PROJECT REPORT
at
ICICI Bank
BY
JAISON VINOD M V
1NH20BA062
Submitted to
DEPARTMENT OF MANAGEMENT STUDIES
NEW HORIZON COLLEGE OF ENGINEERING,
OUTER RING ROAD, MARATHALLI,
BENGALURU
In partial fulfilment of the requirements for the award of the degree of
MASTER OF BUSINESS ADMINISTRATION
Under the guidance of
PROF. SHESHU A
ASSOCIATE PROFESSOR
2020 - 22
1
DEPARTMENT OF MANAGEMENT STUDIES
CERTIFICATE
This is to certify that (Jaison Vinod M V ) bearing (USN 1NH20BA062) (2020-22 batch), is a bonafide
student of Master of Business Administration, New Horizon College of Engineering, Bengaluru
affiliated to Visvesvaraya Technological University, Belagavi.
Project report on ( Study on Home Loans Of ICICI Bank) is prepared by him/her under the guidance
of ( Sheshu A ), in partial fulfillment of the requirements for the award of the degree of Master of
Business Administration of Visveswaraya Technological University, Belagavi, Karnataka.
Signature of Internal Guide
Signature of HOD
Name of the Examiners with affiliation:
Signatures with date
1. External Examiner
2. Internal Examiner
2
Principal
DECLARATION
I, JAISON VINOD M V, hereby declare that The project report at “ICICI BANK LIMITED prepared by me
under the guidance of PROF SHESHU A, faculty of M.B.A Department, New Horizon College of
Engineering.
I also declare that this project report is towards the partial fulfilment of the university regulations for the
award of the degree of Master of Business Administration by Visvesvaraya Technological University,
Belgaum.
I have undergone an industry project for a period of eight weeks. I further declare that this report is based on
the original study undertaken by me and has not been submitted for the award of a degree/diploma from any
other University / Institution.
Signature of Student
Place:
Date:
4
5
ACKNOWLEDGEMENT
The successful completion of the project would not have been possible without the guidance
and support of many people. I express my sincere gratitude to Mr. Sharath, Accounts head,
ICICI BANK LIMITED BENGALURU, for allowing to do my project at ICICI BANK
LIMITED.
I thank the staff of ICICI BANK LIMITED, Bengaluru for their support and guidance and
helping me in completion of the report.
I am thankful to my internal guide Prof. Sheshu A, for his constant support and inspiration
throughout the project and invaluable suggestions, guidance and also for providing valuable
information.
Finally, I express my gratitude towards my parents and family for their continuous support
during the study.
STUDENT NAME: JAISON VINOD M V
USN NO.1NH20BA062
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TABLE OF CONTENTS
SL.
CONTENTS
NUMBER
1
PAGE
NUMBERS
Executive summary
4
Chapter 1- Theoretical Background of The Study
5
2
3
Chapter 2- Industry Profile & Company
8
Profile
4
Chapter 3- Research Methodology
5
Chapter 4- Data Analysis and Interpretation
6
Chapter 5 - Summary of Findings, Suggestion
45
48
51
and Conclusion
7
Bibliography
64
8
Annexure
65
2
Executive Summary
Against the milieu of rapid urbanization and a changing socio-economic scenario, the demand
for housing has grown explosively. The importance of the housing sector in the economy can
be illustrated by a few key statistics. According to the National Building Organization (NBO),
the total demand for housing is estimated at 2 million units per year and the total housing
shortfall is estimated to be 19.4 million units, of which 12.76 million units is from rural areas
and 6.64 million units from urban areas. The housing industry is the second largest employment
generator in the country. It is estimated that the budgeted 2 million units would lead to the
creation of an additional 10 million man years of direct employment and another 15 million
man-years of indirect employment.
The project was undertaken to analyze the concept of “Home Loans in ICICI Bank” in meeting
the objectives and to adopt the best practices.
The research methodology used to comprehend the objectives which involve actual collection
of the data through both primary and secondary sources. In order to procure the data,
questionnaire was designed and was shared to the respondents and was requested to give the
feedback. The sample size of the research is 40 respondents. After receiving the responses from
the respondents, analysis and interpretations was done. At the end, adaptable recommendations
and suggestions based on the findings of the study are given. The entire project report is
presented in the form of a report using a chapter wise scheme developed logically and
sequentially.
The results show that ICICI Bank is very particular about their Home Loans offered majority
of the Customers are quite satisfied with the Products and Services of ICICI Bank. Overall, it
can be said that the ICICI Bank are laying strong and powerful role than any other banks in
areas.
3
INTRODUCTION
The Indian Banking System
The banking system in India is significantly different from that of other nations because of
country’s unique geographical, social and economic versatile characteristics. India has a large
population and vast land size, a diverse culture and extreme disparities in income, which are
marked among its regions. There are high levels of illiteracy among a large percentage of its
population but, at the same time, the country has a large reservoir of managerial and
technologically advanced talents. Between 30 and 35 percent of the population reside in metro
and urban cities and the rest i.e.70 to 65 percent is spread in vast semi-urban and rural
geographical area.
The country’s economic policy framework combines socialistic and capitalistic features with
heavy bias towards public sector investment. India has followed the path of growth-led exports
rather than export led growth the path which has been opted by many other developing
countries. These features are reflected on the structure, size and diversity of the country’s
financial and banking sector. The banking system has had to serve the goals of economic
policies implemented by the government in the form of five year development plans, these
plans are mostly concerned with equal distribution of income, literacy, elimination of
unemployment and private sector monopolies in trade and industry.
In order for the banking industry to serve as an instrument of state policy, it was subjected to
various nationalization schemes in different phases (1955, 1969 and 1980). As a result, banking
remained internationally isolated because of pre-occupations with domestic priorities,
especially massive branch expansion and attracting more people to the banking system.
Bank accepting the payments from the public & lending the loans to the public, without a
complete and successful saving cash system in India it can't have a strong economy. The
supervision a record course of action of India should be sans trouble alongside it should have
the ability to meet new challenges posed by the advancement and some other outside and
internal segments. As far back as three decades India's supervision a record structure has a
couple of exceptional achievements amazingly. The greatest remarkable is its expansive
compass. This one is not any more kept to simply subjects in India. Frankly, Indian keeping
cash structure has come level to the remote corners of the country. This is one of the essential
4
reasons of India's advancement process. The organization's general game plan for Indian banks
taking after 1969 has financed benefits with the nationalization of fourteen banks in India.
Chapter 1
Theoretical Background of the Study
Home Loan is an important service rendered by the Bank to its customers. Means each and
every bank grants of Home Loan to its customer for the determination of meeting their needs
and wants. Home Loan plays a vital part in earning and net profit of the bank.
Granting of Home Loan is an important function of all the banks. Such Home Loan are given
to the customers & to business communities at a greater amount of interest. The banks are
charging the amount of interest depend on the loan amount received from the bank & the period
of loan or based on maturity period. Banks receiving interest on loans, and through this process
banks are gaining income.
Now a day’s loan is playing crucial role to the people. It means for doing everything need
money, for example for doing business need huge money and middle level people cannot
arrange huge money within span of time at that time they apply for the loan in any bank and
they can do business. Loan taken for more than one year, such kind of loans called as Term
loan. And if loan is given for period from one year to five years, it is called as medium-term
loan. Long term loans means loans taken for more than five years, such kind of loans called as
long term loans.
Meaning of Loan:A credit is taken into account a specific timeframe. Overall business banks give transient
advances. Regardless, term credits, i.e., progresses for over a year may in like manner be
permitted. The borrower may be given the entire aggregate in solitary sum or in partitions.
Credits are the most extreme part surrendered against the security of particular assets. A
progress is regularly repaid in parcels. In any case, it may in like manner be repaid in solitary
sum.
Types of loans:-
1) HOME LOAN
House purchase loan
Home construction loan
Land purchase loan
5
Home extension loan
2) Personal loan
3) Vehicle/car loan
4) Business loan
5) Gold loan
Procedure for issuing housing loan:
→ Validation of information
→ Issue of Sanction letter
→ Submission of Documents
→ Validation of property
→ Validation of property
→ Payment procedure
Principles a banker should follow before granting Home Loans
1. Liquidity: Liquidity is the important principle a banker must follow before giving way Home Loan.
Liquidity means ready convertibility of advances into the cash for the persistence of meet
the customers demand across the counter. Before granting loans banker should bear in mind
that easily exchangeable into cash without loss. So, banker should make loan only for short
term nature.
2. Profitability:Profitability is the key intention off all the business. In banking part also the main intention
of lending Home Loan is to make some profit on Home Loan, Banks earning the profit
through interest rates on Home Loan. So, banker should follow this principle before
granting Home Loan.
3. Safety:Banker must consider about the safety while lending Home Loan to customers. Safety is
also an important principle for lending Home Loan because some of the customer will not
refund the loans. So, banks should give loans to people who will repay the loan honestly.
4. Object/Purpose: The purpose mentioned for granting advances is ensuring the settlement of the Home Loan.
Bank should know for what purpose the customer is pleasing loan because if he advances
6
for unproductively purposes like consumer credit, speculation etc. in this situation the
customer cannot repay the loans.
