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Customer Perception on SIB Housing Loan

Maharaja Agrasen Institute OfManagementStudies Page 1

PROJECT REPORT ON

CUSTOMER PERCEPTION ON SOUTH INDIAN BANKS HOUSING LOAN

Submitted in Partial Fulfillment for the Award of the

Degree of Bachelor in Business Administration 2011-2012

Under the Guidance of: Submitted By:

Mr.Gaurav Aggrawal Shubham Gupta

(Assistant Professor) 06214701809

Maharaja Agrasen Institute of Management Studies

Affiliated to Guru Gobind Singh Indraprastha University, Delhi

PSP Area, Plot No. 1, Sector 22, Rohini, Delhi 110086


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DECLARATION

This is to certify that I have completed the Summer Project titled Customer Perception on South

Indian Banks Housing Loan under the guidance of Mr. Gaurav Aggrawal in partial

fulfillment of the requirement for the award of Degree of Bachelor of Business Administration at

Maharaja Agrasen Institute of Management Studies, Delhi. This is an original piece of work & I

have not submitted it earlier elsewhere.

Date: Signature:

Place: Name:

Enrollment No.:


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CERTIFICATE FROM THE INSTITUTE GUIDE

This is to certify that the summer project titled Customer perceptions on SIB Housing loan is an

academic work done by Shubham Gupta submitted in the partial fulfillment of the requirement for

the award of the degree of Bachelor of Business Administration at Maharaja Agrasen Institute of

Management Studies, Delhi, under my guidance & direction.

To the best of my knowledge and belief the data & information presented by him/her in the project has

not been submitted earlier.

Signature :

Name of the Faculty :

Designation :


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TABLE OF CONTENTS

CHAPTERS PARTICULARS PAGE NO.

Chapter-1 Introduction of the project

Chapter-2 Research methodology

Chapter-3 Data analysis and

Interpretation

Chapter- 4 Findings

Chapter-5 Conclusion

Chapter-6 Suggestions

Bibliography

Annexture


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CHAPTER: I

INTRODUCTION


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INTRODUCTION TO LOAN

A loan is a type of deb t. Loan entails the redistribution of financial a s s e ts over

time, between the lender and the borr o w e r . The borrower initially receive an amount of

m oney 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

in tere s t on the deb t. A loan is of the annu it y 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 covenan ts under

the terms of the loan. Acting as a provider of loans is one of the principal tasks for

f inanc ia l in s tit u ti on s . For other institutions, issuing ofdebt contracts such as bon d s 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 ( in tere st).

TYPES OF LOANS

SECURED

A s ecured loan is a loan in which the borrower p ledges some asset (e.g. a car or property)

as co ll a t eral forthe loan.

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

purchase hou s ing. In this arrangement, the money is used to purchase the property. The

financial institution, however, is given security a li en on the title to the house until
http://en.wikipedia.org/wiki/Debthttp://en.wikipedia.org/wiki/Assethttp://en.wiktionary.org/wiki/lenderhttp://en.wiktionary.org/wiki/borrowerhttp://en.wikipedia.org/wiki/Moneyhttp://en.wikipedia.org/wiki/Interesthttp://en.wikipedia.org/wiki/Debthttp://en.wikipedia.org/wiki/Annuityhttp://en.wikipedia.org/wiki/Loan_covenanthttp://en.wikipedia.org/wiki/Financial_institutionhttp://en.wikipedia.org/wiki/Financial_institutionhttp://en.wikipedia.org/wiki/Debthttp://en.wikipedia.org/wiki/Bond_(finance)http://en.wikipedia.org/wiki/Interesthttp://en.wikipedia.org/wiki/Interesthttp://en.wikipedia.org/wiki/Interesthttp://en.wikipedia.org/wiki/Secured_loanhttp://en.wikipedia.org/wiki/Pledgeshttp://en.wikipedia.org/wiki/Collateral_(finance)http://en.wikipedia.org/wiki/Mortgage_loanhttp://en.wikipedia.org/wiki/Househttp://en.wikipedia.org/wiki/Househttp://en.wikipedia.org/wiki/Lienhttp://en.wikipedia.org/wiki/Assethttp://en.wiktionary.org/wiki/lenderhttp://en.wiktionary.org/wiki/borrowerhttp://en.wikipedia.org/wiki/Moneyhttp://en.wikipedia.org/wiki/Moneyhttp://en.wikipedia.org/wiki/Interesthttp://en.wikipedia.org/wiki/Interesthttp://en.wikipedia.org/wiki/Debthttp://en.wikipedia.org/wiki/Annuityhttp://en.wikipedia.org/wiki/Loan_covenanthttp://en.wikipedia.org/wiki/Financial_institutionhttp://en.wikipedia.org/wiki/Financial_institutionhttp://en.wikipedia.org/wiki/Debthttp://en.wikipedia.org/wiki/Bond_(finance)http://en.wikipedia.org/wiki/Interesthttp://en.wikipedia.org/wiki/Secured_loanhttp://en.wikipedia.org/wiki/Pledgeshttp://en.wikipedia.org/wiki/Collateral_(finance)http://en.wikipedia.org/wiki/Mortgage_loanhttp://en.wikipedia.org/wiki/Househttp://en.wikipedia.org/wiki/Lienhttp://en.wikipedia.org/wiki/Debt


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the mortgage is paid off in full. If the borrowerdefau lt s 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 limi t ed par tner s h ip agreements is the recour s e no te .

A stock hedge loan is a special type ofs ecur iti es lend ing whereby the stock of a borrower

is hedged by the lender against loss, using options or other hedg ing strategies to reduce

lender risk.

A pre-settlement loan is a non-recour s e deb t, 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.

UNSECURED

U n s ecured 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:

cred it card debt

personal loans

bank overdrafts

credit facilities or lines of credit

corpora te bonds
http://en.wikipedia.org/wiki/Default_(finance)http://en.wikipedia.org/wiki/Limited_partnershiphttp://en.wikipedia.org/wiki/Recourse_notehttp://en.wikipedia.org/wiki/Securities_lendinghttp://en.wikipedia.org/wiki/Hedge_(finance)http://en.wikipedia.org/wiki/Nonrecourse_debthttp://en.wikipedia.org/wiki/Unsecured_loanhttp://en.wikipedia.org/wiki/Credit_cardhttp://en.wikipedia.org/wiki/Bankhttp://en.wikipedia.org/wiki/Bankhttp://en.wikipedia.org/wiki/Bankhttp://en.wikipedia.org/wiki/Corporate_bondhttp://en.wikipedia.org/wiki/Corporate_bondhttp://en.wikipedia.org/wiki/Default_(finance)http://en.wikipedia.org/wiki/Limited_partnershiphttp://en.wikipedia.org/wiki/Recourse_notehttp://en.wikipedia.org/wiki/Securities_lendinghttp://en.wikipedia.org/wiki/Hedge_(finance)http://en.wikipedia.org/wiki/Nonrecourse_debthttp://en.wikipedia.org/wiki/Unsecured_loanhttp://en.wikipedia.org/wiki/Credit_cardhttp://en.wikipedia.org/wiki/Bankhttp://en.wikipedia.org/wiki/Bankhttp://en.wikipedia.org/wiki/Corporate_bondhttp://en.wikipedia.org/wiki/Corporate_bond


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The in tere s t ra tes 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 Co n s u m er Cred it A ct

1974.

ABUSES IN LENDING

Preda tory lend ing is one form of abuse in the granting of loans. It usually involves

granting a loan in order to put the borrower in a position that one can gain advantage

over him or her. Where the moneylender is not authorized, it could be considered a loan

s hark.

