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A Study on Home Loan Process

Executive Summary:

State bank of India is one of the prime public sector banks in India. Over the years, it has grown

as a major bank. It provides several banking services to its customers. State bank of India home

loan is the most important service provided by the bank. State bank of India loan enables its

consumers to realize their dreams.

The project has been done in state bank of India the title is A STUDY ON PROCESS OF

HOME LOAN IN STATE BANK NOF INDIA IN AKSHAYA NAGAR BRANCH,

BANGALORE.

The problems in SBI are the customer does not have proper knowledge and information about

different options under home loan schemes. The bank is able to furnish adequate information tothe customers. The attitude of the bank with the customers is non-co-operative. Bank has to give

proper knowledge to illiterate people.

The objectives of SBI are understanding satisfaction level of customers. Understand needs and

wants as well as improve the service according to the customer requirements.

Findings in SBI are most of the customers satisfied with the bank service and their interest rate.

The bank people as maintain good relation with customers. The bank as give quick response

about the customer doubts.

Recommendation to SBI are should provide specialized services to satisfy their customers. SBIshould use easy procedure for sanctioning of loan. Yet customers seek less interest rate which

can lower their cost of house. So banks should try to lower their interest rates. The company has

to reduce the administration charges; hence all these factors shall help to satisfy their customers

in long term business.

1S.E.A. College of Engineering And Technology


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INDUSTRY PROFILE:

INTRODUCTION:

We can identify three distinct phases in the history of Indian banking. Early phase from

1786 to 1969 nationalization of bank and up to 1991 prior banking sector reforms new frames of

Indian banking with the advent of financial and banking sector reforms after 1991. The first

phase is from 1786 to 1969 the earlier phase up to the nationalization of 14 largest of Indian

scheduled banks. It was also traditional and conservative phase of Indian banking. The advent of

banking system of India started with the establishment of the first joins stocks banks, the general

bank of India in the year1786. After this first bank of Hindustan and Bengal bank came in to

existence. In the mid of 19th

century east India company established three banks: the bank ofBombay in 1840, and bank of Madras in1843. These three banks were amalgamated in 1920 and

a new bank imperial bank of India was established. All these institutions started as private

shareholders bank and the shareholders were mostly Europeans. The Allahabad bank was

established in 1865. The next bank to be set up was the Punjab national bank ltd., which was

established with its headquarters at Lahore in1894 for the first time exclusively by Indians. Most

of Indian commercial banks, however owe their origin to the 20th century. Bank of India, Bank of

bank of Baroda, Canara bank, the Indian bank and the bank of Mysore was established between

1906 and 1913.

The last major commercial bank to be set up in this phase was the united commercial

bank in 1943. Earlier the establishment of reserve bank of Indian in 1935 as the central bank of

the country was an important step in the development of commercial banking in India. The

history stock banking in this first phase was characterized by slow growth and periodic failures.

There were as many as 1100 banks, mostly small banks, failed during the period from

1913 to 1948. The government of India by the frequent bank failure in the country miseries to

innumerable small depositors and others enacted the banking act 1949. The title of the act was

changed as banking regulation act 1949.

There were large number of commercial banks, but banking services were not available at

rural and semi urban areas.

The Indian banking system: under the reserve bank of India act 1934, banks were

classified as scheduled banks and non-scheduled banks. The scheduled banks are those, which

are entered, in the second scheduled RBI act, 1934. Such banks are those, which have the paid-

up capital and reserves of an aggregate value of the not less than Rs. 5lakhs and which satisfy

RBI that there affairs are carried out in the interest of their depositors. All commercial banks are



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scheduled banks. Non-scheduled banks are those, have not been including in second scheduled

of RBI act, 1934. The organized banking system in India can be broadly divide into threecategories

Commercial

Regional bank

Co-operative bank

The reserve bank of India is the supreme monetary and banking authority in the country and has

the responsibility to control the banking system in India. It keeps their serves of all commercial

banks and hence is known as RESERVE BANK.

Progress of banking in India since 1969: aggregate bank deposits constituting about two-fifths offinancial assets of the household sector have risen from 15% of GDP to around 39.3% and the

total number of branches from 8262 to 65,931. Of these around 45.5% are now in rural areas as

against less than 22.5% at the time of nationalization of major banks in 1969.

Opening of rural branches has improved mobilized of savings in the rural sector. Presently the

rural savings accounted for 15% of total deposits. Since bank nationalization in the country

priority sector credit has increased from 14% of total bank credit to around 30%. The first phase

of financial reforms resulted in the nationalization of 14 major banks in 1969 and resulted in the

shift from class banking to mass banking.

STATUS OF INDIAN BANKING INDUSTRY:

It is useful to note some telling facts about the status of Indian banking industry compared to

with other countries, recognizing the differences between the developed and the emerging

economics.

First, the structure of the industry: in the worlds top thousand banks there are many larger

and medium- sized domestic banks from the developed countries than from the emerging

economies. India, on the other hand, had 20 banks with in the top 1000 out of which only 6 were

with in the top 500 banks. This is perhaps reflective of difference in size of economies and of

the financial sectors.

Second, the share of the bank assets in the aggregate financial sector assets: in India, the

share of the banking assets in total financial sector assets is around 75%, as of end march 2004.

Third, internationalization of banking operations: the foreign banks in India enjoy greater

freedom in their operation, including retail banking in the country on par with domestic banks,

as compared with most of the other developing countries.



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Fourth, the share of the state- owned banks in total banking sector assets: encouraging state-

run banks to diversify ownership by inducting private share capital through public offeringrather than by strategic sale and still absorb the overhang problems. Successful reform of public

sector banks is a good example of a dynamic mix of public and private ownership in banks.

A noteworthy feature of banking reforms in India is the growth of newly licensed private sector

banks, some of which have attained globally best standards in terms of technology, services and

sophistication. The commission examined the problems and recommendations for reaching

changes. The commissions report was the basis of the reforms that place during the 90s and

onwards.



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EVOLUTION OF SBI:

The origin of the State Bank of India goes back to the first decade of the nineteenth century withthe establishment of the Bank of Calcutta in Calcutta on 2 June 1806. Three years later the bank

received its charter and was re-designed as the Bank of Bengal (2 January 1809). A unique

institution, it was the first joint-stock bank of British India sponsored by the Government of

Bengal. The Bank of Bombay (15 April 1840) and the Bank of Madras (1 July 1843) followed

the Bank of Bengal. These three banks remained at the apex of modern banking in India till their

amalgamation as the Imperial Bank of India on 27 January 1921.

Primarily Anglo-Indian creations, the three presidency banks came into existence either as a

result of the compulsions of imperial finance or by the felt needs of local European commerce

and were not imposed from outside in an arbitrary manner to modernize India's economy. Their

evolution was, however, shaped by ideas culled from similar developments in Europe and

England, and was influenced by changes occurring in the structure of both the local trading

environment and those in the relations of the Indian economy to the economy of Europe and the

global economic framework.

Establishment

The establishment of the Bank of Bengal marked the advent of limited liability, joint-stock

banking in India. So was the associated innovation in banking, viz. the decision to allow the

Bank of Bengal to issue notes, which would be accepted for payment of public revenues within a

restricted geographical area. This right of note issue was very valuable not only for the Bank ofBengal but also its two siblings, the Banks of Bombay and Madras. It meant an accretion to the

capital of the banks, a capital on which the proprietors did not have to pay any interest. The

concept of deposit banking was also an innovation because the practice of accepting money for

safekeeping (and in some cases, even investment on behalf of the clients) by the indigenous

bankers had not spread as a general habit in most parts of India. But, for a long time, and

especially up to the time that the three presidency banks had a right of note issue, bank notes and

government balances made up the bulk of the investible resources of the banks. The three banks

were governed by royal charters, which were revised from time to time. Each charter provided

for a share capital, four-fifth of which were privately subscribed and the rest owned by the

provincial government. The members of the board of directors, which managed the affairs ofeach bank, were mostly proprietary directors representing the large European managing agency

houses in India. The rest were government nominees, invariably civil servants, one of whom was

elected as the president of the board.



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A Study on Home Loan ProcessBusiness

The business of the banks was initially confined to discounting of bills of exchange or other

negotiable private securities, keeping cash accounts and receiving deposits and issuing andcirculating cash notes. Loans were restricted to Rs.one lakh and the period of accommodation

confined to three months only. The security for such loans was public securities, commonly

called Company's Paper, bullion, treasure, plate, jewels, or goods 'not of a perishable nature' and

no interest could be charged beyond a rate of twelve per cent. Loans against goods like opium,

indigo, salt woolens, cotton, cotton piece goods, mule twist and silk goods were also granted but

such finance by way of cash credits gained momentum only from the third decade of the

nineteenth century. All commodities, including tea, sugar and jute, which began to be financed

later, were either pledged or hypothecated to the bank. Demand promissory notes were signed by

the borrower in favour of the guarantor, which was in turn endorsed to the bank. Lending against

shares of the banks or on the mortgage of houses, land or other real property was, however,forbidden.

