Home Loan - A Comparitive Study at BOI

Prepared By: Ruchi Prabhu
“HOME LOAN – A COMPARATIVE STUDY AT BOI”
IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR

MASTER OF MANAGEMENT STUDIES
2016-2018
SUBMITTED BY
RUCHI NITYANAND PRABHU
ROLL NO. – B 24
SUBMITTED TO:
DR. V. N. BEDEKAR INSTITUTE OF MANAGEMENT
STUDIES, THANE
Home Loan – A Comparative study at BOI 1

“Home Loan – A Comparative Study at BOI”
INDEX
Sr.
Title Page No.
No.
Introduction
• Introduction to Bank
• Introduction to Loan
1 • Introduction to Home Loan 01 - 25
• Documentation required
• Equated Monthly Instalment
• Steps in Getting Home Loan
Project Proposal
2 • Purpose of Study 26 - 29
• Scope of Study
• Objective of Study
3 • Literature Review 30 - 37
Research Methodology
• Define the problem
4 • Research Design 38 - 42
• Sources of Data
• Sampling
• Data Collection Tools
5 Data Analysis and Interpretation 43 - 67
6 Findings & Recommendation 68 - 69
7 Limitation & Hypothesis 70 - 72
8 Learning from the project 73
9 Strategies Learnt from the Firm 74
10 Conclusion 76
11 Bibliography 76
12 Appendices 77 - 80

EXECUTIVE SUMMARY
Home is one of the basic needs but for everyone. With the growing population of India, the
demand of home is ever increasing. Also, the recent economic growth of India has caused increasing
buying power of Indian consumer, nuclear family structure etc. has boosted the real estate market.
Finance Sector has rosed and came forward in an organized way to woo consumers to get their dream
home in their funding capacity. Even a recent trend sees consumers to go for a second home, causing
an exponential increase in realty market demand.
Firstly, I was appointed to work for Loans and Advances Dept. but the Chief Manger of the Branch
said to work in all the departments one by one.
In Admin Department, I learnt about how to handle the different types of customer in a proper
way, the KYC documents, Various forms (KYC, A/c Opening, FD, RTGS, NEFT, Credit and Debit
Card forms, 15 G, 15H, Form 16) Pass Book Entry, Calculation of Interest Rate on Fixed Deposit, TDS
Calculation, I also learnt about the Cheque Clearance, Lockers etc.
In Loan and Advances Department, I first learnt about the different types of loans eg. Home Loan,
Housing Loan, Top up Loan, Loan against Property, Vehicle Loan, Education Loan, Personal Loan,
SME Loan, even there is Loan against TDR, Loan against OD, Loan against FD, Loan against LIC
Policy etc. then I learnt about what documents are needed to attach with the main form like L-444C,
CBD 23, L-515, L- L-11, L-12, L-15, CHA- 1, OD-516 etc, Then I started reading the proposals,
understanding them, Loan Calculation, EMI Calculation, Insurance Policy on Home, Drawing Power,
Drawing Limit, Stock & Book Debt Statement etc. Finally, creating awareness is very important to get
good profits to the company as well as to build good brand image in the minds of customers. Overall it
was the best experience in learning all the new things.

ACKNOWLEDGEMENT
"Gratitude is not a thing of expression; it is more matter of feeling."
There is always a sense of gratitude which one express towards others for their help and supervision
in achieving the goals. This is a formal piece of acknowledgement which is an attempt to express the
feeling of gratitude towards people who helped me in successfully completing of my training and project
report.
I would firstly like to express my deep gratitude to Mr. Nitin Joshi (Director) of the college without
which I would have not got the opportunity to work with this reputed bank (Bank of India). Then I
would like to thank Mrs. Swati Vaidya (Chief Manager) of the bank for the great support throughout
the internship. She was always there with her competent guidance and valuable suggestion throughout
the pursuance of this research project.
Special thanks to Mr. Deepak Ukidave (Project Guide) who guided me to work honestly and gave
his valuable suggestion for improving my work. I would also like to place of appreciation to all the
respondents whose responses were of utmost importance for this research
project.
Above all no words can express my feelings to my parents, friends all those persons who supported
me during my project. I am also thankful to the Placement Committee of the college whose cooperation
& support has helped me a lot in the Summer Internship.
I would also like to thank almighty God for his blessings showered on me during the completion
of project report.

DECLARATION BY THE CANDIDATE
This is to certify project report entitled “Home Loan – A Comparative Study at BOI” which is
submitted by me in partial fulfilment of the requirement for the award of Master of Management
Studies, University of Mumbai at Dr. V.N. Bedekar Institute of Management Studies, Thane comprises
of my original work and due acknowledgment has been made in the text to all other material used.
Wherever references have been made to intellectual properties of any individual /

Institution / Government / Private / Public Bodies / Universities, research paper, text books,
reference books, research monographs, archives of newspapers, corporate, individuals,
business / Government and any other source of intellectual properties viz., speeches,
quotations, conference proceedings, extracts from the website, working paper, seminars, they
have been clearly indicated, duly acknowledged and included in the Bibliography.
_______________________________
Ruchi Nityanand Prabhu
20th July 2017

CERTIFICATE BY THE GUIDE
This is to certify that project report entitled “Home Loan – A Comparative Study at BOI”
which is submitted by Ruchi Nityanand Prabhu in partial fulfillment of the requirement for the
award of Master of Management Studies, (University of Mumbai) at Dr. V.N. Bedekar Institute
of Management Studies, Thane is a record of the candidate's own work carried out by her under
my guidance. The matter embodied in this report is original and due acknowledgment has been
made in the text to all other material used.
Guide's Name: Mr. Deepak Ukidave
Guide's Signature: __________________________
Date: 20th July 2017


CHAPTER 1 - INTRODUCTION
INTRODUCTION TO BANK
Finance is the Lifeblood of all the industry and Banking Sector is the Backbone of it.
The word ‘Bank’ is derived from the Italian word Banca and from a French word Banque
which means a bench where all the money lenders used to sit to lend the money. Its Primary
objective is to accept deposits and lend loans. It is a financial institution that
accepts deposits from the public and creates credit. The activity of lending can be performed
either directly or indirectly through capital markets. Banks are highly regulated in the country,
due to their importance in maintaining the financial stability. There is a System which is being
institutionalized in many nations known as Fractional Reserve Banking wherein the bank will
hold liquid asset equal to only a portion of current Liabilities. In addition to other regulations
intended to ensure liquidity, banks are generally subject to minimum capital
requirements based on an international set of capital standards, known as the Basel Accords.
There are mainly three types of Bank
1. Central Banks
2. Investment Banks
3. Retail Banks
Central Banks
It is a bank responsible for supervising of monetary system of a nation or group of nation.

Their duty is to issue currency, regulate the money supply, and control interest rates. Behind
the moment in the currency market the central bank plays an vital role because they are
managing the money supply.

Some of the Central Bank are
• Reserve Bank of India
• Federal Reserve Bank
• Reserve Bank of Australia
• Bank of England
• European Central Bank
Investment Banks
It is also known as wholesale bank, which provides financial services to another financial
institution, and corporates. The key role is issuance of securities for a listed company through
IPO or a secondary issue in order to raise capital for expansion.
Investments banks are usually regulated by central bank of the country in which they
operate.
Retail Banks
They are also called as commercial bank or “high street” banks providing banking services
to the public. There work is to offer financial service product to the customers such as
insurance, pension funds, mortgage, overdraft, broking investments, Business Loan for Small
and Medium Enterprises.

BANK OF INDIA
Bank of India (BOI) was founded on September 07, 1906 by a group of businessmen at
Mumbai, Maharashtra. It has its headquarters at Bandra Kurla complex, Mumbai. It is
government-owned since nationalisation from 1969. It started its first office in Mumbai with a
paid-up capital of Rs. 5 Million and 50 employees. Bank of India presently has 5100 branches
as on 31 January 2017, 54 Zonal offices and also including 56 offices outside India, which
includes five subsidiaries, five representative offices, and one joint venture. The Bank is traded
in BSE as well as in NSE. Mr. Dinbandhu Mohapatra is the MD & CEO of the Bank. One of
the founder member of SWIFT (Society for Worldwide Inter Bank Financial
Telecommunications), is BOI which also helps in facilitates provision of cost-effective
financial processing and communication services.
Products Available
• Commercial Banking
• Retail Banking
• Private Banking
• Asset Management
• Mortgages
• Credit Cards
More Information about BOI

• Total Asset: Rs. 6,09,913.93 Crores.
• Total Revenue: Rs. 41,796.47 Crores.

