A Study On Home Loans Of Icici Bank

A STUDY ON HOME LOANS OF ICICI BANK

BY P.SIVA REDDY ENROLL. NO- 5NB -11043

MBA-2005-2007 INC-GUNTUR

UNDER THE GUIDENCE OF

COMPANY GUIDE Mr. BHARAT ICICI BANK LTD BEGUMPET, HYD

FACULTY GUIDE CH. HYMAVATHI INC GUNTUR

1

DECLARATION

I hereby declare that this project work entitled “A study on Home loans of ICICI Bank is my work, carried out under the guidance of my faculty guide Ms. CH. HYMAVATHI and my company guide Mr. BHARAT. This report neither full nor in part has ever been submitted for award of any other degree of either this university or any other university.

(P. SIVA REDDY) Roll no.5nb – 11043 INC GUNTUR

2

CER TIFI CA TE This is to certify that the Summer Internship Project titled “A study on HOME LOANS OF ICICI BANK”, a bonafide work of P. SIVA REDDY is original and has been done under my supervision in partial fulfillment of the requirement for the award of M.B.A for the period of four months from 15, April 2007 to 15, August 2007. This report neither full nor in part has ever before been submitted for awarding of any degree of either this university or any other university. I am pleased to say that his performance during the period was extremely satisfactory.

Company Guide

Faculty Guide

Mr. BHARAT

Ms. HYMAVATHI

ICICI Bank ltd

INC faculty member

Hyderbad

Guntur

3

LETTER OF APPRECIATION

ICICI Bank Ltd Adj: Airport line, Begumpet, HYDERABAD This is to certify that Mr. P. Siva Reddy pursuing MBA (2005 – 2007) From ICFAI National College – Guntur has successfully completed his project “ A study on Home Loan products of ICICI Bank” from 15th April 2007 to 15th August 2007. We appreciate his commitment, Determination and performance during the project and bound to be valuable asset for any organization. I am pleased to say his performance and Sincerity at work during the period was Good.

4

ACKNOWLEDGEMENT

It gives me immense pleasure to express my deep sense of gratitude to Mr. C.UDAY KUMAR, Coordinator, ICFAI National College GUNTUR, for his valuable guidance and consistent supervision through out the course. I am also thankful to Mr. Bharat sir, my Company Guide of ICICI BANK , Hyderabad, for his valuable guidance for preparing the Final Report and also for providing the necessary facilities. I am extremely thankful to Ms. Ch. Hymavathi Faculty Guide and Sr. Faculty member of ICFAI National College, for her timely guidance and support through out the Final Report work. In the course of carrying out the project work. Finally I am indebted to our other faculty members, my friends and my parents who gave their full-fledged co-operation for successful completion of my project. It was a indeed a learning experience for me. NAME OF THE STUDENT : P. SIVA REDDY ENROLLMENT NO

: 5NB12043

5

Executive Summary This Report is an attempt to provide a detailed analysis of the process to get a home loan and the requirements to get a loan in ICICI Bank. In my complete student internship program I met more than 40 customers and promoted ICICI Bank home loan products. During this student internship program I came to know that most of the people r showing to take a home loan but they are so confused what the necessary requirements to get a loan. However, my survery suggests that maximum number of people are interested to take a loan but all are not aware of the products and the process.. Employees and Business people are already taken home loans to meet their financial requirements to construct a home .. In my survey I found that 80% of people do not know how to get a loan in a bank Finally, creating awareness is very important to get good profits to the company as well as to build good brand image in the minds of customers.

6

Contents Indian banking system

8

ICICI Company profile

15

Project

22

Findings

48

Recommendations

49

Conclusion

50

On the job training

51

Objectives

52

Targets

53

Achievements

54

Limitations

56

Learning

57

7

INDIAN BANKING SYSTEM

BANKS IN INDIA India has a well developed banking system. Most of the banks in India were founded by Indian entrepreneurs and visionaries in the preindependence era to provide financial assistance to traders, agriculturists and budding Indian industrialists. Indian banks have played a significant role in the development of Indian economy by inculcating the habit of saving in Indians and by lending finance to Indian industry. The commercial banking structure in India consists of: Scheduled Commercial Banks and Unscheduled Banks. Scheduled commercial Banks constitute those banks, which have been included in the Second Schedule of Reserve Bank of India (RBI) Act, 1934. RBI includes only those banks in this schedule, which satisfy the criteria

laid

down

vide

section

42

(6)

(a)

of

the

Act.

Indian banks can be broadly classified into nationalized banks/public sector banks, private banks and foreign banks.

