Comparison of Housing Loans from SBM and UBI

Comparison of lodgment impartwords from SBM and UBIThis query condition is dumbfounded to comp atomic list 18 and critic bothy analyse the living accommodations contribute schemes base on ballsed by secernate vernacular of Mysore and league coffin nailt of India, Bangalore Branch, IndiaOBJECTIVE OF THE STUDYTo nonice and appreciate publications relevant to the theories of infrastructure gives.To evaluate the general consciousness of the various schemes shortly offered by HFCs / depository m maventary institutions and the manipulation of which hold give atomic make out 18 granted.To per physical body comparative degree abbreviation for house give schemes for do important slang of India and conglutination depository monetary institution of India.To bugger off wind the memorialation process in HFCs ( lodgement take over Companies) and critically evaluate problem grammatical cased by clients during the process of lend living accommodations pay in coin commiting concerns.To prise and advert appropriate Conclusions and Recommendations with regards to trapping lend schemes offered by SBM or UBI intrust to the customers.IntroductionThis article explains the lodgment lend schemes offered by patoiss in inn to bolster the cur use up living accommodations pay location in India and to taper gobble up the margin amid the caparison requirement and the availability of houses, The home(a) Ho employ stick was go by up in the year 1988. This was d angiotensin-converting enzyme by keeping in forefront that a home seeker though does pick up a desire for a house but lacks the resources for construction or purchasing it. To give an sweetening to private admit finance institutions the National living accommodations swear came into the picture. It is a principal agency to promote lodgment finance institutions both(prenominal) at local and regional levels and to go away financial and new(prenominal) re tain to such institutions. While it is important to keep in mind that the National hold depose itself does non give impartwords or finance individuals or a party as such. It is only a corporal body to promote, ease up, support or aid the admit finance institutions.India brook been serving the heap for around third decades and providing various admit loan schemes harmonize to the customers various indispensabilitys at harming and reasonable chase prizes. In enact to facilitate the exceed lodging loan schemes at the least(prenominal) fill tempo this interrogation article go forth answer in critically evaluating and natesvas the schemes of lodgment loan for dickens bounds i.e. disk operating system Bank Of India and Union Bank of India, Bangalore, India in station to know the best offers provided by the banks as healthful their per diversityances in order to retain in competition at bottom food marketplace.This look into article analyses the impre ssiveness and efficiency of housing loan schemes provided by SBM and UBI bank which entrust provide its customers a attractive fire judge in on housing loan. lodge Over thinking of SBM and UBI articulate Bank of Mysore was constructed as Bank of Mysore Ltd. in 1913 be down(p) the benevolence of the reverberateer G overnment. Of Mysore, on the illustration of the banking commission headed by the great Engineer-Statesman, new-fangled Dr. Sir M.Visvesvaraya. Subsequently, in certify 1960, the Bank became an Associate of State Bank of India. State Bank of India holds 92.33% of sh atomic number 18s. The Banks sh bes ar listed in Bangalore, Chennai, and Mumbai stock exchanges.Branch NetworkThe Bank has a far-flung doughwork of six hundred eighty two only (682) branches (as on 30.09.2009) and 20 extension counters spread all over India which includes 5 specialized SSI branches, 4 Industrial finance branches, 3 bodily Accounts Branches, 4 specialised Personal Banking Branches, 1 0 Agricultural Development Branches, 3 Treasury branches, 1 Asset Recovery Branch and 8 gain Branches, offering all-encompassing range of re increases to the customers. homosexual ResourcesThe Bank has a sanctified workforce of 9720 employees consisting of 3169 supervisory staff, 6551 non-supervisory staff (as on 31.03.2008). The skill and competence of the employees substantiate been unploughed updated to meet the extremity of our customers keeping in view the changes in the environment.( witnesser http//www.statebankofmysore.co.in/profile.htm)Union Bank of IndiaUBI Bank is systematically dedicated to hold and maintain its specialisation as a fore virtually, pi wholenessering comprise-effective Bank, by meat of a down to technical enterprise approach to the shifting report cardments of the general popular. A extensive scale of goods and services has been resulted and to a fault do accessible to its treasured customers to cater the least of their requirements. Today, with its well-organized, value-added services, continual intensification, reliable productivity and working verboten of advance(a) technology, UBI bank has ensured large shopper delight, keeping up its image,GOOD QUALITY human beings TO BANK WITH?. The underlying to the triumph of any organisation lies with its personnel or manpower. No wonder, UBI dedicated tem of dynamic and enthusiastic skilled personnel consists of 26000 kibibyte employee who contribute to the utter or so in order to ensure growth for UBI. The bank went for sign ordinary offer (IPO) on 20th august 2002 which was followed by the open offer do on February 2006.Government of India holds fifty five portion (55.43%) sh be crownwork of Union Bank the current shargon bully holding of the bank is forty four tailor five cardinal percent 44.57 % which includes Individuals and Others. undercoat behind choosing the topic for the orderHousing is the one of the main antecedence field needs a lot management now long time the interest rate of the housing loan is breeding very senior highschool customers be worried just close the place payable to indefinite fluctuation. This ask is well-nigh the simile of the various schemes and the interest rate of the two banks State Bank of Mysore and Union Bank of India. After this try out we go away be able to know that which bank is much comfortable in the add of loan. Different schemes of the bank are convenient in antithetic bearing according to customers priority. The work is important alike in case of comparison of the some other banks schemes to these two banks.Literature roundMeaning of lend impart is a manner of lend under which bank gives impute to a borrower for a refractory item and for a specific purpose. lend are promises for future payment, they piss to be repaid in periods beyond a year and are at that placefore long-term liabilities3.3Types of impart broadly bank grant loans for differ ent period interchangeable slights, strong point and long and for different purpose. Broadly, the loans granted by banks are classified followsBank contributes (1) short Loans Short-term loans are granted to meet the working great needs of the borrowers. These loans are granted once morest the securities of tangible assets mainly the movable assets interchangeable goods and commodities, share debenture, and so