Indians were the principal borrowers against deposit of Company's paper, while the business of

discounts on private as well as salary bills was almost the exclusive monopoly of individuals

Europeans and their partnership firms. But the main function of the three banks, as far as the

government was concerned, was to help the latter raise loans from time to time and also provide

a degree of stability to the prices of government securities.

Major change in the conditions

A major change in the conditions of operation of the Banks of Bengal, Bombay and Madras

occurred after 1860. With the passing of the Paper Currency Act of 1861, the right of note issue

of the presidency banks was abolished and the Government of India assumed from 1 March 1862

the sole power of issuing paper currency within British India. The task of management and

circulation of the new currency notes was conferred on the presidency banks and the

Government undertook to transfer the Treasury balances to the banks at places where the banks

would open branches. None of the three banks had till then any branches (except the sole attempt

and that too a short-lived one by the Bank of Bengal at Mirzapore in 1839) although the charters

had given them such authority. But as soon as the three presidency bands were assured of the

free use of government Treasury balances at places where they would open branches, theyembarked on branch expansion at a rapid pace. By 1876, the branches, agencies and sub agencies

of the three presidency banks covered most of the major parts and many of the inland trade

centers in India. While the Bank of Bengal had eighteen branches including its head office,

seasonal branches and sub agencies, the Banks of Bombay and Madras had fifteen each.

Presidency Banks Act



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The presidency Banks Act, which came into operation on 1 May 1876, brought the three presidency

banks under a common statute with similar restrictions on business. The proprietary connection of the

Government was, however, terminated, though the banks continued to hold charge of the public debtoffices in the three presidency towns, and the custody of a part of the government balances. The Act also

stipulated the creation of Reserve Treasuries at Calcutta, Bombay and Madras into which sums above the

specified minimum balances promised to the presidency banks at only their head offices were to be

lodged. The Government could lend to the presidency banks from such Reserve Treasuries but the latter

could look upon them more as a favour than as a right.

The decision of the Government to keep the surplus balances in Reserve Treasuries outside the

normal control of the presidency banks and the connected decision not to guarantee minimum

government balances at new places where branches were to be opened effectively checked the

growth of new branches after 1876. The pace of expansion witnessed in the previous decade fell

sharply although, in the case of the Bank of Madras, it continued on a modest scale as the profitsof that bank were mainly derived from trade dispersed among a number of port towns and inland

centers of the presidency.

India witnessed rapid commercialization in the last quarter of the nineteenth century as its

railway network expanded to cover all the major regions of the country. New irrigation networks

in Madras, Punjab and Sind accelerated the process of conversion of subsistence crops into cash

crops, a portion of which found its way into the foreign markets. Tea and coffee plantations

transformed large areas of the eastern Terais, the hills of Assam and the Nilgiris into regions of

estate agriculture par excellence. All these resulted in the expansion of India's international trade

more than six-fold. The three presidency banks were both beneficiaries and promoters of thiscommercialization process as they became involved in the financing of practically every trading,

manufacturing and mining activity in the sub-continent. While the Banks of Bengal and Bombay

were engaged in the financing of large modern manufacturing industries, the Bank of Madras

went into the financing of large modern manufacturing industries; the Bank of Madras went into

the financing of small-scale industries in a way which had no parallel elsewhere. But the three

banks were rigorously excluded from any business involving foreign exchange. Not only was

such business considered risky for these banks, which held government deposits, it was also

feared that these banks enjoying government patronage would offer unfair competition to the

exchange banks which had by then arrived in India. This exclusion continued till the creation of

the Reserve Bank of India in 1935.



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A Study on Home Loan ProcessPresidency Banks of Bengal

The presidency Banks of Bengal, Bombay and Madras with their 70 branches were merged in

1921 to form the Imperial Bank of India. The triad had been transformed into a monolith and agiant among Indian commercial banks had emerged. The new bank took on the triple role of acommercial bank, a banker's bank and a banker to the government.

But this creation was preceded by years of deliberations on the need for a 'State Bank of India'.What eventually emerged was a 'half-way house' combining the functions of a commercial bankand a quasi-central bank.

The establishment of the Reserve Bank of India as the central bank of the country in 1935 endedthe quasi-central banking role of the Imperial Bank. The latter ceased to be bankers to theGovernment of India and instead became agent of the Reserve Bank for the transaction ofgovernment business at centers at which the central bank was not established. But it continued to

maintain currency chests and small coin depots and operate the remittance facilities scheme forother banks and the public on terms stipulated by the Reserve Bank. It also acted as a bankers'bank by holding their surplus cash and granting them advances against authorized securities. Themanagement of the bank clearing houses also continued with it at many places where theReserve Bank did not have offices. The bank was also the biggest tenderer at the Treasury billauctions conducted by the Reserve Bank on behalf of the Government.

The establishment of the Reserve Bank simultaneously saw important amendments being madeto the constitution of the Imperial Bank converting it into a purely commercial bank. The earlierrestrictions on its business were removed and the bank was permitted to undertake foreignexchange business and executor and trustee business for the first time.

Imperial Bank

The Imperial Bank during the three and a half decades of its existence recorded an impressivegrowth in terms of offices, reserves, deposits, investments and advances, the increases in somecases amounting to more than six-fold. The financial status and security inherited from itsforerunners no doubt provided a firm and durable platform. But the lofty traditions of bankingwhich the Imperial Bank consistently maintained and the high standard of integrity it observed inits operations inspired confidence in its depositors that no other bank in India could perhaps thenequal. All these enabled the Imperial Bank to acquire a pre-eminent position in the Indianbanking industry and also secure a vital place in the country's economic life.



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A Study on Home Loan ProcessWhen India attained freedom, the Imperial Bank had a capital base (including reserves) of

Rs.11.85 crores, deposits and advances of Rs.275.14 crores and Rs.72.94 crores respectively and

a network of 172 branches and more than 200 sub offices extending all over the country.

First Five Year Plan

In 1951, when the First Five Year Plan was launched, the development of rural India was given

the highest priority. The commercial banks of the country including the Imperial Bank of India

had till then confined their operations to the urban sector and were not equipped to respond to the

emergent needs of economic regeneration of the rural areas. In order, therefore, to serve the

economy in general and the rural sector in particular, the All India Rural Credit Survey

Committee recommended the creation of a state-partnered and state-sponsored bank by taking

over the Imperial Bank of India, and integrating with it, the former state-owned or state-associatebanks. An act was accordingly passed in Parliament in May 1955 and the State Bank of India

was constituted on 1 July 1955. More than a quarter of the resources of the Indian banking

system thus passed under the direct control of the State. Later, the State Bank of India

(Subsidiary Banks) Act was passed in 1959, enabling the State Bank of India to take over eight

former State-associated banks as its subsidiaries (later named Associates).

The State Bank of India was thus born with a new sense of social purpose aided by the 480

offices comprising branches, sub offices and three Local Head Offices inherited from the

Imperial Bank. The concept of banking as mere repositories of the community's savings and

lenders to creditworthy parties was soon to give way to the concept of purposeful banking subserving the growing and diversified financial needs of planned economic development. The State

Bank of India was destined to act as the pacesetter in this respect and lead the Indian banking

system into the exciting field of national development.

TRANSFORMATION JOURNEY IN STATE BANK OF INDIA

The State Bank of India, the countrys oldest Bank and a premier in terms of balance sheet size,number of branches, market capitalization and profits is today going through a momentous phaseof Change and Transformation the two hundred year old Public sector behemoth is todaystirring out of its Public Sector legacy and moving with an agility to give the Private and ForeignBanks a run for their money.

The bank is entering into many new businesses with strategic tie ups Pension Funds, GeneralInsurance, Custodial Services, Private Equity, Mobile Banking, Point of Sale MerchantAcquisition, Advisory Services, structured products etc. each one of these initiatives having ahuge potential for growth.



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A Study on Home Loan ProcessThe Bank is forging ahead with cutting edge technology and innovative new banking models, toexpand its Rural Banking base, looking at the vast untapped potential in the hinterland andproposes to cover 100,000 villages in the next two years.

