ACKNOWLEDGEMENT My most sincere thanks and everlasting gratitude to prof R.VENKATARAMAN, M.

tech, FIE, Principal of SRM engineering college for having given me this opportunity to do the course in this college. My special thanks to the Dean, Dr.THAMPI LATIFF, SRM institute of Management studies, SRM Engineering college. I profited immensely by the thought provoking questions, frnak discussions and critical appraisal of my work by my respected guide Shri.T.RAMACHANDRAN, M.Com, M.Phil, MBA, senior faculty, SRM institute of Management Studies, during the course of my project work. I wish to express my whole hearted thanks and heart felt gratitude for his able guidance. I am very much indebted to THE CHENGALPATTU COOPERATIVE URBAN BANK LIMITED for permitting me to do this project. I am thankful to Shri.R.RAJENDRAN, MA, HDC, secretary and Shri.Pandiyan MA, Manager of Algesa Nagar Branch and all the staff for their kind co-operation in completing the project. My special thanks to Shri.GOWRI SHANKAR, Internal Auditor of Valliammai Society for his valuable guidance in completing the project. My special thanks to all faculty members in the SRM Institute of Management Studies for their constant support and encouragement throughout my career. Last but not least, my sincere thanks to all my family members and friends for their kind co-operation in completing this project.

CONTENTS
ACKNOWLEDGEMENT

LIST OF TABLES

LIST OF CHARTS

ABBREVIATIONS

CHAPTER 1. AN INTRODUCTION TO HOUSING FINANCE INDUSTRY 2. INDUSTRY PROFILE 3. BANK PROFILE 4. OBJECTIVES OF THE STUDY 5. METHODOLOGY 6. LIMITATIONS

PAGE NO.

1 7 31 36 37 40

7. ANALYSIS & INTERPRETATION 8. FINDING AND SUGGESTIONS

41 70

9. CONCLUSION

74

APPENDIX BIBLIOGRAPHY

LIST OF TABLES Table No. 1. 2. Name of the table Census gouses and residential dwelling Distribution of houses by type of Dwelling 1989 3. Tread in urbanization 4. 5. Quality of housing stock Housing shortage 19 20 20 19 Page No. 19

6.

Public and private sector investment In housing 20 30

7. 8.

Progress of housing society Chengalpattu co-operative urban bank growth

34 54 55

9. 10.

Loans sanctioned occupationwise 1996-97 Loans sanctioned occupationwise 1997-98

11. 12.

Loans sanctioned occupationwise 1998-99 Customer view interest rate

56 57

13. 14.

Services/Performance of the bank Loans sanctioned as per income group

58 59

15. 16.

Customer view ranking of priority Customer view about terms

60 61

17. 18.

Basis of selecting the bank Customer view procedural aspect

62 63

19. 20.

Loans sanctioned as per quantum of amount Loans sanctioned purpose wise

64 65

21. 22.

Outstanding dues as per installments Customer view sources of identification

66 67

23. 24.

Likert sale on services/Performance of the bank Likert scale on interest rate of the bank -

68 69

LIST OF CHARTS Chart No. 1. 2. Name of the chart Chengalpattu Co-operative urban bank growth Performance of Chengalpattu Co-operative urban bank Page No. 34 (c) 52 (c)

3. 4.

Loans sanctioned occupation wise 1996 97 Loans sanctioned occupation wise 1997 98

54 (c) 55 (c)

5. 6.

Loans sanctioned occupation wise 1998 99 Customer view interest rate

56 (c) 57 (c)

7. 8.

Services/Performances of the bank Loans sanctioned as per income group

58 (c) 59 (c)

9. 10.

Customer view ranking of priority Customer view about terms

60 (c) 61 (c)

11.

Basis of selecting the bank

62 (c)

12.

Customer view procedural aspect

63 (c)

13. 14.

Loans sanctioned as per quantum of amount Loans sanctioned purpose wise

64 (c) 65 (c)

15. 16.

Outstanding dues Customer view sources of identification

66 (c) 67 (c)

ABBREVIATIONS 1. HFC - Housing Finance Companies 2. HUDCO - The Housing and Urban Development Corporation Ltd.

3. HDFC Housing Development Finance Corporation 4. NHB National Housing Bank

5. LIC Life insurance Corporation 6. GIC General insurance Corporation

7. GRHC The Gujarat Rural Housing Corporation 8. NHA National Housing Act

9.

CMHC The General Mortgage and Housing Corporation

10. KHB Korean Housing Bank

11. POSB Post Office Saving Bank 12. JAC Joint Advisory Committee

13. FHA Federal Housing Administration 14. VA Veterans Administration

15. FNMA Federal National Mortgage Association 16. SLA Savings and Loans Association

17. RBI Reserve Bank of India

18. SEBI Security and Exchange Board of India

19. UTI Unit Trust of India 20. EWS Economically weaker sections

21. LIG Lower Income group 22. MIG Middle Income Group

23. HIG High Income Group 24. EMI Equated Monthly Installment

25. NBO National Building Organization 26. CBRI Central Building Research Institute

27. NBCC National Building Construction Corporation 28. CPWD Central Public works department

29. TCPO Town and Country Planning Organisation 30. BIS Bureau of Indian Standard

31. BMTPC Building Materials and Technology Promotion council 32. GSS Global Strategy for Shelter 33. HSB Housing Installment Saving Deposit

34. WHIDS Welfare Housing Installment Deposit Scheme 35. NSSO National Sample Survey Organisation

36. SOB State Co-operative bank 37. DCB District central co-operative bank

38. PCB Primary Co-operative Bank 39. ILO International Labour Organization

40. ARC Arbitration 41. DR Deputy Registrar

42. EP Execution Petition 43. OD Over Due 44. NARDCO National Real Estate Development Council

INTRODUCTION

CHAPTER 1 INTRODUCTION Housing is a basic necessity of life, ranked behind only to food and clothing in importance. There is a strong urge in every individual , whether rich or poor, to own a house. House is not a place of dwelling alone, it also satisfies an individuals social and psychological needs. House by itself is not a productive asset but investement in housing helps in increasing productivity, provision of shelter is thus closely linked with a countrys overall socio economic development. According to 1971 census, more than half of the households live in houses made of mud and gross. Nearly 25-30 percent of the urban population live is slums. In 1971, 19.9% of our people 108.8 million live in urban areas. The percentage went up to 21.1 with 128.9 million in 1976, 22.2% with 151.4 million in 1981 and rule of urbanization is estimated to go upto 29.0% with 291 million in 2001. Number of specialized branches as on 30-06-95 public sector banks totally 681 and private sector banks totally 54 in that no housing finance branch in private sector banks and out of 681 public sector banks only 2 are so tremendous, so huge and they are also getting more and more difficult. We have the problem of rural housing versus urban housing. In urban housing, the problem is that of availability of land and the price of which the land is available. In rural housing land is not the problem average cost of a house in rural areas is also low. A house gives a sense of security to those who own one when one has a house he gets better shelter and security for members of his family. After 50 years of independence, we are short of 22.9 million housing units (1991 census) 50% of urban population lives in slums, without access to hygienic facilities. More than 90% of this shortage involves the environmentally vulnerable sections of the society. This sector is thus the engine for economic growth and a catalyst for economic recovery. Housing is also imperative for dignified living and needs to be given the status of an essential commodity. Percentage of housing investment to total investment in economy as per English five year plan budgetary allocation Rs.70, 000 crore. Expenditure as housing (public sector contribution) as percentage of total expenditure up to seventh five year plan 7.80%.

HOUSING FINANCE COMPANIES Housing finance institutions have two streams-housing finance companies (HFC) and cooperative housing societies. The co-operative housing fianc system, which is more than 80 years old, is the best example of self help in housing. It has two-tier structure Apex federations at state level and co-operative housing societies at primary level numbering about 70,000 which functions under the Registrar of co-operative societies in various states like co-operative banks and institutions. Housing companies (HFCs) are comparatively of recent origin.

