Home loans

A PROJECT REPORT
ON
STUDY OF HOME LOAN (BANK OF
BARODA), PUNE
SUBMITTED BY
SHIVANI JADON
ROLL NO. – 21478
INTERNAL PROJECT GUIDE:
PROF.REKHA KANKARIYA
SUBMITTED IN PARTIAL
FULFILLMENT OF 3 YEAR OF
BACHELOR DEGREE OF BUSINESS
ADMISTRATION (B.B.A) OF
SAVITRIBAI PHULE PUNE UNIVERSITY

DECLARATION
I, the undersigned, hereby declare that the project report titled “A
STUDY ON HOME LOANS” written and submitted by me to the
Savitribai Phule Pune University in partial fulfillment for the
degree of bachelor of business administration (B.B.A.) under the
supervision of Mrs. Rekha Kankariya. It is my original work and
the conclusions drawn therein are based on the material collected
and observations made by me during the academic year 2016-17.
SHIVANI JADON
DATE :

ACKNOWLEDGEMENT
I would like to appreciate everyone who helped me to make this report and
without their support, the report would not be able to complete. I would like to
express my gratitude to my college and deep regards to Dr. Gulshan
Gidwani our honorable principal and Mrs. Stella Ambrose our course
coordinator.
I would like to thank Mrs. Rekha Kankariya for
helping us to make this report .Without her participation and help it would be
very difficult for us to make the report. With the help of Rekha ma’am we gained
lots of information and is able to complete this project report easily.
I would like to thank almighty , my parents,
my friends for their supportand constant encouragement and lastly I would like
to express my gratitude to all those who directly or indirectly helped me and
supported me in this report.
Shivani Jadon

EXECUTIVE SUMMARY
Home is a dream of a personthat shows the quantity of efforts, sacrifices luxuries
and above all gathering funds little by little to afford one’s dream.
Home is one of the things that everyone one wants to own. Home is a shelter to
personwhere he rests and feels comfortable. Many banks providing home
loans whether commercial banks or financial institutions to the people
who want to have a home. The housing sector plays an important role in
the economic development of the country. My project title is “A STUDY ON
HOME LOANS”. I selected this topic because The Indian housing finance
industry has grown by leaps and bound in few years. Total home loans
disbursements by banks has risen which witnesses phenomenal growth
from last 5 years. There is great number of borrowers of home loans, so by this
study we can find out satisfaction level of customers and problems faced
by them in obtaining home loans.
This project gave me a great learning
experience and at the same time it gave me enough scopeto implement my
analytical ability. The analysis and advise presented in this project report is based
on my research on home loans provided by Bank of Baroda. This project will
help to know about some of the customers who take home loans, their views
about the home loans, about the banks from which they take the loans and the
reviews about Bank of Baroda.
The project consists of data and analysis
collected through survey done on 50 people. For the collection of primary data, I
made a questionnaire and surveyed 50 people. I also taken interview of many
people those who were coming at Bank of Baroda, Viman nagar Branch where I
done my project. This project covers the topic “A STUDY ON HOME LOANS”.
The data collected has been well organized and presented. I hope the research
findings and conclusion will be of use.

INDEX
CONTENTS PAGE NO.
DECLERATION
___________
ACKNOWLEDGEMENT
__________
EXECUTIVE SUMMARY __________
CHAPTER 1
OBJECTIVES
1
CHAPTER 2
 RESEARCHMETHODOLOGY
 LIMITATIONS
2-4
CHAPTER 3
 INTRODUCTIONTO HOME LOANS
 IMPORTANCE
 TYPES OF HOME LOANS
5-16

CHAPTER 4
 COMPANYPROFILE
 HISTORY
 VISION AND MISSION
 HOME LOAN PROCESS OF COMPANY
 PURPOSE OF HOME LOAN
 ELIGIBILITY
 MARGIN
 SECURITY
 DOCUMENTATION
 REPAYMENT PERIOD
 DIBURSEMENTOF LOAN
 COMPANYHOME LOAN SEVICES
 HOME LAON ADVANTAGES
 COMPANYHOME LOAN DETAILS
17-46
CHAPTER 5
 DATA ANALYSIS AND INTERPRETATION
 CALCULATION OF EMI
 SWOT ANALYSIS
47-65
CHAPTER 6
 FINDINGS
 CONCLUSIONS
 SUGGESTIONS
66-72
BIBLIOGRAPHY 73
ANNEXURE
 OUESTIONNAIRE
 HOME LAON FORM FOR BANK OF
BARODA
74-82

CHAPTER 1
OBJECTIVES
 To know the Customers perceptions about home loans of Bank of Baroda
and to analyze the data with the help of graphs, pie charts and tables.
 To know the ideas of customers about home loan products and services
provided by Bank of Baroda.
 To study the satisfaction level of customers about home loans.
 To study the problems faced by customers in obtaining the home loans.
 SWOT Analysis of the company.
 Calculation of EMI for 2 years (24 Months).
 To make suggestions based on the finding of the study.

CHAPTER 2
RESEARCH METHODOLOGY
This report is based on primary as well secondarydata, however primary data
collection was given more importance since it is overhearing factor in attitude
studies. One of the most important users of research methodology is that it helps
in identifying the problem, collecting, analyzing the required information data
and providing an alternative solution to the problem .It also helps in collecting the
vital information that is required by the top management to assist them for the
better decision making both day to day decision and critical ones.
Data sources:
Research is totally based on primary data. Secondary data can be used only for
the reference. Research has been done by primary data collection, and primary
data has been collected by interacting with various people. The secondary data
has been collected through various journals and websites.

SAMPALING
Sampling procedure:
The sample was selected of them who are the customers/visitors of Bank of
Baroda, Viman nagar Branch, irrespective of them being customers or not, or
availing the services or not. It was also collected through personal visits to
persons, by formal and informal talks and through filling up the questionnaire
prepared.
Sample size:
The sample size of my project is limited to 50 people only.
Sample design:
Data has been presented with the help of bar graph, pic charts, and tables.

LIMITATIONS
1. Some of the persons were not so responsive.
2. Possibility of error in data collection because many of
respondents may have not given actual answers of my
questionnaire.
3. Some respondents were reluctant to divulge personal
information which can affect the validity of all responses.
4. The research is confined to a certain part of Pune.

Home is an integral part of an individual, who since his / her birth and
childhood, dreams to have living space of his / her own. Once in a lifetime
investment requires loan to accomplish it and that is how the home loan
comes into scheme of things. Buying a home is dream for everyone. Owing
to the rising price of properties, it has almost become impossible for an
average earning person to buy a home on a lump sum payment. Therefore,
the concept of home loan has come in existence. There are plethora of
housing finance companies and equal number of banks that offer home loans.
The task of selecting one company and one offer for home loan amidst the
thousands available options have become a very complex task owing to the
burgeoning housing finance market in the country. Apart from this, there are
intricate business jargons and technicalities that make this task more difficult.
In this study, I propose to give the basic information of home loan
technicalities, so that when a person applies for the home loan, he / she can
understand the basics and help themselves remain away from the duping
elements in the market.