FOREIGN BANKS IN INDIA Foreign banks have brought latest technology and latest banking practices in India. They have helped made Indian Banking system more competitive and efficient. Government has come up with a road map for expansion of foreign banks in India. 8

The road map has two phases. During the first phase between March 2005 and March 2009, foreign banks may establish a presence by way of setting up a wholly owned subsidiary (WOS) or conversion of existing branches into a WOS. The second phase will commence in April 2009 after a review of the experience gained after due consultation with all the stake holders in the banking sector. The review would examine issues concerning extension of national treatment to WOS, dilution of stake and permitting mergers/acquisitions of any private sector banks in India by a foreignbank. Major foreign banks in India are: •

ABN-AMRO Bank

•

Abu Dhabi Commercial Bank Ltd.

•

American Express Bank Ltd

•

BNP Paribas

•

Citibank

•

DBS Bank Ltd

•

Deutsche Bank

•

HSBC Ltd

•

Standard Chartered Bank

9

Nationalized Banks in India Banking System in India is dominated by nationalized banks. The nationalization of banks in India took place in 1969 by Mrs. Indira Gandhi the then prime minister. The major objective behind nationalization was to spread banking infrastructure in rural areas and make available cheap finance to Indian farmers. Fourteen banks were nationalized in 1969. These Banks

were

Before 1969, State Bank of India (SBI) was the only public sector bank in India. SBI was nationalized in 1955 under the SBI Act of 1955.

The second phase of nationalization of Indian banks took place in the year 1980. Seven more banks were nationalized with deposits over 200crores.

List of Public Sector Banks in India is as follows: •

Allahabad Bank

•

Andhra Bank

•

Bank of Baroda

•

Bank of India

10

•

Bank of Maharashtra

•

Canara Bank

•

Central Bank of India

•

Corporation Bank

•

Dena Bank

•

Indian Bank

•

Indian Overseas Bank

•

Oriental Bank of Commerce

•

Punjab and Sind Bank

•

Punjab National Bank

•

State Bank of Bikaner & Jaipur

•

State Bank of Hyderabad

•

State Bank of India (SBI)

•

State Bank of Indore

•

State Bank of Mysore

•

State Bank of Patiala

•

State Bank of Saurashtra

•

State Bank of Travancore

•

Syndicate Bank

11

•

UCO Bank

•

Union Bank of India

•

United Bank of India

•

Vijaya Bank .

Private Banks in India All the banks in India were earlier private banks. They were founded in the pre-independence era to cater to the banking needs of the people. But after nationalization of banks in 1969 public sector banks came to occupy dominant role in the banking structure. Private sector banking in India received a filip in 1994 when Reserve Bank of India encouraged setting up of private banks as part of its policy of liberalization of the Indian Banking Industry. Housing Development Finance Corporation Limited (HDFC) was amongst the first to receive an 'in principle' approval from the Reserve Bank of India (RBI) to set up a bank in the private sector. Private banks have played a major role in the development of Indian banking industry. They have made banking more efficient and customer friendly. In the process they have jolted public sector banks out of complacency

and

forced

them

to

become

more

competitive.

Major private banks in India are: •

Bank of Rajasthan

12

•

Bharat Overseas Bank

•

Catholic Syrian Bank

•

Centurion Bank of Punjab

•

Dhanalakshmi Bank

•

Federal Bank

•

HDFC Bank

•

ICICI Bank

•

IDBI Bank

•

IndusInd Bank

•

ING Vysya Bank

•

Jammu & Kashmir Bank

•

Karnataka Bank

•

Karur Vysya Bank

•

Kotak Mahindra Bank

•

SBI Commercial and International Bank

•

South Indian Bank

•

United Western Bank

•

UTI Bank

•

YES Bank

13

If there is one industry that has the stigma of being old and boring, it would have to be banking; however, a global trend of deregulation has opened up many new businesses to the banks. Coupling that with technological developments like Internet banking and ATMs, the banking industry is obviously trying its hardest to shed its lackluster image.

14

COMPANY PROFILE ICICI Bank is India's second-largest bank with total assets of about Rs.1,676.59 bn(US$ 38.5 bn) at March 31, 2005 and profit after tax of Rs. 20.05 bn(US$ 461 mn) for the year ended March 31, 2005 (Rs. 16.37 bn(US$ 376 mn) in fiscal 2004). ICICI Bank has a network of about 573 branches and extension counters and over 2,000 ATMs. ICICI Bank offers a wide range of banking products and financial services to corporate and retail customers through a variety of delivery channels and through its specialised subsidiaries and affiliates in the areas of investment banking, life and nonlife insurance, venture capital and asset management. ICICI Bank set up its international banking group in fiscal 2002 to cater to the cross border needs of clients and leverage on its domestic banking strengths to offer products internationally. ICICI Bank currently has subsidiaries in the United Kingdom, Canada and Russia, branches in Singapore and Bahrain and representative offices in the United States, China, United Arab Emirates, Bangladesh and South Africa. ICICI Bank's equity shares are listed in India on the 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).