BOI SYMBOL MEANING
Bank of India’s symbol is of Goddess Lakshmi inside a star it means your money will
increase by the blessing of Goddess Lakshmi and will be safe inside a star, Star also represent
branches spread all over the world like stars spread everywhere in the sky.
TAGLINE OF BOI
Relationship Beyond Banking
The Tagline itself has an explanation where it says that the Bank and the Customers have
a strong relationship and the bank staff helps the customers in every possible way.

ORGANISATIONAL CHART OF BOI
Chief Managing Director
Exective Director
GM (Scale VII)
DGM (Scale VI)
AGM (Scale V)
Chief Manager (Scale IV)
Senior Manager (Scale III)
Manager (Scale II)
Officer (Scale I)
Special Assistant
Head Clerk
Operator B and A
Substaff

INTRODUCTION TO LOAN
What is a Loan?
A loan is when you receive money from a friend, bank or financial institution in exchange
for future repayment of the principal, plus interest. The principal is the amount you borrowed,
and the interest is the amount charged for receiving the loan. Since lenders are taking a risk
that you may not repay the loan, they have to offset that risk by charging a fee - known as
interest. Loans typically are secured or unsecured. A secured loan involves pledging an asset
(such as a car, boat or house) as collateral for the loan. If the borrower defaults, or doesn't pay
back the loan, the lender takes possession of the asset. An unsecured loan option is preferred,
but not as common. If the borrower doesn't pay back the unsecured loan, the lender doesn't
have the right to take anything in return.

TYPES OF LOANS
Personal loans
You can get these loans at almost any bank. The good news is that you can usually spend the
money however you like. You might go on vacation, buy a jet ski or get a new television.
Personal loans are often unsecured and fairly easy to get if you have average credit history.
These Loans are usually for small amount between 2,00,000 to 5,00,000 and the repayment is
for less tenure.
Cash advances
If you are in a pinch and need money quickly, cash advances from your credit card company
or other payday loan institutions are an option. These loans are easy to get, but can have
extremely high interest rates. They usually are only for small amounts: typically, 1,00,000 or
less. These loans should really only be considered when there are no other alternative ways to
get money.
Education loans
These are great ways to help finance a college education. The most common loans are Stafford
loans and Perkins loans. The interest rates are very reasonable, and you usually don't have to
pay the loans back while you are a full-time college student. The downside is that these loans
can add up to well over 5,00,000 in the course of four, six or eight years, leaving new graduates
with huge debts as they embark on their new careers.

Mortgage loans
This is most likely the biggest loan you will ever get! If you are looking to purchase your first
home or some form of real estate, this is likely the best option. These loans are secured by the
house or property you are buying. That means if you don't make your payments in a timely
manner, the bank or lender can take your house or property back! Mortgages help people get
into homes that would otherwise take years to save for. They are often structured in 10-, 15- or
30-year terms, and the interest you pay is tax-deductible and fairly low compared to other loans.
Home-equity loans and lines of credit
Homeowners can borrow against equity they have in their house with these types of loans.
These Loans are usually taken to purchase a new flat in new construction. These loans
sometimes also include for making renovations. These loans are good for home additions, home
improvements or debt consolidation. The interest rate is often tax deductible and also fairly
low compared to other loans.
Small business loans
Your local banks usually offer these loans to people looking to start a business. They do require
a little more work than normal and often require a business plan to show the validity of what
you are doing. These are often secured loans, so you will have to pledge some personal assets
as collateral in case the business fails.

INTRODUCTION TO HOME LOAN
How Home Loans Work
Loans are very good when they are used in the right way. They enable you to be able to
afford things that otherwise you would simply miss out on. A home is a good example. Few
people would ever own a home if loans for their purchase were not available. The typical home
is simply far too expensive, and as the prices continue to go up, they manage to stay well out
of reach. But with home loans, you can have it right away and enjoy it while you are paying it
off. In the meantime, with prices rising over time, your house gets more valuable while your
amount owing is going down. That creates “equity” for you – the difference between the market
value and what you owe.
So, since we like the idea of home loans we need to learn enough about it so that we
know what’s going on. This will help us to be able to select one that suits our needs. It will also
help us to implement a strategy to get rid of it! After all, a big part of the purpose of the loan is
to enable us to fully own whatever it is that we have purchased without anything owing on it
one day.

Principal Amount
At the beginning, when you get the loan, the lender will provide some money for your
purchase. This amount of money that they advance is the “principal” of the loan. Principal can
be thought of as the primary or basic thing. And the primary thing that a home loan is all about
is giving you the money that you need to purchase your home.
As time goes on and you make payments to reduce the amount you owe, the loan principal
reduces until the loan is fully repaid and the principal is zero.
Security
Since typical home loans involve a lot of money, the lender needs to have some protections
in place so that they are not left high and dry should things go pear shaped. To do that will
require that a certain value of real property (as a home on a block of land) be used to secure the
loan. That means that if you fail to repay the loan as required they have the legal ability to have
that property sold to get their money back.
There is no limit to how many properties that you use to secure your loan, given that they
are not also being used to secure another loan. The money from the loan might be used for the
purchase of one or several of those properties. That makes no difference. There just needs to
be enough total security value to cover the loan.
Mortgage
The way the property is provided as a security is through a mortgage. That’s a name for
a home loan that is linked to a security property – as they typically are. That mortgage involves
putting an “encumbrance” or “lien” on the title of the property. That’s simply a notation on the
title (papers that define the property and show who the owners are) that says that along with
the ownership of the property there is an obligation of repaying a lender.

Interest Rates
As long as you owe money, you will have to pay interest. This is the basic cost paid to the
lender for the use of their money. The interest rate is the means of calculating this interest.
Usually it is expressed as an annual percentage, even though it is typically calculated daily and
charged to the loan monthly.
Variable/ Floating Interest Rates

The interest rate can be variable or fixed. With the variable rate the lender has the ability
to change the rate as required by economic conditions. If the lender finds that it is more
expensive for them to get the money that they are using to provide the home loans, they can
increase the interest rate. If, however, the cost of their money goes down they can reduce the
rate to both attract new customers as well as to retain their existing ones. It’s a very competitive
industry, so the lender’s margins (the difference between what they pay for money and what
they lend it out at) tend to stay very tight (a small difference).
Fixed Interest Rates

With some loans, it is possible to fix the interest rate on all or part of the loan. The fixed
rate that is on offer changes more often than the variable rate, but once it is set, it stays the
same for the specified period of time, regardless of what the variable rate is doing. Doing this
can either be seen as a gamble or it can be a matter of paying for insurance.
When the fixed rate period is over, the rate will revert to whatever the variable rate is at that
time, and the payments will be adjusted accordingly. There are likely to be very strict
limitations and associated penalties with regard to any sort of early repayment of a fixed interest
rate loan portion.
Payments
Periodically you will be making payments on your home loan. This might be weekly,
fortnightly or monthly. These payments will cover the cost of the interest, and anything
additional will be used to reduce the amount of principal owing.

Redraw
When you are ahead on your payments, which is to say that you have paid in more than just
your required payments, the principal will be brought down below the level where it would
need to be in order to be fully repaid on time. Most home loans will have the capability for the
borrower to ask for that surplus money back. The amount of money that is available is called
“redraw,” and the process of getting it is also “redraw” or “redrawing.”
Some loans will charge a fee for doing this, while with others it is free and also very easy to
do. Redraw gives you the freedom to pay as much as you can into the loan knowing that if
some sort of emergency or special need came up, it is still available.