Us ury is a different form of abuse, where the lender charges excessive interest.

In different time periods and cultures the acceptable interest rate has varied, from no

interest at all to unlimited interest rates. Credit card companies in some countries

have been accused by consumer organizations of lending at usurious interest rates

and making money out of frivolous "extra charges". Abuses can also take place in the

form of the customer abusing the lender by not repaying the loan or with an intent to

defraud the lender.

INDIAN BANKING SYSTEM

Banks and institutional management in the country are under going momentous

change. India is one of the fastest growing economies in the world. Banking dates

back to 1786, the first bank established in India, then the nationalization of banks in

1969 and recently the liberalization of the same since 1991.

Indian banking is the lifeline of the nation. Its network over 62,500 offices is

spread across the length and breadth of the country, servicing nearly 40 crores

depositors. Financing diverse needs of more than 6 crores entrepreneur customers

providing a nation wide framework for payment clearing and settlements and vital

sectors of economy like agriculture , industry, trade and commerce Banks play an

important role in the growth of GDP. According to revised estimates released by the

Central Statistical Organization (CSO) in May 2006, real GDP accelerated from 7.5 per

cent in 2006-07 to 9.6 percent, an 18 year high during 2006-07.
http://en.wikipedia.org/wiki/Interest_ratehttp://en.wikipedia.org/wiki/Interest_ratehttp://en.wikipedia.org/wiki/Consumer_Credit_Act_1974http://en.wikipedia.org/wiki/Consumer_Credit_Act_1974http://en.wikipedia.org/wiki/Predatory_lendinghttp://en.wikipedia.org/wiki/Loan_sharkhttp://en.wikipedia.org/wiki/Loan_sharkhttp://en.wikipedia.org/wiki/Loan_sharkhttp://en.wikipedia.org/wiki/Usuryhttp://en.wikipedia.org/wiki/Interest_ratehttp://en.wikipedia.org/wiki/Consumer_Credit_Act_1974http://en.wikipedia.org/wiki/Consumer_Credit_Act_1974http://en.wikipedia.org/wiki/Predatory_lendinghttp://en.wikipedia.org/wiki/Loan_sharkhttp://en.wikipedia.org/wiki/Loan_sharkhttp://en.wikipedia.org/wiki/Usury


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Banks plays very important role in the economic development of every nation.

They have control over a large part of the supply of money in circulation. A strong

banking sector is, therefore, vital for growth, creation of jobs, generation of wealth,

eradication of poverty, entrepreneurial activity and increasing the Gross

Domestic Product (GDP), all necessary factors for a country to emerge as a developed

one. Banks are the main stimulus of the economic progress of a country, because,

the economic development highly depends upon the extent of mobilization of resources,

investment and on the operational efficiency of the various segments of the economy.

The Reserve Bank of India (RBI), as the Central Bank of the country, is at the

head of this group. RBI is the central bank of the country since 1934. It regulates,

controls credit, issue licenses and functions as banker of all banks and the government.

In general the Indian Financial System consists of Commercial Banks, Development

Banks, Co-operative Banks and Specialized financial institutions.

INDIGENOUS BANKING IN INDIA:

During independence, India had an indigenous banking system with a centuries

old tradition. This system had developed the hundi, a financial instrument still in use

that is similar to the commercial bills of Western Europe. Hundis were used to finance

local trade as well as trade between port towns and inland Centres of production.

Indigenous bankers combined banking with other activities such as the

goldsmiths, merchants, and shippers. They usually belonged to certain castes or

communities, such as the Multanis, Marwaris and Chettiars, and they differed in the

extent to which they relied

on their own resources, rather than deposits and other funds for their lending.

Indigenous bankers often endorsed hundis issued by traders and

sometimes provided personal guarantee for loans from commercial banks. Such

bankers were collectively called as shroffs. The main moneylenders were Sowkars (who

lent to farmers by their own resources or funds borrowed from Chettiars and other

indigenous bankers) and the Pathans (who lent mainly to poor).


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Maharaja Agrasen Institute OfManagementStudies Page


INDIAN FINANCIAL SYSTEM:

The ancient Indigenous banking system gave raise to the Financial System in

India. The Financial System consists of many institutions, instruments and

markets. Financial institutions range from pawnshops and moneylenders to banks,

pension funds, insurance companies, brokerage houses, investment trusts and stock

exchange.

The Indian financial system comprises of an impressive network of banks,

other financial and investment institutions, offering wide range of products and services,

which together function in a fairly developed capital and money markets. As such,financial system has come to occupy an important role in the process of economic

development.

The economic development of a country depends on its financial structure. In

the long run, the larger the proportion of financial assets to real assets, the greater the

scope of economic growth. Investment is a pre-condition of economic growth.

The primary role of any financial institution is to act as a conduit for the

transfer of financial resources from net savers to borrowers i.e., from those who spend

less than they earn to those who earn less than what they spend.

THE STUCTURE OF BANKING SYSTEM:

The structure of banking system is determined by economic and legal.

The development of the economy and the spread of banking habit calls for increasing

banking services. The demand for these banking services affects the banks

structure and organization. National objectives and aspirations result in government

regulations, which have a profound influence on the banking structure.

According to the IBA Bulletin, the banks in India are classified in to six major

categories are Public sector Banks, Private sector Banks, Foreign Banks, State

Co- operative Banks, District Co-operative Banks and Primary Co-operative Banks.

Vasanth Desai (2006) from his book titled as Banks and institutional

Management classified the structure of financial institutions in India in to three major


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Customer Perception on SIB Housing Loansectors : 1. Commercial Banks

2. Co-operative Societies

COMMERCIAL BANKS

Commercial Banks are the oldest, biggest and fastest growing financial

intermediaries in India. They are also the most important depositories of public sector

and the most important disbursers of finance. Commercial Banking in India is a

unique system similar to that exists nowhere in the world.

The commercial banking structure in India consists of: Scheduled

Commercial Banks and Unscheduled Banks. Scheduled commercial Banks constitute

those banks, which have been included in the Second Schedule of Reserve Bank of

India (RBI) Act, 1934. RBI in turn includes only those banks in this schedule which

satisfy the criteria laid down vide section 42(6)(a) of the act.

CLASSIFICATION OF INDIAN COMMERCIAL BANKS:

Indian commercial banks can be broadly classified into two categories. They

are

i) Public Sector Banks

ii) Private Sector Banks

A. PUBLIC SECTOR BANKS:

Public sector Banks refer to commercial banks, which are owned by

the Central Government either directly or through the RBI. They are also referred to

as National Banks. They are established by special Acts passed by the Parliament.

Among the Public Sector Banks in India, United Bank of India is one of the 14 major

banks, which were nationalized on July 19, 1969. Its predecessor, in the Public Sector

Banks, the United Bank of India Ltd., was formed in 1950 with the amalgamation of

four banks viz. Comilla Banking Corporation Ltd. (1914), Bengal Central Bank Ltd.


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Customer Perception on SIB Housing Loan(1918), Comilla Union Bank Ltd. (1922) and Hooghly Bank Ltd. (1932).

Public sector banks can be further classified in to two categories. They are

1. State Bank of India

2. Associates banks

3. 14 Nationalized Banks

4. 6 Nationalized Banks

5. Regional rural banks

B.PRIVATE SECTOR BANKS:Private banking in India was practiced since the beginning of banking system

in India. The first private bank in India to be set up in Private Sector Banks in India

was IndusInd Bank. It is one of the fast growing Private Sector Bank in India. IDBI

ranks the tenth largest development bank in the world as Private Banks in India and has

promoted a world class institutions in India.

