Project Home Loan

7/29/2019 Project Home Loan

1/21

:BANKING INDUSTRY:

A bank is afinancial institutionand afinancial intermediarythat acceptsdepositsand

channels those deposits intolendingactivities, either directly by loaning or indirectly

throughcapital markets. A bank is the connection between customers that have capital

deficits and customers with capital surpluses.

Banks act as payment agents by conductingchecking or current accountsfor customers,

payingchequesdrawn by customers on the bank, and collecting cheques deposited to

customers' current accounts. Banks also enable customer payments via other payment

methods such asAutomated Clearing House(ACH),Wire transfersortelegraphic

transfer,EFTPOS, andautomated teller machine(ATM).Banks borrow money by accepting funds deposited on current accounts, by accepting

term deposits, and by issuing debt securities such asbanknotesandbonds. Banks lend

money by making advances to customers on current accounts, by makinginstallment

loans, and by investing in marketable debt securities and other forms of money lending.

Banks provide different payment services, and a bank account is considered

indispensable by most businesses and individuals. Non-banks that provide payment

services such as remittance companies are normally not considered as an adequate

substitute for a bank account.

ChannelsBanks offer many different channels to access their banking and other services:

Automated Teller Machines

Abranchis a retail location

Call center

Mail: most banks accept cheque deposits via mail and use mail to communicate

to their customers, e.g. by sending out statements

Mobile bankingis a method of using one's mobile phone to conduct banking

transactions

Online bankingis a term used for performing multiple transactions, paymentsetc. over the Internet

Relationship Managers, mostly for private banking or business banking, often

visiting customers at their homes or businesses

Telephone bankingis a service which allows its customers to perform

transactions over the telephone withautomated attendantor when requested

withtelephone operator
http://en.wikipedia.org/wiki/Financial_institutionhttp://en.wikipedia.org/wiki/Financial_institutionhttp://en.wikipedia.org/wiki/Financial_institutionhttp://en.wikipedia.org/wiki/Financial_intermediaryhttp://en.wikipedia.org/wiki/Financial_intermediaryhttp://en.wikipedia.org/wiki/Financial_intermediaryhttp://en.wikipedia.org/wiki/Deposit_accounthttp://en.wikipedia.org/wiki/Deposit_accounthttp://en.wikipedia.org/wiki/Deposit_accounthttp://en.wikipedia.org/wiki/Loanhttp://en.wikipedia.org/wiki/Loanhttp://en.wikipedia.org/wiki/Loanhttp://en.wikipedia.org/wiki/Capital_markethttp://en.wikipedia.org/wiki/Capital_markethttp://en.wikipedia.org/wiki/Capital_markethttp://en.wikipedia.org/wiki/Transactional_accounthttp://en.wikipedia.org/wiki/Transactional_accounthttp://en.wikipedia.org/wiki/Transactional_accounthttp://en.wikipedia.org/wiki/Chequehttp://en.wikipedia.org/wiki/Chequehttp://en.wikipedia.org/wiki/Chequehttp://en.wikipedia.org/wiki/Automated_Clearing_Househttp://en.wikipedia.org/wiki/Automated_Clearing_Househttp://en.wikipedia.org/wiki/Automated_Clearing_Househttp://en.wikipedia.org/wiki/Wire_transferhttp://en.wikipedia.org/wiki/Wire_transferhttp://en.wikipedia.org/wiki/Wire_transferhttp://en.wikipedia.org/wiki/Telegraphic_transferhttp://en.wikipedia.org/wiki/Telegraphic_transferhttp://en.wikipedia.org/wiki/Telegraphic_transferhttp://en.wikipedia.org/wiki/Telegraphic_transferhttp://en.wikipedia.org/wiki/EFTPOShttp://en.wikipedia.org/wiki/EFTPOShttp://en.wikipedia.org/wiki/EFTPOShttp://en.wikipedia.org/wiki/Automated_teller_machinehttp://en.wikipedia.org/wiki/Automated_teller_machinehttp://en.wikipedia.org/wiki/Automated_teller_machinehttp://en.wikipedia.org/wiki/Term_deposithttp://en.wikipedia.org/wiki/Term_deposithttp://en.wikipedia.org/wiki/Banknoteshttp://en.wikipedia.org/wiki/Banknoteshttp://en.wikipedia.org/wiki/Banknoteshttp://en.wikipedia.org/wiki/Bond_(finance)http://en.wikipedia.org/wiki/Bond_(finance)http://en.wikipedia.org/wiki/Bond_(finance)http://en.wikipedia.org/wiki/Installment_loanhttp://en.wikipedia.org/wiki/Installment_loanhttp://en.wikipedia.org/wiki/Installment_loanhttp://en.wikipedia.org/wiki/Installment_loanhttp://en.wikipedia.org/wiki/Automated_Teller_Machinehttp://en.wikipedia.org/wiki/Automated_Teller_Machinehttp://en.wikipedia.org/wiki/Branch_(banking)http://en.wikipedia.org/wiki/Branch_(banking)http://en.wikipedia.org/wiki/Branch_(banking)http://en.wikipedia.org/wiki/Call_centerhttp://en.wikipedia.org/wiki/Call_centerhttp://en.wikipedia.org/wiki/Mobile_bankinghttp://en.wikipedia.org/wiki/Mobile_bankinghttp://en.wikipedia.org/wiki/Online_bankinghttp://en.wikipedia.org/wiki/Online_bankinghttp://en.wikipedia.org/wiki/Customer_relationship_managementhttp://en.wikipedia.org/wiki/Customer_relationship_managementhttp://en.wikipedia.org/wiki/Telephone_bankinghttp://en.wikipedia.org/wiki/Telephone_bankinghttp://en.wikipedia.org/wiki/Automated_attendanthttp://en.wikipedia.org/wiki/Automated_attendanthttp://en.wikipedia.org/wiki/Automated_attendanthttp://en.wikipedia.org/wiki/Switchboard_operatorhttp://en.wikipedia.org/wiki/Switchboard_operatorhttp://en.wikipedia.org/wiki/Switchboard_operatorhttp://en.wikipedia.org/wiki/Switchboard_operatorhttp://en.wikipedia.org/wiki/Automated_attendanthttp://en.wikipedia.org/wiki/Telephone_bankinghttp://en.wikipedia.org/wiki/Customer_relationship_managementhttp://en.wikipedia.org/wiki/Online_bankinghttp://en.wikipedia.org/wiki/Mobile_bankinghttp://en.wikipedia.org/wiki/Call_centerhttp://en.wikipedia.org/wiki/Branch_(banking)http://en.wikipedia.org/wiki/Automated_Teller_Machinehttp://en.wikipedia.org/wiki/Installment_loanhttp://en.wikipedia.org/wiki/Installment_loanhttp://en.wikipedia.org/wiki/Bond_(finance)http://en.wikipedia.org/wiki/Banknoteshttp://en.wikipedia.org/wiki/Term_deposithttp://en.wikipedia.org/wiki/Automated_teller_machinehttp://en.wikipedia.org/wiki/EFTPOShttp://en.wikipedia.org/wiki/Telegraphic_transferhttp://en.wikipedia.org/wiki/Telegraphic_transferhttp://en.wikipedia.org/wiki/Wire_transferhttp://en.wikipedia.org/wiki/Automated_Clearing_Househttp://en.wikipedia.org/wiki/Chequehttp://en.wikipedia.org/wiki/Transactional_accounthttp://en.wikipedia.org/wiki/Capital_markethttp://en.wikipedia.org/wiki/Loanhttp://en.wikipedia.org/wiki/Deposit_accounthttp://en.wikipedia.org/wiki/Financial_intermediaryhttp://en.wikipedia.org/wiki/Financial_institution