It is also focusing at the top end of the market, on whole sale banking capabilities to provideIndias growing mid / large Corporate with a complete array of products and services. It isconsolidating its global treasury operations and entering into structured products and derivativeinstruments. Today, the Bank is the largest provider of infrastructure debt and the largest

arranger of external commercial borrowings in the country. It is the only Indian bank to featurein the Fortune 500 list.The Bank is changing outdated front and back end processes to modern customer friendlyprocesses to help improve the total customer experience. With about 8500 of its own 10000branches and another 5100 branches of its Associate Banks already networked, today it offers the

largest banking network to the Indian customer. The Bank is also in the process of providingcomplete payment solution to its clientele with its over 21000 ATMs, and other electronicchannels such as Internet banking, debit cards, mobile banking, etc.With four national level Apex Training Colleges and 54 learning Centers spread all over thecountry the Bank is continuously engaged in skill enhancement of its employees. Some of thetraining programs are attended by bankers from banks in other countries.The bank is also looking at opportunities to grow in size in India as well as internationally. Itpresently has 82 foreign offices in 32 countries across the globe. It has also 7 Subsidiaries inIndia SBI Capital Markets, SBICAP Securities, SBI DFHI, SBI Factors, SBI Life and SBI

Cards - forming a formidable group in the Indian Banking scenario. It is in the process of raisingcapital for its growth and also consolidating its various holdings.

Throughout all this change, the Bank is also attempting to change old mindsets, attitudes andtake all employees together on this exciting road to Transformation. In a recently concludedmass internal communication programme termed Parivartan the Bank rolled out over 3300 twoday workshops across the country and covered over 130,000 employees in a period of 100 daysusing about 400 Trainers, to drive home the message of Change and inclusiveness. Theworkshops fired the imagination of the employees with some other banks in India as well asother Public Sector Organizations seeking to emulate the programme.The CNN IBN, Network 18 recognized this momentous transformation journey, the State Bank

of India is undertaking, and has awarded the prestigious Indian of the Year Business, to itsChairman, Mr. O. P. Bhatt in January 2008.

BANKING SUBSIDIARIES



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A Study on Home Loan ProcessState Bank of India has the following five Associate Banks (ABs) with controlling interest

ranging from 75% to 100%.

1. State Bank of Bikaner and Jaipur (SBBJ)

2. State Bank of Hyderabad (SBH)

3. State Bank of Mysore (SBM)

4. State Bank of Patiala (SBP)

5. State Bank of Travancore (SBT)

As on September 30, 2010, the five ABs have a combined network of 4497 branches in India

which are on core banking and 4302 ATMs networked with SBI ATMs, providing value added

services to clientele.

The combined net profit of these banks increased by 17.74% over the previous year to reach

Rs.3266.57 crores as on 31st March 2010. Deposits and advances grew by 14.37% and 15.12%,

respectively, during the year. The combined Net NPA ratio of all ABs was at 0.87% as on 31st

March 2010.The highlights of performance of the six ABs (including State Bank of Indore which

was acquired with effect from 26.08.2010) for the Financial Year 2009-10 are as follows:

(Rs. In crores)

Deposits 302835

Loans 228605

Investments 92422

Total Assets 359010

Return on Assets 1.00%

No. of Branches 4841

SBICI Bank Ltd (Banking Subsidiary, fully owned by SBI):

SBICI Bank Ltd has two branches, fully computerised, operating in Mumbai. The Bank recorded

a net profit of Rs.3.14 crores during 2009-10. Deposits, Loans and Investments were at

Rs.491.52 crores, Rs.207.98 crores and Rs.319.54 crores, respectively, as at 31st March 2010.

Return on Assets was at 0.47% while Capital Adequacy Ratio stood at 27.31% as on 31.3.2010.



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A Study on Home Loan ProcessNON BANKING SUBSIDERIES

Top of Form

1. SBI Capital Markets Ltd

2. SBI Funds Management Pvt Ltd

3. SBI Factors & Commercial Services Pvt Ltd

4. SBI Cards & Payments Services Pvt. Ltd. (SBICPSL)

5. SBI DFHI Ltd

6. SBI General Insurance Company Limited

SBI Capital Markets Ltd (SBICAP)

SBICAP undertakes merchant banking activities, advisory services, project appraisal, credit

syndication and securities broking.

SBICAPs current focus is on infrastructure project advisory and syndication mandates,

particularly in sectors, such as, urban infrastructure and power, which are reckoned as the growth

drivers. The other focus areas are public issues of equity, book-building issues, debt placements,

broking, and sales and distribution.

During the year, SBICAPs forged ahead in issue management, project advisory and structuredfinance, sales & distribution. It focused on infrastructure project advisory and syndication

mandates, particularly in the energy sector, which is reckoned as the critical growth driver in the

growth of the economy.

On the international front SBICAPs bagged an infrastructure (water) advisory assignment from

the Ministry of National Economy, Oman and was an integral part of the team effort for SBIs

first acquisition of a bank overseas. It was also associated with SBI for providing advisory in

respect of participation of Societe Generale Asset Management, France in SBI Mutual Funds.

It handled seven public issues out of the thirty four issues, which hit the primary market during

the period. The Company recorded an improved financial performance during the year with gross

income amounting to Rs.175.06 crore as against Rs.142.75 crore in the previous year, a y-o-y

growth of approx. 23%. PAT of Rs.88.12 crore as against Rs. 63.23 crore in the last year shows a

y-o-y growth of approx.40%.

SBI Funds Management Pvt Ltd (SBI FUNDS)



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A Study on Home Loan ProcessSBI FUNDS is the Asset Management Company (AMC) set up for managing the affairs of SBIMutual Fund.

During 2003-04, SBI FUNDS reported a total inflow of Rs.12,450 crore in the open-ended funds.Total redemption amounted to Rs.10,523 crore, leaving a net inflow of Rs.1,927 crore for theyear as against a net inflow of Rs.686 crore in the previous year. The total net assets of domesticfunds under management stood at Rs.5,340 crore as on the 31st March 2004 as against Rs.3,312crores as on the 31st March 2003.

SBI FUNDS recorded a profit after tax of Rs.10.09 crore in 2003-2004, as against Rs.6.21 crorein the preceding year and paid a dividend of 10%. The Bank holds 100% equity of the Company.

SBI DFHI Ltd (SBI DFHI)

SBI DFHI LTD is a Primary Dealer- an Institution created by RBI to support the book buildingprocess in Primary Auctions of Government securities and provides necessary depth andliquidity to the Secondary market in Government Securities.SBI DFHI LTD was created out of the merger in 2004 of two leading players in the domesticMoney and Debt Markets, the RBI promoted Discount & Finance House of India (DFHI) andSBI Gilts Ltd.The Company is active in retailing of Government securities, including small lots, and is thedistributors of Mutual Fund products of all leading funds, actively participating in the domesticinterest rate derivatives and equities / equity future markets.

It is a market leader in the Primary Dealer segment of the domestic debt market, with a NetWorth of Rs.1109.89 crores (as on 31st March 2010) and a presence in all major financialcenters of the country. It is a major participant in the Government Securities market and postedan impressive turnover of Rs. 115477 cr. in Government Securities and Rs. 33834 cr. in T-Billsduring FY 2009-10.

The company has posted a post-tax profit of Rs. 89.23 crores for the year 2009-2010 and paid adividend of 20%. The State Bank Group holds 67.01% of the companys share capital as on 31 st

March 2010.

SBI Factors and Commercial Services Pvt Ltd (SBI FACTORS)

SBI Factors, a subsidiary of State bank of India (SBI) is one of the leading factoring companiesin India with an asset base of Rs. 700.10 crores as on 30.09.2005. It was established in February1991 with the primary objective to provide domestic factoring services to Small and MediumEnterprises (SMEs). Factoring is a Collection and finance service designed to improve the cashflow position of SMEs by turning their credit invoices into ready cash. The major strength of thecompany is that it has put in place a technology driven platform for offering integratedreceivables management. SBI and its Associates Banks hold 70% stake in SBI Factors.



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SBIF offers Domestic Factoring With Recourse and Without Recourse. Purchase Bill Factoring,Factoring of Usance Bills Under LC, Channel Financing of Dealers / Distributors and Export

Factoring Facilities. All its products have been well received by its clients.

SBIF has ten branches all over the country and it has plans to open three more branches duringthe year. It has achieved a turnover of Rs. 1489.54 Crores with Prepayment Outstanding of Rs.459.35 crores for the year ended 31.03.2005. The profit before tax was Rs. 9.64 crores and PAT

Rs. 6.12 Crores for the year 2004-05. It has recorded a NIL NPA position as at 31.03.2005. It hasdeclared a dividend of 8% during the year 2005. It has a market share of 40.30% as on30.09.2005.SBI Cards & Payments Services Pvt. Ltd. (SBICPSL)

1. Launch of SBI Delhi, SBI Hyderabad and SBI Bangalore city affinity cards.2. Launch of Flexipay, an installment loan programme.3. Market leadership in VISA petrol spends in India.4. Launch of e-bill payment of SBI Credit Card for SBI account holders.5. Launch of Elite card which is offered by invitation only.6. Ten per cent maiden dividend declared.

SBI General Insurance Company LimitedSBI General Insurance Company Limited is a joint venture between the State Bank of India andInsurance Australia Group (IAG). SBI owns 74% of the total capital and IAG the remaining

26%.

SBI General commenced its business operation in India late March 2010 in a limited way and isworking towards a nationwide launch with a larger product portfolio.

