A

Project Study Report

On

“COMPARATIVE STUDY OF HOME LOAN AND PERSONAL

LOAN OF ICICI BANK

Submitted in partial fulfillment for theAward of degree of

Master of Business Administration

MASTER OF BUSINESS ADMINISTRATION

Submitted To : Submitted By

The Director Rahim Chopdar

JAIPUR ENGINEERING COLLEGE AND RESEARCH CENTER,

JAIPUR

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Declaration

I Rahim Chopdar declare that the project report title “COMPARATIVE STUDY

OF HOME LOAN AND PERSONAL LOAN OF ICICI BANK WITH SBI &

OTHER BANKS” is based on my project study. This project report is my

original work and this has not been used for any purpose anywhere.

Rahim Chopdar

M.B.A. iv Sem.

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PREFACE

As we know that M.B.A programme is more concern with the practical aspect of the business world.

The M.B.A students need to gain more and more practical experience. It is not possible for them to

have this from classroom lectures only. So in the Fourth Semester the students have to undergo

with the Project Report.

As banking sector is one of the booming sector in current market and in this sector the name ICICI

occupies its own space and doing project with this would provide us with knowing of the banking

sector as a whole and in this we shall know about the banking transaction their procedure of

opening the account, how the marketing helps in this sector and how can we describe our

knowledge either that we achieved after doing the study of this sector. Thus as per syllabus we

have to take project. This project has helped us a lot to gather much practical knowledge about

banking and other functional areas.

In our curriculum we have to cover four area of the company and to gather the information related to

those areas like general information, personnel department, marketing department and finance

department. Being a service firm bank has somewhat different working. And so as per the working

areas of company we have covered this information.

So whatever information we have covered is as per our knowledge and experience with the bank. It

had given added advantage to us by making us aware this new immerging concept of the

investment. During project we have gone through this concept in glance.

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Acknowledgement

I express my sincere thanks to my project guide, Mr.Navneet Sharma I.C.I.C.I.Incharge Training for

guiding me right from the inception till the successful completion of the project. I sincerely

acknowledge him for extending their valuable guidance, support for literature, critical reviews of

project and the report and above all the moral support he had provided to me with all stages of this

project.

I would also like to thank the supporting staff for their help and cooperation throughout our

project.

Khushbu Trivedi

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EXECUTIVE SUMMARY

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

all gathering funds little by little to afford one’s dream. Home is one of the things that everyone one

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

providing home loans whether commercial banks or financial institutions to the people who want to

had a home. The housing sector plays an important role in the economic development of the

country.

My project title is “COMPARATIVE STUDY OF HOME LOAN AND PERSONAL LOAN OF ICICI

BANK WITH SBI & OTHER BANKS”.

. I selected this topic because The Indian housing finance industry & personal loan has

grown by leaps and bound in few years. Total home loans disbursements by banks have raised

which witness’s phenomenal growth from last 5 years. There is greater number of borrowers of

home & personal loans. So by this study we can find out satisfaction level of customers and

problems faced by them in obtaining home loans & personal loans.

My objectives of study are-

• To make comparative study of Disbursement of home loans & personal loans by commercial

banks.

• To study the satisfaction level of customers about home loans & personal loans.

• To study the problems faced by customers in obtaining the home loans & personal loans.

In the research methodology I had taken primary data. In the primary data I had make a

questionnaire to check the satisfaction level of customers about home loans & personal loans.

For the first objective I had collected the information about the number of account holders of

specified banks, no of disbursement of home loans and recovery of these loans.

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CONTENTS

S.no. Particulars Page No.

1. Introduction to the Industry 7 – 40

2. Introduction to the Organization 41– 96

3. Research Methodology

4.1 Title of the Study

4.2 Duration of the Project

4.3 Objective of Study

4.4 Type of Research

4.5 Sample Size and method of selecting sample

4.6 Scope of Study

4.7 Limitation of Study

97– 100

4. Facts and Findings 101 – 104

5. Analysis and Interpretation 105-120

6. SWOT 121-122

7. Conclusion 123

8. Recommendation and Suggestions 124-125

9. Appendix – Questionnaire 126- 128

10. Bibliography 129

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1 . INTRODUCTION TO THE INDUSTRY:-

Indian banking system:

Organized banking was active in India since the establishment of the general bank of India in

1786. After the independence, the reserve bank of India RBI was established as the central bank

and in 1955, the imperial bank of India the biggest bank at the time ,was taken over by the

government to from state owned state bank of India . RBI had undertaken an exercise to merge

weak banks to strong banks and the total number of banks, thus reduced from 566in 1951 to 85 in

1969.

With the objective of reaching out to masses and meeting the credit needs of all sections of

people, the government nationalized 14 large banks in 1969 followed by another 6 banks in 1980.

This period saw enormous growth in the number of the branches and the banks ‘branches network

become wide enough to reach the weakest sections of the society in a vast country like India. SBI‘s

network of 9033 domestic branches and 48 overseas offices is considered to be one of the largest

for any banks in the world

The economic reforms unleashed by the government in early nineties included banking

sector too, to a significant extant. Entry of new private sector banks was permitted under specific

guidelines issued by RBI. A number of liberalization and deregulation measures aimed at

consolidation, efficiency productivity, asset quality capital adequacy and profitability have been

introduced by the RBI to bring Indian banks in line with international beat practices.

Banks are prone to crisis:

The traditional bank has an inherent tendency to crisis. This is because the bank borrows

short terms and lends leveraged long term. The sum of deposits and the bank’s capital will never

equal more than a modest percentage of the loans the bank has outstanding.

Even if liquidity is not a concern, if there is no run on the bank, banks can simply choose a

ban portfolio of loans, and lose more money than they have. The US Savings and Loan Crisis in the

late 1980s and early 1990s is such an incident.

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Role in the money supply:

A bank raises funds by attracting deposits, borrowing money in the inter-bank market, or

issuing financial instruments in the money market or a securities market. The bank then lends out

most of these funds to borrowers. However, it would not be prudent for a bank to lend out all of its

balance sheet. It most keeps a certain proportion of its funds in reserve so that it can repay

depositors who withdraw their deposits. Bank reserves are typically kept in the form of a deposit

with a central bank. This behavior is called fractional-reserve banking and it is a central issue of

monetary policy. Some government (or their central banks) restrict the proportion of a bank’s

balance sheet that can be lent out, and use this as a tool for controlling the money supply. Even

where the reserve ratio is not controlled by the government, a minimum figure will still be set by

regulatory authorities as part of banking supervision.

Social control of banks:

Indian banking structure has grown considerably in strength and stability due to the vigorous

control and effective monitoring by reserve bank of India. However, Order to remove the deficiency

pointed above, the Government introduced a scheme of social control of banks. According to the

Banking Commission (1972), the social control scheme was introduced with the main objective of

“achieving a wider spread of bank credit flow to priority sectors and making it a more effective

instrument of development.

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Structure of the indian banking industy

The Indian Banking industry, which is governed by the Banking Regulation Act of

India, 1949 can be broadly classified into two major categories Non-Scheduled Banks and

Scheduled Banks. Scheduled banks comprise commercial banks and the co-operative banks. In

terms of ownership, commercial banks can be further grouped into nationalized banks, the Stat

Bank of India and its group banks, regional rural banks and private sector banks these banks have

over 67,000 branches spread across the country.

The first phase of financial reforms resulted in the nationalization of 14 major banks in 1969

and resulted in a shift from Class banking to Mass banking. This in turn resulted in a significant

growth in the geographical coverage of banks. Every bank had to earmark a minimum percentage

of their loan portfolio to sectors identified as “priority sectors”. The manufacturing sector also grew

during the 1970s in protected environs and the banking sector was a critical source. The next wave

of reforms saw the nationalization of 6 more commercial banks in 1980. Since then the number of

scheduled commercial banks increased four-fold and the number of bank branches increased eight-

fold.

After the second phase of financial sector reforms and liberalization of the sector in the early

nineties, the Public Sector Banks (PSB) s found it extremely difficult to compete with the new private

sector banks and the foreign banks. The new private sector banks first made their appearance after

the guidelines permitting them were issued in January 1993. Eight new private sector banks are

presently in operation. These banks due to their late start have access to state-of-the-art

technology, which in turn helps them to save on manpower costs and provide better services.

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BANKING STRUCTURE

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RESERVE BANK OF INDIA Central Bank and Supreme Monetary Authority

Scheduled of Banking Sector

COMMERICAL BANKS CO-OPERATIVE BANK

Foreign Banks Regional Rural Banks

Urban cooperative Banks

Public Banks Private Banks

OLD BANKS New Banks

State Banks of India & Other Banks

Other Nationalized Banks

State cooperative Banks

1.4. Structure of Indian Banking Industry

Organized banking was active in India since the establishment of the General Bank of India in 1786.

After independence, the Reserve Bank of India (RBI) was established as the central bank and in

1955, the Imperial Bank of India, the biggest bank at the time, was taken over by the government to

form state-owned State Bank of India (SBI). RBI had undertaken an exercise to merge weak banks

to strong banks and the total number of banks thus reduced from 566 in 1951 to 85 in 1969.

With the objective of reaching out to masses and meeting the credit needs of all sections of people,

the government nationalized 14 large banks in 1969 followed by another 6 banks in 1980. This

period saw enormous growth in the number of branches and the banks’ branch network became

wide enough to reach the weakest sections of the society in a vast country like India. Sib’s network

of 9033 domestic branches and 48 overseas offices is considered to be one of the largest for any

bank in the world.

The economic reforms unleashed by the government in early nineties included banking sector too,

to a significant extent. Entry of new private sector banks was permitted under specific guidelines

issued by RBI. A number of liberalization and de-regulation measures aimed at consolidation,

efficiency, productivity, asset quality, capital adequacy and profitability have been introduced by the

RBI to bring Indian banks in line with International best practices. With a view to giving the state-

owned banks operational flexibility and functional autonomy, partial privatization has been

authorized as a first step, enabling them to dilute the stake of the government to 51 per cent. The

government further proposed, in the Union Budget for the financial year 2000-01, to reduce its

holding in nationalized banks to a minimum of 33 per cent on a case by case basis.

The banking system can be broadly classified as organized and unorganized banking system. The

unorganized banking system comprises of moneylenders, indigenous bankers, lending

pawnbrokers, landlords, traders, etc. Whereas the organized banking system comprise of

Scheduled Banks and Non-Scheduled Banks that are permitted by RBI to undertake banking

business.

1.4.1. Types of Banks

A. Scheduled Banks

Scheduled commercial banks are those that come under the purview of the Second Schedule of

Reserve Bank of India (RBI) Act, 1934. The banks that are included under this schedule are

those that satisfy the criteria laid down vide section 42 (6 of the Act).

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1. The bank is dealing in banking business in India only.

2. The paid up capital and total funds of the bank should not be less than five lakh rupees.

3. It should convince RBI that its activities would not be against the interest of investors.

4. The bank must be:

(a) State cooperative bank, or

(b) A company according to the definition of the companies Act1956, or

(c) An institution notified by the central government, or

(d) A corporation or a company incorporated by or under any law in force in any place

outside India.

Thus,

(I) Indian Commercial Banks

(II) Foreign Commercial Banks, and

(iii) State Cooperative Banks fulfilling the above condition are considered as

scheduled banks.

Moreover under the RBI Act section 42, the Central Government has declared the

following banks as scheduled banks.

(i) State Bank of India and its seven subsidiary banks,

(ii) Twenty nationalized banks, and

(iii) Urban Banks.

In June 1980 there were 149 scheduled banks which included

(i) Public Sector Banks

(ii) Private sector Banks,

(iii) Foreign Exchange Banks and

(iv) State Cooperative Banks.

A bank which wants to register its name as scheduled bank has to apply to the Central Government.

On receiving such application, the central government orders RBI to investigate the banks’

accounts. If RBI gives favorable reports, the central government sanctions its proposal, and the

bank is listed under schedule annexure II and is considered as a scheduled bank.

Some co-operative banks come under the category of scheduled commercial banks though not all

co-operative banks.  

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PUBLIC SECTOR BANKS  

Public sector banks are those in which the Government of India or the RBI is a majority

shareholder. These banks include the State Bank of India (SBI) and its subsidiaries, other

nationalized banks, and Regional Rural Banks (RRBs). Over 70% of the aggregate branches

in India are those of the public sector banks. Some of the leading banks in this segment

include Allahabad Bank, Canara Bank, Bank of Maharashtra, Central Bank of India, Indian

Overseas Bank, State Bank of India, State Bank of Patiala, State Bank of Bikaner and

Jaipur, State Bank of Travancore, Bank of Baroda, Bank of India, Oriental Bank of

Commerce, UCO Bank, Union Bank of India, Dena Bank and Corporation Bank. 

PRIVATE SECTOR BANKS  

Private Banks are essentially comprised of two types:

Old banks and new banks

The old private sector banks comprise those, which were operating before Banking

Nationalization Act was passed in 1969. On account of their small size, and regional

operations, these banks were not nationalized. These banks face intense rivalry from the

new private banks and the foreign banks. The banks that are included in this segment

include: Bank of Madura Ltd. (now a part of ICICI Bank), Bharat Overseas Bank Ltd., Bank

of Rajasthan, Karnataka Bank Ltd., Lord Krishna Bank Ltd., The Catholic Syrian Bank Ltd.,

The Dhanalakshmi Bank Ltd., The Federal Bank Ltd., The Jammu & Kashmir Bank Ltd., The

Karur Vysya Bank Ltd., The Lakshmi Vilas Bank Ltd., The Nedungadi Bank Ltd. and Vysya

Bank.

The new private sector banks were established when the Banking Regulation Act was

amended in 1993. Financial institutions promoted several of these banks. After the initial

licenses, the RBI has granted no more licenses. These banks are gearing up to face the

foreign banks by focusing on service and technology. Currently, these banks are on an

expansion spree, spreading into semi-urban areas and satellite towns. The leading banks

that are included in this segment include Bank of Punjab Ltd., Centurion Bank Ltd., Global

Trust Bank Ltd., HDFC Bank Ltd., ICICI Banking Corporation Ltd., IDBI Bank Ltd., IndusInd

Bank Ltd. and UTI Bank Ltd.  

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CO-OPERATIVE BANKS  

Co-operative banks act as substitutes for moneylenders, and offer timely and adequate

short-term and long-term institutional credit at reasonable rates of interest. Co-operative

banks are relatively similar in terms of functions to the other banks except for the following: 

a) They are organized and managed on the principal of co-operation, self-help, and

mutual help.

b) They operate under the rule of "one member, one vote".

c) Operate on "no profit, no loss" basis.

d) Co-operative bank conducts all the main banking functions of deposit mobilization,

supply of credit and provision of remittance facilities. Co-operative banks offer limited

banking products and are functionally specialists in agriculture-related products, and

even in providing housing loans of late. Urban Co-operative Banks offer working capital

loans and term loans as well.

e) Co-operative banks primarily operate in the agriculture and rural sector. However,

UCBs, SCBs, and CCBs function in semi urban, urban, and metropolitan areas too

f) Co-operative banks are probably the first government sponsored, government-

supported, and government-subsidized financial agency in India. They get

financial and other aid from the Reserve Bank of India NABARD, central

government and state governments. They are the "most favored" banking sector

with risk of nationalization.

g) Co-operative banks normally concentrate on "high revenue" niche retail segments.

DEVELOPMENT BANKS  

Development banks are primarily intended to encourage industrial development by providing

adequate flow of funds to industrial projects. In other words, these institutions undertake the

responsibility of aiding all-round development in the country’s economy by promoting new

industrial projects, and providing financial assistance for the expansion, diversification, and

up gradation of the existing units. Development Banks may be classified as All India

development banks and Regional development banks. While All India development banks

include Industrial Development Bank of India and Industrial Finance Corporation of India,

examples of Regional development banks include State Financial Corporation and State

Industrial Development Corporation. 

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B. NON-SCHEDULED BANKS:

The banks, which are not included in the second schedule of RBI Act, 1934, are known as

non-scheduled banks. Such banks total share capital is less than five lakh. These banks are

not governed according to the RBI Act and they receive no benefits from the RBI. These

banks have no place in the list of recognized banks of the RBI. These banks are not much

trusted by the people and they do not get handsome deposits. Since 1951 the numbers of

such banks have been gradually decreasing. In 1979 there were only five non-scheduled

banks.

Generally now days we found many cooperative banks which are belongs to the non-

schedule co-operative banks. Following are the types of non-schedule banks they are work

like the schedule banks but here difference in its status and it not having the status of the

schedule banks.

a. Deposits Banks

b. Cooperative Banks

c. Central Banks

d. Exchange Banks

e. Investment or Industrial Banks

f. Land Development Banks

g. Savings Banks

(a) Deposits Banks:

Generally, banks which provide short-term loans to business and industrial units and which

mobilize savings of people as deposits are called deposit banks. Deposit banks accept deposits

from people, and provide short-term advances. They provide overdraft and cash credit facilities

to merchants. To meet the long-term requirement of industrial units is not possible for these

banks. They accept three types of deposits- saving bank deposits, fixed deposits and current

account deposits. They accept these deposits which are payable on demand or on short notice,

and provide funds to trading and commercial units for short durations.

(b) Cooperative Banks

Cooperative banks meet the short-term financial needs of farmers. Agriculturists, petty farmers

and artisans organize themselves on cooperative principles and form cooperative societies and

banks. Cooperative banks raise funds through various means, besides receiving all kinds of

15

deposits to make them available as lend able funds to its members. In India developed

cooperative banks supply finance for agriculture and non-agriculture activities.