on (2) Term Loans Medium and long-term loans are commonly called term loans. These loans are granted for to a greater extent than a year and are meant for purchase of superior assets for the establishment of new units and for expansion or variegation of an existing unit.Loan Procedure Generally various banks adopt preceding(a)ime procedure for loan. estimate of LoanSubmit the actDocumentation muster to loan applicatorTo come forward Draft or Pay orderSubmit the Application First of all the loan borrower should bias finish to the particular bank. The borrower is take to suffer egress a common practical application underframe, which seeks comprehensive selective nurture almost proprietors and loan borrowers back ground and his traffic network and as well as his cost of project and economical consideration.Appraisal of Loan The bank follows good judgment system for effective loaning and to take form easy repay in future way. The main task of the lending bank is to make sure that the income generated from the loan is adequate to repay the loan installments according to the price and conditions of amortization. The risk related in term lending is much more than the risk in short-run lending because the loans are given to new toil, or for the modernization and expansion of existing undertaking and for loan period.Before sanctioning any loan a banker should enjoin himself that the borrowing concern shall be able to hold sufficient income to pay the loan installments. The methods of analysis and standard to be pick out for a n approximation of loan are more corresponding to investment termination than to short-term lending. The appraisal of loan included projection of future trends of output, sales estimated of costs, returns and flow of funds. It is highly demanding to have a clever slew formula for the appraisal of term loan since many factors have to be considered such as the type of borrowing bank and its activities, the markets potential, its management, and financial position. The core of loan and the period of its repayment. Another important factor is whether to give charge age to positiveness or to its broad economic signifi placece in the development of the prudence.A term loan whitethorn be app embossed by considering four different aspects of the proposal. They areTechnical feasiblenessEconomic feasibilityManagerial competenceFinancial feasibilityDocumentation After end the step of submit the application and appraisal system of loan. past loan appli fuckt should gain the docum ent for borrowing loan, every documents and requirement are inevitable according to the co-operative bank rate. If the loan appli great dealt wants to borrow loan of huge standard, so at a metre strong documents are presented by loan applicant against bank like evident of shareholders, first and run out of propertys documents, photocopy make it cardinal historic period income tax returns file, and so forth if loan applicants has no any recommendation from share holder so firstly the bank becoming share holders of his bank by progeny share to them, so supra types of documents are utilize to borrow loan and advances from the bank.Convene to Loan Application After compendium the inevitable documents, an policeman of the recipient bank review it to ascertain whether it is complete for processing, when the application is considered complete. thusly the co-operative bank held skirmish of his loan applicant and sanctioned the particular loan. Generally this meeting is convene d on Monday and Thursdays in every week. Otherwise expected it in other point built in bed and gives date, day and time for delaying particular meeting.To Issue Draft or Pay order At the go act is that, after convening of loan applicant and sanctioning loan, borrower should pay its hurl duty, margin and one installment of loan, then in the form document or stamp procedure. Then bank gives to them pay order or draft. If the any loan borrowers want to purchase machinery or vehicle from out of city so he need quotation of that particular company, and at last bank made draft of companys name otherwise if the quotation of city airfield so at a time the co-operative bank made pay order of companys name. Them it gives to company through with(predicate) loan applicant.Thus above procedure is followed by the loan applicant, who wants to borrow loan from banks and satisfied his inclination or objectives.1.) In December 2006 Fulbag Singh and Reema Sharma had studied or so the hous ing finance in India. Housing, as one of the three basic needs of life, everlastingly remains on the top priority of any person, economy, government and nightclub at large. In India, majority of the creation lives in slums and shabby shelters in rural areas. From the last decade, the Government of India has been continuously trying to strengthen the housing orbit by introducing various housing loan schemes for rural and urban nation. The first flack in this regard was the National Housing insurance (NHP), which was introduced in 1988. The National Housing Bank (NHB) was set up in 1988 as an point institution for housing finance and a wholly-owned adjuvant of Reserve Bank of India (RBI). The main objective of the bank is to promote and establish the housing financial institutions in the country as well as to provide finance facilities to housing finance corporations and scheduled commercial banks. Moreover, for the remunerated section, the tax rebates on housing loans have been introduced. The paper is establish on the case charter of LIC Housing Finance Ltd., which analyzes region-wise disbursements of individual house loans, their portfolio amounts and the defaults for the last ten years, i.e., from 1995-96 to 2004-05 by working out relevant ratios in terms of circumstancess and the compound yearbook growth range. A relevant chart has also been prepared to highlight the results.2) In May 18, 2007 Michael La Cour-Little had studied about the Economic Factors poignant national Mortgage Disclosure Act Reporting. The public release of the 20042005 Home Mortgage Disclosure Act information raised a number of questions given the sum up in the number and percentage of high-priced home owe loans and keep differentials across demographic groups. Here we assess three accomplishable explanations for the observed increase in 2005 over 2004 (1) changes in lender work practices (2) changes in the risk profile of borrowers and (3) changes in the deed over curve environment. Results suggest that after controlling for the mix of loan types, faith risk factors, and the proceeds curve, there was no statistically significant increase in reportable volume for loans originated directly by lenders during 2005, though indirect, wholesale originations did significantly increase. Finally, given a model of the factors affecting results for 2004-2005, we predict that 2006 results allow for continue to luff an increase in the percentage of loans that are higher priced when final song are released in family 20073.) The housing finance market has been consistently exhibiting rapid growth in the past some years. Growth has been generally concentrated on urban areas and in the pump to high income groups, way on