There are a large number of HFCs but the most prominent among them with sizable equity base and operations are only two viz., The HOUSING URBAN DEVELOPMENT Corporation Ltd. (HUDCO) and the Housing Development Finance Corporative Ltd. (HDFC). During the last 4 years particularly after the establishment of NHB, several HFCs setup sponsored by public sector banks, LIC and GIC have come up. The Gujarat Rural Housing Corporation, setup by HDFC itself, Can Fin Homes Ltd., sponsored by Canara bank and SBI Homes Finance Ltd., sponsored by State Bank of India, Indian Bank Housing Finance sponsored by Indian Bank. The housing scenario in India has revealed that more than six lakh people live without a roof on top. The total housing stock in the country is around 142.96 million units and the total demand for housing is more than 170 million units. This shortage is given at a 30 million housing units. This housing shortage requires a whopping Rs.1, 50,000 crore if the gap is to be bridged. The funding of this amount cannot come from the government alone. It needs the co-operation of various agencies and financial institutions Hasmukh Thakoredas Parekh setup Housing Development Finance Corporation Limited in October 1977 and setup Gujarat Rural Housing Finance Corporation Ltd., in 1986. In 1951 itself H.T Parekh writing about a housing society for the Bombay state and he follows this interest through several initiatives till they end up in HDFC. It was in recognition of the mutually supportive roles of shelter and development that in mid eighties following declaration of 1987 as the International year of shelter for homeless concerted efforts were made in our country to formulate a comprehensive National Housing Policy, encompassing all the elements relevant to shelter development. Peoples housing problem is now receiving serious attention from both the government and the public. It has many facets relevant to different sections of the community. Almost 40% of the people living in urban or rural areas have income below the poverty line. Even among them there are pavement-dwellers, hutment-dwellers, those living in somewhat secured jhopadpatties, old dilapidated houses, old rented premises like chawls, where a majority of tower and middle classes live preciously, housing common toilet facilities. The financing of houses involves a lot of money which is several times the income of the individual. The housing finance market in India is the growth stage. There are around 96 companies in India out of which only 37 have registered themselves with the NHB. Out of these 37, only 26 have been approved by the NHB for refinancing. Now that more banks andinsurance companies have also jumped into the hand wagon, the competition is getting hot.

BUDGET SPECIAL IMPACT 2000

The extension of infra structure status for housing project by another 2 years up to March 2003. The extension of sec.54 of the Income tax act 1961 investement in second and subsequent houses granting exemption from capital gains. A hike in the limit on housing loans from Rs.10,000 to Rs.20,000. Government Housing Agencies

Central level NBO CBRI Hindustan Pertab Ltd. NBCC CPWD TCPOs

State level Housing Board Municipal Corporation Improvement Trust Development authority Building centers Regional Research Laboratory

National Council for Cement and Slum ImprovementBuilding Materials development method BIS BMTPC Keeping in view of the importance of the infra structure projects like building ofhouses / plots. I have selected the topic Housing Finance in Chengalpattu by Co-operative Urban bank to prepare project report as per University of Madras and submit to the authorities as a part of my MBA degree. I have identified Chengalpattu Co-operative Urban Bank Ltd., Chengalpattu to prepare my project report. The detailed procedural aspects of the bank, their terms and condition schemes are clearly mentioned in the report. Further, the detailed analysis of data about the perfprmance of the banks is clearly given in both tabulation form and charts. Finally, I have concluded this report with my own views and suggestions accordingly. Rural Housing Bank

THE CONTENTS OF THE PROJECT ARE HEREBY GIVEN IN BRIEF

1. Industrial profile about the subject of the project report 2. Bank profile 3. Objectives of study a. To find out procedure for sanctioning house loan b. To study the clear picture of housing society c. To analyse the bank operation in the field of housing finance d. To find out the attitude of customers views about housing finance e. To give suggestions for the better performance of the bank 4. Methodology 5. Limitations 6. Analysis and interpretation 7. Findings and suggestions 8. Conclusion

INDUSTRY PROFILE

CHAPTER 2 INDUSTRY PROFILE Housing is the key to improve the living standards of the family. The advanced countries have reached their high living conditions among other reasons, by means of providing affordable housing, quantity wise and quality wise. In a study prepared by the International Union of Building Societies and Savings Association, Chicago. The case housing in the developing countries, Harold Robinson writes Rural or small town housing may be needed at times to slow down an excessive country to town movement. Lack of housing in rural areas creates a push to the city equal to that of a citys pull and therby creates additional housing problems. The United Nations General assembly in December 1988 proclaimed the Global Strategy Shelter to the year 2000 (GSS) Statistics indicate that, in developed countries, investment is housing as a percentage of GNP varies between 3.5% and 7%, while in India, though no such statistics are available, the percentage of GSP is estimated to be between 1 to 2. This would be a measure of problems in terms of financial magnitudes. Another way of looking at this problem, as indicated in a report is that, while in India for every 1000 persons 3.5 houses are being built, what we need to build is 8 to 10 houses per 1000 persons. This implies that we need to treble our building programmes to take care of population increase and backlog of housing. HOUSING FINANCE SYSTEM IN SELECTED FOREIGN COUUNTRIES 1. CANADA The present National Housing Act (NHA) which was introduced in 1954 was the principal piece of Federal legislation dealing with housing urban developments. The Central Mortgage and Housing Corporation (CMHC) is the crown agency charged with carrying out Federal housing legislation. The corporation assists construction activity in two ways, by granting the loans made by private approved lenders for house construction and by granting direct house loans under its various schemes. MORTGAGE INSUARNCE FUND Federal assistance for ownership for housing projects built by private entrepreneurs are provided for the most part for the system of mortgage insurance introduced in 1954. Under these arrangements loans are advanced wholly by the government to lend under the Act. Most life insurance companies and trust and loan companies as well as charted banks and Quebec savings are lenders under the act. The guarantee on their investment is provided by CMHC through the operation of a mortgage insurance fund built up from fees paid by NHA borrowers. Each borrower must provide from his own resources toward margin may consist of cash, land or his own labor or a combination of these elements. Insured mortgage loans are normally available to individual homeowner applications, to builders constructing houses for sale or for rent and to some special groups such as co-operative housing associations. 2. KOREA

In Korea, there are eight special banks for the specified purposes. These banks play a significant role in the Korean economy. One of these banks, the Korean Housing Bank (KHB) was setup in 1967 under the KHP act with a total paid up share capital of 5.05 million won. Under the Korean Housing Bank Act, the KHB is required to give loans manage funds for the construction of houses, purchase of newly built houses development of housing sites. The KHB also advances loans to the local government small and medium scale enterprises for the production of low cost housing materials quipments. and and and and

Housing lotteries are issued by the KHB for the purpose of mobilsing funds to finance housing construction on comparatively easy terms. Fiscal and other concessions are offered to the winner of the lotteries. Advances out of the amount collected by way of lotteries are mainly to the bereaved families of war dead and members of the low income group. The National Housing Bonds are issued in pursuance of the objectives of National Housing Construction Promotion law. The term and conditions of the bonds are governed by the KHB act. Among the varied savings mobilization schemes, housing installment savings is a contractual savings deposit scheme, directly linked to the housing loan extension, which is offered solely by the KHB. There are two types of housing installment savings deposits. Under one, the subscriber makes monthly installment payment for a certain period to qualify for a housing loan, whereas under the other monthly installments are made for the repayment of the principle and the interest on the housing loan already advanced. Besides there are two other schemes Welfare housing Installment Deposit Scheme (WHIDS) and salary and wage earners fortune formation savings deposit scheme. Under these schemes, depositors are paid an attractive rate of interest on their deposits and they are eligible for housing loans. 3. SINGAPORE Among the various agencies engaged in developing / financing of housing in Singapore, the most important are Housing Development Board and Housing and Urband Urban Development Corporation both statutory bodies. In the private sector, finance compnies plays an important role in financing construction of residential properties. Besides these commercial banks, post office savings banks and insurance companies also make funds available to their customer for housing. The housing and Development Board constituted under housing and development act has been pioneering work in several housing estates with high rise buildings of flats which are almost in nature of self contained townships. Te board derives the funds from government, through budgetary grants, market borrowings subsidies and rental income from flats. The housing and Urban Development Corporation develops housing flats in urban areas and central business districts which are in a very luxury flats for upper middle class and higher income groups. Finance companies play an important role in development and financing of residential and

commercial property in Singapore. The sources of funds for their activities are deposits accepted from the public. The commercial banks play only a marginal role in providing housing finance. They extend housing loans only to their selected customers, who have other business dealings with them. Housing loans are given purely on commercial terms. Post Office Savings Banks (POSB) gives 90% mortgage loans to its depositors under its home ownership scheme. The scheme has proved immensely popular. The POSB does not grant loan for buying commercial properties. The insurance companies also advance loans for housing but the amount involved is small and the loans are restricted to the policy holders of the company.