(c) Central Banks

A central bank is a special institution which controls and regulates the entire banking structure of

country. It also strives to maintain monetary stability of the country. Central bank is also known

as the apex bank of a country. Since it functions in the best interest of the country and making

profits is unknown to it, it is entrusted the right it issue currency notes. No other bank is allowed

this right. It operates in close cooperation with the government of implementing economic

policies, thereby promoting economic development.

(d) Exchange Banks:

There is a difference in financing of foreign trade and financing of internal trade. Generally a

person carrying on international trade requires foreign currencies to meet his obligation. It is

here that exchange banks play the role of financing the dealer for setting transactions involved

in foreign trade, there are specialized banks for exchange business. In India, there is an Export-

Import Bank (EXIM).

(e) Investment or Industrial Banks:

Investment banks provide long-term credit to industries. They raise their funds by way of share

capital, debentures, and long-term deposits from the public. They also raise funds by the issue

of bonds for business operations and government agencies. Usually they underwrite fresh issue

of shares and debentures of companies. Such banks also buy the entire issue of new

securities of public limited companies and try to get them subscribed at a higher price by the

public.

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(f) Land Development Banks:

Land development banks were earlier known as land mortgage banks. In India, there is limited

number of such banks. There are special institutions providing long-term loans to agricultures

and farmers. They provide loans on security of land and other immovable properties. They

supply long-term funds for periods exceeding six years. Agriculturists and farmers need such

funds for making permanent improvements to land and for buying farming machinery and

equipment.

(g) Savings Banks:

Savings Banks are specialized institutions, which encourage general public to save something

from their earnings. In other words such banks pool the small savings of middle and lower

income sections of society. They are the banks in the true sense of the term and their main aim

is to promote and collect of the public. Not only the depositors are given interest, but also they

are allowed to withdraw in times of need. The numbers of withdrawal are, however, restricted.

Separate savings banks are organized in various nations. The government can also run a

savings bank. In India the postal department runs the postal saving bank all over the country. It

is very popular in rural areas where no branches where no branches of established commercial

bank operate. In urban areas, commercial bank handles savings business

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FOREIGN BANKS :-

Foreign banks have brought latest technology and latest banking practices in India. They

have helped made Indian Banking system more competitive and efficient. Government has come up

with a road map for expansion of foreign banks in India.

The road map has two phases. During the first phase between March 2005 and March 2009,

foreign banks may establish a presence by way of setting up a wholly owned subsidiary (WOS) or

conversion of existing branches into a WOS. The second phase will commence in April 2009 after a

review of the experience gained after due consultation with all the stake holders in the banking

sector. The review would examine issues concerning extension of national treatment to WOS,

dilution of stake and permitting mergers/acquisitions of any private sector banks in India by a foreign

bank.

MAJOR FOREIGN BANKS IN INDIA ARE:

ABN-AMRO Bank

Abu Dhabi Commercial Bank Ltd.

American Express Bank Ltd BNP Paribas

Citibank

HSBC Ltd

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PUBLIC BANKS IN INDIA:

The Banking System in India is dominated by nationalized banks. The Nationalization of Banks in

India took place in 1969 by Mrs. Indira Gandhi the then Prime Minister. The major objective

Behind Nationalization Banks was to spread banking Infrastructure in Rural areas and make

available cheap finance to Indian farmers. Fourteen banks were nationalized in 1969. These Banks

were

Before 1969, State Bank of India (SBI) was the only public sector bank in India. SBI was

nationalized in 1955 under the SBI Act of 1955. The second phase of nationalization of Indian banks

took place in the year 1980. Seven more banks were nationalized with deposits over 200 crores.

Some of the following public sector banks in India are listed below.

LIST OF PUBLIC SECTOR BANKS IN INDIA IS AS FOLLOWS:

Allahabad Bank

Andhra Bank

Bank of Baroda

Bank of Maharashtra

Canara Bank

Central Bank of India

Corporation Bank

Dena Bank

Oriental Bank of Commerce

Punjab National Bank

State Bank of Bikaner & Jaipur

State Bank of India (SBI)

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PRIVATE BANKS IN INDIA:

All the banks in India were earlier private banks. They were founded in the pre-

independence era to cater to the banking needs of the people. But after nationalization of banks in

1969 public sector banks came to occupy dominant role in the banking structure. Private sector

banking in India received a fillip in 1994 when Reserve Bank of India encouraged setting up of

private banks as part of its policy of liberalization of the Indian Banking Industry. Housing

Development Finance Corporation Limited (HDFC) was amongst the first to receive an 'in principle'

approval from the Reserve Bank of India (RBI) to set up a bank in the private sector.

Private Banks have played a major role in the development of Indian banking industry. They

have made banking more efficient and customer friendly. In the process they have jolted public

sector banks out of complacency and forced them to become more competitive.

MAJOR PRIVATE BANKS IN INDIA ARE:

Bank of Rajasthan

Centurion Bank of Punjab

UTI Bank

YES Bank

Federal Bank

HDFC Bank

ICICI Bank

IDBI Bank

ING Vysya Bank

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INTRODUCTION OF NEW PRODUCTS AND SERVICES

Banks in India have traditionally offered mass banking products. Most common deposit

products being Savings Bank, Current Account, Term deposit Account and lending products being

Cash Credit and Term Loans. Due to Reserve Bank of India guidelines, Banks have had little to do

besides accepting deposits at rates fixed by Reserve Bank of India and lend amount arrived by the

formula stipulated by Reserve Bank of India at rates prescribed by the latter. PLR (Prime lending

rate) was the benchmark for interest on the lending products. But PLR itself was, more often than

not, dictated by RBI. Further, remittance products were limited to issuance of Drafts, Telegraphic

Transfers, Bankers Cheque and Internal Transfer of funds. 

Banking products structure has undergone a major change. As part of the economic reforms,

banking industry has been deregulated and made competitive. New players have added to the

competition. IT revolution has made it possible to provide ease and flexibility in operations to

customers. Rapid strides in information technology have, in fact, redefined the role and structure of

banking in India. Further, due to exposure to global trends after Information explosion led by

Internet, customers - both Individuals and Corporate - are now demanding better services with more

products from their banks. Financial market has turned into a buyer's market. Banks are also

changing with time and are trying to become one-stop financial supermarkets. Market focus is

shifting from mass banking products to class banking with introduction of value added and

customized products.

A few foreign & private sector banks have already introduced customized

banking products like Investment Advisory Services, SGL II accounts, Photo-credit cards, Cash

Management services, Investment products and Tax Advisory services. A few banks have gone in

to market mutual fund schemes. Eventually, the Banks plan to Market bonds and debentures, when

allowed. Insurance peddling by Banks will be a reality soon. The recent Credit Policy of RBI

announced on 27.4.2000 has further facilitated the entry of banks in this sector. Banks also offer

advisory services termed as 'private banking' - to "high relationship - value" clients.

Properly and also take your passport-sized photo. Home banking has already become

common, where you can order a draft or cash over phone/internet and have it delivered home. ICICI

bank was the first among the new private banks to launch its net banking service, called Infinity. It

allows the user to access account information over a secure line, request Cheque books and stop

payment, and even transfer funds between ICICI Bank accounts. Citibank has been offering net

banking to its Suvidha program to customers.

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Products like debit cards, flexi deposits, ATM cards, personal loans including consumer loans,

housing loans and vehicle loans have been introduced by a number of banks. 

Corporate are also deriving benefit from the increased variety of products and competition

among the banks. Certificates of deposit, Commercial papers, Non-convertible Debentures at can be

traded in the secondary market are gaining popularity. Recently, market has also seen major

developments in treasury advisory services. With the introduction of Rupee floating rates for deposits

as well as advances, products like interest rate swaps and forward rate agreements for foreign

exchange, risk management products like forward contract, option contract, and currency swap are

offered by almost every authorized dealer bank in the market. The list is growing. 

Public Sector Banks like SBI have also started focusing on this area. SBI plans to open 100 new

branches called Personal Banking Branches (PBB) this year. The will also market SBI's entire

spectrum of loan products: housing loans, car loans, personal loans, consumer durable loans,

education loans, loans against share, finance against go banks.

LOAN PRODUCTS OF THE BANKING INDUSTRIES:

A loan is a type of debt. This article focuses exclusively on monetary loans, although, in

practice, any material object might be lent. Like all debt instruments, a loan entails the redistribution

of financial assets over time, between the lender and the borrower.

The borrower initially does receive an amount of money from the lender, which he has to pay

back, usually but not always in regular installments, to the lender. This service is generally provided

at a cost, referred to as interest on the debt. A loan is of the annuity type if the amount paid

periodically (for paying off and interest together) is fixed.

A borrower may be subject to certain restrictions known as loan covenants under the terms of

the loan.

Acting as a provider of loans is one of the principal tasks for financial institutions. For other

institutions, issuing of debt contracts such as bonds is a typical source of funding.

Legally, a loan is a contractual promise between two parties where one party, the creditor,

agrees to provide a sum of money to a debtor, who promises to return the money to the creditor

either in one lump sum or in parts over a fixed period in time. This agreement may include providing

additional payments of rental charges on the funds advanced to the debtor for the time the funds

are in the hands of the debtor (interest).

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Types of loans:

A. Secured

A secured loan is a loan in which the borrower pledges some asset (e.g. a car or property) as

collateral for the loan.

A mortgage loan is a very common type of debt instrument, used by many individuals to

purchase housing. In this arrangement, the money is used to purchase the property. The financial

institution, however, is given security — a lien on the title to the house — until the mortgage is paid

off in full. If the borrower defaults on the loan, the bank would have the legal right to repossess the

house and sell it, to recover sums owing to it.

In some instances, a loan taken out to purchase a new or used car may be secured by the car,

in much the same way as a mortgage is secured by housing. The duration of the loan period is

considerably shorter — often corresponding to the useful life of the car. There are two types of auto

loans, direct and indirect. A direct auto loan is where a bank gives the loan directly to a consumer.

An indirect auto loan is where a car dealership acts as an intermediary between the bank or

financial institution and the consumer.

A type of loan especially used in limited partnership agreements is the recourse note.

A stock hedge loan is a special type of securities lending whereby the stock of a borrower is

hedged by the lender against loss, using options or other hedging strategies to reduce lender risk.[

A pre-settlement loan is a non-recourse debt, this is when a monetary loan is given based on

the merit and awardable amount in a lawsuit case. Only certain types of lawsuit cases are eligible

for a pre-settlement loan. This is considered a secured non-recourse debt due to the fact if the case

reaches a verdict in favor of the defendant the loan is forgiven.

Home loans: a route to home sweet home:

The last few years have seen a rise in the income of the people. As a result of this, many people

have moved up on the income ladder. With the increase in income, there has been seen an

increase in demand. One of the core necessities of human beings is a house of their own. The

increase in the demand for houses, flats and properties has lead to an altogether new dimension.

Just like a demand needs to equal supply to reach at the point of equilibrium, the increase in the

23

demand for finances for the new homes has lead to home loans. It is not a new sector, but home

loans were a proposition which wasn’t considered by the Indian consumers till even a decade back.

The banks present in India were very quick to assess the retail and property boom prevalent in the

economy. This has lead to new bank loan schemes in India. In India, banks alone do not lend

money to people, apart from them, public sector housing finance or private financial

institutions are also main sources of home loans. Hence, now the dreams of owning a home can

be materialized just by considering the different home loans options available in India. These home

loan schemes are gaining popularity because of the cheap interest rates they charge and other

features of simplicity. A large number of choices for loansgive you the opportunity to borrow loans

according to your necessity and earning ability.

The home loans issued by the housing finance companies allocate funds up to 80-85% of the

total flat or plot cost. The approved loan amount is generally transferred to the given account or a

cheque is handed over to the borrower. After this the borrowers are free to make use of the amount

according to their own requirement. An advantage of these sorts of loans is that they follow long

repayment to all categories of people can use the benefits of a home loan, like self-employed,

salaried individuals, housewives, business professionals, retired persons and farmers. The scheme

also works for NRI’s.

As mentioned earlier, there are a variety of options to choose from in the home loans sector.

India has no scarcity of home loan lenders or home loans schemes. What is important for

candidates is to not decide on a home loan without seeing the other options available in the market.

The most important criteria while deciding a home loan is the interest rate that the rms and

candidates can repay them in easy installments.

Home loan charges. These interest rates matter a lot and influence your monthly

installment burden. Hence, it is very important to choose that home loan which offers the best deal

of interest rate to you.

The internet works as an excellent tool in helping people not only choose from the different

home loan schemes being offered by the various banks, but also allows one to obtain a detailed

comparison of all those home loan schemes. These days, people can also purchase home loans

online, instead of physically going to banks. This has helped in saving the time and energy of the

borrowers.

The process of approval of home loans in India is simple. The applicant can credit his/her

property against the loan or if applicant is a salaried individual then he/she should enclose

24

documents proving his/her earnings. The other related identification proofs vary from lender to

lender.

As a last piece of advice, one must always remember to go thorough with all terms and

conditions mentioned in the home loans document. The home loans market is one which one can

enter very easily. However, a little amount of intelligence and awareness can help an individual get

the best deal available in the market. So, pick up a pen and a paper and choose the loan that will

get you the home of your choice.

A boom in the retail sector has seen an immense increase in the home loan interest rates over

the past 4 years. Home loan rates have doubled over the past 4 years. The present problem of

inflation has also had a negative effect on the consumers as the fixed and the floating rate of

interests have soared to an alarming degree. This in turn has certainly affected the loan eligibility for

home loans in India. This has also lead to loan borrowers re-evaluating their options to avail new

eligibility criteria.

At this time, it is important to understand how to enhance one’s

home loan eligibility. Given below are some ways which can help in this

Endeavour:

Increasing the home loan tenure :

The easiest method available to increase one’s home loan eligibility is by taking home loans for the

Maximum Tenure. As an example, let us consider an individual who earns a monthly salary of Rs

60,000. He decides to purchase a house, and for that he buys a home loan. After deducting a

monthly expenditure of Rs 35,000, the individual is able to save Rs 25,000. Undoubtedly, he will use

his savings for repaying the loan in the form of equated monthly installments (EMI).

Now, let’s consider that the installments for a home loan of Rs 1 lakh come at an interest rate of

12.5%. If the loan is taken for tenure of 15 years, the EMI calculated stands at Rs 1,232.50. For this

data, his home loan eligibility will be 20.3 lakh.

However, it is possible for the same individual to increase his home loan eligibility by around Rs 2

lakh if he can extend his tenure to 20 years. Assuming the same rate of interest i.e. 12.5% and now

20 year tenure on Rs 1 lakh loan, the EMI turns out to be Rs 1,136. Consequently, the home loan

eligibility comes to Rs 22 lakh.

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Don’t rush towards a home loan :

Less information is as harmful as wrong information.

The importance of this statement lies in the fact that today there are many banks offering different

varieties of home loans to individuals. Nowadays, almost every bank is offering a home loan with

the repayment period of maximum 20 years. The next important thing to consider after the tenure is

the rate of interest. For that reason, it is always advised, never to rush to purchase a home loan.

It is better to carry out a research regarding the available home loan schemes and to study the

market meticulously to make the best use of what many banks and housing finance companies are

willing to lend before making a choice

The next decision that an individual needs to make is to choose between floating and fixed interest

rate on home loan, which is largely based on one’s personal preference and knowledge about the

both. However, the floating rate home loans are available for anywhere between 11.5-13%.

Also, it might not be necessary that the first scheme being presented by a bank employee would be

the best for an individual.

Hence, always ask questions and enquire about the various schemes available with the bank, and

then make the final call.

Repay all outstanding loans :

A good report card always helps.

It is highly advised by bankers that before going to purchase any bank loan, an individual should

repay all the other pending outstanding loans. Any loan taken by an individual like car loans or

personal loans, taken on any bank, needs to be paid up to date. This adds to the ability to repay of

the individual and the lending institution takes a greater interest in issuing a home loan. Also, these

days, any bounced cheque of any late payment, is not missed by banks. Hence, it’s important to be

thorough with the repayments.

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When in need go for a joint loan :

If one spouse’s income comes short of the required amount set by the bank to issue a loan, then

several banks and HFCs have come up with a joint loan option. This option guarantees a loan for

both the husband and wife earning a combined income of Rs 1 lakh per month. The choice for a

greater loan is available with either husband or wife earning Rs 60,000 per month.

These are simple to follow tips, and can go a long way in increasing the home loan eligibility of an

individual. So, buckle up and get ready to purchase your home loan smartly.

B. Unsecured:

Unsecured loans are monetary loans that are not secured against the borrower's assets. These may

be available from financial institutions under many different guises or marketing packages:

credit card debt

personal loans

bank overdrafts

credit facilities or lines of credit

corporate bonds

The interest rates applicable to these different forms may vary depending on the lender and the

borrower. These may or may not be regulated by law. In the United Kingdom, when applied to

individuals, these may come under the Consumer Credit Act 1974.

What to look for while taking a personal loan:

Are you in need of cash but do not have any solid assets against which you could take a loan? Then

you have an option to rely upon that has been designed specially for this purpose. Personal loans

can be availed for any purpose and thus they are of great help at any point you do not have cash.

However it is important for us to deeply examine any loan offer and make the right choice.

So following are few facts that help you decide if you want to avail a personal loan.