The first Private Bank in India to receive an in principle approval from the

Reserve Bank of India was Housing Development Finance Corporation Limited, to set

up a bank in the private sector banks in India as part of the RBI's liberalization of the

Indian Banking Industry. It was incorporated in August 1994 as HDFC Bank

Limited with registered office in Mumbai and commenced operations as Scheduled

Commercial Bank in January 1995.

The private sector can be further classified as follows

Other private banks

New-sophisticated private banks;

Co-operative banks included in second schedule;

Foreign banks in India, representative offices

One non-schedule banks

There are 33 private banks in India and some of the private banks are


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Customer Perception on SIB Housing Loan Axis Bank

HDFC Bank

IDBI Bank

ICICI Bank

ING Vysya

Karnataka Bank limited

Kotak Mahindra Bank

Yes Bank

South Indian Bank

CO-OPERATIVE SOCIETIES:

The Co-Operative banking sector has been developed in the country to supplant the

village moneylender, the predominant source of rural finance, as the terms on which

he made finance available have generally been detrimental to the development of Indian

agriculture.


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Company PROFILE

Date of Establishment 1908

Revenue 548.557 ( USD in Millions )

Market Cap 23279.33694 ( Rs. in Millions )

Corporate Address S I B House ,T B Road ,Mission QuartersThrissur-680001,

Kerala

www.southindianbank.comManagement Details Chairperson - Amitabha Guha

MD - V A Joseph

Directors - A S Narayanamoorthy, A S Narayanan, Abraham

Thariyan, Amitabha Guha, Amitabha Guha Sarkar, C J Jose,

Cheryan Varkey, Davy K Manavalan, G A Shenai, H Suresh

Prabhu, John Joseph, Jose Alapatt, K S Krishnan, K Thomas

Jacob, M Valsan, Mathew L Chakola, Mohan Alapatt, Mohan

E Alapatt, N J Kurian, Paul Chalissery, V A Joseph

Business Operation Bank Private

Background South Indian Bank (SIB) was incorporated in 1908 by a group

of enterprising men at Thrissur. The bank started with an

intention to induce the habit of savings in the community on

one hand and to free the business community from the clutches

of greedy money lenders on the other by providing need based

credit at reasonable rates of interest.

Milestone

It became the first private ba

Financials Total Income - Rs. 26427.106 Million ( year ending

Mar 2011)

Net Profit - Rs. 2925.641 Million ( year ending Mar 2011)

Company Secretary K S Krishnan

Bankers
http://www.southindianbank.com/http://www.southindianbank.com/


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Customer Perception on SIB Housing LoanAuditors Deloittee Haskins & Sells


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Company History

South Indian Bank(SIB) was incorporated in 1908 by a group of enterprising men at

Thrissur. The bank started with an intention to induce the habit of savings in the community

on one hand and to free the business community from the clutches of greedy money lenders

on the other by providing need based credit at reasonable rates of interest.

One of the earliest banks in South India, "South Indian Bank" came into being during the

Swadeshi movement. The establishment of the bank was the fulfillment of the dreams of a

group of enterprising men who joined together at Thrissur, a major town (now known as the

Cultural Capital of Kerala), in the erstwhile State of Cochin to provide for the people a safe,

efficient and service oriented repository of savings of the community on one hand and to

free the business community from the clutches of greedy money lenders on the other by

providing need based credit at reasonable rates of interest.

Translating the vision of the founding fathers as its corporate mission, the bank has during

its long sojourn been able to project itself as a vibrant, fast growing, service oriented and

trend setting financial intermediary.

Milestone

The FIRST among the private sector banks in Kerala to become a scheduled bank in 1946

under the RBI Act.

The FIRST bank in the private sector in India to open a Currency Chest on behalf of the RBIin April 1992.

The FIRST private sector bank to open a NRI branch in November 1992.

The FIRST bank in the private sector to start an Industrial Finance Branch in March 1993.

The FIRST among the private sector banks in Kerala to open an "Overseas Branch" to cater

exclusively to the export and import business in June 1993.

The FIRST bank in Kerala to develop an in-house, a fully integrated branch automation

software in addition to the in-house partial automation solution operational since 1992.

The FIRST Kerala based bank to implement Core Banking System.

The THIRD largest branch network among Private Sector banks, in India, with all its

branches under Core banking System.

Today, SBIL has a network of total 644 branches, 566 ATMs and 3 extension counters.


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Products and services

Personal Banking-Under this bank offers wide range of personal banking products and

services such as deposit, saving, loans, internet banking, mobile banking, demat services,

credit card, debit card, etc.

The bank offers mutual funds products of various funds houses such as ICICI Prudential

AMC, Franklin Templeton, TATA Mutual Fund, Sundaram BNP Paribas, UTI Mutual

Funds, Reliance Mutual Funds, HSBC Investments, HDFC Mutual Fund, Fidelity Fund

Management, Principal Mutual Funds, Fortis Investments, Birla Sun Life Asset

Management Company and DSP BlackRock Mutual Funds.

NRI banking- SIB also caters its banking products and services to NRI customers such as

deposit, car loans, remittances, investment schemes, insurance are amongst others.

Corporate banking- It provides wide range of products and services to corporates. SIB offers

working capital finance, project finance, structured finance etc.

Outlook

The banking sector inIndiais one of the most dominant sector of the financial system. The

regulatory system of Indian banks is rated at par withJapanandSingapore. South Indian

Bank plans to expand so as to explore the untapped areas.

Awards

South Indian Bank bagged Special Award from IDRBT for Excellence in Banking

Technology.

The bank received best Asian Banking Web Site award from Asian Banking & Finance

Magazine.


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South Indian Bank bags two prestigious D&B Bank Awards

South Indian Bank received two Awards for asset quality and priority sector lending in the

Dun &Bradstreet Banking awards 2010-11.South Indian Bank is the only old generation

private sector bank in India to win this prestigious accolade. This is the second time theaward has been received by the bank for Asset Quality.

DR.V.A.JOSEPH , MD & CEO SOUTH INDIAN BANKRECEIVINGTHE DUN & BRADSTREETAWARDFORTHE BEST

PRIVATE SECTORBANKIN ASSET QUALITY AT MUMBAI.

South Indian Bank Bags Technology Excellence Award 2010 from IDRBT

South Indian Bank has won the Technology Excellence Award 2010 from IDRBT (Institute

for Development and Research in Banking Technology) - the technical arm of the Reserve

Bank of India. This award was presented to our Bank as a national level recognition to the

excellent contribution made in the area of IT Implementation and Management in the small

bank Category. Bank had earlier bagged similar award in 2006 in the area of Information

Security policy and practices. Competing against the peer level Banks in India in this

category, this award from IDRBT recognizes Banks sustained efforts in deployment of IT,

most efficiently


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MD & CEO, DR. V.A JOSEPHRECEIVES THE TECHNOLOGY EXCELLENCE AWARDFOR "IT IMPLEMENTATION AND

MANAGEMENT" FROM SHRI. ANAND SINHA, DEPUTY GOVERNOROF RESERVE BANKOF INDIAATAFUNCTION ORGANISED

BY IDRBT AT HYDERABADON 04.08.2011 INTHE PRESENCEOF MR. G PADMANABHAN , EXECUTIVE DIRECTOR, RESERVE

BANKOF INDIAAND MR. B.SAMBAMOORTHY, DIRECTOR, IDRBT

BUSINESSWORLD INDIAs BEST BANK 2010 AWARD to SOUTH INDIAN BANK

SOUTH INDIAN BANKHASBAGGEDTHE BUSINESSWORLD INDIAS BEST BANK 2010 AWARD. THE MANAGING

DIRECTOR & CHIEF EXECUTIVE OFFICEROF SOUTH INDIAN BANK, DR. V.A.JOSEPH, RECEIVESTHEAWARDFROM

SRI. PRANAB MUKHERJEE, THE HON. UNION MINISTERFOR FINANCE, INACOLOURFULFUNCTIONHELDAT

MUMBAION 23RD DECEMBER 2010.