SBI General will be a technology driven company with state-of-the-art IT systems. It will be amulti-product, multi-segment and multi-channel company. SBI General is in the process ofsetting up a unique multi-distribution model encompassing Banc assurance, Agency, Broking &Retail Direct (On-line & Tele Sales) channels. Banc assurance will be the major channel duringthe initial years.SBI Generals Vision is to emerge as the most trusted protection provider with fair and

transparent business practices and lead the nations effort in increasing general insurancepenetration as well as partnering the nation in reducing risks systematically.JOINT VENTURESThe Bank has the following Joint Ventures in India:

1. SBI Life Insurance Company Ltd (SBI LIFE)


http://www.sbilife.co.in/http://www.sbigeneral.in/http://www.sbigeneral.in/http://www.sbilife.co.in/


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A Study on Home Loan Process1. SBI Life Insurance Company Ltd (SBI LIFE)

SBI Life Insurance, Indias largest private life insurance, is a joint venture between State Bankof India and BNP Paribas Assurance SBI owns 74% of the total capital and BNP ParibasAssurance the remaining 26%. SBI Life Insurance has an authorized capital of Rs. 2,000 croreand a paid up capital of Rs 1,000 crores.

BNP Paribas Assurance is the insurance arm of BNP Paribas - Euro Zones leading Bank. BNPParibas, part of the worlds top 10 groups of banks by market value and part of Europe top 3banking companies, is one of the oldest foreign banks with a presence in India dating back to1860. BNP Paribas Assurance is the fourth largest life insurance company in France, and aworldwide leader in Creditor insurance products offering protection to over 50 million clients.BNP Paribas Assurance operates in 41 countries mainly through the banc assurance andpartnership model.

SBI Life Insurances mission is to emerge as the leading company offering a comprehensiverange of Life Insurance and pension products at competitive prices, ensuring high standards ofcustomer service and world class operating efficiency.SBI Life has a unique multi-distribution model encompassing Banc assurance, Agency andCorporate Solutions. SBI Life extensively leverages the SBI Group relationship as a platform forcross-selling insurance products along with its numerous banking product packages such ashousing loans and personal loans.Agency Channel, comprising of the most productive force ofover 68,000 Insurance Advisors, offers door to door insurance solutions to customers.SBI Lifes Key Accomplishments:

Bagged the coveted personal finance award-Outlook Money NDTV Profit best Life Insurer2008.Globally topped at the prestigious MDRT 09, in terms of number of Million Dollar Round Table(MDRT) members.First life insurer to receive CRISILs highest financial rating AAA/Stable. ICRA too hasassigned iAAA rating indicating highest claims paying ability to SBI Life Insurance.Retains ISO 9001:2000 certificate for superior claim settlement process


SBI General Insurance Company Limited is a joint venture between the State Bank of India andInsurance Australia Group (IAG). SBI owns 74% of the total capital and IAG the remaining26%. SBI General commenced its business operation in India late March 2010 in a limited wayand is working towards a nationwide launch with a larger product portfolio.SBI General will be a technology driven company with state-of-the-art IT systems. It will be amulti-product, multi-segment and multi-channel company. SBI General is in the process ofsetting up a unique multi-distribution model encompassing Banc assurance, Agency, Broking &



16/63

A Study on Home Loan ProcessRetail Direct (On-line & Tele Sales) channels. Banc assurance will be the major channel duringthe initial years.SBI Generals Vision is to emerge as the most trusted protection provider with fair and

transparent business practices and lead the nations effort in increasing general insurancepenetration as well as partnering the nation in reducing risks systematically.

SBI General in course of time will introduce innovative and well-diversified portfolio ofproducts at competitive prices & convenient to buy.SBI General in course of time will introduce innovative and well-diversified portfolio ofproducts at competitive prices & convenient to buy.

NATURE OF BUSINESS CARRIED

Some people believe that Banking means money lending and that a Banker is not but a glorifiedMoney lender. But banking is not money-lending as money lender does not take the risk whereas

the Banker does. Bank is into pooling together the savings of the community scattered all over

and from the very same pool granting loans to the needy in the society. Thus it acts as a link

between the savers and the needy. Thus the two main products of the Bank are Deposits and

Loans.

VISION, MISSION AND QUALITY POLICY:

VISION:

Premier Indian financial services with global perspective, world class standards of theefficiency and professionalism and core institutional values.

Retain its position in the country as a pioneer in developing countries.

Maximize shareholder value through high sustained earnings per share.

An institution with a culture of mutual care and commitment a satisfying and exciting.

Work environment and continuous learning opportunity.

MISSION:

To retain the banks position as the premier Indian financial services.

Group with world class standards and significant global business commitment to

excellence in customer, shareholder and employee satisfaction and to play a leading rolein the expanding and diversifying financial services sector while continuing emphasis on

its development banking sector.

VALUES:

Excellence in customer service.



17/63

A Study on Home Loan Process Profit orientation.

Belonging and commitment to the bank.

Fairness in all dealings and relations.

Risk taking and innovation. Team playing.

Learning and renewal.

Integrity.

Transparency and discipline.

SYMBOL AND SLOGAN

The symbol of the State Bank of India is a circle and not key hole and a small man at thecentre of the circle. A circle depicts perfection and the common man being the centre of

the bank's business. Slogans

With you all the way

Pure banking nothing else

The Banker to every Indian

The Nation banks on us

QUALITY POLICY:

The main objects of SBI is to participate in manage, finance, furnish personal or real security for

the obligations of and provide services to other enterprises and institutions of any kind to

conduct banking business in the widest sense, including insurance brokerage, to acquire, build

and operate real estate and to engage in any activity which may be related or conducive to the

foregoing.

DIFFERENT PRODUCTS OF SBI:

Deposit Loans Cards Different Credit Cards

Savings Account Home Loans Consumer Cards SBI International cards

Life Plus SeniorCitizens SavingsAccount

Loan AgainstProperty

Credit Card SBI Gold cards

http://www.icicibank.com/pfsuser/icicibank/depositproducts/savingaccount/savingaccount.htmhttp://www.icicibank.com/Pfsuser/loans/homeloans/hlhomepage.htmhttp://www.icicibank.com/pfsuser/icicibank/depositproducts/seniorcitizen/seniorcitizen.htmhttp://www.icicibank.com/pfsuser/icicibank/depositproducts/seniorcitizen/seniorcitizen.htmhttp://www.icicibank.com/Pfsuser/loans/lap/laphomepage.htmhttp://www.icicibank.com/Pfsuser/loans/lap/laphomepage.htmhttp://www.icicibank.com/pfsuser/cards/creditcard/cc_home.htmhttp://www.icicibank.com/pfsuser/icicibank/depositproducts/savingaccount/savingaccount.htmhttp://www.icicibank.com/Pfsuser/loans/homeloans/hlhomepage.htmhttp://www.icicibank.com/pfsuser/icicibank/depositproducts/seniorcitizen/seniorcitizen.htmhttp://www.icicibank.com/pfsuser/icicibank/depositproducts/seniorcitizen/seniorcitizen.htmhttp://www.icicibank.com/Pfsuser/loans/lap/laphomepage.htmhttp://www.icicibank.com/Pfsuser/loans/lap/laphomepage.htmhttp://www.icicibank.com/pfsuser/cards/creditcard/cc_home.htm


18/63


Fixed Deposits Personal Loans Travel Card SBI Gold Master cards

Security Deposits Car Loan Debit Cards

Your City Your CardsRecurring Deposits Loans againstSecurities

CommercialCards

Tax-Saver FixedDeposit

Two Wheeler Corporate Cards

Partnership Cards

Salary Account Pre-approvedLoans

Prepaid Card

Advantage WomanSavings Account

Retail Asset Purchase Card

SBI Employee Cards

Rural SavingsAccount

Farmer Finance DistributionCards

People's SavingsAccount

BusinessInstallment

Loans

Business Card

SBI Advantage Cards

Freedom SavingsAccount

Flexi Cash MerchantServices

AREA OF OPERATION:

