SIP Project

On

“Home Loans

&

Builders Tie-ups”

For

“State Bank of India”

Submitted To:

K. S. SCHOOL OF BUSINESS MANAGEMENT

Gujarat University, Navrangpura

(In partial fulfillment of MBA Degree)

Submitted By:

Name: Yogesh Rathod

Roll No.: 5227

CERTIFICATE

I have read the project/survey/study report submitted by Yogesh Rathod

and hereby certify that the student has successfully completed the project, in

line with the objectives set for the same.

(Signature of the Mentor)

PREFACE

Loans have to be paid back one day. Had this been realized by all, how nice

life would have been on this Planet. It would not have prompted the poet to say

“Neither be a Lender, nor a Borrower Be.” Alas! Given the realities in life, this

could remain at best a wishful thinking.

Internship is the integral and basic requirement of all the business study

programs in all of the business study institutes as it is necessary and basic

requirement of the MBA degree. Because it is the practical implication of the

theoretical knowledge which we have taught in our business subjects to gain

further knowledge and experience about professional business activities. It equips

us with the necessary knowledge, skills and values of business culture which are

basic requirement of the business professional and which also helps new post

graduates to perform professionally as they get first step in their practical

professional life.

For this reason I was placed at STATE BANK OF INDIA RASME CCC Branch

Udhyog Bhavan, Gandhinagar. Where I have done my Ten weeks internship.

During my internship tenure I have gained a lot of knowledge about operations

under the supervision and guidance of my Internship Supervisor. During my whole

duration I was briefed about the procedures of all the banking operations by the

concerned staff. My internship report contains all the knowledge which I have

learnt there.

ACKNOWLEDGEMENT

The internship opportunity I had with STATE BANK OF INDIA was a great

chance for learning and professional development. Therefore, I consider myself as

a very lucky individual as I was provided with an opportunity to be a part of it. I

am also grateful for having a chance to meet so many wonderful people and

professionals who led me though this internship period.

Bearing in mind previous I am using this opportunity to express my deepest

gratitude and special thanks to the Mrs. Harinaxi Sharma AGM of SBI

RASMECCC who in spite of being extraordinarily busy with her duties, took time

out to hear, guide and keep me on the correct path and allowing me to carry out

my project during the internship.

I express my deepest thanks to Mr. Pragnesh Kamdar, Assistant

Manager of SBI RASMECCC for taking part in useful decision & giving necessary

advices and guidance and arranged all facilities to make life easier. I choose this

moment to acknowledge his/her contribution gratefully.

It is my radiant sentiment to place on record my best regards, deepest

sense of gratitude to Mr. Pratik Thaker, Assistant Vice President (RE, H &

HD) SBI LHO for their careful and precious guidance which were extremely

valuable for my study both theoretically and practically.

Finally, I would also like to express my earnest gratitude to my friends and

family members for their constant support & encouragement without which the

assignment would not have been completed, besides the constant blessings of

Almighty.

I perceive as this opportunity as a big milestone in my career development.

I will strive to use gained skills and knowledge in the best possible way, and I will

continue to work on their improvement, in order to attain desired career

objectives. Hope to continue cooperation with all of you in the future.

Sincerely,

Yogesh Rathod

Table of Content

Sr. No Topics Page

Number

1 Chapter - 1 Executive Summary 1

2 Chapter – 2 Introduction 3

Profile of Student 4

Profile of Organisation 5

Nature of the project 11

Objectives / responsibilities assigned by the

project mentor 12

3 Chapter - 3 Industry Analysis 13

Banking 14

Real Estate 17

4 Chapter – 4 Framework of Study 19

Theoretical Framework 20

Specific Objectives of the Project 29

Scope of Study 30

Limitation of Study 31

Period of Study 32

5 Chapter - 5 Methodology & Analysis 33

Research Methodology 34

Data analysis & Interpretation 36

Builders Suggestions 49

Strategies to Bring People on Board 50

Opportunity for second charge loan 50

Findings 51

Recommendations 53

Conclusion 55

6 Chapter - 6 Reference 56

List of Chats

Sr. No. Chart Name Page No.

1 Figure 1: How long have builder had construction license or in construction business

36

2 Figure 2: Source of project finance for builders 37

3 Figure 3: Project finance by different banks 38

4 Figure 4: Types of project 39

5 Figure 5: Minimum Down Payment 40

6 Figure 6: Aware about different products and schemes of SBI home loan

41

7 Figure 7: Builders trust SBI 42

8 Figure 8: Builder Tie-up with SBI 43

9 Figure 9: Builder satisfied with SBI services 44

10 Figure 10: Builder satisfaction with SBI services in different areas of Gandhinagar

45

11 Figure 11: Does any bank provide commission 46

12 Figure 12: Why Builders prefer private bank over public sector bank

47

13 Figure 13: Future projects and new launches 48

List of Tables

Sr. No. Table Name Page No.

1 Table 1: How long have builder had construction license or in construction business

36

2 Table 2: Source of project finance for builders 37

3 Table 3: Project finance by different banks 38

4 Table 4: Types of project 39

5 Table 5: Minimum Down Payment 40

6 Table 6: Aware about different products and schemes of SBI home loan

41

7 Table 7: Builders trust SBI 42

8 Table 8: Builder Tie-up with SBI 43

9 Table 9: Builder satisfied with SBI services 44

10 Table 10: Builder satisfaction with SBI services in different areas of Gandhinagar

45

11 Table 11: Does any bank provide commission 46

12 Table 12: Why Builders prefer private bank over public sector bank

47

13 Table 13: Future projects and new launches 48

Chapter – 1

Executive Summary

In today’s fast paced business environment, banks operating in retail space

require a change resilient vertically integrated value chain for delivering the most

competitive products and services. This need is redefining the boundaries of a

banks value chain creating greater thrust for this value add, right from the lowest

end of the delivery channels. In the loans and advances product space, this

requires an integration strategy right from Sourcing, Evaluation and Servicing to

Collections, and Recoveries. The report begins with the introduction to company,

its area of operation, its organization structure, its achievements, etc.

The second chapter is the introduction to the SBI which gives a brief idea

regarding SBI. It also contains the brief profile of researcher, Nature of the

project, and Objectives / responsibilities assigned by the project mentor.

The third chapter is of Industry analysis of both banking and real estate.

The fourth chapter is of Framework of Study which includes Theoretical

framework, problem definition and research objective.

The fifth chapter, methodology adopted in preparing this report is

mentioned. It covers the sample procedure, types of data used and the data

collection method. The fifth chapter also comprehensive coverage of forecasting

concepts and techniques which shows the analysis of data through tabulation,

computation and graphical representation of data collected from survey.

The fifth chapter also deals with the findings, suggestion & conclusion part

which is very much important after analysis is made.

As we know that only analysis and conclusion is not the end of a research,

so next this report contains recommendation part is covered which are made

after a depth study of the analysis part of study.

In each of the five chapters as described above, every chapter has been

scheduled in a manner so as to enable the reader to appreciate the contents easily.

The report is supported by figures and data wherever necessary with a view to

assist the reader in developing a clear cut understanding of the topic.

I hope this report will be extremely useful for those it is meant. Constructive

and healthy suggestions for improvements of the report will be great fully

appreciated.

Chapter -2

Introduction

Profile of Student

I YOGESH RATHOD, undertook the project of “HOME LOAN AND

BUILDERS TIE-UP”. I am a native of Ahmedabad. In regard to my education, I did

my Schooling and Higher Secondary education in Ahmedabad, and B.B.A

(Honours) in Ahmedabad. Currently I am pursuing my MBA degree from K. S.

SCHOOL OF BUSINESS MANAGEMENT. I have maintained 3.34 GPA in aggregate.

Previously I did my 10th class with 60.80% aggregate from Central English School

and 12th class with 73.14% aggregate from St. Mary’s School. I did my B.B.A

(Honours) from K. S. SCHOOL OF BUSINESS MANAGEMENT, Gujarat University

Ahmedabad. Coming to my family background. I am youngest of three siblings.

My father is working at State Bank of India as a Chief Manager (Admin) and my

mother is a perfect home-maker. My strengths are I am very honest, optimistic

and punctual. I can adapt myself to any environment and circumstances and for

that reason I can work with very ease .I am also quite good in team work. My

hobbies are travelling, photography and playing cricket. My weakness are

believing in others very easily coupled with a bit absent mindedness. But, if I

concentrate on anything I become so absorbed in that matter that I can’t listen

even if somebody calls me at that time. And that’s all about myself in brief.