SCHEMES OF HOME LOANS
Home Loans
for
Construction
of New
House / Flat
Home
Home Equity
Extension
Loans
Loan
SCHEMES
OF HOME
LOAN
Home Loan
Home
For Purchase
Improvement
Of Housing
Loan
Site

DOCUMENTATION REQUIRED
Self Employed
Salaried Customers Self Employed Businessman
Professionals
Application form with Application form with Application form with

photograph photograph photograph
Identity and Residence Identity and Residence

Identity and Residence Proof
Proof Proof
Education Qualifications Education Qualifications

Latest Salary-slip Certificate and Proof of Certificate and Proof of
business existence business existence
Last 3 years Income Tax

Form 16 Business profile
returns (self and business)
Last 3 years Income Tax returns

Last 6 months bank Last 3 years Profit /Loss (self and business)
statements and Balance Sheet
Last 3 years Profit /Loss and
Balance Sheet
Last 6 months bank Last 6 months bank statements

Processing fee cheque statements (self and business)
Processing fee cheque Processing fee cheque

SECURITY DOCUMENTS
1. L -434 (DP Note)
2. Special Power of Attorney (Annexure II)
3. L-513 (Agreement for Home Loan)
4. L-516 (Alternate Document)
5. L-517 (Continuing Security)
6. OD-194 (Deed of Guarantee)
7. L-444C (Acknowledgement of Debt)

EQUATED MONTHLY INSTALLMENT (EMI)
An Equated Monthly Instalment (EMI) is the amount paid by a borrower each

month to lender of the loan. The EMI is an unequal combination of principal (the actual
loan you have taken) and interest rate. EMI payments are made every month, generally
on a fixed date, for the entire tenure of the loan, till the outstanding amount has been
completely repaid. It is important to understand how banks work out the EMI so that
you would find it easier to evaluate various loan options. In the earlier years of loan
repayment, it is mainly the interest payments that are being made while the principal
amount is much less. As the loan matures, and as the principal gradually gets paid, the
outstanding loan amount reduces. The interest component thus becomes lower than the
principal, and finally minimal.

INTEREST RATE OF EMI
FIXED RATE EMI: Fixed rate loans are those which remain same throughout the
tenure. This can be best option only when interest rate has reached bottom, from where
upward trend is expected.
FLOATING RATE EMI: Floating rates move in tandem with market and RBI
measures which are prone to fluctuation depending on the market and economy.
CALCULATION OF EMI
The calculation of EMI depends on three major factors:

 Interest Rate
 Loan Amount
 Tenure of the Loan
Mathematically, EMIs are computed using the formula mentioned below:
EMI = (LOAN AMOUNT x INTEREST) x (1+INTEREST) ^N

[(1 + INTEREST) ^N] - 1

STEPS INVOLVED IN GETTING HOME LOAN
STEP 1:
Submit an Application form along with relevant documents:
The finance company will process customer’s application to check the loan eligibility based
on the persons income and personal profile. Usually an up front (non –refundable fee) of
about 0.5-1% of the loan amount must be paid before processing begins.
STEP 2:
Verification of the property and supporting documents:
(Usually takes 5-7 working days after Step1)
A company representative may visit the property as well as the residence to vary
information submitted in the person’s application form. Further, a property valuation
maybe carried out by the company to determine the maximum amount they are willing to
lend you. Any references submitted by the person in the Application Form may also be
contacted. The person may be personally interviewed and any further clarifications in the
documents submitted maybe sought.

STEP 3:
Sanction of the loan:
(Usually on the 7th working days after Step 1)
A sanction letter is issued which the customer will have to sign. This letter will contain the
amount and the terms of the loan. Some companies specify the period for which the loan
sanction is valid. The person will have to pay a Commitment fee (normally 1% of the
unutilized loan amount) if you do not draw on the entire sanctioned amount before that
period.
STEP 4:
Submission of the original Property documents and signing the loan
Agreement
(Usually on the 8-10th working days after Step 1)
The customer will be required to leave the title deed of the property with the company as a
security for the loan. He will be required to go to the company’s office to execute the legal
loan papers.
STEP 5:
Disbursal of the Loan Cheque
(Usually on the 10 –15 working days after Step 1)
The person can draw the loan in parts depending on the stage of construction of the
building. Until such time that the entire sanctioned amount is NOT drawn, you will pay a
simple interest on the Actual Amount drawn (without any principal repayments). The EMI
payments will commence only after the entire Sanctioned Loan Amount is drawn.

CHARGES IN HOME LOAN
Acquiring a Home Loan doesn’t only involve the cost of home loan interest rates but it
also includes other charges & fee accompanying at various stages of taking the Home loan.
You must consider all these charges while comparing the cost structure across banks.
Following is the detailed fee structure incurred by banks at different loan stages:
• Processing Charge
It is a fee payable at the time of submitting the loan application to the bank which is
normally non-refundable. The fee ranges between 0.5 per cent and 1 per cent of the loan
amount.
• Administrative Fee
It is a fee incurred by banks at the time of loan sanction; there are few banks who have
removed this fee so you must check it with all the banks.
• Prepayment Penalties
When the borrower pre-pays the loan before the loan tenure, banks charge a penalty which
usually varies between 1 per cent and 2 per cent of the pre-paid amount.
• Legal Charges
Banks also incur some charges from the customer for legal and technical verification of the
property.
• Delayed payment Charges

When there is a delay in the payment of your EMI, banks charge a late payment fee from
the borrower which normally ranges from 2% to 3% of the EMI.
• Cheque bounce charges

Banks charge between Rs. 250 and Rs. 500 for every bounced cheque towards the loan
payment because of lack of funds in your account.

BENEFITS OF HOME LOANS
You can easily avail home loan from various companies which offer home improvement
loans to finance the cost of tiling, plumbing, electrical work, grills, woodwork, painting,
compound walls and almost all improvements for your house. In fact, it might be a good idea
to avail of these home loans, because they offer a number of added advantages as well. One
of the most important benefits of taking a home loan is the interest rate that is allowed on the
home loan. Fixed and variable interest rate options are also available for home loans. Many
financiers also offer home improvement loans at the same interest rate as they offer the home
loans. Most of the prevailing interest rates fall in the range of 7.75% to 8.75% (8.60% is the
current interest rate at Bank of India). There is usually a processing fee of 1% to 2% also
involved.
The other benefit of taking a home loan is the security that is to be provided. The benefit is
that you can use the property that is currently being constructed as the security for the home
loans. Of course, most banks and finance companies do not finance more than 80% of the cost
of the property mortgaged. Perhaps the benefit that is most used is the tax benefit. The interest
that is paid on home loans are deductible from the annual value resulting in a lower taxable
income. For self-occupied property, interest to the extent of Rs 30,000 is deductible from
taxable income. The maximum amount of fund that can be received through the home loans
varies between 50%-100% of the total cost. Of course, the loan amount is also subject to the
repayment capacity of the borrower. The usual rule states that the sum of all the monthly
instalment’s a borrower has to pay should not exceed 40%-50% of his gross monthly income.
Apart from the income and margin criteria, the applicant needs to be a salaried or self-employed
individual. And it is important that the loan is repaid before the retirement stage or before the
person turns 65 years in case he/she is self-employed. On an average the repayment term of the
home loans can be extended up to 15 years.

TAX BENEFITS IN HOME LOAN
Past record:
The home loan borrower enjoys Tax Benefits on both Interest paid & the Principal re-paid.
Under Section 24(d) of Income Tax, the deduction of interest payable on the home loan is
up to a maximum of Rs. 1, 50,000.
Under Section 80(c) of Income Tax, Principal amount for the repayment of loan along with
other savings & investments is eligible for tax deduction up to a Maximum limit of Rs.
1,00,000.
Recent changes:
According to the new policy changes of the direct tax code bill introduced in the parliament
in the month of august 2010 only up to Rs 1.5 lakh deduction is allowed on the interest paid
on the housing loan and there is no deduction available on the principal amount. So if your
equated monthly instalment is Rs 1.50 lakh, comprising interest and principal outgo of Rs.
75000 each, you can avail deduction of only the interest.

HOME LOAN AT BANK OF INDIA

Eligibility
Salaried employees, professionals, self-employed individuals. Request are also
considered from NRIs, PIOs, HUF, proprietorship firm, partnership firms and corporates.
Purpose
• To purchase/construct house/flat
• To renovate/extend/repair existing house/flat
• To purchase a plot of land and for construction of house
• Takeover of Home Loan from other Bank/Financial Institutions
• Purchase of resale house/flat
Quantum of Loan
• For construction/purchase of a house/flat – Rs. 300 lakh (Rs. 500 lakh in major metros
viz. Mumbai, Kolkata, New Delhi and Chennai)
• Repairs/renovation/extension to house/flat – Rs. 50 Lakh
• Purchase of Plot- Rs. 300 lakh (As a composite loan with construction cost)
• Minimum Home Loan – For Metro/ Urban Centres: Rs. 1 Lakh
Margin
• For 1st House / Flat: For loan, up to Rs. 30 Lakh – 15% on pure cost – excluding stamp
duty, registration charges etc.
• For loan over Rs. 30 lakh upto Rs. 75 lakh: 20% on pure cost excluding stamp duty,
registration charges etc.
• For loan above Rs. 75 lakh: 25% on pure cost of the house, excluding stamp duty,
registration etc.
• For 2nd House/Flat/Loan: 20-25% on pure cost (as applicable) – excluding stamp duty,
registration charges etc.