4. SWEDEN Sweden is one of the few countries in the world, where housing construction has attracted large scale investment since the sixties. In fact, the growth rate of housing construction has slowed down in the last few years. Primarily due to the fact that the demand for new houses could be satisfied form the existing stocks of houses. HOUSING POLICY The main foundations of Swedens housing policy may be summarized as follows: Well organized municipal planning. Active municipal land policy. Rational housing production. State aid in the form of loans and grants for the construction and mordenisation of dwellings. 5. Grants to groups of people with limited economic resources or special housing needs. 6. Rent legislations. 1. 2. 3. 4. The implementation of housing policy is based on the co-operation and the division of work between the state and the municipalities. PLANNING OF HOUSING CONSTRUCTION EACH YEAR THE Ricksdag (parliament) approves a housing construction plan for the next 3 years, which indicates proportion of total resources of the society that could be allocated for housing construction. The plan stipulated the total amount of dwellings and complimentary facilities, in terms of square meters, for which state housing loans may be granted and the extent to which housing construction, not subject to state loans may be permitted. A similar plan is also approved with regard to state support for renewal and modernization of existing houses. Thus, public and private sectors, together strive for the ordinarily promotion of housing activities. In this context, the role of Joint Advisory Committee (JAC) established in 1973, with representatives from the building societies, the Bank of England, The Treasury, The Department of the Environment and the Registry of Friendly Societies needs to be mentioned. The JACs objectives are to encourage the growth of owner-occupation to maintain sufficient funds to enable

the housing sector to plan for a high and stable level of activities, to work towards the stabilization of house prices and to maintain an orderly housing market.

5. USA The major financial institutions such as Commercial Banks, Life Insurance Companies, Savings & Loan Association (SLAs) and Mutual Savings Banks provide funds for construction activities, the federal agencies, such as Federal Housing Administration (FHA), the Veterans Administration (VA) and Federal National Mortgage Association (FNMA) have made significant contribution in the development of the mortgage market, the first two viz., FHA and VA respectively, insure and guarantee mortgage bonds whereas the last oone sells mortgage bonds and buys from investors/lenders. FEDERAL HOUSING ADMINISTRATION (FHA) FHA was established in 1934. Its main objectives are to provide a sound pattern of mortgage lending, to encourage wider home ownership and to upgrade housing standards in the USA. These purposes are achieved by insuring mortgage loans made by lenders in accordance with the FHA housing and credit standards. Such loans are made after a careful scrutiny of the long term value of the security and the prospective borrowers ability to pay. FEDERAL NATIONAL MORTGAGE ASSOCIATION (FNMA) With the establishment of the FHA, the need for an agency to distribute the mortgage money on national basis arose. Accordingly, in 1938 the Federal National Mortgage Association was formed. The FNMA is also authorized to borrow funds privately by issuing debentures and short term discount notes with the approval of the US treasury but they are not guaranteed by the US government. The FNMA purchases only marketable mortgages from private institution lenders. There are generally two types of purchase contracts. Under the immediate purchase contract the seller offers mortgages for immediate purchases, the FNMA purchase them after scrutiny, such contract is known as Over the Counter Transaction. The Stand-by Commitment contract provides for the future purchase of mortgage by FNMA. VETERANS ADMINISTRATION (VA) In 1940, the congress passed a legislation, which permitted the Veterans Administration (VA), under title III of the Act ,G1 Home loan and the loan guarantee programmes to guarantee mortgage loans. The guarantee is payable by cash. The Veteran is required to repay the loan in full. In case of default, the outstanding is deducted from any future benefits that he may receive from the Veterans Administration.

SAVINGS AND LOAN ASSOCIATIONS In the USA, bulk of the mortgage bonds are subscribed by Savings and Loans Association (SLA) followed by Commercial banks, Life Insurance Companies and mutual savings banks. SLAs are chiefly concerned with the welfare of the savers and their concern is prompted by the need to secure funds to support home financing and home ownership. HOUSING FINANCE SYSTEM IN INDIA The responsibility to provide housing finance largely rested with the government of India till the mid-eighties. The setting up of the Ntional housing Bank (NHB), a fully owned subsidiary of the Reserve Bank of India (RBI) in 1988 as per the apex institution marked the beginning of the emergency of housing finance as a fund based financial service in the country. It has grown in volume and depth with the entry of a number of specialized financial institutions / companies in the public, private and joint sectors, although it is an early stage of development. NATIONAL HOUSING BANK The NHB was established in July 1988, under the National Housing Bank Act 1987 as an apex bank, on the lines of IDBI and as a wholly owned subsidiary of the RBI. It is the principle agency to promote housing finance institutions at the regional and local levels and to provide financial and other support to such institutions connected with housing and human settlements. OBJECTIVES AND BUSINESS 1. To promote, establish, support or aid in the promotion establishment and support of housing finance institutions. 2. To make loans and advances or render any other form of financial assistance whatsoever to housing finance institute scheduled bank 3. To subscribe to purchase stocks, shares, bonds debentures and securities of every other description 4. To guarantee the financial obligation of housing finance institutions and under write the issue of stocks and share bonds, debentures and securities of every other description of housing. POWER TO COLLECT CREDIT INFORMATION The housing finance institutions can be directed by the NHB to submit specified credit information. 1. 2. 3. 4. The amount of laws and advances and other credits facilities The nature of security taken for such loans The guarantees furnished Any other having a bearing on the credit worthiness of the borrower.

NHB GUIDELINES NHB has spread operating guidelines for the HFCs in India. They must confirm to these guidelines to be eligible for financial / refinance support from the NHB. There are 21 HFCs in the country which are registered with the NHB as the apex institution housing bank with statutory obligation to regulate and supervise the housing finance industry. SHARE CAPITAL NORMS The minimum capital of the HFCs registered share with the NHB must be 3 crores. The contribution of the promoters to their share capital should be in conformity with the guidelines issued by the Securities and Exchange Board of India (SEBI) from time to time. According to these, such contribution must be 25% and 20% of the post issue capital up to Rs.100 crore respectively as long as HFCs owe any money to the NHB. In addition, HFCs must offer at least 20% of equity capital to the public as a condition present to listing of shares on stock exchanges. According to NHB stipulations, HFC should list shares on at least one stock exchange. The NHB in its direction and on the merits of each is willing to participate in the share capitl of HFCs to the extenc of 20% of their paid-up capital. LOANS LENDING NORMS The main objective underlying the promotion of NHB supported HFC is to extend access of industrial finance to provide a solution to the serious shortage of dwelling units. TARGET GROUP The bulk of lending by the HFCs has to be directed to individuals / groups of individuals. In other words, the target group of institutional housing finance is individual households. FIANACIAL ASSISTANCE FORM NHB TO HFCs NHB has so far approved 17 HFCs (excluding HUDCO) as eligible to draw refinance from it. As at the end of June 1992 the HFCs which have been approved for the purpose of reference. 1. AB Homes Finance Ltd. 2. Akshaya Avas Niraman Villa Ltd. 3. Canfin Homes Ltd. 4. Cent Bank Home Ltd. 5. Cent Bank Home Ltd. 6. Dewan housing Development Finance Ltd. 7. Fair Growth Gome Finance Ltd. 8. Gujarat Rural Housing Finance Corporation Ltd. 9. HDFC Ltd. 10. Ind Bank Housing Ltd. 11. India Housing Finance and Development Ltd. 12. LIC Housing Finance Ltd. 13. Parshwanath House Finance Corporation Ltd.