Profile of Organisation

State Bank of India (SBI) is a multinational banking and financial services

company based mainly in India. It is a government-owned corporation with its

headquarters in Mumbai, Maharashtra. The State Bank of India’s root lies in the

first decade of 19th century, when the Bank of Calcutta, later renamed the Bank

of Bengal, was established on 2 June 1806. The Bank of Bengal was one of three

Presidency banks, the other two being the Bank of Bombay (incorporated on 15

April 1840) and the Bank of Madras (incorporated on 1 July 1843). All three

Presidency banks were incorporated as joint stock companies and were the result

of the royal charters. These three banks received the exclusive right to issue paper

currency till 1861 when with the Paper Currency Act; the right was taken over by

the Government of India. The Presidency banks amalgamated on 27 January 1921,

and the re-organised banking entity took as its name Imperial Bank of India. The

Imperial Bank of India remained a joint stock company but without Government

participation.

Pursuant to the provisions of the State Bank of India Act of 1955, the

Reserve Bank of India, which is India's central bank, acquired a controlling interest

in the Imperial Bank of India. On 30 April 1955, the Imperial Bank of India became

the State Bank of India. The government of India recently acquired the Reserve

Bank of India's stake in SBI so as to remove any conflict of interest because the

RBI is the country's banking regulatory authority.

In 1959, the government passed the State Bank of India (Subsidiary Banks)

Act, which made eight state banks associates of SBI. A process of consolidation

began on 13 September 2008, when the State Bank of Saurashtra merged with

SBI.

The State Bank of India, the country’s oldest Bank and a premier in terms

of balance sheet size, number of branches, market capitalization, profits,

customers and employees is today going through a momentous phase of Change

and Transformation – the two hundred year old Public sector behemoth is today

stirring out of its Public Sector legacy and moving with an ability to give the Private

and Foreign Banks a run for their money.

The bank is entering into many new businesses with strategic tie ups –

Pension Funds, General Insurance, Custodial Services, Private Equity, Mobile

Banking, Point of Sale Merchant Acquisition, Advisory Services, structured

products etc. – each one of these initiatives having a huge potential for growth.

The Bank is forging ahead with cutting edge technology and innovative new

banking models, to expand its Rural Banking base, looking at the vast untapped

potential in the hinterland and proposes to cover 100,000 villages in the next two

years.

It is also focusing at the top end of the market, on whole sale banking

capabilities to provide India’s growing mid/ large Corporate with a complete array

of products and services. It is consolidating its global treasury operations and

entering into structured products and derivative instruments. Today, the Bank is

the largest provider of infrastructure debt and the largest arranger of external

commercial borrowings in the country. It is the only Indian bank to feature in the

Fortune 500 list.

The Bank is changing outdated front and back end processes to modern

customer friendly processes to help improve the total customer experience. The

SBI group consists of SBI and five associate banks. The group has an extensive

network, with over 20,000 plus branches in India. Its Associate Banks already

networked, today it offers the largest banking network to the Indian customer.

The Bank is also in the process of providing complete payment solution to its

clientele with its over 48462 ATMs of SBI, and other electronic channels such as

Internet banking, debit cards, mobile banking, etc.

With four national level Apex Training Colleges and 54 learning Centers

spread all over the country the Bank is continuously engaged in skill enhancement

of its employees. Some of the training programs are attended by bankers from

banks in other countries.

The bank is also looking at opportunities to grow in size in India as well as

internationally. It presently has 191 foreign offices in 36 countries across the

globe. It has also 7 Subsidiaries in India. It is in the process of raising capital for

its growth and also consolidating its various holdings. Throughout all this change,

the Bank is also attempting to change old mindsets, attitudes and take all

employees together on this exciting road to Transformation.

State Bank of India Subsidiaries

Banking Subsidiaries:

State Bank of Bikaner and Jaipur

State Bank of Hyderabad

State Bank of Patiala

State Bank of Travancore

State Bank of Mysore

Non-Banking Subsidiaries:

SBI Capital Markets Ltd. (SBICAP)

SBI Fund Management Pvt. Ltd. (SBI FUNDS)

SBI DFHI Ltd. ( SBI DFHI)

SBI Factors and Commercial Services Pvt. Ltd. (SBI FACTORS)

SBI Card and Payments Services Pvt. Ltd. (SBICPSL)

Joint ventures:

SBI Life Insurance Company Ltd. (SBI LIFE)

SBI General Insurance

Products and Services of SBI

SBI services are most varied and innovative amongst all its contemporaries.

SBI services include a host of products and services to suit all types of consumers.

1. Personal Banking

Deposit Schemes

Personal Finance

Gold Banking

ASBA

2. Agricultural/Rural Banking

Micro Credit

Regional Rural Banking

Financial Inclusion

Aadhaar Seeding

3. NRI services

Account/Deposit

Remittances

Investments

Loan

4. International Banking

Wholesale Banking

Corresponding Bank

Global Trade Services

Remittances

5. SME

Deposit and transaction Banking

SBI Asset Backed Loan

Fleet Finance Services

Collateral Free Loan

6. Corporate Banking

Corporate Account Group (GAP)

MID-Corporate Group

Project Finance

7. Services

Internet Banking

Mobile Banking

ATM

Demat Services

Aadhaar Seeding

Cash Deposit Services

Vision, Mission and Values

VISION

My SBI.

My Customer first.

My SBI: First in customer satisfaction

MISSION

We will be prompt, polite and proactive with our customers.

We will speak the language of young India.

We will create products and services that help our customers achieve their

goals.

We will go beyond the call of duty to make our customers feel valued.

We will be of service even in the remotest part of our country.

We will offer excellence in services to those abroad as much as we do to

those in India.

We will imbibe state of the art technology to drive excellence.

VALUES

We will always be honest, transparent and ethical.

We will respect our customers and fellow associates.

We will be knowledge driven.

We will learn and we will share our learning.

We will never take the easy way out.

We will do everything we can to contribute to the community we work in.

We will nurture pride in India.

SWOT Analysis of SBI

Strengths

1. Strong capital position.

2. Strong domestic market position.

3. Goodwill in the market and largest network.

4. Has a separate act for itself. Thus, a special privilege.

Weakness

1. High Non-performing assets.

2. Lack of modernization.

3. Customer waiting period is long when compared to Private and Foreign

Banks.

Opportunity

1. Mergers with Associate Banks and reduce transaction cost.

2. Global Expansion.

3. Expansion to Rural Areas.

Threats

1. Competition from Private and Foreign banks.

2. Customer retention due to multiple banking.

3. Loss of market share.

Nature of the project

The project assigned to me is mainly to find out How to improve the ticket

size of Home Loans at Gandhinagar and opportunity to grant Home Loans on

second charge to Government employees and to prepare strategies to bring people

on board. The project is to study or survey the builders in various areas of

Gandhinagar. To find out the banking habits of builders and to find out likes and

dislikes of the builders in regards to banking with SBI. And to know whether they

are really satisfied with the products and services provided by the SBI or not i.e.

to know the feedback from the existing as well as non-existing builders of SBI and

to analyze the opportunities and threats of SBI so that more and more builders

can be attracted with SBI. So the nature of the project is to understand and find

out what are the problems faced by builders in Gandhinagar. To find out

opportunity to grant second charge Home Loans to Government employees

various Government Department/ Offices, Educational Institution, Public/Private

Sector companies are visited. The satisfaction level and behavior of builders also

be studied with the adaptation of new and new technologies and services by SBI

and to know about their feedback in order to find out the reasons behind their

likings and disliking’s of SBI services and finally after identifying the reasons find

out the solution to those threats or opportunities so that it can benefit the bank

and fetch more and more profits by increasing its products and services to its

customers.

Objectives / responsibilities

assigned by the project mentor

The research which I am asked to conduct is about to find out how to

improve ticket size of Home Loans at Gandhinagar. To know that first of all we

have to know about banking habits of builders. My first assign responsibility is to

visit builder’s offices and project sites in various areas of Gandhinagar. I have to

meet with builders and asked him/her whether they have a builder tie-up with SBI

or not. If they have a builders tie-up with SBI then various question are asked to

builders like their satisfaction level with SBI services, their trust on SBI or not,

what are the problems faced by builders under builders tie-up, their suggestion to

SBI for better and improved services, which bank they generally prefer for builders

tie-up and why?, then asked some details about their current projects and

upcoming projects. If builder don’t have a builder tie-up with SBI then reason are

asked for not having builder’s tie-up with SBI and their future plan for tie-up with

SBI for their new projects.

My second assign responsibility is to visit various Government Offices/

Department, Educational Institutes and Public/Private Sector companies in the

areas of Gandhinagar. My assign responsibility is to meet with Human Resource

Manager of various Organisation and arranging a small presentation for Home

Loans.

During the visits of various Organisation my another responsibility is to

identify the number of employees in Organisation so that I am able to find out

whether there is an opportunity to grant Home Loans on second charge to

Government employees or not.