Repayment
Highly flexible, maximum – 30 years, including moratorium period up to 36 months, in
monthly instalments. Loan to be normally repaid before attaining 70 years of age.
Eligible Quantum of Loan

Eligible loan is related to income / repayment capacity of proponent/ borrower.
• Salaried Persons: 72 times of gross monthly salary or 6 times of gross annual
income based on Income Tax return, submission of Income Tax return is
compulsory
• Self Employed/ professionals etc.: 6 times of gross annual income based on
Income Tax returns
• HUF/Proprietorship/Partnership Firm/Company: 6 times of cash accruals
(PAT + Depreciation) as per Balance Sheet/ P&L Account
Security
Mortgage (1st charge) on land / flat/ house before/at the time of disbursement of loan
SPECIALLY DESIGNED HOME LOANS AT BANK OF INDIA
• Diamond Home Loan

Available for loan over Rs. 500 lakh in specified cities
• Smart Home Loan
Overdraft facility in home loan Account
• Pravasi Home Loan
Available for NRI customers
• Top Up Loan
Additional Loan after 2 years of Home Loan

CHAPTER 2 - PROJECT PROPOSAL
Home is one of the basic needs for everyone. With the growing population of India, the
demand for home is increasing day by day. The recent economic growth of India has caused
nuclear family structure & increasing buying power of Indian consumer, it has also boosted
the real estate market in recent years. This has given rise to financial sectors to come forward
in an organized way to attract the consumers to get their dream home earlier of their funding
capacity. Even recent trend has seen consumers going for a second home, causing an
exponential increase in demand of realty market.
Looking at the above scenario, I decided to study 'Home Loan' market, EMI calculations,
loan sanctioning, Documentation etc. My aim of the research work is to identify & find out the
major reasons why people take home loans. To align with my academic requirement, I adopted
‘Survey’ method to carry out the research & then to conclude the project.
To have an unbiased approach to my study, I initially interviewed working professionals

in the Banking sectors. I approached them with a set of semi-structured exploratory
questionnaires. I also approached those industry experts at Bank of India individually at a
convenient time suitable to interviewee. Once the interviews were completed, I prepared a
second set of questionnaires based on the outcome of the results of primary interview. The
nature of second set of questionnaires was mainly structured and dichotomous. The aim of this
second set of questionnaires was to freeze factors that attract consumers to select particular
Bank of Financial Institution for taking Loans (Independent Variables) that need to be
surveyed. The above process completed the Phase-1 of the study.
In the Phase-2 of the study, I prepared and freeze the structured questionnaires for
surveying the consumers at Bank of India. This method resulted in identifying the ‘determinant
attributes’ in an unbiased way that ‘Home Loan’ consumer evaluates before approaching the
Banking/Finance Institutes (BFI). A trial was conducted within the Department, and minor
modifications on the questionnaires set were carried out.

Then I will make survey results and will tabulate and evaluate my findings. We have
adopted the ‘Convenient Surveying’ methods to find out which BFI are leading from both from
theirs as well as consumer prospective. I would like to mention that I have also tried to include
consumer ‘Segment’ study that is which ‘Age group’ takes more home loan or which Economy
Class, or Profession of India have more Demand on Home Loan.
I have made a sincere approach on following the research process; I have also reviewed the
same within the Department.
PURPOSE OF THE STUDY
The main purpose of this study is to attain the knowledge of the processing system of home
loans the recent circulars, rules & regulations, consumer preferences etc. the main purpose of
the study are as follows: -
• To know the ideas of customers about home loan products and services.
• To study how to choose the right housing finance bank.
• To study the problems faced by customers in obtaining the home loans.
• To learn about various aspect of Bank of India’s home loan.

SCOPE OF STUDY
The Indian housing finance industry has grown by leaps and bound in few years. total
home loans disbursements by banks has risen which witnesses phenomenal growth from last 5
years. As there are greater number of borrowers for home loans, we can find out satisfaction
level of customers and problems faced by them in obtaining home.
OBJECTIVE OF THE STUDY
This study seeks to evaluate the performance of the banking sector in India in extending
housing finance during the last decade. The innovations made by them to reach out to the needy
borrowers in different parts of the country have been examined in detail. It was proposed to
look into the problems faced by them in developing the linkages between the borrowers and
suppliers. The emergence of NPAs in housing finance is a cause of concern to the bankers as
well as the regulator. This aspect has been examined in detail, subject to the availability of data
pertaining to this sensitive area.
Objective work is like a pivot around which every step of the research is moving. So, any
research study must clearly state the issues being investigated. Therefore, as far as my topic
“Home Loan – A Comparative Study at BOI” concern the major research objective can be
cited as follows: -

PRIMARY OBJECTIVES:
1. The main objective of doing this project is to study the corporate culture
2. To analyse Indian home loan market and its growing trends
3. To analyse various methods of operating a home loan
4. To acquire knowledge about various home loan products
5. To know how are rates, EMI calculated while providing home loan.
SECONDARY OBJECTIVE:
1. To know about the BOI home loan.

2. To have the first-hand information on loan procedure, sanctioning and disbursement in
BOI
3. To compare the performance of BOI with other market players.
4. To study about the financial position of BOI for the financial year 2015-16 in
comparison with position in financial year 2016-17.

CHAPTER 3 - LITERATURE REVIEW
Before giving detailed information regarding the research methodology used in the study, it
is appropriate to present a brief overview of the literature done before, case studies & articles
written, and books on this particular topic. The area of study may be within the country or
outside the country.
Literature review helps a researcher to get proper understanding about his/her selected
research problem and also provide some guidelines in selecting a proper research methodology.
It is also helpful in finding out the research loopholes in the existing literature review. This will
help the researcher in fine-tuning about his/her research problem and research methodology.
Second advantage of reviewing in the existing literature is that in cases where the research
problems are similar, the conclusions and findings may be easily compared between the both
research papers. This will help the researcher in determining whether my finding is possible or
not.
Thus, literature review is most important in formulating the research problem and also helps
the researcher in deciding about the most appropriate methodology to be used while doing the
research. While comparing the results of the earlier studies with his/her recent results, care
must be taken to verify whether the objectives and methodology are similar.
While doing the literature review of the earlier studies a researcher has to state the
objectives of the study, describe the concepts and definitions used, the methodology employed
and the important findings and conclusions of the study.

The Research Study entitled “Housing the New Millennium: A Home Without
Equity is Just a Rental with Debt” by Joshua Rosner (2001).
The author studied the prospects of the U.S. housing loan / mortgage sector over the years.
Based on his analysis, he believed that, there are elements in place for the housing sector to
continue to experience growth well above GDP of the country. However, he believed that there
are risks that can materially distort the growth prospects of the sector. The Credit Underwriting
process was made easy so the housing sector grew in 1990’s
A research article entitled “Home Ownership Risk Beyond a Subprime Crisis: The Role
of Delinquency Management” by Jaco Melissa B. (2002)
The Author said in her article that public investment is an promotion of homeownership
and the home mortgage market she often relies on three justifications to supplement shelter
goals: to build household wealth and economic self-sufficiency, to generate positive social
psychological states, and to develop stable neighbour hoods and communities. Mortgage and
Home ownership obligations do not inherently further these objectives, however and
sometimes undermine them.

A research article entitled “Housing Problem and Public Action: Continued

Incompatibility Experience from a South Indian State” by M. Mahadeva (2004).
In this research article, the author has analysed the nature and distribution of the housing
problem in Karnataka and examined how the state has addressed this issue. From the analysis,
it is found that Karnataka is not an exception to the general rule of housing strategies, which
were evolved over decades, and also have not taken the direction expected. Lack of
comprehensive policy to guide housing development on equity principle together with ad hoc
approaches, have failed to deliver housing benefits and develop critical housing inputs on a
sound footing with equal opportunities for all need based policy interventions hassle free input
delivery mechanism existing housing shortage and rural-urban disparities substantially.
Unfortunately, this did not happen. Thus, policy issues like what policies are needed for the
state of Karnataka to guide housing development, increasing the housing supply to the poorer
and marginalized sections, mobilizing the needed financial resources and a host of other issues
in addressing the housing problem emerge.