Importance of Home Loan
 The need for home loans arises not because property prices are heading
upwards all the time but because home loans make great sense from a long-
term savings perspective. Not only are home loans a handy tool for the
common man to own a roof over his head but they also help save money in
the long run.
 With skyrocketing real estate prices, people are increasingly opting for
housing loans to acquire their dream home. Interest rates are coming down
all the time and the banks and the housing finance companies are literally
falling over each other to lure the prospective home-seekers.
 Notwithstanding the tax breaks and generous lending rates, a lot of people
still cannot arrange resources for the down-payment, which comes out to be at
least 15 per cent of the property value. Taking cognizance of the situation,
Banks are coming up with home loan products called ‘zero down payment
loans’ wherein 100 per cent funding is provided for select properties. These
lucrative offers are other major reasons for why people are opting for loans.
 Even if one can afford to buy a home with one's own money, home loans
should be availed because they act as good savings instrument. According to
industry estimates, the long term average return in investing in a home is
about 20% p.a. while the average cost of borrowing funds in the market today
is about 7% p.a. (considering all tax breaks).

 For salaried employees, housing loans are the best way to avail
of tax benefits. Many people simply go for the home loans in order to avail
these benefits. Interest payments up to ` 1.5 lakh on housing loans are
deductible from the taxable income and there is a further deduction of
taxable income maximum up to ` 1 lakh against repayment of principal
portion per annum. In case a person stays in a rented house, the cost of the
loan will be nearly zero per cent since he will be saving a decent amount on
rent.
All the banks offer many types of loan and advances to the customers like
retail loan, term loan, working capital finance, overdraft, export import
finance and project finance.
Types of Retail Loans
Bank offers a wide range of retail loans to meet customer diverse needs.
Whether the need is for a new house, child's education, purchase of a new
car or home appliances, banks’ unique and need specific loans enable
customer to convert customer dreams to realities.
Types of Retail Loans
1. Home Loan 2. Home Loans to NRIs / PIOs
3. Interest Subsidy Scheme
for Housing the
Urban Poor (ISHUP)
4. Loan Against Future Rent
Receivables
5. Mortgage Loan 6. Education Loan

7. Car Loan 8. Two Wheeler Loan
9. Loan to Professionals 10. Traders Loan
11. Personal Loan 12. Loan for financing Individuals for
subscription to Public Issues / IPO
13. Reverse Mortgage Loan
(1) Home Loan
Home Loan is available for Purchase of new / old dwelling unit,
Construction of house, Purchase of plot of land for construction of a house.
Customers repaying a loan already taken from other Housing Finance
Company / Bank. Repayment period up to 25 years (floating rate
option),Also for Repairs / Renovations / Improvement / Extension of
Home and for Furniture, Fittings & Fixtures.
(2) Home Loans to NRIs / PIOs
Banks have also designed housing loan facility for NRI / PIO. Customer
opt for Flexi Rate plan to hedge the interest rate risk by breaking the loan
into two separate accounts, Free property insurance and personal accident
insurance. Borrower does not pay pre-payment / foreclosure charges for
part as well as full prepayment (when repaid from own sources by the
borrower).

(3) Interest Subsidy Scheme For Housing The Urban Poor
(ISHUP)
“Affordable Housing for all” is an important policy agenda of Government
of India and accordingly the Ministry of Housing and Urban Poverty
Alleviation (MH & UPA) has designed an Interest Subsidy Scheme as an
additional instrument for addressing the housing needs of Economic
Weaker Section (EWS) and Low Income Group (LIG) segment in urban
areas. The scheme envisages the provision of interest subsidy to EWS and
LIG segments to enable them to buy or construct houses.
(4) Loan against Future Rent Receivables
Loan against future rent receivables has been developed considering the
growth potential in the real estate in various metros and urban areas, where
many commercial properties / shopping malls are being developed and the
owners approach banks for loans against securitization of future rent
receivables from such properties. Loan covers the target groups, viz. owners
of immoveable properties and the minimum and maximum loan limits are
based on actual rent income received during the particular year.
(5) Mortgage Loan
Bank gives loan to the customer an innovative combination of a loan and over
draft facility with flexible repayment options against the security of customer
is immovable property. Benefits of this loan are ideal use of idle property -
generate additional income from idle property, customer withdraw money as

per their need and save on interest cost, deposit surplus money / regular
income / salary and save interest, flexibility to withdraw money deposited
earlier. Banks also provide either as overdraft or demand loan as per the
customer’s need.
(6) Education Loan
Education is the most important investment one makes in life. Higher studies
and specialization in certain fields call for additional financial
support from time to time. Whether customers are planning for their child for
school education (nursery to standard XII) pursuing a graduate or post-
graduate degree, the bank gives Education Loans, to fulfill customers’
ambitions and goals.
(7) Car Loan
In today's fast paced world, a vehicle is a necessity. Yet other expenses and
plans in life take priority and the dream of owning a car takes a back seat.
Whether as a comfortable and dependable means of transport or as a status
symbol in society, it is believed that customer deserve ownership of a vehicle.
Benefits of this loan are - available up to ` 15 Lakhs for any car make/model
(Inclusive of Gas-Kit), Loans can be availed for new and second-hand
vehicles (Not more than 3 years old). Repayment period of loan is as long as 7
years.

(8) Two Wheeler Loan
For those individuals who prefer to travel more conservatively or to get to
their destinations faster, a two-wheeler is as much a boon as it is to a car
owner. With newer models coming out each year, the options available to
the customer are both attractive as well as convenient. All resident Indians,
salaried people, professionals, self-employed, businessmen and farmers can
apply for this loan.
(9) Loan to Professional
Banks give loan to professional persons like doctor, engineer, CA. This loan
is designed specially to cater to the financial needs of the professional. The
loan can be availed as a demand / term loan or overdraft as per customer’s
preference. The loan is available for Purchase of office equipment’s viz.
computers, fax, air-conditioners and furniture, etc. Also, loan is available
for Expansion / renovation / modernization of existing premises.
(10) Traders Loan
Traders Loan facility enables individuals, proprietorships, bodies such as
partnership firms and co-operative societies to avail of working capital or
undertake development of shop by way of loan / overdraft. Dealers in gold /
silver jewelry are get benefit of this loan. The loan is provided against the
security of tangible collateral Securities in the form of mortgage of land (not
agricultural land) and building. Also National Savings Certificates,

Government Bonds, Bank's Term Deposits, Assignment of Life Insurance
Policies, standing in the name of the borrower/proprietor/partner/director.
(11) Personal Loan
There is wedding in the family. May be its high time for the person to surprise
the spouse with a priceless gift. The people simply need to pamper his
family with an extended vacation. These are the times when a person may
need a helping hand. Bank offers personal loan to meet the personal
requirements. Bank helps customer to take care of all kinds of expenses at a
short notice. The Loan may be availed to meet expenses related to marriage,
travel, honeymoon, holiday and medical expenditure or for any other personal
use. It is also available to Pensioners / Defense Pensioners. Loan is also
available for Earnest Money Deposits for buyers of home / flat / plot.
(12) Loan for financing Individuals for subscription to Public
Issues / IPO
Loan for financing Individuals for subscription to Public Issues / IPO for the
person to take smart investment decisions and avail of the benefits. Customer
can avail loan up to ` 10 Lakhs for subscribing to new issues. Loan is offered
at affordable / competitive interest rate. Customer can invest to pay within
maximum period of 90 days. Banks give option to continue the loan thereafter
by availing loan against the allotted shares.

(13) Reverse Mortgage Loan
Reverse mortgage loan aims at making financial assistance available to
senior citizens. Customer should be Senior Citizen of India, above 60 years
of age. Married couples will be eligible as joint borrowers provided one of
them is above 60 years of age and age of spouse is not below 55 years at the
time of application. Customer should be the owner of a residential property
(house or flat) located in India in his/her own name. Residential property
should be used as permanent primary residence (fully self-occupied
property). The Commercial property will not be taken as a security under the
product.
Types of Home Loan
Various kinds of home loans are available in India. They are described
below:-
1. Home Purchase Loan
These are the basic home loans for the purchase of a new home. These loans
are given for purchase of a new or already built flat/bungalow/row-house.
2. Home Improvement Loan
These loans are given for implementing repair works and renovations in a
home that has already been purchased by the customer. It may be requested
for external works like structural repairs, waterproofing or internal works
like tiling and flooring, plumbing, electrical work, painting, etc.