Chapter – 3

Industry Analysis

BANKING

The growth in the Indian Banking Industry has been more qualitative than

quantitative and it is expected to remain the same in the coming years. Based on

the projections made in the "India Vision 2020" prepared by the Planning

Commission. The report forecasts that the pace of expansion in the balance-sheets

of banks is likely to decelerate.

The Indian Banking Industry can be categorized into Non-scheduled Banks

and Scheduled Banks. Scheduled Banks constitute of commercial banks and co-

operative banks. As far as the present scenario is concerned the Banking Industry

in India is going through a transitional phase.

As per the Reserve Bank of India (RBI), India’s banking sector is sufficiently

capitalized and well-regulated. The financial and economic conditions in the

country are far superior to any other country in the world. Credit, market and

liquidity risk studies suggest that Indian banks are generally resilient and have

withstood the global downturn well.

Indian banking industry is expected to witness the roll out of innovative

banking models like payments and small finance banks. 11 payment banks are

expected to be launched in 2016 and 2017. Separately about 10 small finance

banks are also expected to be launched. RBI’s new measures may go a long way

in helping the restructuring of the domestic banking industry.

With the potential to become fifth largest banking industry in the world by

2020 and third largest by 2025 according to KPMG-CII report, India’s banking is

currently worth Rs 81 trillion (US $ 1.31 trillion) and the bank are now utilizing

the latest technologies like internet and mobile device to carry out transaction and

communicate with masses.

The Indian banking sector’s assets reached US$ 1.8 trillion in FY15 from

US$ 1.3 trillion in FY10, with 70 per cent of it being accounted by the public sector.

Total lending and deposits increased at a compound annual growth rate (CAGR)

of 20.7 per cent and 19.7 per cent, respectively, during FY07-15 and are further

poised for growth, backed by demand for housing and personal finance. Total asset

size of banking sector assets is expected to increase to US$ 28.5 trillion by FY25.

Deposits have grown at a CAGR of 13.6 per cent during FY05–15 to an estimated

US$ 1.48 trillion in FY16. Deposit growth has been mainly driven by strong growth

in savings amid rising disposable income levels.

Deposit growth has been steady

Total money supply increased at a CAGR of 11.14 per cent during FY06–

16*

Between FY06–16*, narrow money supply (M1) rose at a CAGR of 7.69 per

cent to US$ 392.8 billion, broad money supply (M2) increased at a CAGR of

6.49 per cent to US$ 395.3 billion and money supply (M3) grew at a CAGR

of 11.14 per cent to US$ 1.8 trillion.

Time deposits with banks have shown highest average growth of 12.9 per

cent during FY06–16*, and stood at US$ 1.44 trillion by the end of

October’15

Indian banks are increasingly focusing on adopting integrated approach to

risk management. Banks have already embraced the international banking

supervision accord of Basel II. According to RBI, majority of the banks already

meet capital requirements of Basel III, which has a deadline of March 31, 2019.

Most of the banks have put in place the framework for asset-liability match, credit

and derivatives risk management

Rising incomes are expected to enhance the need for banking services in

rural areas and therefore drive the growth of the sector; programmers like

MNREGA have helped in increasing rural income aided by the recent Jan Dhan

Yojana. The Reserve Bank of India (RBI) has relaxed its branch licensing policy,

thereby allowing banks (which meet certain financial parameters) to set-up new

branches in tier-2 to tier-6 centers, without prior approval from RBI. It has

emphasized the need to focus on spreading the reach of banking services to the

un-banked population of India.

Market Size

The Indian Banking System consists of 26 public sector banks, 25 private

sector banks, 43 foreign banks, 56 regional rural banks, 1,589 urban cooperative

banks and 93,550 rural cooperative banks, in addition to cooperative credit

institutions. Public-sector banks control nearly 80 percent of the market, thereby

leaving comparatively much smaller shares for its private peers.

Standard & Poor’s estimates that credit growth in India’s banking sector

would improve to 12-13 per cent in FY-18 from less than 10 per cent in the second

half of CY-16.

Road Ahead

The Indian economy is on the brink of a major transformation, with several

policy initiatives set to be implemented shortly. Positive business sentiments,

improved consumer confidence and more controlled inflation are likely to prop-up

the country’s the economic growth. Enhanced spending on infrastructure, speedy

implementation of projects and continuation of reforms are expected to provide

further impetus to growth. All these factors suggest that India’s banking sector is

also poised for robust growth as the rapidly growing business would turn to banks

for their credit needs.

Also, the advancements in technology have brought the mobile and internet

banking services to the fore. The banking sector is laying greater emphasis on

providing improved services to their clients and also upgrading their technology

infrastructure, in order to enhance the customer’s overall experience as well as

give banks a competitive edge.

Many banks, including HDFC, ICICI and AXIS are exploring the option to

launch contact-less credit and debit cards in the market shortly. The cards, which

use near field communication (NFC) mechanism, will allow customers to transact

without having to insert or swipe.

Real Estate

Introduction

The real estate sector is one of the most globally recognized sectors. In

India, real estate is the second largest employer after agriculture and is slated to

grow at 30 per cent over the next decade.

The Indian real estate market has become one of the most preferred

destinations in the Asia Pacific1 as overseas funds accounted for more than 50 per

cent of all investment activity in India in 2014, compared with just 26 per cent in

2013.

The real estate sector comprises four sub sectors - housing, retail,

hospitality, and commercial. The growth of this sector is well complemented by

the growth of the corporate environment and the demand for office space as well

as urban and semi-urban accommodations.

The construction industry ranks third among the 14 major sectors in terms

of direct, indirect and induced effects in all sectors of the economy.

It is also expected that this sector will incur more non-resident Indian (NRI)

investments in both the short term and the long term. Bengaluru is expected to

be the most favored property investment destination for NRIs, followed by

Ahmedabad, Pune, Chennai, Goa, Delhi and Dehradun.

Market Size

The Indian real estate market is expected to touch US$ 180 billion by 2020.

The housing sector alone contributes 5-6 per cent to the country's Gross Domestic

Product (GDP).

In the period FY08-20, the market size of this sector is expected to increase

at a Compound Annual Growth Rate (CAGR) of 11.2 per cent. Retail, hospitality

and commercial real estate are also growing significantly, providing the much-

needed infrastructure for India's growing needs.

During the first nine months of 2015, PE funds invested about US$ 2.4

billion in the real estate sector, across 53 transactions compared US$ 1.3 billion

across 57 transactions in the same period last year. Deal sizes have also increased

in 2015, and residential projects both luxury and affordable have attracted a

substantial amount of capital.

Private Equity (PE) funds and Non-Banking Financial Companies (NBFCs) in

India are seen increasingly investing jointly in real estate projects, in order to

hedge risk and undertake bigger transactions.

Road Ahead

Responding to an increasingly well-informed consumer base and, bearing

in mind the aspect of globalization, Indian real estate developers have shifted

gears and accepted fresh challenges. The most marked change has been the shift

from family owned businesses to that of professionally managed ones. Real estate

developers, in meeting the growing need for managing multiple projects across

cities, are also investing in centralized processes to source material and organize

manpower and hiring qualified professionals in areas like project management,

architecture and engineering.

The growing flow of FDI into Indian real estate is encouraging increased

transparency. Developers, in order to attract funding, have revamped their

accounting and management systems to meet due diligence standards.

Chapter – 4

Framework of Study

Theoretical Framework

Home Loan

Home is an integral part of an individual, who since his / her birth and

childhood, dreams to have living space of his / her own. Once in a lifetime

investment requires loan to accomplish it and that is how the home loan comes

into scheme of things. Buying a home is dream for everyone. Owing to the rising

price of properties, it has almost become impossible for an average earning person

to buy a home on a lump sum payment. Therefore, the concept of home loan has

come in existence.

Loan acquired from a financial institution or bank to purchase a home.

Home loans consist of an adjustable or fixed interest rate and re-payment terms.

Home loans may also be referred to as mortgage loans. The average ticket size of

Home Loans in Gandhinagar is Rs. 18,00,000. There is need to improve this ticket

size by some portion.

Importance of Home Loan

The need for home loans arises not because property prices are heading

upwards all the time but because home loans make great sense from a

long-term savings perspective. Not only are home loans a handy tool for

the common man to own a roof over his head but they also help save money

in the long run.

With skyrocketing real estate prices, people are increasingly opting for

housing loans to acquire their dream home. Interest rates are coming down

all the time and the banks and the housing finance companies are literally

falling over each other to lure the prospective home-seekers.

Notwithstanding the tax breaks and generous lending rates, a lot of people

still cannot arrange resources for the down-payment, which comes out to

be at least 15 per cent of the property value. Taking cognizance of the

situation, Banks are coming up with home loan products called ‘zero down

payment loans’ wherein 100 per cent funding is provided for select

properties. These lucrative offers are other major reasons for why people

are opting for loans.

