PPT of Comaprative Study of Banks

1. B A N K O F B A R O D A
Comparative Study of Bank’s Retail
Loan Product(Home Loan) vis-a-vis
Competition / Peer Banks
Submitted to :
Prof. SUBRAT SARANGI
Presented to :
Prof. SUBRAT SARANGI
Prof. JITENDRA MOHANTY
Presented by : DEVO PAM NAG
Roll No. : 15202208
Internship in Marketing
Under the guidance
of
Mr. Nanda Dulal Jana
(Chief Manager, SMS-Kolkata)

2. Contents
 Introduction
 Objectives
 Loan Sanctioning Process
 EMI and Loan Tenure
 Non-Performing Assets
 Tax Benefits
 Methodology
 Observations
 Bank of Baroda
 State Bank of India
 Bank of India
 Punjab National Bank
 Union Bank of India
 HDFC Bank
 ICICI Bank
 Axis Bank
 Yes Bank
 IndiaBulls Home Loans
 L&T Finance
 Reliance Home Finance
 Tata Capital Home Loans
 Analyzation
 Conclusion

3. INTRODUCTION
 A home loan is a type of loan in which the borrower uses the value of his or her home as
collateral.
 The loan amount is determined by the value of the property, and the value of the property is
determined by an appraiser from the lending institution.
 Home equity loans are often used to finance major expenses such as home repairs, medical bills,
or college education.
 A home equity loan creates a lien against the borrower's house and reduces actual home equity.

4. OBJECTIVES
The main objective of this project is to study different types of Home Loans offered by Bank of
Baroda and also identify the competitive advantage of Bank of Baroda over it's competitors and
peer banks in retail loan segment in India. This study also covers the recent transformations taken
place in retail loan segment in recent past in both public sector and private sector financial
institutions in India.
 To know about EMI, Loan Tenure, Recovery processes, NPA.
 I will also be studying about the procedure involved in the approval or rejection of the loans in
Bank of Baroda. Following are the other objectives that are also involved in the successful
completion of the project assigned :
 To know the scenario of Home Loans in India.
 To know various parameters that play major role in the approval or rejection of Loan applications.
 To know the differences in the rate of interest and other fees charged by Bank of Baroda and other
financial institutions in Home Loan segment.
 To know the Tax Benefits that are allowed by the Government of India to the applicants in Home
Loan Category.
 To know the advantages and drawbacks in the Loan products provided by Bank of Baroda over
other financial institutions in India.

5. Loan Sanctioning Process

6. EMI and Loan Tenure
 EMI is a series of monthly payments that you make to the lender towards fulfilment of your loan
obligations.
 This amount stays fairly constant over the tenure of the loan unless there is a major change in the
interest rates or you have prepaid a part of the loan principal.
 EMI is combination of principal repayment of the loan and the interest on the same. In the earlier
years interest forms the major components of the EMI.
 Loan Tenure is the time period within which the principal amount along with the interest amount
should be paid.
Starting EMIs Later EMIS

7. Non-Performing Assets (NPA)
 A Non-Performing Asset is defined as a credit facility in respect of which the interest and /or
instalment of principal has remained past due for a specific period of time.
 When the borrower has failed to make interest or principal payments for 90 days then the loan is
considered to be a Non-Performing Asset.
 When an account is declared as NPA then it is checked whether the borrower is wilful defaulter or
non-wilful defaulter (i.e. due to loss of job by the downsizing of the organization, organization
closure etc).
o For non-wilful defaulters : The account is restructured, rescheduled etc. so that the borrower could upgrade
the account and standardize it to the rules and regulation of the bank.
o For wilful defaulters : In this case the borrower is called for settlement after regular reminders in those 90
days. The settlement is done either in Debt Recovery Tribunal (DRT) or Lok Adalat. If the borrower even
fails to settle the debt in DRT and Lok Adalat then the property is taken in possession by the bank. For debts
upto Rs. 20 lakhs the settlements are done in DRT and above Rs. 10 lakhs the settlements are done in Lok
Adalat.