5. Yield: In simple term yield is nothing but return. Before granting the Home Loan the banks must
consider about the returns on loans. It is an important principle that banks should follow
before giving way Home Loan. Yield from the safety can be utilized in settlement of the
interest and the due principle from the customer.
6. Security: Another important principle should follow while lending Home Loan is security. When the
banker advances without security, he will run the rise of losing the money. The banker
should lend Home Loan to the customer with tangible security. If not banker will be in
trouble that customer will delay for repayment.
7. Validity of Time: For lending Home Loan also validity time is important because the banker need sure that
the customer had effective label to the tangible security offered against the bank advance.
8. Capital resources of the borrower: Capital resources of the borrower are the important principle that banker must survey before
allowing Home Loan. Credit worth of the mortgagor is important factor to be considered
before granting/lending Home Loan because capital denotes the financial situation of the
customer.
9. Sources of repayment: Banker should verify the sources of the customer for the persistence of repayment because
customer should refund the loan aggregate to the banks. It is an important principle that
banker must monitor before lending Home Loan. Customer should have some sources for
repayment, than only banks lend loans to customers.
10. Documentation: Before granting the loans the banks should take the security against Home Loan. Without
security like property documents etc. the banks must not provide loans because if the
customer couldn’t repay loans means the banker can sell that property and take money
back. So, banker should also see that all the necessary forms are submitted or not.
7
Chapter 2
Industry Profile & Company Profile
Banking
Bank accepting the payments from the public & lending the loans to the public, without a
complete and successful saving cash system in India it can't have a strong economy. The
supervision a record course of action of India should be sans trouble alongside it should have
the ability to meet new challenges posed by the advancement and some other outside and
internal segments. As far back as three decades India's supervision a record structure has a
couple of exceptional achievements amazingly. The greatest remarkable is its expansive
compass. This one is not any more kept to simply subjects in India. Frankly, Indian keeping
cash structure has come level to the remote corners of the country. This is one of the essential
reasons of India's advancement process. The organization's general game plan for Indian banks
taking after 1969 has financed benefits with the nationalization of fourteen banks in India.
In the no so far earlier, a record holder expected to sit tight for sensibly a long time in the bank
counters for recovering a draft or for pulling his own specific money. These days, he takes
choice .When greatest effective bank exchanged money from one bank to another within two
days.
Evolution of the Indian Banking Industry
The Indian Banking Industry has its foundation in the 18th century and has had a varied
evolutionary experience since then. The initial banking in India were primarily traders’ banks
engaged only in financing activities. Banking industry in the pre-independence era developed
with the Presidency bank, which were transformed into Imperial Bank of India and
subsequently into the State Bank of India. The initial days of the industry saw a majority private
ownership and a highly volatile work environment. Major strides towards public ownership
and accountability were made with nationalization in 1969 and 1980 which transformed the
face of banking in India. The industry in recent times has recognized the importance of private
and foreign players in a competitive scenario and has moved towards great liberalization.
The primary bank in India, however moderate, was built up in 1786. From 1786 till today, the
adventure of Indian banking system can be divided into three distinctive stages.
Stage I
8
In 1786, the General Bank of India was built up in India and after that Bank of Hindustan and
bank of Bengal was set up in India. East India Company set up Bank of Bengal in 1809 and
Bank of Bombay in 1840 and Madras bank in 1843 as free units and called it Presidency Banks.
These banks were participated in 1920 and Imperial Bank stayed set up. Which began as private
banks, generally Europeans investors? In1865 Allahabad Bank remained created and most
reliable time only
➢ PHASE 1 PRENATIONALIZATION PHASE
➢ PHASE 2 ERA OF NATIONALISATION AND CONSOLIDATION
➢ PHASE 3 INTRODUCTIONS OF INDIANFINANCIAL AND BANKING SECTOR
REFORMS AND PARTIAL LIBERALISATION
➢ PHASE 4 PERIOD OF LIBERALISATION AND GLOBALISATION
By methods for Indians, Punjab National Bank Ltd. stayed set up in 1894 with home office at
Lahore. Some place around 1906 and 1913, Bank of India, Bank of Baroda, Canara Bank and
so forth was built up. RBI began in 1935.
Amid the important stage the change was immediate and banks likewise experienced
unpredictable disillusionments some place around 1913 and 1948. There were around 1100
banks all things considered slight. To streamline the working and exercises of business banks,
the Government of India thought of The Banking Act, 1949. Spare Bank of India stayed
relegated with expansive administrations for the rule of sparing cash in India as the Central
Banking Power.
Amid those day's open has lesser trust in banks. As a repercussions store plan was direct. One
beside the other of it store holds bank office gave by the Postal office was for the most part
more secure. Also, bolsters were, everything considered and given to merchants.
Stage II
Government ventured in this Indian Banking Division Change after opportunity. In 1955 it
national Imperial Bank of India through expansive sparing cash workplaces on a tremendous
scale especially in nation and semi-urban reaches. It formed State Bank of India go about as
the central administrators of RBI and to deal with sparing cash trades of the Union and State
Governments wherever all through the country. Seven banks molding helper of State Bank of
India remained nationalized in 1960 on nineteenth July, 1969, methodology of
nationalization3was finished. It was the effort of than Prime Minister of India Mrs. Indira
Gandhi. Fourteen business banks in country were nationalized.
Second time nationalization of Indian Banking Division was changed in 1980 with 7 more
9
banks. This walk brought about 80% of the sparing cash segment in India under the
Government ownership.
The going with the steps involved by means of Indian government to Regulate Banking
Institutions within Country In 1949 managing an account direction act authorized, and 1961:
Insurance spread contacted stores and nationalized of fourteen banks in 1969, finally in 1980
nationalized of 7 noteworthy saves money with stores in excess of 200crores.
Stage III
This stage has shown different more things and work environments in the dealing with a record
zone in its movements measure. In 1991in the chairmanship of M Narasimham a main leading
body of trustees stayed settled by his name which worked for the progression of dealing with
records. The nation is flooded with remote banks and their ATM stations. Tries are being put
to give a charming association to clients. Telephone sparing money and net sparing money is
shown. The entire structure ended up being more favorable and snappy. Time is set additional
centrality than money.
The cash related action of India demonstrated a huge amount of value. It is shielded from any
emergency incited by any outside macroeconomics stun as other East Asian Countries drove
forward. This is because of an adaptable change scale association, the remote stores are high,
the capital record isn't yet absolutely convertible, and banks and their clients have constrained
outside trade.
Stage IV
Regional Rural Banks (RRBs) are Indian Scheduled Commercial Banks (Government Banks)
operating at regional level in different States of India. They have been created with a view of
serving primarily the rural areas of India with basic banking and financial services. However,
RRBs may have branches set up for urban operations and their area of operation may include
urban areas too.
The area of operation of RRBs is limited to the area as notified by Government of India
covering one or more districts in the State. RRBs also perform a variety of different functions.
RRBs perform various functions in following heads:
o Providing banking facilities to rural and semi-urban areas.
o Carrying out government operations like disbursement of wages of MGNREGA
workers, distribution of pensions etc.
o Providing Para-Banking facilities like locker facilities, debit and credit cards,
mobile banking, internet banking, UPI etc.
o Small financial banks.
10
Types of Banks in India
Different sorts of banks which work in our nation to meet the monetary necessities of various
classes of individuals occupied with agribusiness, business, calling and so forth. On the premise
of capacities, the managing an account foundations in India might be isolated into the
accompanying sorts.
1. Central Bank:
A bank which depended with the elements of directing and controlling the keeping money
arrangement of a nation is known as its Central bank. Such a bank does not manage the overall
population. It acts basically as Government's broker; keep up store records of every single other
bank and advances cash to different banks, when required. The Central Bank gives direction to
different banks at whatever point they confront any issue. It is laterally these positions known
as the banker's bank. The RBI is the national bank of our nation.
2. Commercial Banks:
Commercial banks mean it accepts the payments from customers& lending advances toward
the people. It is called as commercial banks. Commercial banks giving short-term loans and
also long-term loans to customer for the determination of doing business. Under commercial
bank 3 categories of banks are there. They are,
▪
Public sector banks:-Public sector banks is well-ordered by government of India or
RBI. There are 27 public sector banks exist there in overall India. In that 21 nationalized
banks & remaining 6 banks are SBI banks and its associate.
▪
Private sector banks: Private sector banks is well-ordered by the private individuals.
▪
Foreign banks:-Foreign banks are the banks which is having headquarters in foreign
countries and operating their branches in different countries. Those kinds of banks
called as foreign banks. Some of foreign banks are working in India and that is Hong
Kong & Shanghai Banking corporations (HSBC), City Banks, American express banks
etc.
3.
Co-operative Banks: -
Cooperative banks an important type. When a Cooperative society connects with itself in
handling an account business it is identified as a Cooperative Bank. The common public needs
to acquire a permit from the RBI before beginning saving money business. There are 3
categories of Cooperative banks remain there. They are
→ Primary credit society
→ Central Cooperative banks
11
→ State Cooperative banks
→
4. Development Banks: For doing business machineries, equipment’s and technology is very important and for
purchasing these items money is also an important. Without money people can’t do business
and can’t buy the equipment’s. And the development banks are giving long-term and shortterm loans for purchasing the machineries or for expansion of their business. Examples of the
development banks are Industrial Finance Corporation of India (IFCI), State Financial
Corporation’s (SFCs).