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Examine your personal loan:

Today all banks and financial institutions are offering personal loans to the borrowers but it is

important to note down few tips before you finalize your personal loan lender.

• You should do a detailed market survey of the various options like the interest rates offered, pre-

payment charges levied and terms & conditions laid down by the lender.

• Interest rate is the most critical component of all the costs that you pay on your personal loan, so

make sure that you grab on the cheapest available option in the market. Some banks calculate

interest on monthly reducing basis while others evaluate it on annual basis. It is advisable to ensure

that the interest rate is calculated on a monthly reducing basis because the moment you pay your

installment, the next month's interest rate is calculated on the reduced amount.

• Equated Monthly Installments (EMIs) sometime come out to be a lot more than what you can

afford on a monthly basis. So keep in mind that a lower loan amount will reduce the tenure and also

make the EMI fall in your budget. The best way to find out a reasonable option is to get your EMI

calculated before you buy the loan and then check the repayment tenure. Banks normally limit the

maximum number of years for which a loan is given. Moreover the maximum number of years may

be different for salaried individuals, self-employed individuals and self-employed professionals. At

the same time the minimum and maximum loan amount that can be availed by an individual is also

categorized in the same manner.

• Make sure that other costs such as processing charges, foreclosure charges, service charges and

other charges are all worked out before considering the loan. You should look for zero processing

fees and zero-penalty for foreclosure option but if it not available then hunt for the lowest option.

• All deals and offers agreed upon should be taken on fine print to avoid future hassles.

Although a personal loan is a friend in need but it should be ensured that it is not availed for a luxury

that becomes a burden in the future. Where by bet on the lowest EMI.

Advantages:

• Personal loans do not require you to produce any collateral or security, like other loans.

• There is no agent or middleman while obtaining a personal loan.

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• Banks are always ready to offer this loan.

• You may avail personal loans according to your eligibility ranging anywhere from Rs. 15,000 to

Rs. 10, 00,000.

• Paper work to get the loan sanctioned is less.

• The payment period is up to a maximum of 60 months.

• It is better to avail a personal loan than to borrow cash on your credit card in terms of the interest

rates charged on both.

• You can use a personal loan for whatever purpose you want.

Disadvantages:

• The eligibility criteria are stricter in case of personal loans, since there is no security required and

the paper work is also less.

• The bank checks on your capability to repay more than any other loan due to the same reason.

• Only an approved category of borrowers are given personal loans because of the higher amount

risk associated with them.

• Personal loan rates are high as compared to the interest rates charged on home loans, loans

against property or loans against shares. They could range from 12% to 30%. Even the service

charges and prepayment penalty are very high

So given the pros and cons of personal loans one should be cautious while he goes shopping for

such a loan. He should know what exactly to look for in the market.

Getting the best rates on your personal loans in India:

Personal loans provide vital financial support for any reason within a short period of time. The

convenience offered by personal loans is not without the associated costs. The interest rates,

processing fees, prepayment penalty, administrative charges, document charges, verification

charges and other fees make them a pretty costly way to get instant money.

How do we get the best rates for our personal loans? What is the process by which we can save

money on interest rates, other fees and associated charges on our personal loans? This question

bothers almost everyone who wants or has taken a personal loan. Here are few things, which if

taken into consideration while applying for a personal loan can save a

The basic of getting any loan applies to personal loans as well. For all loans if the bank thinks that

you are a worthy customer who shows promise by your repayment capacity and fulfills other

eligibility requirements completely, they will try to offer the best rates. On the other

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Hand if they find that something which is required is missing from your profile they might impose

higher terms, which could increase the cost of your personal loan drastically.

30

Benefits and drawbacks of personal loans in India:

Personal loans are a panacea for any urgent cash crunch. A medical emergency, payments for a

laptop, funding a vacation, quick cash for marriage- whatever the need, personal loans are here to

help. Banks in India are more than willing to give a personal loan to the right applicant, but before

jumping on the bandwagon it would be good if a borrower knows the benefits and drawbacks of

taking a personal loan.

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Benefits of a personal loan in India:

1. No questions asked about the end use of the money:

Banks will simply give the cash and it's up to the borrower, where to use it and how to use it. So, it is

a very convenient monetary help.

2. No collateral, security or guarantor requirements:

Personal loans are solely granted on the basis of an individual's credit-worthiness. Banks do take

into account the income, employment, continuity of business and other factors so as to establish the

fact that the borrower will be able to repay the personal loan with interest in due time. No collateral

or security requirements are put forth by the banks for issuing a personal loan. This saves a lot of

embarrassment and hassles.

3. Total confidentiality:

Since there are no security or collateral requirements, personal loans can remain a secret between

you and the bank. Moreover every bank has some privacy policies, which ensures adequate

confidentiality.

4. Easy repayment:

Banks provide personal loans for 12 to 60 months. Varying from bank to bank, these tenures allow

easy repayment options to the borrower. The borrowed amount along with the interest rate is

calculated for the entire ten has to pay every month. Personal loans also come with a prepayment

clause are of the loan and a EMI is calculated which the borrower

5. Simple documentation:

With minimal eligibility and nil collateral requirements, the personal loans from banks in India require

minimal documentation. A proof of identity, income proof and residence proof will suffice in most

cases.

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6. Big loan amounts:

Depending on a borrower's repayment capacity, banks in India are willing to give a personal loan

ranging from Rs. 25000 to Rs. 2000000. This makes a personal loan an ideal choice to meet big

budget requirements.

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Drawbacks of Personal Loans in India:

1. High interest rates:

Personal loans are unsecured loans. In most of the cases banks won't ask for a collateral, security

or guarantee before issuing any personal loan, so it becomes a risky proposition for banks. To offset

this risk, banks provide personal loans at higher interest rates. Secondly, personal loan interest

rates also vary from person to person. How much of a risk banks consider you will determine the

terms and interest rates on your personal loan. A person with good existing loan repayment record,

serving in a reputed public sector, government, MNC, or blue chip company is more likely to get a

low interest rate personal loan than one who deviates from the standard norms. A low risk borrower

can get a personal loan at 16% interest rates while it can climb up 30% or more for others.

2. Not available to everyone:

Banks enforce strict employment, income and residence criteria before issuing any personal loan.

They'll only put their money where they find that the risk involved is minimal. So, a larger

percentage of applicants are rejected in case of personal loans.

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3. No part prepayments:

Prepayment of personal loan can be done as a whole. Banks in India generally do not allow part

prepayment of any personal loan. Moreover, there is a prepayment penalty of 2-5 percent on the

outstanding amount, which has to be paid to the bank while making any prepayments.

BANKING SERVICES IN INDIA

35

BROKER

DEBITHELP

CREDIT LOANS

LOAN

LIFEINSURANC

EPOLICY

SAVINGACCOUN

T

FIXEDDEPOSIT

E

CHECKING

ACCOUNT

BANKINGSERVICES

Indian banking sector analysis

The Indian banking sector is the growing banking industries. Their product quality and their

services in India. This report helps clients to analyze the leading-edge opportunities critical to the

success of the banking Industry in India. Detailed data and analysis helps an investor, financial

service providers, and global banking players navigate the evolving market of banks in India.

These are the some important point regarding the Indian banking sector

analysis are listed below:

The nationalized banks have more branches than any other types of banks in India. Now

there are about 33,627 Branches in India, as on March 2005.0

The Investments of scheduled commercial banks also saw an increase from Rs 8, 04,199

crore in March 2005 to Rs 8,43,081 crore in the same month of 2006

India's retail-banking assets are expected to grow at the rate of 18% a year over the next

four years (2008-2012).

The retail loan to drive the growth of retail banking in future.

The housing loan account for major chunk of retail loan.

36

37

KEY PRODUCT ANALYZED

NOTE…. This diagram is showing the ‘Banking Key Products’ such as Deposits, Retail credit, Credit card, Debit card, Internet banking.

38

Retail Credit

CreditCards

Debit Card

Internet Banking

Deposits

Key product

Analyzed

Banking in India today:-

The entire banking sector has undergone a restructuring during recent years as a result of recent

development. The new technologies have added to the competition. The IT revolution has made it

possible to provide easy and flexibility in operation to customer thus making life simpler and easiest.

The rapid strides in information technology have, infect, redefined the role and structure of banking

in India. Further, due to the exposure to global trend s after information explosion lead by more

products from their bank. The financial market has turned in to a buyers market. Banks are also

coping and adapting with time and are trying to become one stopped financial super market.

Private sector Banks have pioneered internet banking, phone banking, anywhere banking,

mobile banking, debit cards, Automatic Teller Machines (ATMs) and combined various other

services and integrated them into the mainstream banking arena, while the Private Sector Banks

are still grappling with disgruntled employees in the aftermath of successful VRS schemes. Also,

following India’s commitment to the WTO agreement in respect of the services sector, foreign

banks, including both new and the existing ones, have been permitted to open up to 12 branches a

year with effect from 1998-99 as against the earlier stipulation of 8 branches .Meanwhile the

economic and corporate sector slowdown has led to an increasing number of banks focusing on the

retail segment. Many of them are also entering the new vistas of Insurance. Banks with their

phenomenal reach and a regular interface with the retail investor are the best placed to enter into

the insurance sector. Banks in India have been allowed to provide fee-based insurance services

without risk participation invest in an insurance company for providing infrastructure and services

support and set up of a separate joint-venture insurance company with risk participation.

The Indian has finally worked up to the competitive dynamics of new Indian market and is

addressing the relevant issues take on the multifarious challenges of globalization. Bank that

employ IT solutions are perceived to be futuristic and proactive players capable of meeting the

multifarious requirement of large customer base. Private Banks have been fact on the uptake and

are reorienting their strategies using the Internet as a medium.

The Indian banking has come from a long from being a sleepy business institution to a highly

proactive and dynamic entity this transformation has been largely brought by the large dose of

liberalization and economic reforms that allowed exploring new business opportunities rather than

generating revenues form conventional streams.

The Indian Industry has confidently hit the growth trial that pick in activity is best reflected in the

banking sector which after all is as candid a mirror of a country’s economy as you could ever find.

39

Most of the Indian financial intermediaries have been keeping pace with the deepening market

economy, riding the opportunity that come along with reforms even as they brace themselves for

increased competition both foreign and private by strengthening prudential norms and leveraging

technology to ensure that growth engine hums smoothly along.

The essential function of a bank is to provide services related to the storing of value and the

extending credit. The evolution of banking dates back to the earliest writing, and continues in the

present where a bank is a financial institution that provides banking and other financial services.

Currently the term bank is generally understood an institution that holds a banking license. Banking

licenses are granted by financial supervision authorities and provide rights to conduct the most

fundamental banking services such as accepting deposits and making loans. There are also

financial institutions that provide certain banking services without meeting the legal definition of a

bank, a so called non-bank. Banks are a subset of the financial services industry.

The word bank is derived from the Italian bank, which is derived form German and means bench.

The terms bankrupt and “broke” are similarly derived from banker Rota, which refers to an out of

business bank, having its bench physically broken. Money lenders in Northern Italy originally did

business in open areas, or big open rooms, with each lender working from his own bench or table.

Typically, a bank generates profits from transaction fees on financial services or the interest spread

on resources it holds in trust for clients while paying them interest on the asset.

Branches of various banking:

State bank of India branches:

State Bank of India (SBI) is India's largest commercial bank. SBI has a vast domestic network of

over 9000 branches (approximately 14% of all bank branches) and commands one-fifth of deposits

and loans of all scheduled commercial banks in India.

I.C.I.C.I. bank branches:

ICICI Bank is India's second-largest bank. The Bank has a network of about 573 branches and

extension counters and over 2,000 ATMs. ICICI Bank was originally promoted in 1994 by ICICI

Limited, an Indian financial institution, and was its wholly-owned subsidiary

40

Hdfc bank branches:

Hdfc bank branches was incorporated in August 1994 in the name of 'HDFC Bank Limited', with its

registered office in Mumbai, India. The Bank commenced operations as a Scheduled Commercial

Bank in January 1995.

The Housing Development Finance Corporation Limited (HDFC) was amongst the first to receive an

'in principle' approval from the Reserve Bank of India (RBI) to set up a bank in the private sector, as

part of the RBI's liberalization of the Indian Banking Industry in 1994.

Headquartered in Mumbai, HDFC Bank, has a network of over 531 branches spread over 228 cities

across India. All branches are linked on an online real-time basis. Customers in over 120 locations

are serviced through Telephone Banking. The Bank also has a network of about over 1054

networked ATMs across these cities. HDFC Bank's ATM network can be accessed by all domestic

and international Visas / MasterCard Punjab National Bank was established in 1895 at Lahore. PNB

has the distinction of being the first Indian bank to have been started solely with Indian capital. In

1969, Punjab National Bank was nation

Impact of globalization on banking service in india

Business environment of global bank:

Global Bank has undergone a series of substantial changes in the last 10 years, starting with

the deregulation of the U.S. financial services industry in the late 1990s. Seeking to rapidly expand

its portfolio, the bank undertook a series of mergers and acquisitions. Global Bank now has over

200 branches across the western United States, and offers a complete line of integrated financial

services, including:

Lending. This includes credit cards, consumer loans (such as, auto and line of credit),

mortgage, and home equity.

Investing. This includes certificates of deposit, trust services, brokerage services (including

securities), annuities, individual retirement accounts, and mutual funds. Financial planning. This includes comprehensive financial planning services, including

retirement, education, tax, and estate planning, including both future planning and plan

execution services.

41

Technical environment of global bank

In the mid-1980s Global Bank had a single mainframe system, accessed through IBM 3270

terminals in each branch. Due to numerous acquisitions, the fragmentation of technology within its

divisions, and the natural evolution of technology, the technical environment at Global Bank have

changed substantially since then. It now consists of multiple different back-end systems, with a

middleware component to facilitate communication between them. The 3270 terminals have been

replaced with personal computer clients that run multiple applications and perform terminal emulation

to communicate with the back-end systems. During this time, Global Bank also invested heavily in

technology to provide additional Channels for customer communication, including Automated teller

machines , Telephone banking services, Internet banking

Global Bank networking environment

42

2. INTRODUCTION TO THE ORGANIZATION:-

COMPANY PROFILE

ICICI Bank is India's second-largest bank. The Bank has a network of about 573 branches and

extension counters and over 2,000 ATMs. ICICI Bank was originally promoted in 1994 by ICICI

Limited, an Indian financial institution, and was its wholly-owned subsidiary.ICICI was formed in

1955 at the initiative of the World Bank, the Government of India and representatives of Indian

industry. The objective was to create a development financial institution for providing medium-term

and long-term project financing to Indian businesses.

In the 1990s, ICICI transformed its business from a development financial institution offering only

project finance to a diversified financial services group offering a wide variety of products and

services, both directly and through a number of subsidiaries and affiliates like ICICI Bank.

In 1999, ICICI become the first Indian company and the first bank or financial institution from non-

Japan Asia to be listed on the NYSE. In 2001, ICICI bank acquired Bank of Madura Limited

ICICI Bank set up its international banking group in fiscal 2002 to cater to the cross border needs of

clients and leverage on its domestic banking strengths to offer products internationally. ICICI Bank

currently has subsidiaries in the United Kingdom, Canada and Russia, branches in Singapore and

Bahrain and representative offices in the United States, China, United Arab Emirates, Bangladesh

and South Africa…Today, ICICI Bank offers a wide range of banking products and financial services

to corporate and retail customers through a variety of delivery channels and through its specialized

subsidiaries and affiliates in the areas of investment banking, life and non-life insurance, venture

capital and asset management.

ICICI Bank is India's second-largest bank with total assets of Rs. 3,744.10 billion (US$ 77 billion) at

December 31, 2008 and profit after tax Rs. 30.14 billion for the nine months ended December 31,

2008. The Bank has a network of 1,438 branches and about 4,644 ATMs in India and presence in

18 countries. ICICI Bank offers a wide range of banking products and financial services to corporate

and retail customers through a variety of delivery channels and through its specialized subsidiaries

43

and affiliates in the areas of investment banking, life and non-life insurance, venture capital and

asset management. The Bank currently has subsidiaries in the United Kingdom, Russia and

Canada, branches in United States, Singapore, Bahrain, Hong Kong, Sri Lanka, Qatar and Dubai

International Finance Centre and representative offices in United Arab Emirates, China, South

Africa, Bangladesh, Thailand, Malaysia and Indonesia. Our UK subsidiary has established branches

in Belgium and Germany.

ICICI Bank's equity shares are listed in India on Bombay Stock Exchange and the National Stock

Exchange of India Limited and its American Depositary Receipts (ADRs) are listed on the New York

Stock Exchange (NYSE).

ABOUT ICICI BANK:

ICICI was established by the Government of India in the 1960s as a Financial Institution (FI, other

such institutions were IDBI and SIDBI) with the objective to finance large industrial projects. ICICI

was not a bank - it could not take retail deposits; and nor was it required to comply with Indian

banking requirements for liquid reserves. ICICI borrowed funds from many multilateral agencies

(such as the World Bank), often at concessional rates. These funds were deployed in large

corporate loans.

At the time of the reverse merger, there were rumours that ICICI had a large proportion of Non

Performing Loans ("NPA", as they are known in India) on its books - in particular to the steel

industry. Since 2002, there has been a general revival in Indian industry (and metal based industry

in particular). It is widely believed that the All this changed in 1990s. ICICI founded a separate legal

entity - ICICI Bank which undertook normal banking operations - taking deposits, credit cards, car

loans etc. The experiment was so successful that ICICI merged into ICICI Bank ("reverse merger")

in 2002.proportion of NPAs has come down to prudent levels (even if it were high earlier).