8. Tax Benefits
 Section 24 (Income under Head House Property) : This section allows a fully fledged deduction for
interest paid on Housing Loan up-to Rs. 2,00,000 (earlier it was Rs. 1,50,000).
 In case it is not self occupied or it is let out, then the deduction would be equal to the actual amount of
interest paid (i.e. there is no maximum limit prescribed).
 Property should be self occupied.
 Section 80EE (Interest Deduction for first time buyers) : This deduction is in addition of all earlier
deductions on interest on Home Loan. That is this deduction is only on the interest component of the
EMI.
 Eligible Assessee : First time buyer of house
 Value of property : Less than Rs. 50,00,000
 Value of Loan : Less than Rs. 35,00,000
 Section 80(C) (Tax benefit on Home Loan) : In case the assessee transfers the house property on
which he has claimed tax deduction under Section 80(C) before the expiry of 5 years from the end of the
FY in which the possession has been obtained by him, then no deduction and tax benefit on Home Loan
shall be allowed under Section 80(C). The aggregate amount of tax deduction already claimed in respect
of previous years shall be deemed to be the income of the assessee of such year in which the property has
been sold and the assessee shall be liable to pay tax on such income. Payment made for Stamp Duty and
Registration Fee is allowed as tax deduction under Section 80(C) even if the assessee has not taken loan.
 Maximum deduction : Rs. 1,50,000 p.a.
 Lock in Period : 5 years

9. Methodology
For the completion of this project work I had to visit the centralized Loan factory of each of the Bank of Baroda’s
competitors in Home Loan business with a questionnaire to know the details about their home loan products and
analyze Bank of Baroda’s competition.
Bank of Baroda's main competitors in Housing Loan business are as follow :
 Public Sector banks :
 State Bank of India
 Union Bank of India
 Punjab National Bank
 Bank of India
 Private Sector banks :
 HDFC Bank
 ICICI Bank
 Axis Bank
 Yes Bank
 Financial Institutions :
 Indiabulls Home Loans
 L&T Finance
 Reliance Home Finance
 Tata Capital Home Loans

10. Observations
All the banks and financial institutions have similar Home Loan following their own guidelines and the guidelines provided by RBI.
Following are the details required for the study and analyzation collected from the banks :
 Documents needed:
o Signed application form with photograph;
o Identity and address proof;
o Processing fee cheque;
o Last 6 months bank statements;
o Documentation for Salaried applicants :
o Last 3 months salary slips;
o Form 16 or Income Tax Returns.
o Documentation for Self-employed applicants :
o Education qualification certificate & proof of business existence;
o Last 2 years CA certified/Audited Balance Sheet and Profit & Loss Account;
o Last 2 years Income Tax Returns with computation of Income.
 Various modes of repayment :
 Standing instructions to the bank’s Savings Account to deduct the EMI amount in favour of the loan account.
 Net Banking - As available with the bank’s Savings Account
 Electronic Clearing Service (ECS) facility.
 Post Dated Cheques (PDCs).
The documents needed while applying for a Home Loan are same for all banks
The observations are continued in the next slides