5. Specialized banks: Specialized banks are also an important type of banks. Specialized banks supports for the
people for the determination of set up of business in a particular field of activity. The examples
of the specialized banks are, EXIM banks (Export Import bank of India), SIDBI (Small
Industrial Development Bank of India), NABARD (National Bank for Agriculture and Rural
Development).
12
Structure of Indian banking system
RBI
Scheduled Banks
Commerical
Banks
Public Sector
Banks
Private Sector
Banks
Unscheduled
Banks
Co-operative
Banks
Foreign Sector
Banks
Regional Rural
Banks
SBI and
Associated
Banks
Other
Nationalized
Banks
Other Public Sector
Banks
Present scenario of banking sector
The banking sector in India has always been one of the most preferred avenues of
employment. In the current decade, this has emerged as a resurgent sector in Indian
economy. As per the McKinsey report ‘India Banking 2010’, the banking sector index
has grown at a compounded rate of over 51 % since the year 2001, as compared to a
27% growth in the market index during the same period. Today, banks have diversified
13
their activities and are getting into new products and services that include opportunities
in credit cards, consumer finance, wealth management, life and general insurance,
private equity.etc. Further most of the leading Indian banks are going global, setting up
offices in foreign countries, by themselves or through their subsidiaries.
Role of Information Technology (IT) in the Banking Sector
Banking environment has become highly competitive today. To be able to survive and
grow in the changing market environment banks are going for the latest technologies,
which is being perceived as an ‘enabling resources’ that can help in developing fast and
flexible structure that can respond to quickly to the dynamics of a fast changing market
scenario. Information Technology enables sophisticated product development, better
market infrastructure, implementation of reliable techniques for control of risks and
helps the financial intermediaries to reach geographically distant and 19 diversified
markets. Internet has significantly as an important medium for delivery of banking
products and services. Many banks have modernized their services with the facilities of
computer and electronic equipment’s. The electronic revolution has made it possible to
provide ease and flexibility in banking operations to the benefits of the customer. The
ebanking has made the customer say good-bye to huge account registers and large paper
bank account. The e-banks, which may call as easy bank offers the following services
to its customers:
❖ Credit/Debit Cards
❖ ATM
❖ E-Cheques
❖ EFT (Electronic Fund Transfer)
❖ DEMAT account
❖ Mobile banking
❖ Telephone banking
❖ Internet banking
❖ EDI (Electronic Data Interchange)
14
Company Profile
ICICI Bank started as a wholly owned subsidiary of ICICI Limited, an Indian financial
institution, in 1994. Four years later, when the company offered ICICI Bank's shares to the
public, ICICI's shareholding was reduced to 46%. In the year 2000, ICICI Bank offered made
an equity offering in the form of ADRs on the New York Stock Exchange (NYSE), thereby
becoming the first Indian company and the first bank or financial institution from non-Japan
Asia to be listed on the NYSE. In the next year, it acquired the Bank of Madura Limited in an
all-stock amalgamation. Later in the year and the next fiscal year, the bank made secondary
market sales to institutional investors.
With a change in the corporate structure and the budding competition in the Indian Banking
industry, the management of both ICICI and ICICI Bank were of the opinion that a merger
between the two entities would prove to be an essential step. It was in 2001 that the Boards of
Directors of ICICI and ICICI Bank sanctioned the amalgamation of ICICI and two of its
wholly-owned retail finance subsidiaries, ICICI Personal Financial Services Limited and ICICI
Capital Services Limited, with ICICI Bank. In the following year, the merger was approved by
its shareholders, the High Court of Gujarat at Ahmedabad as well as the High Court of
Judicature at Mumbai and the Reserve Bank of India.
Present Scenario
ICICI Bank has its equity shares listed in India on Bombay Stock Exchange and the National
Stock Exchange of India Limited. Overseas, its American Depositary Receipts (ADRs) are
listed on the New York Stock Exchange (NYSE). As of December 31, 2008, ICICI is India's
second-largest bank, boasting an asset value of Rs. 3,744.10 billion and profit after tax Rs.
30.14 billion, for the nine months, that ended on December 31, 2008.
Branches & ATMs
ICICI Bank has a wide network both in Indian and abroad. In India alone, the bank has 1,420
branches and about 4,644 ATMs. Talking about foreign countries, ICICI Bank has made its
presence felt in 18 countries - United States, Singapore, Bahrain, and Hong Kong, Sri Lanka,
Qatar and Dubai International Finance Centre and representative offices in United Arab
Emirates, China, South Africa, Bangladesh, Thailand, Malaysia and Indonesia. The Bank
15
proudly holds its subsidiaries in the United Kingdom, Russia and Canada out of which, the UK
subsidiary has established branches in Belgium and Germany.
Products & Services
Personal Banking
•
Deposits
•
Loans
•
Cards
•
Investments
•
Insurance
•
Demat Services
•
Wealth Management
NRI Banking
•
Money Transfer
•
Bank Accounts
•
Investments
•
Property Solutions
•
Insurance
•
Loans
Business Banking
•
Corporate Net Banking
•
Cash Management
•
Trade Services
•
FXOnline
•
SME Services
•
Online Taxes
•
Custodial Services
16
Corporate Profile of ICICI BANK:
ICICI Bank is India's second-largest bank with total assets of Rs. 3,562.28 billion (US$ 77
billion) at December 31, 2009 and profit after tax Rs. 30.19 billion (US$ 648.8 million) for the
nine months ended December 31, 2009. The Bank has a network of 1,723 branches and about
4,883 ATMs in India and presence in 18 countries. ICICI Bank offers a wide range of banking
products and financial services to corporate and retail customers through a variety of delivery
channels and through its specialised subsidiaries and affiliates in the areas of investment
banking, life and non-life insurance, venture capital and asset management. The Bank currently
has subsidiaries in the United Kingdom, Russia and Canada, branches in United States,
Singapore, Bahrain, Hong Kong, Sri Lanka, Qatar and Dubai International Finance Centre and
representative offices in United Arab Emirates, China, South Africa, Bangladesh, Thailand,
Malaysia and Indonesia. Our UK subsidiary has established branches in Belgium and Germany.
ICICI Bank's equity shares are listed in India on Bombay Stock Exchange and the National
Stock Exchange of India Limited and its American Depositary Receipts (ADRs) are listed on
the New York Stock Exchange (NYSE).
Business Continuity Management (BCM)
ICICI Bank (the Bank) is committed to safeguard the interests of its customers, employees and
stakeholders in the event of a disaster or significant disruption that may affect its operations
and premises.
The Bank has developed a plan for Business Continuity Management. The plan is designed to
facilitate the continuity of the critical business processes in the event of defined disaster
scenarios. The scenarios address city wide (wide-area) disruptions too.
The Bank has adopted a three pronged approach while developing the BCM as given below:
●
Group specific plans for continuity of business and operations
●
Disaster recovery plans for recovery of information technology systems, data
backup and networks
●
Emergency response procedures addressing the risks of injuries to customers
/employees and damage to the Bank's assets
17
The plan is in line with the guidelines issued by the Reserve Bank of India (RBI) in this regard
and is subject to regular review.
Management of ICICI Bank
Name
Designation
K V Kamath
Non Executive Chairman
L N Mittal
Director
Anupam Puri
Director
P M Sinha
Director
V Prem Watsa
Director
Sonjoy Chatterjee
Executive Director
M S Ramachandran
Non Executive Director
K Ramkumar
Executive Director
V Sridar
Non Executive Director
Sridar lyengar
Director
Narendra Murkumbi
Director
M K Sharma
Director
Marti G Subrahmanyam
Director
Chanda D Kochhar
Managing Director & CEO
Sandeep Bakhshi
Deputy Managing Director
N S Kannan
Executive Director & CFO
Homi R Khusrokhan
Non Executive Director
18
BOARD COMMITTEE
Audit Committee
Board Governance Remuneration &
Nomination Committee
Mr. Sridar Iyengar, Chairman
Mr. M. K. Sharma, Chairman
Mr. M. K. Sharma, Alternate Chairman
Mr. K. V. Kamath
Mr. Narendra Murkumbi
Mr. Anupam Puri
Mr. V. Sridar
Prof. Marti G. Subrahmanyam
Corporate Social Responsibility
Customer Service Committee
Committee
Mr.M.K. Sharma, Chairman
Mr. K. V. Kamath, Chairman
Dr. Anup K. Pujari
Mr. Narendra Murkumbi
Ms. Chanda D. Kochhar
Dr. Anup K. Pujari
Mr. M. S. Ramachandran
Mr. M.K. Sharma
Ms. Chanda D. Kochhar
Credit Committee
Fraud Monitoring Committee
Mr. K. V. Kamath, Chairman
Mr. M. K. Sharma, Chairman
Mr. Narendra Murkumbi
Mr. K. V. Kamath
Mr. M. S. Ramachandran Mr. M .K.