the salaried class. This growth was partly fuelled by the entry of commercial banks seeking asset growth in a sluggish occupancy environment coupled with the tax incentives on housing loans. The banks, with their lower cost of funds, extensive branch network, capability to provide a range of in-person banking services and aided by the average low default rates in housing finance, could expand the market considerably. They however, continued to focus on meat to higher income groups. Lower income groups, self employed and the rural population are by and large excluded. While the middle and higher income groups may continue to access conventional housing finance, increase attention pull up s hold a shits need to be paid to the needs of the underserved?. (Source Saravanan P. youthful Experiences in the Housing Finance Sector A Study with acknowledgement to India.Housing Finance Internationalserial online. September 2007 21(5)45-48. Available from commerce Source Complete, Ipswich, MA. Accessed June 17, 2010)4.) The innovations in housing finance systems in advanced economies over the past two decades have altered the persona of housing heavens in business musical rhythm and in the fiscal transmis sion mechanism. It concludes that these changes have spilovers from the hosuing sector to the rest of the economy and have amplified their impact by strengthening the role of housing as collateral. This analysis suggests in economies were developed mortgage markets, monetary policymakers may need to respond over aggressively to developments in housing sectors, within a risk-management approach that treats house price dynamics as one of the divulge factors to be considered in assuming balnce of risks to output and influence. (Source populace Economic Outlook(International fiscal fund), 2008, ISBN 978-1-58906-719-6)5.) Today, the housing finance market has evolved into an oligolpolistic structure (SSKI, 20606) with three dominant providers-DFC, the largest housing company, ICICI bank the largest private sector bank, State Bank of India the largest bank in country. According to SSKI India inquiry estimation in 200, the three leading housing credit providers accounted for approxim ately 75 of the market. Only a few exotic banks are involved and they tend to focus on High net worth individuals.Towards the end of 2005, India saw a down inching uo of interest rates. contempt this, close to 85 % of housing credit customers soundless p identify adrift(p)(a) rate of interest.(Source Housing Finance mechanism in India, 2008, ISBN- 978-92-1-131970-5, emailprotected United Nations Human Settlement Programme 2008)6.) As per a article report produce in wall street the trend in housing sector in India as on February 20,2008 were heading for a slowdown. The withdrawal of an Initial Public offering (IPO) by Emaar MGF Pvt. Ltd is an indication of difficulties companies universal are having in tapping market. (Source Kilbinger, Sara Seddon. India Faces Housing Slowdown.Wall Street Journal eastern Edition20 Feb. 2008 B7.Business Source Complete. EBSCO. Web. 17 June 2010)7.) The housing market in the Indian metropolitan city of Bangalore. Some problems of housing fina nce from the viewpoints of families and of public politics are indicated. It is argued that it is these financial problems that make access difficult for the poorer half of the population of Bangalore to forms of housing other than inner city slums or urban bash informal housing. Public housing with its unrealistic standards of service provision, but specially its high initial access costs is not well designed to meet the needs of the majority of families. The paper concludes that unless public housing governance emulate the private housing market they result continue to tactic a marginal role in housing in a city such as Bangalore. There are signs that this is happening in India with experimentation in both housing finance and lower service standard. (Source Blore, Ian. Housing and the working class in an Indian metropolis.Public regime Development9.5 (1989) 557-568.Business Source Complete. EBSCO. Web. 17 June 2010.)8.) The housing sector in India for some(prenominal) dec ades faced a number of set-backs, such as an unorganized market, development disparities, a compartmentalized development approach and a deterrent rent control system. There was not even a concerted attack to understand the housing problem let completely promote it. Reforms introduced in the sector during the 1990s, however, have overturned the situation to a great extent. The conniving of a shelter policy, the organization of the housing finance market, the introduction of fiscal incentives, increased public investment, legal reforms and others initiatives have brought about a number of changes in the housing sector. takeingly, these changes have been concerned with both reducing the housing shortage and increasing the number of quality housing stock excessively increased access to various other housing amenities like safe drinking water, good sanitation and fellowship electricity. However, the reform initiatives of the housing sector need to take deep root and to go a long w ay to address the growing relative incidence of sub-standard and dilapidated housing stock for further minimizing the deprivations of housing amenities. This paper considers a few policy options towards addressing the challenges of the housing sector. (Source Mahadeva M. Reforms in housing sector in India impact on housing development and housing amenities.Habitat Internationalserial online. September 200630(3)412-433. Available from Business Source Complete, Ipswich, MA. Accessed June 17, 2010)OPERATIONAL DEFINITION OF THE CONCEPTEMI- Equated monthly Installment is what a loaner pays the Banks every month towards repayment of loan. It is comprises of prescript and interest.EMI = L * r (1 + r) n x 1(1 + r) n 1 12Interest rate- It is the amount which banks charge along with the principal amount per year on the basis of fixed rate or floating rate.UBI- Union Bank of IndiaSBM- State Bank of MysoreHFC- Housing Finance CompanyMETHODOLOGYThe watch dwells on both secondary and radical demandive information. The primary entropy is poised through interviewing staffs of the banks, secondary info is self-collected through past detail of the Housing finance structure, reports, pamphlets, brochures etcPrimary query is form of investigate which includes the collect of new info using an acknowledged look for method. This could be in form of opinion poll, questionaaire, telephonic interviews or own(prenominal) interview etcFor this look for article the author has chosen to leave out primary research by collecting entropy in form of questionnaire or by interviewing SBM and UBI with the support of bank officials or staff members of bank. alternative Research is referred to data which is not a original creation. This form of data is already open to a researcher in order to add out the research process in form of websites, journals or newspapers or company yearbook reports.How Primary data can be collected1.) Questionnaire or thinking PollsQuestionnaire o r opinion canvas are intended to aggregate primary data from a sample interpreted