14. PNB House Fin Ltd. 15. Saya Housing Finance Company Ltd. 16. SBI Home Finance Ltd. 17. Vysya Bank Housing Finance Ltd. LOANS AND ADVANCESS GIVEN BY NHB FOR THE YEARS 1991-92 & 1992-93 PARTICULARS HFC Co-operative Housing Society Commercial Banks State Co-operative Banks Urban Co-operative Banks State Co-operative Agricultural Rural Development Others TOTAL 1991-92 951.75 57.35 64.39 13.73 2.10 71.88 0.44 11661.64 1992-93 1283.57 68.20 91.98 32.29 2.40 92.63 0.56 1571.63

The National Sample Survey Organisation (NSSO) has been collecting certain data on housing since the mid fifties though not as a regular feature. The latest surve worth mentioning is the comprehensive survey on Housing conditions carried out by NSSO in both rural and urban areas during its 44th round ( July 1988 to June 1989) HOUSES AND RESIDENTIAL DWELLINGS The house list as per 1981 census shows that there were 151 million censuses of houses of which more than three fourth were in rural areas. These census houses includes residential dwelling mixed (resident cum commercial dwellings and commercial houses) TABLE 1 CENSUS HOUSES AND RESIDENTIAL DWELLING (in million) Year / Area 1 Census Houses 2 Residential Total 3 Dwelling Mixed 4 3/2 % 5 4/3 % 6

1971 Rural 96.1 71.9 2.1 Urban 24.2 18.2 0.7 TOTAL 120.3 90.1 2.8 1981 Rural 115.3 84.6 3.2 Urban 35.8 27.0 1.2 TOTAL 151.1 111.6 4.4 Source: census of India. The figures are exclusive of Assam

74.8 75.2 74.9 73.4 75.4 73.9

2.9 3.8 3.1 3.8 4.4 3.9

TABLE-2 DISTRIBUTION OF HOUSEHOLDS BY TYPE OF DWELLING 1989 (percentage) TYPE OF ALL INDIA ALL INDIA DWELLING RURAL URBAN No. Dwelling 0.0 0.1 Independent Houses 82.6 52.4 Flat 2.7 17.1 Chawl 3.0 10.8 Others 11.7 19.6 TOTAL 100 100 Source: National sample survey organization 44th round survey. TABLE-3 TREND IN URBANISATION (in million) YEAR TOTAL URBAN SLUM URBAN POPULATION POPULATION POPULATION POPULATION TO TOTAL POPULATION 1981 685.2 159.7 27.9 23.3 1991* 837.3 241.5 51.2@ 28.8 2001* 986.1 326.0 NA 33.1 Projections @relates to 1990 Source: census of India 1981 occasional paper no.4 of 1998 Report of the Expert committee and population projection SLUM POPULATION TO URBAN POPULATION 17.5 21.3 -CITIES POOLED -21.1 31.0 28.1 19.8 100

TABLE 4 QUALITY OF HOUSING STOCK Dwelling 1961 1971 Type Rural Urban Total Rural Urban Total 65.2 14.1 79.3 74.5 18.5 93.0 Total Housing Stock (in million) 46 19 19 64 28 Of which % pucca 13 house 37 35 36 37 23 34 Semi pucca 38 19 35 32 13 28 Katcha House (including serviceability) 12 0 10 12 0 10 Unserviceable houses Source: National Buildings Organization Housing Needs, August 1988 1987 Rural Urban Total 88.7 28.0 116.7 21 38 29 65 24 11 32 34 25

12

10

TABLE 5 HOUSING SHORTAGE (in million) Items 1981 94.1 94.1 Rural 1991 113.5 113.5 2001 137.0 137.0 1981 29.3 30.7 Urban 1991 2001 45.0 69.0 47.1 72.2 1981 123.4 124.8 116.7 101.5 23.3 Total 1991 2001 158.5 206.0 160.6 209.2 148.8 192.6 129.6 168.2 31.0 41.0

No. of households Households adjusted for registration 88.7 106.2 127.8 28.0 42.6 64.8 Housing stock 111.5 23.7 36.7 56.7 Of which acceptable 77.8 92.9 16.3 20.6 25.5 7.0 10.4 15.5 Housing Gap (2-4) Source: Housing Needs, Aug 1988, National buildings Organisation.

TABLE 6 PUBLIC AND PRIVATE SECTOR INVESTEMENT IN HOUSING (Rs. Crore) Plan Period Total Investement in the economy Investment in housing % of housing investment to total investment

Private Total Publi c 1560 1800 3360 250 900 1150 34.2 1st nd 3650 3100 6750 300 1000 1300 19.2 2 6100 3400 10400 425 1125 1550 14.9 3rd th 13655 6890 22635 652 2175 2800 12.4 4 th 31400 16161 47561 796 3460 4436 9.3 5 90000 66000 156000 1491 18000 19491 12.5 6th 168148 180000 349148 2458 29000 31458 9.0 7th Source: Prominent Facts of Housing in India, NBO & UN Regional Housing centre for ESCAP Nirman Bhavan, New Delhi 1990.

Public

Private

Total

HOUSING AND URBAN DEVELOPMENT CORPORATION (HUDCO) HUDCO was established on 35thApril 1970, as a fully owned Government of India Enterpirse with the following objectives: 1. To provide long term finance for construction of houses for residential purpose or undertake housing and urban development programmes in the country. 2. To finance or undertake the setting up of new satellite towns. 3. To finance or undertake the setting up of the building materials industries. 4. To administer the money received from government of India and other such grants for the purpose of financing or undertaking housing and urban development programmes. 5. To subscribe to the debentures and bonds to be issued by the State Housing Board, Improvement Trusts, Development Authorities etc. specially for the purpose of financing housing and urban development programmes.

RESOURCE BASE HUDCO establishes with an equity base of Rs. 2 crore. Over the years, the equity base has been expanded by the government. The present paid up of capital HUDCO is Rs.298 crore as against the authorized capital of Rs.385 crore. It has further been able to mobilize resources from institutional agencies like LIC, GIC, UTI banks and international assistance as well as through public deposits. The cumulative resource of equity Rs.298 crore reserves Rs.367 crore, borrowings Rs.4400 crore. Up to the end of March 95, it has been sanctioned over 11,041 projects worth Rs. 16,577 crore for which HUDCOs loan committee was Rs.10,116 crore, of which Rs.7432 crore has already been released. The project on completion will help provide over 57 lakh residential units over 4 lakh developed plots 29.3 lakh sanitation with and 319 urban infrastructure projects. Eighth Plan period, the sanctions are expected to be out of the order of Rs.8230 crore and disbursements would be above Rs.5551 crores. HUDCO vision 2002 sanction for Rs.14746 crore and release Rs.12534 crores. HUDCO has extended loan assistance to the co-operatives to the extent of Rs.2162 crores for taking up about a million housing units in our country. HUDCO has contributed an amount Rs. 166 crores for supporting about 6.82 lakh housing units. HUDCOs assistance now reaches out to 6.80 lakhs families through the Tamil Nadu co operative Housing Federation, which has availed the highest loan of Rs.1164 crores from HUDCO, vis--vis all other housing agencies this represents more than 25% of HUDCOs loadn sanction of Rs,4271 crores to Tamil Nadu HUDCO slashes interest rates on housing loans to 0.25% - 1.25%. Elaborating on the HUDCOs yearly performance, the corporation ahs achieved all time high sanctions of Rs.8899.89 crores, making a jump of 33.5% during 1999-2000 over last years performance of Rs.6666.67 crores. As per te provisional results for 1999-2000, the corporation registered a quantum jump of 43.13% in profit before tax and 20.27% in profit after tax. The figures are Rs.115.18 crores and Rs. 83.84 crores respectively against Rs.80.47 crores and Rs.69.71 crores for 1989-99. During 1999-2000 HUDCO mobilized the resources worth Rs.3836.43 crores, up 18% from Rs. 3240 crores in the previous year. This was done through a basket of options covering both domestic and external funding sources. In its maiden effort to raise funds from the US markets, the corporation raised $10 million in the form of bonds under the USAID housing guarantee programme. The funds have been swapped with EXIM bank for a period of 30 year for Rupee funds totally Rs.43.60 crores HUDCO has initiated action for raising the second tranche of $20 million from the US capital market under this scheme. SBI FINANCE SCHEMES SBIHF provides housing finance to individuals, corporate holders and promoters and developers. The salient features of the schemes for the three categories are listed as follows.