Mr. Narendra Murkumbi
Sharma
Ms. Chanda D. Kochhar
Ms. Chanda D. Kochhar
Risk Committee
Mr. Sandeep Bakhshi
Share Transfer & Shareholders'/
Investors' Grievance Committee
Mr. K. V. Kamath, Chairman
Mr. M. K. Sharma, Chairman
Mr. Sridar Iyengar
Mr. Narendra Murkumbi
Dr. Anup K. Pujari
Mr. N. S. Kannan
Prof. Marti G. Subrahmanyam
19
Mr. V. Prem Watsa
Ms. Chanda D. Kochhar
Committee of Executive Directors
Ms. Chanda D. Kochhar, Chairperson
Mr. Sandeep Bakhshi
Mr. N. S. Kannan
Mr. K. Ramkumar
Mr. Sonjoy Chatterjee
HOME LOAN SCHEME AND ITS EXTENSIONS
A home loan scheme is generally offered to the person to accommodate finance for purchasing
the house or for renovation or extension of the existing house.
The various extensive schemes, which are included in the home loan portfolio, are:
Home Purchase Loan:
This is the basic home loan for the purchase of a new home.
Home Improvement Loans:
These loans are given for implementing repair works and renovations in a home that has already
been purchased by you.
Home Construction Loan:
This loan is available for the construction of a new home.
Home Extension Loan:
This is given for expanding or extending an existing home.
For eg: addition of an extra room etc.
Home Conversion Loan:
This is available for those who have financed the present home with a home loan and wish to
purchase and move to another home for with some extra funds are required. Through home
conversion loan, the existing loan is transferred to the new home including the extra amount
required, eliminating the need of pre-payment of the previous loan.
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ICICI offers:
•
Attractive loan interest rates.
•
Home Loan amounts starting from Rs.2 lacks and ends up to 20lakhs.
•
Tern loans up to 20 years.
•
Free personal Accident Insurance (Terms & Conditions).
•
Insurance options for your home loan at attractive premium.
•
Special 100% funding for select properties.
ELIGIBILITY CRITERIA FOR HOME LOANS
How much can you borrow?
Griha Home Loans range from Rs.1lakh to Rs. 50lakhs. Your repayment period can vary from
1 year to 20 years depending upon your capacity to repay.
Eligibility:
Age: - Min: You should be at least 21 years of age.
Max: At the time of loan maturity, you should not exceed 65 years or your
retirement age, whichever is earlier.
Individuals:
You should have completed a minimum of 2 years of service (with a minimum of 1 year in the
current job)
Businesspersons/Self-employed professionals:
You must have an established business or professional practice of not less than 3 years, with a
positive net worth and must have posted a net profit for the last 2 years.
Note: Minimum net take home salary of Rs. 6000/- p.m. for salaried employees or annual
income of not less than Rs. 1.20lakh for businesspersons/ self-employed professionals.
(Spouse/co-applicant’s income can be included in the income computation).
1. Individuals who are salaried or self-employed, professionals, businessmen are eligible.
Proprietary concerns, HUF, partnership firms or limited companies are not eligible for this
loan, where partners at their individual capacity are free to avail this loan.
2. As a customer to enhance the loan eligibility, all HFIs lay down conditions to who be co
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applicants, al co owners to the property should necessarily be co-applicant. Income of the co
owners can be clubbed together to get higher loan eligibility. Minors are not eligible to become
co owners, as also friend and relative’s only blood relatives are eligible to take a property
jointly.
Some of the acceptable relationships where loan clubbing is possible:
Income clubbing of co – applicants
Combinations
Income clubbing
Husband – wife
YES
parent – Son
YES (if only son)
Parent – Daughter
YES (If only child)
Brother- Brother
YES (if currently staying together and
intend staying together in the new property)
Brother – Sister
NO
Sister – Sister
NO
Parent – Minor child
Not eligible for loan
3. The minimum age for the applicant and the co applicant to become eligible for the
commencement of loan is 23 years, and co applicant can be of 18 years of age if their
income is not clubbed to calculate the loan eligibility.
4. The maximum age at the time of loan maturity for applicant or co-applicant is 60 years
or the retirement age whichever is earlier.
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DOCUMENTS INVOLVED IN EVALUATION OF HOME LOAN:
The documentation requirement for various categories of applicants depends on their status.
For this purpose all HFIs segregate their employees in different categories. They are:
•
Salaried
•
Professional or Businessman
The criteria of evaluation changes according to their status. The general documents, which
remain same for all the categories, are as follows:
1. Proof of age
Any one of the following is considered for proof of age, they are:
•
Passport
•
Voter’s ID card
•
PAN card
•
Ration card
•
Employer’s identity card
•
School leaving Certificate
•
Birth Certificate
2. Copy of bank statements for the last six months:
Bank statement for the last six months of all operating and salary accounts. Bank
statements for the last six months of all current accounts, if self-employed. Any other
photocopies of investments held, if required by the HFIs
3. Copy of latest credit card statement.
4. Passport size photograph
5. Signature verification by your bankers.
6. Proof of residence:
•
Ration Card
•
PAN Card
•
Passport
•
Rent agreement if any, if you are currently staying on rent.
•
Allotment letter from your company if you are residing in company Quarters.
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The documents required to be provided by the salaried class are as follows:
•
Salary slips for the last one month.
•
Appointment letter
•
Salary certificate
•
Retainer ship agreement, if appointed as consultant.
•
From-16 issued by the employer in your name.
Proof of Employment:
The proof of employment is verified by the
•
Identity card issued by the employer
•
Visiting card.
Employer’s details (in case of private limited companies):
The employer’s details are to be provided in addition to the above documents for
documents for a private sector employee, they are:
•
Name of promoters / Directors
•
Background of promoters / Directors
•
Number of employees
•
List of branches / factories
•
List of clients / Customers
•
Turnover of your employer
•
Annual reports of your employer for the last two to three years.
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Criteria chosen by ICICI Bank for categorizing the various employees:
Employment
Minimum period of service (in
Category
years)
Norm
Total
Current
Employment
(Confirmed service)
Govt. Sector
Any Organization
2
1
(Central/State)
Public sector
Should profit making
Undertaking
and not in the negative
(or)
list
2
1
Quasi Govt.
The documents required to be submitted by the businessmen as follows:
a.
Last three years Profit & Loss Account Statement duly attested by a Charted
Accountant
b.
Last three years Balance Sheets duly attested by a Chartered Accountant
c.
Last three years Income Tax Returns duly filed and certified by Income Tax
authorities
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Proof of Investments:
1. Bank statements for the last six months of all current accounts.
2. Any other photocopies of investments held, as required by the HFI.
The above are the various documents required by the businessman in addition to the documents,
which are common to the entire category.
The businessman is also judged on the basis of the business conducted by him, if his Business
profile is in the negative list, he will be thoroughly considered for his credibility before
dispersing loan, the organization and property location should not be in the negative list.
These are the additional documents which are required to be looked at before going on for
completing the pre sanction formalities with respect to dispersing of the home loans to the
business class.
THE PARAMETERS INVOLVED IN HOUSING LOAN EVALUATION
There are a number of parameters on which the housing loans are built:
They are:
1. TENURE
The tenure of the home loan refers to the time limit for a customer to repay the loan
Generally, the maximum tenure of home loans is 20 years, with a few lenders offering tenure
of 20 years or more (ICICI has recently launched a 30 years loan). The longer the tenure, more
a customer pays in total interest, but monthly payments will be less.
So depending on the earning potential and bank balance of the customer, an appropriate can be
chose. An important requirement of most banks/ HFIs is that they pay up the entire loan before
you retire. The customer can always prepay the entire loan amount before it is due.
As long as the tenure goes up a customer pays more interest which is up to 0.25 – 0.5%,
generally above the home loan rates.
2. AMOUNT PAID BY THE FINANCER/ MARGIN REQUIREMENTS
The financer does not pay the entire amount of the loan, they request the customer to maintain
margin, most banks go in for an 85% funding of the property value including the stamp duty
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and charges, and it however varies among various banks.
This is also treated as the margin money or own contribution required to be put by the
prospective loan seeker as the contribution towards the purchase of the house. Most HFIs
believe the amount paid is upfront before they release any disbursement.
As a rule of thumb, depending upon the HFC, the prospective loan seeker has to cough up 15%
- 20% of the loan amount as a down payment. For smaller amounts, this may not be much. But
for figures running into lacks, this could make loads of difference.
For example: An apartment costing Rs. 10lacss may get 85 per cent financing. So, customer
has to arrange for the remaining Rs 1.5lacs.
Some banks however make way for the payment for 90% of financing and about 100%
financing for some new projects, however they are subjected to a large number of factors and
constrains.
3. INTEREST RATES
Without doubt the most important parameter to factor into home loan calculations. The interest
rates may vary from institutions to institutions and generally range from about 7.25% - 7.75%
to around 9% Repayment is in the form of EMIs (Equated Monthly installments). The longer
the tenure, the more you pay in interest, but your monthly payment will be less.
The two kinds of interest rates available to a customer are:
•
Fixed interest rates
•
Floating interest rates
Fixed interest rates remain fixed over the tenure of the loan.