ICICI Bank now has the largest market share among all banks in retail or consumer financing. ICICI

Bank is the largest issuer of credit cards in India It was the first bank to offer a wide network of

ATM's and has a large network of ATM's.

ICICI Bank now has the largest market value of all banks in India, and is widely seen as a

sophisticated bank able to take on many global banks in the Indian market.

The Bank is expanding in overseas markets and has the largest international balance sheet among

Indian banks. The international banking business was set up in 2002 to implement a focused

strategy for the overseas market. The Bank now has wholly-owned subsidiaries, branches and

44

representatives offices in 18 countries, including an offshore unit in Mumbai. This includes wholly

owned subsidiaries in UK, Canada and Russia, offshore banking units in Singapore and Bahrain;

advisory branch in Dubai, branches in Sri Lanka, Hong Kong and Belgium; and rep offices in the

US, China, United Arab Emirates, Bangladesh, South Africa, Indonesia, Thailand and Malaysia. The

bank is targeting the NRI (Non Resident Indian) population for expanding its business.

ICICI Bank was originally promoted in 1994 by ICICI Limited, an Indian financial institution, and was

its wholly-owned subsidiary. ICICI's shareholding in ICICI Bank was reduced to 46% through a

public offering of shares in India in fiscal 1998, an equity offering in the form of ADRs listed on the

NYSE in fiscal 2000, ICICI Bank's acquisition of Bank of Madura Limited in an all-stock

amalgamation in fiscal 2001, and secondary market sales by ICICI to institutional investors in fiscal

2001 and fiscal 2002. ICICI was formed in 1955 at the initiative of the World Bank, the Government

of India and representatives of Indian industry. The principal objective was to create a development

financial institution for providing medium-term and long-term project financing to Indian businesses.

In the 1990s, ICICI transformed its business from a development financial institution offering only

project finance to a diversified financial services group offering a wide variety of products and

services, both directly and through a number of subsidiaries and affiliates like ICICI Bank. In 1999,

ICICI become the first Indian company and the first bank or financial institution from non-Japan Asia

to be listed on the NYSE.

After consideration of various corporate structuring alternatives in the context of the emerging

competitive scenario in the Indian banking industry, and the move towards universal banking, the

managements of ICICI and ICICI Bank formed the view that the merger of ICICI with ICICI Bank

would be the optimal strategic alternative for both entities, and would create the optimal legal

structure for the ICICI group's universal banking strategy. The merger would enhance value for

ICICI shareholders through the merged entity's access to low-cost deposits, greater opportunities

for earning fee-based income and the ability to participate in the payments system and provide

transaction-banking services. The merger would enhance value for ICICI Bank shareholders

through a large capital base and scale of operations, seamless access to ICICI's strong corporate

relationships built up over five decades, entry into new business segments, higher market share in

various business segments, particularly fee-based services, and access to the vast talent pool of

ICICI and its subsidiaries. In October 2001, the Boards of Directors of ICICI and ICICI Bank

approved the merger of ICICI and two of its wholly-owned retail finance subsidiaries, ICICI Personal

Financial Services Limited and ICICI Capital Services Limited, with ICICI Bank. The merger was

approved by shareholders of ICICI and ICICI Bank in January 2002, by the High Court of Gujarat at

Ahmadabad in March 2002, and by the High Court of Judicature at Mumbai and the Reserve Bank

of India in April 2002. Consequent to the merger, the ICICI group's financing and banking

operations, both wholesale and retail, have been integrated in a single entity.

45

FOREWORD:

Liberalization and Globalization have shrunk the world into a global village. Rapidly moving world

economy has intertwined the geographically divided countries into single thread. Opening up of the

economy for the rest of the world would shape our industries and companies by the same economic

forces as else where in the world. Industries and companies thus have to work in a competitive

market place, where there is no guarantee that every business must make money. Dynamic market

condition and global economic slowdown have forced an individual to become more cautious about

investment of each penny saved.

In such time of uncertainty and insecurity, banks come to investor’s rescue by offering safe and

revenue yielding investment avenues. Modifying their deposit products and developing new and

innovative schemes with advanced services modern banks have there by made banking more

closer and easier in individual’s life.

Privatisation waves in last decade of twentieth century have changed the face of baking in service

industry. Plethora of private banks flooded in to the market. ICICI bank one, amongst them, come

up ahead leaving other private banks one, amongst them, come up ahead leaving other private

banks behind by serving e-age-banking of customers. This report unveils the growth story of ICICI

bank, throws light on unknown aspects of banking and would unfolds the hidden facts about the

bank.

This report served as a mean to share our personal experiences while working on this project,

which provided us platform where we were face-to face to practical aspects of theoretical

knowledge gained so far.

46

ICICI BANK - THE UNIVERSAL BANK

47

Assets> Rs.1, 25,000

Crores Second largest Bank in India

Rated by Moody’s above

sovereign rating

Globally held (ADR, FII stake)

First Indian Bank to be

listed on NYSE

Icici bank history:

Industrial Credit and Investment Corporation of India) India's largest private sector bank in market

capitalization and second largest overall in terms of assets. ICICI Bank has total assets of about

USD 79 Billion (end-Mar 2007), a network of over 950 branches and offices, about 3500 ATMs, and

24 million customers (as of end July '07). ICICI Bank offers a wide range of banking products and

financial services to corporate and retail customers through a variety of delivery channels and

through its specialised subsidiaries and affiliates in the areas of investment banking, life and non-life

insurance, venture capital and asset management. ICICI Bank's equity shares are listed in India on

stock exchanges at Kolkata and Vadodara, the Stock Exchange, Mumbai and the National Stock

Exchange of India Limited and its ADRs are listed on the New York Stock Exchange (NYSE).

The World Bank, the Government of India and representatives of Indian industry form ICICI

Limited as a development finance institution to provide medium-term and long-term project

financing to Indian businesses in 1955.

1994 ICICI establishes ICICI Banking Corporation as a banking subsidiary.ICICI Banking

Corporation is renamed as 'ICICI Bank Limited'

1999 ICICI becomes the first Indian company and the first bank or financial institution from non-

Japan Asia to list on the NYSE.

2001 ICICI acquired Bank of Madura (est. 1943). Bank of Madura was a Chettiar bank, and had

acquired Chettinad Mercantile Bank (est. 1933) and Illanji Bank (established 1904) in the 1960s.

2002 The Boards of Directors of ICICI and ICICI Bank approve the merger of ICICI, ICICI

Personal Financial Services Limited and ICICI Capital Services Limited, with ICICI Bank. After

receiving all necessary regulatory approvals, ICICI integrates the group's financing and banking

operations, both wholesale and retail, into a single entity. Also, ICICI Bank bought the Shimla

and Darjeeling branches that Standard Chartered Bank had inherited when it acquired Grindlays

Bank.

2002 ICICI establishes representative offices in NY and London.

2003 ICICI opens subsidiaries in Canada and the United Kingdom (UK), and in the UK it

establishes alliance with Lloyds TSB. It also opens an Offshore Banking Unit (OBU) in

Singapore and representative offices in Dubai and Shanghai.

2004 ICICI opens a rep office in Bangladesh to tap the extensive trade between that country,

India and South Africa.

2005 ICICI acquires Investitsionno-Kreditny Bank (IKB), a Russia bank with about US$4mn in

assets, head office in Balabanovo in the Kaluga region, and with a branch in Moscow. ICICI

Bank offers a high-interest (5.4% gross) internet savings account to UK customers. Also, ICICI

establishes a branch in Dubai International Financial Centre and in Hong Kong.

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2006 ICICI Bank UK opens a branch in Antwerp, in Belgium. ICICI opens representative offices

in Bangkok, Jakarta, and Kuala Lumpur.

2007 ICICI amalgamates Sangli Bank, which is headquartered in Sangli, in Maharashtra State,

and which has 158 branches in Maharashtra and another 31 in Karnataka State. ICICI also

received permission from the government of Qatar to open a branch in Doha.

Business Overview:

ICICI Bank is India's second-largest bank with total assets of about Rs.1,67,659 crore at March 31,

2006 and profit after tax of Rs. 2,005 crore for the year ended March 31, 2006 (Rs. 1740 crore in

fiscal 2004). ICICI Bank has a network of about 570 branches and extension counters and over

2200 ATMs. ICICI Bank offers a wide range of banking products and financial services to corporate

and retail customers through a variety of delivery channels and through its specialized subsidiaries

and affiliates in the areas of investment banking, life and non-life insurance, venture capital and

asset management. ICICI Bank set up its international banking group in fiscal 2002 to cater to the

cross border needs of clients and leverage on its domestic banking strengths to offer products

internationally. ICICI Bank currently has subsidiaries in the United Kingdom, Canada and Russia,

branches in Singapore and Bahrain and representative offices in the United States, China, United

Arab Emirates, Bangladesh and South Africa.

ICICI Bank's equity shares are listed in India on the Stock Exchange, Mumbai and the National

Stock Exchange of India Limited and its American Depositary Receipts (ADRs) are listed on the

New York Stock Exchange (NYSE).

As required by the stock exchanges, ICICI Bank has formulated a Code of Business Conduct and

Ethics for its directors and employees.

At April 4, 2006 ICICI Bank, with free float market capitalization* of about Rs. 308.00 billion

(US$ 7.00 billion) ranked third amongst all the companies listed on the Indian stock

exchanges.

ICICI Bank was originally promoted in 1994 by ICICI Limited, an Indian financial institution, and was

its wholly-owned subsidiary. ICICI's shareholding in ICICI Bank was reduced to 46% through a

public offering of shares in India in fiscal 1998, an equity offering in the form of ADRs listed on the

NYSE in fiscal 2000, ICICI Bank's acquisition of Bank of Madura Limited in an all-stock

amalgamation in fiscal 2001, and secondary market sales by ICICI to institutional investors in fiscal

2001 and fiscal 2002. ICICI was formed in 1955 at the initiative of the World Bank, the Government

of India and representatives of Indian industry. The principal objective was to create a development

49

financial institution for providing medium-term and long-term project financing to Indian businesses.

In the 1990s, ICICI transformed its business from a development financial institution offering only

project finance to a diversified financial services group offering a wide variety of products and

services, both directly and through a number of subsidiaries and affiliates like ICICI Bank. In 1999,

ICICI become the first Indian company and the first bank or financial institution from non-Japan Asia

to be listed on the NYSE.

After consideration of various corporate structuring alternatives in the context of the emerging

competitive scenario in the Indian banking industry, and the move towards universal banking, the

managements of ICICI and ICICI Bank formed the view that the merger of ICICI with ICICI Bank

would be the optimal strategic alternative for both entities, and would create the optimal legal

structure for the ICICI group's universal banking strategy. The merger would enhance value for

ICICI shareholders through the merged entity's access to low-cost deposits, greater opportunities

for earning fee-based income and the ability to participate in the payments system and provide

transaction-banking services. The merger would enhance value for ICICI Bank shareholders

through a large capital base and scale of operations, seamless access to ICICI's strong corporate

relationships built up over five decades, entry into new business segments, higher market share in

various business segments, particularly fee-based services, and access to the vast talent pool of

ICICI and its subsidiaries. In October 2001, the Boards of Directors of ICICI and ICICI Bank

approved the merger of ICICI, and two of its wholly-owned retail finance subsidiaries, ICICI

Personal Financial Services Limited and ICICI Capital Services Limited, with ICICI Bank. The

merger was approved by shareholders of ICICI and ICICI Bank in January 2002, by the High Court

of Gujarat at Ahmadabad in March 2002, and by the High Court of Judicature at Mumbai and the

Reserve Bank of India in April 2002. Consequent to the merger, the ICICI group's financing and

banking operations, both wholesale and retail, have been integrated in a single entity. *Free float

holding excludes all promoter holdings, strategic investments and cross holdings among public

sector entities.

50

Vision

“To be the preferred brand for total financial and banking solutions for both

corporate and individuals”

ICICI Bank is India’s largest private sector bank with a legacy of over 50 years.

We have a wide customer base and a leading global presence.

Our Small & Medium Enterprises Group (SMEG) caters to the SME segment and offers

banking solutions to sole proprietorship, partnership firms and companies. Our extensive

trade related expertise, widespread local network and global alliances enable us to provide

value-added service. SMEs trust us for information, assistance, and advice and customized

banking solutions.

Mission

To identify and support initiatives which are designed to improve the capacity of the poorest of

the poor to participate in the larger economy.

These initiatives must be cost effective, capable of large-scale replication and should have the

potential for both near and long-term impact.

To leverage technology in order to overcome constraints and enhance the effectiveness of

various social initiatives.

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COMPANY INFORMATION

BOARD OF DIRECTORS

Mr. K.V. Kamath, Managing Director & CEO

Ms. Chanda Kochhar, Deputy Managing Director

Mr. Sridar Iyengar

Mr. Lakshmi N. Mittal

Mr. Narendra Murkumbi

Mr. Anupam Puri

Mr. Vinod Rai

Mr. M.K. Sharma

Mr. P.M. Sinha

Prof. Marti G. Subramanian

Mr. T.S. Vijayan

Mr. V. Prem Watsa

CHAIRMAN

Narayanan vaghul

CFO AND TREASURER

N.S. Kannan

MAJOR COMPITITORS

HSBC Holding

Standard Charted

State Bank Of India

HDFC Bank

52

ICICI GROUP TODAY

53

ICICI GROUP

ICICI Pru Life Insurance

ICICI Infotech

ICICI Bank

ICICI Home Finance

ICICI Securities

Pru - ICICI AMC

ICICI Lombard

ICICI Venture Capital

Strategy of the icici bank

1. IDENTIFY AND SUPPORT PROJECTS AND PROGRAMMES THAT ARE WITHIN ITS FOCUS AREAS AND,

Have a large- scale and measurable- impact;

Are replicable in a cost effective manner; and

Are time-bound.

2. IDENTIFY AND SUPPORT PILOT PROJECTS WITHIN ITS FOCUS AREAS.

3. CONTRIBUTE TOWARDS IMPROVING THE EFFICACY OF ASSISTED ORGANIZATIONS THROUGH:

capacity building;

Providing access to research and information; and providing platforms for an effective

exchange of ideas, thoughts and experiences.

Subsidiaries and other group companies

Icici bank has 14 subsidiaries:

ICICI Securities limited.

ICICI brokerage services limited

ICICI securities holdings limited

ICICI securities insurance limited

ICICI prudential life insurance company limited

ICICI Lombard general insurance company limited

ICICI venture funds Management Company limited

ICICI home finance company limited

ICICI bank UK limited

ICICI bank Canada

ICICI international limited.

ICICI trusteeship service limited

ICICI investment Management Company limited

ICICI distribution finance private limited

54

ICICI has the following other group companies with in the meaning of the Securities exchange

board of India (SEBI) guidelines:

Prudential ICICI assets Management Company limited

Prudential ICICI Trust limited

In addition, ICICI is the sponsors or co sponsors of prudential ICICI mutual funds, the assets

management company of which is prudential ICICI assets Management Company limited and the

trustee of which is prudential ICICI trust

ICICI securities fund, the assets management company of which is ICICI investment Management

Company limited. None of its subsidiaries or other group companies has any shares listed on any

stock exchange

OVERVIEW OF THE ICICI BANKS OPERATIONS

ICICI bank offer products and services in the area of commercial banking to corporate and retail

customer, both domestic and international. ICICI bank also under tokens treasury operations and

offer treasury elated products and services to its customers.

COMMERCIAL BANKING PRODUCTS AND SERVICES FOR RETAIL

CUSSTOMER:

ICICI bank has capitalized on the growing retail opportunity in India and it India it has emerged as a

market leader in credit on an incremental basis, with an outstanding retail finance portfolio of Rs

33424 crore at March 31, 2004. The key dimensions of its retail strategy are;

Innovative products

Parity pricing

Customer convenience

Wide distribution

Strong process

Customer focus

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Cross selling of the entire range of credit and investment products and banking services in the

customer is a critical aspects of ICICI bank‘s retail strategy .ICICI Bank offers a wide range of

Varity of consumers credit products such as.

Home loans

Automobile loan

Commercial vehicle loan

Personal loans

ICICI Bank commercial banking operation for retail customer also consists of raising deposits for

retail customer it offer retail liability products in form of variety of unsecured redeemable bond.

GENERAL

Retail lending Activities

Home Finance

Automobiles Finance

COMMERICIAL BUSINESS

Personal loans

Credit cards

Dealer financing

Retail Deposites

In additions to conventional deposit products ICICI Bank offers a variety of SPECIAL VALUE –

ADDED PRODUCTS AND SERVICES. Such as special products for different categories of

customer depending upon their age and occupation, which seek to cater to their ICICI Bank, offer

different liability products to various categories of customer depending on their age group such as;

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PRODUCTS AND SERVICES OFFERED BY THE ICICI BANK

57

INVESTMENT SERVICES

ASSET PRODUCTS

LIABILITIESPRODUCTS

Products & Services

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LIABILITY PRODUCTS

Salary Account

Saving Account

Auto Invest Account

Welcome kit

Senior Citizen Services

Fixed Deposits

Term Deposits

ASSET PRODUCTS

Credit Cards

Home Loans

Personal loan

Two wheeler loan

INVESTMENT SERVICES

ICICI Direct .Com

Demat Account

Mutual Fund

Insurance

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Loan products of ICICI Bank

Bank Home loans provide not just the most competitive interest rates & best level of service, but

also products designed to cater to the specific needs of consumer. New products / New features in

existing products are introduced based on customer feedback. Choose the ICICI Bank Home Loan

that suits your needs

Best Deals on Home Loan for You

We, at ICICI Bank Home Loans, offer unbeatable benefits to ensure that you get the best deal

without any hassles.

