EXECUTIVE SUMMARY

“Housing finance brings together complex and multi-sector issues that are driven by constantly
changing local features, such as a country’s legal environment or culture, economic makeup,
regulatory environment, or political system”
In addition, the concept of housing finance and housing finance systems has been evolving over time.
Looking at definitions from the mid-1980s, we see that housing finance was defined primarily in
terms of residential mortgage finance:

“The purpose of a housing finance system is to provide the funds which home-buyers need to
purchase their homes. This is a simple objective, and the number of ways in which it can be achieved
is limited. Notwithstanding this basic simplicity, in a number of countries, largely as a result of
government action, very complicated housing finance systems have been developed. However, the
essential feature of any system, that is, the ability to channel the funds of investors to those purchasing
their homes, must remain.”
Banks are the most significant players in the Indian financial market. - They are the biggest purveyors
of credit, and they also attract most of the savings from the population. Dominated by public sector,
the banking industry has so far acted as an efficient partner in the growth and the development of
the country. Driven by the socialist ideologies and the welfare state concept, public sector banks
have long been the supporters of agriculture and other priority sectors. 'They act as crucial
channels of the government in its efforts to ensure equitable economic development.

To understand this, one has to understand the requirements of short-term finance for
conducting the day to day business. This type of finance is required to fund the current assets
in the business. The current assets in any business have two basic characteristics. These are (1)
Short life spam and (2) swift transformation into other forms of current assets.

Accepting deposits is one of the two major activities of the Banks. Banks are also called
custodians of public money. Basically, the money is accepted as deposit for safe keeping. But
since the Banks use this money to earn interest from people who need money, Banks share a
part of this interest with the depositors.

A secured loan is a loan in which the borrower pledges some asset (e.g. a car or property) as collateral
for the loan. A mortgage loan is a very common type of debt instrument, used by many individuals to
purchase housing. In this arrangement, the money is used to purchase the property. The financial
institution, however, is given security , a lien on the title to the house until the mortgage is paid off in
full. If the borrower defaults on the loan, the bank would have the legal right to repossess the house
and sell it, to recover sums owing to it.
 CHAPTER 1.

INTRODUCTION:

Housing finance is a broad topic, the concept of which can vary across continents, regions and
countries, particularly in terms of the areas it covers. For example, what is understood by the term
“housing finance” in a developed country may be very different to what is understood by the term in a
developing country.

The International Union for Housing Finance, as a multinational networking organisation, has no
official position on what the best definition of housing finance is. However, the selection of quotes
below is offered as a snapshot of what housing finance as a topic cover:

“Housing finance brings together complex and multi-sector issues that are driven by constantly
changing local features, such as a country’s legal environment or culture, economic makeup,
regulatory environment, or political system”
In addition, the concept of housing finance and housing finance systems has been evolving over time.
Looking at definitions from the mid-1980s, we see that housing finance was defined primarily in
terms of residential mortgage finance:

“The purpose of a housing finance system is to provide the funds which home-buyers need to
purchase their homes. This is a simple objective, and the number of ways in which it can be achieved
is limited. Notwithstanding this basic simplicity, in a number of countries, largely as a result of
government action, very complicated housing finance systems have been developed. However, the
essential feature of any system, that is, the ability to channel the funds of investors to those purchasing
their homes, must remain.”
However, in more recent years, a number of other much wider definitions have appeared:

“Put simply, housing finance is what allows for the production and consumption of housing. It refers
to the money we use to build and maintain the nation’s housing stock. But it also refers to the money
we need to pay for it, in the form of rents, mortgage loans and repayments.”
“There is recognition of other relevant forms of housing finance [apart from residential mortgage
finance] such as developer finance, rental finance, or microfinance applied to housing. Developer
finance is often in the form of unregulated advance payments by buyers, and developers sometimes
provide long-term finance to buyers through instalments sales when mortgages markets are not
accessible. Microfinance for housing is typically used for home improvement or progressive housing
purposes. Loans are typically granted without pledging properties. Although the overall impact of
microfinance in housing remains limited, this activity can represent an important source of funding for
those in the informal sector.”

Banks are among the main participants of the financial system in India. Banking offers several
facilities and opportunities. Banks in India were started on the British pattern in the beginning of the
19th century. The first half of the 19th century, The East India Company established 3 banks The Bank
of Bengal, The Bank of Bombay and The Bank of Madras. These three banks were known as
Presidency Banks. In 1920 these three banks were amalgamated and The Imperial Bank of India was
formed. In those days, all the banks were joint stock banks and a large number of them were small
and weak. At the time of the 2nd world war about 1500 joint stock banks were operating in India out
of which 1400 were non- scheduled banks. Bad and dishonest management managed quiet a quiet a
few of them and there were a number of bank failures. Hence the government had to step in and the
Banking Company’s Act (subsequently named as the Banking Regulation Act) was enacted which led
to the elimination of the weak banks that were not in a position to fulfil the various requirements of
the Act. In order to strengthen their weak units and review public confidence in the banking system, a
new section 45 was enacted in the Banking Regulation Act in the year 1960, empowering the
Government of India to compulsory amalgamate weak units with the stronger ones on the
recommendation of the RBI. Today banks are broadly classified into 2 groups namely—
(a) Scheduled banks.
(b) Non-Scheduled banks.