2/21

Video bankingis a term used for performing banking transactions or professional

banking consultations via a remote video and audio connection. Video banking

can be performed via purpose built banking transaction machines (similar to an

Automated teller machine), or via avideo conferenceenabled bank branch

clarification

Business model

A bank can generate revenue in a variety of different ways including interest, transaction

fees and financial advice. The main method is via chargingintereston the capital it lends

out to customers.[citation needed]

The bank profits from the difference between the level of

interest it pays for deposits and other sources of funds, and the level of interest it charges

in its lending activities.

This difference is referred to as thespreadbetween the cost of funds and the loan interestrate. Historically, profitability from lending activities has been cyclical and dependent on

the needs and strengths of loan customers and the stage of theeconomic cycle. Fees and

financial advice constitute a more stable revenue stream and banks have therefore placed

more emphasis on these revenue lines to smooth their financial performance.

In the past 20 years American banks have taken many measures to ensure that they

remain profitable while responding to increasingly changing market conditions. First, this

includes theGramm-Leach-Bliley Act, which allows banks again to merge with

investment and insurance houses. Merging banking, investment, and insurance functions

allows traditional banks to respond to increasing consumer demands for "one-stop

shopping" by enabling cross-selling of products (which, the banks hope, will alsoincrease profitability).

Second, they have expanded the use ofrisk-based pricingfrom business lending to

consumer lending, which means charging higher interest rates to those customers that are

considered to be a higher credit risk and thus increased chance ofdefaulton loans. This

helps to offset the losses from bad loans, lowers the price of loans to those who have

better credit histories, and offers credit products to high risk customers who would

otherwise be denied credit.

Third, they have sought to increase the methods of payment processing available to the

general public and business clients. These products includedebit cards, prepaid cards,

smart cards, andcredit cards. They make it easier for consumers to conveniently maketransactions and smooth their consumption over time (in some countries with

underdeveloped financial systems, it is still common to deal strictly in cash, including

carrying suitcases filled with cash to purchase a home).

However, with convenience of easy credit, there is also increased risk that consumers will

mismanage their financial resources and accumulate excessive debt. Banks make money