As one of the leading home loan provider, ICICI Bank understands how special building a new

home is for you and our Home Loan help you lay the foundation for your dream home.

ICICI offers you the most convenient home loan plans to suit your needs. With so many attractive

features in every type of home loan we offer, creating the home you always wanted is no longer a

distant dream. Some of our key benefits are:

• Guidance through out the process

• Home loan amounts suited to your needs

• Home Loan tenure upto 20 years

• Simplified Documentation

• Doorstep Service

• Attractive interest rates

• Sanction approval without having selected a property.

• Free Personal Accident Insurance (Terms & Conditions)

• Insurance options for your home loan at attractive premium

No matter what the requirement, we have an appropriate plan for you.Get the best deals, and

finance your perfect home, only from ICICI Bank.

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Home Loans

Home Loans are provided to individuals to own a residential property.

ICICI Bank offers easy home loans for

First Purchase in ready construction

Under construction property

Purchase in re-sale

Self construction - extension of existing living space

The following are the features of ICICI Bank Home Loans

Home loan amount can be chosen to suit specific needs.

One can avail of a loan up to 80% of Cost of Property.

Conveniently pay off the loan over a period of up to 25 years.

It can be availed at the Floating rate of Interest or at the fixed rate of Interest or at the

combination of both Fixed & Floating rates.

Faster repayment as principal repayment in on monthly rest.

Eligibility Norms for Home Loans.

Home Loans can be availed by Resident Indian whether salaried or Self-Employed and also by

Non- Resident Indian who are Salaried. For resident Indians the following are the eligibility norms

You must be at least 21 years of age when the loan is sanctioned.

The loan must terminate before or when you turn 65 years of age or before retirement,

whichever is earlier.

You must be employed or self-employed with a regular source of income.

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Types of home loans: -

Housing loans offered by banks are of different types:-

Home Purchase Loans

 Home Construction Loans

 Home Improvement Loans

 Home Extension Loans

 Home Conversion Loans

 Land Purchase Loans

 Stamp Duty Loans

 Bridge Loans

 Balance Transfer Loans

 Refinance Loans

 Loans to NRIs

Home purchase loans:-

This is the basic home loan for the purchase of a new home. If you want to buy a flat in

some society or some already built house, banks and HFCs sanction you home purchase loans for

this process.

Home construction loans:-

This loan is available for the construction of a new home on a said property. The documents

that are required in such a case are slightly different from the ones you submit for a normal Housing

Loan. If you have purchased this plot within a period of one year before you started construction of

your house, most HFCs will include the land cost as a component, to value the total cost of the

property. In cases where the period from the date of purchase of land to the date of application has

exceeded a year, the land cost will not be included in the total cost of property while calculating

eligibility.

Home improvement loans:-

These loans are given for implementing repair works and renovations in a home that has

already been purchased, for external works like structural repairs, waterproofing or internal work like

tiling and flooring, plumbing, electrical work, painting, etc. One can avail of such a loan facility of a

home improvement loan, after obtaining the requisite approvals from the relevant building authority.

the following are coming under the home improvement loans:

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External repairs

Tiling and flooring

Internal and external painting

Plumbing and electrical work

Waterproofing and roofing

Grills and aluminum windows

Waterproofing on terrace

Construction of underground/overhead water tank

Paving of compound wall (with stone/tile/etc.)

Borewell.

Home extension loans:-

An extension loan is one which helps you to meet the expenses of any alteration to the

existing building like extension/ modification of an existing home; for example addition of an extra

room etc. One can avail of such a loan facility of a home extension loan, after obtaining the requisite

approvals from the relevant municipal corporation.

Home conversion loans:-

This is available for those who have financed the present home with a home loan and wish

to purchase and move to another home for which some extra funds are required. Through a home

conversion loan, the existing loan is transferred to the new home including the extra amount

required, eliminating the need for pre-payment of the previous loan.

Land purchase loans:-

This loan is available for purchase of land for both home construction or investment

purposes.

Stamp duty loans:-

This loan is sanctioned to pay the stamp duty amount that needs to be paid on the purchase

of property.

Bridge loans:-

Bridge Loans are designed for people who wish to sell the existing home and purchase

another. The bridge loan helps finance the new home, until a buyer is found for the old home.

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Balance- transfer loans:-

Balance Transfer is the transfer of the balance of an existing home loan that you availed at a

higher rate of interest (ROI) to either the same HFC or another HFC at the current ROI a lower rate

of interest.

Refinance loans:-

Refinance loans are taken in case when a loan for your house from a HFI at a particular ROI

you have taken drops over the years and you stand to lose. In such cases you may opt to swap

your loan. This could be done from either the same HFI or another HFI at the current rates of

interest, which is lower.

NRI home loans:-

This is tailored for the requirements of Non-Resident Indians who wish to build or buy a

home or property in India. The HFCs offer attractive housing finance plans for NRI investors with

suitable repayment options.

On would be entitled for home loans in the range of Rs 5 lakh to a maximum of Rs 1 crore, based

on the repayment capacity, previous credit history and the cost of the property. The bank may

provide a maximum of 85% of the cost of the property or the cost of construction as applicable and

75% of the cost of land in case of purchase of land. The repayment capacity is calculated taking into

account factors such as:

Age

Income/Salary

Qualifications

Dependant/(s)

Assets/Liabilities

Credit History

Stability / continuity of your employment/business

Income of co-applicant/(s)

Taking home loans these days has become simpler. With the RBI regularly bring down interest

rates; taking home loans have become extremely easy. Housing loans which were 16.5% to 18% a

few years ago fell by 11.5% to 13%. With interest rates going down, people increasingly number

apply to take these loans. Some of the leading banks offering home loans in India, including ICICI

Bank, IDBI Bank, HDFC Bank State Bank, Bank of Baroda, Kotak Bank, SBI, Standard Chartered

Bank and Axis Bank.

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Types of icici home loan:

1. Land Loans:

Land loans give an opportunity for individual customer to purchase a residential plot of land

to do self- construction. Thus, customer can invest now in a plot of land & build in future.

The Land loan can be financed only within municipal limits of HUB locations or in case of

direct allotment outside municipal limits by DA.

Land Loan can be availed by Resident Indian whether Salaried or Self-Employed and also by

Non- Resident Indian.

2. Home Improvement Loans:

Home Improvement Loan is offered to facilitate improvement of a self-owned dwelling unit to

existing or new customer. HIL considers a range of facilities internal or external to the structure

without increase in the living pace. Thus, a customer can add or improve facilities to his dwelling

unit with a loan at Home Equity Loan rate of interest

Home Improvement Loan can be availed by Resident Indian whether salaried or Self-Employed.

3. Office Premises Loans:

Office Premises Loan can be used for purchase, construction, extension & also for improvement (at the

time of acquisition of office premises. It creates an opportunity to extend loans to self-employed individuals to

house their profession or business giving a permanent address for generating steady flow of income. The

product can also include the estimate of renovation at the time of purchase of the property. This loan is

especially meant for self-employed professionals like Doctors, Architects etc.

Home Loans can be availed by Resident Indian who are Self-Employed and also by Non- Resident Indian

who are Salaried.

EMI under Construction:

EMI under Construction is offered for structuring a home loan to enable individuals to commence his

EMI in a partly disbursed under construction project. Commencement of EMI ensures re-payment

towards principal amount leading to savings in interest and faster repayment of the loan. The EMI

paid is as per the sanctioned loan amount and remains constant during the tenure of the loan. The

tenure of the loan keeps moving up with additional amount being disbursed.

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EMI under Construction can be availed by Resident Indian whether Salaried or Self-Employed and

also by Non- Resident Indian.

Balance Transfer:

Balance Transfer is a facility offering the customer a choice to transfer the outstanding balance of

the loan availed for better terms & conditions. Balance Transfer helps to move from higher rate of

interest to lower rate of interest or increase in loan component as Top up. BT is possible only from

loans taken from HFCs approved by NHB for refinance, Banks or employer Loans taken from

Central or State Government.

4. Top Up Loan:

Top up Loan can be availed time and again for various personal requirement based on value of the

property. It offers the customer additional funds against the security of the same property. To avail

Top Up loan, the vintage of at least six months is required for the loan availed. The basic eligibility

emerges with good repayment track record. The end use letter is essential to be collected.

The End use of Top Up Loans can be

Furnishing of home

Consumer durable

Child’s education

Daughter’s marriage

Family holiday

Vehicle

Any other personal requirement of the borrower provided it is not speculative or illegal in nature.

This product is applicable to fully disbursed cases with no post- disbursement document pending.

This product is priced more than base home loan rates but lower than any personal loan rates. Top Up

Loan can be availed by Resident Indian whether Salaried or Self-Employed.

5. Loan on Phone:

Loan On Phone is a pre-sanctioned loan. Its is based on the existing relationship of the customer

with ICICI Bank. The biggest advantage is that the customer can get the loan with minimum

documentation. Good banking transactions and repayment records becomes a strength for availing

loans in future.

Loan on Phone can be availed by Resident Indian whether salaried or Self-Employed

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6. Home Equity Loan:

Loan against property gives the owner of residential or commercial premises to leverage on the

value of the property. It offers the ability to unlock funds gives the advantage of looking at the asset

as a source of security bringing liquidity and retaining ownership. In case of HEL the property

should be self occupied by one of income considered applicants. The security of the property

ensures competitive rate of interest. The interest component of the EMI paid by SEP / SENP can be

booked as expenses in their P & L

Home Equity Loans are provided for many personal requirements of the customer viz. –

Marriage

Child Education

Business

Purchase of Property (Where mortgage is not possible)

Improvement of Property

Medical Treatment

Home Equity Loans can be availed by Resident Indian who are Self-Employed and also by Non-

Resident Indian who are Salaried.

Property Overdraft:

The overdraft facility from ICICI Bank Home Loans allows you to borrow money against your self-

occupied property. The overdraft facility comes with a multi-city cheque book and phone banking

facility. The customer is charged interest only for the amount that he withdraws from the account.

Whenever he deposits funds into the account, they go towards reducing the outstanding balance in

the account.

It offers the following benefits:-

Generating capital against property (R) or ( C) for business or personal use

Convenience of Pre - Sanctioned limit and draw as you need

Pay interest on the amount drawn and for days utilized

Convenience of depositing & withdrawing like any Current Account

Benefit of Cheque Book & Phone banking

Fast Processing and door-step service

Multi-city cheque book and phone banking facility

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Lease Rental Discounting:

Lease Rental Discounting helps to raise funds against the future expected rentals of self owned

commercial property. The property should be occupied by the Lessee. Similar to Home Equity

Loans, LRD can be provided for any personal requirements of the customer viz. –

Marriage

Child Education

Business

Purchase of Property (Where mortgage is not possible)

Improvement of Property

Medical Treatment

Factors affecting your Loan Amount:

With ICICI Bank Home Loans, you can get a home loan suited to your needs. The home loan

amount depends on your repayment capability and is restricted to a maximum of 80% of the cost of

the property or the cost of construction as applicable. A number of factors are taken into account

when assessing your repayment capacity. Repayment capacity takes into consideration factors

such as income, age, qualifications, number of dependants, spouse's income, assets, liabilities,

stability, continuity of occupation and savings history.

However, there are ways by which you can enhance your eligibility.

If your spouse is earning, put him/her as a co-applicant. The additional income shall be included to

enhance your loan amount. In case of any co-owners they must necessarily be co-applicants.

The final amount to be sanctioned will depend on your repayment capacity. However, what you

ultimately are entitled to will have to conform within the limits fixed for each loan.

Also, when the company looks at the total cost, registration charges, transfer charges and stamp

duty costs are included.

Repayment Terms of your Home Loan

In our  endeavor to  make taking a home loan an easy process for you, we at ICICI Bank Home

Loans address all your  queries  about the  repayment terms of Home Loans with respect to tenure,

home loan EMIs, methods of home loans EMI payments and pre-EMI interest .

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What is the repayment tenure?

Repayment tenure is the tenure for the number of year for which the loan gets sanctioned. We offer

you a wide range of options for the tenure of the loan. You can take a home loan for up to 25 years

provided you do not reach the age of 65 years or retire within that period.

How is the loan repaid?

All loan repayments are done via equated monthly installments (EMI).

 What is an EMI?

An EMI refers to an equated monthly installment. It is a fixed amount which you pay every month

towards your loan. It comprises of both, principal repayment and interest payment.

When does the repayment start?

EMI payments start from the month following the month in which the full disbursement has been

made 

How is the EMI paid?

The EMI is to be paid every month through post-dated cheques (PDCs) or Electronic Clearing

System (ECS)*. If you are opting for PDCs, then you will have to provide 36 PDCs upfront. The

PDCs are to be dated on the 1st of every month. However, if you receive your salary a few days

later, we provide the flexibility of dating the cheques for the 10th of the month.

What if a PDC bounces?

In the case of a bounced cheque or delayed payment, charges and outstanding dues will be

charged as per the prevailing company policy. You can replace old PDCs with new ones within 5 - 7

working days.

 What is pre-EMI interest?

In the case of part disbursement of the loan, monthly interest is payable only on the disbursed amount. This

interest is called pre-EMI interest (PEMI) and is payable monthly till the final disbursement is made, after

which the EMIs would commence.

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Application Process of your Home Loan

Your search for the perfect home loan ends here at ICICI Bank Home Loans, even before your

have found the perfect property.

The moment you decide to buy a home, you can put in your application for a home loan. Yes, you

can apply for a home loan even before you have selected the property.

The property need not even be in the same city where you are residing. The only condition being

that ICICI Bank has Home Loans operations in both the cities.

Should there be a change in your financial status or plans, you can withdraw your sanction within 6

months of approval of your home loan.

However, we are always ready to assist our customers in the event of legitimate problems. And, we

might reconsider this if we find that there are satisfactory reasons for the delay.

And, neither would we charge you extra for this delay.

If it is refinancing you are interested in, it is possible within 6 months from the date of purchase of

property.

Changes in Floating Reference Rate (FRR)

Interest rate on ICICI Bank Home Loans is linked to the ICICI Bank Floating Reference Rate

(FRR/PLR). ICICI Bank FRR has been reduced by 50 basis points (i.e. 0.50%) with effect from April

22, 2009. Thus the FRR has been reduced from 13.75% to 13.25%. ICICI Bank PLR has also been

reduced by 50 basis points (i.e. 0.50%) with effect from April 22, 2009. Thus the PLR has changed

from15.75% to 15.25%.

Accordingly, the Home Loan floating rate of interest has been reduced by 0.5% (50 basis points).

Interest paid on the home loan:

As per Sec 24(b) of the Income Tax Act, 1961 a deduction up to Rs. 150,000 towards the total

interest payable on the home loan towards purchase / construction of house property can be

claimed while computing the income from house property. (The deduction stands reduced to Rs

30,000 in case of loans taken prior to March 1, 1999). The interest payable for the pre-acquisition or 70

pre-construction period would be deductible in five equal annual installments commencing from the

year in which the house has been acquired or constructed. This deduction is allowed only for self -

occupied property.

The interest towards home loan taken for purchase, construction, repairs, renewal or reconstruction

of house property is eligible for deduction under section 24(b).

Principal repayment of the home loan:

As per Section 80C r of the Income Tax Act, 1961 the principal repayment up to Rs. 100,000 on

your home loan for purchase or construction of a residential house property will be allowed as a

deduction from the gross total income subject to fulfillment of prescribed conditions. Let us consider

a hypothetical example.

You’re taxable Income: Rs 5, 50,000

Principal repayment for the same year: Rs 1, 10,000 and Interest payable for the year: Rs 1, 60,000

Total Deductions allowed: Rs 2,50,000 (Rs 1,50,000 towards interest payable & Rs 1,00,000 for

principal repayment of the loan)

Thus, your taxable income will reduce to Rs 3, 00,000 (Rs 5, 50,000 - Rs 2, 50,000).

ICICI Bank home loan does a complete Legal and Technical verification of the property that you

intend to buy. This ensures the safety of the purchase for the customer

Legal Verification

The customer would need to submit the original property documents as per the indicative list given

by ICICI Bank along with the letter from the registrar for pending documents if any and NOC from

the landowner. The copies of the same are forwarded to an empanelled lawyer who has to peruse

the document, provide a legal opinion and a title clearance certificate to ensure a clear and

marketable legal title.

Technical Appraisal

This appraisal serves the following purpose

It confirms that the property really exists

It is an assess of the available infrastructure

It checks the quality and speed of construction

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Personal Loans

Thinking of renovating your house? Yearning to buy a new Laptop? Need financial assistance with

marriage related expenses or your child higher education? An ICICI Bank Personal Loan is your

One-stop-shop for all your financial needs to fulfill any of your desires.