http://www.icicibank.com/pfsuser/icicibank/depositproducts/fixeddeposits/fixeddeposits.htmhttp://www.icicibank.com/Pfsuser/loans/personalloans/plhomepage.htmhttp://www.icicibank.com/pfsuser/cards/travel_card/index.htmhttp://www.icicibank.com/pfsuser/icicibank/depositproducts/Security_deposits/Security_deposits.htmhttp://www.icicibank.com/Pfsuser/loans/carloans/alhomepage.htmhttp://www.icicibank.com/pfsuser/cards/debitcard/dbhome.htmhttp://www.icicibank.com/Pfsuser/loans/las/lashomepage.htmhttp://www.icicibank.com/Pfsuser/loans/las/lashomepage.htmhttp://www.icicibank.com/Pfsuser/icicibank/depositproducts/taxsaverfixdep/taxfixeddeposits.htmhttp://www.icicibank.com/Pfsuser/icicibank/depositproducts/taxsaverfixdep/taxfixeddeposits.htmhttp://www.icicibank.com/Pfsuser/loans/twowheeler/twhomepage.htmhttp://www.icicibank.com/pfsuser/cards/com_card/corporate_card1/co_card.htmhttp://www.icicibank.com/pfsuser/icicibank/depositproducts/powerpay/powerpay.htmhttp://www.icicibank.com/Pfsuser/loans/preapprovedloans/preapploans.htmhttp://www.icicibank.com/Pfsuser/loans/preapprovedloans/preapploans.htmhttp://www.icicibank.com/Pfsuser/cards/prepaidcards/prepaid.htmhttp://www.icicibank.com/pfsuser/icicibank/depositproducts/woman_adv/main.htmhttp://www.icicibank.com/pfsuser/icicibank/depositproducts/woman_adv/main.htmhttp://www.icicibank.com/Pfsuser/loans/RetailAssetBrances.htmhttp://www.icicibank.com/Pfsuser/cards/purchase_card/purchase_card.htmhttp://www.icicibank.com/Pfsuser/icicibank/depositproducts/ruralsav/rural_fea.htmhttp://www.icicibank.com/Pfsuser/icicibank/depositproducts/ruralsav/rural_fea.htmhttp://www.icicibank.com/Pfsuser/loans/FarmerFinance/ffhomepage.htmhttp://www.icicibank.com/Pfsuser/cards/Distribution_Cards/Distribution_Cards.htmhttp://www.icicibank.com/Pfsuser/cards/Distribution_Cards/Distribution_Cards.htmhttp://www.icicibank.com/Pfsuser/icicibank/depositproducts/peoplesav/people_fea.htmhttp://www.icicibank.com/Pfsuser/icicibank/depositproducts/peoplesav/people_fea.htmhttp://www.icicibank.com/Pfsuser/cards/com_card/bus_card/bus_card.htmhttp://www.icicibank.com/Pfsuser/icicibank/depositproducts/bank_atm/bank_atm.htmhttp://www.icicibank.com/Pfsuser/icicibank/depositproducts/bank_atm/bank_atm.htmhttp://www.icicibank.com/Pfsuser/loans/flexicash/fchomepage.htmhttp://www.icicibank.com/pfsuser/cards/creditcard/merchant.htmhttp://www.icicibank.com/pfsuser/cards/creditcard/merchant.htmhttp://www.icicibank.com/pfsuser/icicibank/depositproducts/fixeddeposits/fixeddeposits.htmhttp://www.icicibank.com/Pfsuser/loans/personalloans/plhomepage.htmhttp://www.icicibank.com/pfsuser/cards/travel_card/index.htmhttp://www.icicibank.com/pfsuser/icicibank/depositproducts/Security_deposits/Security_deposits.htmhttp://www.icicibank.com/Pfsuser/loans/carloans/alhomepage.htmhttp://www.icicibank.com/pfsuser/cards/debitcard/dbhome.htmhttp://www.icicibank.com/Pfsuser/loans/las/lashomepage.htmhttp://www.icicibank.com/Pfsuser/loans/las/lashomepage.htmhttp://www.icicibank.com/Pfsuser/icicibank/depositproducts/taxsaverfixdep/taxfixeddeposits.htmhttp://www.icicibank.com/Pfsuser/icicibank/depositproducts/taxsaverfixdep/taxfixeddeposits.htmhttp://www.icicibank.com/Pfsuser/loans/twowheeler/twhomepage.htmhttp://www.icicibank.com/pfsuser/cards/com_card/corporate_card1/co_card.htmhttp://www.icicibank.com/pfsuser/icicibank/depositproducts/powerpay/powerpay.htmhttp://www.icicibank.com/Pfsuser/loans/preapprovedloans/preapploans.htmhttp://www.icicibank.com/Pfsuser/loans/preapprovedloans/preapploans.htmhttp://www.icicibank.com/Pfsuser/cards/prepaidcards/prepaid.htmhttp://www.icicibank.com/pfsuser/icicibank/depositproducts/woman_adv/main.htmhttp://www.icicibank.com/pfsuser/icicibank/depositproducts/woman_adv/main.htmhttp://www.icicibank.com/Pfsuser/loans/RetailAssetBrances.htmhttp://www.icicibank.com/Pfsuser/cards/purchase_card/purchase_card.htmhttp://www.icicibank.com/Pfsuser/icicibank/depositproducts/ruralsav/rural_fea.htmhttp://www.icicibank.com/Pfsuser/icicibank/depositproducts/ruralsav/rural_fea.htmhttp://www.icicibank.com/Pfsuser/loans/FarmerFinance/ffhomepage.htmhttp://www.icicibank.com/Pfsuser/cards/Distribution_Cards/Distribution_Cards.htmhttp://www.icicibank.com/Pfsuser/cards/Distribution_Cards/Distribution_Cards.htmhttp://www.icicibank.com/Pfsuser/icicibank/depositproducts/peoplesav/people_fea.htmhttp://www.icicibank.com/Pfsuser/icicibank/depositproducts/peoplesav/people_fea.htmhttp://www.icicibank.com/Pfsuser/cards/com_card/bus_card/bus_card.htmhttp://www.icicibank.com/Pfsuser/icicibank/depositproducts/bank_atm/bank_atm.htmhttp://www.icicibank.com/Pfsuser/icicibank/depositproducts/bank_atm/bank_atm.htmhttp://www.icicibank.com/Pfsuser/loans/flexicash/fchomepage.htmhttp://www.icicibank.com/pfsuser/cards/creditcard/merchant.htmhttp://www.icicibank.com/pfsuser/cards/creditcard/merchant.htm


19/63

A Study on Home Loan ProcessState Bank of India administrative structure is well equipped to oversee the large network

of branches in India and abroad. The State Bank of India 14 Local Head Offices and 57 Zonal

Offices are located at important cities spread throughout the country. State Bank of India has 52

foreign offices in 34 countries across the globe. The Corporate Accounts Group is a StrategicBusiness Unit of the Bank set up exclusively to fulfill the specialized banking needs of top

corporate in the country. The main activities of State Bank of India are - Personal Banking, NRI

Services, Agriculture, International, Corporate, SME and Domestic Treasury.

Branches of SBI

State Bank of India has 131 foreign offices in 32 countries across the globe.

SBI has about 21,000 ATMs; and SBI group (including associate banks) has about45,000 ATMs.

SBI has 26,500 branches, including branches that belong to its associate banks.

SBI includes 99345 offices in our country.

ADDRESS:

Branch Name: State Bank of India Akshayanagar

No.9, KRV Towers, T C Palya Main Road

Akshaya Nagar, Ramamurthy Nagar

Pin: 560016

Std Code: 080Phone: 28474255

Fax: 28474432

E-Mail:[email protected]

OWNERSHIP PATTERN:



20/63

A Study on Home Loan ProcessCentral board of State Bank of India

(As on 31-12-2010)Sr. No. Name of Director Designation Sec. of SBI Act, 1955

1. Shri O.P. Bhatt Chairman 19(a)

2. Shri R. Sridharan Managing

Director

19(b)

3. Dr. Ashok Jhunjhunwala Director 19(c)

4. Shri. Dileep C. Choksi

Director

19( c)

5. Shri S Venkatachalam Director 19(c )

6. Shri D. Sundaram Director 19(c )

7. Shri. G.D. Nadaf Officer Employee

Director

19(c )

8. Dr. Vasantha Bharucha Director 19(d)

9. Dr. Rajiv Kumar Director 19(d)

10. Shri Ashok Chawla Director 19(e)

11. Smt. Shyamala Gopinath Director 19(f)



21/63


ORGANISATION STRUCTURE:

List of Regional Offices bank has a lien three-tier structure. The delegated powers have been

enhanced. The decentralized power structure has accelerated decision making process and

thereby Bank quickly responds to changing the needs of the customers and has also been able to

adjust with the changing environment.

ORGANISATION STRUCTURE OF SBI:


State Bank of India

Chairman

Managing Director

DirectorDirectorDirector

Executive DirectorExecutive DirectorExecutive Director


22/63


COMPETITORS INFORMATION:

List of

banks

Last price Market

price(rs.cr)

Net interest

income

Net profit Total assets

SBI 2761.05 175326.15 70993.92 9166.05 1053413.74

PNB 1095.05 34527.20 21422.09 3905.35 296632.79

Bank of

Baroda

900.40 32912.32 16698.34 3058.33 278316.71

Canara Bank 583.25 23913.25 18751.96 3021.43 264741.09

Bank of India 442.85 23289.92 17877.99 1741.07 274966.46

Union Bank 338.75 17110.87 3302.68 2074.92 195161.85

IDBI Bank 133.30 13123.80 15272.63 1031.13 233572.01

Indian Bank 220.35 9469.98 7714.37 1554.99 101389.32

Allahabad

Bank

208.85 9329.33 8369.20 1206.33 121699.21

Oriental

Bank

330.60 8282.84 10257.12 1134.68 137431.00


ShareholderShareholderShareholder


23/63


INFRASTRUCTURAL FACILITIES:

As regards to the infra structural facilities provided in State Bank of India Offices: The Head

office of SBI has a central air condition system which helps the employees to escape from theheat of Mumbai City, Canteen: The Bank provides canteen facility to all its employees and it is

situated inside the Bank premises, System: The bank is one of the main bank in the country

which uses Financial Software which in turn helps the bank to serve its customers more

efficiently. The bank also provides internet facility to its employees, safe deposits, locker

facilities and other security facilities etc.