from card products through interest payments and fees charged to consumers and
http://en.wikipedia.org/wiki/Video_bankinghttp://en.wikipedia.org/wiki/Video_bankinghttp://en.wikipedia.org/wiki/Video_conferencehttp://en.wikipedia.org/wiki/Video_conferencehttp://en.wikipedia.org/wiki/Video_conferencehttp://en.wikipedia.org/wiki/Interesthttp://en.wikipedia.org/wiki/Interesthttp://en.wikipedia.org/wiki/Interesthttp://en.wikipedia.org/wiki/Wikipedia:Citation_neededhttp://en.wikipedia.org/wiki/Wikipedia:Citation_neededhttp://en.wikipedia.org/wiki/Wikipedia:Citation_neededhttp://en.wikipedia.org/wiki/Net_interest_spreadhttp://en.wikipedia.org/wiki/Net_interest_spreadhttp://en.wikipedia.org/wiki/Net_interest_spreadhttp://en.wikipedia.org/wiki/Economic_cyclehttp://en.wikipedia.org/wiki/Economic_cyclehttp://en.wikipedia.org/wiki/Economic_cyclehttp://en.wikipedia.org/wiki/Gramm-Leach-Bliley_Acthttp://en.wikipedia.org/wiki/Gramm-Leach-Bliley_Acthttp://en.wikipedia.org/wiki/Gramm-Leach-Bliley_Acthttp://en.wikipedia.org/wiki/Risk-based_pricinghttp://en.wikipedia.org/wiki/Risk-based_pricinghttp://en.wikipedia.org/wiki/Risk-based_pricinghttp://en.wikipedia.org/wiki/Default_(finance)http://en.wikipedia.org/wiki/Default_(finance)http://en.wikipedia.org/wiki/Default_(finance)http://en.wikipedia.org/wiki/Debit_cardhttp://en.wikipedia.org/wiki/Debit_cardhttp://en.wikipedia.org/wiki/Debit_cardhttp://en.wikipedia.org/wiki/Smart_cardhttp://en.wikipedia.org/wiki/Smart_cardhttp://en.wikipedia.org/wiki/Credit_cardhttp://en.wikipedia.org/wiki/Credit_cardhttp://en.wikipedia.org/wiki/Credit_cardhttp://en.wikipedia.org/wiki/Credit_cardhttp://en.wikipedia.org/wiki/Smart_cardhttp://en.wikipedia.org/wiki/Debit_cardhttp://en.wikipedia.org/wiki/Default_(finance)http://en.wikipedia.org/wiki/Risk-based_pricinghttp://en.wikipedia.org/wiki/Gramm-Leach-Bliley_Acthttp://en.wikipedia.org/wiki/Economic_cyclehttp://en.wikipedia.org/wiki/Net_interest_spreadhttp://en.wikipedia.org/wiki/Wikipedia:Citation_neededhttp://en.wikipedia.org/wiki/Interesthttp://en.wikipedia.org/wiki/Video_conferencehttp://en.wikipedia.org/wiki/Video_banking


3/21

transaction feesto companies that accept the credit- debit - cards. This helps in making

profit and facilitates economic development as a whole.

Types of banks

Banks' activities can be divided intoretail banking, dealing directly with individuals and

small businesses;business banking, providing services to mid-market business; corporate

banking, directed at large business entities;private banking, providing wealth

management services tohigh net worth individualsand families; andinvestment banking,

relating to activities on thefinancial markets. Most banks are profit-making, private

enterprises. However, some are owned by government, or arenon-profit organizations.

PRODUCTS:

Retail banking

Checking account Savings account

Money market account

Certificate of deposit(CD)

Individual retirement account(IRA)

Credit card

Debit card

Mortgage

Home equity loan

Mutual fund

Personal loan

Time deposits

ATM card

Current Accounts
http://en.wikipedia.org/wiki/Transaction_feehttp://en.wikipedia.org/wiki/Transaction_feehttp://en.wikipedia.org/wiki/Retail_bankinghttp://en.wikipedia.org/wiki/Retail_bankinghttp://en.wikipedia.org/wiki/Retail_bankinghttp://en.wikipedia.org/wiki/Business_bankinghttp://en.wikipedia.org/wiki/Business_bankinghttp://en.wikipedia.org/wiki/Business_bankinghttp://en.wikipedia.org/wiki/Private_bankinghttp://en.wikipedia.org/wiki/Private_bankinghttp://en.wikipedia.org/wiki/Private_bankinghttp://en.wikipedia.org/wiki/High_net_worth_individualhttp://en.wikipedia.org/wiki/High_net_worth_individualhttp://en.wikipedia.org/wiki/High_net_worth_individualhttp://en.wikipedia.org/wiki/Investment_bankinghttp://en.wikipedia.org/wiki/Investment_bankinghttp://en.wikipedia.org/wiki/Investment_bankinghttp://en.wikipedia.org/wiki/Financial_marketshttp://en.wikipedia.org/wiki/Financial_marketshttp://en.wikipedia.org/wiki/Financial_marketshttp://en.wikipedia.org/wiki/Non-profit_organizationhttp://en.wikipedia.org/wiki/Non-profit_organizationhttp://en.wikipedia.org/wiki/Non-profit_organizationhttp://en.wikipedia.org/wiki/Checking_accounthttp://en.wikipedia.org/wiki/Checking_accounthttp://en.wikipedia.org/wiki/Savings_accounthttp://en.wikipedia.org/wiki/Savings_accounthttp://en.wikipedia.org/wiki/Money_market_accounthttp://en.wikipedia.org/wiki/Money_market_accounthttp://en.wikipedia.org/wiki/Certificate_of_deposithttp://en.wikipedia.org/wiki/Certificate_of_deposithttp://en.wikipedia.org/wiki/Individual_retirement_accounthttp://en.wikipedia.org/wiki/Individual_retirement_accounthttp://en.wikipedia.org/wiki/Credit_cardhttp://en.wikipedia.org/wiki/Credit_cardhttp://en.wikipedia.org/wiki/Debit_cardhttp://en.wikipedia.org/wiki/Debit_cardhttp://en.wikipedia.org/wiki/Mortgagehttp://en.wikipedia.org/wiki/Mortgagehttp://en.wikipedia.org/wiki/Home_equity_loanhttp://en.wikipedia.org/wiki/Home_equity_loanhttp://en.wikipedia.org/wiki/Mutual_fundhttp://en.wikipedia.org/wiki/Mutual_fundhttp://en.wikipedia.org/wiki/Personal_loanhttp://en.wikipedia.org/wiki/Personal_loanhttp://en.wikipedia.org/wiki/Time_depositshttp://en.wikipedia.org/wiki/Time_depositshttp://en.wikipedia.org/wiki/ATM_cardhttp://en.wikipedia.org/wiki/ATM_cardhttp://en.wikipedia.org/wiki/Transactional_account#Current_accountshttp://en.wikipedia.org/wiki/Transactional_account#Current_accountshttp://en.wikipedia.org/wiki/Transactional_account#Current_accountshttp://en.wikipedia.org/wiki/ATM_cardhttp://en.wikipedia.org/wiki/Time_depositshttp://en.wikipedia.org/wiki/Personal_loanhttp://en.wikipedia.org/wiki/Mutual_fundhttp://en.wikipedia.org/wiki/Home_equity_loanhttp://en.wikipedia.org/wiki/Mortgagehttp://en.wikipedia.org/wiki/Debit_cardhttp://en.wikipedia.org/wiki/Credit_cardhttp://en.wikipedia.org/wiki/Individual_retirement_accounthttp://en.wikipedia.org/wiki/Certificate_of_deposithttp://en.wikipedia.org/wiki/Money_market_accounthttp://en.wikipedia.org/wiki/Savings_accounthttp://en.wikipedia.org/wiki/Checking_accounthttp://en.wikipedia.org/wiki/Non-profit_organizationhttp://en.wikipedia.org/wiki/Financial_marketshttp://en.wikipedia.org/wiki/Investment_bankinghttp://en.wikipedia.org/wiki/High_net_worth_individualhttp://en.wikipedia.org/wiki/Private_bankinghttp://en.wikipedia.org/wiki/Business_bankinghttp://en.wikipedia.org/wiki/Retail_bankinghttp://en.wikipedia.org/wiki/Transaction_fee