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SOUTH INDIAN BANK BAGGED THE BEST WEB SITE AWARD FROM KMA

South Indian Bank has bagged the best web site award from Kerala Management

Association. On 4th February 2011, Our Executive Director Sri. Abraham Thariyan and

Deputy General Manager(DICT) Sri. P J Jacob received the award from Sri. Jayaraj, Addl.

Chief Secretary of Karnataka at a glittering function in Kochi. There were totally 54

nominations for consideration of the Best Web Site from various business verticals and this

award is a great recognition for our Bank. In fact, this is the second award we are receiving

for our web site, the first one being the best Asian Banking Web Site award from Asian

Banking & Finance Magazine, Singapore in January-2009.

OUR EXECUTIVE DIRECTOR SRI. ABRAHAM THARIYANAND DEPUTY GENERAL MANAGER(DICT) SRI. P J JACOB

RECEIVETHE BEST WEBSITE AWARD FROM SRI. JAYARAJ, ADDL. CHIEF SECRETARYOF KARNATAKA.


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Customer Perception on SIB Housing LoanBEST BANK AWARD TO SOUTH INDIAN BANK

MD & CEO, DR.V.A.JOSEPHRECEIVESTHEAWARDFORTHE BEST BANK INTHEOLDGENERATIONBANKS

CATEGORY - FE INDIAS BEST BANK AWARDS FROM HON: UNION FINANCE MINISTERMR.PRANAB MUKHERJEE .

FINANCIAL EXPRESS AWARDSFOR INDIAS BEST BANKS WERESELECTEDBY ERNST &YOUNG. THEFUNCTION

WASORGANIZEDATTHE TAJ MAHAL HOTEL, MUMBAION 25TH JULY, 2009.

AWARDFORTHEBESTBANKINASSETQUALITYAMONGALLPRIVATESECTORBANKSIN INDIA

MD & CEO DR.V A JOSEPHRECEIVESTHEAWARDFORTHEBESTBANKINASSETQUALITYAMONGALLPRIVATE

SECTORBANKSIN INDIAFROM MR.JAMES E THOMPSON, GBS CHAIRMAN & CHIEF EXECUTIVE, CROWN GROUP

OFCOMPANIESON 18TH FEBRUARY 2009 AT MUMBAI. ACCOMPANIEDBY DR.MANOJ VAISH, PRESEDISENT &CEO, DUN&BRADSTREET, INDIA.

Outlook


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Customer Perception on SIB Housing LoanThe banking sector inIndiais one of the most dominant sector of the financial system. The

regulatory system of Indian banks is rated at par withJapanandSingapore. South Indian

Bank plans to expand so as to explore the untapped areas.

Key Executives

S.No Name Designation

1 Amitabha Guha Chairman

2 V A Joseph Managing Director

3 Jose Alapatt Director

4 Paul Chalissery Director

5 Mathew L Chakola Director

6 N J Kurian Director

7 Mohan Alapatt Director

8 K Thomas Jacob Director

9 H Suresh Prabhu Director

10 Abraham Thariyan Executive Director

11 Cheryan Varkey Executive Director


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Competitors


24/65



CompanySales(Rs.Million)

CurrentPrice

Change(%)

P/E RatioMarketCap.(Rs.Million)

52-WeekHigh/Low

HDFC Bank199282.12

471.15 -0.22 26.22 1101094.01 520/396

ICICI Bank259740.53

887.20 1.60 18.73 1022361.48 1277/814

Axis Bank151548.0

6

1076.95 0.18 12.37 443936.90 1608/992

Kotak MahindraBank

43035.58 442.50 0.17 36.99 326776.44 530/333

Indusind Bank 35893.57 251.60 2.30 18.38 117445.95 309/181

Yes Bank 40417.47 278.90 0.31 12.37 97353.92 388/234

Centurion Bk ofPunj 12685.30 41.40 0.00 52.93 78932.68 43/41

Federal Bank 40520.28 366.40 -1.09 10.42 62671.80 501/326

ING Vysya Bank 26940.64 292.25 -0.15 12.74 43764.72 444/283

Karur Vysya Bank 22176.95 374.75 0.69 8.97 40181.07 508/346

J&K Bank 37131.32 799.00 1.52 5.94 38733.76 938/695

Bank of Raj 13594.89 212.10 1.80 0.00 34222.35 214/207

South IndianBank

24460.17

20.60 -0.24 7.35 23279.34 30/17

StandardChartered

56748.90 80.25 0.69 0.91 19260.00 135/71

City Union Bank 12184.08 46.55 1.09 8.26 18932.57 54/36

Karnataka Bank 23708.47 96.95 0.99 8.78 18246.91 193/90

Lakshmi VilasBank

10648.36 104.80 0.34 9.99 10220.71 143/85

Devp Credit Bank 5362.62 46.00 -1.08 27.77 9210.33 77/39

DhanalakshmiBank

9064.18 78.45 -0.06 28.51 6678.94 213/67


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Product

Product Name Year MonthSales

Quantity

Sales

Value(Rs.Millio

n)

% of STO

Interest/Discount on

advances/ Bills

2010 03 0.00 15186.25 78.45

Income on

Investments2010 03 0.00 3780.66 19.53

Interest on balances

with Reserve Bank of

India and other inter-

bank funds

2010 03 0.00 390.30 2.02


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BALANCESHEET - SOUTH INDIAN BANK LTD

PARTICULARS MAR'11 MAR'10 MAR'09 MAR'08 MAR'07

LIABILITIES 12 MONTHS 12 MONTHS 12 MONTHS 12 MONTHS 12 MONTHS

SHARE CAPITAL 113.01 113.01 113.01 90.41 70.41

RESERVES & SURPLUS 1,582.65 1,354.21 1,172.59 1,051.81 653.56

NET WORTH 1,847.28 1,485.29 1,304.00 1,160.98 723.96

SECURED LOANS 290.35 330.96 257.01 27.59 32.51

UNSECURED LOANS 29,721.08

23,011.5

2 18,092.33 15,156.12 12,239.21

TOTAL LIABILITIES 31,858.7024,827.78

19,653.35 16,344.69 12,995.68

ASSETS

GROSS BLOCK 501.38 274.26 241.28 203.82 168.47

(-) ACC. DEPRECIATION 144.54 121.72 104.96 91.07 78.88

NET BLOCK 205.22 134.47 117.91 93.99 89.59

CAPITAL WORKIN PROGRESS. 0.00 0.00 0.00 0.00 0.00

INVESTMENTS. 8,923.77 7,155.61 6,075.20 4,572.22 3,430.13

INVENTORIES 0.00 0.00 0.00 0.00 0.00

SUNDRY DEBTORS 0.00 0.00 0.00 0.00 0.00

CASH AND BANK 2,466.13 1,987.67 2,035.86 1,702.65 1,945.47

LOANS AND ADVANCES 21,073.4816,238.22

12,136.14 10,702.30 8,187.38

TOTAL CURRENT ASSETS 23,539.6018,225.89

14,172.00 12,404.95 10,132.86

CURRENT LIABILITIES 961.52 706.27 730.18 745.24 656.90

PROVISIONS 0.00 0.00 0.00 0.00 0.00

TOTAL CURRENT LIABILITIES 961.52 706.27 730.18 745.24 656.90

NET CURRENT ASSETS 22,578.0917,519.63

13,441.82 11,659.71 9,475.95

MISC. EXPENSES 0.00 0.00 0.00 0.00 0.00

TOTAL ASSETS(A+B+C+D+E)

31,858.7024,827.78

19,653.35 16,344.69 12,995.68


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CHAPTER: II

RESERCH DESIGN


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STATEMENT OF THE PROBLEM:

Study on loans and working capital of South Indian bank in Noida. It

is important to know the evolution of the workplace to understand as to why and how

things are being done today.