In India the banks are being segregated in different groups. Each group has their own benefits and
limitations in operating in India. Each has their own dedicated target market. Few of them only
work in rural sector while others in both rural as well as urban. Many even are only catering in cities.
Some are of Indian originand some are foreign players.
One more section has been taken note of is the upcoming foreign banks in India. The RBI has
shown certain interest to involve more of foreign banks than the existing one recently. This step
has paved a way for few more foreignbanks to start business in India.

ABOUT THE BANK

Bank of Maharashtra (BoM) was registered in Sep 16, 1935 with an authorised capital of 1 million. It
commenced business in Feb 8 1936. The bank was nationalised in 1969. BoM sponsored the
following RRBs - the Marathwada Gramin Bank Ltd in 1976 and the Aurangabad-Jalna Gramin Bank
Ltd in 1982. In FY04, BoM came out with its IPO. it known as a common man’s bank since its
inception.

The Bank was founded by a group of visionaries led by the late V. G. Kale and the late D. K. Sathe
and registered as a Banking Company on 16 September 1935 at Pune. Today, Bank of Maharashtra
has over 15 million customers across the length and breadth of the country served through 1825
branches in 29 states and 2 union territories.

Apart from providing regular banking services to the customers, Bank of Maharashtra has established
two Joint Ventures to fulfill its other commitments towards the general public and society. These Joint
Ventures are MSETI and Mahabank Info Centre.

Banks are the most significant players in the Indian financial market. - They are the biggest purveyors
of credit, and they also attract most of the savings from the population. Dominated by public sector,
the banking industry has so far acted as an efficient partner in the growth and the development of the
country. Driven by the socialist ideologies and the welfare state concept, public sector banks have
long been the supporters of agriculture and other priority sectors. 'They act as crucial channels of
the government in its efforts to ensure equitable economic development.

The banking sector in India has undergone remarkable changes since the economic reforms were
initiated in 1991-92. The period has been marketed by a slew of reforms in the sector, which provided
the much needed impetus for the growth of the sector as a whole. One of the remarkable reforms
found crucial to study is emphasizes of public sector banks on retail banking. Thus, the project tells us
the basics of retail banking, the day to day operations of the bank. It also tells us various types of loan
provided by the bank.

Banking typical mass-market banking in which individual customers use local branches of larger
commercial banks. Services offered include savings and checking accounts, mortgages, personal
loans, debit/credit cards and certificates of deposit (CDs).
What Does Banking Mean?

When the banking is between INDIVIDUAL and BANK then it is Banking where individual is a
person (whether Natural or Artificial) or entity who either depositing or borrowing money from the
bank.

Banking aims to be the one-stop shop for as many financial services as possible on behalf of retail
clients. Some retail banks have even made a push into investment services such as wealth
management, brokerage accounts, private banking and retirement planning. While some of these
ancillary services are outsourced to third parties (often for regulatory reasons), they often intertwine
with core Banking accounts like checking and savings to allow for easier transfers and maintenance.
The Banking environment today is changing fast. The changing customer demographics demands to
create a differentiated application based on scalable technology, improved service and banking
convenience. Higher penetration of technology and increase in global literacy levels has set up the
expectations of the customer higher than never before. Increasing use of modern technology has
further enhanced reach and accessibility. The market today gives us a challenge to provide multiple
and innovative contemporary services to the customer through a consolidated window as so to ensure
that the bank’s customer gets “Uniformity and Consistency” of service delivery across time and at
every touch point across all channels. The pace of innovation is accelerating and security threat has
become prime of all electronic transactions. High cost structure rendering mass-market servicing is
prohibitively expensive. Present day tech-savvy bankers are now more looking at reduction in their
operating costs by adopting scalable and secure technology thereby reducing the response time to
their customers so as to improve their client base and economies of scale. The solution lies to market
demands and challenges lies in innovation of new offering with minimum dependence on branches – a
multi-channel bank and to eliminate the disadvantage of an inadequate branch network. Generation of
leads to cross sell and creating additional revenues with utmost customer satisfaction has become
focal point worldwide for the success of a Bank.

Banking is, however, quite broad in nature - it refers to the dealing of commercialbanks with
individual customers, both on liabilities and assets sides of the balance sheet. Fixed, current / savings
accounts on the liabilities side; and mortgages, loans (e.g., personal, housing, auto, and educational)
on the assets side, are the more important of the products offered by banks. Related ancillary services
include credit cards, or depository services.Banking refers to provision of banking services to
individuals and small business where the financial institutions are dealing with large number of low
value transactions. This is in contrast to wholesale banking where the customers are large, often
multinational companies, governments and government enterprise, and the financial institution deal in
small numbers of high value transactions.
Today’s Banking sector is characterized by three basic characteristics:

 Multiple products (deposits, credit cards, insurance, investments and securities)

 Multiple channels of distribution (branches, call center, internet)
 Multiple customer groups (consumer, small business, and corporate).