4/21

Business (or commercial/investment) banking

Business loan

Capital raising(Equity/Debt/Hybrids)

Mezzanine finance

Project finance

Revolving credit

Risk management(FX,interest rates,commodities,derivatives)

Term loan

Cash Management Services

BANKING INDUSTRY IN INDIA

Banking in India originated in the last decades first banks were The General Bank

of India, which started in 1786, andBank of Hindustan, which started in 1770; both are

now defunct. The oldest bank in existence in India is the State Bank of India, which

originated in theBank of Calcuttain June 1806, which almost immediately became the

Bank of Bengal. This was one of the three presidency banks, the other two being the

Bank of Bombay and the Bank of Madras, all three of which were established under

charters from the British East India Company. The three banks merged in 1921 to form

theImperial Bank of India, which, upon India's independence, became theState Bank of

Indiain 1955. State Bank of Mysore is an associate bank of State Bank of India.

ABOUT STATE BANK OF MYSORE:

01. History

In 1913, at the instance of Sir M. Visvesvaraya, the Engineer Statesman, a state

aided Bank, under the patronage of His Highness the Maharaja of Mysore, Sri

Krishnaraja Wodeyar IV, was established. This was "MYSORE BANK LTD". During 1953,

"Mysore Bank" was appointed as an agent of Reserve Bank of India to undertake

Government business and treasury operations, and in March 1960, it became a
http://en.wikipedia.org/wiki/Loanhttp://en.wikipedia.org/wiki/Loanhttp://en.wikipedia.org/wiki/Stock_exchange#Raising_capital_for_businesseshttp://en.wikipedia.org/wiki/Stock_exchange#Raising_capital_for_businesseshttp://en.wikipedia.org/wiki/Equity_(finance)http://en.wikipedia.org/wiki/Equity_(finance)http://en.wikipedia.org/wiki/Equity_(finance)http://en.wikipedia.org/wiki/Debthttp://en.wikipedia.org/wiki/Debthttp://en.wikipedia.org/wiki/Debthttp://en.wikipedia.org/wiki/Hybrid_securityhttp://en.wikipedia.org/wiki/Hybrid_securityhttp://en.wikipedia.org/wiki/Hybrid_securityhttp://en.wikipedia.org/wiki/Mezzanine_financehttp://en.wikipedia.org/wiki/Mezzanine_financehttp://en.wikipedia.org/wiki/Project_financehttp://en.wikipedia.org/wiki/Project_financehttp://en.wikipedia.org/wiki/Revolving_credithttp://en.wikipedia.org/wiki/Revolving_credithttp://en.wikipedia.org/wiki/Risk_managementhttp://en.wikipedia.org/wiki/Risk_managementhttp://en.wikipedia.org/wiki/Foreign_exchange_markethttp://en.wikipedia.org/wiki/Foreign_exchange_markethttp://en.wikipedia.org/wiki/Foreign_exchange_markethttp://en.wikipedia.org/wiki/Interest_rateshttp://en.wikipedia.org/wiki/Interest_rateshttp://en.wikipedia.org/wiki/Interest_rateshttp://en.wikipedia.org/wiki/Commoditieshttp://en.wikipedia.org/wiki/Commoditieshttp://en.wikipedia.org/wiki/Commoditieshttp://en.wikipedia.org/wiki/Derivative_(finance)http://en.wikipedia.org/wiki/Derivative_(finance)http://en.wikipedia.org/wiki/Derivative_(finance)http://en.wikipedia.org/wiki/Term_loanhttp://en.wikipedia.org/wiki/Term_loanhttp://en.wikipedia.org/w/index.php?title=Bank_of_Hindustan&action=edit&redlink=1http://en.wikipedia.org/w/index.php?title=Bank_of_Hindustan&action=edit&redlink=1http://en.wikipedia.org/w/index.php?title=Bank_of_Hindustan&action=edit&redlink=1http://en.wikipedia.org/wiki/State_Bank_of_Indiahttp://en.wikipedia.org/wiki/State_Bank_of_Indiahttp://en.wikipedia.org/wiki/Bank_of_Calcuttahttp://en.wikipedia.org/wiki/Bank_of_Calcuttahttp://en.wikipedia.org/wiki/Bank_of_Calcuttahttp://en.wikipedia.org/wiki/Bank_of_Bengalhttp://en.wikipedia.org/wiki/Bank_of_Bengalhttp://en.wikipedia.org/wiki/Bank_of_Bombayhttp://en.wikipedia.org/wiki/Bank_of_Bombayhttp://en.wikipedia.org/wiki/Bank_of_Madrashttp://en.wikipedia.org/wiki/Bank_of_Madrashttp://en.wikipedia.org/wiki/Imperial_Bank_of_Indiahttp://en.wikipedia.org/wiki/Imperial_Bank_of_Indiahttp://en.wikipedia.org/wiki/Imperial_Bank_of_Indiahttp://en.wikipedia.org/wiki/State_Bank_of_Indiahttp://en.wikipedia.org/wiki/State_Bank_of_Indiahttp://en.wikipedia.org/wiki/State_Bank_of_Indiahttp://en.wikipedia.org/wiki/State_Bank_of_Indiahttp://en.wikipedia.org/wiki/State_Bank_of_Indiahttp://en.wikipedia.org/wiki/State_Bank_of_Indiahttp://en.wikipedia.org/wiki/Imperial_Bank_of_Indiahttp://en.wikipedia.org/wiki/Bank_of_Madrashttp://en.wikipedia.org/wiki/Bank_of_Bombayhttp://en.wikipedia.org/wiki/Bank_of_Bengalhttp://en.wikipedia.org/wiki/Bank_of_Calcuttahttp://en.wikipedia.org/wiki/State_Bank_of_Indiahttp://en.wikipedia.org/w/index.php?title=Bank_of_Hindustan&action=edit&redlink=1http://en.wikipedia.org/wiki/Term_loanhttp://en.wikipedia.org/wiki/Derivative_(finance)http://en.wikipedia.org/wiki/Commoditieshttp://en.wikipedia.org/wiki/Interest_rateshttp://en.wikipedia.org/wiki/Foreign_exchange_markethttp://en.wikipedia.org/wiki/Risk_managementhttp://en.wikipedia.org/wiki/Revolving_credithttp://en.wikipedia.org/wiki/Project_financehttp://en.wikipedia.org/wiki/Mezzanine_financehttp://en.wikipedia.org/wiki/Hybrid_securityhttp://en.wikipedia.org/wiki/Debthttp://en.wikipedia.org/wiki/Equity_(finance)http://en.wikipedia.org/wiki/Stock_exchange#Raising_capital_for_businesseshttp://en.wikipedia.org/wiki/Loan