15

ICICI Bank was originally promoted in 1994 by ICICI Limited, an Indian financial institution, and was its wholly-owned subsidiary. ICICI's shareholding in ICICI Bank was reduced to 46% through a public offering of shares in India in fiscal 1998, an equity offering in the form of ADRs listed on the NYSE in fiscal 2000, ICICI Bank's acquisition of Bank of Madura Limited in an all-stock amalgamation in fiscal 2001, and secondary market sales by ICICI to institutional investors in fiscal 2001 and fiscal 2002. ICICI was formed in 1955 at the initiative of the World Bank, the Government of India and representatives of Indian industry. The principal objective was to create a development financial institution for providing medium-term and long-term project financing to Indian businesses. In the 1990s, ICICI transformed its business from a development financial institution offering only project finance to a diversified financial services group offering a wide variety of products and services, both directly and through a number of subsidiaries and affiliates like ICICI Bank. In 1999, ICICI become the first Indian company and the first bank or financial institution from non-Japan Asia to be listed on the NYSE. After consideration of various corporate structuring alternatives in the context of the emerging competitive scenario in the Indian banking industry, and the move towards universal banking, the managements of ICICI and ICICI Bank formed the view that the merger of ICICI with ICICI Bank would be the optimal strategic alternative for both entities, and would create the optimal legal structure for the ICICI group's universal banking strategy.

16

The merger would enhance value for ICICI shareholders through the merged entity's access to low-cost deposits, greater opportunities for earning fee-based income and the ability to participate in the payments system and provide transaction-banking services.

The merger would enhance value for ICICI Bank shareholders through a large capital base and scale of operations, seamless access to ICICI's strong corporate relationships built up over five decades, entry into new business segments, higher market share in various business segments, particularly fee-based services, and access to the vast talent pool of ICICI and its subsidiaries. In October 2001, the Boards of Directors of ICICI and ICICI Bank approved the merger of ICICI and two of its wholly-owned retail finance subsidiaries, ICICI Personal Financial Services Limited and ICICI Capital Services Limited, with ICICI Bank. The merger was approved by shareholders of ICICI and ICICI Bank in January 2002, by the High Court of Gujarat at Ahmedabad in March 2002, and by the High Court of Judicature at Mumbai and the Reserve Bank of India in April 2002. Consequent to the merger, the ICICI group's financing and banking operations, both wholesale and retail, have been integrated in a single entity.

*Free float holding excludes all promoter holdings, strategic investments and cross holdings among public sector entities.

17

Deposits ICICI Bank offers wide variety of Deposit Products to suit your requirements. Coupled with convenience of networked branches/ ATMs and facility of E-channels like Internet and Mobile Banking, ICICI Bank brings banking at your doorstep. Select any of our deposit products and provide your details online and our representative will contact you for Account Opening. ICICI Bank offers you a power packed Savings Account with a host of convenient features and banking channels to transact through. So now you can bank at your convenience, without the stress of waiting in queues. We understand that as you reach the age to retire, you do have certain concerns … whether your hard earned money is safe and secure … whether your investments give you the kind of returns that you need. That's why we have an ideal Banking Service for those who are 60 years and above. The Senior Citizen Services from ICICI Bank has several advantages that are tailored to bring more convenience and enjoyment in your life. It's really important to help children learn the value of finances and money management at an early age. Banking is a serious business, but we make banking a pleasure and at the same time children learn how to manage their personal finances Safety, Flexibility, Liquidity and Returns! A combination of unbeatable features of the Fixed Deposit from ICICI Bank.

18

When expenses are high, you may not have adequate funds to make big investments. But simply going ahead without saving for the future is not an option for you. Through ICICI Bank Recurring Deposit you can invest small amounts of money every month that ends up with a large saving on maturity. So you enjoy twin advantages- affordability and higher earnings.

Investments At ICICI Bank, we care about all your needs. Along with Deposit products and Loan offerings, ICICI Bank assists you to manage your finances by providing various investment options ranging from ICICI Bank Tax Saving Bonds to Equity Investments through Initial Public Offers and Investment in Pure Gold. ICICI Bank facilitates following investment products: •

ICICI Bank Tax Saving Bonds

•

Government of India Bonds

•

Investment in Mutual Funds

•

Initial Public Offers by Corporates

•

Investment in "Pure Gold"

•

Foreign Exchange Services

•

Senior Citizens Savings Scheme, 2004

19

You can invest in above products through any of our branches. For select products ICICI Bank also provides the ease of investing through electronic channels like ATMs and Internet (ICICIdirect.com).