Floating interest rates are affected by the rates in the market, they fluctuate according to the
rates issued or changed by the RBI from time to time.
The finance minister’s diktat on home loans does not hold for private banks. India’s largest
home loan provider and second largest bank — ICICI Bank —on Tuesday hiked its home loan
by 1%. The bank has also increased its deposit rates.
As per the new rate structure, customer will have to pay 10.5% on the home loans with a
floating rate, while the fixed home loan will now invite an interest of 12.5%. With this increase,
the monthly installment on an Rs.1lakh loan for 20 years goes up by Rs70.
Some public sector banks do so only once in 12 months while some private sector lenders do
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it as frequently as a quarter. Though the current interest rate quote maybe lower, over the life
of the loan, a customer will be able saved more in the case of a lender who resets your floating
rate more frequently.
The investors are also given the option of changing their option from fixed rate loan to a
floating rate loan, of course by paying a penalty.
4. MISCELLANEOUS CHARGES:
All banks charge certain amount of processing fee which cannot be ignored, it should
be understood that along with monthly payments, the customer should also ensure that he has
to pay these charges, so he should careful in choosing his HFC.
Miscellaneous charges generally range around 2.5% to 3%.
A 1% administration fee and 0.8% processing fee on, say RS. 5, 00,000 loan, would
amount to RS 10.000. Other times, it could be just one fee (either administration or processing)
but could yet work out to be much more if it is considerably higher at, say, 2.5 per cent or 3
per cent. The various other fees, which you are required to be paid along with the margin
amount, are:
a) Processing fee:
It’s a fee payable to the lender on applying for a loan. It is either a fixed amount not
linked to the loan or may also be a percentage of the loan amount. The loan amount received
by customer can be less than the processing fee. It is charged at the submission of the
application form and covers expenses incurred for processing the application form.
b) Prepayment Penalties:
When a loan is paid back before the end of the agreed duration a penalty is charged by
some banks/companies, which is usually between 1% and 2% of the amount being pre-paid.
c) Administrative Fees:
An administrative fee is charged by the HFI on the loan amount sanctioned to customer. This
fee is normally payable at a time of accepting the offer letter. It is charged mainly to meet the
operating expenses of the loan amount of the entire tenure.
d) Others:
It is quite possible that some lenders may levy a documentation or consultant charge.
In case of ICICI Bank the processing fee is 0.25% of the loan amount and the administrative
fee is approximately 0.50% of the loan amount.
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5. AMORTISATION
It means the method or the calculation by way of which the entire Principal amount/loan
amount is paid through the tenure of the loan.
This helps the customer to know what his outstanding principal is at any point of time. There
are two methods generally followed:
•
Annual rests
•
Monthly rests
Annual rests:
This is more commonly known as annual reducing balance of the principal/loan amount
lent to you. In an annual rest the EMIs (fixed monthly payment for the dispersal of the loan
amount) are calculated on an annual basis.
The component of interest is higher in the initial years and later on the component of principal
increases and the interest keeps reducing year after years. In other words, the interests in the
EMI will keep reducing year after year and the principal component keeps increasing.
Monthly rests:
This is called monthly reducing balance or principal. The calculation in the above
method remains the same as of the above except that the balance is calculated on a monthly
basis and the EMI is broken up every month to arrive at the opening balance of the principal
for the next month. It is always better for a customer to seek an HFI, which generally has
monthly rests, based system; this will reduce the amount of interest paid by the customer. Many
banks have adopted to the monthly rests system.
6. REPAYMENT FACILITY
The bank has given three options for repayment of the loan to suit the convenience of
Borrower.
Equated Monthly Installments (EMI) uniform monthly installment, inclusive of interest, for
the entire repayment of only interest for the first five years, and thereafter in EMI for the next
10 years.
Repayment of only interest in the first five years, 30% principal plus interest in the next five
years, and balance 70% plus interest in the remaining period.
Repayment to start on completion of construction, but not later than 18 months from first
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disbursement and in case built up houses after one month from disbursement. Interest during
gestation shall be paid as & when due. The repayment not to extend beyond the age of
retirement of the borrower or 70 years whichever is earlier, however where co-borrower is
taken, a maximum repayment period of 20 years may be considered provided the loan is
liquidated within the age of 70 years of the borrower/ co-borrower having capacity to service
the loan.
THE LOAN PROCEDURE FOLLOWED AT ICICI BANK
The procedures involve in the disbursement of home loan by any bank entails the following
steps:
•
Home loan application form is first submitted by the customer covering all
details.
•
Checklist of requirements is requested for from the customer, and all documents
are required to be submitted (copies), they are then verified whether the details
are failed in correctly and whether all the documents are submitted.
•
Additional loans, if any are applicable. Many banks provide for supplementary
loan as a part of their comprehensive home loan scheme.
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The
following
diagram
indicates
the
loan
procedure
at
the
bank
Customer
Branch manager
Loan Department
Legal opinion, valuation
And Technical
Branch manager
For large borrows
Regional Officer
RISK CAPTURING MECHANISM
One of the important aspects in the home loan financing is to ensure that the loan seeker is
worthy and credible. ICICI follows the credit score model to male home loan disbursements.
Credit score model is a risk capturing mechanism, which is used to assess the risk perspective
of the loan seekers.
The prospective loan seeker is assessed on a number of parameters which helps in the
evaluation of his profile and each parameter is assigned a score based on which the decision is
taken.
A score of 100 is fixed, and a score of 75 is considered to be good, score of 55 is considered
above average and score of 25 to be average. The prospective loan seeker on a scale of 100 is
expected to get 55 avail the home loan.
The parameters on which risk is assessed are:
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1. DEMOGRAPHIC PROFILE
The demographic profile includes a number of sub-parameters they are basically:
•
Age
•
Educational Qualifications
•
Number of Dependents
•
Marital status
The demographic profile of the loan seeker is allotted a maximum score of 15.
2. RELATIONSHIP WITH ICICI BANK
The relationship with the bank is also considered for the benefit of its customers.
The sub-parameters considered here are:
•
Value of relationship (in terms of deposits)
•
Number of years
The relationship with the bank is given a weight of 10 on the total score of 100.
3. INCOME MODEL
The income module of the bank includes parameters such as:
•
Gross Eligible Monthly Income
•
IRR ( Income to Installment Ratio)
•
FOIR (Fixed obligations to income ratio)
•
Net take home
The income model is given the highest score of 50 points.
4. STABILITY AND CONTINUITY
The stability and continuity factors are based on
•
Organization Profile : Govt. / public sector companies / public limited or private limited
companies or partnership or others
•
Length of service in Present job / organization.
This module is provided with maximum score of about 15 points.
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5. ASSET MODULE
The asset module include factors like
•
Margin
•
Net-Worth ( Total assets – Total Liabilities)
The asset module is given a weight of 10 on a scale of 100.
The various parameters of the credit score model and their respective weights are
depicted in the following chart.
Parameters in the model
AM
10%
IM
50%
SC
15%
DM
15%
Ricici
10%
The abbreviations of the above term are:
DM
– Demographic profile
RICICI – Relationship with the ICICI
IM
– Income Module
SC
– Stability and Continuity
SCRUTINY OF THE DOCUMENTS
The retail processing is a procedure, which involves careful scrutiny of accounts. ICICI Bank
uses a specialized system to go through the accounts, before dispersing the loan to the customer.
The basic groups set up in the process of loan application are:
RETAIL MANAGER ENTERER GROUP:
This group does the data entry. Upon completion of the data entry the group forwards the same
to the RM Verifier group to verify and resends it to the former in case of tiny discrepancies for
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editing.
The Loan officer enterer group and the RM Verifier group should ensure, confirm and verify
the following:
•
The organization is in the appropriate list.
•
The organization is not in the negative list
•
The property location is not in the negative list.
Applicant Details:
•
Name and the personal details
•
Identity details Address
•
Employment details – salaried
•
Financial details: Income asset ownership, Existing bank account details and credit card
details
•
Employment details: Business
•
Financial details: Existing bank accounts and credit card details.
Existing Loan details:
The name of the financial institution (in case of takeover) type of loan, purpose of loan
amount etc., as per the home loan application form.
Loan request:
Including the disbursement details.
Acquisition details:
Gee details, loan amount recommended, name of the customer preferred branch.
Reference details:
Entry of at least one reference is mandatory.
Property details:
The RM enterer group and the RM Verifier group shall affix their initials on the home
loan process note.
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Upon completion of the above activities, the field investigation, legal opinion and the technical
appraisal process shall be initiated by the RM.
The basic scrutiny checks followed by the bank:
•
Field investigation study.
•
Technical Feasibility
•
Legal Feasibility
Field Investigation Study:
The manager RM shall go through the documents and inform the same to the field
investigation agency the details:
a) Field Investigation Report:
•
Residence and Reference (Tele – Check)
•
Name, Address, Office or Business telephone number of the applicant
and
•
Co-applicant.
•
Income Tax return.
The reports are too given on the letterhead of the respective approved agency by their
authorized employee with agency’s rubber stamp. The RM should ensure from the field
investigation agency in case of Residence and reference (Tele-check)
The details in the report should match with the information given in the home loan application
form.