ACHIEVEMENTS/AWARDS:

Awards

1. State Bank Of India Has Been Awarded Best Online Banking Award (Winner)ByIBA Banking Technology Awards - 2010

2. Best Bank 2009 State bank of India has been adjuged the best bank 2009 by business

India (August-2009)

3. Shri OM Prakash Bhatt, the chairman of SBI, has declared as one of the "25 mostvaluable Indians" by the week magazine for 2009(Published in August-2009 Issue).

4. Awarded the Bank of the year 2008-India by the Banker Magazine, London.5. Ranking in The Banker-Top 1000 world Banks improved to 57 from 70 in 2007.

Only Indian Bank among the Top 100 Banks in the world. Ranked 8th in Top 25Banks in Asia.

6. Reputation Institute, US has ranked SBI as 29th ranked 59 in global 500 FinancialBrand Recognition ranking by Brand Finance, London 2008.

7. Ranked No.1 in Survey of Top 5 companies in India in terms of Financial Reputationby Wall Street Journal Asia.

8. Only Indian Bank to find a place in the Fortune Global 500 list. Improved rankingfrom 495 last year to 380 this year.



24/63

A Study on Home Loan Process9. Improved ranking from 219th position last year to 150th this year in the Forbes 2000

List of largest companies in the World.

WORK FLOW MODEL:

Chart showing the process map deposit


Deposit Application

Application Review

and Documentation

Decision Making

Cash

Cheque

Draft

Savings Account

Current Account

Processing


25/63


The various stages of granting loan to customers were depicted below.


Accounts Department

Work Done

Customers

Customer Specific

Requirement

Filling of Application

Application of Review

Decision

Loan Disbursement

Documentation

Reject


26/63


MCKINSEYS 7S FRAME WORK:

The Mckniseys 7-s frame work as an attempt: Developed in the 1970s by consultation at

Mckniseys and company to assist manager to do away with the difficulties in implementation

that are associated with change in the organization. 7s model shows the change in complex and

indicate due to organizational immune systems, difficult paradoxes and many interconnectionvariables involved. In understanding how 7s model works.

SRTATEGY:

SBI covers vision, mission, objectives, goals and major actions plans and policies for its business

operations. The bank targets at gaining competitive advantage over rivals in India. The 7s frame

work includes that execution of strategy poses more problems than formulation.


Structure

Systems

Strategy

Shared values

StyleSkills

Staff

Repayment of Interest


27/63

A Study on Home Loan ProcessSBI as an organization driven by values is committed to pursue objectives that are in the

interests of the bank shareholders and the society at large in consonance with best practice.

To become the bank of first choice in one chosen areas by building beneficial and lastingrelationship with customers through a process of continues improvement.

A logical extension of the Vision statement is the Mission of the bank, which is to gain

market recognition in the chosen areas.

To build a sizable market shares in each of the chosen areas of business through effective

strategies in terms of pricing product packaging and promoting the product in the market.

To facilitate a process of reconstructing of branches to support a greater efficiency in the

retail banking field.

To sustain the mission objective through harnessing technology driven banking anddelivery channels.

To promote confidence and commitment among the staff members to address the

expectation of the customers efficiently and handle technology banking with ease.

Practice sound financial and accounting procedures to ensure statutory regulatory

compliances and constantly review organizational structure and control systems to

respond to new challenges.

Establish clearly documented and transparent management processes for policy planning

and development, coherent business strategies implementation and review, decision

making, monitoring control and reporting.

Ensure that the Banks Board of Directors meet regularly provide effective leadership,exercise control over the management and monitor executive performance with their

blend expertise and professionalism.

Establish a frame work of strategic control and continuously review its efficacy to

promote integrity openness and accountability. Better disclosures and transparency will

bolster investor/share/stakeholder confidence.

STRUCTURE:

SBI has divided the whole structure into activities department setting division of labor and

delegation of authority. The bank also facilitates coordination control of various activities in the

framework of organizational mission purposes and goal. SBI concentrates on reduction of

uncertainty that stems from unpredictable human behavior via the mechanism of control system.



28/63

A Study on Home Loan ProcessOrganizational Structure:

The Regional Offices Bank has a lean three-tier structure. The delegated powers have been

enhanced. The decentralized power structure has accelerated decision making process and thereby Bank quickly responds to changing needs of the customers and has also been able to adjust

with the changing environment with its decentralization policy.

The Managing Director assisted by the Chief General Manager and 6 General Managers in

the areas of operation Commercial and Institutional Banking Planning and Development Finance

and Services Inspection and Vigilance and information and technology form the management

team of the bank.

SYSTEMS :

In the 7s frame work systems signify rules and regulations including procedures that supportthe organization structure. Thus the bank focuses on production planning and control system,

budgeting and budgetary control system financial and cost accounting system, training and

development system, performance system, performance evaluation system and so on. Systems

and procedures department designs and implement various system to improve the efficiency of

the bank. Banking system was designed to enable customers to conduct their transactions in any

branch of the bank across the country. With their product the customer has truly become the

customer of the bank.

Risk management policies of the bank covering credit market and operational risk envisage

identifying, measuring and managing the major risks faced by the bank. For managing the risksarising out of adverse movement in the market interest rate, currency exchange rates, equity price

risk and commodity price risk, the market Risk Management Policy has been formed.

STYLE/CULTURE:

SBI has its own distinct culture and management style. It includes the dominant values

beliefs and norms which develop over times and become relatively enduring features of the

organizational life. It also entails the way managers interact with the employees and the way they

spend their time. However extensive efforts are made to change to culture to a more open,

innovative and friendly environment with fewer hierarchies and smaller chain of command.

Culture remains an important consideration in the implementation of any strategy in the

organization. A separate Head Office Customer Service Committee under the chairmanship of

the Chief General Manager with representation from the officers Association and Employees

Union and Departmental Heads, monitor the implementation of customer service guideline

across the bank.



29/63

A Study on Home Loan ProcessThe Banking Codes and Standards Board of India are set up as a society promoted by

banks to formulate comprehensive code of conduct for fair treatment to customers. The Boards

Code on Banks commitment to customers has been adopted by the bank and is made available to

all existing and new customers. The code is also placed on the website of the bank. During thecurrent year the Bank has adopted Cheque Collection Policy Grievances policy, Compensation

Policy, Policy on Collection of dues and Repossession of Security, in tune with the

recommendations of BCSBI.

The banks vision and mission emphasizes a healthy customer relationship and customer

services continue to be accorded the highest priority in the bank. Customer service committee of

the Board oversees implementation of customer service initiative/direction of government of

India/Reserve Bank of India.

STAFFING:

Staffing is that vital process that deals with recruiting and selecting matching persons for

the organizational posts or positions training and developing them. Placing them in posts so as to

get out each one of them. High performing companies are the best employees. It is a process of

Recruitment and Selection. Due to registration, termination, retirement and transfers the

concerned department head will give the manpower requirement along with the job description.

The manpower sourcing is done via advertisement, manpower consultant and employment

exchange and personnel reference. Promotion is on the basis of seniority.

SKILLS :

It is ability or proficiency in performing a particular task it is an acquired or learnt ability

to translate knowledge into performance. It is the competency that allows for superior of

knowledge is one thing and applying it is another.

The bank continued to extend financial assistance to weaker section of the society comprising ofsmall and marginal farmers landless labors tenant farmers etc.

SHARED VALUES:

It stands for companys vision, mission, values, philosophy, in the back drop of which

organization goals and objectives are set and strategies are formulated. Excellence in customer



30/63

A Study on Home Loan Processservice profit orientation belongs and commitment to the bank fairness in all dealing and

relations risk taking and innovation team playing learning and renewal integrity. Transparency

and discipline in polices and systems.

The supporters of Mckniseys model speak of super ordinate goals and they mean by it a

set of values and aspirations. That goes beyond the conventional formal statement of cooperate

objectives. These are but essential as they inspire the members of the organization and provide a

definite direction towards the peak heights of success.

SBI as on organization driven by values is committed to pursue objectives that are in the

interests of the Bank, shareholders and all stake holders and the society at large, in consonance

with best practices.