3. Home Construction Loan
These loans are available for the construction of a new home. The
documents required by the banks or bank for granting customer a home
construction loans are slightly different from the home purchase loans.
Depending upon the fact that when customer bought the land, the lending
party would or would not include the land cost as a component, to value the
total cost of the property.
4. Home Extension Loan
Home Extension Loans are given for expanding or extending an existing
home. For example addition of an extra room, etc. For this kind of loan,
customer needs to have requisite approvals from the relevant municipal
corporation.
5. Land Purchase Loan
Land Purchase Loans are available for purchase of land for both home
construction or investment purposes. Therefore, customer can be granted
this loan even if customer is not planning to construct any building on it in
the near future. However, customer has to complete construction within
tenure of three years on the same land.
6. Bridge Loan
Bridge Loans are designed for people who wish to sell the existing home
and purchase another. The bridge loan helps finance the new home, until a

buyer is found for the old home.
7. Balance Transfer
Balance Transfer loans help customer to pay off an existing home loan and
avail the option of a loan with a lower rate of interest. Customer can transfer
the balance of the existing home loan to either the same banks or any
another banks.
8. Stamp Duty Loan
These loans are sanctioned to pay the stamp duty amount that needs to be
paid on the purchase of property.
9. NRI Home Loan
This is a special home loan scheme for the Non-Resident Indians (NRI) who
wish to build or buy a home or land property in India. They are offered
attractive housing finance plans with suitable reimbursement options by
many banks in the country.

History
Sayajirao Gaekwad, under whose patronage the bank was incorporated on
20th July 1908 with a paid-up capital of ` 10 Lakhs (now US$ 20,800). The
bank survived the disastrous years between 1913 and 1917 – when as many as
87 banks failed – mainly due to its financial integrity and an abiding
responsibility it feels toward its client's hard earned money. These principles
have become the guiding mantra of the bank in the 102 years of its existence
and have helped steer the bank safely through various financial upheavals. In
1953 Bank of Baroda became one of the first Indian banks to open an office
abroad, when it set up a branch in Kenya followed by an office in London six
years later. It has since extended its footprint to 25 countries which it serves
through 74 branch offices. The bank was nationalized in July 1969. This set in
motion a new phase in its growth. While commerce continued to be its
objective, the bank was now also called upon to help in the development of
rural markets. With its multi service agency model for urban micro-credit, Bank
of Baroda has, today, redefined social banking and has emerged as a leading
lender to this community. The mid-1980s marked the beginning of a shift to a
buyers' market. The bank responded by diversifying into areas of merchant
banking, housing finance, credit cards and mutual funds. Overseas operations
were revamped and structural changes intensified in various servicing various
needs

Vision and Mission of Bank
It has been a long and eventful journey of almost a century across 26
countries. Starting in 1908 from a small building in Baroda to its new hi-rise
and hi-tech Baroda Corporate Centre in Mumbai is a saga of vision, enterprise,
financial prudence and corporate governance.
It is a history scripted in corporatewisdom and social pride. It is a way of
ordinary bankers and their extraordinary contribution in the ascent of Bank of
Baroda to the formidable heights of corporate glory. It is a story that needs to be
shared with all those millions of people - customers, stakeholders, employees &
the public at large - who in ample measure, have contributed to the making of
an institution. “To be a top ranking National Bank of International Standards
committed to augmenting stake holders' value
through concern, care and competence”.
Products and Services of Bank of Baroda
The bank have been provide following facilities to the customer
 Rural / Agri Banking
 Wholesale Banking
 Small and Medium Enterprise (SME)
Banking
 Wealth Management
 Dematerialized of shares and securities
services
 Product Enquiry

 Internet Banking
 NRI Remittances
 Baroda e-Trading
 Interest Rates
 Deposit Products
 Loan Products
 ATM / Debit Cards
 Retail Banking
Bank of Baroda takes special care to look after the requirements of its
shareholders. Given below are the various benefits provided to the shareholders
of the bank:-
 Change of address or names
of Shareholders
 Transmission of shares
 Transposition
 De-materializing Shares
 Investors Services
Department
 Registrars & Share Transfer
Agent
 Bonds related to Transfer
 Lodgment of Shares
 Duplicate Share Certificate
 Duplicate Dividend Warrants
 Revalidation
 Means of communication
 Investor Grievance Committee
 Electronic Clearing Services or
ECS
 StockMarket Data
Personal Services of
Bank
 Deposits
 Gen-Next
 Loans
 Credit Cards & Debit Cards
 Services
 Lockers

Corporate Services of
Bank
 Wholesale Banking
 Deposits
 Loans
 Advances
 Services
International Services of Bank
 NRI Services
 FGN Currency Credits (Foreign
Currency Credits)
 ECB (External Communication
Borrowings)
 FCNR (B) Loans
 OffshoreBanking
 Finance in Export and Import
 CorrespondentBanking Facility
 International Treasury
Treasury service of Bank of Baroda includes Domestic operations and Forex
operations.
Rural Facilities Provided by
Bank Domestic Services
 Deposits
 Priority Sector Advances
 Services
 Lockers

Priority Sector Advances
 Small Scale Industries
 Small Business
 Retail Loans
 Schemes sponsoredby the
GOI (Government of India)
 Baroda General Credit Card Scheme
(BGCC)
Bank of Baroda Home Loan Process
Bank of Baroda extends its hand to help the customers sail through and
realize their dream of owning a home. Most competitive rates have made by
Bank of Baroda home loans popular among the home buyers. In most of urban
area / city Bank of Baroda has started central processing cell - loan factory
where file for home loan has been processes centrally for the city. The main
concepts for opening cpc centre are early process of sanctioning home loan.
Bank of Baroda has committed that the bank will process and sanction the
home loan within seven days. The detailed internal process of home loan given
is as follows.

Purpose of Home Loan
 Construction of new dwelling unit and purchasing of new residential house /
flat.
 Old dwelling unit (not more than 25 years old) for dwelling units which are
older than 20 years but not more than 25 years, branch to ascertain structural
soundness of the building by obtaining an approved engineer’s certificate,
certifying the structural soundness as well as residual life of the building
which should be at least 5 years more than the repayment period.
 For dwelling units which are older than 25 years, Regional Head may
authorize such cases on selective basis, subject to, ascertaining structural
soundness of the building by obtaining an approved engineer’s certificate,
certifying the structural soundness as well as residual life of the building
which should be at least five years more than the repayment period of the loan.
 Purchase of plot of land, subject to the condition that a house will be
constructed thereon within 3 years or up to the period allowed by
Development authority, whichever is earlier, from the date of purchase of plot,
without resorting to penal interest. Please note that there is no exclusive
scheme for purchase of plot under home loan productand provision of plot is a
part of home loan project. As such, only a reasonable part of the total home
loan eligibility should be sanctioned /

disbursed for purchase of plot, keeping margin for construction of house
over the plot. When the loan is considered for purchase of a plot to
construct the house, the branch should obtain a suitable undertaking from
the borrower to this effect. Since the compliance of the undertaking rests
with the borrower, Branches are required to incorporate suitable covenants
in the loan documents at the time of sanction, to enable them to recall the
loan and / or charge higher rate of interest, ab initio, in the event of non-
compliance by the borrower with his undertaking. In this background, for
the benefit of the branches, we would like to clarify the issue as under:
In case the borrower fails to constructthe house within a period of
three years from the ailment of the said finance:
 Branch to charge commercial rate of interest (PLR / BPLR plus maximum
band declared by the Bank) from the date of first disbursement.
 Branch to recall the loan and recover total loan with revised
interest.
 Repayment of the loan already availed from any other Bank / Housing
Finance Company and / or other sources, provided documentary evidences
are produced.