Cards ICICI Bank offers a varied range of cards to suit your requirements. These cards having a wide acceptance, nationally and internationally, coupled with benefits of channels like Internet and Mobile, will enhance your experience. ICICI Bank Credit Cards give you the facility of cash, convenience and a range of benefits, anywhere in the world. These benefits range from life time free cards, Insurance benefits, global emergency assistance service, discounts, utility payments, travel discounts and much more. The ICICI Bank Debit Card is a revolutionary form of cash that allows customers to access their bank account around the clock, around the world. The ICICI Bank Debit Card can be used for shopping at more than 100,000 merchants in India and 13 million merchants worldwide.

20

DIFFERECT LOANS PROVIDED BY ICICI BANK

ICICI Bank offers wide variety of Loans Products to suit your requirements.Coupled with convenience of networked branches/ ATMs and facility of E-channels like Internet and Mobile Banking, ICICI Bank brings banking at your doorstep. Select any of our loan product and provide your details online and our representative will contact you for getting loans.

21

PROJECT A STUDY ON HOME LOANS WITH REFFERENCE TO ICICIC BANK

22

HOME LOAN PRODUCTS OF ICICI BANK

ICICI Bank home loan provide not just the most competitive interest rates & best level of service, but also products designed to cater to the specific needs of consumer. New products / New features in existing products are introduced based on customer feedback. Choose the ICICI Bank Home Loan that suits your needs.

Home Loans

Home Loans are provided to individuals to own a residential property. ICICI Bank offers easy home loans for •

First Purchase in ready construction

•

Under construction property

•

Purchase in re-sale

•

Self construction & extension of existing living space

The following are the features of ICICI Bank Home Loans

•

Home loan amount can be chosen to suit specific needs

•

One can avail of a loan up to 85% of Cost Of Property

•

Conveniently pay off the loan over a period of upto 25 years 23

•

It can be availed at the Floating rate of Interest or at the Fixed rate of Interest or at the combination of both Fixed & Floating rates

•

Faster repayment as principal repayment in on monthly rest.

Eligibility Norms for Home Loans. Home Loans can be availed by Resident Indian whether Salaried or SelfEmployed and also by Non- Resident Indian who are Salaried. For resident Indians the following are the eligibility norms • You must be at least 21 years of age when the loan is sanctioned. • The loan must terminate before or when you turn 65 years of age or before retirement, whichever is earlier. • You must be employed or self-employed with a regular source of income.

24

Land Loan Land loans give an opportunity for individual customer to purchase a residential plot of land to do self- construction. Thus, customer can invest now in a plot of land & build in future. The Land loan can be financed only within municipal limits or in case of direct allotment outside municipal limits by DA. Land Loan can be availed by Resident Indian whether Salaried or SelfEmployed and also by Non- Resident Indian.

Home Improvement Loans Home Improvement Loan is offered to facilitate improvement of a self owned dwelling unit to existing or new customer. HIL considers a range of facilities internal or external to the structure without increase in the living pace. Thus, a customer can add or improve facilities to his dwelling unit with a loan at Home Equity Loan rate of interest Home Improvement Loan can be availed by Resident Indian whether salaried or Self-Employed.

25

Office premises loans: Office Premises Loan can be used for purchase, construction, extension & also for improvement (at the time of acquisition of office premises). It creates an opportunity to extend loans to self employed individuals to house their profession or business giving a permanent address for generating steady flow of income. The product can also include the estimate of renovation at the time of purchase of the property. This loan is especially meant for self-employed professionals like Doctors, Architects etc. Home Loans can be availed by Resident Indian who are Self-Employed and also by Non- Resident Indian who are Salaried.

EMI under construction: EMI Under Construction is offered for structuring a home loan to enable individuals to commence his EMI in a partly disbursed under construction project. Commencement of EMI ensures re-payment towards principal amount leading to savings in interest and faster repayment of the loan. The EMI paid is as per the sanctioned loan amount and remains constant during the tenure of the loan. The tenure of the loan keeps moving up with additional amount being disbursed. EMI under Construction can be availed by Resident Indian whether Salaried or Self-Employed and also by Non- Resident Indian.

26

Balance transfer: Balance Transfer is a facility offering the customer a choice to transfer the outstanding balance of the loan availed for better terms & conditions. Balance Transfer helps to move from higher rate of interest to lower rate of interest or increase in loan component as Top up. BT is possible only from loans taken from HFCs approved by NHB for refinance, Banks or employer Loans taken from Central or State Government. Balance Transfer can be availed by Resident Indian whether Salaried or SelfEmployed Money saver: Money Saver account is a home loan account with transaction facility. The account holder can deposit & withdraw to the extend of balance maintained. On the commencement of EMI the interest will be calculated on the outstanding debit balance. Thus, the home loan account holder maintaining large balance in the Money Saver account can save on the interest paid by faster repayment. This means one can pay less & repay loan faster. This product can be offered only in case of first and final disbursement – Part disbursement cases cannot be offered this product. MoneySaver would be available at Floating Rates only & Fixed EMI per lac per month would be applicable . IT certificate in the case of MoneySaver is not issued. Money Saver can be availed by Resident Indian whether Salaried or SelfEmployed