OBJECTIVES OF THE STUDY:

1. To study the role of SBI in Indian banking sector.

2. To study the regulations followed by SBI while providing the loans and

advances.

3. To study different types of the loans and advances made by SBI.

4. To evaluate operational performance of loans and advances made by bank.

5. To make suggestions on the basis of the analysis.

SCOPE OF THE STUDY:

Customers are facing many problems in terms of availing loan and therefore SBI

is providing assistance to the development of them as it plays a vital role in development

of Indian economy. It is essential to study the norms and regulations of the SBI in lending

money to the public.

METHODOLOGY:

This data will be collected from the bank and will be analyzed to draw appropriate

conclusion.

The data is collected on the basis of Primary as well as Secondary sources.


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Primary data

The primary data is collected through direct communication with the branch

manager and staff members of bank

Secondary data

The sources of secondary data are published materials such as Company records,

textbooks, Internet, Magazines and annual reports of SBI.

LIMITATIONS OF THE STUDY

The bank may not reveal certain financial details due to authenticity of the bank.

The outcome of the study depends entirely on the fairness of information supplied

by the bank.

A study will be conducted within specified time period of 8 weeks.


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CHAPTER-III

ANALYSIS

& INTREPRETATION OF

DATA


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SIB HOMELOANS

FOR RESIDENT INDIANS

FOR NON RESIDENT INDIANS

FOR SENIORCITIZENS - SPECIALSCHEMEFORPENSIONERS

SIB-SHIELD - INSURANCE COVERAGEFORYOURHOME LOANATATTRACTIVESINGLE

PREMIUM
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FOR RESIDENT INDIANS

Target Group : Individual or individual jointly with spouse (Group of individuals notpermitted)

Purpose of the loan:

Purchase of Flat or House

Construction of Flat for own use or House

Purchasing land & constructing a House

For major repair, renovation, extension or improvement of flat or house.

Takeover of Housing loans from other banks & reputed housing finance companies.

Reimbursement of investments already made by the borrower provided the investment

has taken place within one year.

Quantum of loan : Maximum Rs.1.00 crore;

For renovations/additions/major

repairs/ improvements etc. : Maximum Rs.10 lacs
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Rate of Interest :

HOME LOANS

SL NO: CATEGORY INTEREST RATE

1 HOME LOAN SCHEME (R ESIDENT/ NON RESIDENT) (UPTO 30 LAKHS

& UPTO 5 YRS)

BR + 3.40%

2 HOME LOAN SCHEME (R ESIDENT/ NON RESIDENT) (UPTO 30 LAKHS

& ABOVE 5 YRS)

BR + 3.65%

3 HOME LOAN SCHEME (R ESIDENT/ NON RESIDENT) (ABOVE 30

LAKHS & UPTO 5 YRS))

BR + 3.90%

4 HOME LOAN SCHEME (R ESIDENT/ NON RESIDENT) (ABOVE 30

LAKHS & ABOVE 5 YRS)

BR + 4.15%

5 HOME LOAN SCHEME (SENIOR CITIZEN) (UPTO 30 LAKHS &UPTO 5 YRS)

BR + 2.90%

6 HOME LOAN SCHEME (SENIOR CITIZEN) (UPTO 30 LAKHS &

ABOVE 5 YRS)

BR + 3.15%

7 HOME LOAN SCHEME (SENIOR CITIZEN) (ABOVE 30 LAKHS

& UPTO 5 YRS)

BR + 3.40%

8 HOME LOAN SCHEME (SENIOR CITIZEN) (ABOVE 30 LAKHS

& ABOVE 5 YRS)

BR + 3.65%


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Customer Perception on SIB Housing LoanPrimary security : Land and building under Equitable Mortgage

Minimum Margin:

construction of new house/ purchase of land and construction of new house / purchase of ready

built house/ flat : 25% of estimated cost

30% of cost for purchase of old house/ renovation of existing house

Repayment ( including holiday) : Minimum 5 years & Maximum 20 years by Equated

Monthly Instalments(EMIs).

Holiday / Moratorium for repayment

Ready built house or flat : Max. 3 months

New construction : Max. 12 months

Holiday period interest:

Can be funded or

serviced at the option of the borrower as decided at the time of sanction.

Upfront fee : one time upfront fee 0.50% of the loan amount .

Early Closing Fee :

If closed from own sources after 2 years: : Nil

If closed from own sources before 2 years: 1% of the prepaid amount.

If closed through take over by other banks : 2% of the pre-paid amount

Penal Interest : 2% of the defaulted amount for the defaulted period.

The scheme details are furnished in brief only. For more details please contact any of the

branches nearest to you.

*All loans are subject to the discretion of the bank and subject to such conditions as may be

stipulated by the Bank. Interest rates are subject to change without notice


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Customer Perception on SIB Housing LoanFOR NON RESIDENT INDIANS

Rate of interest and terms and conditions similar to that of domestic home

loans subject to the following exceptions :

Maximum Repayment Period : 10 years

Eligible loan amount : 50 times average monthly remittance made by the borrowerfrom abroad for credit to his / her NRE account with any bank in India, for a

minimum period of 12 months, excluding bulk remittances, if any. If necessary ,

remittances made by the NRI directly to his / her spouses domestic account(excluding bulk remittances) for the previous 12 months also shall be taken into

account to reckon the loan amount

Minimum project cost : Rs.10 lacs

Property may be in the name of a NRI or jointly with another NRI /resident spouse.

Margin should be brought in by way of foreign inward remittance through normal

banking channels or debit to NRE, FCNR, NRO account of the NRI.

Repayment of the loan shall be by way of foreign inward remittance through normal

banking channels, debit of NRE, FCNR, NRO or the rental income from the house

financed by us.

Close relatives of the borrowers in India as defined under Section 6 of the

Companies Act 1956 ( given below) also are permitted to repay the loans throughtheir bank accounts directly to the housing loan accounts of the NRIs

The list of relatives as defined in the section is given below.

Members of a Hindu undivided family

Husband and wife

Related to one another in the manner indicated below: i)Father, ii) Mother (includingstep-mother), iii) Son (including step-son) iv) Son's wife, v) Daughter (includingstep-daughter), vi) Father's father vii) Father's mother, viii) Mother's mother, ix)

Mother's father, x) Son's son, xi) Son's son's wife, xii) Son's daughter, xiii) Son's

daughter's husband, xiv) Daughter's husband, xv) Daughter's son, xvi) Daughter'sson's wife, xvii) Daughter's daughter, xviii) Daughter's daughter's husband xix)

Brother's wife, xx) Brother (including step-brother), xxi) Sister (including step-

sister), xxii)Sister's husband.
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Customer Perception on SIB Housing Loan As the employment abroad may not be considered as permanent especially in gulf

countries, comfort available from other sources of income in India may also be taken

into account while sanctioning the loan.