Eligibility for applying home loan
 All individuals singly or jointly.
 Principal applicant must be employed minimum for last three years.
 Minimum age must be 21 years. However, the minimum age of co-
borrower can be 18 years. Age of the borrower plus repayment period
should not be beyond retirement age in case of salaried persons and 65
years in case of others.
 Person who already owns a house can also be considered for construction
/ buying a second house / flat in the same village / town / city or other
village / town for the purpose of self-occupation.
 Normally Housing Loan is to be considered only for purchase /
construction of one house / flat. However, looking to the size of the
family, income eligibility

and repayment capacity of the applicant, Housing Loan can be considered
for purchase of two flats / two houses also, provided both the flats /
houses are adjacent or in the same place (city / town / village) and
acquired for self-occupation.
 Person who has been provided accommodation by his / her employer is
also eligible for loan, even though he / she is not in a position to occupy it
in the near future and proposes to let out on rental basis.
 Housing loan to HUF is not to be considered as it is not meant for the
purpose of family business of HUF and also there are certain legal
complications.
 In the case of individuals who have taken loan for construction /
acquisition of house / flat from other bank / HFC and need supplementary
finance, loan may be considered to high class borrowers after obtaining
pari passu or second charge over the property mortgaged in favour of
other bank / HFC and / or against such other security as deemed
appropriate.

Income Criteria for Determining the Loan
Amount
The maximum amount of loan should not exceed the following:
a) In Case of Salaried Persons:
Monthly Income Eligible Amount of Loan
3.
Up to ` 20, 000 36 times of monthly gross
income
More than ` 20, 000 and Up to `
1,00,000
48 times of monthly gross
income
More than ` 1,00,000 54 times of monthly gross
income
a. In case of others viz. professionals / self-employed / business / persons
etc., 5- times of average annual income (last three years). (Depreciation
allowed hitherto is not to be considered for computing eligible loan
amount). However, bank should verified income tax return of applicant,
co-applicant and guarantor from income tax department and verified CIBIL
score of every person for their credit history. After verifying income tax
return and CIBIL score, bank should further process for home loan.
Wherever income of the family members is clubbed, they should be made
co- borrowers.

b. Considering the average life expectancy of about 65 years, the pension
income is not to be included in the income for calculating the eligible loan
amount.
Repaying Capacity
i. In Case of SalariedPersons:Monthly Income Total Deductions
not toexceed (Including proposed EMI)
Monthly Income TotalDeductions not to
exceed(including
proposedEMI)
Up to 20,000 40 %
More than 20,000 and up to 50,000 50%
Above 50,000 and up to 1,00,000 60%
Above 1,00,000 60%
ii. In Case ofOthers: Annual Income Total Deductions not to exceed
(Including proposed EMI)
Annual Income TotalDeductions not to
exceed(including
proposedEMI)
Up to 2.4 lakhs 50%
Above 2.4 lakhs & up to Rs12 Lakhs 60%
Above 12 lakhs 70%
However, higher repayment capacity may be considered by taking into
account age, income, qualification, number of dependents, assets, liabilities
stability / continuity of employment / business of the applicant and the co-
applicant’s income.

Margin
Margin stipulation on purchase of plot / flat / readymade house (including
registration charges, cost of stamp etc.) and on cost of construction:-
For Salaried Persons
Monthly
Income
Purpose Margin
Up to 20,000 Purchase of plot 20%
House/flat already constructed from own
resources
25%
All other cases 20%
Above 20,000 Purchase of plot 20%
House/flat already constructed from own
resources
20%
All other cases 15%
For Others
i. For purchase of plot - 20%
ii. For houses / flats already constructed from own resources and loan is
taken subsequently, 20% of the cost of construction / purchase price
of house /flat.
iii. For all other cases 15%
iv. For the purpose of finance, least of the value assessed by Bank’s
approved valuer on a realistic basis at the current market value / cost
of construction / agreement value and other legal charges viz. stamp
duty, registration charges, legal expenses etc. should be considered.

Security for Home Loan
i. Mortgage of the property constructed / purchased.
ii. If mortgage is not feasible, branch can accept, at its discretion, security of
adequate value in the form of life insurance policies, Government Promissory
Notes, shares and debentures, gold ornaments or such other security as may be
deemed adequate including third party guarantee from individuals with the
prior permission of Regional Head.
iii. Even if it is possible to create equitable mortgage, but customer desires that
the equitable mortgage need not be insisted upon, in such a case branch may
as a special case, accept at its discretion, security of adequate value in the
form of life insurance policies, Government Promissory Notes, shares and
debentures, gold ornaments or such other security as may be deemed adequate
with the prior permission of Regional Head, along with stamped undertaking
that the borrower shall not create any charge on the said property to any
third party and that he will create mortgage of the dwelling units / housing
property at a later date if desired by the bank, be obtained from the borrower.
Margin on above securities is to be maintained as per extant guidelines
applicable for financing against those securities.

iv. In cases where procedure for execution of sale deed / conveyance deed ,
forming a co-operative society and issuance of share certificate takes a very
long time and as such there are practical difficulties in creating equitable
mortgage at the time of sanction of housing loan for flats developed by
builders / developers following procedure may be adopted: Create equitable
mortgage by obtaining following documents duly supported with the
advocate’s search report and opinion on title of the land as also on the
agreement to sale.
 Original agreement to sale executed by builder in favour of
borrower, duly stamped and registered.
 Index – II Property Card
 Original Receipt in respect of registration of “Agreement to sell”.
 Copy of the map of the building duly approved by the appropriate
authority.
 NOC from builder for creating mortgage and noting of Bank’s lien
if the building is under construction.
 Share Certificate, if society is formed, duly supported with NOC
from the society for creation of mortgage and noting of banks lien
in society’s record.
 Possession letter in original.
As regard stamp duty, the same is to be paid as applicable on Memorandum
of Deposit of Title Deed.

Rate of Interest
Bank has both the options of interest rate, i.e. Fixed and Floating and
borrower can avail any of the option as per his choice, however, fixed rate
option is subject to reset clause after every 3 years. Floating interest rates are
linked with BPLR and subject to stipulation of minimum interest rate clause.
The minimum interest rate would be the rate applicable as on date of sanction.
 Fixed rate option is not available for loans up to 2 Lakhs.
 “Floating rate of interest will undergo change as and when Bank will
revise floating rate or BPLR” in the sanction letters issued to the borrowers
who opt for floating interest rate option.
 For the purpose of deciding rate of interest, tenure should be arrived at by
adding moratorium period to the number of EMIs.
 An option of Flexi interest rate providing therein part of the loan under
fixed and part of the loan under floating rate option.

Documentation
Following documents are to be obtained:
 Term loan agreement
 General form of Guarantee wherever third party guarantee is stipulated.
 Usual procedure for creation of equitable mortgage / registered
mortgage of the immovable property being financed.
 Document required to be obtained for recovery as per State Recovery
Act. In order to ensure that panel advocate incorporates all vital points in his
report relating to the property offered as security such as non-encumbrance,
marketability and title of the property, the branches are advised to send letters
to Advocates as per model draft while seeking his / her opinion. Reports
which do not contain the information on the points mentioned in the branch
letter must not be accepted.