Key Benefits of ICICI Bank Personal Loan:

Loan up to 15 lacs

No security/guarantor required

Faster Processing

Minimum Documentation

Attractive Interest Rates

12-60 Months repayment options

ICICI Personal Loans is provided only to an existing ICICI Bank customer:

With the "Loan on Phone" facility, it is possible to secure a loan even without having to visit your

bank branch. If you have been an ICICI Bank customer for the past 9 months, you might have a pre-

approved loan offer waiting for you. All you need to do is:

Login to icicibank.com using your user ID and password and know your offer

Speak to our phone banking officers and quote your relationship number. For phone banking

numbers.

Walk into any ICICI Bank branch

72

Eligibility Terms for your Personal Loan

You can avail of an ICICI Bank Personal Loan if you are an existing ICICI Bank customer and if you

meet the following criteria:

Criteria Salaried

Age 25 yrs. - 58 yrs.

Net Salary Net annual income - Rs. 1,44,000 p.a

Eligibility Employees of Public Ltd. companies, Private Ltd. companies, Government companies or MNCs

Years in current job / profession

1 Year

Years in current residence

1 Year

Documents required for your Personal Loan:

ICICI Bank provides you with personal finance to fulfill any of your desires with minimum documentation:

Documents ( Pre Sanction) Salaried

Latest 3 months Bank Statement (where salary/income is credited)

Yes

3 Latest salary slips Yes

Proof of Continuity current job (Form 16 / Company appointment letter )

Yes

Proof of Identity (any one)Passport / Driving License / Voters ID / PAN card / Photo Credit Card / Employee ID card

Yes

Proof of Residence (any one) Ration Card / Utility bill / LIC Policy Receipt

Yes

Proof of Qualification Highest Degree (for Professionals / Govt employees)

Yes

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Service Charges for your Personal Loan

Enclosed find the service charges for an ICICI Bank Personal Loan

Prepayment of the loan is possible after 180 days of availing the loan.

Foreclosure charges as applicable would be levied on the outstanding loan.

Part pre-payment is not allowed.

No other fees or commitment charges are levied.

Description of Charges Personal Loans

Loan Processing Charges /

Origination Charges  

2% or 3 % depending on the location of loan amount

Prepayment Charges 

Lower of the two amounts given below. 1. 5% of principal

outstanding or 2. Interest outstanding for unexpired period of

the loan.

Charges for late payment   2% per month

Cheque Swap Charges  Rs. 500/- per transaction

Cheque bounce charges  Rs. 200/- per bounce

Statement of Account Charges Rs. 200/- per statement

Foreclosure Statement

ChargesRs. 100/- per statement

Duplicate NOC Charges Rs. 500/- per NOC

Duplicate Repayment /

Amortization Schedule

Charges

Rs. 200/- per schedule

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Notes:

1. Service Tax and other govt. taxes, levies, etc. applicable as per prevailing rate will be

charged over and above these charges at the discretion of ICICI Bank.

2. The charges or fees given in above table are subject to change and the one recorded in

agreement will be binding over this site.

Application Process

You have the option of applying online for a personal loan.

An ICICI Bank Ltd. representative will contact you to service your loan requirements.

On receiving the completed application form with the requisite documents, we shall process

your loan within 3 working days.

Please do not send any payment via cash/ cheque with your application. Kindly ensure that

all Post Dated Cheques are Drawn in favor of "ICICI Bank Limited", duly filled in all respects

and endorsed "Account Payee only".

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Attraction of the icici bank

Convenience banking

8 TO 8 BANKING AT BRANCHES

Anywhere banking

Fast and efficient account opening process

Large AT networking

Advantage – employees

Welcome kit

Value added saving

Free anywhere banking

Debit card

Free internet banking

Online fund transfer

Mobile banking

Phone baking

Free utility Bill payments

Overdraft facility

SMS alert

Free bank statement

Access to non ICICI Bank ATM

Universal banking

Loan and credit card

Investment and services

Employee reimbursement account

76

Sbi bank profile:-

Spreading its arms around the world, the SBI’s International Banking Group delivers the full range of

cross-border finance solutions through its four wings – the Domestic division, the Foreign Offices

division, the Foreign Department and the International Services division.

The Domestic wing provides services like merchant banking, shipping finance and project export

finance. The Foreign Offices wing offers the entire range of international trade and industrial finance

products, while the Kolkatta-based Foreign Department undertakes treasury and currency

operations.

The International Services division renders specialized services like correspondent banking, global

link services and country and bank risk exposure monitoring. Being India’s largest and most trusted

commercial bank, the SBI offers you a network of relationships unmatched in strength and span by

any other Indian financial entity.

The bank has a network of 66 offices/branches in 29 countries spanning all time zones. The SBI’s

international presence is supplemented by a group of Overseas and NRI branches in India and

correspondent links with over 522 leading banks of the world. SBI’s offshore joint ventures and

subsidiaries enhance its global stature.

The bank has carved a niche for itself in Euroland with branches strategically located in Paris,

Frankfurt and Antwerp. Indian banks and corporate are able to avail single-window Euro services

from SBI Frankfurt.

These strengths are reinforced by a dedicated and highly skilled team of professionals deployed by

the bank in each specific segment. The Bank is actively involved since 1973 in non-profit activity called

Community Services Banking.

All our branches and administrative offices throughout the country sponsor and participate in large number of

welfare activities and social causes. Our business is more than banking because we touch the lives of people

anywhere in many ways.

Investor relations:

State Bank of India, the country’s largest commercial Bank in terms of profits, assets, deposits,

branches and employees, welcomes you to its ‘Investors Relations’ Section. SBI, with its heritage

dating back to the year 1806, strives to continuously provide latest and upto date information on its

financial performance. It is our endeavor to walk on the path of transparency and allow complete

access to all the stakeholders enabling total awareness about the Bank. The Bank communicates

with the stakeholders through a variety of channels, such as through e-mail, website, conference

call, one-on-one meeting, analysts’ meet and attendance at Investor Conference throughout the

world.

77

Please find below Bank’s financial results, analysis of performance and other highlights which will

be of interest to Investors, Fund Managers and Analysts. SBI has always been fundamentally strong

in its core business which is mirrored in its results – year after year.

Evolution of sbi:

The origin of the State Bank of India goes back to the first decade of the nineteenth century with the

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 modernise 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

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 of

each 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.

Business

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 and

circulating 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 woollens, 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

78

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

in favor 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.

History of state bank of India:

The origin of the State Bank of India goes back to the first decade of the nineteenth century with

the 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 modernise 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.

79

Bank of Bengal H.O.

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 of Bengal 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 of

each 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.

80

Business:

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 and

circulating 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 woollens, 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 favor 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, they embarked 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 centres 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.

81

Presidency Banks Act:

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

debt offices 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 favor 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 profits of

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 this commercialization

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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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-associate banks. 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.

RBI survey lowers GDP growth forecast to 5.7%

Personal loans grew at just 8.5 per cent in the last one year compared with 13 per cent growth

registered in the previous year.

Our Bureau

Mumbai, April 20 The median forecast of real GDP growth, according to the Reserve Bank of India’s

latest professional forecasters’ survey, for 2009-2010 has been revised downwards to 5.7 per cent

from 6 per cent.

83

The central bank, in its report on the Macroeconomic and Monetary Developments in 2008-2009,

said that the various surveys of economic activity point towards prevalence of less-than-optimistic

sentiment for the outlook of the economy in the coming months.

Between the sixth round survey conducted in December 2008 and seventh round survey in March

2009, median forecast of real GDP growth for 2008-09 was revised downwards to 6.6 per cent from

6.8 per cent.

According to the report, for the April-June 2009 quarter, the overall net sentiment for all industries,

except textiles, is positive. Moderate growth is expected across the various companies in the first

quarter. However, the expectations are less optimistic for smaller companies compared with their

bigger counterparts.

Inflation:

On the inflation front, the report underscored the fact that unlike the wholesale price index based

inflation, consumer price index based inflation in India remains high, with recent evidence of very

slight moderation. “The transmission process of lower inflation at the wholesale level to inflation at

the retail level has emerged as an important issue in the conduct of RBI’s monetary policy,” the

report said.

The WPI-based inflation eased to 0.18 per cent for the week ended April 4 from 0.26 per cent for

the previous week. Various measures of consumer price inflation, though started declining, still

remained high in the range of 9.6-10.8 per cent during January/ February 2009.

The higher level of consumer price inflation (CPI) as compared with WPI inflation , in recent months,

could be attributed to higher prices of food articles, which have higher weight in CPI.

Scheduled commercial banks (SCBs’) investment in statutory liquidity ratio (SLR) securities as a per

cent of their net demand and time liabilities (NDTL) increased at end-March 2009 to 28.1 per cent,

from 27.8 per cent a year ago.

However, adjusted for Liquidity Adjustment Facility collateral securities on an outstanding basis,

SCBs holding of SLR securities amounted to Rs 11,10,156 crore or 26.7 per cent of NDTL at end-

March 2009 – implying an excess of Rs 1,13,817 crore or 2.7 per cent of NDTL over the prescribed

SLR of 24 per cent of NDTL.

84

The lower expansion in credit relative to the expansion in deposits resulted in a decline in the

incremental credit-deposit ratio (y-o-y) of SCBs to 64.4 per cent at March-end 2009 from 73.6 per

cent a year ago.

85

Personal loans:

Our Chennai Bureau reports: The latest confirmation of a slowdown in the personal loans segment

comes from the Statement on Macroeconomic and Monetary Developments put out by the Reserve

Bank of India. Personal loans (inclusive of housing, credit cards, educational loans, consumer

durable loans etc.) at Rs 5, 55,392 crore account for about 22 per cent of the total loans outstanding

as of end February 2009. Personal loans grew at just 8.5 per cent in the last one year compared

with 13 per cent growth registered in the previous year.

Loans for housing, which constitute about half the personal loan segment, were at Rs 272,376

crore. They grew at just 7.5 per cent last year compared with 13 per cent in the previous year

(2007-08) and 26 per cent in the year 2006-07. Credit card outstanding also grew at a mere 8 per

cent compared to about 51 per cent in 2007-08 and 46 per cent in 2006-07.

Despite oft-repeated complaints that the real estate sector was credit starved, statistics provided by

the RBI show that real-estate loans grew 61.4 per cent last year to Rs 9,0765 crore compared with

a 27 per cent growth in 2007-08.

Similarly, loans to NBFCs also grew by 42 per cent during the last year to Rs 90,521 crore.

Loan product of state bank of india

State Bank of India Home Loan:

Introduction:

There are number of finance companies offering cheap home loans. State Bank Of India is one

such government bank, which understands your needs and helps you to purchase the homes of

your dreams. A lot of hard work goes into building a home, owning it and then decorating it. State

Bank Of India understands your efforts and for that matter they have designed their Home Loan

schemes in a way to make the process hassle free and full transparency has been offered. The

Unique Features of their Home Loan Schemes are no cap on maximum loan amount for purchase

or construction of house or flat. They give an option to club the income of your partner and children

to compute eligible loan amount. You can repay the loan up to 70 years of age. The home loan

schemes also have free personal accident insurance cover. They charge no administration fee or

application fee. Provision for downward refixation of EMI in respect of floating rate borrowers who

86

avail Housing Loans of Rs.5 lacs and above, to avail the benefit of downward revision of interest

rate by 1% or more.

They provide Home Loans for various purposes such as: for the purchase or construction of a new

house or flat, purchase of an already built house or flat and if you want to buy a plot of land for

construction of house. Finance for home is also provided if you want to undertake extension, repair,

renovation, and alteration of an existing house or flat, if you wish to buy furniture, furnishings and

other commodities for your home.

You are Eligible for taking Home Loan if you have a minimum age of 21 years as on the date on

which your loan is sanctioned. They charge a processing fee that comes to 0.50 % of loan amount

including service tax.

Their Interest Rate amount is of two types- Floating Interest Rate and Fixed Interest Rate. Floating

Interest Rate is linked to State Bank Advance Rate- SBAR. The interest rate under Floating Interest

Rate is 10.75% and on Fixed Interest Rate it is 9.50% upto first five years then 9.75% above five

years and upto ten years.

The most important aspect is that you need to submit duly filled documents as mentioned in their

schemes. You need to complete application form, passport size photograph, a proof of identity,

proof of Residence, proof of business address and all documents relating to sale deed or

agreement deed, tax paid receipt, statement of bank account etc.

State Bank of India has four types of Home Loan schemes under which they provide finance:

• 'SBI-Flexi' Home Loans

• 'SBI-Maxgain' Home Loans

• 'SBI-Realty' Home Loans

• 'SBI-Freedom' Home Loans

they have a package for exclusive benefits like complimentary international ATM- Debit card. They

provide complimentary SBI Classic and International Credit Card with waiver of joining and first

year's fees. State Bank Of India provides an option for E- Banking. There is a confessional package

for car home loan borrowers.

SBI has been awarded “The Most Preferred Home Loan Provider” by AWAAZ Consumer Awards.

SBI home loans give concession on interest rates on GREEN HOMES under its environment

protection program. SBI has different options for loan borrowers such as ‘SBI – Flexi’ home loans

provides borrowers a one time irrevocable option to choose one of the three combinations of fixed

and floating interest rates and also to choose the order in which the fixed and floating rate will be

availed. The other is ‘SBI- Maxgain’ home loans - earn optimal yield on savings and minimize

87

interest burden on home loans, with no extra cost. ‘SBI –Realty’ Home loans - purchase a plot of

land for house construction. ‘SBI – Freedom’ Home loans – who want to invest in a property without

mortgaging the same. SBI offers ‘SBI – Optima’ additional home loans and ‘SBI – Homeline’ special

personal loans for existing home loan borrowers who have a repayment record of 3 years, etc.

SBI Home Loan:

Features:

Some of the unique features of SBI home loans are:

Provision for on the spot "In principle" approval.

Loan sanctioned within 6 days of submission of required documents.

Option to avail Home Loan as a Term Loan or as an Overdraft facility to save on interest and

maximise gains (see SBI MaxGain in the following sections)

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 compute

eligible loan amount

Provision to finance cost of furnishing and consumer durables as part of project cost

Repayment permitted upto 70 years of age

Free personal accident insurance cover

Optional Group Insurance from SBI Life at concessional premium (Upfront premium financed

as part of project cost)

Interest calculated on daily reducing balance basis, and starts from the date of

disbursement.

Plus schemes which offer attractive packages with concessional interest rates to Govt.

Employees, Teachers, Employees in Public Sector Oil Companies.

Special scheme to grant loans to finance Earnest Money Deposits to be paid to Urban

Development Authority/ Housing Board, etc. in respect of allotment of sites/ house/ flat

Option to avail loan at the place of employment or at the place of construction

Eligibility:

SBI home loans are available for purchase or construction of house or flat; purchase of a plot of

land for construction of house; extension, repair, renovation, alteration of an existing house or flat;

purchase of furnishings and consumer durables as a part of the project cost, takeover of an existing

loan from other banks or housing finance companies.

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Age:

Minimum age of applicant is 18 years as on the date of sanction and maximum age limit for a home

loan borrower is 70 years, i.e. the age by which the loan should be fully repaid.

Loan Amount:

Applicants aged between 18 and 45 years, can get 60 times Net Monthly Income (NMI) or 5 times

Net Annual Income (NAI) and for applicants aged over 45 years of age; it is 48 times NMI or 4 times

NAI.

This will be subject to a maximum EMI/NMI ratio as under:

Net Annual Income EMI/NMI Ratio

Upto Rs.2 lacs 40%

Above Rs.2 lac to Rs. 5 lacs 50%

Above Rs. 5 lacs 55%

Margin:

The SBI home loan borrower should pay 20% of the cost of home for loans up to Rs 1 crore and

25% for loans above Rs 1 crore.

Repayment Period:

The maximum repayment period for home loan is 20 years for applicants below 45 years and 15

years for applicant above 45 years.

Documents Required:

1. Completed application form

2. Passport size photograph

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

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

Voters ID

5. Proof of business address in respect of businessmen/ industrialists

89

6. 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)

7. Copy of approved plan and approval from the Local Body

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

Highlights:

Interest Rate 11.25%

Loan Amount Min. - Rs 100000Max. - Rs 20000000

Tenure Min. - 5 Yrs.Max. - 20 Yrs.

Time to Process Loan 7 days

Interest Rates

Tenure Interest Type Interest Rate Offer

20 - 25 Yrs. Floating 11 %  

15 - 20 Yrs. Floating 11 %  

10 - 15 Yrs. Floating 10.75 %  

5 - 10 Yrs. Floating 10.75 %  

1 - 5 Yrs. Floating 10.5 %  

5 - 10 Yrs. Fixed 12.75 %  

1 - 5 Yrs. Fixed 12.75 %

Security:

•  Equitable mortgage of the property

•  Other tangible security of adequate value like NSCs, Life Insurance policies etc., if   the property

cannot be mortgaged

Maximum Repayment Period:

•  For applicants upto 45 years of age: 25 years

•  For applicants over 45 years of age: 15 years

Moratorium:

Up to 18 months from the date of disbursement of first installment or 2 months after final

disbursement in respect of loans for construction of new house/ flat (moratorium period will be

included in the maximum repayment period)90

Disbursement:

•  In lump sum direct in favour of the builder/ seller in respect of outright purchase

•  In stages depending upon the actual progress of work in respect of construction of   house/ flat

etc.

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

 ‘SBI-Flexi’ Home Loans:

A customized product designed to enable borrowers to hedge their Home Loan against unfavorable

movement in interest rates. The product gives you a one time irrevocable option to choose one of

the three customized combinations of fixed and floating interest rates and also to choose the order

in which the fixed and floating rate will be availed.