Once the NRI customer returns to India for permanent settlement as declared by

him/her, the repayment may be permitted from local sources also.

Copy of the employment contract, salary certificate / pay slip, current work permit,

copy of identity card, copy of stamped visa, relevant pages of passport, name andfull address of the employer / sponsor abroad, contact number of the NRI applicant,

name, address and contact phone number of a close relative in India for local

contacts etc. may be collected.

The number of housing loans ( both domestic and NRI) to a person can go up to a

maximum of two only , subject to eligibility. The total amount sanctioned to an

individual [ balance outstanding in the first housing loan plus the new (second)housing loan ] should not exceed the individual branch discretionary power for

housing loans.

All branches can entertain NRI home loans ( except service branches and those

specifically prohibited).

FOR SENIORCITIZENS - SPECIALSCHEMEFORPENSIONERS

Target Group : Those who are drawing pension from State/ Central Government / banks/

Insurance Companies / other reputed companies and completed the age of 55 years.

Purpose : For construction of house in own plot / purchase of land and construction of

house / purchase of ready built house with plot / purchase of flat / repairs and / or renovation

of existing houses owned.

Rate of Interest :Same as for the esident Indians

Quantum of loan : Maximum quantum of loan limited to Rs. 25.00 lacs or 50 times of

monthly pension drawn at the time of application, which ever is less, subject to the condition

that EMI should not exceed 50% of the monthly pension .
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Customer Perception on SIB Housing LoanMinimum Margin :

construction of new house/ purchase of land and construction of new house /purchase of ready built house / flat : 25% of estimated cost

30% of cost for purchase of old house/ renovation of existing house

Pension account to be maintained with our bank or post-dated cheques for 12 EMIs

(initially) drawn on the pension account with the concerned bank to be submitted on the dateof execution and thereafter every 12 months.

Guarantor : If spouse is alive he/she should join the documents.

Security :

Prime : Residential property being financed

Collateral : (any one among the following is mandatory)

1. Insurance policy ( whole life) for value of loan

or

2. Lien on banks own deposits for full value of loan

or

3. Combination of insurance policy / banks own deposit for equal value of loan

Repayment period : Maximum repayment period 15 years including repayment holiday or

till the borrower attains the age of 75 years , which ever is earlier, through Equated Monthly

Instalments(EMIs) .

Holiday period interest : Can be funded or spot serviced

Upfront Fee : One-time upfront fee of 0.25% of the loan

amount .

Premature closure charges : NIL , provided the account runs with our bank for a minimum

period of one year after completion of disbursement . Otherwise @1% of balance


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Customer Perception on SIB Housing Loanoutstanding.

The scheme details are furnished in brief only. For more details please contact any of the

branches.

*All loans are subject to the discretion of the bank and subject to such conditions as may be

stipulated by the Bank. Interest rates are subject to change without notice

SIB-SHIELD - INSURANCE COVERAGEFORYOURHOME LOANATATTRACTIVESINGLE

PREMIUM

Life Insurance cover under SIB-Shield- Product features & Claim proceedures

SIB introduces SIB-Shield, which can provide life insurance cover to you while you avail

our unique housing loan products. We have tied up with Kotak Mahindra Old Mutual Life

insurance Co. Ltd. (KLI) to provide the complete security to your family in the event of any

unforeseen event happening to your life. In case of any of these happenings, insurance

company will pay the outstanding principal balance of your loan a/c as per the original

schedule.

Features of SIB-Shield Cost of insurance cover is extremely competitive as it is a group insurance policy for

long term.

No medical test required for most of the customers. Only a one page DOGH

(Declaration Of Good Health) form to be signed by the customer.

For life insurance cover more than DOGH limits, the borrower does not have to bear

the expenses for medical check up.

Customized insurance cover: Ensures that the borrower pays only for the cover that

he/she needs to protect the loan outstanding (for reducing covers).

Peace of mind: Eliminates fear of any loan recovery/Asset repossession on the

unfortunate death of the borrower during the tenure of the loan.

Hassle free single premium payment which will be funded by the bank. In case of foreclosure, proportionate premium would be refunded.

Liberal underwriting standards as against individual policies.

Simplified claims procedure.

Claims procedure:
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Customer Perception on SIB Housing LoanIn the event of death, the legal heirs of the insured have to intimate the same to the bank

within one month. The claim form has to be duly filled and to be submitted to the bank and

the bank will then inform KLI about the claim raised with the support of necessary

documents. KLI may call for additional information and documents required to satisfy itself

as to the validity of a claim.

Once documentation is completed at the end of KLI settlement will be done within 15 days.

The claim amount will be credited to the loan a/c of the deceased borrower. Short amount if

any in the loan a/c has to be paid to the bank by the legal heirs/nominees. Similarly excess

amount will be paid to the legal heirs/nominees of the deceased.

Contact Details:

1. Group Operations

Kotak Mahindra Old Mutual Life InsuranceLtd.,

8th Floor, Godrej Coliseum

Behind Everard Nagar, Sion (East)Mumbai 400 022

Phones | (D) 64511556| (B) 66215234

Fax | 66215252

2. The South Indian Bank

LtdMarketing Dept.

Head Office

Thrissur 680001E-mail: [email protected]

DISCLAIMER: "The South Indian Bank Limited (SIB)" at any time is not liable to pay to

the customer the amount claimed. It is the sole responsibility of the Kotak Mahindra Old

Mutual Life Insurance Company Ltd. (KLI) who had insured the borrower accepting the

insurance premiums in advance to settle the claim on time. SIB is helping the customers to

facilitate the claims procedure. You may please complete all the procedures prescribed by

the insurance company for timely settlement of the claims if any.

For more details please contact your nearest SIB Branch

OrCall our Toll Free 1800-843-1800.

ANALYSIS OF THE DATA COLLECTED THROUGH

THE QUESTIONNAIRE
mailto:[email protected]:[email protected]


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I have analyzed the data collected through the questionnaire and have classified the

data into tables.

The given below BAR graph shows the response of 100 customer.

TABLE-I

The given below Bar chart shows the Services expected from South Indian bank

SERVICES EXPECT ED FROM SIB

QUICK

RESPONSE

38

GOOD CUSTOMER RELATION

37

EXTRA FACILITY FOR EXISTING CUSTOMER

25


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0 10 20 30 40

EXTRA FACILITY FOREXISTING CUSTOMER

GOOD CUSTOMERRELATION

RESPONSE

Interpretation:

Out of 100 customers, 38 of them said that they expect QUICK RESPONSE

from the SIB bank, 37 said they expect GOOD CUSTOMER RELATION and 25

customers said that they expect EXTRA FACILITY FOR EXISTING CUSTOMER.

TABLE-II

The given below Bar chart shows the CUSTOMER WANTS TO TAKE ANOTHER

LOAN FROM SIB

CUSTOMER WANTS TO TAKE ANOTHER LOAN FROM SIB

YES 68%

NO 32%


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Customer Perception on SIB Housing Loan70

60

50

40 Y

30N

20

10

0

1 2

Interpretation:

Out of 100 customers, 68 would like to take another loan from SIB but 32 would notlike to take another loan from SIB.