5/21

subsidiary of the State Bank of India under the State Bank of India (subsidiary Banks) Act

1959. Now our bank is an Associate Bank under State Bank Group.

The Bank has grown progressively, right from its inception and has declared

uninterrupted profits from the beginning. "MYSORE BANK", as it is popularly known, is

constantly committed to serve it's customers. Our dedicated service to clientele hasbrought recognition / laurels to "MYSORE BANK" .

In this competitive world of Banking and Technology we reiterate and resolve to

rededicate ourselves for the service of the Nation through improved service to our

customers.

PROFILE OF THE STATE BANK OF MYSORE (SBM):

State Bank of Mysore was established in the year 1913 as Bank of Mysore Ltd. under the

patronage of the erstwhile Govt. of Mysore, at the instance of the banking committee

headed by the great Engineer-Statesman,Late Dr. Sir M.Visvesvaraya. Subsequently, in

March 1960, the Bank became an Associate of State Bank of India. State Bank of Indiaholds 92.33% of shares. The Bank's shares are listed in Bangalore, Chennai and Mumbai

stock exchanges.

Branch Network

The Bank has a widespread network of 737 branches (as on 31.03.2012) and 22

extension counters spread all over India which includes 6 Small and Medium Enterprises

Branches, 4 Industrial Finance branches, 3 Corporate Accounts Branches, 6 specialised

Personal Banking Branches, 9 Agricultural Development Branches, 3 Government

Business branches, 1 Asset Recovery Branch and 6 Service Branches, offering wide range

of services to the customers

Human Resources

The Bank has a dedicated workforce of10249 employees consisting of3187 supervisorystaff, 7062 non-supervisory staff (as on 31.03.2012). The skill and competence of the

employees have been kept updated to meet the requirement of our customers keeping

in view the changes in the environment.
http://www.statebankofmysore.co.in/index.php/our-profile/88.htmlhttp://www.statebankofmysore.co.in/index.php/our-profile/88.htmlhttp://www.statebankofmysore.co.in/index.php/our-profile/88.htmlhttp://www.statebankofmysore.co.in/index.php/our-profile/88.html


6/21

OrganisationalSetup

While the Chairman of State Bank of India is also the Chairman of the Bank, The

Managing Director is assisted by two Chief General Manager and 12 General Managers

Financial Profile

The paid up capital of the Bank is Rs. 468 Millions as on 31.03.2012 out of which State

Bank of India holds 92.33%. The net worth of the Bank as on 31.03.2012 is Rs.3412.72

Crores and the Bank has achieved a capital adequacy ratio of12.55% as at the end of

31.03.2012. The Bank has an enviable track record of earning profits continuously and

uninterrupted payment of dividend since its inception in 1913. The Bank earned a net

profit ofRs.369.15 Crores for the year ended March 2012 and earnings per share is at

Rs.78.88

Business Profile

Total deposits of the Bank as at the end of March 2012 is Rs.50186 Crores and the total

advances stood at Rs. 40653 Crores which include export credit ofRs. 1325 Crores. The

Bank is a major player in foreign exchange dealings also and has achieved a merchant

turnover of over Rs 31583 Crores and a trading turnover of over Rs 146405 Crores for

the year ended March 2012.