Even if one can afford to buy a home with one's own money, home loans

should be availed because they act as good savings instrument. According

to industry estimates, the long term average return in investing in a home

is about 20% p.a. while the average cost of borrowing funds in the market

today is about 9-10% p.a. (considering all tax breaks).

For salaried employees, housing loans are the best way to avail of tax

benefits. Many people simply go for the home loans in order to avail these

benefits. Interest payments up to 1.5 lakh on housing loans are deductible

from the taxable income and there is a further deduction of taxable income

maximum up to 1 lakh against repayment of principal portion per annum.

In case a person stays in a rented house, the cost of the loan will be nearly

zero per cent since he will be saving a decent amount on rent.

Types of Home Loan

1. Home Purchase Loan: These are the basic home loans for the purchase

of a new home. These loans are given for purchase of a new or already built

flat/bungalow/row-house.

2. Home Improvement Loan: These loans are given for implementing

repair works and renovations in a home that has already been purchased

by the customer. It may be requested for external works like structural

repairs, waterproofing or internal works like tiling and flooring, plumbing,

electrical work, painting, etc.

3. Home Construction Loan: These loans are available for the construction

of a new home. The documents required by the banks or bank for granting

customer a home construction loans are slightly different from the home

purchase loans. Depending upon the fact that when customer bought the

land, the lending party would or would not include the land cost as a

component, to value the total cost of the property.

4. Home Extension Loan: Home Extension Loans are given for expanding

or extending an existing home. For example addition of an extra room, etc.

For this kind of loan, customer needs to have requisite approvals from the

relevant municipal corporation.

5. Land Purchase Loan: Land Purchase Loans are available for purchase of

land for both home construction or investment purposes. Therefore,

customer can be granted this loan even if customer is not planning to

construct any building on it in the near future. However, customer has to

complete construction within tenure of three years on the same land.

6. Bridge Loan: Bridge Loans are designed for people who wish to sell the

existing home and purchase another. The bridge loan helps finance the new

home, until a buyer is found for the old home.

7. Balance Transfer: Balance Transfer loans help customer to pay off an

existing home loan and avail the option of a loan with a lower rate of

interest. Customer can transfer the balance of the existing home loan to

either the same banks or any another banks.

8. Stamp Duty Loan These loans are sanctioned to pay the stamp duty

amount that needs to be paid on the purchase of property.

9. NRI Home Loan This is a special home loan scheme for the Non-Resident

Indians (NRI) who wish to build or buy a home or land property in India.

They are offered attractive housing finance plans with suitable

reimbursement options by many banks in the country.

Second Charge Loan

The trend of taking second mortgage home loans is fast catching up among

borrowers, owning to the ease of processing and the several ways in which it can

be used. It’s faster than taking personal loans and can help you get a larger loan

as it’s against a verified property. In cases where borrowers may not have any

additional security to offer, second mortgage loans come in pretty handy.

What is a Second Mortgage?

Also known as top up loans, second mortgage loans are an additional loan

against a property which is still under mortgage with another or the same

lender. You can use the loan for various purposes like:

1. Paying off existing debts

2. Home improvements

3. Funding other property purchases

4. Making other investments

5. Covering personal expenses

Second mortgage home loans are preferred by many over personal loans

as they have a lower interest rate and can be easily processed if taken from the

same bank, from which you have taken your existing home loan.

How is a second mortgage loan repaid?

A second mortgage home loan is treated like any other loan and needs to

be re-paid along with your existing home loan. To disburse this loan, the bank will

open a separate loan account for which it will deduct EMIs separately from your

specified savings account.

What happens if you are unable to repay the loan?

If due to any untoward circumstances you default on your loan repayments,

the bank will recover your home loan payments first. If the bank decides to sell

your property to recover dues, then it will recover dues for both loans and

additional funds (if any) will be handed over to you.

Are there any risks involved in taking top-up loans?

Borrowing money always has a certain risk factor involved owing to the

possibility of default payments. So by taking an additional loan on a property which

has already been mortgaged for an existing loan, you add on to your liability.

Further you may have to pay a hefty processing fee and the interest rate

will be slightly higher than your existing mortgage loan. Such loans are

appropriate for times when you need a lot of money urgently. So before you go

for a second mortgage, do ask the following questions:

How will the bank decide if you are eligible for a second mortgage?

Banks are always happy to give additional loans to existing borrowers as it

means more business for them. However, not all borrowers may be considered

eligible. Here’s what the banks look for before giving you a top-up:

1. Your disposable income: The bank will make sure that you have the

repayment capacity to pay 2 loans.

2. Property’s value: If your property’s value has gone up since you took a

home loan, the bank may be willing to give you a top-up loan for a larger

amount.

Though it can be tempting to tap a large source of money with a second

mortgage, it’s advisable to do so only if necessary, as you are borrowing against

your home.

Though most borrowers prefer to take a top-up from their existing bank as

it is easier and faster, it’s advisable to go for a second mortgage with another

bank is you are getting a better offer.

So how does this work?

A second mortgage implies that the first lender will have priority over the

asset mortgaged. This means that if you default on your payments, the first lender

will realize his dues first, only then the second lender will be able to get his dues.

So here, both the lenders share rights in the property in accordance with

proportions So in the event of non-payment of dues, the first lender will realize

his dues first, and only then the second lender will be able to realize his dues.

This means, in case of a default by the borrower, the two lenders will share

the rights in the property according to the proportion of loans disbursed.

Builders Tie-up

Tie-ups with reputed builder’s enables bank to book Home loan business

from borrowers with a relatively low risk profile i.e. HNIs/ Affluent NRIs/ highly

paid executives etc. Arrangement with builders enables bank to publicize bank

scheme as well as to have business directed to bank.

Documents Required:

1. A Request Letter from the Builder agreeing to enter into Tripartite

Agreement on the prescribed format

2. The Builder should enter into a Tripartite Agreement with the Bank and

Buyers as per the Draft Tripartite Agreement given in Annexure of Home

Loan Master Circular at the time sanction of Home Loan. The builder should

agree in the Tripartite Agreement to

(A) Deliver the Title Deeds in favor of the purchaser of the flat directly to

the Bank and

(B) Insist on No-objection Certificate from the bank before cancellation of

the Agreement of Sale and refund of payment received and

(C) To convey Bank’s security interest to the existing society for noting

Bank’s charge in its records.

3. Search Report from 2 Empanelled Advocates should be obtained certifying

a clear, absolute, marketable Title to the property in favor of the

Builders/owner of the property.

4. Possession of all mandatory legal clearances under various Building laws

and other enactments should be ascertained. A copy of the same should be

obtained for record.

PROCESS FLOW FOR BUILDER TIE-UPS APPROVAL

The following processes should be adopted for approval of project under Builder

Tie-ups:

Approving Authority:

Builder Tie-ups should be approved by the AGMs (RBO)/AGMs (Branch)/

AGMs (HLST). All approvals for fresh Builder Tie-ups and review of the existing

Tie-ups should be done through Online Approval of Builder Tie-ups. While

approving Projects, the system will auto-generate a Unique Project Identity

Number for each Project, which should be used by all the sourcing and processing

Officials while processing/sanctioning Home Loans in the Approved projects. The

Approval Note with all enclosures should be sent to the DGMs for vetting and

control. The Projects should be approved after obtaining a satisfactory Title

Investigation Report (TIR) from the empanelled Advocates and Valuation Report

from empanelled Valuers.

Intimation of approval to the Builder:

A written information regarding approval of the project should be sent to

the Builder mentioning therein the name and contact details of the Relationship

Manager identified for the said project.

Title Investigation Report:

Consolidated Search Report for the Project should be obtained by the Bank

from Two empanelled Advocates certifying a clear, absolute and marketable Title

to the property in favour of the Builders/Owners of the landed property. The

Search Report should not be insisted upon from the purchasers of individual flats

being financed by Bank irrespective of the loan amount.

Valuation Report:

A consolidated valuation report should be obtained from 2 empanelled

Valuers who should also comment on the reasonableness of prices of individual

flats of various types. Valuation Report should not be insisted upon from

purchasers of individual flat financed by Bank irrespective of the loan amount.

Valuation fee in this regard should be borne by the Bank. If there has been

increase in the Valuation of the property over a period of time, fresh Valuation

Report may be obtained by the RACPC and uploaded at Builder Tie-up site.

PROCESS FLOW FOR POST TIE-UP APPROVAL

Safekeeping of files under Builder Tie-ups:

Original file related to the Tie-up should be handed over to CPC for safe

keeping against acknowledgement. The files should be kept in Branch Documents.

Subsequent Search:

RACPC should obtain periodical TIR once in every 12 months from the date

of previous TIR/Search to verify the status of encumbrance of the Project land.

Inspection Report:

The RACPC should upload subsequent Inspection Report of the Project at

regular intervals, at least monthly, mentioning the stage and level of construction

at Builder Tie-up site. This report should be referred by other offices/RACPCs for

disbursement of Home Loans without inspecting the Project in individual cases.