TABLE-III

The given Bar graph shows THE INFLUENCING FACTOR FOR TAKING LOANFROM SIB

INFLUENCING FACTOR FOR LOAN FROM SIB

ADVERTISEMENT 26

FRIENDS 20

EASY AVAILABILITY OF LOAN 22

TRUST 32


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0

5

10

15

20

25

30

35

ADVERTISEMENT

FRIENDS

EASY AVAILABILITY OFLOANTRUST

I nte r p r etation:

Out of 100 customers, 32 said trust, 26 said advertisement, 22 said easy availability

and rest 20 said friends and relatives about the influence factor to taking loan from SBI.


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TABLE-IV

The given Bar chart shows the People received home loan :

People received home loan

Yes 64

No 36

0

10

20

30

40

50

60

70

People received home loan

Yes

NO

Interpretation:

Out of 100 customers 64 peoples said that they have received home loan , 36 people

said that they havent received home loan in processing procedure of availing home loan.


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TABLE-V

The given Bar chart shows the co-operation of the bank employees in processing and

helping in documentation:

Co-operation of the bank employees in processing and helping in documentation

Excellent 21

Good 55

Average 24

0

10

20

30

40

50

60

co-operation of

employees in processing

and documentation.

Excellent

Good

Average

Interpretation:

Out of 100 customers 55 peoples said good, 21 said excellent and 24 peoples said average

about co-operation of employees in processing and documentation.


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TABLE-VI

The given below Pie chart shows the SATISFACTION LEVEL OF CUSTOMER

AFTER AVAILING LOAN

Satisfaction Level of customer after availing loan

Satisfied 42%

Normal 34%

Dissatisfied 24%

Satisfied

Normal

Dissatisfied

INTERP RE TAT ION

Out of 100 customers 42 were found SATISFIED after taking loan from SIB, 34 Customerwere NORMALY satisfied from SIB and 24 were DISSATISFIED because of interest

charged, and behavior of the employee.


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TABLE-VII

The given below Bar chart shows the Time period customer prefer for availing homeloan

Time period customer prefer for availing home loan

People opting for 10 year 21



0

10

20

30

40

50

Time period customer

prefer for availing loan

10 year 15 year 20 year

10 year

15 year

20 year

Interpretation:

Out of 100 customers 21 peoples opted for 10 years of loan , 45 said that they would be

opting for 15 years of loan and 34 peoples opted for 20 years of loan about time-period

of availing home loan.


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TABLE-VIII

The given below Bar chart shows theCustomer interested in different loans

Customer interested in Home loan in comparison with different loans

Educational loan 12

Housing loan 32

Vehicle loan 41

Gold loan 15

0

10

20

30

40

50

Customer interested

in different loans

Education

loan

Housing

loan

Vehicle loan Gold loan

Education loan

Housing loan

Vehicle loan

Gold loan

Interpretation:

Out of 100 customers 12 peoples opted for Educational loan , 32 wanted Housing loan , 41

peoples opted for Vehicle loan, and 15 people opted for Gold loan in the different types

of loan according to different types of interests.


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TABLE-IX

The given below Bar chart shows theCustomer interested in fixed or floating rate of

interest in home loan

Customer interested in fixed or floating rate of interest in home loan

Fixed rate of interest 26

Floating rate of interest 74

0

10

20

30

40

50

60

70

80

Fixed rate of interest

Floating rate of interest

Interpretation:

Out of 100 customers 26 peoples opted for Fixed rate of interest , and 74 people opted for

Floating rate of interest at the time of taking home loan from the bank.


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TABLE-X

The given below Bar chart shows the In comparison with other banks how much you willrate SIB out of 10 in fixing suitable EMI

In comparison with other banks how much you will rate SIB out of 10 in

fixing suitable EMI

0-3 2

3-5 22

5-8 56

8-10 20

0

20

40

60

0-3 bet. 3-5 bet. 5-8 bet. 8-10

0-3

bet. 3-5

bet. 5-8

bet. 8-10

Interpretation:

Out of 100 customers 2 peoples opted for 0-3 , 22 people opted for 3-5, 56 people opted for

5-8 , and 20 people opted for 8-10 in the comparison with other banks to rate SIB out of 10

in fixing suitable EMI.


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TABLE-XI

The given below Pie chart shows the Positive aspects for the success of SIB in Home loan

sector

Positive aspects for the success of SIB in Home loan sector

Sales promotion and brand 3

Customer friendly home loan schemes 12

Easy sanctioning of home loan 33

Lower interest rate 24

Lower EMI 28

Sales promotion and brand

Customer friendly home loanschemes

Easy santioning of home loan

Lower Intrest rate

Lower EMI

Interpretation:

Out of 100 customers 3 people opted for Sales promotion and brand , 12 people opted for

customer friendly home loan scheme , 33 people opted for easy sanctioning of home loan ,

24 people opted for lower interest rate , and 28 people opted for lower EMI in the Positive

aspects for the success of SIB in home loan sector.


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TABLE-XII

The given below Pie chart shows the Lagging area with other banks

Lagging Area

Confined mainly in metro cities and urban areas 29

Non-Effective advertisement 51

Delay in processing 20

confined mainly in metrocities and urban ares

non-effective advertisement

Delay in processing

Interpretation:

Out of 100 customers 29 people opted for Confined mainly in metro cities and urban areas ,

51 people opted for non-effective advertisement, 20 people opted for delay in processing

when asked for lagging areas with other banks.


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SWOT ANALYSIS

STRENGTHS

Brand name of South Indian Bank (SIB) is established over the ears.

Single window clearance - a single employee provides wide variety of facilities to

the borrower, minimizing the hassle of wastage of time.

Appraisal techniques are used.

Specialized software's are big assets.

There is no penalty for prepayment from borrowers own service.

WEAKNESSES

High interest rates as compared to other housing finance institutions. Top management takes large amount of time to approve high value seeking loan

borrowers. No publicity.

No marketing managers work, only through dsa's (direct sales agent).

People are not aware of wide variety of schemes offered by the company; tend to

think the company as only providing home loans.

There is the shortage of staff at almost all branches which does not ensure easy

addressable of the customers problems. Delegation of authority and responsibility is

not proper.

OPPORTUNITIES

Special rates of interest are offered during exhibitions.

Product life cycle is to be reviewed

The growing category of the builders ensure that good, high value& qualitative

projects, providing them home loans with the new and innovative schemes can leadto over all development of the company.

THREATS

The competition in market is very high due to the private players.

The rates of interest of other players are quite low.

Innovative schemes with home loan from other players. The processing process is quite slow which leads to low housing finance.

A fraud case involving 32 cases worth Rs.3 crores at the one branch of SIB Housing

Finance Limited in year 2002 leads decreasing brand name.


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CHAPTER III

FINDINGS


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FINDINGS

The study is carried out to know the kinds of loans and advances provided by SIB.

After finishing the analysis and observation of the collected data the following findings

were known:

1. SIB HOME LOANS now offers Interest Rates concessions on GREEN HOMES

in accordance with SIB's commitment to Environment protection.

2. Interest rate after three years may be Fixed or Floating as per the borrowers

choice made at the time of sanction. If floating rate option is chosen, then the rate

will be 2.75% below SBAR.

3. Interest rate subject to change without notice.

4. SIB offering complete transparency to the customers.

5. The accessblility of the SIB loans is that, it can be easily accessbile.

6. The customers perception towards the service of SIB is good.

7. After seeing the procedure of bank to sanction a loan, I can say that it is very

safe and secured because to sanction a loan, it requires lot of approval fromdifferent levels so that risk of NPAs & debt become lesser.


