T A T O NA N D

A N A L Y S IS (B A R GRAPHS)
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DATA PREPARATION AND ANALYSIS


(1)

According to the facility Availed

Term Loan 70% Max Gain 30%

This graph depicts the facilities and benefits that most of the people avail from the Home Loan Product. In this graph 30% accounts for Maxgain and 70% accounts for Term Loan provided to the customer.

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This graph shows the most demanding loans in Indian market. Happy loan accounts 80% of the total loans availed by the population. 5% accounts for NRI, 5% for tribal plus and rest 10% accounts for reality home loan products.

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2. ACCORDING TO THE CUSTOMER CATEGORY


(A) AMOUNT WISE

90% 80% 70% 60% 50% 40% 30% 20% 10% 0% HNI Custom er Mass Affluent

HNI Customer 90% Mass Affluent 10% Here the bar graphs shows that total loan availed by different categories of customer. High network individual comprises of industrialist, businessman and the person with higher income accounts for 90% of high amount loan taken in SBI and rest 10% is mass affluent.

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(B) NUMBER WISE

Mass Affluent 75% HNI Customer 25% Here the graph shows the number of customer that avail the facilities of home loan. Most of the loans taken from SBI are by mass affluent which accounts for 75% of total population on (as the major population in India needs shelter for themselves, because it is a basic necessity for everyone) and rest 25% are taken by high network individuals.

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L IM IT A T IO

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LIMITATIONS
1. The major limitation of home loan schemes lies in the fact that the uneducated customers take erratic decision regarding home loan schemes. They take the decision by simply watching the advertisement in television, pamphlets and in newspaper. For example customer saw the SBI home loan benefit scheme in a newspaper which is provided at 85% mentioned in the paper. Without enquiring about the detail, one avails it impulsively and thus getting into trouble. 2. Many of the customers take home loan and are not able to pay it in the future, in the specific period of time. So they are not able to repay back in the future and debts starts increasing as interest of home loan keeps increasing. 3. In some cases, customers do not avail home loans facility as the home is kept as security which is mortgaged to the bank, so there is a risk involving it. It hinders many customers to avail the home loan products.

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CO N CLU ON
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CONCLUSION

Despite all the limitation, home loans are very beneficial to the customers. As we all know that the three basic necessity of life are food, clothing and shelter. The shelter comprises of home and house is the basic necessity of every individual. Due to unequal distribution of wealth, the weaker sections of societies are unable to get home for oneself, which can be computed. As SBI offers many products at varied schemes and benefit and nominal interest are charged people can easily fulfil their want. Basically, SBI home loans could be trusted by people and customers has faith in them. major objective of SBI is to retain
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leadership through continuous product and process, innovation has been decided to give uninterrupted service to the customer. We conclude that SBI home loans are concerned about getting the needy buyer at appropriate place and time to every different home loan.

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REFERENCE
RESEARCH METHODOLOGY BY- C.R KOTHARI CIRCULARS OF STATE BANK OF INDIA BANK GUIDE

INTERNET SEARCH SITES www.sbi.com www.sbi.co.in www.google.com

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APPENDI X
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ABBREVIATIONS USED
EMI NMI ROI TL ATL CC NAI FY PIO PG EMR SHG GOI NMB SB CA TD NSC KVP HNI FC TPG PDC SA NPA Equated Monthly Installment Net Monthly Income Rate of Interest Term Loan Agriculture Term Loan Cash Credit Net Annual Income Financial Year Person of India Origin Personal Guarantee Expected Monthly Rental Self Help Groups Government of India National Housing Bank Savings Account Current Account Term Deposit National Saving Certificate Kisan Vikas Patra High Network Individual Foreign Currency Third Party Guarantee Post Dated Cheque Standard Asset Non Performing Asset
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