Repayment Period
 Maximum 25 years including moratorium period. Loan to be repaid in
monthly equated installments except in case of farmers where the loan is
proposed to be repaid in half yearly installments coinciding with
harvesting/marketing of major crops produced.
 Moratorium period maximum 18 months or one month after completion
of house/ taking possession of flat / house whichever is earlier.
 Present age of the borrower plus repayment period should not be beyond
retirement age in case of salaried persons and beyond 65 years in case of
others.
 The repayment period can be extended up to 65 years of the age in case of
salaried persons drawing pension subject to the condition that 40% of the
pension is sufficient to pay EMI. In case EMI exceeds 40% of the pension, the
borrower to deposit adequate amount in the loan account so as to reduce the
outstanding amount of loan to the extent it can be serviced by 40% of the
pension.
 In exceptional cases, this term may be extended beyond above age limit if
borrower pledges FDRs / NSCs / Govt. Security etc. of adequate value to
ensure continuity of income for repayment of loan installment with interest if
sanctioning authority is satisfied about the same.

Equated Monthly Installment (EMI) Plan
i. The recovery under EMI provides for repayment of dues uniformly
throughout the loan period. The following accounting procedure may be
followed in this regard:
a. At the time of granting loan, EMI should be calculated as per chart
b. The EMI should be in figures rounded off to next higher rupee.
ii. Accounting & interest application
a. The monthly recovery under EMI shall be credited in full to the loan
account.
b. At the time of monthly interest application, interest is to be calculated on
daily products basis and debited to the loan account. In effect, this would result
in application of interest on daily product basis at monthly rests.
iii. Change in Interest Rates (Under floating Rate Option)
a. As interest rates on Housing Loans are linked to Benchmark Prime
Lending Rate (BPLR) the ultimate rate would, therefore, undergo change as
and when Bank will revise floating rate or BPLR. Accordingly, whenever rate
of interest is changed, the EMI also would need to be modified.
iv. Recovery of interest for the pre-EMI period
a. Interest charged during the pre-EMI period is to be recovered as and when
debited, before commencement of recovery by EMI.
b. For any reason, if the borrower is not in a position to repay the interest as
and when charged in one lump sum, the same may be recovered within 2
months, by charging overdue interest as and where applicable, as per rules /

extant guidelines.
v. Issuance of Interest Certificate
For the purpose of income tax, branches may issue certificate to the borrower
for interest debited during the year to the Housing Loan account, being
interest actually accrued on loan account.
Disbursement of Loan
i. In case of outright purchase of house / flat ready for possession –
Disbursement be made in one installment directly to the seller of the house /
flat.
ii. In case of construction of house / flat – In 3 to 4 stages after physical
verification, depending on the progress of construction. Payment can be made
either to the builder directly or to the borrower subject to verification of
bills/money receipts/invoices etc. or certificate issued by approved valuer /
architect certifying the progress of the work and the estimated expenditure
having incurred there for, as the case may be. During the course of
construction at least once valuation report from Bank’s approved/ Govt.
valuer must be obtained.
iii. To safeguard banks’ interest and as a preventive vigilance measure
branches should adhere to the guidelines given hereunder:
 Upon receipt of quotation / agreement the branch should obtain in writing
the name of the Bank and Branch from the builder / vendor for the purpose of
issuing Banker Cheque / Demand Draft pertaining to the disbursement.

 To obtain request letter from borrower for making the payment to the
builder.
 To issue Demand Draft / Bankers Cheques in favour of Bank /
Branch, A/c- No., Name of Builders / Vendors / Suppliers alongwith a letter
addressed to the vendor.
 Not to hand over the Demand Draft / Bankers Cheque towards
disbursement to the borrower.
Unified Processing Charges
Only unified processing charges (which includes processing charges,
documentation charges, document verification charges and pre & onetime post
sanction inspection charges) to be levied as detailed below:
Loans up to ` 20 lakhs 0.35% of loan amount.
Loans above ` 20 lakhs 0.40% of loan amount.
Maximum ` 15,000
In case oftakeoverof Home loan: 0.10% maximum ` 5,000.
(Unified Processing charges recovered, should be credited to ‘P/L Comm.
Earned – Service charge A/c’).

Insurance of the House Property & Personal
Accident Insurance of the Borrower
The house mortgaged with the Bank is to be insured. As a value
proposition the premium is to be borne by the Bank. Bank have an
arrangement of free insurance cover in the name of “Baroda Home Loan
Suraksha Bima Yojana” for house property mortgaged with the Bank and also
accidental death insurance cover with the National Insurance Company
limited, who are our partner of Bancassurance business.
Life Insurance cover to Home Loan Borrowers
Life insurance cover available to home loan borrowers under Group
Mortgage Redemption Assurance scheme of LIC of India called Baroda
Jeevan Griha Suraksha and home loans sanctioned / disbursed on or after
01.01.2010 will be covered under tie-up arrangement with Kotak Life
Insurance.

Inspection of House Property
i. Pre-sanction inspection is to be carried out
 To ascertain the correctness of various facts and data submitted by
an applicant.
 To verify the credentials and antecedents of the applicant.
 To verify the house/flat proposed to be purchased / constructed
with the bank finance.
 To do careful analysis of information collected during pre sanction
inspection to arrive at a credit decision.
 In short the above activities form the due diligence process in
appraising the applications for loans.
 Detailed Pre-sanction inspection including visit to the place of
residence, work / business place as well as property to be purchased,
must be carried out preferably without giving prior information to the
applicant. Pre-sanction inspection report should be prepared in the format
prescribed and kept on record.

 During Pre-sanction inspection, the branch official must cross
verify the information submitted by the applicant with respect to his
identity, residence, employment / business and property to be purchased.
No separate charge is levied as pre sanction is part of processing.
ii.Post –Sanction Activities
 To verify the end use of funds after each disbursement of the loan
by physically verifying the assets created out of bank finance.
 After completion of the house/dwelling unit, inspection be carried
out at least once in 3 years if the account is regular. If this condition is not
fulfilled, regular inspections are to be carried out as per administrative
guidelines for inspection of other advances accounts.
 For quick and immediate detection of misutilisation of bank's loan,
if any and to immediately take corrective steps.
 Inspection reports for each inspection are to be kept on record.
100/- plus service tax per inspection may be recovered for carrying out
post-sanction inspection.

Conversion from Fixed Interest Rate to
Fluctuating Interest Rate Option
Requests from customers may be considered for allowing conversion from
fixed Interest rate to fluctuating interest rate option by Branch Manager with
prospective effect subject to the following:
 if the account is regular
 As one time offer from the Bank.
 Upfront payment of charges on outstanding balance @ 0.5% for every
year forth residual period of the loan maximum 2% of the amount outstanding
on the date of allowing conversion.
Change of Tenure
Borrowers may be permitted to reduce the tenure of the loans subject to the
following conditions:
i. This option can only be exercised by those borrowers who have
availed home loans under tenure-based rate of interest.
ii. Upfront payment of charges @ 0.20% p.a. on the outstanding amount
of loan for the residual period of the loan as per new repayment schedule i.e.
after considering reduction in the tenure (0.20% x Balance outstanding i.e.
10/- Lakhs x residual period of loan i.e. 9 years). However, vice-versa i.e.
change from lower tenure to higher tenure is not possible.
iii. There should not be any overdue in the account.

iv. The new repayment schedule should be duly supported by repaying
capacity of the borrower.
v. A written request is to beobtained from the borrower.
vi. The decision of the Bank to be conveyed in writing to the borrower and
also the guarantor, if any, and their acknowledgement be obtained. This letter
along with the request letter of the borrower should be kept with the
documents.
vii. New tenure for deciding revised rate of interest will be the period of loan
already lapsed plus the remaining period in which customer wants to repay the
entire loan. The new tenure in the above-cited example will be ten years
(period already elapsed i.e. 1 year plus residual period i.e. 9 years) and
accordingly revised rate of interest is to be levied from the date of Bank’s
decision to reduce the tenure.
Bank of Baroda Home Loans Services
The home loans products and services by Bank of Baroda cover:
 Loans for purchase of a new house
 Loan for financing an old house
 Loans for purchasing a plot
 Repayment of loans from other housing finance companies
To help customer with any financial requirement for a ready-to-move-in
property, under construction property or any repayment issues. The loan
sanctioned can be up to 100 lakhs with a flexible repayment period of 25
years.