The branch network includes 22 branches specialising in foreign exchange, industrial finance,
small-scale industry and hi-tech agriculture. • BoM offers numerous schemes such as: Mahabank
Family Banking Card, Mahabank Educational Loan Scheme, Mahabank Aadhar Scheme for
pensioners, Laghu Udhyami Credit Card Scheme and Women Empowerment Scheme. • The bank
implemented the rural bank mechanisation project to computerise its 591 rural branches, that
capture 10.2% of the bank’s bus Cont. • BoM acquired a 9% stake in Global Trade Finance Pvt
Ltd, a NBFC promoted by Exim Bank. In Jun 2004, the bank implemented RTGS for inter-bank
fund transfer, FEX receipts & payments and treasury settlements. • For the year to Mar 31, 2005,
total income increased to Rs 27.5 bn, up 3.2% over the previous year’s figure. Net profit decreased
41.8% to Rs 1.8 bn. • Bank has a tie up with LIC of India and United India Insurance company for
sale of Insurance policies. Bank has achieved 100% CBS enabling anytime anywhere banking to
its customers.
 CHAPTER 2

COMPANY PROFILE

Bank of Maharashtra is a public sector bank in Maharashtra which offers personal banking cash
management retail loans and other financial services. Their services include deposits savings/current
bank account vehicle loans personal loans retail trade finance global banking lending to priority sector
and small-scale sector foreign exchange and export finance corporate loans and equipment loans. As
on 31 March 2018 the bank's total branch network comprised of 1846 branches spread across all the
States and 4 union territories. The branch network includes specialized branches in the area of Foreign
Exchange Government Business Treasury and International Banking Industrial Finance MSME and
Hi-tech Agriculture Pension Payment etc. The bank's ATM network stood at 1864 as on 31 March
2018.The Bank has one subsidiary namely The Maharashtra Executor & Trustee Company Pvt Ltd
which undertakes management of public/ private trusts and administration/ execution of Will. They
also sponsored three Regional Rural Banks namely Aurangabad Jalna Garmin Bank Thane Garmin
Bank and Marathwada Garmin Bank with head office at Aurangabad Thane and Nanded respectively.
Bank of Maharashtra was incorporated on September 16 1935 and started their business on February 8
1936. In April 10 1946 The Maharashtra Executor & Trustee Company Pvt Ltd was incorporated as a
wholly owned subsidiary of the Bank. In July 1969 Bank of Maharashtra was nationalized along with
13 other banks. After nationalization the Bank expanded rapidly. In the year 1998 the Bank attainted
the autonomous status which helped the Bank in providing more and more services with simplified
procedures without intervention of Government. In the year 2000 they incorporated Magic money Ltd
(MeM) a joint venture of Bank of Maharashtra Dena Bank Next Step Infotech P. Ltd. (NSIPL) and
Magic Software Enterprises (MSE) Israel continued to undertake departmental projects. During the
year 2003-04 the Bank came with their initial public offer of 10 crore shares of Rs 10/- each at a
premium of Rs 13/- amounting to Rs 230 crore. The issue received overwhelming response and was
oversubscribed by more than 11 times. Also, they opened 34 new branches and upgraded 10 extension
counters into full-fledged branches during the year. During the year 2004-05 the Bank opened 14 new
branches 2 extension counters and up-graded 1 extension counter into a full-fledged branch. Also,
they opened Holiday Home at Shirdi in addition to 5 existing Holiday Homes at different places. The
Bank acquired a stake of 9% in Global Trade Finance Pvt Ltd a non-banking finance company
promoted by the EXIM Bank. In January 2006 the Bank signed a MoU with Life Insurance
Corporation of India for distribution of their insurance products. Also, they launched a scheme of
money transfer service for Non-Resident Indians and other foreign account customers using the
Western Union Money Transfer Services provided by Western Union Financial Services Inc. For this
regard the Bank has entered into agreement with Weizmann Forex Ltd the primary agent of Western
Union Financial Services Inc. During the year 2006-07 the Bank opened 29 new branches and
upgraded 16 extension counters into full-fledged branches. They expanded the ATM Network from
145 ATMs to 302 ATMs during the year and entered into collaboration with VISA for issuance of
Debit cards. The Bank commissioned their own Data Centre at Pune and Disaster Recovery (DR) site
at Hyderabad. Also, they established six IT Labs at Delhi Kolkata Chennai Hyderabad Bangalore and
Lucknow in order to take care of the massive training requirement for the CBS project. The Bank
launched new schemes like Mahalaxmi Term Deposit Scheme (3 years term deposit scheme)
Mahadeep Scheme (Financing of Solar Water Heating System) Insta Remit Scheme (RTGS scheme
for instant fund transfer) etc during the year. In May 2006 they entered into tie up with United
Insurance Company Ltd for distribution of their non-life insurance products. During the year 2007-08
the Bank also launched two group insurance schemes namely Maha Suraksha Deposit Scheme for all
types of deposit account holders and Maha Grih Suraksha for home loan borrowers. Also, they
entered into distribution agreement with 15 select Asset Management Companies during the year.
They opened 20 new branches upgraded 10 extension counters into full-fledged branches. They also
opened 3 Currency Chests during the year. In March 2008 the two Regional Rural Banks namely
Aurangabad Jalna Garmin Bank and Thane Garmin Bank were amalgamated into one unit in the name
of Maharashtra Godavari Gramin Bank with head office at Aurangabad and having area of operation
in nine districts of Maharashtra. As at March 31 2008 the total branch network comprised of 1375
branches and three extensions counters spread over 22 states and two union territories. During the
financial year ended 31 March 2010 Bank of Maharashtra crossed the milestone business level of Rs
100000 crore. During the year the bank set up currency futures desk at its dealing room and started
proprietary trading in MCX-SX Exchange. Straight-through-Processing (STP) of Merchant
Transactions was implemented in all 28 designated Fex Centres during the year. During the year
under review Bank of Maharashtra opened 33 new branches. The bank set up three retail credit hubs
one each at Pune Mumbai and Delhi to facilitate robust and qualitative growth in retail credit with
special focus on housing loans. Five Asset Recovery branches were also set up one each at Pune
Mumbai Nagpur Kolkata and Aurangabad to provide greater thrust to the legal and administrative
measures for recovery of NPAs.The year 2009-2010 was a landmark year in the chronicle of the bank
as far as technology implementation and up-scaling are concerned.