4. SWOT ANALYSIS:

STRENGTH:

It plays a very proactive and dynamic role in the economic development of the

nations wide network.



31/63

A Study on Home Loan Process Large number of customers.

Investment portfolio.

Wide product portfolio.

Enhanced financial performance. Efficient use of resources.

WEAKNESS:

To growth curve may not move steadily upwards and in the short to medium terms,

multiple challenges would tamper the speed and growth in various business.

Our business with the economy and capital market our financial performance in

subject to fluctuations depending on the pace of economic growth and activity in the

capital market and many market.

OPPORTUNITIES:

We perceive the low retail penetration of financial services and products in India

as a huge business opportunity for as.

Indias attractive demographic profile will facilitate multiplier growth in the

financial services sector.

With increase in the income levels and risk taking abilities of the youth the Indias

growth stories continues to move ahead at a steady pace. While the funding business will pace same challenges for a while we believe that

distressed assets will offer several interesting opportunities for our newly

commended at reconstruction business.

THREATS:

Political stability always has a direct correlation with the investment environment

of any economies and forms a crucial factor in determining investor sentiments.

New entrants in the Indian financial markets will also add to the increased

competitor for our various businesses.



32/63

A Study on Home Loan Process We face still competitions in all our business from domestic and multinational

players operating in India.

5. Profit and loss account for the year ended-31 st March, 2010(In Rs.Cr.)

Mar '09 Mar '10

12 mths 12 mths

Income



33/63


Interest Earned 63,788.43 70,993.92

Other Income 12,691.35 14,968.15

Total Income 76,479.78 85,962.07

Expenditure

Interest expended 42,915.29 47,322.48

Employee Cost 9,747.31 12,754.65

Selling and Admin Expenses 5,122.06 7,898.23

Depreciation 763.14 932.66

Miscellaneous Expenses 8,810.75 7,888.00

Preparative Exp Capitalized 0.00 0.00

Operating Expenses 18,123.66 24,941.01

Provisions & Contingencies 6,319.60 4,532.53

Total Expenses 67,358.55 76,796.02Liabilities

Net Profit for the Year 9,121.23 9,166.05

Extraordinary Items 0.00 0.00

Profit brought forward 0.34 0.34

Total 9,121.57 9,166.39

Preference Dividend 0.00 0.00

Equity Dividend 1,841.15 1,904.65

Corporate Dividend Tax 248.03 236.76

Per share data (annualized)

Earnings Per Share (Rs) 143.67 144.37

Equity Dividend (%) 290.00 300.00

Book Value (Rs) 912.73 1,038.76

Appropriations

Transfer to Statutory Reserves 6,725.15 6,495.14

Transfer to Other Reserves 306.90 529.50

Proposed Dividend/Transfer to Govt 2,089.18 2,141.41

Balance c/f to Balance Sheet 0.34 0.34

Total 9,121.57 9,166.39

Learning Experience :



34/63

A Study on Home Loan ProcessSBI is one of the prime public sector banks in India. Over the years it grown as a major bank

which provides banking services to its customers. As leading banker in India which focuses

diversified banking services among which the researcher as concentrated on home loan services.

The home loan schemes supports thousands of customers to realize their dreams come true.

Organization Structure SBI has divided the whole structure into activities department setting

division of labor and delegation of authority. The bank also facilitates coordination control of

various activities in the framework of organizational mission purposes and goal. SBI

concentrates on reduction of uncertainty that stems from unpredictable human behavior via the

mechanism of control system.

Staffing is that vital process that deals with recruiting and selecting matching persons for the

organizational posts or position training and developing them. High performing companies are

the best employers. It is a process of Recruitment and Selection.

SBI has its own distinct culture and management style. It includes the dominant values

beliefs and norms which develops over time and become relatively enduring features of the

organizational life. It also entails the way managers interact with the employees and the way they

spend their time.

The bank focuses on planning and control system, budgeting and budgetary control system

financial and cost accounting system, training and development system, performance system,

performance evaluation system and so on.

SBI targets at gaining competitive advantage over rivals in India. To become the bank of

first choice in one chosen areas by building beneficial and lasting relationship with customers

through a process of continues improvement. Excellence in customer service profit orientation

belonging and commitment to the bank fairness in all dealing and relations risk taking and

innovation team playing learning and renewal integrity. Transparency and discipline in polices

and system.

The bank were coordinate with the customer and responding to their doubts complaints to

maintain long relationship with the bank. It focuses on marketing and sales aspects of the bank of

their products and services through the advertisements. It provides more business to the bank.

Marketing of their products and services through television radios print media etc.

Information system is very useful to the banking sector it gives various information on various

matters relating to the banking products and services about the competitors.

This was a great experience and opportunity to feel the cooperate culture at SBI. I could

meet all levels of managers and learnt many valuable lessons from them. I was exposed to



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A Study on Home Loan Processcertain training programs and other policies. What I learnt in my text book was set live in the

organization. Personally I gained many valuable insights in SBI which would help in my career.

It is about the working environment about dealing with the employees, about the attitude

required to sustain in an organization and so on. The experience gained during the training periodis unmatched and it is more equal to a hundred class room session.

GENERAL INTRODUCTION:



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A STUDY ON PROCESS OF HOME LOAN SERVICES IN STATE BANK

OF INDIA IN AKSHAYA NAGAR BRANCH, BANGALORE

Home loans work like any other debt. That is, loans are simply specific money that we borrowfrom a bank, a private lender, or some other type of lender. Afterwards, we must repay our debts

with interest. However, unlike other type of loans, home loans are different in several respects.

Owing a piece of land or property is a lifetime dream for every individual. There are many home

loans provider in the market.

Home is a dream of a person that shows the quantity of efforts, sacrifices luxuries and above all

gatherings funds little by little to afford ones dream. Home is one of the things that everyone

wants to own. Home is a shelter to person where he rests and feels comfortable. Many banks

providing home loans to the people who want to had a home. The housing sector plays an

important role in the economic development of the country.

There are greater numbers of borrowers of home loans. So by this study we can find out

satisfaction level of customers and problems faced by them in obtaining home loans.

STATEMENT OF THE PROBLEM:

Banking is the backbone of a modern economy. Health of banking industry is one of the most

importance pre-conditions for sustained progress of any country.

1. The customer lacks knowledge and the information about different options under home

loan schemes.

2. The bank is unable to furnish adequate information to the customers.

3. Delays in sanctioning of home loans.

4. The attitude of the bank with the customers is non co-operative.

5. Bank has to give proper knowledge to illiterate people.

6. Customers were dissatisfied regarding the service.

OBJECTIVES OF THE STUDY:

1. To understand the satisfaction level of customers rendering about home loan services.

2. To find out our problems faced by the customers during the home loan process.

3. To understand the customer needs and wants for SBI.4. To improve the quality of service.

5. To analyze the customer perception about home loan.

6. To comply with handling the customer complaints and suggestions.

SCOPE OF THE STUDY:



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A Study on Home Loan ProcessThe study is focused on process of home loan and perceived level of satisfaction with regard to

SBI. This study is limited to the customers with in Bangalore city. The study will be able to

reveal the preferences, needs satisfaction of the customers regarding the banking services. It also

help banks to know whether the existing products or services that are offering are reallysatisfying the customers needs.

METHODOLOGY:

The research methodologies for this study are both primary data as well as secondary data. The

primary data structured questionnaire was framed to check the satisfaction level, process; service

etc. of customers about home loans was included. The secondary data collection was through

intensive study made on annual reports of RBI, SBI bank, brochure, newspapers, magazine and

websites.

Design of Research:

The research will be exploratory in nature. A population of peoples who take home loan from

these banks will be considered for the study. I tried to explore about the home loans which would

make a difference in the behavior of the customer. Effort will be made to throw light on most of

the factors which have either direct r indirect effect on the behavior of the consumer. I also

explore the impact of home loans on the market share of the banks.

Sampling plan:

Population:

The study aimed to include the customers of SBI oin Bangalore, to make a study on home loan

process.

Sample size:

A Sample size of 50 respondents is taken for the current study because it is not possible to cover

the whole universe in the available time period. So it is necessary to take the sample size. The

sample may take in the form of strata based on age, sex and income group.

Sampling technique:

The sampling technique will be probabilistic sampling more specifically the random convenient

and judgmental sampling will be used. As in probabilistic sampling the select unit for

observation with known probabilities so that statistically sound assumptions are supported from

the sample to entire population so that we had positive probability of being selected into the

sample. I went for stratified random sampling as we are interested to study the home loan

process in SBI bank, so we make the strata on the basis of age, occupation, income level, gender.

And from each stratum we will go for random sampling.