Minimum Loan Amount: Rs.5 lacs

(Other terms and conditions – as applicable to regular Home Loans)

 ‘SBI-Maxgain’ Home Loans:

An innovative and customer-friendly product to enable you to earn optimal yield on your savings and

minimize interest burden on Home Loans, with no extra cost.

The loan is granted as an Overdraft facility with the added flexibility for you to operate your Home

Loan Account like your SB or Current Account.

91

The product serves to minimize your interest cost by enabling you to park your surplus funds in

‘SBI-Maxgain’ (with the benefit to withdraw the surplus funds whenever you require), specially in the

wake of low yields from other deposit/ investment avenues.

Minimum Loan Amount: Rs.5 lacs

(Other terms and conditions – as applicable to regular Home Loans)

 ‘SBI-Realty’ Home Loans:

A unique product if you are on the look out for a loan to purchase a plot of land for house

construction. The loan is available for a maximum amount of Rs.20 lacs* and with a comfortable

repayment period of upto 15 years.

You are also eligible to avail another Housing Loan for construction of house on the plot financed

above with the benefit of running both the loans concurrently.

(House construction should commence within 2 years from the date of a ailment of ‘SBI-Realty’

Housing Loan)

(Other terms and conditions – as applicable to regular Home Loans)

(* relaxation considered on case to case basis)

  ‘SBI-Freedom’ Home Loans:

A revolutionary product designed for customers who are on the look out for a source of finance for a

property they want to invest in without mortgaging the same. All you have to do is pledge any

financial security that you have and you will get a Home Loan for your dream home.

A must-take for those who do not want to pay stamp duty for mortgage of their property or go

through the hassles of creation of mortgage.

You also have an option to take the loan by way of mortgage of the property and pledge financial

securities in lieu of margin money.

Repayment is highly customized, giving you the option to repay through regular EMIs or through

maturity proceeds of the securities pledged.

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(Other terms and conditions – as applicable to regular Home Loans)

‘SBI-OPTIMA’ ADDITIONAL HOME LOANS:

Innovative and value added products extended to existing Home loan borrowers with a satisfactory

repayment record of 3 years and whose loan is Standard Asset, with a view to reinforce the

customer loyalty and to maintain long term relationship with the borrowers. In case of take-over of

Home Loans from other Banks/HFCs, the borrower should have fulfilled the above conditions with

the present Bank/HFC.

Purpose:

‘SBI-Optima’ Additional Home Loans

to meet expenditure towards major repair,

renovation, addition to their house/flat, purchase of

furniture, fixtures and consumer durables

‘SBI-Homeline’ Special Personal Loans General purpose loan to meet expenditure to meet

foreseen/unforeseen contingencies

Eligibility:

‘SBI-Optima’ Additional Home Loans

18 times NMI (for salaried borrowers)/

1 ½ times NAI ( for others) or

(i)25% of the original project cost of house/flat (ii)

85% of the cost of repairs etc. or (iii) gap between

85% of the current market price of flat/house and

actual outstanding loan dues ,

Which ever is lower (EMI/NMI ratio of all loans

should not exceed 60%)

‘SBI-Homeline’ Special Personal Loans 18 times NMI (for salaried borrowers)/

1 ½ times NAI (for others)

Interest Rates/processing fee:

‘SBI-Optima’ Additional Home Loans

As applicable to Home Loans

93

‘SBI-Homeline’ Special Personal LoansInterest rates 50 bps above rates applicable to the

repayment tenure (floating rates only)

Processing fee : 0.50% of the loan amount (including

service tax)

Other Salient Features:

Inbuilt provision for availment of the loans on the expiry of each bloc of 5 years, the first bloc

commencing on the expiry of 5 years from the date of sanction of original Home Loan.

Original Home Loan and all ‘SBI-Optima’ Home Loans/’SBI-Home Line’ Personal Loans can run

concurrently

Comfortable repayment obligations – Tenure of the loans equal to the residual maturity of the

original Home Loans -

‘PRASHASAN PLUS’, ‘TEACHER PLUS’ AND ‘OIL PLUS’:

The above ‘ plus’ schemes offer concessional interest rate of 0.25% below the applicable interest

rates on Home Loans to niche client groups like Government Employees, Teachers, employees of

public sector oil companies etc

SBI Special Home Loan Scheme

(w.e.f. 16.12.2008 and valid up to 30th June 2009)

For Loans up to Rs.5 Lac – 8.5% p.a. fixed rate with reset every 5 years* from the date of

disbursement of first installment.

For Loans above Rs.5 Lac and up to Rs.20 Lacs – 9.25% p.a. fixed rate with reset every 5 years*

from the date of disbursement of first installment.

*Option to customer at the end of 5 years to convert into floating rate. Reset or conversion will be at

the rates prevailing at the time of reset.

SBI Happy-Home Loan Offer for new loans sanctioned on or after 2nd February 2009 and at least

partially disbursed on or before 30th April 2009 –

Interest rate 8% p.a. (Frozen) for a period of one year. Interest rate will be reset after one year as

per contracted rate at the time of sanction of loan as under-

94

Interest Rates w.e.f. 01.01.2009

a) Floating Rates linked to SBAR:

SBAR w.e.f. 01.01.2009 = 12.25 % p.a.

 

Loans (i.e. Sanctioned limits) up to Rs.30 Lacs

Loan amount   

 

Loan Tenure -> Up to 5

Yrs

Above 5

Yrs & up

to 15 Yrs

Above 15

Yrs & up to

25 Yrs

Loans up to Rs.30 lacs

for new loans

sanctioned on or after

01.01.2009

Linkage with SBAR in the loan

document

2.25%

below

SBAR,

2.00 below

SBAR

1.75%

below

SBAR

Special product level discount

which may be withdrawn/revised

solely at the discretion of the

Bank.

0.25% 0.25% 0.25%

Effective

Rate

9.75%

p.a.

10.00%

p.a.

10.25% p.a.

Loans (i.e. Sanctioned limits) above Rs.30 Lacs and up to Rs.75 Lacs

  Loan

Tenure ->

Up to 5 Yrs Above 5 Yrs

& up to 15 Yrs

Above 15 Yrs

& up to 25 Yrs

Above Rs.30 lacs and up to

Rs.75 Lacs w.e.f. 01.01.2009

Linkage with

SBAR

2.00% below

SBAR

1.75% below

SBAR

1.50% below

SBAR

 

Effective

rate

10.25%p.a. 10.50% p.a. 10.75% p.a.

 

Loans (i.e. Sanctioned limits) above Rs.75 Lacs

Above Rs.75 Lacs w.e.f.

01.01.2009

Linkage with

SBAR

2.00% below

SBAR

1.75% below

SBAR

1.25% below

SBAR

 

Effective rate 10.25% p.a. 10.50% p.a. 11.00% p.a.

B) Fixed rates - Re-payment Up to 10 Years

(w.e.f. 01.01.2009):

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Fixed rates (subject to ‘force majeure’ clause and interest rate reset at the end of every two years

on the basis of fixed interest rates prevailing at that time)

Up to Rs. 30 Lacs

Above Rs. 30 Lacs

11.25% p.a.

12.25% p.a.

c) Loans for deposit of earnest money for allotment of a plot / house / flat 

(Floating rates only)- W.E.F. 01.01.2009 - 1% above SBAR, Min. 13.25% p.a.

Loan amount Margin

Up to Rs.30 Lacs 20%

Above Rs.30 Lacs and up to Rs.75 Lac 20%

Above Rs.75 Lac 25%

State Bank of India Personal Loan:

Introduction:

SBI Personal Loans also known as State Bank of India personal finance schemes, aim to provide

the necessary financial assistance to as many people as possible to help them realize their dreams

or come out of situations of financial need. State Bank of India being India's largest bank is a trusted

name and the SBI personal loan rate of interest are kept at the most competitive level to make a

personal loan as approachable as possible.

SBI provides SBI Saral personal loan to help you in meeting any kind of personal expenses

whenever you need it to meet your requirements. Loan is provided at low interest rates, no hidden

costs or administrative charges, no prepayment penalties and comfortable repayment tenure.

Highlights

  Salaried Self Employed

Loan Scheme Saral Personal Loan Saral Personal Loan

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Loan Type Term Loan Term Loan

Loan Amount Max Loan: 12 times the monthly income

Max Loan: 12 times the monthly income

Tenure Min. - 12 Yrs. Min. - 12 Yrs.

Interest Rate Min. - 16.5 %Max. - 16.5 %

Min. - 16.5 %Max. - 16.5 %

Time to Process Loan 2 days 2 days

PERSONAL LOAN AGAINST THIRD PARTY SECURITY:

w.e.f. 01.01.2009 (SBAR 12.25%)

Personal Loan against Third Party Security of NSC/ IVP/ RBI Relief Bonds etc.

Tenure Rate of Interest

Up to 3 years 1.00% above SBAR i.e. 13.25% p.a.

Above 3 years up to 6 years 0.25% above SBAR i.e. 12.50% p.a.

NOTE: ALL INTEREST RATES ARE SUBJECT TO CHANGE, WITHOUT NOTICE.

SBI SARAL PERSONAL LOAN:

Do you want funds readily available to you whenever you desire or need, be it a sudden vacation

that you plan with your family or urgent funds required for medical treatment? SBI Saral - Personal

Loan is the answer to your questions.

Access this facility from over 3000 branches across the country and confidently face the challenge

of meeting any kind of personal expenses!

The Scheme:

Purpose:

The loan will be granted for any legitimate purpose whatsoever (e.g. expenses for domestic or

foreign travel, medical treatment of self or a family member, meeting any financial liability, such as

marriage of son/daughter, defraying educational expenses of wards, meeting margins for purchase

of assets etc.)

Eligibility:

you are eligible if you are a salaried individual of good quality corporate, self employed engineer,

doctor, architect, chartered accountant, MBA with minimum 2 years standing.    

97

Salient Features:

Loan Amount:

Your personal loan limit would be determined by your income and repayment capacity.

Minimum: Rs.24, 000/- in metro and urban centres

Rs.10, 000/- in rural/semi-urban centres

Maximum: 12 times Net Monthly Income for salaried individuals and pensioners subject to a

ceiling of Rs.10 lacs in all centres

Documents Required:important documents to be furnished while opening a Personal Loan Account:

For existing bank customers:Passport size photograph

From salaried individuals: Latest salary slip and Form 16

Margin:

we do not insist on any margin amount.

Interest Rates:

4.25% above SBAR Floating i.e. 16.50% p.a. (w.e.f. 01.01.2009)

Repayment:

The loan is repayable in 48 EMI. You are allowed to pay more than the EMI if you wish to, without

attracting any prepayment penalty.

Security:

NIL

Processing Fee:

Processing charges are 2-3% of the loan amount. This is amongst the lowest fees in the industry.

Processing fees have to be paid upfront. There are no hidden costs or other administrative charges.

Enjoy the SBI Advantage:

98

  Low interest rates. Further, we charge interest on a daily reducing balance!!

  Low processing charges; only 2%-3% of loan amount

  No hidden costs or administrative charges.

  No security required ……which means minimal documentation…something that you had

always wanted.

  No prepayment penalties. Reduce your interest burden and optimally utilize your surplus

funds by prepaying the loan (1% of the loan amount will be charged if you repay the loan

before 6 months)

  Long repayment period of up to 48 months.

SBI cuts home, personal loan rates for festive season:

State Bank of India has slashed its interest rates on home loans, auto loans and personal loans.

That’s a big relief for first time buyers.

The interest rate cut on new home loans will be between 0.50 per cent to 1 per cent depending on

loan maturities and amount.

It’s almost the festive season and India's biggest lender has also announced interest rate cuts on

auto and personal loans.

Where as interest rates on new car and two-wheeler loans have been reduced by up to 1 per cent,

the personal loans are cheaper by 0.50 per cent to 1 per cent.

The rate cut on retail loans will be applicable on all new loans from October 8 to December 31,

while the reverse mortgage scheme for senior citizens above 60 years will be offered at all SBI

branches from October 12.

Simultaneously, SBI also reduced interest rates on deposits under two special schemes by 0.25 per

cent to 9 per cent with effect from October 8.

"We reduced interest rates on Smart Deposit Scheme of 550 days and on Super Saver Term

Deposit of 4-5 years duration by 0.25 per cent to 9 per cent," PTI quoted SBI CGM Personal

Banking Sangeet Shukla as saying.

For senior citizens too, it was good news as SBI announced its entry into reverse mortgage, through

which they can avail loan, released in monthly or quarterly installments or as a lump sum payment

at the beginning, against the security of the house they own and live in.

  

99

3. RESEARCH METHODOLOGY:-

Introduction:

Research in Common parlance refers to search for Knowledge. It’s a scientific and systematic

search for pertinent information on specific topic. Research is an art of Scientific investigation its

mean Systematized effort to gain new Knowledge.

According to Clifford woody “Research Comprises defining and redefining problem formulating

hypothesis or suggested solution Collecting, Organizing and evaluating data making deductions and

reaching Conclusion at Carefully testing the Conclusion to determine whether they fit the

formulating hypothesis.

In Short the Search for Knowledge through Objective and systematic method of finding solution to a

problem is research its refer to the systematic method Consisting enunciating the problem,

formulating a hypothesis, Collecting the fact or data analysis the fact and reaching Certain

Conclusion in the form of Solution.

3.1 Title of the project:- “comparative study of home loan and personal loan of

ICICI Bank with SBI Bank”

3.2 Duration of the project:- 15 Days

3.3 Objective of the study:-

The Purpose of research is to discover answer to question through the Application of scientific

procedure. The main aim of research is to find out the truth which is hidden and which has not been

discovered as yet.

To know and apply different market research techniques in our study as follows:

o Sampling Design

o Research Methodology

o Questionnaire Design

100

To highlight the satisfaction level regarding products.

To know the perception regarding ICICI and SBI products and services.

To gain familiarity with a phenomenon or to achieve new insights into it (Studies with this object

in view are termed as exploratory or formulate research studies)

To portray accurately the characteristics of a particular individual Situation or a group (Studies

with this object in view are know as descriptive research studies).

3.4 Type of research:-

THERE ARE TWO TYPE OF RESEARCH DESIGN ARE FOLLOWING:-

DESCRIPTIVE RESEARCH DESIGN

QUANTITATIVE RESEARCH DESIGN

DESCRIPTIVE RESEARCH DESIGN:

Descriptive research includes survey and fact finding enquiries of different Kinds. The major

Purpose of descriptive research is description of State affairs as it exists in present. In social and

business research we quite often use. We have done Survey found fact by personal interview so it

is descriptive.

QUANTITATIVE RESEARCH DESIGN:

Quantitative research is based on the measurement of quantity or amount. It is applicable to

phenomena that can be expressed in term of quantity. We have also found requirement in quantity

so it’s the quantitative research.

3.5 Sample design:-

Sample design refers to the technique or the procedure the researcher would adopt in selecting

item for the Sample. Sample design may be well lay down the number of items to be included in the

sample that is the size of the sample design is determined before data are collected. There are

many Sample designs from which a researcher can choose some designs are relatively more

101

precise and easier to apply than other researcher must select a sample design which should be

reliable and appropriate for his research study.

Here we have used random sampling and the sample size was 50. We have made a

questionnaire through personal interview filled the questionnaire.

3.6Scope of Study:-

To serve the objective and study the scope banks we have designed two set of questionnaires.

1. The first questionnaire was developed to study the product offering and facilities of different

banks so as to check the level of competition in the market for multinational banks. Nationalized

banks

NATIONALIZED BANKS : Consisting of SBI bank

PRIVATE BANKS : Consisting of ICICI,

MULTINATINATIONAL : Other banks and NBFC”S

For the comparison of various banks we have taken a sample size of 8 with non probability

sampling

2. The second quest was developed to check the level of satisfaction the people after getting loan

from their favorable institutions and the factors they consider important while selecting a bank

to getting the home loan and personal loan And what facilities they require from their bankers or

their grievances arising due to non fulfillment of their needs and what is their opinion regarding

different categories of banks

Data collection

Basically there are two main method of data Collection primary data and Secondary data. Primary

data are those which are Colleted freshly and the first time and thus happen to be original in

character. Other hand Secondary data are those which have already been collected by someone

else and which have already been passed through the Statistical granting.

102

Primary data

Questionnaire method : -

This method of data collection is quite popular, particularly in case of big enquiries. It is being

adopted by private individuals, research workers private and public organization and even by

governments in this method a questionnaire Consists of a number of question printed or typed in

definite order on a form or set of form I have made a Questionnaire for Survey. The inquiry was

done of the respondents through questionnaire in which the same set of questions were asked to

the very respondents falling within out sample. The advantage is that it is simple to administer easy

to tabulate and analyse.

Personal interviews:

The interview method of collecting data involves presentation of oral verbal stimuli and reply in term

of oral verbal responses. We have used this method through personal interview.

3.7 Limitations:-

Due to the financial & time constraints the study was limited to our place thus the conclusion

arrived in the end rely in short term experience.

Being an opinion survey the personal bases of the respondents might have entered into their

responses.

Time constraints resource constraints were some of the limitations.

The selected sample might have affected the results of the study therefore the findings &

conclusions of the study are only suggestive & not conclusive.

Sample was chosen according to convenience & judgment sampling & not according to random

sampling.

The sampling error that appeared due to the kind of sampling technique adopted.

Indifference and lack of interest disposed by a few respondents leading to unauthentic

responses.

Time proved to be a major constraint as far as collection and analysis of data was concerned.