Bank of Baroda Home Loan Advantage
Along with providing finance for dream home, Bank of Baroda also gives
additional benefits with each housing loan product to the customers like:
 Free Property Insurance and Personal Accident Insurance during
the stipulated tenure of loan.
 No processing charges for housing loans taken over from other
Banks/Institutions.
 Free Credit Card - "PARAS" card (Complimentary for first year) to
all new home loan borrowers with loan limit of 2 lakhs and above.
 Free Personal Accident Coverage up to 2 lakhs Under "PARAS"
credit card Advance up to 90% of the principal amount of home loan repaid
for any requirement ('AAA').
As per current IT provisions - Interest on loan up to 1.5 lakhs per annum is
exempt from income tax (Under section 24(b) of the Income Tax Act)

Bank of Baroda Home Loan Details
Particulars Details
Maximum Tenure 30 Years
Interest Rate Option Fixed & Floating
Interest Rate 8.35%-9.35% p.a.
Processing Fee 0.25%-0.50% of the loan amount
Minimum- ₹7,500
Maximum- ₹20,000
Foreclosure Charges NIL
Details on Margin & Loan to Value (LTV)
Home Loan Category LTV Mar
gin
Up to ₹30,00,000 90% 10%
Over ₹30,00,000-75,00,000 80% 20%
Over ₹75,00,000 75% 25%
LTV indicates the portion of property value that can be financed by a lender to a
borrower. Margin, on the other hand, is a percentage of the property value to be
paid by a borrower to avail a loan from the lender.

Max. Amount of Home Loan for Salaried
Professionals
Monthly Income Extent of Loan Disbursement
Upto ₹20,000 36 times of monthly salary
Above ₹20,000-1,00,000 48 times of monthly salary
Over ₹1,00,000 54 times of monthly salary
Eligibility Criteria of Bank of Baroda Home
Loan
Parameters Salaried
Professionals
Self-
employed
Age 21-60 Years 21-70 Years
Income Must be earning reasonably
sufficient to pay off the loan
Must be earning
reasonably sufficient
to pay off the loan
Job/Professional
Status
Must have worked for at least 2-3
years
Required to be in the
same line of business
for 2-3 years

CHAPTER 5
ANALYSIS AND
INTERPRETATION OF
THE DATA
AND EMI CALCULATION

1. What is the occupation of respondents?
OCCUPATION NO. OF RESPONDENTS
Student 2
Self-employed 7
Salaried 26
Government service employee 12
Others 3
INTERPRETATION
Above data shows that in my survey most of the respondents are employees who get salaries
that is they are 26 in no. out of 50 which is 52% of the total respondents , after that
government employees are the second most respondents after salaried employees, that is they
are 12 in no. out of 50 respondents that is 24%. After those, self-employed respondents are 7
in no. that is 14% and students are 2 that is 4% and others are 3 that is 6%.
0
5
10
15
20
25
30
student Self-employed Salaried Government service
employee
others
NO.OFRESPONDENTS
OCCUPATION

2. Which income group do you belong?
INCOME GROUP (PER ANNUM)
)
NO. OF RESPONDENTS
Below 2 lakhs 8
2-4 lakhs 13
4-6 lakhs 18
6 lakhs and Above 11
INTERPRETATION:
Above data shows that in my survey out of 50 respondents, 18 (36%)
respondents belongs to income group of 4-6 lakhs, 13 (26%) respondents
0
2
4
6
8
10
12
14
16
18
20
Below 2 lakhs 2-4 lakhs 4-6 lakhs 6 lakhs and Above
NO.OFRESPONDENTS
INCOME GROUP

belongs to income group of 2-4 lakhs, 11 (22%) respondents from income
group of 6 lakhs and above and 8 (16%) respondents belongs to income
group of below 2 lakh.
3. Are you aware of products and services provided by Bank of Baroda?
CATEGORY NO. OF RESPONDENTS
YES 41
NO 9
82%
18%
YES
NO

INTERPRETATION:
Above data shows that 41 respondents out of 50 that is 82% are aware of
the products and services provided by bank of Baroda and the rest 9
respondents that is 18% are not aware about the products and services
provided by bank of Baroda.
4. Are you aware of the home loans of bank of Baroda?
CATEGORY NO. OF RESPONDENTS
YES 46
NO 4
INTERPRETATION:
Above data shows that 46 respondents out of 50 that is 92% are aware of
the home loans provided by bank of Baroda and the rest 4 respondents that
is 8% are not aware about the home loans provided by bank of Baroda.
5. from where you got information about home loan schemes?
92%
8%
YES
NO

PARTICULARS NO. OF RESPONDENTS
Newspapers 16
Magazines 14
Hoardings/banners 5
Word of mouth 8
Any other 3
Not aware about home loans
schemes
4
0
2
4
6
8
10
12
14
16
18
NO.OFRESPONDENTS
SOURCES

INTERPRETATION:
Above data shows that 32% that is 16 respondents got to know about
home loan schemes from newspapers, 28% that is 14 respondents from
magazines, 10% that is 5 respondents from hoardings/banners, 16% that
is 8 respondents from word of mouth and 8% that is 4 respondents out of
50 are not aware about home loan schemes.
6. Which bank you prefer for taking home loans?
BANK NO. OF RESPONDENTS
Bank of Baroda 28
SBI 9
ICICI 5
HDFC 3
OTHER 1

INTERPRETATION:
Out of 46 respondents who are aware of home loans provided by bank of
Baroda and their schemes, 28 respondents that is 60% prefer to take home
loans from Bank of Baroda because they feel that their interest rate is low
and affordable, 9 respondents that is 19% prefer SBI for taking home
loans, 5 respondents prefer ICICI, 3 respondents prefer HDFC and 1
respondent prefer others to take home loans.
0
5
10
15
20
25
30
Bank of Baroda SBI ICICI HDFC OTHER
NO.OFRESPONDENTS
BANKS

7. While taking loan, which things attract you the most?
Interest rates 15
Service Providers 12
Payback period 10
Schemes 7
Others 2
INTERPRETATION:
Above data shows that out of 46 respondents the thing that attracts most
of the respondents is interest rates that is 33% (15 respondents) choose
interest rates whereas 26% (12 respondents) choose service providers as
their attracting factor, 22% (10 respondents) feel that payback period is
the attracting factor, 15% (7 respondents) feel schemes are attracting
factor whereas 4% (2 respondents) have some other opinions.
0
2
4
6
8
10
12
14
16
Interest rates Service
Providers
Payback period Schemes Others
NO.OFRESPONDENTS
SERVICES