27

Topup loan: Top Up Loan can be availed time and again for various personal requirement based on value of the property. It offers the customer additional funds against the security of the same property. To avail Top Up loan , the vintage of atleast six months is required for the loan availed. The basic eligibility emerges with good repayment track record. The end use letter is essential to be collected. The End use of Top Up Loans can be •

Furnishing of home

•

Consumer durable

•

Child’s education

•

Daughter’s marriage

•

Family holiday

•

Vehicle

Any other personal requirement of the borrower provided it is not speculative or illegal in nature This product is applicable to fully disbursed cases with no postdisbursement document pending This product is priced more than base home loan rates but lower than any personal loan rates . Top Up Loan can be availed by Resident Indian whether Salaried or SelfEmployed.

28

Loan on phone: Loan On Phone is a pre sanctioned loan. Its is based on the existing relationship of the customer with ICICI Bank. The biggest advantage is that the customer can get the loan with minimum documentation. Good banking transactions and repayment records becomes a strength for availing loans in future. Loan on Phone can be availed by Resident Indian whether Salaried or SelfEmployed

Home equity loan: Loan against property gives the owner of residential or commercial premises to leverage on the value of the property. It offers the ability to unlock funds gives the advantage of looking at the asset as a source of security bringing liquidity and retaining ownership.

In case of HEL the property should be self occupied by one of income considered applicants. The security of the property ensures competitive rate of interest . The interest component of the EMI paid by SEP / SENP can be booked as expenses in their P & L

29

Home Equity Loans are provided for many personal requirements of the customer viz. – •

Marriage

•

Child Education

•

Business

•

Purchase of Property (Where mortgage is not possible)

•

Improvement of Property

•

Medical Treatment

Home Equity Loans can be availed by Resident Indian who are SelfEmployed and also by Non- Resident Indian who are Salaried.

Property overdraft: The overdraft facility from ICICI Bank allows you to borrow money against your self occupied property. The overdraft facility comes with a multi-city cheque book and phone banking facility. The customer is charged interest only for the amount that he withdraws from the account. Whenever he deposits funds into the account, they go towards reducing the outstanding balance in the account.

It offers the following benefits:-

30

•

Generating capital against property (R ) or ( C) for business or personal use

•

Convenience of Pre - Sanctioned limit and draw as you need

•

Pay interest on the amount drawn and for days utilized

•

Convenience of depositing & withdrawing like any Current Account

•

Benefit of Cheque Book & Phone banking

•

Fast Processing and door-step service

•

Multi-city cheque book and phone banking facility

Property Overdraft can be availed by Resident Indian who are SelfEmployed

Lease rental discounting: Lease Rental Discounting helps to raise funds against the future expected rentals of self owned commercial property. The property should be occupied by the Lessee. Similar to Home Equity Loans, LRD can be provided for any personal requirements of the customer viz. –

•

Marriage 31

•

Child Education

•

Business

•

Purchase of Property (Where mortgage is not possible)

•

Improvement of Property

•

Medical Treatment

Lease Rental Discounting can be availed by Resident Indian whether Salaried or Self-Employed

Loan amount: Factors affecting your Loan Amount ICICI home loans bring to you a home loan power-packed with numerous facilities making it the perfect home finance option for you. You can get a home loan suited to your needs. The home loan amount depends on your repayment capability and is restricted to a maximum of 85% of the cost of the property or the cost of construction as applicable. Repayment capacity takes into consideration factors such as income, age, qualifications, number of dependants, spouse's income, assets, liabilities, stability, continuity of occupation and savings history. A number of factors are taken into account when assessing your repayment capacity. Your income, age, number of dependants, qualifications, assets and liabilities, stability/ continuity of your employment / business are some of them. However, there are ways by which you can enhance your eligibility.

32

• If your spouse is earning, put him/her as a co-applicant. The additional income shall be included to enhance your loan amount. Incidentally, if there are any co-owners they must necessarily be co-applicants. • Did you know that your blood relater income can also be considered for sanctioning the loan on your combined income? The disbursement of the loan, however, will be done only after you submit proof of your marriage. • Providing additional security like bonds, fixed deposits and LIC policies may also help to enhance eligibility.

While there is no need for a guarantor, it could be that having one might enhance your credibility with us. If so, our loan officer would provide you with the necessary details. The final amount to be sanctioned will depend on your repayment capacity. However, what you ultimately are entitled to will have to conform within the limits fixed for each loan. Also, when the company looks at the total cost, registration charges, transfer charges and stamp duty costs are included.