IT-Return:
It should be tallied as per the office records.
The manager RM shall make a tele-check to cross verify the investigation made by the agency
in case, for the salaried applicants where the disbursement is greater than 10 lacks and in case
of the businessman where the disbursement is greater than 10 lacks.
2. LEGAL FEASIBILITY
The bank should arrange for the legal opinion.
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The manager RM should forward it to the bank’s empanelled lawyer various documents for
scrutiny.
Some of the documents required for the scrutiny by the lawyer are:
•
Sale agreement duly registered
•
Own contribution receipts
•
Allotment letter
•
Land documents indicating ownership, if applicable registration receipt
•
Possession letter
•
Lease agreement, if applicable (Property bought from a development authority)
•
No objection certificate from the developer, society or development authority.
•
In case of the construction of the house the agreement of construction of the house
between the land owner and the contractor.
The above are the list of documents to be referred to by a lawyer. The manger has to provide
the copies of the documents should be provided by duly specifying the name of the applicant,
particulars of property and list of documents attached.
All correspondence with regard to the legal opinion must be carried forward between the
lawyer and the RM only.
3. FINANCIAL SCRUTINY
Prior to disbursement, the HFI also conducts a site visit to the customer’s property to ensure
the following:
In case of under construction property:
•
Stage of construction is the same as that mentioned in the payment notice given to the
builder.
•
Quality of construction
•
Satisfactory progress of work.
•
Lay out of the flats and area of property is within the permission granted by the
governing authority
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•
Requisite certificate have been received by the builder to start the construction at the
site.
In case of ready / Resale construction:
•
External maintenance of the property.
•
Internal maintenance of the property.
•
Age of the building
•
Whether the building will last the tenure of the loan
•
Quality of construction
•
There is no existing lien or mortgage on the property
The list of valuation engineers empanelled by the bank need to take up these various documents
and ensure that the report is furnished in the prescribed format and that loan amount requested
by the applicant is sufficient to complete the project. The details in the property report given
by the technical term and compare it with the legal opinion and application and ensure that
there are no discrepancies. After completion of the above checks and scrutiny the manager RM
must forward the home loan process not along with the home loan application and other
enclosures Legal opinion, technical appraisal report, for further processing to the Loan
Manager term, after retaining in the customer’s file, copy of the following papers:
•
Home loan application
•
Legal opinion with all enclosures
•
Technical appraisal report
Loan Department has to send the documents and papers to the RM for further scrutiny and
processing of the proposals. This would increase the turnaround time, of processing and also
additional charge towards the courier charges and also losing the documents in transit, In order
to avoid the above discrepancies the documents are verified by the document imaging system.
Newgen document imaging system is introduced to facilitate electronic transmission of
documents for processing of proposals by RM.
•
It facilitates scanning and maintenance of scanned images.
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•
It also provides the provision of linking the documents if the same document is required
for multiple loans
•
Provisions to make remarks, on the document without disturbing the original.
•
Scanned images can be attached to any mail
This facilitates easy transmission of data and other documents and also provides the flexibility
in loan processing and helps in fast transmission of data, these all advantages helps in easy
disbursement of loans.
THE INNOVATIVE LOAN CONCEPTS
1. THE CONCEPT OF SURF
The new concept of SURF is the step up repayment facility, it is a scheme provided to young
professionals who have just begun their careers, considering that their repayment capacity will
increase steadily in the near future.
The scheme increases the repayment capacity of a customer, his loan eligibility increases as it
considers the increase in income of the customer over the next few years.
Corporation bank has introduced this SURF concept in its home loan scheme.
Corporation Bank has introduced ‘Corp Flexi Home Loan’ a variant of the housing loan with
attractive feature of Progressive Monthly Installment (PMI) i.e. Repayment linked to increase
in future salary earnings.
The scheme provides for “step-up installment facility” under Corp Home Scheme. The CorpFlexi scheme is offered with two options.
Option1: The borrower can opt for higher quantum of loan (130% of eligible amount under the
normal scheme) as per the present income criteria with a provision to pay the installments based
on current income initially and gradually increases over the latter part of repayment period.
Option 2: The loan shall be considered as per applicant’s normal eligibility with a provision to
pay lower installments initially (70% of the normal EMI) and installments are stepped up in
the later part of the repayment period.
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2. THE HOME SAVER LOANS
Home Saver is a revolutionary new concept in home loans designed to save you interest thereby
letting you pay off your loan faster.
The Standard Charted bank offers a special home loan named the “home saver advantage”, the
home saver advantage, where the interest rates vary from 7.75 per cent to 8 per cent.
Every month, all you need to do is deposit your surplus funds, be it your salary or other savings
into Home Saver, instead of letting them lie idle in different accounts. All this money then
works towards reducing you interest payable because the deposits automatically reduce the
balance outstanding on which the interest is calculated on a daily basis.
So, more the number of days you place your savings into Home Saver, greater is the interest
saving. There is also continuous access to your funds 24 hours a day with the globally valid
ATM cum debit card. The loan taker should maintain a deposit account with the bank to avail
the home saver advantage.
Unique Features of the home saver:
•
Freedom to save more
•
Freedom to reduce your loan period
•
Freedom to access your money – anytime, anywhere
Home Saver is currently available in Bangalore, Chennai, and Delhi, Kolkata, Mumbai and
pune.
Freedom to save more:
With Home Saver, there is more to save than a normal low-cost home loan. Because interest is
calculated on your daily balance, you can reduce your interest cons substantially even if your
surplus savings are in the account for only a day. For each day that your outstanding balance
reduces, you pay less interest for that day.
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Since that’s interest saved not earned, you save on taxes that you would otherwise pay on your
interest earned!
Freedom to reduce your loan period:
Home Saver gives you the flexibility and freedom to make excess payments so that you can
reduce the duration of your loan anytime, without penalties.
Freedom to access money – Anytime, Anywhere:
You have the flexibility of depositing and withdrawing cash just as you would your normal
bank account. Home Saver comes with a globally valid ATM-cum-Debit card, which allows
you free to access to your money from over 2000 ATMs across the country Anytime Anywhere.
FLEXI-SAVINGS ACCOUNT
Citibank also offers a flexi-savings account to reduce your cost of borrowing. The bank will
automatically open a Saving Account from which you can give standing instructions to deduct
the EMI payments for the loan. You can then prepay the loan at any point in time and be given
instant credit for the same, in case you get a large lump-sum annual bonus from your employer.
Should you require money in an emergency at any point you can avail of an overdraft on this
savings account at an interest rate that is the same as that on your
Home loan. This works out much cheaper than taking an overdraft on a normal savings account.
CUSTOMIZED REPAYMENT SCHEMES
HDFC which has been in the home loan segment since 1977 has also introduced a host of new
features to its home loan portfolio.
HDFC offers Flexible (Customized) Repayment Schemes, keeping in mind the fact that each
individual has a unique problem requiring unique solutions.
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HDFC has developed various repayment options like:
•
Step Up Repayment Facility
•
Flexible Loan Installment
•
Balloon Payment Scheme, Where the payment in the initial years is less and the later
years are more.
Pari Passu/Second Mortgage Arrangements: HDFC has a tie-up with a large number of Public
Sector Organizations and banks which enables us to offer loans to loan seekers with the
flexibility of their spouse also having a loan from his/her own employer.
3. INCREASE IN THE TENURE PERIOD OF THE HOME LOANS
The home loans are provided for the period of 5 years to 20 years period.
ICICI is the first of its kind to introduce the home loan scheme for a 20-year period.
ICICI has been the largest private sector bank of the country. It has introduced the concept of
providing home loans for a 20-year tenure.
This 20year tenure home loan is available at only fixed rates of interest.
This interest rate structure for the 20-year tenure period for ICICI home loans is as follows:
Tenor
Floating Rates
Fixed Rates
Upto Rs.10 lakhs
Upto Rs.10 lakhs
7.25%
8.25%
Above 5 years, but less 7.75%
8.75%
Home Loans
Band
A
B
C
1 to 5 years
than 10 years
Above 10 years, but
8.00%
9.00%
less than 20 years
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HOME LOAN FACILITIES WITH VARIOUS ADD-ON BENEFITS
The banks have buckled for the completion of the home loan products by providing various
add-on benefits, which has also become a key factor in the competitive era of home loans.
The banks have also tied up with various property insurance companies in order to make their
home loan competitive.
The ABN-AMRO bank which has entered the home loan segment in October 2003, launched
its product “All Smiles Home Loans” with the lowest interest rate of 6 percent in the first year
and 6.5 per cent in the second year has added a number of value added services like:
•
SMS alert to help the customers keep track of their loan sanctions and disbursement
status.
•
The bank also offers its smart Gold credit card to the borrowers and concessional rates
on personal loans and auto loans.
GIC housing finance limited has offered the consumer loans for the purchase of home
equipment at the same rates of interest at the of the home loans and lower than the other
consumer loans.
The tenure of consumer loans is restricted to the tenure of 5 years.
Many banks have also done away with the guarantor for provision of home loans for amount
less than RS.10 lakes, like HSBC housing loan scheme, ICICI bank.