Today’s Banking sector is characterized by three basic characteristics:

 Multiple products (deposits, credit cards, insurance, investments and securities)

 Multiple channels of distribution (branches, call center, internet)
 Multiple customer groups (consumer, small business, and corporate).

Bank of Maharashtra operates in the Commercial banks sector. In addition to historical fundamental
analyses, the complete report available to purchase compares Bank Of Maharashtra with three other
companies in this sector in India: Federal Bank Ltd (2018 sales of 110.76 billion Indian Rupees
[US$1.59 billion] of which 42% was Retail Banking), Vijaya Bank (141.92 billion Indian Rupees
[US$2.04 billion] of which 39% was Corporate/wholesale), and United Bank of India (105.53 billion
Indian Rupees [US$1.52 billion] of which 43% was Treasury Operations).

Sales Analysis. Bank of Maharashtra reported sales of 126.02 billion Indian Rupees (US$1.81 billion)
for the fiscal year ending March of 2018. This represents a decrease of 7.1% versus 2017, when the
company's sales were 135.71 billion Indian Rupees. Contributing to the drop in overall sales was the
28.8% decline in Corporate/wholesale Banking, from 51.48 billion Indian Rupees to 36.64 billion
Indian Rupees. . However, these declines were partially offset by the increase in sales of Retail
Banking (up 5.9% to 42.29 billion Indian Rupees) and Treasury (up 3.1% to 42.05 billion Indian
Rupees) and Other Banking Operations (up 45.9% to 5.37 billion Indian Rupees).

Name Designation

A C Rout Executive Director

A S Rajeev CEO

A S Rajeev Managing Director & CEO

Archana Ravindrarai Dholakia Part Time Non-Official Director

C V Venkatesh Chief Vigilance Officer & General Manager

Chandrakant Bhagwat Co. Secretary & Compl. Officer

Chandrakant Bhagwat Secretary

Deendayal Agrawal Director

G Sreekumar Director

N Muniraju General Manager

N Ram Babu General Manager

Nalini Shriraman General Manager

P N Deshpande General Manager

Pradeep Mishra Asst. General Manager

R H Phadnis General Manager

R Thamodharan Director

Rajkiran Bhoir General Manager

Ramesh B Kshirsagar General Manager

Sanjay Rudra Deputy General Manager

T V Raman Murthy General Manager

Vandita Kaul Director

Vasant Mhaske General Manager

Vijay Prakash Srivastava Chief Financial Officer

FACILITIES
All the branches of BOM have been fully computerized whit depository services with depository
services and DEMAT facilities being offered at 131 branches as of April 2009. The bank aims at
increasing its ATM network from planning to install biometric and mobile banking is also on the cads.

OTHER HIGHLIGHTS

apart from providing regular banking services to the customers banks of Maharashtra has established
two joint ventures to fulfill its other commitments towards its other commitments towards the gernal
public a society. These joint ventures are M-SETI and MAHABANK information center.
MAHABANK self-employment training instituted

(M-SETI) is an an effort initiated by MAHABANK agricultural research and rural development fund
(MARDEF), a trust run by Bank of Maharashtra receiving help from national bank for rural
development (NABARD). the institute run various self-employment oriented training courses for the
rural unemployed youth from the districts of pune, Kolhapur, satara, sangli, nshik, ahmednagar,
jalgaon, dhule and nandurbar.

Mahabank information center is get another initiative by bank of Maharashtra aimed at providing
various retail banking related information to the customers and enabling smoother operation for them

Head office

Bank of Maharashtra,

Lolmangal,

1501, Shivaji Nagar,

Pune:- 411005.

Website:- bankofmaharashtra.in

The Birth
Registered on 16th Sept 1935 with an authorized capital of Rs 10.00 lakh and commenced business on
8th Feb 1936.

The Childhood

Known as a common man's bank since inception, its initial help to small units has given birth to many
of today's industrial houses. After nationalization in 1969, the bank expanded rapidly. It now has 1276
branches (as of 31st March 2004) all over India. The Bank has the largest network of branches by any
Public sector bank in the state of Maharashtra.

The Adult

The bank has fine-tuned its services to cater to the needs of the common man and incorporated the
latest technology in banking offering a variety of services.

Banks Philosophy

Technology with personal touch.

The 3m’s symbolizing

 Mobilization of Money

 Modernization of Methods and

 Motivation of Staff.

Banks Aims
The bank wishes to cater to all types of needs of the entire family, in the whole country. Its dream is
"One Family, One Bank, Maharashtra Bank".

The Autonomy
The Bank attained autonomous status in 1998. It helps in giving more and more services with
simplified procedures without intervention of Government.

Banks Social Aspect

The bank excels in Social Banking, overlooking the profit aspect; it has a good share of Priority sector
lending having 46% of its branches in rural areas.