11. Bank of Baroda
 Age Eligibility : 21 years to 70 years
 Who can apply : Individuals(singly/jointly), NRI with regular income (salaried/self-employed/business)
 Rate of Interest : 9.65% for 760 CIBIL score, and increases with bad CIBIL score.
 Processing Fee : 0.25%of loan amount.
 Tenure : max 30 years
 EMI calculation/limitation :
 For salaried : up-to Rs. 20000 GMI – 50%, 20000-50000 GMI – 60%, 50001-2Lakhs GMI – 65%, 2Lakhs-5Lakhs GMI – 70%, 5Lakhs and
above GMI – 75%
 For businessmen/self employed : Up-to Rs. 6 Lakhs GAI – 70%, Above Rs. 6 Lakhs GAI – 80%
 Loan Amount :
 Mumbai - Maximum of Rs. 10 crores
 Other Metros : Maximum of Rs. 5 crores
 Urban cities : Maximum of Rs. 3 crores
 Semi Urban/ Rural : Maximum of Rs. 1 crore
 Pre-closure charges : No charges
 Partial/Pre-payment Charges : No charges
 Moratorium Period : Up-to 36 Months
 Average time of approval of loan : 5 working days
 Margin : Up-to Rs. 30 Lakhs – 1:9, Rs. 30 Lakhs to up-to Rs. 75 Lakhs – 2:8, Above Rs. 75 Lakhs – 2.5: 7.5
 Loan amount calculation on the basis of income :
 For salaried : up-to Rs. 50000 GMI – 48 times, Rs. 50000 – Rs. 1 Lakh GMI – 54 times, above Rs. Lakh GMI – 60 times.
 For businessmen : less than Rs. 2 Lakhs GAI – 4 times, Rs. 2 Lakhs and above GAI – 6 times

12. State Bank of India
State Bank of India has different Home Loan products for different category of applicants fulfilling their needs. The
different Home Loan products of SBI are as follows :
SBI Maxgain Home Loan : 0.25% higher ROI and minimum loan amount of Rs.5 Lakhs
SBI Yuva Home Loan : 0.20% higher ROI and the applicant’s age should be between 21 & 45 years and Rs. 30000 minimum monthly
income.
SBI NRI Home Loan : This scheme is only for NRI applicants with a minimum of Rs. 3 Lakhs loan amount 10.15% ROI.
SBI Realty : This sheme is only for buying land or plot and the loan tenure is maximum of 15 years.
SBI Pal : This is a pre-approved Home Loan scheme where the loan is approved before selecting the property and minimum loan amount to
be sanctioned is Rs. 10 Lakhs and 10.15% ROI.
SBI Her Ghar Home Loan : Here, a woman should be the sole and primary applicant of the loan and the ROI is 9.85%.
SBI Tribal Plus : In this scheme the maximum loan amount should not cross Rs. 10 Lakhs and a tenure of maximum of 15 years which can
only be applied the people living in tribal and hilly areas.
SBI Gram Niwas : This sheme can only be applied by the peoples from villages and a maximum loan amount of Rs. 5 Lakhs and a tenure
of 15 years.
SBI Sahyog Niwas : This scheme can only by applied the people of self-help groups who have a good credit history. The maximum loan
amount here is Rs. 50000 per person.

13. State Bank of India
 Age Eligibility : 18 years – 60 years
 Who can apply : Anyone with salaried or self-employed with regular income.
 Rate of Interest :
 For General applicants : 9.40%;
 For Women : 9.35%.
 Processing Fee : 0.35% of sanctioned Loan Amount or maximum of Rs. 11500 + S.T.
 Tenure : Maximum of 30 years.
 EMI calculation/limitation : EMI should be maximum of 50% of Net Monthly Income.
 Pre-closure charges : No
 Partial/Pre-payment Charges : No
 Moratorium Period : 36 months to 60 months.
 Average time of approval of loan : 7 – 10 working days.
 Margin : down-payment 20%, loan amount – 80%.
 Loan amount calculation on the basis of income : EMI * tenure (months) = Loan Amount + interest.

14. Bank Of India
 Age Eligibility : 21 years – 60 years.
 Who can apply : Anyone with salaried or self-employed with regular income.
 Rate of Interest : 9.70% - for loan up-to Rs. 75 Lakhs and 9.90% for loans of Rs. 75 Lakhs and above.
 Processing Fee : 0.25 % of loan amount of maximum of Rs. 20000 + S.T.
 Tenure : Maximum of 30 years.
 EMI calculation/limitation : EMI should be maximum of 50% of Net Monthly Income.
 Loan Amount : maximum of Rs. 5 crores and no minimum amount.
 Pre-closure charges: No
 Partial/Pre-payment Charges : No
 Moratorium Period : Up-to 18 months
 Average time of approval of loan : 7 working days
 Margin : Down-payment – 20%, loan amount 85 % of property value.
 Loan amount calculation on the basis of income : 72 times of Net monthly income.