SCHEME FOR INDIVIDUALS The loans are granted for construction of houses, purchase of house/flats and repairs, renovation extension, additional/alteration of existing houses/flats. The quantum of loan is the lowest of 1. Rs. 10 lakh 2. 70% - 85% of the cost including the cost of the building 3. A sum based on the repayment capital of the borrower as assessed by the SBIHIF. The repayment period is 5-20 years. In any case, the loan must be repaid retirement of the individual borrower or 65 years of age whichever is earlier. The mode of repayment is normally Equated Monthly Insurance (EMI) comprising principal and interest. SCHEME FOR PROMOTERS AND DEVELOPERS The purpose of housing loans given to this category of borrowers is an additional sources of finance to supplement their resources, for construction of residential housing projects. The period of loan is based on the cash flow of the project. It however, does not exceed 24 months. SCHEME FOR CORPORATES The size of housing loan in all the scheme is the lower of Rs.5,00,000 or 80-85 percent of the project cost including the cost of land. i. The SBIHF has designed 3 alternative schemes for lending for houing to corporate bodies / for construction / purchase of staff quarters of their own employees (scheme A) ii. For on lending to their employee is accordance with their own housing scheme (scheme B) iii. Loans to their employees nominated by them (scheme C) LIC HOUSING FINANCE It has access to low cost funds obtained from its parent Life Insurance Corporation of India and has in the 7 year since its incorporation not raised funds through public deposits. As of March 95, out of the total funds of Rs. 1640 crores borrowings from LIC amounter to as much as 90%, with the balance from National Housing Bank (NHB)aand deposits under the NHB home loan account scheme. The company accessed the capital markets with the premium IPO (issue price Rs.60) in September 1994, the performance for 1994-95 has fallen slightly short of projections. For 1995-96 the company had projected a total income if Rs.356 crores and an earnings per share of Rs. 6.81. For the six months ended September 1995, the total income was Rs.150 crores and annualized per share earnings Rs.5.94. The company has a widespread branch network of about 60 offices, the largest in the industry. IND BANK HOUSING LIMITED It was incorporated in 1991. It was a joint venture of Indian Bank and HUDCO. Its objectives are to carry on the business of providing finance to eract, construct or purchase or upgrade any house, building, flat or any part there of India for residential purpose. Repayment

of housing loans is by way of Equated Monthly Installments (EMIs) comprising of principal and interest. Ind Bank performance highlighted from the year 91-92 to 97-98. PERFORMANCE OF THE BANK Year Housing Loans (in crores) 91-92 18.68 92-93 42.12 93-94 63.40 94-95 92.14 95-96 136.42 96-97 147.34 97-98 149.26 CO-OPERATIVE BANKS The co-operative banking sector consists of state co-operative Banks (SCBS), District Central Co-operative Banks (DCBs) and Primary Co-operative Banks (PUCBs). The first set of comprehensive guidelines for these co-operative banks were issued in 1984 by the RBI cooperative banks finance individuals, co-operative group societies, housing boards etc, who undertake housing projects for EWS, LIGS and MIGS. Institutions Primary cooperative Banks Items Numbers Owned funds Deposits Borrowings Loans Outstanding 1992-93 1.399 2.224 13.531 565 10.132 1993-94 1.400 2.723 16.796 496 12.172

CO-OPERATIVE BANKING

REGISTRATION / LICENSING OF NEW PRIMARY (URBAN) CO-OPERATIVE BANKS The policy towards alowing new Primary Co-operative Banks (PCBs) continued to be liberal depending upon the necessity and the prospects of achieving viability within a specified time frame. During the period July 1998 june 1999, 218 fresh proposals including 25 conversion proposals for setting up of new primary Co-operative banks were received by bank. Of these 107 proposals were cleared for registrations, 3 proposals were closed, no response from the proposed banks and 77 were rejected. During the year licenses were issued to 126 new Urban Co-operative bank for the commencement of banking business, licenses issued during the period June 98 march 99 were 21. NO. OF OFFICES OF PRIMARY URBAN CO-OP. BANKS The total of PCBs including salary earner type of banks increased to 1936 as on 31/03/1999 from 1811 as at the end of 31/03/1988. The number of offices increased to 5934 as on 31/01/1998 from 5417 as on 31/03/1998.

CO-OPERATIVE HOUSING SOCIETY Tamil Nadu Co-operative Housing Federation has completed 40 years of its useful service to the public. Their 40th annual general body meeting of federation is being held on 30th March 2000. According to ILO Co-operative is defined as an association of persons usually of limited means, who have voluntarily joined together to achieve a common economic and through the formation of a democratically controlled business organization, making equitable contributions to the capital required and accepting a fair share of risks and benefits of the undertaking. The total amount distributed by NHB to the Co-operative sector up to the end of 1992 has been Rs.146.77 crores. The share of the 4 different categories of co-operative sector and institutions has been as under: Category Amount (Rs. In crores) Share in % State co-op. banks 14.00 9.5 Urban co-op. banks 2.31 1.6 Apex co-op Housing Finance 58.79 40.1 society Agricultural & rural 71.67 48.8 development Banks TOTAL 146.77 100 LOANS DISTRIBUTED TO PRIMARIES A sum of Rs.2763.40 crores have been disbursed upto 15/03/2000 for construction of 10,28,976 houses under urban and rural housing scheme a detailed below. The Tamil Nadu Cooperative Housing Federation is the only federtation in the country disbursing a highest amount in the co-operative sector. S.No Scheme 1 2 Urban Housing Rural Housing TOTAL No. of Houses 2,70,127 7,58,849 10,28,976 Loan distributed (in crores) 2,015.81 747.59 2,763.40

NATIONAL AWARD The Tamil Nadu Co-operative Housing federation is the only co-operative Housing Federation in the country to win sixth time: HUDCO NATIONAL AWARD for all round excellent performance for the year 1992-93, 1993-94, 1994-95, 1995-96, 1997-98 and 1998-99. In view of the excellence performance, the Tamil Nadu Co-operative Hosing Federation has been adjusted as the BEST MANAGED APEX COOPERATIVE HOUSING FEDERATION in the country by the National Co-operative Housing federation and given the NATIONAL AWARD for 1994-95. Besides, four more special awards have been bagged by the federation in the ALL INDIA LOW COST HOUSING COMPETETION

COST HOUSING COMPETETION Programme for 1999-2000 It was proposed to provide financial assistance to an extent of Rs.687 crores as detailed below: S.No Scheme No. of Units

1 2

Urban Housing Rural Housing TOTAL

42,000 62,678 1,04,678

Loans to be Distributed (Rs. In crores) 430.00 256.82 686.82

CO-OPERATIVE HOUSING SOCIETY LTD. CHENGALPATTU Objects of the housing society are: To issue land to members for constructions of new house 1st, 2nd floors and additions. On mortgage of the house properties To acquire land and make into house plots Area of operation of the society is Chengalpattu Municipal limit and upto the area of all village panchayat limits and up to the area of the village panchayats lying within the radius of 10km from the municipal limit. Maximum loan issued to a member is Rs.7 lakhs in the municipal limit and Rs.6 lakhs in the other places. Loans issued to members on the basis of their income, area of the building to be constructed as given below: LOANS ISSUED ON THE BASIS OF INCOME AND AREA S.No Group 1 2 3 4 EWS LIG MIG HIG A Monthly Income Below 2100 2101 4500 4501 10,000 Above 10,000 Maximum Loan amount 25,000/1,00,000/2,00,000/Area of the building 35 sq.m 377 sq.ft 55 sq.m 592 sq.ft 95 sq.m 1022 sq.ft 190.5 sq.m 2000 sq.ft 190.5 sq.m 2000 sq.ft

6,00,000/(in village panchayat and municipal area) 5 HIG B Above 10,000 7,00,000/(corporation and Municipal) Source: Housing Society Annual Reports.