33

Documents required for loan sanction

The leading home loan provider offers attractive interest rates and unbeatable benefits to ensure that you get the best deal without any hassles. Keeping your convenience in consideration, we ask you for minimal mandatory documents for the sanctioning of your home loan. At ICICI Bank we require the following documents to sanction your home loan:

Sanction Documents • Duly Completed Application Form • Photograph • Fee cheque • Photo identity proof • Age proof • Signature verification proof • Residence address proof

34

Documents for salaried people • Last three months salary slips • Form 16 • Bank statements for last 6 months from salary account • Repayment track record of existing loans

Documents specific for Self Employed • Income Tax Return / Computation of Total Income / Auditors Report / Balance Sheet / Profit & Loss Account certified by Chartered Accountant for last 2 years (3 years for Home Equity) (both for business and personal of partners/directors) • Bank Statement for last 6 month from operating account • Repayment Track record of existing loans / Loan closure letter • Board Resolution in case of a company • Proof of existence • Office Address Proof • Photo Identity Proof, Residence Address Proof, Signature Verification is required to be provided for all the main partners / directors.

These are the documents required for sanctioning a loan. You may be asked to submit further legal documents if required by ICICI Bank or its approved lawyers. Do retain photocopies of all documents being submitted by you.

35

Disbursement of your ICICI bank home loan We disburse the loan amount after you identify and select the property or home that you are purchasing and submit the requisite legal documents. While you may be under the impression that the list of documents asked for is rather extensive, please note that it is for your own good. Each and every single document asked for will be verified and checked to ensure your safety. This may take some time but we want to ensure a clear title and will complete all the legal and technical verifications to ensure that you have full rights to your home. Your loan will be disbursed after you identify and select the property or home that you are purchasing and on your submission of the requisite legal documents. The 230 A Clearance of the seller and / or 37I clearance from the appropriate income tax authorities (if applicable) is also needed. On satisfactory completion of the above, on registration of the conveyance deed and on the investment of your own contribution, the loan amount (as warranted by the stage of construction) will be disbursed by ICICI Bank.

36

Disbursement Documents Property documents (as per P&D for respective states and as asked by empanelled lawyers for individual cases)

• Facility Agreement • Disbursal Request Form • Cheque Submission • ECS or Auto Debit for ICICI Bank account holders or Post Dated Cheques for EMI • ECS or Auto Debit for ICICI Bank account holders or Post Dated Cheques for EMI • Personal Guarantor’s Documents (PG Form, Photograph, Identity Proof, Address Proof, Signature Verification and Income documents, if applicable)

In case of property is owned by a company •

Memorandum of Entry

•

Form 8

•

NOC

37

Home Loan Interest Rates for Resident Indians In your quest of the perfect home loan, ICICI Bank ensures that you get the best deal, in terms of interest rate and other facilities also, in the most convenient way. With our varied offering of house loans and home finance, we give you an opportunity to select the perfect home loan as per your needs. You can choose from: •

Adjustable Rate Home Loan

•

Fixed Rate Home Loan

Combination of the above two

Step Up Repayment Facility (SURF) SURF is a variant to enhance the eligibility of a young professionally qualified home loan customer with out increasing monthly outflow as EMI. The structuring consider a notional percentage increase in income & offers options of graded increase in EMI over the tenure of the loan contracted. The tenure is divided in three parts •

Primary being lowest EMI

•

Secondary

•

Tertiary being highest EMI

38

The following are the features of SURF Higher eligibility of loan amount with lower EMI Graded increase in EMI considering future increase in Income Suited for young professionals. SURF can be availed by Resident Indian whether Salaried or SelfEmployed Professionals.

Flexible Installment Plan (FLIP)

FLIP is a variant for structuring enhanced eligibility of home loan applicants with varying tenure of income source. This repayment facility is given when income is going to reduce after certain time during the loan tenure due to one of the borrowers retiring before loan maturity. The EMI payable becomes affordable based on individual income source and also matching the family cash flow. This variant is offered typically to family members joining as applicants like husband & wife or father & son with varying tenure of service Period / Age norm.

39

FLIP has the following features •

FLIP considers income of two applicants and offers step down repayment facility

•

One of the applicants should have service period till the end of the tenure of the loan

•

FLIP would have two different EMIs during the tenure of the loan

•

Normally the first EMI would be based on the combined income

•

The second EMI would be smaller & based on the lower income with longer tenure of the applicant

FLIP can be availed by Resident Indian whether Salaried or SelfEmployed and also by Non- Resident Indian who is Salaried.