THE FUTURE OF HOME LOANS
OUTLOOK:
In the last 3-4 years the retail finance disbursements are estimated to have increased at CAGR
of over 30 per cent to RS. 250 million in the year of 2001-02.
The yield in the housing fiancé is estimated at about 11-12 per cent. With the operating costs
and credit losses of 0.5-0.8 percentage points and 0.1 – 0.5 percentage points respectively.
The net margin in the business is expected to be at around 1-1.5 per cent.
Total direct housing disbursements is expected to grow at a CAGR of 2401 per cent during the
period 2001-02 to 2006-07 period, to RS. 734.92 billion.
42
The market share of HFCs is set to decline from 5902 per cent to 5401 per cent. The market
shares of the banks are expected to increase from 3408 per cent to 41.4 per cent during the
period.
THE FUTURE OF MARKET PLAYERS
The major players in the home loan market are HFCs and the commercial banks and the
scheduled commercial banks.
In 2001-02, the incremental disbursements of housing finance companies is estimated have
increased by over 17.3 per cent.
The disbursement of leading HFCs has increased over the previous years like HDFC, Can find
homes, over the previous year. However the incremental disbursements of smaller and medium
size HFCs have declined by 3.9 percent,
Due to:
•
Increased competition from the banks
•
Lower availability of low cost funds
•
Tightening interest spreads
The banks aggregate market share of all the banks, in incremental direct disbursement has
increased by 10.1 per cent, to 34.8 per cent.
The growth has been largely driven by the cost advantages of banks over HFCs and lower
credit off-take from the corporate segment
The banks have the advantage over the HFCs because of the access to lower cost retail funds
(savings deposits). The banking sector every year gets about 400 – 450 billion in savings and
demand/current deposits, out of which around 75-80 percent is considered core float and are
largely long term in nature.
43
This indicates the scope of increase in disbursements by the banks without significant maturity
mismatch risks in comparison to the disbursement by the housing finance industry.
History and Major Events
We were incorporated in 1994 as a part of the ICICI group. Our initial equity capital was
contributed 75.0% by ICICI and 25.0% by SCICI Limited, a diversified finance and shipping
finance lender of which ICICI owned 19.9% at December 1996. Pursuant to the merger of
SCICI into ICICI, we became a wholly owned subsidiary of ICICI.
The chronology of events since we were incorporated in 1994 is as follows:
Change of name
Our name was changed from ICICI Banking Corporation Limited to ICICI Bank Limited on
September 10, 1999. The change of name was effected on account of our being widely known
by the name ICICI Bank.
Merger of Bank of Madura
Bank of Madura was merged with us effective March 10, 2001. The share Exchange ratio fixed
for the transaction was two of our equity shares of Rs. 10 each for every equity share of Bank
of Madura of Rs. 10 each.
Amalgamation of ICICI
ICICI, ICICI Capital Services and ICICI Personal Financial Services amalgamated with us with
effect from May 3, 2002. The Appointed Date for the merger specified in the Scheme of
Amalgamation, which was the date of the amalgamation for accounting purposes under Indian
GAAP, was March 30, 2002. The amalgamation was approved by the High Court of Judicature
at Bombay vide its order dated April 11, 2002 and by the High Court of Gujarat at Ahmedabad
vide its order dated March 7, 2002. The share exchange ratio was one of our equity shares of
Rs. 10 each for every two equity shares of ICICI of Rs. 10 each.
44
Chapter 3
Research Methodology
NEED AND IMPORTANCE OF THE STUDY
The study is mainly concentrated on the lending practices pattern and influence in the
organization performance.
1) To know and to set its objectives and goals.
2) To need of the study is limited to ascertain the profitability gained by the bank by lending
loans.
3) The study enables the bank to know its financial position.
4) The need of the study is limited to home loan using their rates, time period & amount limit
as a tool based on primary data provided by the bank.
OBJECTIVES OF THE STUDY
1. To study about home loans provided by the bank.
2. To build up the relationship with the customers and to follow up them, make sure that they
are satisfied with the product.
3. To find out the borrowing attitude of the respondents with respect to the loan scheme.
4. To study the process of loan sanctions in bank.
5. To give constructive suggestions on findings towards the Home loans at the bank.
HYPOTHESIS
A hypothesis is a proposed explanation for a phenomenon. Proposed explanation made on the
basis of limited evidence as a starting point for further investigation.
Null hypothesis [H0]: There is no significant indifference between feedback from customers
on loans offered by the bank and difficulties in accessing accounts during pandemic (COVID19).
Alternative hypothesis [H1]: There is a significant indifference between feedback from
customers on loans offered by the bank and difficulties in accessing accounts during pandemic
(COVID-19).
45
TYPE OF RESEARCH
The type of research used for this study is descriptive in nature.
For this purpose, primary data collection was through questionnaire and secondary data
collection was through magazines & previous annual reports of the bank, journals and write
ups available regarding to the topic and websites of the bank.
SAMPLING TECHNIQUE
To study the project, a Simple random sampling technique is used.
SAMPLE SIZE
Sample of 40 people was taken into study, and their data was collected. The questionnaire was
circulated to the customers of ICICI bank, HSR Layout branch.
SAMPLE DESCRIPTION
The type of sampling used in this research is a simple random sampling. The sample consists
of customers of ICICI bank.
TOOLS USED FOR ANALYSIS
1. Simple Average Method: This method was used to analyze the data collected from the
respondents. In simple average technique, the total number of responses for a particular option
is divided by the total number of respondents. This gives out the percentage of respondents
opting for a particular option. The analyzed data were presented by the way of tables.
Percentage of respondents = (No. of responses / Total no. of Respondents)*100
2. Weighted Average Method: Weighted average is used when the relative importance of the
items is not the same. Different weights are assigned to different and calculation is made. The
weights assigned may be actual or arbitrary.
Weighted Average = ∑wax / ∑w
3. Correlation:
Correlation is a tendency towards interrelation variation and the coefficient is a measure of
such tendency. Correlation analysis deals with the association between two or more variables.
46
Correlation is the technique of determining the degree of correlation between two variables in
case of ordinal data where ranks are given to the different values of the variables.
4. MS excel:
Microsoft Excel is a commercial spreadsheet application written and distributed by Microsoft
for Microsoft Windows. The application was used to organize and analyze the raw data
collected from survey. Excel was also helpful in making graphical representations of the
organizational data.
LIMITATIONS OF THE STUDY
•
The study was limited to only one of the important activities of the organization i.e.
Home Loans.
•
Accuracy of the data provided cannot be guaranteed which does not give a clear idea
about the actual functioning of the bank.
•
Study covers only last five years performance of the bank.
•
There was limited interaction by the bank employees because of busy working
schedule.
•
Due to strict confidential policy of the bank the accounts department provided only
screened information.
47
Chapter 4
Data Analysis and Interpretation
Data analysis and interpretation is the process of assigning a meaning for the study by taking
into consideration each of the question asked and determining the conclusions, significance
and implications of the findings so obtained.
TABLE 4.0.1: Age group of the Respondents
Age
No. of respondents
Percentage of respondents
18-25
20
50%
25-30
8
20%
30-35
3
7.5%
35-40
2
5%
40 and above
7
17.5%
Total
40
100%
ANALYSIS: It is observed that out of 100%, 50% of respondents are below 25 years of age,
20% fall between 25-30 years, 7.5% fall between 30-35 years, 5% fall between 35-40 and
remaining 17.5% are above 40 years.
No. of respondents
18-25
25-30
30-35
35-40
40 and above
INTERPRETATION:
Therefore, after analysis it is found that majority of respondents are below 25 years of age.
48
TABLE 4.0.2: Type of Loans Availed by Respondents
Type of Loans
No. of respondents
Percentage of respondents
Education Loan
14
35%
Auto Loan
9
22.5%
House Loan
9
22.5%
Personal Loan
7
17.5%
Gold Loan
1
2.5%
Total
40
100%
ANALYSIS:
It is analyzed that out of 100% respondents, 35% customers 82availed Education Loan, 22.5%
availed Auto Loan, 22.5% availed House Loan, 17.5% availed Personal Loan and remaining
2.5% availed Gold Loan.
No. of respondents
Education Loan
Auto Loan
House Loan
Personal Loan
Gold Loan
INTERPRETATION:
Therefore, majority of respondents availed Education Loan.
49
TABLE 4.0.3: Satisfactory Feedback from Respondents on loans offered
Feedback
No. of respondents
Percentage of respondents
Yes
39
97.5%
No
1
2.5%
Total
40
100%
ANALYSIS:
It is observed that out of 100%, 97.50% of Respondents have responded as “Yes”, and
remaining 2.5% as “No”.
Yes
No. of respondents
Percentage of respondents
INTERPRETATION:
Therefore, majority of respondents are satisfied with Home loan offered by Bank.
TABLE 4.0.4: Type of Interest Rate preferred by Respondents on loans offered
50
Type
No. of respondents
Percentage of respondents
Fixed Rate
35
87.5%
Flexible Rate
5
12.5%
Total
40
100%
ANALYSIS:
It is observed that out of 100%, 87.50% of Respondents prefer Fixed Rate and remaining
12.50% prefer Flexible Rate.