Disbursement Procedure:

Disbursement under Builder Tie-ups would be only Construction Linked. For

projects where Advance Disbursement Facility (ADF) has been approved, earlier

instructions would continue to be applicable. The disbursement shall be made to

the Builders directly through RGTS/NEFT/IOI followed by an e-mail to the builder

advising the Name, Account number and Amount remitted for the Flat.--, allotted

to the borrower.

Validity of Approval:

The validity of the Tie-ups will continue for the duration of the Project,

viz; as long as the sales are taking place in the project. A review should be

done by the Builder Tie-up Approving Authority at the interval of 12 months

to the assess the business booked under the tie-ups.

Specific Objectives of the

Project

Following are the research objectives:

1. To improve the ticket size of Home Loans at Gandhinagar.

2. To improve builder tie-up through project approval.

3. To find out opportunities to grant Home Loans on second charge to

Government employees.

Scope of Study

This study focus on how to improve ticket size of home loan in Gandhinagar,

to find opportunity to grant second charge loan to government employees and to

improve builder tie-up in Gandhinagar.

Market analysis has been carried out in various areas of Gandhinagar like

Kudasan, Sargasan, Vavol, Pethapur, Randesan, PDPU Road, Raysan etc. For this

market research various builders are surveyed in Gandhinagar. They were asked

to fill up a questionnaire which includes 14 questions overall. Out of 14 question

some question are to know about their satisfaction level, their trust on SBI or not,

their various project details and upcoming projects details. These 14 question are

help in finding out banking habits of builders.

LIMITATIONS OF STUDY

Many of the respondents (builders) filled inaccurate information and left

some questions unanswered.

Some respondents (builders) refused to fill up questionnaires and did not

cooperate while some gave false answers.

Some builders didn’t provide correct information regarding their projects.

The information that has been gathered from builders limited in the sense

of they might not have disclosed everything which was needed for the

survey.

Due to academic study there is time constraint to complete such a project.

Moreover, the cost to complete the Project is considered meagre

considering its importance.

Period of Study

The data collection process of my study followed an action research spiral

that involved four phases. During each phase a theory and questions were first

diagnosed then followed by planned projects and initiatives. Each project or

initiative was then evaluated. These evaluations then served as the basis for more

specific exploration in the next spiral.

Each phase of research adopted a different strategy in order to observe and

analyses creative policy in action. During the first three days of my internship. I

research an in-depth review of the builder’s tie-up process and prepare

questionnaire. This review allowed for an initial theory to be established through

observation and participation with the builders. After preparing questionnaire next

work is to meet builders and questionnaire got filled and discuss with builders

about their current as well as future upcoming projects in gandhinagar and SBI

services. Then after I visit various Government Organisation in Gandhinagar. Then

revisit all the areas of gandhinagar again to meet builders. Then visit Educational

Institutions and after that my findings, analyses, conclusions and

recommendations sections are the outcomes of the remaining eleven days of my

research. This method permitted an in-depth analysis of a real world situation

and gave rise to recommendations which helped in writing the conclusion.

Overall Research Period – 17th May 2016 to 22nd July 2016

Theoretical framework and Framing of questionnaire – 17th May 2016 to 19th May

2016

Questionnaire filling and meeting with builders – 21st May 2016 to 30th May 2016

Visit Government Organisation – 1st June 2016 to 13th June 2016

Revisit to all builders – 14th June 2016 to 18th June 2016

Visit Educational Institution – 23rd June 2016 to 29th June 2016

Again Government Offices – 30th June 2016 to 8th July 2016

Analyzing and completing – 11th June 2016 to 22nd June 2016.

Chapter – 5

Methodology

&

Analysis

Research Methodology

Research methodology is a methodology for collecting all sorts of

information & data pertaining to the subject in question. The objective is to

examine all the issues involved & conduct situational analysis. The methodology

includes the overall research design, sampling procedure & fieldwork done & finally

the analysis procedure.

The methodology used in the study consistent of sample survey using both

primary & secondary data. The primary data has been collected with the help of

questionnaire as well as personal observation, interview and book, magazine,

journals have been referred for secondary data.

Sample Size: Sample of 32 builders was taken into study, and their data was

collected.

Sampling Technique: Simple Random Sampling.

Sampling Unit: Builders and Members of Builders association.

Data Collection: Data collection mainly dealt with the way data was collected. I

have collected data through primary and secondary source.

1. Primary Data Collection: I have collected primary data by visiting

construction site, builder’s offices, meeting with individual builders and

member of builders association.

2. Secondary Data Collection: Secondary data was collected through

journals, magazines, brochures, internet, etc.

Data Analysis: After data collection, I am able to analyze builder’s views, ideas

and opinions related to Builder Tie-ups and about SBI services and from this, SBI

will come to know the about builders requirements.

Data Interpretation: Interpretation of data is done by using statistical tools like

Pie diagrams, Bar graphs, and also using quantitative techniques (by using these

techniques) accurate information is obtained.

Classification & tabulation of data: The data thus collected were classified

according to the categories, counting sheets & the summary tables were prepared.

The resultant tables were one dimensional, two dimensional.

Statistical tools used for analysis: Out of the total respondents, the

respondents who responded logically were taken into account while going into

statistical details & analysis of data. The tools that have been used for analyzing

data & inference drawing are mainly statistical tools like percentage, ranking,

averages, etc.

As per questionnaire and surveys I have find out different responses from

different builders. According to their responses I analyze the findings and draw

certain remarks.

Data analysis & Interpretation

How long have builder had construction

license or in construction business

Table 1: How long have builder had construction license or in construction

business

No. of Years Builders

0-2 Years 1

3-5 Years 15

5-10 Years 5

11-20 Years 9

More than 20 Years 2

Total 32

Figure 1: How long have builder had construction license or in

construction business

Interpretation: Most of the builders are of 3-5 years (47%). It can be known

that builders will change their company name after completion of 1 or 2 projects

so, that they can get tax benefits. 28% builders are of 11-20 years and only 6%

builders are of 20 or more years of experience in construction business.

3%

47%

16%

28%

6%

0-2 Years 3-5 Years 5-10 Years 11-20 Years More than 20 Years

Source of project finance for builders

Table 2: Source of project finance for builders

Source of Finance No. of Builders

Bank 7

Own 25

Others 0

Total 32

Figure 2: Source of project finance for builders

Interpretation: Builders generally finance their projects through their own funds.

78% builders finance their projects through own funds or funds of their partners.

Only 22% builders finance their projects through bank. As in case of bank source

interest rate is differs from bank to bank. In this case interest rate is higher than

Home loan. Interest is charged on the basis of credit rating of builders.

22%

78%

0%

Bank

Own

Others

Project finance by different banks

Table 3: Project finance by different banks

Bank No. of Builders

SBI 5

ICICI 2

HDFC 1

Bank of India 1

Total 9

Figure 3: Project finance by different banks

Interpretation: SBI has finance 5 projects out of 9 projects. Its shows that SBI

charge lower interest rate as compared to other banks. SBI charge interest rate

on the basis of credit rating of builders.

0

1

2

3

4

5

6

No

. of

Bu

ilder

s

Banks

SBI ICICI HDFC Bank of India

Types of projects

Table 4: Types of project

High Ended Utility Total

19 22 41

Figure 4: Types of project

Interpretation: 54% projects in gandhinagar are utility projects most of utility

projects are located in voval and pethapur. 46% projects are high ended or luxury

type project most of high ended projects are located in kudasan, sargasan and

PDPU Road. Starting price of utility project for 1BHK is around 12 lakhs and for 2

BHK is 18 lakhs. Starting price of High ended project for 2BHK is around 40 lakhs,

for 3BHK is around 50 lakhs. Price of High Ended project varies from project to

project. Villas and Bungalows are costly than Apartments and flats.

46%54%

High Ended

Utility

Minimum down payment required from buyers

Table 5: Minimum Down Payment

Minimum Down Payment No. of Builders

0-5% 0

6-10% 2

11-15% 4

16-20% 23

More than 20% 3

Total 32

Figure 5: Minimum Down Payment

Interpretation: Most of builders (72%) required down payment of 11-15% of

cost of home/flat/villa. As bank sanction loan up to 80-85% of cost of home or

documents.

0%6%

13%

72%

9%

0-5% 6-10% 11-15% 16-20% More than 20%

Awareness about different products and

schemes of SBI home loan

Table 6: Aware about different products and schemes of SBI home loan

Yes No Total

23 9 32

Figure 6: Aware about different products and schemes of SBI home loan

Interpretation: It is found that most of the builders (72%) are aware about all

the different products and schemes of SBI home loan and only 28% builders are

unaware about different products and schemes of SBI home loan. Reason behind

awareness is SBI tie-ups with builders, sales executive at the project site visit

regularly, arranging builders meet at regular interval of time and aggressive

marketing campaigns.