8. What do you feel about the service provided by Bank of Baroda in
home loan products?
Dissatisfactory 7
Moderate 5
Satisfactory 26
Delighted 8
INTERPRETATION:
Above data shows that 56% (26 respondents) feelthat services provided by
Bank of Baroda in home loan products are satisfactory, 17%(8
respondents) feel delighted with the services whereas15%(7 respondents)
feel dissatisfactorywith the services and 11% (5 respondents) feel moderate
about the services.
0
5
10
15
20
25
30
Dissatisfactory Moderate Satisfactory Delighted
NO.OFRESPONDENTS
PERCEPTION

9. Which features you like most in loan segments of Bank of Baroda?
(You can choose more than one option).
Less paper work 5
Attractive interest rate 22
Transparency 11
Fast processing 6
Longer repayment period 25
Home loan services 28
Employees behavior 32
INTERPRETATION:
Above data shows that 69% respondents like employees behavior, 61%
respondents like home loan services, 54%respondents like longer
0
5
10
15
20
25
30
35
Less paper
work
Attractive
interest rate
Transparency Fast
processing
Longer
repayment
period
Home loan
services
Employees
behavior
NO.OFRESPONDENTS
FEATURES

repayment period, 47% respondents like attractive interest rate, 24%
respondents like transparency, 13% respondents like fast processing and
11% respondents like less paper work.
10. How do you rate the interest rates charged by Bank of Baroda?
Highly satisfactory 4
Satisfactory 15
Average Satisfactory 16
Dissatisfactory 6
Highly Dissatisfactory 3
INTERPRETATION:
Above data shows that out of 46 respondents 35% (16 respondents) feel
that interest rate charged by bank of Baroda is average satisfactory, 8%
feel that it is highly satisfactory, 33% feel that it is satisfactory, 13% feel
that it is dissatisfactory whereas 7% feel that it is highly dissatisfactory.
0
2
4
6
8
10
12
14
16
18
Highly
satisfactory
Satisfactory Average
Satisfactory
Dissatisfactory Highly
Dissatisfactory
NO.OFRESPONDENTS
PERCEPTION

SWOT ANALYSIS
STRENGTHS
1. Bank of Baroda is one of the biggest names in public sector banking in India.
2. Bank of Baroda offers number of services and products offered by the bank.
3. International presence adds to the credibility of Bank of Baroda.
4. Strong legacy of the bank since its inception in 1908.
5. More than 50,000+ people are employed with Bank of Baroda.
6. Acquisitions have strengthened the position of the bank in the Indian market.
7. Bank of Baroda has more than 5000+ branches and 10000+ ATMs.
8. Strong advertising and branding of the brand.
WEAKNESSES
1. Limited market share growth due to intense competition.
2. International presence of Bank of Baroda is limited as compared to global
banks.

OPPORTUNITY
1. International branches of Bank of Baroda give scope to expand in other
economies.
2. Branch expansion for rapid growth.
3. Broadening of the demographic base.
4. Tie ups with master card networks.
5. Integrated sales and service approach.
6. Capturing the youth with internet services and apps.
THREATS
1. New banking licenses by RBI can affect operations.
2. Foreign banks investing in huge numbers can reduce market share of Bank of
Baroda
3. Online facilities are vulnerable to data leaks and loss of confidential
information

CALCULATION OF EMI
Bank of Baroda Home Loan Eligibility Calculator
The calculator works in an easy and hassle-free manner while computing the
indicative loan amount. The calculator works on the principle of income and
savings to arrive at the desired figure. To understand the function of
the calculator in a simple manner, take the help of an example stated below:
Instance– Harish earns a salary of ₹50,000 and saves around ₹20,000 every
month. If he wishes to apply for a home loan at Bank of Baroda, then what will
be his loan amount eligibility?
Firstly, the calculator will determine per Lac EMI before arriving at the loan
amount.
Amount – ₹1, 00,000
Loan Tenure – 30 Years
Rate of Interest – 8.35 - 9.35%p.a.
Per Lac EMI- ₹758-₹830
Loan Amount Eligibility- ₹1, 00,000 x Savings/Per Lac EMI
=> ₹1, 00,000 x ₹20,000/758 = ₹26.38 Lakhs
=>₹1, 00,000 x ₹20,000/830 = ₹24.09 Lakhs
So, Harish is expected to get a loan amount ranging within ₹24 lakhs to ₹26
lakhs from Bank of Baroda to buy a dream home.

EMI (Equated Monthly Installments)
When customer takes a loan, he has not only to pay back the amount
of money he has borrowed, but also the cost of borrowing, which is the
interest rate on the loan. The cost of the loan will vary depending upon
the number of years. Customers are borrowing for, usually, a longer-term
loan which will be more expensive, than a shorter loan, because
simply put, the lending institution has taken a risk, over a longer period
of time. An EMI's amount is dependent on the principal amount
borrowed and the interest that is levied. The number of EMIs on the
other hand, will be dependent on the tenure of the loan. The longer the
loan period, the more number of EMIs customer needs to pay. The EMI
usually remains constant throughout the period of the loan. However,
what of this is used to pay off interest and what part to pay off the
principal varies. In the beginning of the loan repayment period, the
interest component of an EMI is higher and the principal amount is
lower. Later on, as the years go by, the principal amount becomes higher
and the interest becomes lower.
Calculation of EMI
An EMI can be calculated on a daily reducing, monthly reducing,
quarterly reducing, and half yearly or yearly reducing basis. The EMI will
be lowest, if it is calculated on a daily reducing basis.
Daily Reducing Basis: Even better than a monthly reducing
calculation is a daily reducing method, which some banks apply.
Monthly Reducing Balance: Now, let us take a real life

example of an EMI calculated on a monthly basis. Keeping the loan
amount at 1 Lakh the period as 15 years and the rate of interest as 12%, the
bank will change the principal outstanding every month. After the
customers pay their EMI for the month, the new reduced amount will be
calculated only for the next month.
Similarly, in a quarterly, half yearly or annual reducing balance the
interest is levied according to principal outstanding at the end of these
periods. Progressively, the EMI works out to be more, with the highest
being in an annual reducing basis.
Computation of EMI is calculated with the help of the following
formula:
EMI = L×r×(1 + r)
n
/((1 + r)
n
-
1)
Where, L - Loan Amount
r - Rate of Interest in
Decimals
n - Period of loan (in
years).

CALCULATION OF EMI FOR HOME LOANS
FOR 2 YEARS (24 MONTHS)
LOAN AMOUNT – 10 LAKHS
RATE OF INTEREST – 8.35%
YEARS – 2 (24 MONTHS)
MONTH STARTING
BALANCE
INTEREST
PAID
EMI ENDING
BALANCE
1 1000000 6958.33 45387.09 961571.24
2 961571.24 6690.93 45387.09 922875.08
3 922875.08 6421.67 45387.09 883909.66
4 883909.66 6150.54 45387.09 844673.11
5 844673.11 5877.52 45387.09 805163.54
6 805163.54 5602.6 45387.09 765379.05
7 765379.05 5325.76 45387.09 725317.72
8 725317.72 5047 45387.09 684977.63
9 684977.63 4766.3 45387.09 644356.84
10 644356.84 4483.65 45387.09 603453.4
11 603453.4 4199.03 45387.09 562265.34
12 562265.34 3912.43 45387.09 520790.68