Title:

A Study on Direct Housing Loan to Public Individual in State Bank of Mysore

(13, Langford Town Branch, Bangalore-560025)

General Introduction:

House is a dream of every human. to make that dream true money is the main source.

We may not get the lump sum money at a time to build a house, for that purpose we

will go for credit from friends or relatives or any financial institution or banks etc.,


7/21

among all these bank is the most secured place to take the credit because it is

transparent in transactions, interest rates etc., as a part of my MBA Project I have taken

a study on housing Loan in State Bank of Mysore.

All the banks are providing housing loans with attractive interest rates. But state bank of

mysore is one of the associate banks of the state bank of India, it is providing the

housing loans with interest rates at par with the SBI, which will attract the customers

quickly.

Statement of the Problem:

The banking industry is a vast industry . It includes deposits, advances, export and

import etc., among these the advances area is the most important for bankers. Theyshould be very attentive while processing a loan and sanctioning. there are many types

of advances like personal loan, auto loan, mortgage loan, housing loan, education loan

etc.,. As a part of project I have taken the housing loan to study in depth. My study

helps the organization as well the public to understand better in the area of housing

loan.

Objective of the study:

Through this project I would study completely about housing loan sanction process and

benefits and consequences of the housing loan in state bank of mysore. I would also get

the feedback from the customers who has availed the housing loan and who are going

to avail, which will help to the organization to understand the customer needs better

and to give the proper information to the customers on behalf of the Bank.

Scope of the study:

This study covers the entire process of housing loan sanction which is one of the most

important types of the advances in any financial institution which is providing loans. This


8/21

study helps in either way to me to get the knowledge of the advances particularly

housing loan and the organization to know their customer better.

Methodology:

As of now I am getting information from the bank side only hence I am not able to give

the full details of methodology.

Limitations of the study:

01.It covers only one product of advances of the bank

02.No possibility to study about the other departments of banking viz., depositssection.

03.While taking customer feedback they may not be willing to give proper

information and there may be possibility for wrong data.

04.Less possibility to get the confidential information from the officials of the bank.

HOUSING LOAN OR HOME LOAN IN STATE BANK OF MYSORE:

INTRODUCTION:

Housing Loan

Under Personal Segment, You can avail a loan for

Construction or Purchase of a new house or flat

Repairs / Renovation / Extension of existing house

For purchase of plot for construction of house within two years

For purchase of built houses not more than 15 years old

Housing loan against II charge

For Purchase of Furnishings / Consumer durables as part of the project cost

Maximum Repayment period

Age Repayment


9/21

period

For persons below 35 yearsof age

25 years

For persons below 45 years

of age

20 years

For persons above 45 yearsof age

15 years

Margin

Amount Margin (%)

Upto Rs. 30 lakhs 20%

Above Rs. 30 laks to 75lakhs

20%

Above Rs 75 lakhs to 1.00Crore

25%

Above Rs 1.00 crore 40%

Margin for Purchase of New houses which are ready for possession(Applicable to First sale only)

Amount Margin (%)

Upto Rs. 75 lakhs 15%

Above Rs.75 laks to 1cr

20%

Above Rs 1.00 crore 30%

InterestPenal interest of 1% in case of default of three or more consecutiveinstalments.

Processing charges

Loan Amount Processing Charges (w.e.f. 01.06.2011)

Upto Rs 25 Lacs 0.25% of loan amount, with a minimum ofRs 500/-

Above Rs 25 Lacs and upto Rs75 Lacs

Rs 10,000/-


10/21

Above Rs 75.00 Lacs Rs 20,000/-

InsuranceThe house property has to be insured covering all risks. Group insurance isavailable to cover the life of the borrower on payment of one time upfront

premium.DisbursementDirect to the sellers in case of purchase.For Construction / Repairs / Renovations in a phased manner

RepaymentRepayable in monthly instalments. Repayment period ranging from 5 to 25 years,including a moratorium period ranging from 6 to18 months from the date of thefirst disbursement.

Pre-Payment penalty

No Pre-closure / Pre-payment penalty on all Home Loans.

Housing loan process:

The following steps will be followed in SBM for the sanction of HOUSING LOAN.

IDENTIFYING THE CUSTOMER.

First and foremost step in sanctioning of home loan is identifying the customer. In this

process the bank will identify the customer who is in need of housing loan and the

repayment capacity of the customer.

Calculating eligibility at branch level:

After duly complying KYC (Know your customer) norms (verification of identity and

address with valid proofs as per RBI) the bank will verify the income of the customer. As

per his income the bank will calculate the eligibility and fix the Loan amount.

Process at the Branch:

The branch will accept the duly filled in application from the customer to process the

loan while accepting the application the branch head or the loan processing officer will

interview the customer. Some of the important questions are mentioned here.


11/21

01.What is the project value?

02.Whether it is purchasing / construction / renovation/ takeover/ site?

03.What is your own contribution towards project?

04.Are you salaried of self employed or businessman?

05.What is your annual income?06.Are you income tax assessee ?

07.If yes are your filing income tax returns regularly?

08.Are you having any other liabilities with any bank or financial institution?

09.What is the time period of the project?

After getting the basic information from the customer the branch will process the

application.

The process is as under:

01.Scrutinizing the application form.

02.Verifying the required documents as per kyc norms.

03.Verifying the property documents and general documents.

04.Inspecting the residence of the customer by the advances manager or branch

head.

05.Forwarding the application to RACPC* (Retail Assets Centralized Processing Cell)

for further processing.