To overcome the above limitations and to minimize their impact on the findings of my report I had to

meet more respondents than my actual sample size.

103

4. FACTS &FINDINGS:-

As part of the project we had make a survey with the help of questionnaire that has to taken to

different people to get perception towards ICICI and SBI product the questionnaire is passed on the

general public and requested to give their opinion toward ICICI and SBI product the questionnaire

Consists of both open and close ended question the main motto behind the Study is to find out how

people react against the ICICI and SBI Home Loan And Personal Loan products and aware about

the benefits of these products.

In research methodology we have used random sampling and sample size was 50. Simple

random sampling method is followed where every member of population have equal chance of been

selected. The questionnaire is administrated on sample to find out their perception to wards ICICI

and SBI Banking loan product and benefits of product. After analysis of questionnaire Conclusions

were made based on finding from pie charts.

After analysis I came to following findings

In the comparative study of specified banks it’s found that

ICICI Bank is having large number of customer base with high loan disbursement and recovery

of loans.

The SBI bank showed less outstanding balance which presented in percentage form in the

diagram.

In case of second objective i.e. customer satisfaction level it is found that

On the basis of data the ICICI is emerging at higher position a Compare to SBI bank and other

public sector banks on Ground of professionally managed services, reliable & transparent

System, easy query handling etc.

And problems face by customers in obtaining home loans is

The customer does not have proper knowledge about different Home loan products so they

face problem in making a good deal.

There are procedural delays, which harass the customers lot this will crush the curtsy of

customers to avail the home loan.

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The attitude of bank employees sometimes non cooperative and it creates a hurdle in

building trust and Confidence among customers about banks.

The banks do not take into account the paying capacity of customers. So some customers

are not able to get amount of Loan needed by them.

Finally the whole research was carried out in a systematic way to reach at exact results. The whole

research and findings were based on the objectives some of the limitation faced in collecting the

data were Lack of time, lack of data, non-response, reluctant attitude and illiteracy of respondents,

which posed problems in carrying out the research.

105

COMPARATIVE ANALYSIS

ICICI Bank V/S HDFC Bank

Content ICICI BANK HDFC BANK

Feature Free Internet Banking

Any where Banking

Nomination facility

8 Am to 8 Pm Banking

Largest Network

Second largest bank in

the country.

Free email statement

facility

avail of facilities like safe

deposit locker

Free payable at par

Cheque book.

ATM Network

Interest

rate

Home loan interest rate is

up to 12.25%-13.25%

Personal loan interest

rate is up to12.50%-

13.25%

Home loan interest rate is

up to 12.50%-13.50%

Personal loan interest rate

is up to 13%

Benefits Use your ICICI Bank

ATM Cum debit card for

free

Free Transaction on SBI/

Andhra Bank per month in

three times.

Shopping used your

international debit card.

ICICI Bank providing better services compare to HDFC Banks Because of…………

Second largest bank in the country. Largest ATM Networking & Branches. Up to.25% lower rate on home loan and personal loan

106

COMPARATIVE ANALYSIS

ICICI Bank V/S STATE BANK OF INDIA

Content ICICI BANK STATE BANK OF INDIA

Feature Free Internet Banking

Any where Banking

Nomination facility

8 Am to 8 Pm Banking

Largest Network

Second largest bank in

the country.

25 cheque free in a year

Nomination facility – available

Transfer of accounts between our wide networks of branches without any charge.

Interest

rate

Home loan interest rate is

up to 12.25%- 13.25%

Personal loan interest

rate is up to12.50%-

13.25%

Home loan interest rate is

up to 11.25%-12.25%

Personal loan interest rate

is up to12.25%-13.25%

Benefits Use your ICICI Bank

ATM Cum debit card for

free

. Presently at CBS

Branches

Easy and Wide

Accessibility

ICICI Bank providing better products & services compare to SBI Banks Because of………….

Fast and efficient lending process Anywhere banking , mobile banking, Largest ATM Networking Up to.50% higher rate on home loan products.

107

5. DATA ANALYSIS & INTERPRETATION:-

Occupation

Interpretation:-

This bar diagram clearly reveals that service holders have occupied a major chunk of it

reason for this could be as ICICI gives the facility of “Anywhere Banking’’ which suits them.

Businessman has also liked it but their contribution in this bar, could be said satisfactory

reason for this could be attributed to availability of another product, which really suits them,

is home loan.

108

Age Group

4%

18%

30% 32%

16%

0%5%

10%15%

20%25%

30%35%

Below-20

20-25 30-35 35-45 above45

Series1

Interpretation:-

After looking this bar, it can be said the middle aged group are the main customer of the bank as

they have occupied almost 75% of this graph. It means they have more access on the all features,

which are really useful for them. the young and old age group people have been less attractive on

this leading product of ICICI Bank and SBI bank, Which is fast area of concern. So collectively it can

be said a huge potentiality, is still available for this product.

109

Income level (monthly)

22%

42%

14%

22%

0%5%

10%15%20%25%30%35%40%45%

5000-10000

10000-40000

40000-100000

above100000

Series1

Interpretation:-

Here we can see by this graph that income level of the peoples mainly 42% is 10000-40000

monthly. Whose wants to take loan from different public and private Banks.

110

Do you want to take loan?

78%

22%

yes

no

Interpretation:-

In this survey I found that 78% respondents who want to take the loan whereas 22% respondents

do not want to take the loan from any others institutions.

111

What is future loan requirement?

34%

22%

28%

16%

0%5%

10%15%20%25%30%35%40%

Series1

Interpretation:-

This table represents that future loan requirements for the respondents from 34% in personal loan,

22% from the home loan and 28% from other instruments and 16% respondents which have not

give any response.

112

From where you would like to take loan?

38%

4%

52%

4% 2%0%

10%20%30%40%50%60%

Series1

Interpretation:-

In survey I found that most of the respondents want to take the loan from government banks,

whereas 38% respondents want to take loan from the private banks. 4% respondents want to take

loan from NBFC’S and 4% from Gramine banks and 2% from other institutions.

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Before taking a loan from a particular bank, you look for?

52%

14%

10%

18%

6%

interest rate

services

unique features

good relationship

others

Interpretation:-

When a customer visits any bank the first and foremost thing he looks; how quickly he is served

and how his problem is entertained by the bank employee that is why in this bar most of customer

prefer quick service. Second thing customer wishes to have proper information regarding their

queries. One thing in this bar also really significant is, factors like, less formalities of document while

taking loan, variety of product do not make a big impact on customer behavior for getting loan in

any bank if its service is efficient. But on the other hand bank can’t ignore relationship, as in this bar

customer have erred it. So service sector like banking preference should be given to make a prompt

and customer friendly service channel. For this focus must be given to make a prompt and

customer-friendly service channel. For this focus must be given to make well informed and pro-

active employee along with work should be executed technologically rather than manually.

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How much amount of loan you would like to take?

8%10%

18%

22%

42%

50000

100000

100000-150000

150000-200000

above 200000

Interpretation:-

In this survey I found that 8% respondents interested up to 50000, 10% respondents interested up

to 100000, 18% respondents interested between 100000-150000, 22% respondents interested

between 150000-200000, and 42% respondents which want to take loan above 200000.

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Have you ever taken loan from any of the following banks?

26%28%

12%10%

24%

0%

5%

10%

15%

20%

25%

30%

SBI ICICIBANK

SBBJ BANKOF INDIA

OHTERS

Series1

Interpretation:-

This graph represents that 26% respondents take loan from state bank of India, 28% take loan from

ICICI bank, 12% takes loan from state bank of Bikaner and Jaipur , 10% takes loan from Bank of

India , and 24% takes loan from others.

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In comparison to other bank how would customer rate ICICI Bank

Interpretation:-

Rating of any bank loan on it’s overall performance in the eyes of the people. This bar is vividly

showing that the performance of ICICI Bank has been good because in such a short span of its

existence in this city with strong competition from major public sector bank like SBI and other private

banks. Reason for this could be, it has occupied a different position in the people mind with its

customer friendly products and to serve them a efficient and prompt banking system.

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Do you know about the credit norms of the banks?

76%

24%

YES

NO

Interpretation:-

This chart represent that how much of customers know about the credit norms of banks yes and no.

76% respondents know about the credit norms and 24% respondents not know about the credit

norms.

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How you know about the credit norms?

26%

36%

38% advertisement

friends

others

Interpretation:-

In this survey I found that know about the credit norms of the banks by the help of advertisement

26%, by friends 36% and others sources like bank employee, agents, sales persons 38%.

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Comparative study of disbursement of home loans by commercial banks:-

8.1 - Disbursement of Home loans by different banks:-

ICICI BANK:-

Years No. of

Home

loan

account

holders

Home loan Disbursed

(in crores Rs.)

Distributed Recovered Balance

2007-08

2008-09

2009-10

2010-11

2011-12

650

853

1019

1132

1434

104.33

123.24

150.65

176.75

224.00

98.12

105.00

133.46

144.65

209.16

6.21

18.24

17.19

32.10

14.84

Interpretation :-

The amount reveal that there is tremendous increase in Home loan accountholders. The

amount distributed as home loan is also increased from Rs. 104.33 in 2007-08 to Rs. 224 crore in

2011-12. But the recovery mechanism of the Bank is not so good that’s why the outstanding amount

shows fluctuating trend.

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HDFC LTD :-

Years No. of Home

loan

account

holders.

Home loan Disbursed

(in crore Rs.)

Distributed Recovered Balance

2007-08

2008-09

2009-10

2010-11

2011-12

700

950

1130

1435

1594

90.07

120.00

144.67

180.33

240.00

63.05

91.20

127.31

165.90

228.12

27.02

28.8

17.36

14.43

11.88

Interpretation:-

On the above table, it is evident that there are increase in No. of account holders from 700 to

1594 in the year 2008-09. The loan amount distributed among home loan account holder has also

increased from Rs.90.07 crore in 2004-05 to Rs.240 crore in 2008-09. The recovery procedure for

home loans is also strengthening due to increment in recovered amount, i.e. Rs.63.05 crore to

Rs.288.12 crore. So it nut shall there are upward trend in number of accountholders and

disbursement of home loans.

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Punjab National Bank :-

Years No. of Home

loan account

holders.

Home loan Disbursed

(in crores Rs.)

Distributed Recovered Balance

2007-08

2008-09

2009-10

2010-11

2011-12

810

950

1120

1433

1500

120.15

183.26

213.65

240.87

265.15

97.28

150.00

185.86

231.07

265.05

22.87

33.26

28.05

9.80

9.10

Interpretation:-

The Punjab National Bank is Public sector Bank. It comes second after State Bank of India

in its branch location and expansion. From the Table, the figures show that there are increasing

trend in customer base from 810 in the year 2004-05 to 1500 in the year 2008-09. The bank also

show enhancement in loan amount up to Rs.265.15 crore in the year 2008-09. The recovery

process of loans in past is slow but now it is increasing.

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Standard Chartered Bank :-

Years

No. of Home

loan

account

holders

Home loan Disbursed

(in crores Rs.)

Distributed Recovered Balance

2007-08

2008-09

2009-10

2010-11

2011-12

106

130

154

180

260

6.21

11.55

17.06

20.09

24.10

5.27

10.16

14.35

18.68

23.91

0.94

1.38

2.70

1.41

0.48

Interpretation:-

The standard chartered bank is a private sector bank. It has also upgraded its position in

banking sector in DEHRADUN. The figures shown in table reveals that there is upward shift in

customer base of Bank from 106 customers to 260 customers. The bank has also increased its

share in housing finance by distributing Rs. 24.10 crores in 2008-09. The recovery procedure of

Home loan is very sound.

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6. SWOT ANALYSIS:-

ICICI BANK

STRENGTHS:

All the branches are interconnected which give the unique facility of anywhere banking.

All operations of the bank are carried on with the help of computers thus transaction are

carried with greater efficiency.

ICICI bank provide after loan services for the customers.

Employees of ICICI Bank make good relationship with the customers.

Documentations process of loan is easily other banks.

High number of executives which make the work of customers very convenient.

Maximum customer base in Jaipur; as compared to any of the bank.

WEAKNESS:

Less awareness among general masses about the different LOAN PRODUCTS provided by

bank.

People’s faith in private banks is still not very high.

Dissatisfaction among customers due to improper and lack of after sales services.

Exchange rates of demand draft are high

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OPPORTUNITIES:

People’s dissatisfaction towards nationalized banks in terms of services has turned to be

blessing for private banks.

Among the private players ICICI Bank have the excellent brand image.

There lies a great scope in forex department which is unutilized to a greater extent can yield

much better results by which the bank can increase its volume.

Special services can be provided to women as the women’s role is becoming prominent.

The trust of people is increasing on the banks rather then going for financial institution.

There is vast untapped opportunity which lies for every bank in the rural areas.

THREATS:

Reorganization of PSU’s. The all PSU’s have started to redefine their services to attract

customer’s attention.

A few foreign banks have been permitted to increase their number branches and its entry

has taken away some business of the existing banks.

Stringent norms by RBI in any time in future can be a threat to private banks as their

activities can be adversely affected.

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7. CONCLUSION:

The products of ICIC bank are no doubt very good and it provides the customized solution to its

customer the products offerings are made so very flexible and adaptable in order to get with the

customer requirements. All the products and the special offering at ICICI Bank loaded with lot of

benefits for the customer. ICICI bank is always there to serve its customers with great speed. ICICI

Bank has a wide network of branches and largest number of ATM amongst the private sector bank

to services its customer efficiently.

Today ICICI Bank hold largest market shares in private sector bank in India. This is possible all

because of its products and services.

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8. RECOMMENDATION AND SUGGESTIONS:-

Banks should have extensive advertising to attract potential Customers.

Adequate training improves the skill of employee.

Company should put stress on market Capture.

Adequate transparency in product plan and policies

Maintain proper Customer relationship

Company should publish its weekly review of internal or external Competitive business.

There must be proper management information system in Banks

Monthly NAV statement to provide to the customer.

Time to time banks launched new loan products for the customers with extra unique

features.

Some of the other suggestions are

To increase their customers, the banks should provide specialized services in this sector.

These services can be such as proper guidance to the Customer regarding the processing of

loans, especially for the customers who are illiterate.

To satisfy their customers and for good dealings in future, the banks should make prompt

disbursement of loan amount to the customers so that they can buy or construct their dream

home as early as possible.

The Banks should use easy procedure, or say, less lengthy procedure for the sanctioning of

loan to the customer. There should be less number of legal formalities, in case this exists,

then, these should be completed in less time. This will be helpful in attracting more

customers.

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Although the interest rates on specific norms, yet customers seek less interest rate which

can lower their cost of house. So banks should try to lower their interest rates. Needles to

say, that the bank which having lower interest rates, have the maximum clients for loans.

The public sector banks should improve their overall services to increase the number of

customers for home loans. They should recruit professionals to provide such services and to

satisfy the customers.

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9. APPENDIX:-

Questionnaire

Dear Sir/Madam,

I am the student of Maharshi Arvind Institute of Engineering & Technology , Jaipur. As part of

the requirements for my project study I am required to do a research based project on

”COMPARATIVE STUDY OF PERSONAL AND HOME LOANS OF ICICI V/S STATE BANK OF

INDIA ”Kindly spend a few minutes of your valuable time and fill in this questionnaire. Every

information given by you will be only for Academic purpose.

NAME OF RESPONDENT___________________________________________

ADDRESS______________________________________________________________________

________________________________________________________

Q.1 what is your occupation?

a) Student b) service

c) Business d) Others

Q.2What is your Age Group?

a) <20 b) 20-25

c) 30-35 d) 35-45

e) Above 45 years

Q.3 What is your income level?

a) 5000 – 10000 b) 10000-40000

c) 40000-100000 d) above 100000

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Q.4Do you want to take loan?

a) Yes b) No

Q.5 What is your future loan requirement?

a) Personal loan b) Home loan

c) Any other d) No requirement

Q.6From where you would like to take loan?

a) Private Bank b) NBFC’S

c) Government Bankd) Gramine Bank

e) Any other, please specify_________________________________

Q.7Before taking a loan from a particular Bank, you look for?

a) Interest rate b) Services

c) Unique feature d) Relationship with the customers

e) Any other, please specify_________________________________

Q.8How much Amount of loan you would like to take?

a) 50,000 b) 1, 00,000

c) 1, 00,000-1, 50,000 d) 1, 50,000-2, 00,000

e) Above 2, 00,000

Q.9Have you ever taken loan from any of the following institutions?

a) SBI b) ICICI BANK

c) SBBJ d) BANK OF INDIA

e) Others (Please specify)____________________________________

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Q.10Do you think about Private sector loan is better than Public sector loans?

If Yes: Why, If No Why?

Q.11Do you know about the credit norms of the Banks?

a) Yes b) No

Q.12How you know about the credit norms of the above specified Banks?

a) Advertisement b) friends

c) Others (please specify)__________________________________

Q.13what suggestions you want to give for Bank to improve their services?

_________________________________________________________________________

_________________________________________________________________________

________________________________________

Thank You

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10.BIBLIOGRAPHY:-

Text books:

“Research Methodology” By C.R.Kothari.

News Papers:

Economic timesBusiness standardBusiness lineFinancial express

WEBLIOGRAPHY:-

http://www.icicibank.comhttp://www.rbi.org.inhttp://www.indiainfoline.comhttp://www.wikipedia.comhttp://www.apnaloan.comhttp://www.google.com

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