13 520790.68 3623.84 45387.09 479027.43
14 479027.43 3333.23 45387.09 436973.57
15 436973.57 3040.61 45387.08 394627.1
16 394627.1 2745.95 45387.09 351985.96
17 351985.96 2449.24 45387.08 309048.12
18 309048.12 2150.46 45387.09 265811.49
19 265811.49 1849.6 45387.09 222274
20 222274 1546.66 45387.08 178433.58
21 178433.58 1241.6 45387.09 134288.09
22 134288.09 934.42 45387.08 89835.43
23 89835.43 625.1 45387.09 45073.44
24 45073.44 313.64 45387.08 0
TOTAL PAYMENT 89290.11 1089290.11
Therefore, EMI for one month for the home loan of
10 lakhs = Rs.45387.09
And total EMI for 2 years (24 months) = Rs.1089290.11

CHAPTER 6
FINDINGS,
CONCLUSIONS
AND
SUGGESTIONS

FINDINGS
 Bank of Baroda have good brand image in minds of customers.
 From this project it is found that Bank of Baroda home Loans have
good place in the market at Pune, but HDFC and ICICI also working
hard for for improving their market share in home loan segment so they
are the main threat or competitors.
 Majority of the people got loans from Bank of Baroda because of
their affordable home loan interest rate.
 Most of the customers are not aware of the products and services
of Bank of Baroda home loans.
 Some of the customer’s felt that the interest rates of Bank of
Baroda home loans are somewhat high whereas some felt that
they are moderate whereas some are highly satisfied with the
interest rates.
 Some of the customer doesn’t have good faith on private banks like
standard chartered, HSBC bank etc.
 Most of the people are directly go to Bank of Baroda to apply a
home loan.
 Bank of Baroda providing good services to their customers.

 It has been observed that a most of the people prefer to come to Bank of
Baroda for sanctioning their loan but sometimes bad response from Bank
of Baroda force them to switch to the other bank.
 Most of the customers of Bank of Baroda are satisfied with the services
provided by the bank.
 Many of these customers are well aware of Bank of Baroda and their
home loan product and satisfied with the low interest rate and longer
repayment period of the advance product, whereas some respondents are
not even aware about the bank and their services.
 Most of the respondents feel that Bank of Baroda trying really hard for
improving their services.
 A response from customer care is so clear & good.
 Many customers have no time to call customer care by which they are not
able to know about the service & features of Bank of Baroda advance
product.
 Most customers are shifted from other bank’s advance product to Bank
of Baroda home loans because of hidden charges, high interest rate, less
repayment period.

CONCLUSION
 From the survey itcan be seen that many people are interested in taking
home loans from Bank of Baroda.
 Home loans have long period when compare to other personal loans and
other loans. So peoples are confused to take a home loan.
 People are willing to take home loans from Bank of Baroda because of the
affordableand attracting interest rates.
 The interest rates of Bank of Baroda home loans are low when compare
to other banks.
 The loan sanction process is good and easy when comparing to other
banks.
 Also For disbursement process, it take low time when compare to other
banks.
 From the analysis part it can be concluded that customers have a good
respond towards Bank of Baroda advance products.

 Bank of Baroda has large number of customers & providing good
services to them. The bank has a wide customer base.
 In present scenario Bank of Baroda is one of the largest advance product
issuer in India. They are providing best possible services and It happens
due to employee dedication towards the organization, fastest growing
Indian economy, & brand image.
 By calculating EMI for 2 years (24 months) we got to know that taking
home loans from Bank of Baroda is affordable for a middle class person.
 Calculated EMI for 1 month for the home loan of bank of Baroda for the
amount 10 lakhs at the interest rate of 8.35% comes out to be Rs.
45387.09and total EMI for 2 years (24 months) is Rs.1089290.11
 To be the largest advance productissuer, Bank of Baroda should focus
on-
. Launch innovative product
. Customized advance products
. Better customer services
. Fastest customer’s problem solving techniques
. Customer retention
Apart from all the above, Bank of Baroda believe in providing good customer
services to their customers which is a key factor for success in future.

SUGGESTIONS
 To increase their customers, the Bank of Baroda should provide
specialized services in this sector. These services can be such as proper
guidance to the customer regarding the processing of loans, especially
for the customers who areilliterate.
 To satisfy their customers and for good dealings in future, the Bank of
Baroda should make prompt disbursement of loan amount
to the customers so that they can buy or construct their dream
home as early as possible.
 The Bank of Baroda should use easy procedure, or say, less lengthy
procedure for the sanctioning of loan to the customer. There
should be less number of legal formalities, incase this exists,
then, these should be completed in less time. This will be
helpful in attracting more customers.
 Although the interest rates on specific norms, yet customers
seek less interest rate which can lower their cost of house. So banks
should try to lower their interest rates. Needless to say, that the bank
which is having lower interest rates, have the maximum clients
for loans.
 Bank of Baroda provide loan according to the repaying capacity of the
customer and his/her eligibility. Due to which, some customers are not
able to get amount of loan needed by them. So, the Bank of Baroda
should soften their norms regarding the loan amount.

 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 company has to reduce their interest rates on home
loan products and services so that more and more people can afford
home loans.
 The company has to identify the potential customers.
 Company should consider the present competition and should act
according to the customer needs.
 The Bank of Baroda should try to provide proper knowledge
regarding their home loan schemes, even to people who don't
know about such schemes and their benefits especially in
rural areas. So they should provide knowledge to the ignorant
customers, especially in rural areas and backward urban
areas.

BIBLOGRAPHY
 Practical Banking Advances
By: Bedi & Haldikar
 Fund management in commercial bank
By: Malhotra & Verma
 NEWS PAPERS (Times of india , Economic times)
 INTERNET:
 www.bankofbaroda.com
 www.googlesearch.com
 www.mahabank.com
 www.bankrate.com
 www.apnaloan.com
 www.bankofbaroda.co.in/pfs/homeloans.asp
 www.myloancare.in/home-loan-interest-rates/bank-of-baroda
 WWW.ONLINERESEARCHONLINE.COM

QUESTIONNAIRE
(I). Personal Details:
(a). Name:
(b). Address: (c).Phone:
(d). Age:
(II). CHOOSE ONE OPTION FOR EACH QUESTION AND TICK(√)
YOUR ANSWER :
1. What is the occupation of respondents?
A. Student
Self-employed
C. Salaried
D. Government service employee
E. Others
2. Which income group do you belong?
A. Below 2 lakhs
B. 2-4 lakhs
C. 4-6 lakhs
D. 6 lakhs and Above

3. Are you aware of products and services provided by Bank of
Baroda?
A. YES
B. NO
4. Are you aware of the home loans of bank of Baroda?
A. YES
B. NO
5. From where you got information about home loan schemes?
A. Newspapers
B. Magazines
C. Hoardings/banners
D. Word of mouth
E. Any other
F. Not aware about home loans schemes
6. Which bank you prefer for taking home loans?
A. Bank of Baroda
B. SBI
C. ICICI
D. HDFC
E. OTHER

7. While taking loan, which things attract you the most?
A. Interest rates
B. Service Providers
C. Payback period
D. Schemes
E. Others
8. What do you feel about the service provided by Bank of
Baroda in home loan products?
A. Dissatisfactory
B. Moderate
C. Satisfactory
D. Delighted
9. Which features you like most in loan segments of Bank of
Baroda? (You can choose more than one option).
A. Less paper work
B. Attractive interest rate
C. Transparency
D. Fast processing
E. Longer repayment period

F. Home loan services
G. Employees behavior
10. How do you rate the interest rates charged by Bank of
Baroda?
A. Highly satisfactory
B. Satisfactory
C. Average Satisfactory
D. Dissatisfactory
E. Highly Dissatisfactory

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