72%

28%

Yes No

Builders trust SBI

Table 7: Builders trust SBI

Yes No Total

26 6 32

Figure 7: Builders trust SBI

Interpretation: Most of the builders (around 81%) trust SBI for their services,

being government Bank, most stable and known Bank from many years in the

market. Only 19% builders do not trust SBI.

81%

19%

Yes

No

Builders Tie-up with SBI

Table 8: Builder Tie-up with SBI (Based on various schemes)

Yes No Total

37 8 45

Figure 8: Builder Tie-up with SBI

Interpretation: Around 82% projects have builder tie-up with SBI in

Gandhinagar because of SBI transparency in services, the lowest interest rate for

any kind of loan product, most known bank in customers and reputation in market.

Only 18% projects don’t have builder tie-up with SBI. Out of 37 tie-ups 21 tie-ups

are of High Ended projects and 16 are of Utility type project. Those builder who

don’t have tie-up with SBI are because of SBI don’t approved some of them

because of some reasons like don’t have enough document, problems in

documentations and some builders don’t like SBI services so that they don’t prefer

SBI for tie-up.

Note: Some builders have more than 1 projects in Gandhinagar. It is possible that

one builder have tie-up for one project and don’t have tie-up with other project or

may be in processing for tie-up.

82%

18%

Yes No

Builder satisfaction with SBI services

Table 9: Builder satisfied with SBI services

Percentage No. of Builders

0-25% 7

26-50% 2

51-75% 9

76-100% 6

Total 24

Figure 9: Builder satisfied with SBI services

Interpretation: Satisfaction level of around 38% of builders is between 51-75%

and around 25% builder’s satisfaction level is between 76-100%. Reason for their

satisfaction is good rate of interest. Satisfaction level of 29% of builders are

between 0-25% because of slow process, No door step service, late disbursement,

not sanction enough loan, requires more documents & do not get proper response

sometimes.

29%

8%

38%

25%

0-25%

26-50%

51-75%

76-100%

Builder satisfaction with SBI services in

different areas of Gandhinagar

Table 10: Builder satisfaction with SBI services in different areas of

Gandhinagar

Satisfaction

Level/Area Kudasan Sargasan Vavol Randesan Other

0-25% 0 1 5 0 1

26-50% 1 0 1 0 0

51-75% 3 2 0 3 1

76-100% 2 3 0 0 1

Total 6 6 6 3 3

Figure 10: Builder satisfaction with SBI services in different areas of

Gandhinagar

Interpretation: Most of builders in kudasan and sargasan are satisfied with SBI

services and most of builders are highly dissatisfied with SBI services in vavol. Its

shows that SBI should improve their services in vavol.

0

1

5

0

11

0

1

0 0

3

2

0

3

1

2

3

0 0

1

Kudasan Sargasan Vavol Randesan Other

0-25% 26-50% 51-75% 76-100%

Any Bank provide commission for granting a

loan to customer’s

Table 11: Does any bank provide commission

Yes No Total

17 15 32

Figure 11: Does any bank provide commission

Interpretation: 53% builders say that other banks provide them commission for

granting loan to customers or for suggesting a bank which is not provided by SBI.

The amount of commission varies from project to project, bank to bank, area to

area and amount of loan. Generally rate of commission is 0.15-0.40% of amount

of loan. Mostly commission is provide by Private Banks like HDFC Bank, ICICI

Bank, Axis Bank.

Yes53%

No47%

Builders prefer private sector bank over

public sector bank

Table 12: Why Builders prefer private bank over public sector bank

Reason No. of Builders

Better Service 13

Fast Sanctioning 12

Easy Processing 12

Others 14

Total 51

Figure 12: Why Builders prefer private bank over public sector bank

Interpretation: Builders prefer private sector bank over public sector banks

because private sector bank provides better and fast services over public sector

banks. Private bank sanction loan quickly and disburse loan even before time.

Some other reasons are private bank provide door step service to builders and

home loan customers, quick response, easy processing and required less

documents.

Better Service

Fast Sanctioning

Easy Processing

Others

13

12

12

14

No. of builders

Reasons

Future projects and new launches

Table 13: Future projects and new launches

Yes No Total

15 17 32

Figure 14: Future projects and new launches

Interpretation: Out of 32 builders survey 15 builders maybe come up with new

project in Gandhinagar in near future. 53% builders say no to new project in

gandhinagar.

Figure 13: Future projects and new launches

Interpretation: Out of 32 builders survey 15 builders maybe come up with new

project in Gandhinagar in near future. 53% builders say no to new project in

gandhinagar. Builders who say no to new project in Gandhinagar are small builders

because their investment are stuck in current project, sales are not taking place

at a pace which they think, they have a high inventory there may be chances they

may come up with new project if all the inventory of current project is sold out

and their stuck investment return after that they may be come up with new

project.

47%

53%

Yes No

Builders Suggestions

Quick sanction of home loan

Fast disbursement of loan

Improve loan process

Remove mortgage

Pre-sanction of home loan

Inter branch coordination

Provide door step service

Legal charges should be borne by SBI

Charges should be include in loan

Early and fast payment to builders.

Strategies to Bring People on

Board

Conducting housing loan fair or property fair.

Developing liaison with builders by visiting their offices and project sites.

Visit to various schools/ colleges/ government department and offices/

reputed private sector companies for making presentation on housing loan

scheme.

Organize a socially responsible event such as marathon or race for a tending

cause.

Aggressive marketing and greater publicity through newspaper and

websites.

Blogs can be successful elements in content marketing strategy.

Through social media site like Facebook, Twitter, etc. As E-mail in not

everyone is going to see you sent out, but Facebook post can be seen.

Hoardings at various sites/project under construction

Through telemarketing, advertisement in TV, movie hall etc.

Organize a small game or event at school/college or government

organization. In between game or during break time make a small

presentation on home loan.

Opportunity for second

charge loan

The second charge mortgage market has seen huge growth year on year

and will continue to grow. There is a good opportunity for second charge loan in

Gandhinagar as more number of government offices are in gandhinagar. Second-

charge loan remains a popular option with those who hold a dented credit history,

or are self-employed. Second-charge loan are also favoured by consumer wants

a larger loan over a longer period of time. A second charge loan can be a cost

effective alternative to re-mortgaging, especially if your clients currently have a

mortgage with a low interest rate, early redemption charges or any other reason

that would make it expensive for your client’s to redeem.

Findings

The processing time (including the approval and sanctioning time) that SBI

puts into practice (highest amongst the banks), is usually 25-30 days when

compared to the private banks like ICICI Bank, HDFC Bank and AXIS Bank

who process in within 7-9 business days.

The home loan provides ideal home loan product for the borrowers including

ready to move-in property, under-construction property, self-constructions

and lots more. It provides adequate home loans at suitable interest rate

and time period.

The Lawyer’s fees for legal advice are borne by the customers only

in SBI where as in all other banks it is borne by bank itself which

shows lack of concern of SBI towards its customers’ pockets.

Builders will recommend SBI to their customers due to various positive

traits like SBI is economical, interest rates are low & good customer

service provided.

Some builders will not recommend SBI to their customers because

agents of other banks like HDFC & ICICI are personally approaching

the builders & displaying their various products on housing loan to

lure the customers.

Builders in kudasan and sargasan are satisfied with SBI services but

builders in vavol are not satisfied with SBI services.

Builders prefer or favor private sector bank over SBI because private sector

bank provide better and fast services, provide commission to builders for

recommend private bank. The rate of commission is between 0.15-

0.40percent of amount of loan.

Most of High Ended project is located in Kudasan, PDPU Road and Sargasan

and most of utility project is located in Pethapur and Vavol.

Most of Builders required minimum down payment of 16-20% of cost of

home/flat.

Almost all the builders are aware about SBI different products and schemes

of SBI home loan.

Builders prefer private sector bank over public sector bank because of better

service, fast sanction, easy processing and quick response of private banks.

Recommendations

It should focus on fast processing of housing loans keeping in mind

the pace of other banks.

SBI needs to decrease the Turn-Around-Time (TAT) and the documentation

hassles. The entire process of builder’s tie-up including the Title

Investigation Report (TIR) and Valuation Report takes a lot of time to be

completed which makes builders apprehensive to associate with SBI. So

that needs to be decreased.

As the project is soft-launched, SBI should position a home loan sales

executive at the project site as the maximum enquiries about the property

and financing takes place from the moment the project is launched and

decreases gradually.

SBI also has a huge documentation verification process which requires

frequent follow-ups from the customers. SBI can offer doorstep verification

process at the customers’ ease and preferred time.

Loan ticket size can be improve by cutting down or lowering rate of interest

by some points or some extent.