15. Punjab National Bank
 Age Eligibility : 23 years to 70 years
 Who can apply : Anyone with salaried or self-employed with regular income.
 Rate of Interest : 9.65 %
 Processing Fee : 0.25% f loan amount and maximum of Rs. 5000 + S.T.
 Tenure : Maximum of 30 years.
 EMI calculation/limitation : Maximum of 50% of net monthly income.
 Loan Amount : minimum of Rs. 5 Lakhs and maximum of Rs. 5 crores.
 Pre-closure charges : No
 Partial/Pre-payment Charges : No
 Moratorium Period : Up-to 12 months
 Average time of approval of loan : 3.6 working days
 Margin : Down-payment – 20% and loan amount of 90% of property value.
 Loan amount calculation on the basis of income : 60 times of Net monthly income.

16. Union Bank of India
 Age Eligibility : 21 years – 65 years.
 Who can apply : Anyone with salaried or self-employed with regular income.
 Rate of Interest :
 Up-to Rs. 5 Lakhs : 9.65%
 Rs. 5 Lkahs to less than Rs. 30 lakhs : 11.40%
 Rs. 30 Lakhs to less than Rs. 50 Lakhs : 12.40%
 Rs. 50 Lakhs and above : 12.65%
 Processing Fee : 0.50% of loan amount and maximum of Rs. 15000 + S.T.
 Tenure : Maximum of 30 years.
 EMI calculation/limitation : EMI should be between 60% and 75% of Net monthly income.
 Loan Amount : maximum loan amount is Rs. 5 crores.
 Pre-closure charges : No
 Partial/Pre-payment Charges : No
 Moratorium Period : Up-to 18 months
 Average time of approval of loan : 5 working days.
 Margin : Down-payment – for property value up-to Rs. 75 Lakhs – 20%, Rs. 75 Lakhs to Rs. 2 crores – 25%, Rs. 2 crores and above – 35%.
 Loan amount calculation on the basis of income : EMI * tenure (months) = Loan Amount + interest.

17. HDFC Bank
 Age Eligibility : 21 years – 60 years
 Who can apply : Anyone with salaried or self-employed with regular income.
 Rate of Interest :
 For General applicants : 9.45% - 9.95%;
 For Women : 9.30% - 9.95%.
 Processing Fee : 0.50% of sanctioned Loan Amount or maximum of Rs. 11500 + S.T.
 Tenure : 15 years to 30 years.
 EMI calculation/limitation : EMI should be maximum of 50% of Net Monthly Income.
 Loan Amount : Minimum of Rs. 5 Lakhs and maximum of Rs. 10 crores.
 Pre-closure charges : No
 Partial/Pre-payment Charges : No
 Moratorium Period : Up-to 24 months.
 Average time of approval of loan : Same day loan sanctioning.
 Margin : down-payment 20%. Loan amount – for property value up-to Rs. 30 Lakhs – 90%, Rs. 30 Lakhs – Rs.
75 Lakhs -80%, Rs. 75 Lakhs and above – 75%.
 Loan amount calculation on the basis of income : HDFC Bank didn’t share the calculation.