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CHAPTER IV

CONCLUSION


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CONCLUSION

This project went through the deep study of Home loan of South Indian Bank. It

is satisfying thing to know that SIB i s growing towards a Service of Excellence.

All the achievements can be given a broader sky view by applying and considering

the findings and suggestions given in this project. Efforts have been made to know all

spectrum of possbilities through which South Indian bank can satisfy their customers

more and understandingly.

The availability of computerized software much of the technicalities of the

assessment have been largely simplified. The efforts by SBI constantly update its

evaluation procedures, indicate its high level of professionalism and also explain why it is

in a leading position amongst the nationalized banks. The project can be had with

management of borrowing firms to get better idea about the business, its viability and

also the capacity of management to tackle exceptional situations.


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CHAPTER V

SUGGESTIONS


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SUGGESTIONS

SIB should provide much more customer service, should try and reduce interest rates to

make its products more competitive and also give its customers an option of short term

repayment period.

SIB must try and introduce cash back policy on the processing fee/documentation fee of

the short-term loan.

To speed up loan appraisal, embracement loan if asked from the customer should be

issued fast and interest charged on loans should be less.

To introduce cash back policy in shopping center.

Banks should improve the operational efficiency to improve the processing speed of the

loans and reduce the time to provide loans.

As SIB have large network it should introduce as many as schemes possbile.

South Indian Bank should start one HINDI WEBSITE for conven ience of it s

customers and it should start toll free number so that customer can frequently take a step

while applying for home loan.

To get advantage over other banks, it can consider of down payment and 100%

finance in some deserving cases.

To further increase in market share SIB should provide loan even to retired person on the

basis of their income profile.


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BIBLIOGRAPHY


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BIBLIOGRAPHY

BOOKS:

Varshney P.N , Banking Law & Practice 2009 Edition, Published by Sultan

Chand & Sons , Delhi 2009 , Pg no.209-213

Vasanth Desai, Banks and Institutional Management First edition, published by

Himalaya Publishing House, Mumbai 2006 , Pg no. 113-115

Sundaram K.P.M , Money and Banking in Indian Trade Third edition, Published

by Sultan Chand & Sons , Delhi 2008 , Pg no. 45-49

L. M. Bhole, Financial institutions and Markets, first edition, Tata McGraw Hill

Publications company Ltd., 2004 , Pg no.73-75

Tannan M.L, Tannans Banking Law and Practice in India , Twenty second

edition ,Vikas publications , 2010 , Pg no. 449-450

Indian Institute of banking and finance, Home loan councelling E.B.C

Publications , 2007 , Pg no.118-129

WEBSITES:

http://www.southindianbank.com/content/viewContent.aspx?

linkIdLvl2=12&linkId=88&sec=1http://rbidocs.rbi.org.in/rdocs/notification/P

DFs/71235.pdf

http://www.southindianbank.com/UserFiles/Forms/HOUSING%20LOAN

%20AGREEMENT.pdf


linkIdLvl2=12&linkId=506&sec=


linkIdLvl2=12&linkId=553&sec=

BULLETIN:
http://www.southindianbank.com/content/viewContent.aspx?linkIdLvl2=12&linkId=88&sec=1http://www.southindianbank.com/content/viewContent.aspx?linkIdLvl2=12&linkId=88&sec=1http://rbidocs.rbi.org.in/rdocs/notification/PDFs/71235.pdfhttp://rbidocs.rbi.org.in/rdocs/notification/PDFs/71235.pdfhttp://www.southindianbank.com/UserFiles/Forms/HOUSING%20LOAN%20AGREEMENT.pdfhttp://www.southindianbank.com/UserFiles/Forms/HOUSING%20LOAN%20AGREEMENT.pdfhttp://www.southindianbank.com/content/viewContent.aspx?linkIdLvl2=12&linkId=506&sec=http://www.southindianbank.com/content/viewContent.aspx?linkIdLvl2=12&linkId=506&sec=http://www.southindianbank.com/content/viewContent.aspx?linkIdLvl2=12&linkId=553&sec=http://www.southindianbank.com/content/viewContent.aspx?linkIdLvl2=12&linkId=553&sec=http://www.southindianbank.com/content/viewContent.aspx?linkIdLvl2=12&linkId=88&sec=1http://www.southindianbank.com/content/viewContent.aspx?linkIdLvl2=12&linkId=88&sec=1http://rbidocs.rbi.org.in/rdocs/notification/PDFs/71235.pdfhttp://rbidocs.rbi.org.in/rdocs/notification/PDFs/71235.pdfhttp://www.southindianbank.com/UserFiles/Forms/HOUSING%20LOAN%20AGREEMENT.pdfhttp://www.southindianbank.com/UserFiles/Forms/HOUSING%20LOAN%20AGREEMENT.pdfhttp://www.southindianbank.com/content/viewContent.aspx?linkIdLvl2=12&linkId=506&sec=http://www.southindianbank.com/content/viewContent.aspx?linkIdLvl2=12&linkId=506&sec=http://www.southindianbank.com/content/viewContent.aspx?linkIdLvl2=12&linkId=553&sec=http://www.southindianbank.com/content/viewContent.aspx?linkIdLvl2=12&linkId=553&sec=


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Annual reports of SIB

Annual reports of RBI and IBA (Indian Banks Association) Bulletin.

ANEXURE


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QUESTIONNAIRE

Dear Sir/ Madam,

As part of my BBA( B a n k i n g a n d i n s u r a n c e ) curriculum,

I, Shubham Gupta, am conducting a market research regarding the study of Home

loan for which I need your personal views regarding banking products & services

in shape of a questionnaire designed by me. The data being collected are solely

for academic purpose. I request you to kindly extend your co-operation.

1) Name: 2) Profession:

3) Age group :( plz tick)

A)18-30 yrs. B)31-40 yrs. C)41-50 yrs. D)51-60 yrs.

4) Annual Income (in Rs.):-

A) 60000-200000 b) 200000-400000 c) 400000-1000000

d) Above 1000000

5) What kind of service or services do you expect from SIB?

A) Quick Response B) Good Customer Relation

C) Extra Facility for Existing Customer

6) What influence you at taking loan from SIB?

A) Advertisement B) Friend/Relative

C) Easy availability loan D) Trust

7)What time-period would you prefer for housing loan ?

A)10 year B) 15 year C) 20 year


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8) How do you find the cooperation of the bank employees in processing and helping

you with documentation?

A) Excellent B) Good C) Average

9) What do you think for the positive aspects for the success of SIB in Home loan sector?

A)Sales promotion and brand B) Customer friendly Home loan scheme

C)Easy sanctioning of home loan D) Lower interest rate

E)Lower EMI

10) Would you like to take another loan from SIB in future?

A) Yes B) No

11) Your overall level of satisfaction with SlB:

A) Satisfied B) Normal C) Dissatisfied

12) What do you think is SIB lagging area with other banks ?

A) Confined mainly in metro cities and urban areas

B) Non-Effective in metro cities and urban areas

C) Delay in Processing

13) Did you receive Home loan ?

A) Yes B) No

14) In comparison with other bank how much will rate SIB out of 10 in fixingsuitable EMI?

A)0-3 B)3-5 C)5-8 D)8-10


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15) Are you interested in fixed or floating rate interest in home loan ?

A)Fixed rate of Interest

B)Floating rate of Interest

16)Other than Housing loan , In which loan you are interested ?

A) Educational loan

B) Gold Loan

C) Housing loan

D) Vehicle loan

(Thanks)

loans advances sib

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