40

Part Fixed, Part Floating A product that offers the dual benefit of fixed rate loans as well as floating rate loans. With this product, a customer can book part of his loan under a fixed rate plan and the other part under a floating rate plan. Thus, he can minimize the impact of any adverse changes in the interest rate regimes and at the same time, avail of any benefits that may come by way of favorable changes. Part Fixed, Part Floating can be availed by Resident Indian whether Salaried or Self-Employed and also by Non- Resident Indian who is Salaried. SmartFix Home Loans 3 years fixed and floating rate thereafter. A product that offers the safety of fixed rates plus the advantages of floating rates. The Smart Fix enables the customer to lock at fixed rate of interest today with the contract to move to a floating rate on a subsequent date. For the first 3 years you get a fixed interest rate. From the fourth year, your loan gets switched to the prevailing floating interest rate. Thus, a customer gets an opportunity to observe the interest rate movement over a period of time and expects to benefit in the bargain

41

Smart Fix can be availed by Resident Indian whether Salaried or SelfEmployed. The interest rate on ICICI Bank Home Loans is linked to the ICICI Bank Floating Reference Rate (FRR)/PLR. As per earlier communication, FRR/PLR was increased by 1% on Feb 9th 2007. Consequently interest rate for all existing customers under Adjustable Rate Home Loans (ARHL) also went up by 1%. Subsequent to this change, as per recent announcement, the FRR/PLR has been further increased by 1% effective from March 31st 2007.The FRR has gone up from 11.75% to 12.75%& PLR has gone up from 13.75% to 14.75%. For all the Adjustable Rate Home Loan customers, both the above changes will be effective from 1st April 2007.

42

What is the repayment tenure?

Repayment tenure is the tenure for the number of year for which the loan gets sanctioned. We offer you a wide range of options for the tenure of the loan. You can take a home loan for up to 25 years provided you do not reach the age of 65 years or retire within that period How is the loan repaid? All loan repayments are done via equated monthly installments (EMI).

What is an EMI? An EMI refers to an equated monthly installment. It is a fixed amount which you pay every month towards your loan. It comprises of both, principal repayment and interest payment.

When does the repayment start? EMI payments start from the month following the month in which the full disbursement has been made.

How is the EMI paid? 43

The EMI is to be paid every month through post-dated cheques (PDCs) or Electronic Clearing System (ECS)*. If you are opting for PDCs, then you will have to provide 36 PDCs upfront. The PDCs are to be dated on the 1st of every month. However, if you receive your salary a few days later, we provide the flexibility of dating the cheques for the 10th of the month. In case you have an ICICI Savings account you can also go in for the facility of Auto Debit. * ECS facility is available in selected cities only.

What if a PDC bounces? In the case of a bounced cheque or delayed payment, charges and outstanding dues will be charged as per the prevailing company policy. You can replace old PDCs with new ones within 5 - 7 working days.

What is pre-EMI interest? 44

In the case of part disbursement of the loan, monthly interest is payable only on the disbursed amount. This interest is called pre-EMI interest (PEMI) and is payable monthly till the final disbursement is made, after which the EMIs would commence.

When do I pay PEMIs? The first PEMI is payable by cheque by the end of the month in which the disbursement is made and each subsequent PEMI at the end of every month till the commencement of EMI. In case you have an ICICI Savings account you can also go in for the facility of Auto Debit.

Application Process of your Home Loan

Your search for the perfect home loan ends here at ICICI bank home loan, even before your have found the perfect property. The moment you decide to buy a home, you can put in your application for a home loan. Yes, you can apply for a home loan even before you have selected the property. The property need not even be in the same city where you are residing. The only condition being that ICICI Bank has home loan operations in both the cities.

45

Should there be a change in your financial status or plans, you can withdraw your sanction within 6 months of approval of your home loan. However, we are always ready to assist our customers in the event of legitimate problems. And, we might reconsider this if we find that there are satisfactory reasons for the delay. And, neither would we charge you extra for this delay. If it is refinancing you are interested in, it is possible within 6 months from the date of purchase of property.

Insurance Plans for your Home Loan Introducing exclusive home loan insurance that can provide cover to your Home loan in the face of any unforeseen event happening to your life. In case of any of these happenings, your family will have the support of the insurance cover to pay for the outstanding Home loan, without being burdened by the loan EMI's.

Key Benefits of HomeSafePlus •

No medical checkup

•

Comprehensive insurance plan for individual, home and its contents

•

Single premium long-term insurance plan

•

Premium paid for the Critical Illness cover is eligible for tax benefits u/s 80D of the Income Tax Act

46

•

Sum Insured remains constant throughout the policy period (loan O/S amount to come to bank, rest goes to individual)

•

Multiple applicants can be covered under the same loan

•

Simple application form

Key Benefits of HomeAssure/HealthAssure •

Life Cover from HomeAssure for the entire home loan tenure

•

Critical Illness cover from life threatening illnesses like cancer, coronary artery bypass, heart attack, kidney failure, stroke, major organ transplant

•

Special non-medical limits only for ICICI Bank Home Loans customers

•

Dual benefit to customers, Life Cover from HomeAssure and Critical Illness Cover from HealthAssure

•

Dual tax benefits, Section 80C benefits under HomeAssure, Section 80D benefits under HealthAssure

•

Simplified claim procedure

47

FINDINGS 1. ICICI Bank having good brand image in the minds of customers. 2. Majority of the people got loans from ICICI Bank only 3. Most of the customers are not aware of the products of ICICI home loans 4. Some of the customer’s felt that the interest rates are some what high 5. Some of the customer not having good faith on private banks 6. Most of the people are directly go to bank to apply a home loan 7. Some of the customer of ICICI already benefited through ICICI home loan products and services 8. Customer awareness is medium about ICICI products. 9. ICICI providing good services to their customers.