A Paper entitled “Retail Banking – Emerging Issue in Home Loan” by K. N. Rao (2005)
In this paper, the author revealed that during 2002-03 housing loans by banks grew at a
hefty growth rate of more than 100%. This aggressive growth factor contribution was the
portfolio of housing loans of banks and HFC are: Tax intensives on repayment of principal and
interest, rising income level of middle class, falling rate of interest, stableness of real estate
prices, easy availability of housing/home loans, low returns on the investment opportunities
available in the market. They concluded that although there is strong growth in housing loans
by financial situations in India, we are still behind the developed countries in terms of GDP
ratio of housing loans. In India, it is around 2.5% compared to 57% in the UK and 54% in the
US. It shows that there is a vast scope for housing loans in India. One economist has argued
that every rupee spent on the housing sector will increase the GDP by more than paise 75 . It
also creates a labour intensive. Despite of immense growth in housing loans there are certain
challenges that the banks might face in the time to come, e.g. falling rate of interest, rising
mismatch in the assets and liabilities of the bank, rising NPA in the housing/home loan
portfolio, etc.

A Research Article entitled “Housing Loan Frauds in Banks: Some Precautionary

Measures” by Phogat M. (2006)
The author stated that the measures of the housing loan frauds in banks. The author
concluded that housing for all envisaged 2 million houses every year out of which 0.7 million
are in the urban sector. Government provided certain relief under Income Tax Act. It motivated
many people to avail housing loan. The author thinks that different frauds committed on various
banks can be divided into the following two categories. i.e. Pre-sanction and Post Sanction.
KYC related due weakness in pre-inspection, Benami A/c, forged title deeds, by selling same
flat to different people, inflated salary certificate, filing of IT return for the last three years in
one lot and particularly by paying a nominal amount of tax, valuation of the property is
manipulated to manage margin money are post sanction fraud.
The precautions should be taken at the bank level to avoid the assurance of fraud i.e. KYC
norms be followed, IT returns of last 3 years should be filed, main salary A/c should be verified,
loan should be granted against the flat / houses built by reputed builders only. An undertaking
from the builders for not been sold to any other person, search report of property to be
conducted by the advocate, original title deeds, property tax, electricity bill, kept on records.
Disbursement of loan should be made after spot verification; title deed should be scanned
through ultra violet ray machines before mortgage and bank should independently verify the
report and no middle man should be involved in the process and entire KYC. So the author
points out that above mentioned precautions will enable the bankers to curb frauds and public
money can be saved.

A Paper entitled “Housing Finance – A Global Perspective” by K.N. Rao (2006)
According to Rao, housing finance is a long-term proposition involving many risks for the
lenders, borrowers and even for the economy in general. As housing finance is a long term
game, it requires proper asset-liability management strategy, the borrowers also face interest
rate risk, especially when they are locked in fixed rates when interest rates are falling and
floating rates are rising. The author mentions in this article that home loans have been
registering exponential growth in India during the last six years. Low interest rates, easy
liquidity conditions, availability of tax shelters on repayment of principal and interest surging
demand from middle income group borrowers, lower regulatory capital, and the comfort of
tangible security have all collectively contributed to the spurt in home loans.

A Research Article entitled “Housing Loan Frauds: Are they Avoidable?”

by Padhi Manohar (2007)
The author said that aggressive growth in housing finance by the banks is for the reasons of
Tax incentives on repayment of affordable interest rate, principal and interest, rising income
level of the middle class, completion amongst banks and housing finance institutions, low
returns on other investments, low incidence of NPA, and housing as priority sector lending for
banks. Housing loans as a percentage of GDP: In UK it is 57%, In USA it is 54% and In India
it is only 2.5%. It shows vast scope for housing loans in India. Fraud is very risky in housing
finance when focused is increased. NPA of the bank is due to the fraud taking place in the
banks.
The main reason for housing loan turning NPA are loss of job, closure of the
factory/company, illness of the borrower, dispute between builder and borrower, over-finance
to the borrower, agents approaches the bank for section of housing loans in bunches, sections
of loan on fabricated documents without proper verification (Benami A/C, submission of fake
title deeds of immovable property, coloured Xerox copy of the title deed, subject of fake
income certificate etc.) but the precautionary measures prevent the frauds in housing finance
like – pre-sanction appraisal, documentation and creation of charge and post-sanction follow-
up. The other preventive measures like Identification of Borrower, Guarantor and Branch
should insist opening of bank A/C as per KYC Norm, pre-sanction verification report, site
verification, existence of property, valuation of property photo of the immovable property,
approval of map and cost-estimate, scrutiny of title, end-use verification of amount disbursed.
Pay order should be issued in the name of banker, cross verification with balance sheet
document of title should be in DEMAT form, Bank should develop in-house expertise in case
of large value of loan.

A Research article entitled “Reverse Mortgage - A Novel Financial Product for Elderly
People” by K. Bhattacharjee (2007)
A reverse mortgage is a home equity loan offered to senior citizens that permits them to
convert home equity into cash while they retain ownership. A reverse mortgage works like a
traditional mortgage loan, only in reverse direction. A borrower does not make regular
payments to a lender; instead he/she receives payments from the lender. The first reverse
mortgage loan launched by Dewan housing in 2006. Reverse mortgage product name was
“Saksham”. Then ICICI and NHB launched a new product of reverse mortgage. Reverse
mortgage can provide a valuable income source for seniors who own property but lack liquid
assets. So, it is mainly meant for home-rich senior citizens who are otherwise cash-poor. This
is the scenario of the research where a product can be a boon to senior citizens and a business
for the lenders.
A Research Study entitled “Housing Advances and Commercial Banks: A Review”

Authored by Vimala P. (2007)
The objectives of the study were:

1) To review the housing advances of commercial banks in state of Kerala.
2) To compare the performance of different bank groups in respect of housing advances.
The study covered a period of seven years from March 2000 to March 2006 and the
secondary data are used in the study of research. For the purpose of the study, the commercial
banks were grouped into four categories. The study revealed that there is no significant
difference in the growth rate of housing advances by different bank groups in this state. H-Test
was applied to arrive at this conclusion. The amount of housing loan disbursed by RRB which
was Rs. 6.09 crore in 1999-2000 rose to Rs. 236.35 crore in 2005-06 showing a CGR of 85%
which was the highest amount of all categories.

CHAPTER 4 - RESEARCH METHODOLOGY
A systematically solving of the research problem means research methodology. It is a study

of how research is scientifically done. In it we study the various steps that are generally adopted
by a researcher in studying his/ her research problem along with the logic behind them. It is
necessary for the researcher to not only know the research techniques/methods but also the
methodology.
DEFINE THE PROBLEM
Defining the research problem is the main aim of the research study because after the
research problem is identified the researcher has the idea to form the survey or the related
documents regarding the research. The Researcher first should find out the problem and also
the general areas of interest, understanding the problem thoroughly, and then re-establishing
them into meaningful terms from an analytical point of view.
The problem was that customer was not aware about the different types of loan offered by
Bank of India, their interest rates, documentation process, repayment process, etc.
RESEARCH DESIGN
Research design is a blue print of how research is done in a systematic manner with
minimum expenditure.
The research design of my project was to conduct a proper mixture of open ended and close
ended questionnaire followed by the Data and interpretation of it in proper graphs with each
graph having a proper interpretation of questionnaire.

SOURCES OF DATA
• Primary Source
Primary data is collected through the responses of the customers through

Questionnaires, which were specially prepared for this study. The questionnaire where of two
type open and close ended containing questions regarding the general and socio-economic
characteristics of the respondents such as age, gender, profession, etc. and also about their
reason for taking home loan, LAP, Term, documentation, rate of interest, tenure of loan,
procedure, etc. Primary data also included information collected by personal interview with
officers & managers at Bank of India.
My Primary source of collection of data will be purely survey method where they will be
given a set of questionnaires and then they have to respond without any biasednesss.
• Secondary source
There was extensive use of secondary information in the form of books, articles published
in magazines, journals, newspaper, pamphlets of bank, reports & circulars of Bank of India,
website etc.
The secondary source for me was banks pamphlets, circulars, customers documents who
have taken housing or home loan, their proposals etc.