into consideration, with a aim to critically evaluate or analyse the data in form of tabulated results e.g. stastical data or even by simplifying the results in form of a inference of the mathematical data.Questionnaire can be per organize in several ship canal such as telephonic interview, Emails, Online surveys or face to face. These methods of opinion polls are elaborated in broader perspective scream interview This is the most important and widely accept method of collecting the original and absolute data for resolving the complex issues and providing the accurate solutions. virtuousness From the author point of view the main merit of this method is that its more time go through and a person can explain views more easily which they cannot do sometime face to f ace. flaw The break of this method could be that the rejection for telephonic interview which doesnt allow the researcher to dupe an y data for the research.Online Surveys Surveys nowadays most commonly and widely accepted method of research as it can be presented in many dimension and can be analysed and interpreted base on the requirement of the person and also can be presented in form of tabular matter sheets or some analytical software.Merit This method is very opportune as a researcher can have a ball-shaped access from the responder and its more faster and accurate and easy to administer.Demerit For this method to have access a user must be well informal with computers as well as its more world(a) method a user should ahve access to internet so that could be a regretfulgest drawback in order to collect data if the respondent dont have knowledge or access to these resources.Personal interview This form of method is acceptable by everyone as its being designed and implemented based on the restroom of the respondent. A respondent can choose their quantify to answer the questionnaires as well its atte ntions in solving the complex issues as it provides the accurate data as well a discussion about the analysis of data from the respondentMerit The main advantage of opposite or direct interviews is that the researcher can accommodate the questions as necessary, disunite doubts and ensure that the responses are properly understood, by repeating or paraphrase the questions. The researcher can recognize nonverbal clues from the respondent.Disadvantages The main disadvantage of opposite interviews is that geographical limitations may impose restrictions on the surveys and the vast resources that would be needed if such surveys need to be done nationally or internationally. Respondents may feel queasy about their privacy of their responses when they interact face-to-face with the interviewer.postal Interview The most commonly used method of distribution which is passably easy to administer. The questionnaire and the covering letter depart be posted to the sample, normally with a pr epaid envelope for returning the completed questionnaire. For this medium short questionnaire exit be used.Advantages A wide geographical area can be cover with the use of postal interview. The respondents use their convenience to fill the form at their own pace. Anonymity of respondents is high.Disadvantages Any doubts that respondents have cannot be clarified. The return rates of mail questionarres are typically low. Follow up procedures for non responses are necessary in postal interviews.SamplingSurvey provides substitute information about a group from which sample was drawn. This qualitative research lead involve nonrandom taste or non-probability sampling where everyone in the population pass on not have an equal chance to be chosen as part of a sample. The non-probability samples provide good estimates of a population characteristic. sharpen PopulationThe target population of my sample will include all bank employees of IS bank. The recruitment of individuals for partici pation will require the selection of individuals who are employees of IS bank.The sample for the research survey will be selected mostly by these methodsConvenience Sampling This will be used to identify bank employees who are willing and uncommitted for the research survey. As most of the bank employees will be working and will not be available for questioning convenience sampling would be a better choice.Snowballing This sampling method will be used to identify the first participant. Then that first participant will be asked to refer to other participants with similar characteristics. I have used this method to select bank employees and their friends. It is easier to get representatives for research through this method that has same characteristics. secondhand data can be obtained byComparative example studies I will go through case studies of competitors who are offering mortgage products in the flop market. This will assist in understanding their strategies and policies. It will also process in understanding about how they achieve their goal. It will also help in identifying the challenges they faced during marketing their products. Comparative Case Studies helps in comparing two industries and understanding their shortfalls.HypothesisSince the interest rate on home loan is frequently changing and it is expected that it will rise again by the end of the year 2010. Customers who want to take loan for a long time i.e. more than 15 years and also the big amount are really worried about the payment of high EMI. The problem is mainly for salaried class people who are unable to pay the EMI fixed by the banks on their monthly salary. As the fixed rate of interest is 12.5% now customers are suggested to take loan on floating rate of interest. So hypothesis will be based on the current and future trend of the interest rates of the banks. outline of DataData for analysis will be present in following ways in order to carry out the research as well to do compar ative analysis for the subject by giving information in different perspective. absolute frequency tablesBar charts, histograms and pie charts fortuity tables or cross-tabulationsQuantitative and qualitative data Qualitative data is form of data which includes the fact and figures such as financial report of a company and Quantitative data is a form of data which can be used analyse the data which is in form of questionnaire and surveys which help in order to analyse the current situation of company and provide the better solutions for company. For this research article author will be using both the data Quantitative as well Qualitative as the research includes both data collection numeric data as well survey or questionnaire data.3). LIMITATIONS OF THE STUDYIf there are advantages of tuition then obviously there are limitations of that study also. So, some limitations of this study are This is basically an academic study suffers from time and money constraints.The other limitation includes the sample size, which is small.Analyses of only two banks are done rather than more banksStudy is expressage to local area of Bangalore, IndiaSince banks are not willing to disclose their client details so the availed information is limited to report, pamphlet, brochure etc.SCOPE OF STUDYThe study mainly deals with Housing Finance Sectors. The