Other Attributes
Bank is the convener of State level Bankers committee
Bank has signed a MoU with EXIM bank for co-financing of project exports
Bank offers Depository services and Demat facilities in Mumbai.
Bank has captured 95.25% of its total business through computerization.

Banks Future Plans

 Opening of 40 new branches at the most strategic business centers.

 Circle offices at Pune, Mumbai, Delhi, Banglore and Nagpur.

 255 additional ATMs will be installed.

 To cross business level of around Rs 46000 crore.

 To increase customer base by 10%.

 To increase finance to Self Help Groups in rural areas.

 To substantially increase the Savings Bank Deposits.

 Bank is planning setting up of overseas representative offices in New York , London,

Singapore & Dubai.

INTEREST RATE ON DEPOSITES

Duratio For amount less than Rs. 1.00 crore For amount Rs. 1.00 Indicative Rates for
n crore to Rs. 5.00 amount
crore above Rs. 5.00 crore

Normal( Annualize Senior Annualize Normal( Annualize Normal( Annualize

% p.a.) d Yield Citizen ( d Yield % p.a.) d Yield % p.a.) d Yield
(% p.a.) % p.a.) (% p.a.) (% p.a.) (% p.a.)

7 to 14
4.00 4.00 4.00 4.00 7.00 7.00 7.00 7.00
Days

15 to 45
5.50 5.50 5.50 5.50
days
8.00 8.00 8.00 8.00
46 to 90
7.00 7.00 7.00 7.00
days
91 days
to 180 7.00 7.06 7.50 7.57 8.00 8.08 8.00 8.08
days

181
days to
less 8.50 8.77 9.00 9.31 8.50 8.77 8.50 8.77
than 1
year

One
9.10 9.42 9.85 10.22 9.10 9.42 9.10 9.42
year

Mahanidhi
9.30 11.86 10.05 12.86 - - - -
(444 days)

Above one year to 3 years 9.10 10.33 9.85 11.30 9.10 10.33 9.10 10.33

Over 3 years to 5 years 9.00 11.21 9.75 12.37 8.75 10.83 8.75 10.83

Over 5 years to 10 years 9.00 14.35 9.75 16.20 8.50 13.19 8.50 13.19
(Effective from 11.09.2018)

 The rate of interest on Bank Term Deposits Scheme, (Tax Saving Scheme for 5-year term
deposit) up to investments of Rs. 1.00 Lakh only will be 9.00%.

 In case of premature withdrawal of deposits, interest is payable at the rate applicable to the
period for which deposit has been actually held with the Bank.

 On premature withdrawal of term deposits, for deposits up to 1-year maturity (tenor at the time
of opening the account) there will be NO PENALTY on the applicable interest rate. Interest
rates on prematurely withdrawn term deposits with maturity period more than 1 year will be
1% below the applicable rate.

 Deposits to be accepted for a maximum period of 10 years.

 All rates are subject to change from time to time.

"Maha Double" Deposit Scheme

Under "Maha Double" Deposit Scheme, deposits will be doubled in 94 months for depositors other
than senior citizens. For senior citizens, under the scheme deposits will be doubled in 87 months.

Category Duration For amount less than Rs. 1.00 crore

Normal (% p.a.) Annualized Yield (% p.a.)

For General Public 94 months 9.00 12.86

For senior Citizens 87 Months 9.75 13.93

Special Housing Loan scheme

Purpose  Build your own house

 Purchase new house/Flat (Old or New)

 Repairs/Renovation of existing house

Eligibility Salaried Persons, Professionals, Businessmen with sufficient

disposable income. Farmers having min five acres of irrigated land
holding. Non-Resident Indians are also eligible.

Age Minimum 21 years - Maximum 50 yrs. for salaried persons.

Maximum 55 years for other than salaried persons

Quantum of Loan: For salaried class

50 times of Gross Salary or 60 times of Net Monthly salary
whichever is higher subject to applicable margin

For Businessmen
Equal to avg annual income (Net profit + Depreciation) of last 3 yrs
X 4 times (B/S, IT returns) Also note repayment of any other term
liabilities.

For Farmers
4 times of avg annual net income. Cross check Gross income, land
holding, cropping pattern, Sugar Factory/APMC/ other agencies bills
etc. Ensure for repayment capacity & repayment experience. If
jointly owned, consider joint holder’s income

Maximum Loan Quantum: No maximum limit for Metro/Urban area

Rs.15 lakh in Semi Urban/Rural area
Rs.5 lakh for repairs/renovation in all areas

Deductions Total deductions including proposed EMI should not exceed 65% of
gross monthly salary / annual income.
 Security Upto Rs 25000/- One Guarantor with sufficient income/net worth
Above Rs 25000/- Equitable/Regd. Mortgage of property or Equal
amount of paper security (NSCs, FDRs of our Bank etc. excluding
shares) guarantee of the spouse, guarantee of relatives whose income
is considered for quantum

Insurance For full value against fire/ Earthquake etc. with Bank’s clause.