SAMPLING
• Sampling plan
It means a plan to set up on how to select the size of the respondent as the respondent
should not be small nor to large and it should be selected at random without any
biasedness.
• Sampling size
The size of sample should neither be excessively large, nor too small. It should be optimum.
Because optimum sample is one which fulfils the requirements of efficiency,
representativeness, reliability and flexibility. Sample Size is the main problem in the survey
because customers have the insecurity to share the information as they think that the
information may be leaked or misused.
The Sample Size I choose to research was 100 divided into two groups that is 50 from Bank
of India and 50 at random.
• Sampling unit
Sampling unit may be a geographical one such as locality, state, city, district, village, etc.,
or a construction unit such as house, building, flat, etc., or it may be a social unit such as family,
club, friends group, school, college etc., or it may be each and every random individual.
The sample size I took was 100 where 30 will be the customers of Bank of India who have
taken the Home Loan, 10 will be the staff members of bank of India who have taken Home
Loan, remaining will be random public.

DATA COLLECTION TOOL
In dealing with any real-life problem it is often found that data at hand are inadequate, and
hence, it becomes necessary to collect data that are appropriate. There are several ways of
collecting the appropriate data which differ considerably in context of money costs, time and
other resources at the disposal of the researcher. But in the case of a survey, data can be
collected by any one or more of the following ways:
• Questionnaire
Questionnaires are made in way of google forms and send through mails or WhatsApp to
the respondents with a request to return after completing the same. It is the most extensively &
advanced used method in various economic and business surveys. Questionnaire to be used
must be prepared very carefully without hurting any sentiments of person, no personal or
religious questions to be adopted so that it may prove to be effective in collecting the relevant
information. This is the only method where the researcher and the respondent comes in contact
with each other.
Questionnaire which is designed for the survey is common for the customer of BOI, staff
members at BOI & Public at Random. I have attach the questionnaire at the end.
• Personal interview
The investigator follows a rigid procedure and seeks answers to a set of pre-conceived
questions through personal interviews. Personal Interview is to be carried out in a structed and
systematic way where the response of the person is considered in a large scale.
Personal Interview will be taken by me of Customers who are loyal and will not give fake
information, Branch Manager and Officers at the Branch.

• Observation
In observation method the information is collected in way where the investigator will not
interview any question nor ask them anything, he/she will take the output just by observing
them.
Observation is done by me while my officer talk to the Customer or any customer who
comes to take loan. I observe what type of question is asked by the customers or what doubt
they have, and on that basis, I have formed the Questionnaire.
TIME SPAN OF THE FIELD WORK: 2 Weeks

CHAPTER 5 - DATA ANALYSIS AND INTERPRETATION
Data
Gender
Male 55%
Female 45%
Interpretation
Out of 100 respondents the Percentages of Female taking loan is 45 and Male taking loan is
55. This states that more number of male are involved in taking loans as they have risk taking
capacity or they are the main head of the family.
On the other hand, we can say that women also take loan to support the family, some of
them share the loan amount with their husband or take the loan themselves.

Data
Profession
Student 6%
Service 74%
Business 20%
Other 0%
Interpretation
The Profession also plays a main role in taking the Loan as Students will take only
Education loan so it is 6%, the person who has own business will take loan of high amount and
businessman taking loan is 20% and rest all means 74% is of people who are working or doing
jobs.

Data
Loan Amount
1 to 10 Lakhs 17%
10 to 20 Lakhs 42%
20 to 50 Lakhs 33%
More than 50 Lakhs 8%
Interpretation
The person taking loan was more between 10 to 20 lakhs which is 42% followed by 20 to
50 lakhs which is 33% then 1 to 10 lakhs this is mostly personal loan (Top up Loan) which is
taken for renovation of home or holiday loan, and least is loan which is more than 50 lakhs
which is mostly taken by the person having business which is 8%.

Data
Tenure
1 to 5 Years 10%
5 to 10 Years 32%
10 to 15 Years 41%
More than 15 Years 17%
Interpretation
The Tenure of repayment of loan is highest which is 41% for 10 to 15 Years as the Home
loan repayment loan averagely falls in this group, followed by 32% which is 5 to 10 years and
more than 15 years is the highest loan payment which is more than 50 Lakhs, the most least is
1 to 5 years which is Education Loan, Holiday Loan, Personal Loan, and even Home Loan
which will be till 10 Lakhs.

Data
Mode of Payment
ECS 35%
NEFT 25%
RTGS 26%
Cheque 14%
Other 0%
Interpretation
The mode of repayment of loan customer does in the form of ECS (Electronic Clearing
System) which is the Highest at 35%, then RTGS (Real Time Gross Settlement) which is 26%
followed by NEFT (National Electronic Fund Transfer) at 25%, least is Cheque at 14% as this
include 3 days in clearing. So, the customers are aware and are using the advanced technique
for the payment of loan.

Data
Property Mortgage
Yes 81%
No 19%
Interpretation
After taking the loan the property is kept at mortgage so that if due to any reason the person
is not able to pay instalment of loan the bank should not suffer loss (NPA). So the property is
kept at mortgage and the valuation is it is done. And the value should approximately match the
loan amount and then only the property’s original agreement is taken after its valuation. So,
the property is kept at mortgage when the customers take home loan so it is 81% yes, the
holiday loan, personal loan, education loan is a type where the property is not kept at mortgage.
Data

1. Which Banks are you currently banking with
Public Sector 15%
Private Sector 36%
Bank of India 49%
Interpretation
The respondents were mostly of Banks customer so the respondents have about 49% who
have their account with the Bank of India. Even the respondents consist of the Bank Staff,
customer who have long term relation with the bank, followed by private sector as the
respondents think that the private sector has advanced technology, faster processing and a good
service, hence it is 36% and the least is 15% which is Public sector Banks

Data
2. For the past how many years you have account with this bank?
1 to 5 Years 14%
5 to 10 Years 46%
10 to 20 Years 38%
More than 20 Years 02%
Interpretation
The respondents are very loyal to the bank which they are banking with as they have relation
with the bank for about 5 to 10 Years which is 46% followed by 10 to 20 Years which is 38%
this are the account of the businessman and SME holders for a long time, then it is 1 to 5 years
which is 14% and at last it is more than 20 years which is 02%.

Data
3. What kind of account do you maintain in this bank?
Saving A/c 31%
Current A/c 18%
Loan A/c 47%
Demat A/c 04%
Credit A/c 00%
Interpretation
The respondents mainly maintain the loan account with the bank which is 47% followed by
the saving account which is 31% then current account 18% and least is 04% which is Demat
A/c.

Data
4. Which Retail Banking Products do you currently posses
Personal Loan 06%
Home Loan 75%
Vehicle Loan 13%
Educational Loan 07%
Holiday Loan 05%
Interpretation
The respondents which was surveyed had more of home loan which is 75%, then was the
vehicle loan where two wheeler was more as compared to four wheeler which is 13% followed
by Education loan which is again divided into studying abroad and in home country, then was
the Personal Loan which is 6% this is also known as Top Up Loan which is given to the
customer who takes new house and they need the loan for renovation after 5-6 years of taking
house and the least is Holiday Loan which is of less amount of 2 to 4 Lakhs.

Data
5. Which of the following information search tools which you could use for making
a choice for your retail banking product?
Family/ Friends/ Relatives Advice 13%
Bank Staff 51%
Website Visits 26%
Newspaper/ Magazines 10%
Other 00%

Interpretation
The bank staff of every respondents is very friendly as they have guided the customer in
taking any of the retail banking products, so it is the highest at 51%, then it is website as the
generation is based on the internet world and the website plays an important role in giving the
proper information and the generation is dependent on internet and so it is 26%, then it is
family/friends/relatives advice as they play an important role in giving the advices as they have
experience and it is 13% and the least is 10% which is Newspaper and Magazine as the new
generation is least bothered about reading.

Data
6. If you have not taken the loan now then, what you think could be your future
financial needs in the coming 2 years?
Term Loan 06%
Home Loan 36%
Vehicle Loan 23%

Personal Loan 08%
Education Loan 00%
Others 00%

Interpretation
Loan is the need of everyone’s life and each and every individual will take loan in their life
once and so this question came to my mind that if the customer has not taken the loan now then
what are their future needs and the highest is Home Loan at 36% as every individual needs
home to stay and the rates of real estate are growing so Home loan is the most in today’s world.
No one can buy house without having the home loan, followed by others which is 27% then it
is Vehicle Loan which is 23% as there is a need of vehicle in every one’s life to stay luxurious.
Then it is Personal Loan at 8% taken for the personal benefit of work, and at the end it is Term
Loan at 6%.