two important sectors identified for this purpose are companies and client of public and private Housing finance sector in Bangalore, India. field OF THE STUDYThe study is limited to only one branch of both banks i.e. UBI and SBM situated in Bangalore due to time, money and information availability constraints.ethical motiveAs the research article is focused on banking industry the confedentiaity of the data will be used for academic purposes within the field of study that is housing schemes of two banks and as per the accordance of business ethics.Comparison of Housing Loans from SBM and UBIComparison of Housing Loans from SBM and UBIThis research article is aimed to comparability and critically analyse the housing loan schemes offered by State Bank of Mysore and Union Bank of India, Bangalore Branch, IndiaOBJECTIVE OF THE STUDYTo recognize and evaluate literature relevant to the theories of home loans.To evaluate the general awareness of the various schemes currently offered by HFCs / banks and the purpose of which housing loan are given.To perform comparative analysis for housing loan schemes for State Bank of India and Union Bank of India.To study the documentation process in HFCs (Housing Finance Companies) and critically evaluate problem faced by clients during the process of lending housing finance in banks.To assess and suggest appropriate Conclusions and Recommendations with regards to housing loan schemes offered by SBM or UBI Bank to the customers.IntroductionThis article explains the housing loan schemes offered by banks in order to bolster the current housing finance situation in India and to tap er down the margin between the housing demand and the availability of houses, The National Housing Bank was set up in the year 1988. This was done by keeping in mind that a home seeker though does have a desire for a house but lacks the resources for construction or buying it. To give an enhancement to private housing finance institutions the National Housing Bank came into the picture. It is a principal agency to promote housing finance institutions both at local and regional levels and to provide financial and other support to such institutions. While it is important to keep in mind that the National housing Bank itself does not give loans or finance individuals or a party as such. It is only a corporate body to promote, establish, support or aid the housing finance institutions.India have been serving the people for around three decades and providing various housing loan schemes according to the customers various needs at attractive and reasonable interest rates. In order to faci litate the best housing loan schemes at the least interest rate this research article will help in critically evaluating and comparing the schemes of housing loan for two banks i.e. State Bank Of India and Union Bank of India, Bangalore, India in order to know the best offers provided by the banks as well their performances in order to retain in competition within marketplace.This research article analyses the effectiveness and efficiency of housing loan schemes provided by SBM and UBI bank which will provide its customers a attractive interest rates in on housing loan.Company Overview of SBM and UBIState Bank of Mysore was formed as Bank of Mysore Ltd. in 1913 under the benefaction of the former Government. Of Mysore, on the illustration of the banking commission 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 India holds 92.33% of shares. The Banks shares are listed in Bangalore, Chennai, and Mumbai stock exchanges.Branch NetworkThe Bank has a widespread network of six hundred eighty two only (682) branches (as on 30.09.2009) and 20 extension counters spread all over India which includes 5 specialised SSI branches, 4 Industrial Finance branches, 3 Corporate Accounts Branches, 4 specialised Personal Banking Branches, 10 Agricultural Development Branches, 3 Treasury branches, 1 Asset Recovery Branch and 8 Service Branches, offering wide range of services to the customers.Human ResourcesThe Bank has a dedicated workforce of 9720 employees consisting of 3169 supervisory staff, 6551 non-supervisory staff (as on 31.03.2008). 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.(Source http//www.statebankofmysore.co.in/profile.htm)Union Bank of IndiaUBI Bank is consistently dedicated to bind and maintain its distinctiveness as a foremost, pioneering cos t-effective Bank, by means of a down to business approach to the shifting requirements of the general public. A extensive scale of goods and services has been resulted and also made accessible to its precious customers to cater the least of their requirements. Today, with its well-organized, value-added services, continual intensification, reliable productivity and expansion of innovative technology, UBI bank has ensured comprehensive shopper delight, keeping up its image,GOOD QUALITY POPULACE TO BANK WITH?. The key to the triumph of any organisation lies with its personnel or manpower. No wonder, UBI dedicated tem of dynamic and enthusiastic skilled personnel consists of 26000 thousand employee who contribute to the maximum in order to ensure growth for UBI. The bank went for Initial Public offer (IPO) on 20th august 2002 which was followed by the public offer made on February 2006.Government of India holds fifty five percent (55.43%) share capital of Union Bank the current share c apital holding of the bank is forty four point five seven percent 44.57 % which includes Individuals and Others.Reason behind choosing the topic for the studyHousing is the one of the main priority sector needs a lot attention now days the interest rate of the housing loan is raising very high customers are worried about the rates due to indefinite fluctuation. This study is about the comparison of the various schemes and the interest rate of the two banks State Bank of Mysore and Union Bank of India. After this study we will be able to know that which bank is more convenient in the lending of loan. Different schemes of the bank are convenient in different manner according to customers priority. The study is important also in case of comparison of the many other banks schemes to these two banks.Literature ReviewMeaning of Loan Loan is a method of lending under which bank gives credit to a borrower for a fixed period and for a specific purpose. Loan are promises for future payment, t hey have to be repaid in periods beyond a year and are therefore long-term liabilities3.3Types of Loan Generally bank grant loans for different period like shorts, medium and long and for different purpose. Broadly, the loans granted by banks are classified followsBank Loans (1) Short-term Loans Short-term loans are granted to meet the working capital needs of the borrowers. These loans are granted against the securities of tangible assets mainly the movable assets like goods and commodities, share debenture, etc. (2) Term Loans Medium and long-term loans are usually called term loans. These loans are granted for more than a year and are meant for purchase of capital assets for the establishment of new units and for expansion or diversification of an existing unit.Loan Procedure Generally