(* in metros where the CPC is located, in rural or other locations it will be sent to

their 2`region heads for further processing)

06. Process at RACPC:


12/21

i) Accepting the application for processing at RACPC

ii) Assigning the application to the processing officer.

iii) Sending the documents for legal opinion from the panel of advocates of the bank.

iv) IT verification

v) pre sanction inspection

vi) Property valuation

vii) Arriving the eligibility as per the terms and conditions of the bank and fixing the loan

amount.

viii) Sanctioning by the processing department.

ix) Sending the sanctioned project to maintenance department for further process.

x) Mortgaging of the title deeds and disbursement

xi) Post sanction inspection.

01.Scrutinizing the application form at branch level:

The branch head or the loan processing officer at the branch will scrutinize the

application received from the customer to make sure that everything is filled; this

will enable the branch to check the customers bank account details and financial

position. The housing loan application* of the SBM is very effectively prepared

where we can get maximum information about the applicants and the project as

well. The check list also is enclosed to make sure the customer has enclosed all the

required documents for the processing. The loan processing officer will verify the

application for hassle free processing.

(*application format enclosed with this as annexure)


13/21

02.Verifying the required documents as per kyc norms.

This is one of the very important steps in the entire process. As per Reserve Bank of

India guidelines the KYC (know your customer) compliance is very important for any

bank or financial institution because there were so many cases of frauds by providing

incorrect address and fake identification. The branch has to verify the genuineness of

identity proof and address proof of the customer and collect the contact details viz.,

phone numbers and email id.

List of documents as per kyc norms:

01.PAN card

02.Voter identity card

03.Aadhar card

04.Driving licence

05.Passport

Any one of the above documents can be taken as identity proof. For address

proof any one of the following documents can be obtained.

01.Passport

02.Ration card

03.Recent telephone bills

04.Property tax receipts

03.Verifying the property documents and general documents.

At branch level it is difficult to verify whether the documents produced for the property

is genuine or fake; usually at branch level they will attest the required documents by

verifying the originals and the to check the genuineness the documents will be sent for

legal opinion by RACPC.

Particulars of the documents required to be submitted along with the fully completedapplication form

General Documents (Applicable to all)

1. Application form duly filled by the borrower, co-borrowers (if

applicable) along with 3 photographs each


14/21

2. Proof of identity and proof of residence

3. Last six months Bank account statements and signature

identification from present Bankers

4. If any previous loan (from other Bank/Financial institution), then

loan account statement for the last one year

5. Personal asset liability statement in the Banks standard format

For Salaried Employees

1. Salary slips for the last 3 months

2. Copy of identity card issued by the employer

3. Copies of Bank account statement for the last 6 months reflecting salary credits4. Form 16 or IT returns for the last 2 years

5. Employer certificate, Appointment letter, Increment letter (duly attested by the

employer)

For Self Employed/Professionals

1. Photocopies of IT Returns/Assessment orders for the last 3 years

2. Photocopies of challans evidencing payment of Advance Income Tax

3. Statement of income, Balance sheet, Profit and Loss Account for the last 3 years(Certified true copy)

4. Proof of business address

5. Business proof (Registration certificate of establishment, Trade license, Sales Tax

Registration etc)

6. A photocopy of Certificate of Practice (if applicable)

7. A photocopy of Registration Certificate for deduction of Profession Tax (if

applicable)

8. TDS Certificate (Form 16A, if applicable)

For NRIs & PIOs

1. Valid residence proof

2. Employment profile for the last 5 years


15/21

3. Copy of passport including page containing Visa stamping

4. Copy of valid work permit/work contract and appointment letter

5. Copy of identity card issued by the employer

6. Statement of overseas Bank account for the last six months which reflects credit

of salary, savings etc

7. Salary slips for the last three months

8. Copies of latest 2 years Tax Returns (if applicable)

9. Copy of Continuos Discharge Certificate in respect of applicants employed in

Merchant Navy

10.Power of Attorney, if applicable, in Banks standard format duly stamped and

notarized/attested by Indian Embassy/Consulate

For property purchased from Builder/Development Authority (New Flats)

1. Agreement for sale, construction agreement

2.

Copy of order under the Urban land Ceiling Act

3. Blueprint (Plan Copy) duly sanctioned by Municipal Authority

4. All payment receipts to builder/seller

5. Letter from builder/society/Housing Board intimating their account number and

name of their Bankers for remittance of instalments

6. Copy of tax paid receipt and possession certificate issued by the revenue

authorities

7. Registered Development Agreement between the owner of the land and the

builder, Power of Attorney to the builder from the land owner for sale of flats

8. Commencement Certificate granted by Corporation

9. Letter of allotment from Private builder/Housing Board/Society10.NOC & Transfer letter from Development Authority

11.NOC from private builder in Banks standard format

12.Tripartite Agreement

13.If leased land then Registered Agreement of lease

For property purchased from registered society

1. Agreement for sale

2. Copy of order under the Urban land Ceiling Act3. Letter of allotment from the society

4. A copy of approved plan by the appropriate authority

5. Share certificate in original

6. Permission for construction

7. List of members submitted by society with Registrar of Societies duly

acknowledged


16/21

8. Copy of bye laws of society

9. Certificate of IT clearance

10.Certificate of registration

11.NOC to mortgage from the society

12.NOC from land allotting in case of lease hold property

Undertaking by architect, member, Power of attorney, Accepting deposit of original

share certificate accepting the Bank as nominee, resolution passed by the Managing

Committee

For property purchased from Society not registered / originally allotted from

Development authority / Resale flat

1. Agreement for sale

2. Copy of order under the Urban land Ceiling Act

3. Blueprint (Plan copy) duly sanctioned by Municipal Authority4. Occupancy certificate and share certificate

5. Chain of old agreements in original with original receipt of registration (if any)

6. Original letter of allotment issued to the first owner by the development

authority/builder (as applicable)