48

RECOMMENDATIONS

 Create awareness: The Company has to take care of awareness creation about the products and services among the customers.  Charges: The Company has to reduce the mortality and administration charges.  The process is some what late to sanction a loan.  The company has to reduce their interest rates on home loan products and services.  The company has to identify the potential customers.  Production promotion strategies should be improved.  Company should consider the present competition and should act according to the customer needs.

49

CONCLUSION • In my study we came to know that many peoples are interested to take a home loan from ICICI bank to construct their homes. • Home loans have long period when compare to other personal loans and other loans. So peoples are confused to take a home loan. • The interest rates also some what high when compare to other banks. • Even though the interest rates are high peoples are willing to take a loan from ICICI bank due to some reasons. • The loan sanction process is low when compare to other banks. • For disbursement process is also it will take low time when compare to other banks

50

ON THE JOB TRAINING

INTODUCTION My OJT is promoting ICICI home loan products and services I have to promote the ICICI bank products and create awareness in the minds of customers. And I have to identify the potential customers, who are showing interest to take home loan. I have to convert them as ICICI customers. I have to collect all the required documents to get a home loan from the customers. I have submit all the documents to our technical team, these are the people evaluate the property value. I have to inform to the customers about their loan status.

51

OBJECTIVES The main objective of doing this project is to study the corporate culture and creating awareness among the customers about home loan products of ICICI bank. During this student internship program period I have to achieve some thing which is helpful to the development of myself and some value addition to the company. Generating business to the company is the main objective. It gives me good exposure of myself and creating good impression of corporate mind.  The main objective of this study is to know the Customers perceptions about home loans of ICICI bank.  Generating good business to the company by promoting and selling the products of ICICI. .  To know the ideas of customers about home loan products and services.  To get the knowledge about different loan products of ICICI Bank.  Creating awareness of ICICI Bank products in the minds of Walk-in customers in the bank.  Fixing the appointments with the customers.  Visiting the customers and closing the deal.

52

TARGETS/ TASKS I have to approach the customer with in the bank and out side of the bank also to promoting the products and services of ICICI. If he gets the information about the product I have to take his mobile number and appointment. After getting the leads I have to submit to the financial consultants. With the guidance of financial consultants I have to generate the business.

STRATEGIES Followed strategies to achieve my Targets

1. Direct marketing My OJT is promoting the home loan products of ICICI.By adopting this strategy I can understand the ideas of customers and their investment habits. If I know the ideas I can create better idea of our products. Direct approach creates great awareness about the product and we can easily clarify the doubts of customers.

2. Tele-marketing This is the one of the strategy I am following to promote the product. If once I got the phone number of the customer I can easily grab the customer. Through Tele marketing I can convince the customer.

53

3. Relationship marketing It is also one of the best marketing strategy. Direct approach is only belongs one customer. Through relationship marketing we can pinch the product to many persons. If one customer got good faith on us. Then he will promote the products to his friends and colleagues. It is also one of the best strategies I am following.

ACHIEVEMENTS I promoted ICICI Bank home loan products during my SIP period. I have showing them as monthly wise as follows,

1st week nd

2 week rd

3 week 4th week

In The Month Of MAY Training class, for different home loan products of ICICI Training class on documents and disbursement part 4 leads 3 leads

54

1 week 2nd week 3rd week 4th week

In The Month Of JUNE 6 leads 3 leads 4 leads 5 leads

1st week 2nd week 3rd week 4th week

In The Month Of JULY 5 leads 7 leads 1 lead 6 leads

st

st

1 week 2nd week 3rd week 4th week

In The Month Of August 5 leads 2 leads 3 leads 6 leads

LIMITATIONS

55

1. The survey was confined to only certain parts of twin cities, which Included walk-in customers of ICICI Bank and outsiders. 2. We don’t have sufficient knowledge to close all the deals. 3. Getting the prospective customers are very time consuming. 4. Time to explain the customer about the product inside branch is less. 5. Time Period of my OJT is one of the Limitation.

LEARNINGS 56

Learning’s in the on the job training 1) Product knowledge of ICICI home loan products and services 2) The way to improve my communication skills. 3) The way to convince the customers. 4) The way to behave people in corporate world. 5) The way to adopt new strategies to attract customers. 6) The way to convince the people who do not trust private organizations. 7) How people invest their money in different investment schemes. .

57