Effective marketing through wide publicity, personalized services and

speedy disposal to be given still more importance by SBI which will

undoubtedly lead to increase its market share in HOUSE FINANCE.

Free value added services provided to the housing loan customers and the

rewards that the Bank provides for being a regular customer are not within

knowledge of customers . This should be highlighted which not only bring

more customers but also attracts more business from the existing

customers.

Home loan being a long term affair between the bank and the customer, it

is very essential that the bank co-operates with the customer at every level

of their queries and difficulties. So, SBI should have a department catering

to the queries of the home loans customers and work rigorously to provide

them a better service.

Conclusion

Home loan market in India has grown at rapid and alarming rate of over

40% over the period of last four year. And from the reports from some of the

industry expert’s, it is evident that there is very little chance that there will be any

significant decline in growth rates in the near future, Therefore it becomes

important at this point in the time to examine the key factors that have been

instrument in triggering this higher growth.

Most of banks and housing finance companies in India have introduce

several new home loan products in order to meet the needs of a wide variety of

customers.

The SBI has made home loans in India easy. The home loan provides ideal

home loan product for the borrowers including ready to move-in property, under-

construction property, self-constructions and lots more. It provides adequate

home loans at suitable interest rate and time period. SBI offers excellent

customer friendly services. SBI offers housing loan on complete transparency

with no hidden costs or administrative costs. Lowest Equated Monthly Installments

(EMI). Lowest interest rates, currently between 9.35% P.A and 9.50% P.A. Unique

facilities such in principle approval, overdraft facility, option to enhance loan

amount eligibility, free personal accident insurance & varied schemes like

the plus schemes.

SBI has enough numbers of builder’s tie-up in gandhinagar. Most of tie-ups

projects with SBI are utility projects. SBI do not get enough loan application or

proposal because of several factors.

State Bank of India is comparatively late in tie-ups and by the time they

approach the builders, the tie-ups are already done by the competing banks. Not

only that, but also few builders actually are apprehensive in tying up with SBI

owing to the following reasons:

Higher turn-around time.

Greater documentation hassles.

Delayed approval & sanctioning of loans.

Approval /Tie-up arrangements are aimed to reduce Turnaround Time of

Loan applications by avoiding duplication of certain works in respect of the

processing of loan applications in respect of the units in such projects.

Chapter – 6

Reference

Banking Sector in India, July, 2016 from http://www.ibef.org/industry/banking-

india.aspx

Real Estate Industry in India, July, 2016 from http://www.ibef.org/industry/real-

estate-india.aspx

EVOLUTION OF SBI, June, 2016 from https://www.sbi.co.in/portal/web/about-

us/evolution-of-sbi

Home loans from banks that have tie-ups with builders, March, 2016

https://housing.com/news/home-loans-from-banks-that-have-tie-ups-with-your-

builder-what-you-should-know/

Financial year report of SBI 2014-15,

https://www.sbi.co.in/AR1415/PDF/SBI_AR_Unabridge(English)%20%202015.p

df

Recent Trends in Residential Property Prices in India: An exploration using housing

loan data May 17, 2015 from

https://rbi.org.in/scripts/PublicationsView.aspx?Id=16223

Second charge or second mortgages, January 2016 from

https://www.moneyadviceservice.org.uk/en/articles/second-charge-or-second-

mortgages

Annexure

QUESTIONNAIRE

Dear Sir / Madam,

I am a student of K.S. SCHOOL OF BUSINESS MANAGEMENT undertaking

an internship project at SBI to improve the ticket size of SBI home loan at

Gandhinagar. For this purpose I would like you to spare a few minutes with you.

1. Business/Company Name: ______________________________________

2. Address :____________________________________________________

____________________________________________________________

3. Contact No. : _________________________________________________

4. How long have you had your general construction license or been in the

construction business?

0-2 years 3-5 years

6-10 years 11-20 years

More than 20 years

5. From which source you generally get project finance?

Bank Source Own Source

Other__________________

If Bank source then from which bank?

SBI Punjab National Bank

ICICI Bank HDFC Bank

Bank of Baroda Dena Bank

Other____________________________________________________

6. Current projects details:-

High ended Utility

No. of projects

Name of projects

Total units/houses

Average price

Total Units Sold

Approx. Possession

7. Minimum down payment required from buyers (% of cost of home)?

0-5 % 6-10 %

11-15% 16-20%

More than 20%

8. Are you aware about all the different products and schemes of SBI home

loan?

Yes No would like to know in details

9. Do you trust SBI?

Yes No

If yes / no then specify the reason ______________

10. Have you ever had Builder Tie-up with SBI?

Yes No

If yes then how much you are satisfied with SBI services?

0-25% 26-50%

51-75% 76-100%

Reason

___________________________________________________________________

___________________________________________________________________

___________________________________________________________________

11. Suggest a new additional service SBI should offer under builder tie-up.

1.____________________________________________________________

2.____________________________________________________________

3.____________________________________________________________

12. Does any Bank provide you a commission for granting a loan to customer?

Yes No

If yes then percentage of cost of home/flat _______________

13. Why do builders prefer private sector bank to public sector bank?

Better Service Fast Sanctioning

Easy processing Others______________________

14. Future projects (FY 2016-17) and new launches?

Yes No

______________________________________________________________

______________________________________________________________

______________________________________________________________

______________________________________________________________

THANK YOU

List of Builders Who Respond

Sr. No. Company Name Name of Project

High Ended Utility

1 Landmark Probuild Private Limited Landmark Living Landmark Harmony

2 MD Infrastructure Maruti Magnum

3 Shree Rang Infrastructure Shree Rang Aroma

Shree Rang Nano City 1

Shree Rang Nano City 2

Shree Rang Oasis

Shree Rang Upvan

Shree Rang Nagar

4 Balaji Infrastructure Shrifal Heights

5 Aakar Infra

Salvik Sukan

6 Dev Projects

Dev Greens

7 Om Corporation Om Residency

8 Krishna Developers Tulsi Bunglows

9 Shubh Infrastructure Shubh 36 Shubh Aaramb

Shubh Pioneer

Pramuk Paramount

10 Surya Group Surya Reterat Surya Crystal

11 ADI Infrastructure Aamrakunj Bunglows

12 Madhuram Infra Project Private Limited

Madhuram Green

13 Aawaass Buildcon Private Limited Aawaass Mango

Aawaass Strawberry

14 B and M Buildcon

Divya Sanskar City

15 Vaidehi Corporation

Vaidehi-2

16 Dharmaja Corporaton

Shivesh 182

Shivesh 195

Shalvik Homes

17 Dolphin Projects Vinayak Lifestyle

18 Nilkanth Developers Radhe Homes

19 Shree Sainath Corporation

Sopan Pratishtha

20 Uma Projects Mahalaxmi Royal Palace

21 Sheladia Infrastructure Poornam Residency

22 S.R.Infracon Shivalay Parisar

23 Shiv Buildcon

7Seas

24 Shreeji Developers Sahjanand Homes 2

Sahjanand Status

25 Vihaan Developers Sarthak Era

26 Swagat Infrastructure Pvt. Ltd. Swagat Blossam 2 Swagat Agacia

Swagat Blossam 3 Swagat Pelican

27 Sarthak Infra

Sarthak Safal

28 Shreeji Developers

Shreeji Homes

29 H. S. Corporation

Aamrakunj Heights

30 Shree Gayatri Buildcon

Satyamev Riviera

31 Shubhlaxmi Developers

Saral Heights

32 Gayatri Infrastructure

Sunflower Heights

List of Builders Who Not Respond

Sr. No. Company Name Name of Project

1 Shubh Developers Hari Gold

2 Shivam Corporation Shreeji Icon

3 Heaven Associate Aakshat Heaven

4 PSY Spacelink Pramuk Oasis

5 Shreeji Housing Projects Pvt. Ltd Pramuk Zion

6

Pramuk Bliss

7

Akshat Tilak

8

Tirth Residency

9 Bhanushri Realities Maruti Amrakunj

10 Omkar Infratech Swarnim Paradise

11

Akshar Villa

12

Siddhart Homes

13 Riddhi Group Yash Residency

14 Sheetal Infrastructure Pvt. Ltd Vedika Happy Valley

15 Sheetal Infrastructure Pvt. Ltd Vedika Habitat

16 Rudra Corporation Sarthak Fortune

17

Sarthak Camphore

18

Shreedhar Century

19 Shree Elvadurga Infrastructure Jainam Bungalows

20 Shree Elvadurga Infrastructure Jainam 16

21

Satva Signature

22 Silicon Infra Silicon La Vista

23 Silicon Infra Silicon Hills

24

Pramuk Corporate

25 Samrat Infrastructure Saundraya

26 Aawaass Buildcon Private Limited River Front

27 Labh Infra Private Limited Labh Residency

28 Siddheswari Infrastructure Viraj Apartment

29 Quaint Living N54

30 Pratham Developers Radhe Square

High Ended Projects Details

Sr. No.