7. Original stamped receipts of payments issued to the previous and present owners

by the builder/development authority/society

8. Conveyance deed executed by the builder/development authority in favour of

society/seller

9. Transfer permission from the respective authority (development

authority/society)Construction on own land

1. Detailed estimate from Chartered Engineer/Architect

2. Blueprint (Plan Copy) duly sanctioned by Municipal Authority

3. Copy of tax paid receipt and possession certificate issued by the revenue

authorities

If take over loan from other Bank

1. Original sanction letter of financier

2. A/c statement from the financier

3. Copy of title papers in the name of the applicant

4. Possession certificate where house is complete and repayment has started


17/21

5. Detalis of interim security

6. Foreclosure letter

7. List of documents held by the financing institute

8. Letter of No Objection Certificate from the current lender Bank/ Financial Institute

04. Inspecting the residence of the customer by the advances manager or branch

head.

After taking all the necessary documents from the customer it is mandatory to

inspect the residence of the customer and a report has to be prepared by the

inspecting official in prescribed format.

05. Forwarding the application to RACPC* (Retail Assets Centralized Processing Cell)

for further processing.

State Bank of Mysore has introduced Business Process Re-Engineering (BPR) centres in

Bangalore and some major cities. These are the centralized business centres where the

processing will be done as a backend to the branches. For Personal segment loans in

SBM there is a cell called Retail Assets Centralized Processing Cell which is located near

Lalbagh, Bangalore. All the housing loan applications will be forwarded to this cell after

basic verification and residence inspection by the branch. (Where ever these BPR

Cantres are not located the applications will be forwarded to their regional heads for

scrutinizing and sanctioning the loan.)

The branch has to write a recommendation letter along with the application by

mentioning the observations; also branch has to attach the enclosures list.

06. Process at RACPC:

i) Accepting the application for processing by RACPC:

Application will be accepted by RACPC for processing at their end. They will verify as per

the list enclosed by the branch, if any discrepancies RACPC will re send the application

to the branch.


18/21

ii) Assigning the application to the processing officer:

After receiving the application the same will be allotted to an officer for processing the

application further. The official will scrutinize once again the application and check the

enclosures from the bank. Then the official will dispatch the documents for legal opinion

and Income Tax search report.

iii) Sending the documents for legal opinion from the panel of advocates of the

bank.

The processing official will send the property documents for legal opinion from the

advocates panel of the bank. The advocate will scrutinize the genuineness of the

property documents

The list of the documents advocates panel scrutinizes:

1. Sale deeds

2. Khatha certificate

3. Khatha extract

4. Tax period receipts

5. Encumbrance certificate

6. Sanctioned plan from the competent authority

7. Letter of allotment.

8. In case of conversion of agricultural land, copy of the relative order.

The above mentioned are some of the documents only the additional documents will be

taken depending up on the type of the loan.

iv) IT verification:

Income tax returns filed by the customers are to be verified with the auditor who has

filed the returns and search report to be submitted to the bank. Usually these searches

are being done by an auditor appointed by the bank. This is also very important and the

processing official should be cautious because frauds can take place while providing the

IT retrns.


19/21

v) Pre sanction inspection:

This is the inspection conducted by the processing cell to ensure the measurements and

the property details mentioned in the application and as per the documents produced

by the customer are correct. This inspection can be done by the processing officer or it

can be assigned to branch head.

vi) Property valuation:

After pre sanction inspection by the bank official the bank will approach an authorized

builder for property valuation. The bank has tied up with the builders and developers

and the authorized builders will inspect the property where the house going to be

constructed. They will compare the estimation given by the customer and they prepare

their estimation as per the market rate and government rate in the prescribed format

given by the bank. Based on the estimation given by the builder the bank will proceedfor the loan amount eligibility calculation.

vii) Arriving the eligibility as per the terms and conditions of the bank and

fixing the loan amount.

After receiving the reports from the advocates panel legal opinion , auditors IT

verification reports, and property valuation reports the bank will arrive the eligibility

amount for loan as per customers income and repaying capacity keeping in mind the

customers own contribution. They calculate the NMI (Net Monthly Income) and theproposed EMI (Equated Monthly Installments) as per the EMI:NMI ration the loan

amount will be sanctioned.

For example:

X persons annual income is Rs.1500000.00

Then his monthly income is= 1500000/12

=125000.00

Assume deductions per month are Rs. 24000.00

Then net monthly income NMI is Rs.125000-24000=101000.00

The proposed EMI for one lakh is Rs.915 for 30 years.


20/21

Hence the eligible loan amount would be: 101000/915=110 Lakhs.

viii) Sanctioning by the processing department:

The processing officer will arrive the eligibility of the customer and the official will

prepare the documents accordingly compiling all the reports received by him and he

recommends for the sanction. Then the application will be sent to the competent

authority for sanction. The authorized official will scrutinize all the reports and

application as well as recommendations sent by the branch and processing officer. He

will re confirm the eligibility and sanction the loan. If he cannot sanction the loan

amount due to sanctioning powers then he will recommend high authority for

sanctioning. After sanctioning the sanction communication letter will be sent to the

customers along with the terms and conditions letter. The customer has to agree with

the terms and conditions of the bank.

ix) Sending the sanctioned project to maintenance department for further

process:

Till sanction of the loan the processing department will handle. After sanctioning the

project will be sent to maintenance department for documentation, after Post sanction

inspection the loan amount will be disbursed.

x) Mortgaging of the title deeds:


21/21