RATE OF INTEREST OF HOUSING SOCIETY Loan Amount Rate of Interest Borrowing Lending 25,000 10.5 11.5 1,00,000 14.5 15.5 1,00,001 3,00,000 15.5 16.5 3,00,000 5,00,000 16 17 5,00,000 7,00,000 17 18 Source: Housing Society Annual Reports TABLE 7 Year No. of members PROGRESS OF HOUSING SOCIETY Loan distributed (lakhs) 45.49 45.19 47.44 102.23 120.53 174.42 163 Loan No. of houses Outstanding constructed 225/13 240/15 259/22 329/77 412/76 533/80 659/03 983 1035 1140 1210 1312 1437 1531

Share Loan capital borrowed (lakhs) (lakhs) 1993 94 776 22.39 48.59 1994 95 773 23.55 42.28 1995 96 757 25.45 44.53 1996 97 683 30.68 103.82 1997 98 744 36.43 116.85 1998 99 794 45.32 169.94 31/12/99 857 53.39 136.36 Source: Housing Society Annual reports.

BANK PROFILE

CHAPTER 3 THE CHENGALPATTU CO-OPERATIVE URBAN BANK LIMITED PROFILE The Bank was registered on 6.05.1910 and it started to function from 26.06.1910. it covered the entire area of Chengalpattu Municipality, Hanumanthaputheri and Pulipakkam villages. OBJECTIVES The main objectives of the bank are: a. Getting deposits from the members as well as non-members and distributing the same as loans for productivity purposes among its members. b. Collecting cheques and demand drafts from the members, customers, issuing cheques and demand drafts to the members and customers. c. Encouraging self-sufficiency, thrift and co-operative spirit among its members. STRUCTURE OF THE SHARE CAPITAL The banks is having A class and B class members and in the case of A class category each share value is Rs.25 while for B category its value is Rs.10 on 31.01.2000this banks was in possession of Rs.44.11 lakhs as share capital. This indicates the share capital of Rs.42.39 lakhs from 10602 A class members Rs. 1.72 lakhs from 21932 B class members. DEPOSITS The bank received Fixed Deposits, Recurring Deposits, savings Deposits and current Deposits. In the case of Fixed Deposits maximum, the rate of interest is 12.5% and for savings deposits it is 5.5% and for recurring deposits it is from 11% to 12.5%. SCHEDULE OF DEPOSITS AS ON 28.01.2000 Item Fixed Deposits Savings Deposits Current Deposits TOTAL LOANS It offers loans on jewels subject to a maximum of Rs.1,00,000 at the interest rate of 18%. Similarly, housing loan is granted maximum of Rs.5,00,000 at the rate of 19%. This bank also issuing loans for small scale industries, cottage industries and for businessmen on security. It also offers loans for the monthly income group on personal surety upto Rs.10,000 at the interest of rate of 19%. Further, it gives loans on the deposits invested, subjected to a maximum of 75% of the deposit amount. Amount ( Rs. In lakhs) 1184.70 200.40 17.32 1402.42

SCHEDULE OF LOANS SANCTIONED 31.01.2000 (Rs. In lakhs) Jewel loans Mortgage loans (including Housing Loans) Others 253.10 266.47 14.85

For the depressed classes, salaried people and for business and industrial community loans are given on guarantee basis. MICRO CREDIT LOANS Under the loan scheme so far 170 loan are issued to the women during business. The members loan amount is Rs.1000 repayable in 100 days. The recovery position is very good. We have only 1% of overdue. The president, board od directors and staff are very much interested in collecting the micro credit loan without any overdue amount. TOTAL INVESTEMENT OF THE BANK AS ON 28.02.2000 WAS AS FOLLOWS: S.No 1. 2. 3. 4. 5. 6. 7. 8. 9. ITEM Current account Savings account Fixed account Indra Vikas Certificate Kissan Vikas Certificate Reserve fund Share capital of coop. societies Cash certificate Other investments TOTAL Amount (Rs. in lakhs) 56.90 2.27 43.17 0.50 0.60 3.42 0.63 628.70 4.14 740.33

This bank has opened one branch at Alagesa Nagar and another branch at Natham. Both branches are working well on profits and saving the people.

THE CHENGALPATTU CO-OPERATIVE URBAN BANK LIMITED TABLE 8 Year BANKS GROWTH IN THE LAST 7 YEARS Members Share amount (Rs. In lakhs) Deposits (Rs. In lakhs) Loans (Rs. In lakhs) 193.62 238.38 272.69 324.57 467.93 637.03 820.97 Profit (Rs. In lakhs) 9.00 11.19 5.01 8.27 10.29 13.27 2.62

A B 1993 7283 22110 12.11 216.49 1994 7735 22028 14.84 259.66 1995 7487 21997 16.58 323.67 1996 8080 21957 19.49 433.17 1997 8829 21947 24.71 615.72 1998 9470 21936 31.30 889.88 1999 10086 21932 39.34 1209.67 Source: compiled from the record of the Urban Co-operative Bank.

THE CHENGALPATTU CO-OPERATIVE URBAN BANK GROWTH

1400 1200 1000 800 Deposits 600 400 200 0 1993 1994 1995 1996
Year

Loans

1997

1998

1999

ORGANISATION CHART

Board of Directors

Managing Director

Secretary

Assistant Secretary

Manager 1

Manager 2

Appraiser

Assistant

Assistant

Typist

Assistant

Assistant

Typist

METHODOLOGY

CHAPTER 5

METHODOLOGY DATA COLLECTION METHOD DATA SOURCE Primary and secondary data were used for the purpose of study. Primary Data: Survey of customers in Chengalpattu area. Secondary Data: Bank records, journals, newspapers and Governemnt of India Census reports.

RESEARCH APPROACH Survey method was used to collect primary data from the customers of the bank.

RESEARCH INSTRUMENTS a questionnaire method was applied to extract the required information. Since research inferences were of great importance to building and other activities a plot was done on 10 people to design the correct questionnaire contains open ended questions and multiple choice questions. Likert scales were also included so as to measure the attitude and opinion in certain cases. The pilot survey showed that 3 out of 10 respondents has availed the facility of housing finance. p = probability of occurrence = 0.3 q = 1 p = 1 0.3 = 0.7 standard deviation = = = = 0.145
( )

Organization has permitted an error level of 0.02 at 95% confidence level z = 1.96 Z = error / (standard deviation of sample/n) n = Z x standard deviation of sample / error n = 1.96 x 0.145 / 0.02 = 14.21 Z = 0.02 / (0.145 / 0.02 ) = 0.02 / 0.0102 = 1.96 So the survey is conducted for 200 samples.

SAMPLING DESIGN I have selected convenience sampling as my sampling technique. The addresses of the customer were collected from the bank. From the list of the custiomers, the respondents weer selected according to the conveniences of the researcher.

DATA COLLECTED METHOD The method of contact used in this study is personal interview based on structures questionnaire.

FIELD WORK The customers were met personally and the answer of the questions were marked by the researcher. The respondents were met at their residence and also from bank.