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A Study on Home Loan ProcessSBI HOME LOAN PROCEDURE:

Purpose: Purchase/ Construction of House/ Flat Purchase of a plot of land for construction of House Extension/ repair/ renovation/ alteration of an existing House/ Flat Purchase of Furnishings and Consumer Durables as a part of the project cost. Takeover of an existing loan from other Banks/ Housing Finance Companies

Features: Interest charged on the daily reducing balance No penalty for prepayments made No hidden costs All the features of our product, including interest rates, are in the public domain. Loan sanctioned within 6 days of submission of required documents.

Option to club income of your spouse and children to compute eligible loan amount Provision to club depreciation, expected rent accruals from property proposed to computeeligible loan amount Provision to finance cost of furnishing and consumer durables as part of project cost Repayment permitted up to 70 years of age Free personal accident insurance cover up to Rs.40 Lac. Optional Group Insurance from SBI Life at concessional premium (Upfront premium financedas part of project cost) SBI provides 80% amount of total value of the purpose. Special scheme to grant loans to finance Earnest Money Deposits to be paid to UrbanDevelopment Authority/ Housing Board, etc. in respect of allotment of sites/ house/ flat

Eligibility:

1. Minimum age 18 years as on the date of sanction.2. Maximum age limit for a Home Loan borrower is fixed at 70 years, i.e. the age by which theloan should be fully repaid.

Availability of sufficient, regular and continuous source of income for servicing the loanrepayment.

To enhance loan eligibility you have option to add:

1. Income of your spouse/ your son/ daughter living with you, provided they have a steady

income and his/ her salary account is maintained with SBI.

http://www.deal4loans.com/home-loan-banks.phphttp://www.deal4loans.com/http://www.deal4loans.com/home-loans.phphttp://www.deal4loans.com/home-loan-banks.phphttp://www.deal4loans.com/http://www.deal4loans.com/home-loans.php


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A Study on Home Loan Process2. Expected rent accruals (less taxes, cess, etc.) if the house/ flat being purchased is proposed to

be rented out.

3. Depreciation, subject to some conditions.

4. Regular income from all sources.

5. Should be a Government employee or should be an Income tax payer to the Government.

Margin (Special Festival Season Offer)

Purchase/ Construction of a new House/ Flat/ Plot of land: 15% for loans up to Rs. 1 cr.,20% for loans above Rs. 1 cr.

Repairs/ Renovation of an existing House/ Flat: 15%

Pre-closure Penalty:

No penalty if the loan is preclosed from own savings/windfall gains for which documentary

evidence is produced by the customer.

In case, such proof is not produced by the borrower, penalty @2% on the amount prepaid in

excess of normal EMI dues shall be levied if the loan is preclosed within 3 years from the date of

commencement of repayment.

Maximum Repayment Period

for applicants up to 45 years of age: 20 years

for applicants over 45 years of age: 15 years

Documents:

Completed application form

Passport size photograph

Proof of Identity PAN Card/ Voters ID/ Passport/ Driving License

Proof of Residence Recent Telephone Bill/ Electricity Bill/ Property tax receipt/ Passport/

Voters ID

Proof of business address in respect of businessmen/ industrialists

Sale Deed, Agreement of Sale, Letter of Allotment, Non encumbrance certificate, Land/

Building Tax paid receipt etc. (as applicable and subject to satisfaction report from our

empanelled lawyer)

Copy of approved plan and approval from the Local Body

Statement of Bank Account/ Pass Book for last 6 months.

Top of Form



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TYPES OF HOME LOAN

1. SBI Easy Home Loan

Getting your dream home has become easier with SBI Easy Home Loan. With low interest ratesfor home loan under Rs. 30 lakhs category, SBI Easy ensures that you are not burdened with

high interest for your home loan. Plus with over 13700 SBI branches nationwide you can getyour Home Loan account parked at a branch nearest to your present or proposed residence.

(Base Rate: 8.25% p.a.)

Name SBI Easy Home Loan

Facility Type Term Loan or OD as in SBI MaxGain. (OD facility will be available for loansabove Rs.5 Lacs.)

Loan amount Upto (and including) Rs.30 Lacs

Interest Rate Card Rate applicable for the tenor of the loan 1.50% above Base Rate,Present effective rate being 9.75% p.a.

1st Year 1% discount over Card Rate, present effective rate being 8.75% p.a.

2nd and 3rd

year0.25% discount over Card Rate, present effective rate being 9.50% p.a.

4th yearonwards

Card Rate

Processing Fee

The revised processing fee structure (including service tax) is as under:

Loan Amount Processing Fee

Upto Rs.5 Lac Rs.1000/-

Above Rs.5 Lac and upto Rs.10 Lac Rs.2000/-

Above Rs.10 Lac and upto Rs.20 Lac Rs.5000/-



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Above Rs.20 Lac and upto Rs.30 Lac Rs.7,000/-

2. SBI Advantage Home Loan


Name SBI Advantage Home Loan

(Above Rs.30 Lacs and upto Rs.75 Lacs)

Facility Type Term Loan or OD as in SBI MaxGain.

Loan amount For Home Loans above Rs 30 Lacs and upto Rs. 75.00 Lacs

Interest Rate Card Rate applicable for the tenor of the loan 1.75% above Base Rate, Presenteffective rate being 10.00% p.a.

Ist Year 1.25% discount over Card Rate, present effective rate being 8.75% p.a.

2nd and 3rd

year0.50% discount over Card Rate, present effective rate being at 9.50% p.a.

4th

yearonwards Card Rate

Processing Fee:


Above Rs.30 Lac and upto Rs.50 Lacs Rs.7,000/-

Above Rs. 50 Lacs and upto Rs. 75 Lacs Rs. 8,000/-



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3. SBI Premium Home Loan Above Rs.75 Lacs


Name SBI Premium Home Loan Above Rs.75 LacsFacilityType

Term Loan or OD as in SBI MaxGain upto Rs.1 Crore.

Loanamount

For Home Loans above Rs 75.00 Lacs

Interestrate

Card Rate applicable over the tenor of the loan is 1.75% over the Base Rate,present effective rate being 10.00% p.a.

Concessions including discretionary concessions will be available over thetenor of the loan.

Processing Fee

The revised processing feestructure (including servicetax) is as under:



Above Rs.75 Lacs and upto Rs.1 Crore Rs. 8,000/-

Above Rs. 1 Crore and upto Rs. 5 Crores Rs. 10,000/-

Above Rs. 5 Crores Rs. 20,000/-


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LIMITATIONS OF THE STUDY:

1. The time given for the project to be completed is less and thus a chances that some

information might have been left out.

2. Due to time constraints the area of sample size was relatively small.

3. It was difficult to find respondents as they were busy in their schedule, and collection of

data was very difficult.

4. It is very difficult to know all the respondents gave accurate information; some

respondents may give misleading information.



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ANALYSIS AND INTERPRETATION

Table No.1: Showing the age of respondents.

Analysis: From the above table it states that 32% of respondents are 31-40 age groups, 28% of

respondents are 21-30 age groups, 24% of respondents are 41-50 age groups, and 16% of

respondents are above 51 age group.

Interpretation: From the above analysis, it clearly found that 32%of total respondents are 31-40

age groups.

Graph No. 1: Showing age of respondents.

Table No.2: Showing Occupation of the respondents.


SI.NO Age of respondents No. of respondents Percentage

1 21-30 14 28

2 31-40 16 32

3 41-50 12 24

4 Above 51 8 16

5 Total 50 100


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SI.No Occupation of respondents No. of respondents Percentage

1 Businessman 10 202 Professional 9 18

3 Employee 20 40

4 Retired 7 14

5 Housewife 4 8

6 Total 50 100

Analysis: From the above table it states that 40% of respondents were employees, 20% of

respondents were businessman, 18% of respondents were professional, 14% of the respondents

were retired, and finally 8% of respondents were housewife..

Interpretation: from the above analysis, it is found that 40% of total respondents were

employees and 60% were employed in various organizations in Bangalore.

Graph No.2 Showing Occupation of the Respondents.

Table No. 3: Showing Annual Income of the Respondents.

SI.No Annual income of

respondents

No. of

respondents

Percentage

1 100000-300000 26 52

2 300001-500000 14 28

3 500001-1000000 6 12

4 Above 1000000 4 8

5 Total 50 100



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A Study on Home Loan ProcessAnalysis: From the above table it states that 52% of respondents income level is 100000-

300000, 28% of respondents income level is 300001-500000, 12% of respondents income level

is 500001-1000000, 8% of respondents income level is above 1000000.

Interpretation: From the above analysis, it states that 52% of total respondents income level is

100000-300000.

Graph No. 3: Showing Annual Income of the respondents.

Table No. 4: showing status of bank account holders.

SI.No Status of bank

account holders

No. of

respondents

percentage

1 Yes 45 90

2 No 5 10

3 Total 50 100

Analysis: From the above table it indicates that 90% of respondents have bank account with SBI

and 10% of respondents do not hold bank account with SBI.

Interpretation: The above ana