18. ICICI Bank
 Age Eligibility : 21 years – 65 years
 Who can apply : Anyone with salaried or self-employed with regular income.
 Rate of Interest :
 For General applicants :
 For salaried borrowers :9.45% - 9.70% for loans up-to Rs. 5 crores;
 For self employed : 9.45% - 9.70% for loans up-to Rs. 15 crores.
 For Women : 9.40% - 9.65%.
 Processing Fee : 0.50% of sanctioned Loan Amount or maximum of Rs. 10000 + S.T.
 Tenure : 3 years to 30 years.
 EMI calculation/limitation : EMI should be maximum of 50% of Net Monthly Income.
 Loan Amount : Minimum of Rs. 5 Lakhs and maximum of Rs. 10 crores.
 Pre-closure charges : No
 Partial/Pre-payment Charges : No
 Moratorium Period : up-to 18 months.
 Average time of approval of loan : Same day sanctioning.
 Margin : down-payment 20%, loan amount – 80%.
 Loan amount calculation on the basis of income : Calculated on the basis of FOIR of 60%. (FOIR/EMI*100000)

19. Axis Bank
 Age Eligibility : 24 years – 65 years
 Who can apply : Anyone with salaried or self-employed with regular income.
 Rate of Interest :
 For salaried borrowers : up-to Rs. 2800000 – 9.45%, Above Rs. 2800000 – 9.50%
 For Self-employed borrowers : up-to Rs. 2800000 – 9.55%, Above Rs. 2800000 – 9.60%
 Processing Fee : 0.50% of sanctioned Loan Amount or maximum of Rs. 10000 + S.T.
 Tenure : Maximum of 30 years.
 EMI calculation/limitation : EMI should be maximum of 50% of Net Monthly Income.
 Loan Amount : Minimum of Rs. 5 Lakhs and maximum of Rs. 5 crores.
 Pre-closure charges : No
 Partial/Pre-payment Charges : No
 Moratorium Period : up-to 18 months.
 Average time of approval of loan : 3.1 working days.
 Margin : down-payment – up-to Rs. 2800000 – 20%, Above Rs. 2800000 – 25%.
 Loan amount calculation on the basis of income : Calculated on the basis of FOIR – 65%.

20. Yes Bank
 Age Eligibility : 23 years – 60 years
 Who can apply : Anyone with salaried or self-employed with regular income.
 Rate of Interest : 10.25% to 10.75%
 Processing Fee : maximum of Rs. 11500 + S.T.
 Tenure : Maximum of 30 years.
 EMI calculation/limitation : EMI should be maximum of 50% of Net Monthly Income.
 Loan Amount : Minimum of Rs. 5 Lakhs and maximum of Rs. 10 crores.
 Pre-closure charges : No
 Partial/Pre-payment Charges : No
 Moratorium Period : up-to 18 months.
 Average time of approval of loan : Same day loan sanctioning.
 Margin : down-payment 30%, loan amount – 70%.
 Loan amount calculation on the basis of income : Is calculated on the basis of FOIR 60%.

21. IndiaBulls Home Loans
 Age Eligibility : 23 years – 70 years
 Who can apply : Anyone with salaried or self-employed with regular income.
 Rate of Interest :
 For General applicants : 9.45% floating;
 For Women : 9.40% floating.
 9.95% fixed (for first 3 years and floating thereafter)
 Processing Fee : 0.50% of sanctioned Loan Amount or minimum of Rs. 7500 + S.T.
 Tenure : Maximum of 30 years.
 EMI calculation/limitation : EMI should be maximum of 50% of Net Monthly Income.
 Loan Amount : Minimum of Rs. 2 Lakhs and maximum of Rs. 3 crores.
 Pre-closure charges : No
 Partial/Pre-payment Charges : No
 Moratorium Period : up-to 24 months.
 Average time of approval of loan : 3 – 7 working days.
 Margin : down-payment 20%, loan amount – 80%.
 Loan amount calculation on the basis of income : IndiaBulls Home Loans didn’t share the calculation of loan
amount based on the applicant’s income.