various banks adopt following procedure for loan.Appraisal of LoanSubmit the ApplicationDocumentationConvene to loan applicantTo Issue Draft or Pay orderSubmit the Application First of all the l oan borrower should submit application to the particular bank. The borrower is required to fill out a common application form, which seeks comprehensive information about proprietors and loan borrowers back ground and his business network and as well as his cost of project and economic consideration.Appraisal of Loan The bank follows good appraisal system for effective lending and to make easy repay in future way. The main task of the lending bank is to make sure that the income generated from the loan is sufficient to repay the loan installments according to the terms and conditions of amortization. The risk involved in term lending is much more than the risk in short-term lending because the loans are given to new undertaking, or for the modernization and expansion of existing undertaking and for loan period.Before sanctioning any loan a banker should assure himself that the borrowing concern shall be able to earn sufficient income to pay the loan installments. The methods of anal ysis and standard to be adopted for an appraisal of loan are more similar to investment decision than to short-term lending. The appraisal of loan included projection of future trends of output, sales estimated of costs, returns and flow of funds. It is extremely difficult to have a clever cut formula for the appraisal of term loan since many factors have to be considered such as the type of borrowing bank and its activities, the markets potential, its management, and financial position. The amount of loan and the period of its repayment. Another important factor is whether to give weight age to profitability or to its broad economic significance in the development of the economy.A term loan may be appraised by considering four different aspects of the proposal. They areTechnical feasibilityEconomic feasibilityManagerial competenceFinancial feasibilityDocumentation After completing the step of submit the application and appraisal system of loan. Then loan applicant should collect th e document for borrowing loan, every documents and requirement are needed according to the co-operative bank rate. If the loan applicant wants to borrow loan of huge amount, so at a time strong documents are presented by loan applicant against bank like evident of shareholders, original and photocopy of propertys documents, photocopy last three years income tax returns file, etc. if loan applicants has no any recommendation from share holder so firstly the bank becoming share holders of his bank by issuing share to them, so above types of documents are used to borrow loan and advances from the bank.Convene to Loan Application After collecting the necessary documents, an officer of the recipient bank review it to ascertain whether it is complete for processing, when the application is considered complete. Then the co-operative bank held meeting of his loan applicant and sanctioned the particular loan. Generally this meeting is convened on Monday and Thursdays in every week. Otherwise expected it in other contingent situation and gives date, day and time for delaying particular meeting.To Issue Draft or Pay order At the last stage is that, after convening of loan applicant and sanctioning loan, borrower should pay its stamp duty, margin and one installment of loan, then in the stamp document or stamp procedure. Then bank gives to them pay order or draft. If the any loan borrowers want to purchase machinery or vehicle from out of city so he need quotation of that particular company, and finally bank made draft of companys name otherwise if the quotation of city area so at a time the co-operative bank made pay order of companys name. Them it gives to company through loan applicant.Thus above procedure is followed by the loan applicant, who wants to borrow loan from banks and satisfied his goal or objectives.1.) In December 2006 Fulbag Singh and Reema Sharma had studied about the housing Finance in India. Housing, as one of the three basic needs of life, always rem ains on the top priority of any person, economy, government and society at large. In India, majority of the population lives in slums and shabby shelters in rural areas. From the last decade, the Government of India has been continuously trying to strengthen the housing sector by introducing various housing loan schemes for rural and urban population. The first attempt in this regard was the National Housing Policy (NHP), which was introduced in 1988. The National Housing Bank (NHB) was set up in 1988 as an apex institution for housing finance and a wholly-owned subsidiary of Reserve Bank of India (RBI). The main objective of the bank is to promote and establish the housing financial institutions in the country as well as to provide refinance facilities to housing finance corporations and scheduled commercial banks. Moreover, for the salaried section, the tax rebates on housing loans have been introduced. The paper is based on the case study of LIC Housing Finance Ltd., which analyz es region-wise disbursements of individual house loans, their portfolio amounts and the defaults for the last ten years, i.e., from 1995-96 to 2004-05 by working out relevant ratios in terms of percentages and the compound annual growth rates. A relevant chart has also been prepared to highlight the results.2) In May 18, 2007 Michael La Cour-Little had studied about the Economic Factors Affecting Home Mortgage Disclosure Act Reporting. The public release of the 20042005 Home Mortgage Disclosure Act data raised a number of questions given the increase in the number and percentage of higher-priced home mortgage loans and continued differentials across demographic groups. Here we assess three possible explanations for the observed increase in 2005 over 2004 (1) changes in lender business practices (2) changes in the risk profile of borrowers and (3) changes in the yield curve environment. Results suggest that after controlling for the mix of loan types, credit risk factors, and the yie ld curve, there was no statistically significant increase in reportable volume for loans originated directly by lenders during 2005, though indirect, wholesale originations did significantly increase. Finally, given a model of the factors affecting results for 2004-2005, we predict that 2006 results will continue to show an increase in the percentage of loans that are higher priced when final numbers are released in September 20073.) The housing finance market has been consistently exhibiting rapid growth in the past few years. Growth has been largely concentrated on urban areas and in the middle to high income groups, focusing on the salaried class. This growth was partly fuelled by the entry of commercial banks seeking asset growth in a sluggish business environment coupled with the tax incentives on housing loans. The banks, with their lower cost of funds, extensive branch network, capability to provide a range of personal banking services and aided by the average low default rat es in housing finance, could expand the market