METHODS OF DATA ANALYSIS Data collected was analysed systematically. Tables were prepared on the basis of simple percentage Likert scales made with respect to some aspect and presented along with the respected table. Pie diagrams are used for their easy understanding of the analysis.

LIMITATIONS

CHAPTER 6 LIMITATIONS OF THE STUDY 1. Survey was done to a limited number of dealers which were selected by sampling , there is a chance for the date being biased. 2. This survey need not be representative one for all co-operative urban banks, since it was limited to Chengalpattu urban bank only. 3. The study has limited scope it suffers from certain limitations. 4. The conclusions arrived are based purely on the respondents responses. 5. Selected sample sizes of customers due to unavailability of time and resources. The difficulty in gathering information from the respondent. 6. Questionnaire has to be translated in Tamil.

ANALYSIS AND INTERPRETATION

CHAPTER - 7 ANALYSIS AND INTERPRETATION

OBJECTIVE I:

TO FIND OUT THE PROCEDURES FOR SANCTIONING OF HOUSING LOAN. PROCEDURE FOR SANCTIONING LOAN.

ELIGIBILITY:

Individuals requiring housing loan from bank should satisfy the basic two conditions. 1. The individual should belong to Chengalpattu town. 2. He should be the permanent resident. 3. He should be the member of the bank

Housing loans shall be granted to the persons for the following purposes by virtue of provisions contained in the co-operative urban bank regulations. Renovation/repair to the existing house/flat Construction or purchase of a new flat / house within local limits.

Individuals eligible for housing loans from the bank fall into 4 categories namely, i. ii. iii. iv. Those belonging to Economically weaker sections (EWS), low, middle and high income groups. Those holding land and capable of liquidating the loan within the stipulated time. Those purchasing residential flats from State Housing Boards / Co-operative Societies / Private Builders etc. Those belonging to Scheduled Castes / Scheduled tribes who have been allotted land by the government.

The quantum of the loan is determined on the basis of two different parameters: i. On the basis of income of the borrower. The eligibility of the quantum of the loan is arrived at in a manner that the installment doesnt exceed 30% of the net take home income of the borrower. On the basis of estimated cost of construction on repair The second parameter is based on the estimated cost of construction less necessary margin requirement. If the quantum of the loan is the lower amount arrived on the basis (i) or (ii), the loan amount is further subjected to a ceiling of 5 lakhs.

ii.

The rate of interest is charged to the amount of loan. Presently bank charge exclusive of income tax Upto Rs.1,00,000 1,00,000 to 2,00,000 2,00,000 to 5,00,000 SECURITY The normal housing loan as mortgage of property from the proceeds of the loan. 18% 18.5% 19%

MARGIN REQUIREMENT In general, bank do not finance the full cost of the house and the owners / borrowers have to bring in the margin from their own resources as part of the cost however the bank will fix the loan money at the discussion of the Board on case to case basis.

REPAYMENT The loan is repayable in Equated monthly installments (EMI) in a maximum period of 6 years. The term of the loan, the interest rate and the amount of monthly mortgage payments fixed for the entire terms of loan. The monthly installment consists of the principal repayment and the interest on outstanding principal and is given by:

In case of default additional interest of 2% more than the normal rate of interest shall be charged on the defaulted installment every month.

SCRUTINITY OF APPLICATIONS The person/individual requires loan from the bank shall submit an application form duly filled along with the necessary enclosures (mentioned in annexure) by paying Rs.400 towards : Application Rs.50 legal & survey etc Rs.350.

ENCLOSURES WITH THE LOAN APPLICATION Bond Rent recipt Encumbrance certificate Land tax recipt Pay certificate Other sources of income Construction or alteration estimate

After receiving the application, the bank will verify and check the details and forward it to their legal opinions. The legal advisor shall forward and to the end of the bank about the genuine of the application. Then the application shall be put-up to the notice board for discussion and approval. After getting the approval from the board, the bank manager will sanction the loan amount to the customer. After sanctioning the loan and before the disbursement of the first installment the customer is asked to mortgage the property in favour of the bank as a security against the loans sanctioned. After satisfying the necessary formalities the bank will first disburse 50% of the loans sanctioned. The balance amount will be released once the loan was utilized properly. The bank will deduct 2.5% towards margin from the loan amount sanctioned and will be kept as a deposit. The interest will be paid on this deposits 14% per annum. TREATMENT OF DEFAULT CASES The customer who fails to pay their installment due for continuously more than 6 month or installment which is due more than 6 months, the customer will be treated as a defaulter. Then the bank will send a notice by registered post acknowledgement, reminding repayment of the installment to the customer and will close the customers account. For closing accounts the bank will calculate interest as on date and other postal and printing chargers added with principal amount and that the total amount will be treated as principal amount. For this principal, interest rate will be the normal interest + 2% penalty interest. This interest will remain same up to the clearance of the overdue principal. If he cleared the overdue principal amount then the normal interest rate only applicable. If the customer fails to pay, bank will file a suit for arbitration by sending a notice to the customer. After due verification of the suite field by the bank the Deputy Registrar will register the case against the customer and send summons to the defaulter for 3 times. After ARC if the customer pays the interest regularly and cleared all his overdue means the DR will decree the customer. After the decree the interest rate will be the normal rate will be +2% penalty rates and this rate will never change even if he paid his overdue principal.

The next step decree is property attachment. This means that the customer cannot do anything in the property without the bankers knowledge. Then the customer not paying the overdue for the long time and the customer is not responding means, the next step is Execution Petition (EP). DR will send sale officer to the customer and they announce the auction of the property and this auction will be informed through advertisement in the newspapers and the bank notice board. Then an on date interest will be calculated and added with overdue principal then from the action sale they will take the money due and the balance returned to the customer. If the auction sale amount is less than the overdue amount of the customer then recover the whole money for the bank and balance should be collected from the customer.

TERMS AND CRITERIA FOR THE AUDIT CLASSIFICATION OF THE COOPERATIVE BANKS IN AUDIT Audit classifications are to be arrived at on basis of the aggregate marks secured indicated below 1. DEPOSIT MOBILIZATION Increase in total deposits over the previous year INCREASE 20% and more Between 15% - 20% Between 10% - 15% Between 5% - 10% ** increase MARKS 10 8 5 1 nil

2. PERFORMANCE UNDER PRIORITY SECTOR Percentage of priority sector advances to total advances at the end of the year 60% and more Between 50% - 60% Between 40% - 50% Less than 40% MARKS 10 7 5 nil

Percentage of weaker sections advance to total priority sector advances at the end of the year. 25% and more Between 15% - 25% Less than 15% MARKS 5 3 nil

3. RECOVERY PERFORMANCE Percentage of overdue to loans and advances outstanding at the end of the co-operative year. Between 5% - 10% Between 10% - 15% Between 15% - 20% Between 20% - 25% Between 25% - 30% Above 30% MARKS 12 10 8 5 3 nil

4. RESERVE/PROVISIONS TO COVER EROSION IN THE VALUE OF ASSETS 100% 50% Less than 50% MARKS 5 3 nil

5. MAINTENANCE OF CASH RESERVATION ASSETS Cash reserve Liquid assets MARKS 5 3

6. MANAGEMENT OF FUNDS 1. Maintenance of cash reserve/liquid assets below the optimum level throughout the year. 2. Surplus over the optimum level either under cash reserve or liquid assets or both sporadically observed for a short period not exceeding 10 occasions in a year. 3. If surplus noticed in cash reserve and/or liquid assets over and above the optimum level for a long stretches of period and for more than 10 occasions. 7. LOANS AND ADVANCES The bank should have certain loan rules properly or its local policy should have been incorporated in its by laws duly approved by the Registrar of Co-operative societies.

8. WORKING RESULT 1. The bank has strained norms of viability in respect of a. Paid up share capital. b. Deposits. c. Loans and advances. d. The banker has earned profits. 2. The bank has made appropriate allocations to various resrves/provisions 3. The bank has declared a reasonable dividend 4. The bank cost of management was not more than 2% of its working capital or 30%.