Data
7. Have taken Home Loan from Bank of India?
Yes 83%
No 17%
Interpretation
The answer to this is yes which is given by 83% of the respondent and 17% of respondent
has said that they have not taken Home loan from Bank of India means they do not have their
any type of account with Bank of India.

Data
8. If not then are you planning to take home loan from Bank of India
Yes 58%
No 40%
Maybe 02%
Interpretation
If the respondents have not taken the loan from Bank of India now then are they willing to
take the loan from the bank in the near future the answer were yes from the 58% of respondent
and 40% of respondent gave no as the answer and 02% said that they are not sure of taking
loan from this bank.

Data
9. Reason for taking Home Loan from Bank of India?
Faster Processing 09%
Interest Rates 32%
Brand Image of the Bank 34%
Margin Amount 19%
Others 06%
Interpretation
Brand image plays an important role in every business and here also while taking up the
loan 34% of the respondent thought of the brand of the bank plays an role in giving the loan,
followed by 32% that is the Interest rates charged by the bank the margin amount at 19%,
followed by faster processing at 9% and at the end it is 6% which is other reasons.

Data
10. How do you rate the Interest rates charged by Bank of India?
Highly Satisfactory 31%
Satisfactory 29%
Averagely Satisfactory 31%
Dissatisfactory 08%
Highly Dissatisfactory 01%

Interpretation
The respondents said that the interest rates which are charged by the Bank of India is Highly
Satisfactory and some say that it is averagely satisfactory and both the option have got 31%
followed by Satisfactory which is 29%, even there are customers who said that they are not at
all happy with the interest rate charged by the bank which is 08% and 01% customers says that
they are highly dissatisfactory with the rates charged by Bank of India. The Current Interest
rate on Home loan is 8.60% and Education Loan is 11%.

Data
11. How do you rate the EMI of Bank of India?
Satisfactory 32%
Dissatisfactory 07%
Interpretation
The EMI rate which is provided by Bank of India is Highly Satisfactorily and Satisfactorily
as it is said by the respondent and so it is 32%. Then the respondents said that the rate of EMI
is Averagely Satisfactorily and it is 29% and the least is Dissatisfactory at 9%.

Data
12. How do you rate the Documentation Procedure of Bank of India?
Excellent 33%
Very Good 39%
Good 24%
Fair 03%
Poor 01%
Interpretation
When I asked this question to the respondent they said that the documentation process is
very good and in a very systematic manner, so it is 39%, followed by Excellent at 33%, then
good at 24% and 03% said it is fair, 01% said it is poor, even the valuation is also done in a
proper manner.

Data
13. How do you rate the Closure Procedure of Bank of India?
Excellent 33%
Very Good 40%
Good 21%
Fair 05%
Poor 01%
Interpretation
The Loan Closure procedure of bank is also Very good as it does not take time and is done
in a very smooth manner and so it is highest at 40%, followed by Excellent at 33% and Good
at 21%, Fair at 05% and Poor at 01%

Data
14. “I would prefer the bank I am currently banking with, for my next retail
banking need”
Strongly Disagree 10%

Disagree 29%
Neutral 24%
Agree 14%
Strongly Agree 23%

Interpretation
This question is open ended and was common to all with not being restricted to Bank of
India. The respondents were not happy with the bank they were currently banking with due to
reason like the staff members are not cooperative, not helpful etc. some of them preferred not
to say anything and being neutral was the best thing and the percentage is 24%, on the positive
side some of the customers were very happy and said that they will surely preferred their bank
to their friends or relatives and so the percentage is 23% and the least is Strongly Disagree at
10%.

Data
15. Rate your overall Satisfaction with this Bank
Satisfactory 32%
Dissatisfactory 02%
Interpretation
The overall satisfaction with the bank the respondents were banking with said that they are
Highly satisfied and so it is highest percentage at 34%, followed by satisfactorily at 32% and
Averagely Satisfactory at 31%, only 02% people said that they are not happy with the bank
they were banking with, and 01% people said that they are highly dissatisfied with the bank
they were banking with.

CHAPTER 6 – FINDINGS & RECOMMENDTIONS
FINDINGS
1. According to this project report 74% respondents are interested in housing

finance (Home Loan).
2. 38% people like to take Bank of India’s home loan. Because this bank gives
well services, less interest rate, faster processing, etc.
3. I found out that this bank uses advance technology like: Net banking, mobile
banking, RTGS, ECS, NEFT and forex banking.
4. The Bank has helpful staffs which has helped the customer to take proper
decision under their guidance.
5. The EMI & Interest rates charged by the is extremely satisfactorily, and the
customers are happy about it.
6. Only 1 officer and 2 clerks in loan dept. handling mortgage, stock statement,
documentation, Procedure of loan, etc.
7. The Files of the Loan are properly maintained and kept in a proper order with
proper labelling, which helps the staff to work in a prompt manner without any
error.
8. Audit of the branch is done by the Internal Auditor as well as External Auditor
and the report is generated.
9. External Auditor gives visit to the branch alternate days and analyses the work
properly and in a systematic manner.
10. Concurrent Audit takes place every month and the report generated from it gives
a clear information about the branch. The report is then tallied by the previous
month report and judgement is given to the bank, on what are the changes which
has to be adopted for the benefit of the branch.
11. The advocate also gives weekly visit to the bank and also check the record of
the bank so that no errors can be found.

RECOMMENDATION
1. There should be more time period for repayment of home loan even for less
amount (eg. 10 to 15 years)
2. Bank of India should take steps to solve customer problems immediately, in a
very limited time.
3. Loan sanction date should be according to customer convenient.
4. A customer awareness program should be taking place in rural area.
5. Bank of India should take feedbacks of customers regarding features & services
for the betterment of the branch.
6. For the better services, new offers would be introduced and it should be on
customer’s preferences.
7. Bank should give all information related to terms and condition to the customer.
8. To make people aware about the benefits of home loan the bank should advertise
through Print Media; Hoarding & Banners should be placed with the attractive
offers so that the customers are attracted.
9. Make people understand about the various benefits of taking Home Loan like
Tax Benefit.
10. The Branch should also have the Customer Relationship Officer who will retain
the old customer and maintain a good relation with the existing customers.
11. The Branch should have the ATM in different shop so that the Customer of the
Kopri Locality can withdraw the money after the branch is closed or any time
they are in need of it.
12. The Kiosk Machine of Pass Book Printing and Cash Deposit should be properly
maintained so that the customer can take advantages of the available machine.
13. The customers should not be allowed to come near the desk of the employee
they should remain at the counter as there are chances of paper misplacement
or loss of any important documents.

CHAPTER 7 – LIMITATION & HYPOTHESIS
LIMITATION OF SURVEY
Although best of the efforts were made to conduct a prefect survey but still it faces
certain limitation. Following were certain limitation of this project.
1. Some of the respondents were not aware about the terms and condition of home
loan schemes.
2. Some of the respondents did not answer all the questions. This could hamper
the final results to a certain extent.
3. I had limited time for conducting this survey report.
4. The study confines itself to the respondents of “Thane” only. Hence findings
would not be relevant to other cities.
5. People mind set about the survey was an obstacle in acquiring complete
information & positive interaction.
6. Respondents were very busy in their schedule. So, it was very time consuming
for them to answer all the questions properly.
7. Some Respondents were dishonest about answering the questionnaire even they
feel that the questionnaire won’t affect and it is just a waste of time.

HYPOTHESIS OF STUDY
The principal instrument in research usually is considered Hypothesis. Its main function is
to recommend new experiments and observations. In fact, several experiments are carried out
with the deliberate object of testing hypotheses. Decision-makers usually face situations
wherein they are interested in testing hypotheses on the basis of available information and then
take decisions on the basis of such testing. In social science, where direct knowledge of
population parameter(s) is rare, hypothesis testing is the usually used strategy for deciding
whether a sample data offer such support for a hypothesis that generalisation can be made.
Thus hypothesis testing enables us to make probability statements about population
parameter(s). The hypothesis may not be proved absolutely, but in practice it is accepted if it
has withstood a critical testing. Before we tend to explain how hypotheses are tested through
different tests meant for the purpose, it will be appropriate to explain clearly the meaning of a
hypothesis and the related concepts for better understanding of the hypothesis testing
techniques.
Ordinarily, when one talks about hypothesis, one simply means a mere assumption or some
supposition to be proved or disproved. But for a researcher hypothesis is a formal question that
he intends to resolve. Thus a hypothesis may be defined as a proposition or a set of proposition
set forth as an explanation for the occurrence of some specified group of phenomena either
asserted merely as a provisional conjecture to guide some investigation or accepted as highly
probable in the light of established facts. Quite often a research hypothesis is a predictive
statement, capable of being tested by scientific methods, that relates an independent variable
to some dependent variable.