Base Rate: 10.50% (With effect from 01. 05. 2017)

BPLR: 15.00% (With effect from 01. 10. 2018)

3.
 LITERATURE REVIEW

A Research Article entitled “Housing Credit Situation in Eighties” by Lall Vinay (1984) . He
has focused attention upon ‘formal factor’ (Permanent Construction) which served mainly to
the HIG and MIG, the loan meets only 47% of the price of the house, forcing the borrowers to
make very large down payments. Also the price of a typical house was above 3 times the
annual families’ income of the borrowers. In spite of, the entire system of housing allocation
and credit the supply of affordable funds was much smaller than demand. Thus, large growth
in urban population and the historically low priority given to housing, supply falls very short
of demand and need. Therefore, not only that the volume of saving and investments should
increase but also larger volumes of capital should flow into housing. Also, accessibility and
terms and condition of housing credit will determine the long term redistribution performance
in housing.

The Research Study entitled “Housing in the New Millennium: A Home Without Equity is
Just a Rental with Debt” by Joshua Rosner (2001) He studied the prospects of the U.S.
housing / mortgage sector over the next several years. Based on his analysis, he believes that,
there are elements in place for the housing sector to continue to experience growth well above
GDP. However, he believes that there are risks that can materially distort the growth prospects
of the sector. Specifically, it appears that a large portion of the housing sector’s growth in the
1990’s came from the easing of the credit underwriting process. Such easing includes: The
drastic reduction of minimum down payment levels from 20% to 0%. A focused effort to
target the “low income” borrower. The reduction in private mortgage insurance requirements
on high loan to value mortgages. The increasing use of software to streamline the origination
process and modify recast delinquent loans in order to keep them classified as “current”.
Changes in the appraisal process which has led to widespread over appraisal / overvaluation
problems.
If these trends remain in place, it is likely that the home purchase boom of the past
decade will continue unabated. Despite the increasingly more difficult economic environment,
it may be possible for lenders to further ease credit standards and more fully exploit less
penetrated markets. Recently, targeted populations that have historically been denied
homeownership opportunities have offered the mortgage industry novel hurdles to overcome.
Industry participants in combination with eased regulatory standards and the support of the
GSEs (Government Sponsored Enterprises) have overcome many of them. If there is an
economic disruption that causes a marked rise in unemployment, the negative impact on the
housing market could be quite large. These impacts come in several forms. They include a
reduction in the demand for homeownership, a decline in real estate prices and increased
foreclosure expenses. These impacts would be exacerbated by the increasing debt burden of
the U.S. consumer and the reduction of home equity available in the home. Although we have
yet to see any materially negative consequences of the relaxation of credit standards, we
believe the risk of credit relaxation and leverage can’t be ignored. Importantly, a relatively
new method of loan forgiveness can temporarily alter the perception of credit health in the
housing sector. In an effort to keep homeowners in the home and reduce foreclosure expenses,
holders of mortgage assets are currently recasting or modifying troubled loans. Such policy
initiatives may for a time distort the relevancy of delinquency and foreclosure statistics.
However, a protracted housing slowdown could eventually cause modifications to become
uneconomic and, thus, credit quality statistics would likely become relevant once again. The
virtuous circle of increasing homeownership due to greater leverage has the potential to
become a vicious cycle of lower home prices due to an accelerating rate of foreclosures.
A research article entitled “Home Ownership Risk Beyond a Subprime Crisis: The
Role of Delinquency Management” by Jaco Melissa B. (2002) She concluded that public
investment in and promotion of homeownership and the home mortgage market often relies
on three justifications to supplement shelter goals: to build household wealth and economic
self-sufficiency, to generate positive social psychological states, and to develop stable
neighborhoods and communities. Home ownership and mortgage obligations do not
inherently further these objectives, however and sometimes undermine them. The most visible
triggers of the recent surge in subprime delinquency have produced calls for emergency
foreclosure avoidance interventions (as well as front-end regulatory fixes). Whatever their
merit, she contends that a system of mortgage delinquency management should be an
enduring component of housing policy.
Furtherance of housing and household policy objectives hinges in part. On the
conditions under which homeownership is obtained, maintained, leveraged, and in some
situations exited. Given that high leverage or trigger events such as job loss and medical
problems play significant roles in mortgage delinquency independent of loan terms, better
origination practices cannot eliminate the need for delinquency management. In terms of
analyzing this framework, it is tempting to focus on its impact on mortgage credit cost and
access or on the absolute number of homes temporarily saved, but her proposed analysis is
based on whether the system honors and furthers the goals of wealth building, positive social
psychological states, and community development. Because those ends are not inexorably
linked to ownership generally or owning a particular home, a system of delinquency
management that honors these objectives should strive to provide fair, transparent, humane,
and predictable strategies for home exit as well as for home retention.
A research article entitled “Housing Problem and Public Action: Continued
Incompatibility Experience from a South Indian State” by M. Mahadeva (2004). In this
article, the author has analysed the nature and distribution of the housing problem in
Karnataka and examined how the state has addressed this issue. In particular, it considers the
strategies adopted during the 90s and identifies a number of failures including the task force
on housing. Some of the major weaknesses, pertaining to incidence by type and by rural-urban
areas, on approaches, on financial requirements and issue of development and redevelopment
are examined to propose alternative policy strategies to effectively address the housing
problem in the state. From the analysis it is found that Karnataka is not an exception to the
general rule that housing strategies, which were evolved over decades, have not taken the
direction expected. By and large, the sectoral policies pursued were only ad hoc without a
clear focus. Lack of comprehensive policy to guide housing development on equity principle
together with ad hoc approaches, have failed to deliver housing benefits and develop critical
housing inputs on a sound footing with equal opportunities for all need based policy
interventions hassle free input delivery mechanism existing housing shortage and rural-urban
disparities substantially. Unfortunately, this did not happen. Thus, policy issues like what
policies are needed for the state of Karnataka to guide housing development, increasing the
housing supply to the poorer and marginalized sections, mobilizing the needed financial
resources and a host of other issues in addressing the housing problem emerge.
4. RESERCH METHODOLOGY

Research methodology is a way to systematically solve the problem. It may be understood as a

science of studying how research is done scientifically. In it we study the various steps that are
generally adopted by a researcher in studying his research problem along with the logic behind them.
It is necessary for the researcher to know not only the research method/techniques but also the
methodology.