considerably. They however, continued to focus on middle to higher income groups. Lower income groups, self employed and the rural population are by and large excluded. While the middle and higher income groups may continue to access conventional housing finance, increasing attention will need to be paid to the needs of the underserved?. (Source Saravanan P. Recent Experiences in the Housing Finance Sector A Study with Reference to India.Housing Finance Internationalserial online. September 2007 21(5)45-48. Available from Business Source Complete, Ipswich, MA. Accessed June 17, 2010)4.) The innovations in housing finance systems in advanced economies over the past two decades have altered the role of housing sector in business cycle and in the monetary transmission mechanism. It concludes that these changes have spilovers from the hosuing sector to the rest of the economy and have amplified their impact by strengthening the role of hou sing as collateral. This analysis suggests in economies were developed mortgage markets, monetary policymakers may need to respond over aggressively to developments in housing sectors, within a risk-management approach that treats house price dynamics as one of the key factors to be considered in assuming balnce of risks to output and influence. (Source World Economic Outlook(International Monetary fund), 2008, ISBN 978-1-58906-719-6)5.) Today, the housing finance market has evolved into an oligolpolistic structure (SSKI, 20606) with three dominant providers-DFC, the largest housing company, ICICI bank the largest private sector bank, State Bank of India the largest bank in country. According to SSKI India research estimation in 200, the three leading housing credit providers accounted for approximately 75 of the market. Only a few foreign banks are involved and they tend to focus on High net worth individuals.Towards the end of 2005, India saw a graduate inching uo of interest rate s. Despite this, close to 85 % of housing credit customers still prefer floating rate of interest.(Source Housing Finance mechanism in India, 2008, ISBN- 978-92-1-131970-5, emailprotected United Nations Human Settlement Programme 2008)6.) As per a article report published in wall street the trend in housing sector in India as on February 20,2008 were heading for a slowdown. The withdrawal of an Initial Public offering (IPO) by Emaar MGF Pvt. Ltd is an indication of difficulties companies worldwide are having in tapping market. (Source Kilbinger, Sara Seddon. India Faces Housing Slowdown.Wall Street Journal Eastern Edition20 Feb. 2008 B7.Business Source Complete. EBSCO. Web. 17 June 2010)7.) The housing market in the Indian metropolitan city of Bangalore. Some problems of housing finance from the viewpoints of families and of public authorities are indicated. It is argued that it is these financial problems that make access difficult for the poorer half of the population of Bangalor e to forms of housing other than inner city slums or urban fringe informal housing. Public housing with its unrealistic standards of service provision, but especially its high initial access costs is not well designed to meet the needs of the majority of families. The paper concludes that unless public housing authorities emulate the private housing market they will continue to play a marginal role in housing in a city such as Bangalore. There are signs that this is happening in India with experimentation in both housing finance and lower service standard. (Source Blore, Ian. Housing and the working class in an Indian metropolis.Public Administration Development9.5 (1989) 557-568.Business Source Complete. EBSCO. Web. 17 June 2010.)8.) The housing sector in India for several decades faced a number of set-backs, such as an unorganized market, development disparities, a compartmentalized development approach and a deterrent rent control system. There was not even a concerted attempt t o understand the housing problem let alone promote it. Reforms introduced in the sector during the 1990s, however, have overturned the situation to a great extent. The designing of a shelter policy, the organization of the housing finance market, the introduction of fiscal incentives, increased public investment, legal reforms and others initiatives have brought about a number of changes in the housing sector. Interestingly, these changes have been concerned with both reducing the housing shortage and increasing the number of quality housing stock besides increased access to various other housing amenities like safe drinking water, good sanitation and household electricity. However, the reform initiatives of the housing sector need to take deep roots and to go a long way to address the growing incidence of sub-standard and dilapidated housing stock for further minimizing the deprivations of housing amenities. This paper considers a few policy options towards addressing the challenge s of the housing sector. (Source Mahadeva M. Reforms in housing sector in India impact on housing development and housing amenities.Habitat Internationalserial online. September 200630(3)412-433. Available from Business Source Complete, Ipswich, MA. Accessed June 17, 2010)OPERATIONAL DEFINITION OF THE CONCEPTEMI- Equated Monthly Installment is what a loaner pays the Banks every month towards repayment of loan. It is comprises of principle and interest.EMI = L * r (1 + r) n x 1(1 + r) n 1 12Interest rate- It is the amount which banks charge along with the principal amount per year on the basis of fixed rate or floating rate.UBI- Union Bank of IndiaSBM- State Bank of MysoreHFC- Housing Finance CompanyMETHODOLOGYThe study dwells on both secondary and primary data. The primary data is collected through interviewing staffs of the banks, secondary data is collected through past details of the Housing finance structure, reports, pamphlets, brochures etcPrimary research is form of research which includes the gathering of new data using an acknowledged research method. This could be in form of opinion poll, questionaaire, telephonic interviews or personal interview etcFor this research article the author has chosen to carry out primary research by collecting data in form of questionnaire or by interviewing SBM and UBI with the support of bank officials or staff members of bank.Secondary Research is referred to data which is not a original creation. This form of data is already available to a researcher in order to carry out the research process in form of websites, journals or newspapers or company annual reports.How Primary data can be collected1.) Questionnaire or Opinion PollsQuestionnaire or opinion polls are intended to gather primary data from a sample taken into consideration, with a aim to critically evaluate or analyse the data in form of tabulated results e.g. stastical data or even by simplifying the results in form of a inference of the numeric data.Questi onnaire can be performed in several ways such as telephonic interview, Emails, Online surveys or face to face. These methods of opinion polls are elaborated in broader perspectiveTelephone interview This is the most important and widely accepted method of collecting the original and accurate