22. L&T Finance
 Age Eligibility : 22 years – 65 years
 Who can apply : Anyone with salaried or self-employed with regular income.
 Rate of Interest :
 For salaried : 9.65% +
 For self-employed : 9.90% +
 Processing Fee : 2% of sanctioned Loan Amount.
 Tenure : Maximum of 20 years.
 EMI calculation/limitation : EMI should be maximum of 50% of Net Monthly Income.
 Loan Amount : Minimum of Rs. 10 Lakhs and maximum of Rs. 10 crores.
 Pre-closure charges : No
 Partial/Pre-payment Charges : No
 Moratorium Period : up-to 18 months.
 Average time of approval of loan : 3 – 7 working days.
 Margin : down-payment 20%, loan amount – 80%.
 Loan amount calculation on the basis of income : Is calculated on the basis of FOIR – Net monthly income
below Rs. 25000 – 50%, Net monthly income Rs. 25000 to up-to Rs. 50000 – 55%, Rs. 50000 and above to up-
to Rs. 1 Lakh – 60%, Net monthly income of Rs. 1 Lakh and above – 65%.

23. Reliance Home Finance
 Age Eligibility : 21 years – 58 years/ 60 years for salaried appicants.
 Who can apply : Anyone with salaried or self-employed with regular income.
 Rate of Interest : 9.95%
 Processing Fee : 1% of sanctioned Loan Amount or minimum of Rs. 3000 + S.T.
 Tenure : Minimum of 3 years to 25 years for salaried borrowers and 12-15 years for self-employed.
 EMI calculation/limitation : EMI should be maximum of 50% of Net Monthly Income.
 Loan Amount : Minimum of Rs. 30 Lakhs and maximum of Rs. 5 crores.
 Pre-closure charges : No
 Partial/Pre-payment Charges : No
 Moratorium Period : up-to 12 months.
 Average time of approval of loan : 3-7 working days.
 Margin : down-payment 25%, loan amount – 75%.
 Loan amount calculation on the basis of income : 100 times of applicant’s Net monthly income.

24. Tata Capital Home Loans
 Age Eligibility : 25 years – 58 years
 Who can apply : Anyone with salaried or self-employed with regular income.
 Rate of Interest : 9.45% to 9.55% depending on the Loan Amount.
 Processing Fee : Minimum of Rs. 5750 to Rs. 11500
 Tenure : Minimum of 10 years to Maximum of 30 years.
 EMI calculation/limitation : EMI should be maximum of 60% of Net Monthly Income.
 Loan Amount : Minimum of Rs. 40 Lakhs and maximum of Rs. 10 crores.
 Pre-closure charges : No
 Partial/Pre-payment Charges : No
 Moratorium Period : up-to 36 months.
 Average time of approval of loan : 3 – 7 working days.
 Margin : down-payment 25%, loan amount – 75%.
 Loan amount calculation on the basis of income : Tata Capital Home Loans didn’t share the calculation of loam
amount based on the applicant’s income with me.

25. Analyzation
 In terms of Home Loan, State Bank of India is better because of its wide variety of products and low interest
rates. Whereas, Bank of Baroda is trying to provide better products and services by providing concession in
interest rate to government and preferred organization employees.
 Bank of Baroda sanctions loan within short time period respect to other public sector banks.
 Nationalized Public sector banks take maximum time for processing Loan applications. SBI also takes upto 1
year and even loads of file pending for processing as a result applicants shift their applications to other banks or
financial institutions for faster sanctioning.
 Financial Institutions sanctions loan very fast for which applicants first gets the loan from a financial institution
then later on transfer the loan to other public/private sector banks.
 Bank of Baroda gets many transfer of Home loans from L&T Finance.

26. Conclusion
 Private banks have low rate of interest but their penalty charges are very high whereas in public sector banks the
rate of interest are high but they have very low penalty charges. Maximum times the applicants also get the
charges waved by consulting the Branch Manager
 Private Sector banks provide better services.
 In co-op banks loans will be sanctioned but it depends upon the relation with the banking personnel and member
of the banks.
 The very important benefit that the customer getting tax benefits. Home loans are the only product which
Government of India have given relief & tax deduction for the income tax payee.