DATA COLLECTION

1. Primary Data

2. Secondary Data

PRIMARY DATA

The primary data are those which are collected afresh and for the first time, and thus happen to be
original in character. Primary data do not exist in record and publication. The researcher has to gather
primary data which is fresh for the specific study, under taken by him. The researcher would have to
decide which sort of data he would be using for his study and accordingly he will have to one or the
other method of data collection. The method of collecting primary and secondary data differ since
primary data are to be originally collected, data the nature of data work is merely that of compilation.
The various methods to collect primary data are as follows:

1. Observation Method

2. Experimental Research

SECONDARY DATA

The data referred to those which had gathered for some other purpose and already available in the
firm’s initial record and commercial, trade or sources of secondary data.

1. Internet.

2. Published of secondary data.

3. Specialized libraries.
In my project I have used Exploratory, Descriptive and Casual Research. A vast amount of Primary
data was collected through Interviews and secondary data was collected through various books,
journals and Internet sites appreciated in Bibliography and Webliography.
 OBJECTIVES OF STUDY

 A Study of Housing finance bank of Maharashtra.

 Studying the importance of housing, demand for housing and house finance in India.

 Evaluation of the role of Bank of Maharashtra in financing of houses.

 To identify the popular schemes of Bank of Maharashtra.

 To analyze the trends in housing finance by Bank of Maharashtra.

 Measuring the service quality being provided by Bank of Maharashtra to its customers.
 SCOPE OF STUDY

The project has a wide scope, especially in India, where a vast area is rural and is yet to be
covered by banks and various other reasons. My project can be very easily related to India as
the bank I have chosen to work in is a picture of developing banking scenario in rural and
semi urban areas.

1. A vast area is still untapped

2. Farmers require funds for various needs

3. Middle class is growing, and they have different financial needs All round increase
in economic activity

4. Increase in the purchasing power. The rural areas have the large purchasing power at
their disposal and this is an opportunity to market Retail Banking.

5. India has 200 million households and 400 million middleclass population more than
90% of the savings come from the house hold sector. Falling interest rates have
resulted in a shift. “Now People Want To Save Less And Spend More.”

6. Nuclear family concept is gaining much importance which may lead to large savings,
large number of banking services to be provided are day-by-day increasing.

7. Tax benefits are available for example in case of housing loans the borrower can
avail tax benefits for the loan repayment and the interest charged for the loan.
 RESEARCH PROBLEM

In the earlier chapter, the analysis of supply and demand dimension has clearly shown the widening
supply and demand gap for housing stock in India. The recent higher economic growth and rapid
urbanization coupled with the government's enabling policy initiatives have also led to the emergence
of booming housing market in India. Since housing is capital intensive construction activity, it requires
huge investment. Moreover, housing being a basic necessity for the family life, there is a strong
household sentiment in favor of homeownership. Homeownership is, in general, viewed as the key
investment of typical Indian households. A critical constraint for the development of ownership
housing stock is, therefore, mainly centered around on lack of adequate finance at supply and demand
end. In view of the critical importance of housing finance, this chapter focuses on an analysis of type
of financing required for housing sector, institutional framework developed for housing finance, role
of various financing institutions and emerging issues in housing finance.
 HYPOTHESIS

H0: The hypothesis taken under consideration for the study is “That 20% of customer require housing

loan of the total loan provided by bank of Maharashtra.”

Sample Size
A random sample of 100 were administered with the questionnaire and responses collected.

Research Area
The research was carried out in wardhamannagar, nagpur.
 ANALYSING AND FINDING OF STUDY

1) AGE DISTRIBUTION OF THE HOUSING FINANCE CUSTOMERS OF NAGPUR.

Age group 18-25 26-33 34-41 42-49 > 50

Customers 10 43 30 12 5

50
45 43

40
35
30
30
25
Series1
20
15 12
10
10
5
5
0
18-25 26-33 34-41 42-49 > 50

Interpretation:

According to this chart we knows that the customers who takes loan from Bank of Maharashtra are
most in age group 26-33 that is 43%. And least in group which is above 50 that is 5%.
2) Monthly income of the HOUSING FINANCE Customers.

Monthly Income Customers

< 3000 8

3001-5000 38

5001-8000 32

8001-10000 18

> 10000 4

4 8

18
< 3000
3001-5000
5001-8000
38
8001-10000
> 10000
32

Interpretation:

By observation it is found that the income of the customers is highest in 3001-5000 that is 38% then
in between 5001-8000 that is 32%.
3) Occupation of the customers.