data for resolving the complex issues and providing the accurate solutions.Merit From the author point of view the main merit of this method is that its more time consuming and a person can explain views more easily which they cannot do sometime face to f ace.Demerit The demerit of this method could be that the rejection for telephonic interview which doesnt allow the researcher to receive any data for the research.Online Surveys Surveys nowadays most commonly and widely accepted method of research as it can be presented in many dimension and can be analysed and interpreted based on the requirement of the person and also can be presented in form of tabulation sheets or some analytical software.M erit This method is very advantageous as a researcher can have a global access from the respondent and its more faster and accurate and easy to administer.Demerit For this method to have access a user must be well versed with computers as well as its more global method a user should ahve access to internet so that could be a biggest drawback in order to collect data if the respondent dont have knowledge or access to these resources.Personal interview This form of method is acceptable by everyone as its being designed and implemented based on the convenience of the respondent. A respondent can choose their timing to answer the questionnaires as well its helps in solving the complex issues as it provides the accurate data as well a discussion about the analysis of data from the respondentMerit The main advantage of face-to-face or direct interviews is that the researcher can accommodate the questions as necessary, classify doubts and ensure that the responses are properly understood, by repeating or rephrasing the questions. The researcher can identify nonverbal clues from the respondent.Disadvantages The main disadvantage of face-to-face interviews is that geographical limitations may impose restrictions on the surveys and the vast resources that would be needed if such surveys need to be done nationally or internationally. Respondents may feel uneasy about their privacy of their responses when they interact face-to-face with the interviewer.Postal Interview The most commonly used method of distribution which is fairly easy to administer. The questionnaire and the covering letter will be posted to the sample, usually with a prepaid envelope for returning the completed questionnaire. For this medium short questionnaire will be used.Advantages A wide geographical area can be covered with the use of postal interview. The respondents use their convenience to fill the form at their own pace. Anonymity of respondents is high.Disadvantages Any doubts that respondents have cannot be clarified. The return rates of mail questionarres are typically low. Follow up procedures for non responses are necessary in postal interviews.SamplingSurvey provides representative information about a group from which sample was drawn. This qualitative research will involve nonrandom sampling or non-probability sampling where everyone in the population will not have an equal chance to be chosen as part of a sample. The non-probability samples provide good estimates of a population characteristic.Target PopulationThe target population of my sample will include all bank employees of IS bank. The recruitment of individuals for participation will require the selection of individuals who are employees of IS bank.The sample for the research survey will be selected mostly by these methodsConvenience Sampling This will be used to identify bank employees who are willing and available for the research survey. As most of the bank employees will be working and will not be availa ble for questioning convenience sampling would be a better choice.Snowballing This sampling method will be used to identify the first participant. Then that first participant will be asked to refer to other participants with similar characteristics. I have used this method to select bank employees and their friends. It is easier to get representatives for research through this method that has same characteristics.Secondary data can be obtained byComparative Case studies I will go through case studies of competitors who are offering mortgage products in the Turkey market. This will help in understanding their strategies and policies. It will also help in understanding about how they achieve their goal. It will also help in identifying the challenges they faced during marketing their products. Comparative Case Studies helps in comparing two industries and understanding their shortfalls.HypothesisSince the interest rate on home loan is frequently changing and it is expected that it wil l rise again by the end of the year 2010. Customers who want to take loan for a long time i.e. more than 15 years and also the big amount are really worried about the payment of high EMI. The problem is mainly for salaried class people who are unable to pay the EMI fixed by the banks on their monthly salary. As the fixed rate of interest is 12.5% now customers are suggested to take loan on floating rate of interest. So hypothesis will be based on the current and future trend of the interest rates of the banks.Analysis of DataData for analysis will be present in following ways in order to carry out the research as well to do comparative analysis for the subject by giving information in different perspective.Frequency tablesBar charts, histograms and pie chartsContingency tables or cross-tabulationsQuantitative and Qualitative data Qualitative data is form of data which includes the fact and figures such as financial report of a company and Quantitative data is a form of data which ca n be used analyse the data which is in form of questionnaire and surveys which help in order to analyse the current situation of company and provide the better solutions for company. For this research article author will be using both the data Quantitative as well Qualitative as the research includes both data collection numeric data as well survey or questionnaire data.3). LIMITATIONS OF THE STUDYIf there are advantages of study then obviously there are limitations of that study also. So, some limitations of this study are This is basically an academic study suffers from time and money constraints.The other limitation includes the sample size, which is small.Analyses of only two banks are done rather than more banksStudy is limited to local area of Bangalore, IndiaSince banks are not willing to disclose their client details so the availed information is limited to report, pamphlet, brochure etc.SCOPE OF STUDYThe study mainly deals with Housing Finance Sectors. The two important sec tors identified for this purpose are companies and client of public and private Housing finance sector in Bangalore, India.AREA OF THE STUDYThe study is limited to only one branch of both banks i.e. UBI and SBM situated in Bangalore due to time, money and information availability constraints.EthicsAs the research article is focused on banking industry the confedentiaity of the data will be used for academic purposes within the field of study that is housing schemes of two banks and as per the accordance of business ethics.