40
35
30
25
20
15
10
5
0
Fixed Rate
Flexible Rate
INTERPRETATION:
Therefore, majority of respondents prefer fixed rate of Interest on the Loans.
TABLE 4.0.5: Type of Respondents
51
Type
No. of respondents
Percentage of respondents
Salaried
15
37.5%
Farmer
10
25%
Shop Keeper
5
12.5%
Industrialist
4
10%
other
6
15%
Total
40
100%
ANALYSIS:
It is observed that out of 100%, 37.50% of Respondents are salaried, 25% are Farmers, 12.50%
are shop keepers, 10% are Industrialist and remaining 15% are of other professions.
No. of respondents
16
14
12
10
8
6
4
2
0
Salaried
Farmer
Shop Keeper
Industrialist
other
INTERPRETATION:
Therefore, majority of borrowers are salaried
TABLE 4.0.6: Rating from Respondents on Services given by Bank
52
Rating
No. of respondents
Good
14
35%
Excellent
12
30%
Satisfied
8
20%
Bad
6
15%
Total
Percentage of respondents
40
100%
ANALYSIS:
It is observed that out of 100%, 35% of Respondents rated Good, 30% rated Excellent, 20%
rated Satisfied and remaining 10% rated services offered by Bank as Bad.
No. of respondents
Good
Excellent
Satisfied
Bad
INTERPRETATION:
Therefore, majority of borrowers have rated services offered by bank as “Good”.
TABLE 4.0.7: Channels used by Respondents to access the Accounts
53
Channel
No. of respondents
Percentage of respondents
Direct Bank
18
45%
Mobile Banking
18
45%
Phone Banking
3
7.5%
Net Banking
1
2.5%
40
100%
Total
ANALYSIS:
It is observed that out of 100%, 45% of Respondents access their Accounts by directly visiting
Bank, another 45% use Mobile Banking, 7.5% use Phone Banking and remaining 2.5% use
Net Banking.
No. of respondents
Direct Bank
Mobile Banking
Phone Banking
Net Banking
INTERPRETATION:
Therefore, researcher can infer that most of the Customers use direct and Mobile Banking
Channels to access their Accounts.
54
TABLE 4.0.8: Position of Loan Recovery
Channel
No. of respondents
Percentage of
respondents
Good
26
65%
Excellent
10
25%
Bad
4
10%
Total
40
100%
ANALYSIS:
It is observed that out of 100%, 65% of Respondents feel that Loan recovery process of Bank
is good, 25% voted as Excellent and remaining 10% voted Bad.
No. of respondents
Good
Excellent
Bad
INTERPRETATION:
Therefore, researcher can infer Loan recovery process of bank in “Good”.
WEIGHTED AVERAGE METHOD
55
Particulars = X
No. of respondents = W
Weighted Average Method = (X1*W1) + (X2*W2)+……+(Xn*Wn)
N
= (3*26) + (2*10) + (1*4)
40
= 78 + 20 + 4
40
= 102
50
= 2.55/3
CONCLUSION:
Most of the Customers agree that Position of Loan Recovery from bank is “Good”.
TABLE 4.0.9: Action for Loan Recovery
56
Action
No. of respondents
Percentage of respondents
Contact Borrower
29
72.5%
Legal Action
11
17.5%
Total
40
100%
ANALYSIS:
It is observed that out of 100%, 72.5% of Respondents authorized bank to contact Borrower in
case of irregular repayment and remaining 17.5% voted to take legal action.
No. of respondents
Contact Borrower
Legal Action
INTERPRETATION:
Therefore, researcher can infer, Contacting Borrowers is the right approach to be followed in
case of irregular Payment.
TABLE 4.0.10: Facilities issues at Bank
57
Action
No. of respondents
Percentage of respondents
Inordinate Delays
11
27.5%
Lack of Basic Amenities
7
17.5%
18
45%
Others
Indifferent attitude of
4
10%
Staff
Total
40
100%
ANALYSIS:
It is observed that out of 100%, 27.5% of Respondents Complained of Inordinate delays at
bank, 17.5% Complained lack of Basic Amenities,10% complained the indifferent attitude of
bank staff and remaining 45% customer reported other issues.
No. of respondents
Inordinate Delays
Lack of Basic Amenities
Others
Indifferent attitude of Staff
INTERPRETATION:
Therefore, by looking at above data, majority of customers have reported other facility issues
which have not been clearly mentioned in data.
58
TABLE 4.0.11: Difficulties during pandemic (COVID19)
Result
No. of respondents
Percentage of respondents
Yes
21
52.5%
No
19
47.5%
Total
40
100%
ANALYSIS:
It is observed that out of 100%, 52.5% of Respondents Complained of difficulties in accessing
their accounts at bank due to COVID-19 pandemic and remaining 47.50% of reported no issues
in accessing their bank accounts.
No. of respondents
Yes
No
INTERPRETATION:
Therefore, by looking at above data, majority of customers have reported difficulties in
accessing their bank accounts and facilities during the COVID-19 pandemic.
ANALYSIS OF OPINION OF RESPONDENTS REGARDING THE FEEDBACK
59
FROM CUSTOMERS ON LOANS OFFEREDAND DIFFICULTY IN ACCESSING
ACCOUNTS DURING PANDEMIC
RANK CORRELATION
OPINION
YES
NO
Feedback from Customers on Loans Offered (X)
39
1
Difficulty in Accessing Accounts during Pandemic (Y)
21
19
X
Y
(xi-vi)
1
1
0
2
2
0
r = 1 - 6∑ di²
n (n²-1)
= 1 – 6 (0)
2 (2²-1)
=1-0
2 (4-1)
=1-0
6
=1
CONCLUSION:
Feedback from Customers on Loans Offered and Difficulty in Accessing Accounts during
Pandemic are positively correlated.
60
Chapter 5
Summary of Findings, Suggestion and Conclusion
FINDINGS:
After analyzing and interpreting the data, certain findings are drawn to make “A study of home
loan offered by ICICI Bank”
•
During the project process I found that bank officials and staffs were Cooperative, and
friendly while dealing with customers with the help of computerization it has enabled
the banks staff to perform their task efficiently.
•
By the study it is found that the interest rates of different loans will be fluctuating and
Small enterprise is provided with loans under business loan category.
•
Bank operates mostly to customers of middle class and lower middle class people.
•
Age group of the respondents is observed that out of 100%, 50% of respondents are
below 25 years of age and 35% of customers availed education loan.
•
82.5% of ICICI Bank customers are satisfied with the home loan offered by the bank
and majority (87.5%) of the customers prefer fixed interest rate and most of the
customers are salaried customers.
•
It is observed that out of 100%, 35% of customers rated well (Rating from the
customers).
•
It is observed that out of 100%, 45% of customers access their accounts by directly
visiting bank.
•
65% of Customers feel that loan recovery process of bank is Good and 72.5% of
customers authorized bank to contact borrower in case of irregular repayment.
•
82.5% of Customers hold savings account with bank and 42.5% of customers rated that
bank staff is polite (staff behavior at the bank).
•
Difficulties during covid-19 pandemic at bank is observed that out of 100%, 52.5% of
customers complained of difficulties in
•
Accessing their accounts at bank due to COVID-19 pandemic and remaining 47.50%
of reported no issues in accessing their bank accounts.
61
SUGGESTIONS:
These are the suggestions of the study on “a study of home loan offered by ICICI Bank”
•
The bank has to extend their branches throughout the state and expand the bank
branches for increase the growth.
•
In this modern world the banking must be wide spread, for this reason website and
online banking has to be more effective for customer service.
•
Bank has to introduce new loans schemes to encourage more and more different classes
of people and should give the awareness about the online banking to uneducated rural
peoples.
•
One of the customer of ICICI Bank is suggestion is to give sum low interest for
education loan.
•
The profit position can be improved by reducing the interest rates on deposits.
•
ICICI Bank should take steps to solve customer problems immediately.
•
Customer awareness program should be taking place in rural area (for uneducated
people).
62
CONCLUSION
The study of Loans & Advances undertaken “ICICI Bank” was done to analyze the financial
performance and to suggest the measure to improve the current performance.
The bank possesses a sound investment planning and also it has good profit it is playing a
dominate role in banking industries, ICICI Bank has been setup to provide essential help for
promoting economic development of the country. It plays a natural role in providing financial
assistance to small and medium scale industries which are located in rural and urban areas.
It provides advance facility within the short span of time compared to other Commercial bank;
it takes every primitive measure while issuing loans. For this reason only bank must not face
any problem while recovering loans back, most of the banks face problem while issuing and
getting back from improper documentation. Here in this bank, growing person should provide
securities also.
So finally, Performance of the bank is very good and Researcher can conclude that ICICI Bank
are laying strong and powerful role than any other banks in rural areas.
63
BIBLIOGRAPHY
1. Banking and Financial Systems by A.V.Ranganathachary, K.Anjaneyulu, K.Lalitha
2. Financial Services, A.K.Khan
3. www.icicibank.com
4. http://www.icicibank.com/pfsuser/loans/homeloans/hlhomepage.htm
5. Online Home loan. in/ICICI Bank
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