Occupation Farmer Agriculture Fertilizer Self Any

labour merchant employed other

customers 41 38 8 10 3

45
40
35
30
25
20 Series1
15
10
5
0
Farmer Agriculture Fertilizer Self Any other
labour merchant employed

Interpretation:-

In occupation group out of 100 customers 38% are farmers, 40% are labours, 8% are fertiliser
merchant, 10% are self employed and 3% customers are involved in other business.
4) Customers who taken loan from Bank of Maharashtra.

Response Yes No
No. of Respondents 78 22

22

Yes
No

78

Interpretation:-

From the above chart it is inferred that 78% people are already taken loan from Bank Of
Maharashtra and 22% people are not taken any loan from BoM.
5) Different kind of loan taken from Bank of Maharashtra.

Name of Loan Customers Percentage

Tractor finance 06 8%

Housing loan 42 42%

MSE finance 19 24%

Educational loan 03 4%

Agricultural finance 08 10%

Other loan 10 12%

45
40
35
30
25
20
15
10
5
0

Interpretation: -
From the various schemes of Bank of Maharashtra 8% customers take Housing finance, 42%
take agricultural finance, 24% MSE (Micro and small enterprise finance),4% educational finance,
10% Tractor finance and 12% take other loan.
6) Chances of taking any loan in future from Bank of Maharashtra.

Chances of taking Very less Less Average High Very high

loan

customer 10 20 25 40 5

5 10

20
very less
40
less
avg

25 high
very high

Interpretation:
By observation of this pie chart I inferred that chances of taking loan from Bank of Maharashtra is
very high because 40 customer out of 100 are said that high chances. 20% said that less chances.
7) Ratings of Bank of Maharashtra for fulfilling your objective in terms of HOUSING FINANCE .

Ratings Strongly Disagree Do not know Agree Strongly

Disagree Agree

Customer 8 16 26 39 11

40

35

30

25

20 39
Series1
15 26
10 16
11
5 8

0
Strongly Disagree Do not Agree Strongly
Disagree know Agree

Interpretation:

By observation it is found that 39 customers are Agree that their objective are satisfied by
BoM in terms of HOUSING FINANCE. 8 customers are strongly disagree, 16 customers are
disagree, 26 customers are Do not know, 11 customers are strongly agree.
8) Rating of Bank of Maharashtra on the basis of following features.

1 - Bank of Maharashtra provides flexibility to rural customers for HOUSING FINANCE in terms of
payment. Customers are not satisfied with respect to value added services provided by Bank of
Maharashtra. Bank of Maharashtra provides efficient loan sanctioning procedure to the customers.
Customers are satisfied with the interest rate provided by Bank of Maharashtra.

FINDINGS OF STUDY
 It is analysis that there is the glorious future in retail banking, bank must
innovate new product for customers.
 Processing time in the various business operations in bank is higher it
must me minimize for the customers.
 The majority of the customers go with Bank of Maharashtra for housing
loan, because it provides housing loan at lower interest rates.
 Purchase decision of customers mainly influence by interest rates.

6. CONCLUSIONS AND RECOMMENDATION

CONCLUSIONS:

 From the above objectives & hypothesis it is clear that because of study of housing loan
of bank of Maharashtra know the rate of loan given by bank to its customers.
 From the data & study graph it is clear that the age group between 26 – 83 takes
maximum housing loan.
 The age group between less than 50 take minimum housing loan from bank of
Maharashtra.
 From the above objectives we know the role of bank of Maharashtra in timing of houses.
 Because of these research study of importance of housing demand of housing in India.

The hypothesis taken under consideration for the study is “That 50% of customer squire
housing loan out of the total loans provided by bank of Maharashtra” is proven to be false
seen on the basis of survey it is reflected that only 25% people procure housing loan out
of the role loan provided by Bank of Maharashtra. Hence the hypothesis of rejected.

RECOMMENDATIONS:
 Easy access of statement of accounts of the customers should be made convenient in

each and every branch.

 More spread over of the company branches in other cities & rural areas of India.

 Processing time of providing service to customer should be reduced.

 Bank should introduce new attractive schemes to attract new customers & thereby to

increase its market share.

 Bank should also concentrate on developing & maintaining customer relationship

which now a days plays vital role in retail banking.

 BIBLIOGRAPHY

BIBLOGRAPHY

Financial Management-Prasanna Chandra

The Institute of Company Secretary-Indian Economy

www.bankofmaharashtra.com

www.google.com

www. bankofmaharashtra.in
 APPENDICES

 QUESTIONNAIRE

1) AGE DISTRIBUTION OF THE HOUSING FINANCE CUSTOMERS OF NAGPUR.

 8-25
 26-33
 34-41
 42-49
 > 50

2) Monthly income of the HOUSING FINANCE Customers.

 < 3000
 3001-5000
 5001-8000
 8001-10000
 > 10000

3) Occupation of the customers.

 Farmer
 Agriculture labor
 Fertilizer merchant
 Self employed
 Any other

4) Customers who taken loan from Bank of Maharashtra.

 Yes
 No

5) Different kind of loan taken from Bank of Maharashtra.

 Tractor finance
 Agricultural finance
 MSE finance
 Educational loan
 Housing loan
 Other loan
6) Chances of taking any loan in future from Bank of Maharashtra.

 Very less
 Average
 Less
 High
 Very high

7) Ratings of Bank of Maharashtra for fulfilling your objective in terms of HOUSING FINANCE .

 Strongly Disagree
 Disagree
 Do not know
 Agree
 Strongly Agree