The following is the hypothesis of my study
1. Null Hypothesis (Ho): Decision to go for a home loan by a middle-income group

individual is independent of the decision attributes viz. tax benefits, low interest rates and
convenience.
2. Nominal home loan interest rate has a negative impact on the demand home loans.
3. Real home loan interest rate has a negative effect on the demand home loans.
4. Alternate Hypothesis (Ha): Decision to go for a home loan by a middle-income group
individual is dependent of the decision attributes viz. tax benefits, low interest rates and
convenience.

CHAPTER 8 - LEARNING FROM THE PROJECT
My work was to read the proposals and see the documents regarding the loans. Even
maintaining the L-444C register, Stock Statement Register, Insurance Register etc.
There was some concept which was studied by me during my academics but saw in practical
at branch.
1. I Learnt many things from this project like how home loan is taken
2. Procedure and Documentation required in taking the home loan
3. Criteria on which home loan is granted
4. Detailed Information about Bank of India, its products

CHAPTER 9 - STATERGY LEARNT AT BANK OF INDIA
1) Product knowledge of Bank of India home loan products and services
2) The way to improve my communication skills by handling Customers.
3) The way to convince the customers for taking loans.
4) The way to behave with people in corporate world.
5) The way to adopt new strategies to attract customers like different scheme on Insurance
policy taken on home loan.
6) The way to convince the people who says that private banks gives home loans at less
interest rates.
7) How people invest their money in different investment schemes.

CHAPTER 10 - CONCLUSION
Housing is a growing industry. Various public and private institutions have entered
in this field. These institutions have initiated various house financing schemes to cater
the diversified needs of this sector. Besides the emerging and expanding institutional
set up, the system of credit delivery of housing is still inadequate. The responsibility to
provide house finance largely was rested with the Central Government till the early
eighties.
The setting up of the NHB in 1988, as the apex housing finance institution, was the
beginning of the emergence of housing finance as a fund based financial service in the
country. Its role falls into three categories promotional, financial and regulatory.
Housing finance institutions must become self-sustaining units which work on full cost
recovery basis and device innovative financial instruments to mobilize their resources
from household sector.

CHAPTER 11 - BIBLOGRAPHY
WEBSITES
• www.marketresearch.com
• www.Investopedia.com
• www.cmia.com
• www.bankofindia.com
• www.google.com
• www.rbi.org.in
• www.sbi.com
BOOKS & PUBLICATIONS
• A Research Study of Customer Preferences in the Home Loans Market: The Mortgage
Experience of Greek Bank Customers - John My lonakis 10 Niki forou str., Glyfada,
166 75, Athens, Greece International Research Journal of Finance and Economics ISSN
1450-2887 Issue 10 (2007) © Euro Journals Publishing, Inc. 2007
htttp://www.eurojournals.com/finance.htm
• Bank of India manuals and circulars
• Credit management ( a practical approach)
• Pratiyogita Darpan

APPENDICES
Respected Sir/ Mam
As part of my MMS curriculum, I Ruchi Prabhu Student of Dr. V N Bedekar Institute of

Management Studies, Thane is having a Research Project on “Home Loan – A Comparative
study at BOI”. Kindly give your response to the following questions. It may require only 10
minutes of your time. The data collected will be used for academic purpose only. Please do the
needful.
Part A: Personal Details
Name: _____________________________________________________________________
Age: ________ Gender: ________________ Profession: __________________________
Loan Amount: _________________________ Tenure: ____________________________
Mode of Payment: __________________ Property Mortgaged: _______________________
Part B : Questionnaire (Tick the following options)
1. Which Banks are you currently banking with (Please mention all)
2. For the past how many years you have account with this bank?
_____________________________________________________________________
3. What kind of account do you maintain in this bank?

o Saving A/c
o Current A/c
o Loan A/c
o Demat A/c
o Credit A/c

4. Which Retail Banking Products do you currently posses

o Personal Loan
o Home Loan
o Vehicle Loan
o Education Loan
o Holiday Loan
5. Which of the following information search tools which you could use for making
a choice for your retail banking product?
o Family/ Friends/ Relatives advice
o Bank staff
o Website visits
o Newspapers/ Magazines
o Others ____________________
6. If you have not taken the loan now then, what you think could be your future
financial needs in the coming 2 years?
o Term Loan
o Home Loan
o Vehicle Loan
o Personal Loan
o Education Loan
o Others ____________________
7. Have taken Home Loan from Bank of India?

o Yes
o No

8. If not then are you planning to take home loan from Bank of India
o Yes
o No
o May Be
9. Reason for taking Home Loan from Bank of India?

o Faster Processing
o Interest Rates
o Brand image of the Bank
o Margin Amount
o Others
10. How do you rate the Interest rates charged by Bank of India?
o Highly Satisfactory
o Satisfactory
o Averagely Satisfactory
o Dissatisfactory
o Highly Dissatisfactory
11. How do you rate the EMI of Bank of India?

o Satisfactory
o Dissatisfactory
12. How do you rate the Documentation Procedure of Bank of India?

o Excellent
o Very Good
o Good
o Fair
o Poor

13. How do you rate the Closure Procedure of Bank of India?

o Excellent
o Very Good
o Good
o Fair
o Poor
14. “I would prefer the bank I am currently banking with, for my next retail banking
need”
o Strongly Disagree
o Disagree
o Neutral
o Agree
o Strongly Agree
15. Rate your overall Satisfaction with this Bank

o Satisfactory
o Dissatisfactory
Thank You!!!

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Prepared By: Ruchi Prabhu

“HOME LOAN – A COMPARATIVE STUDY AT BOI”

IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR

Home Loan – A Comparative study at BOI 1

“Home Loan – A Comparative Study at BOI”

Home Loan – A Comparative study at BOI 2

Home Loan – A Comparative study at BOI 3

"Gratitude is not a thing of expression; it is more matter of feeling."

Home Loan – A Comparative study at BOI 4

DECLARATION BY THE CANDIDATE

Wherever references have been made to intellectual properties of any individual /

20th July 2017

Home Loan – A Comparative study at BOI 5

CERTIFICATE BY THE GUIDE

Guide's Name: Mr. Deepak Ukidave

Guide's Signature: __________________________

Date: 20th July 2017

Home Loan – A Comparative study at BOI 6

Home Loan – A Comparative study at BOI 7

There are mainly three types of Bank

It is a bank responsible for supervising of monetary system of a nation or group of nation.

Home Loan – A Comparative study at BOI 8

Some of the Central Bank are

• Reserve Bank of India

• Federal Reserve Bank

• Reserve Bank of Australia

• European Central Bank

Home Loan – A Comparative study at BOI 9

More Information about BOI

Home Loan – A Comparative study at BOI 10

BOI SYMBOL MEANING

Relationship Beyond Banking

Home Loan – A Comparative study at BOI 11

ORGANISATIONAL CHART OF BOI

Chief Managing Director

DGM (Scale VI)

Chief Manager (Scale IV)

Senior Manager (Scale III)

Manager (Scale II)

Home Loan – A Comparative study at BOI 12

Home Loan – A Comparative study at BOI 13

Home Loan – A Comparative study at BOI 14

Home-equity loans and lines of credit

Small business loans

Home Loan – A Comparative study at BOI 15

INTRODUCTION TO HOME LOAN

How Home Loans Work

Home Loan – A Comparative study at BOI 16

Home Loan – A Comparative study at BOI 17

Variable/ Floating Interest Rates

Fixed Interest Rates

Home Loan – A Comparative study at BOI 18

Home Loan – A Comparative study at BOI 19

SCHEMES OF HOME LOANS

Home Loan – A Comparative study at BOI 20

Application form with Application form with Application form with

Identity and Residence Identity and Residence

Education Qualifications Education Qualifications

Last 3 years Income Tax

Last 3 years Income Tax returns

Last 6 months bank Last 6 months bank statements

Processing fee cheque Processing fee cheque

Home Loan – A Comparative study at BOI 21