Area Name of project Average Price Total Units Sold Approx.

Possession

1 Randesan Landmark Living 3 BHK - 52L 60 50% Sold May-17

4 BHk - 76L 12 50% sold May-17

2 Raysan Maruti Magnum 3 BHK - 40L 102 50% Sold Ready

3 Kudasan Shrifal Heights 2 BHK - 38L 145 85% Sold Aug. -16

3 BHK- 50L 69 85% Sold Aug. -17

4 Raysan Shubh 36 2 BHK - 42.4L 24 70% Sold Ready

3 BHK - 58.8L 12 70% Sold Ready

5 Vavol Om Residency 3 BHK - 60-75L 25 20% Sold Jan-17

6 Vavol Tulsi Bungalows 3 BHK - 60-75L 49 20% Sold Aug. - 19

7 Sargasan Surya Retreat 3 BHK - 75-90L 45 70% Sold Ready

8 Pethapur Aamrakunj Bungalows 4BHK - 60-85L 34 24 units sold Nov. - 16

9 Kudasan Aawaass Mango 4 BHK - 92-200L 52 32 Units sold Jan.-17

10 Kudasan Aawaass Strawberry 4 BHK - 116-200L 35 30 Units Sold Ready

11 Raysan Vinayak Life Style 2 BHK - 42L 28 9Units Sold Mar.-18

3 BHK - 58-62L 42 26 Units Sold Mar.-18

4 BHK - 78L 14 12 Units Sold Mar.-18

12 Kudasan Radhe Homes 4 BHK - 75-83L 62 50% Sold Aug. - 17

13 Kudasan Mahalaxmi Royal Palace 3 BHK - 75-80L 60 50% Sold Dec. - 17

4 BHK - 92L 5 50% Sold Dec. - 17

14 Kudasan Poornam Residency 2 BHK - 40-45L 149 50% Sold 0ct. - 16

3 BHK - 48-56L 64 50% Sold Oct. - 16

15 Kudasan Shivalaya Parisar 3 BHK - 87-95L 168 50% Sold Jul.-17

16 Sargasan Sarthak Era 2 BHK - 28-32L 50 80% Sold -

3.5 BHK - 50-56L 50 80% Sold -

4 BHK - 60-68L 50 80% Sold -

17 Swagat Agacia 100L 140 20% Sold 2019

18 Swagat Pelican 176 25% Sold 2019

Utility Projects Details

Sr. No.

Area Name of project Average Price Total Units Sold Approx.

Possession

1 Randesan Shubh Aarambh 2 & 3 BHK - 28-42L 131 60 % Sold Dec. -16

2 Shubh Paramount 172 100 % Sold Ready

3 Raysan Shubh Pioneer 2 & 3 BHK - 28-42L 102 90% Sold Ready

4 Sargasan Landmark Harmony 2 BHK - 30L 84 70% Sold Ready

3 BHK - 40L 36 70% Sold Ready

5 Kudasan Sunflower Heights 2 BHK - 32L 48 39 Sold Ready

3 BHK- 38L 48 43 Sold Ready

6 Kudasan Saral Heights 2 BHK - 33L 56 - Jan. -19

3 BHK - 42L 84 - Jan. -19

7 Randesan Satyamev Riviera 2 BHK - 24-31L 197 175 Ready

3 BHK - 40-45L 18 13 Ready

8 Pethapur Aamrakunj Heights 1 BHK - 12.5-15L 30 7 Oct. -17

9 Vavol Shreeji Homes 1 BHK - 19L 24 21 Ready

2 BHK- 35-38L 36 35 Ready

10 Vavol Sarthak Safal 2 BHK - 15-18.5L 50 30 Ready

3 BHK - 28-30L 10 6 Ready

11 Sargasan Sahjanand Homes - 2 2 BHK - 15-20L 90% Sold Oct.- 16

3 BHK - 22-26L 2 & 3 - 80 90% Sold Oct. -16

12 Sargasan 7 Seas 1 BHK - 18.5-20L 32 95% Sold Aug. 16

13 Kudasan Sopan Pratishtha 2 BHK - 18-21L 43 50% Sold Mar.-17

3 BHK - 27-30L 11 50% Sold Mar.-17

14 Vavol Shivesh 195 1 BHK - 15.6L 149 50% Sold Ready

15 Vavol Vaidehi - 2 2 BHk - 176 70% Sold Jun.-17

16 Sargasan Divya Sanskar City 2 BHK 24-32L 111 75% Sold Ready

3 BHk - 42L 18 75% Sold Ready

17 Madhuram Green 2 BHK - 30-33L 54 80% Sold Ready

3 BHK - 38-43L 16 80% Sold Ready

18 Vavol Salvik Sukan 2 BHK - 25-28L 116 90% Sold Ready

3 BHK - 35-40L 25 90% Sold Ready

19 Pethapur Dev Greens 1 BHK - 9-14.5L 12 60% Sold Oct. -16

2 BHK - 16.2L 54 60% Sold Oct. -16

20 Sargasan Surya Crystal 2 BHK - 35-41L 20 95% Sold Ready

3 BHK - 46-52L 46 95% Sold Ready

21 Sargasan Swagat Blossom 2 2BHK-25-40L 144 - 2019

22 Sargasan Swagat Blossom 3 3BHK-35-50L 140 - Ready

Upcoming Future Projects

Company Name Project Name No. of Projects Area Launching

Time(Approx.)

Vihaan Developers - 3 Within 6 months

S. R. Infracon - 1 Kudasan Within 7-8 months

Sheladia

Infrastructure - 1 Kudasan Nov. -16

Uma Projects - - - -

Dolphin Projects - 2 Raysan Dec. -16

Balaji Infrastructure Commercial Mall 1 Bhaijipura Within 2-3 months

Shree Rang

Infrastructure - 7 - Upto 2017

Shreeji Developers - 2 PDPU Road Within 3-4 months

Sarthak Infra - 1 Vavol Within 6 months

Shiv Buildcon - 1 Vavol Oct. -16

Dharmaja Corporation - 1 Vavol Oct. -16

Aakar Infra Shalvik Homes-2 1 Vavol Aug. -16

Aakar Infra Spenta 1 Vavol Oct. -16

Shubh Infrastructure Shubh Ashish 1 - Dec. -16

Shubh Infrastructure Vinayak Woodland 1 Raysan Aug. -16

List of Government Organization

Sr.

No. Name of Organization

No. of

Employees

1 Gujarat Ecology Commission 46

2 INDEXTb 80

3 GCPC 16

4 Gujarat Livelihood Promotion Co. Ltd 22

5 Bhavnagar Energy Co. Ltd. 36

6 Director of Gujarat Printing and Stationary 21

7 Gujarat Sheep & Wool development Corporation 20

8 Gujarat Informatics Limited 38

9 Gujarat Infrastructure Development Board 53

10

Gujarat Women Economic Development

Corporation 24

11 Centre for Entrepreneurship Development 33

12

Gujarat State Non-Resident Gujaraties

Foundation 11

13 Dahej SEZ Limited 16

14 Gujarat Tourism 66

15

Gujarat Rural Industrial Marketing Corporation

Ltd. 18

16 Kendriya Bhandar 13

17 Employment and Training Commission 106

18 Water Authority Board 47

19 Gujarat State Technical Exam Board 102

20 Gujarat State Agricultural Marketing Board 56

21 Gujarat Knowledge Society 27

22 Gujarat Gram Kamdar Kalyan Board 16

23 Gujarat Scheduked Caste Development Corporation 24

24

Gujarat Backward Class Development

Corporation 19

25 Gujarat Minorities Finance & Development Corporation 32

26 Gujarat Safai Kamdar Development Corporation 29

27

Gujarat Gopalak Development Corporation

Limited 17

28 Bachar Swami Atipachhat Jati Vikas Board 26

29

System Application of Technology for HR

Improvement 38

30 Sardar Sarovar Narmada Nigam Limited 122

List of Educational Institution

Sr. No Educational Institutions

No. of

Employees

1 A. A. Patel Commerce College 21

2 Bholabhai Patel College of Business

Administration 28

3 Bholabhai Patel College of Computer Studies 36

4 DA-IICT 115

5 Government Polytechnic, Gandhinagar 39

6 K. B. Institute of Pharmaceutical Education & Research 35

7 National Institute of Co-operative Management 45

8 S. K. Patel Institute of Management & Computer Studies 43

9 Samarpan Arts & Commerce College 26

10 Shardben Shantibhai Patel College of Education 27

11 Uma Arts & Nathiba Commerce Mahila College 32

12 PDPU 190

13 GIDM 47

14 Institute of Hotel Management 28

15 Chaudhari Technical Institute 41