9. OPERATION EFFICIENCY 1. Compliance with RBI directions. 2. No default in the repayment from higher finance agencies. 3. No default in the submission of various returns prescribed under the regulation act 1949 and the state co-operative housing societies act throughout the year. 4. Submission of satisfactory compliance on or before due date to the inspection report of RBI and to last audit report

10. EFFICIENY OF MANAGEMENT 1. The modeling of the board/committee/general body held regularly. 2. Regularity in interviewing the bank;s working. 3. Proper maintenance of books of accounts. 4. Proper systems of internal checks and branch control introduced and observed. 5. Proper systems for recruitment of qualified staff and their training procedures. AUDIT CLASSIFICATION Depending upon the aggregate marks secured by the banks audit classification made on this basis of following Marks Secured 60% and above 45% and above but below 60% 30% and above but below 45% Below 30% Audit Classification A B C D

OBJECTIVE 3 TO ANALYSE THE BANK OPERATION IN THE FIELD OF HOUSING FINANCE

Apart from district and central co-operative banks which provide mainly bridge finance to primary housing co-operative societies, urban co-operative banks also play useful role in the provision of housing finance unlike commercial banks. Urban co-operative banks can give loans only to their customers. The Chengalpattu co-operative urban bank for the last 7 years were analyzed and the details given below.

Years

Housing loans (Rs. In lakhs)

1992 93 1993 94 1994 95 1995 96 1996 97 1997 98 1998 1999 TOTAL

17.67 36.61 15.52 31.80 62.40 203.65 211.24 578.89

Source: compiled from the records of urban co-operative bank From the table observed that the bank has sanctioned housing loans 17.67 lakhs during 92 - 93. For the year 93 94, it sanctioned about 36.61 lakhs. It shows the tremendous performance of the bank in sanctioning housing loans. However, there was a competition in the bank in the market. Keeping in view the competition in the market and the potentiality the bank has received this policy in order to attract the people and consequent, when there was a sudden jump in the year 1995 96 of about 16% more than the previous year and so on. Due to liberalization in economic policies such as importance and encouragement of infrastructure projects like housing and other income tax benefits attracts the public more and more. There was a tremendous response from the public. As a result the bank could achieve substantial jump in sanctioning the housing loans to the extent of 203.65 during 1997 98 and Rs.211.24 crores during 1998 99.

Performance of Chengalpattu Co-operative urban bank

250 200 150 100 50 0 1992 93 1993 94 1994 95 1995 96 1996 97 1997 - 1998 -99 98 Housing loans

52(C)

OBJECTIVE 4 TO FIND OUT THE ATTITUDE OF CUSTOMERS VIEWS ABOUT HOUSING FINANCE TABLE 9 LOANS SANCTIONED OCCUPATION WISE 1996-97 Details of occupation Business Government employee Non-governmental employee Agriculture Profession TOTAL Loan sanctioned (Rs. In lakhs) 16.95 13.53 5.87 7.99 18.06 62.4 Percentage 27 22 9 13 29 100

INFERENCE The table clearly shows that during the year 96 97 loan sanctioned to profession customers about 29% followed by business people about 27% and 22% to government employee and so on.

29%

27%

Business Government employee Non Governement Employee Agriculture

13% 9%

22%

Profession

54(C)

TABLE 10 LOANS SANCTIONED OCCUPATION WISE 1997-98 Details of occupation Business Government employee Non-governmental employee Agriculture Profession Staff TOTAL Loan sanctioned (Rs. In lakhs) 35.79 37.41 46.83 25.44 20.19 19.00 184.66 Percentage 19 20 26 14 11 10 100

INFERENCE The table clearly shows that during the year 97 98, 26% loan sanctioned to non government employee customers about 20% to government employee and 19% loans available by business people followed by agriculture 14% and profession 11% and staff 10%.

10% 11%

19%

Business Government employee Non Governement Employee

14%

20%

Agriculture Profession Staff

26%

55(C)

TABLE 11 LOANS SANCTIONED OCCUPATION WISE 1998-99 Details of occupation Business Government employee Non-governmental employee Agriculture Profession Staff TOTAL Loan sanctioned (Rs. In lakhs) 100.40 63.45 7.10 15.09 22.20 3.00 211.24 Percentage 47.53 30.03 7.14 10.51 10.51 1.43 100

INFERENCE About 47.53% of total loans sanctioned during the year 1998 99 to business sector followed by government employees 30.03%, Proffesionals 10.51%, agricultural sector 7.14% and 3.36% to nongovernmental employee as indicated in the table.

1% 11% 3% 7% 48% Business Government employee Non Governement Employee Agriculture Profession 30% Staff

56(C)

TABLE 12 CUSTOMER VIEW ABOUT INTEREST RATE

Views Very important Important Ok Not important Not very important Total INFERENCE

No. of persons 53 44 25 38 40 200

Percentage 26 22 13 19 20 100

It is observed from the table that about 26% of customers view about interest rate is very important followed by important from 33% of customers and 20% of customers opinion is not very important and 19% of customers views are not important followed by 12% of customers view is no commands.

20%

26%

Very important Important Ok

19% 22% 13%

Not important Not very important

57(C)

TABLE 13 SERVICES / PERFORMANCE OF THE BANK

Views Highly satisfied Satisfied Neither satisfied not dissatisfied Dissatisfied Highly dissatisfied Total

No. Of persons 40 25 60 38 37 200

Percentage 20 13 29 19 19 100

INFERENCE It is observed from the table that about 20% of customer option about the performance of the bank is satisfied and 29% customers with no comments and 19% of customers are dissatisfied and 19% of customers highly dissatisfied and only 13% of the customers are satisfied with the performance of the bank.

19%

20%

Highly satisfied Satisfied

19%

13%

Neither satisfied nor dissatisfied Dissatisfied Highly dissatisfied

29%

58(C)

TABLE 14 LOANS SANCTIONED AS PER INCOME GROUP Income group Upto 50,000 50,001 1,00,000 1,00,001 2,00,000 2,00,001 3,00,000 Total No. of persons 56 69 58 17 200 Percentage 28 34 29 9 100

INFERENCE it is observed from the table that the bank had sanctioned the loans to the income group in between 50,001 1,00,000 of about 34% followed by the income group 1,00,001 2,00,000 about 29% and followed by the minimum group of 50,000 about 28% and so on.

9% 28% 29% Upto 50,000 50,001 - 1,00,000 1,00,001 - 2,00,000 2,00,001 - 3,00,000 34%

59(C)

TABLE 15 CUSTOMER VIEW RANKING OF PRIORITY Terms Interest rate Pay back period Procedure Reputation of the bank Total No. of persons 50 78 62 10 200 Percentage 25 39 31 5 100 Rank 3 1 2 4

INFERENCE It is observed from the table that about 39% of customers ranking views as indicated rank 1, for the pay back period followed by procedural aspect and interest rate of reputation of the bank as shown in the table.

5% 31%

25%

Interest rate Pay back period Procedure Reputation of the bank

39%

60(C)

TABLE 16 CUSTOMERS VIEWS - ABOUT TERMS Terms High interest rate and low pay back period Low interest rate and high pay back period Total 200 100 83 42 No. of persons 117 Percentage 58

INFERENCE It is observed that about 58% customers choose the first option which is high rate and low pay back period and about 41% of customers chose Low interest rate and high pay back period.

42% 58% High interest rate and low pay back period Low interest rate aand high pay back period

61(C)

TABLE 17 BASIS OF SELECTING THE BANK Selection Interest rate Pay back period Procedure Total No. of persons 0 114 86 200 Percentage 0 57 43 100

INFERENCE It is observed from the table that 57% customers selected the bank because the pay back period and about 43% of customers selected this bank because of banks simple procedural aspects.

0%

43% 57%

Interest rate Pay back period Procedure

62(C)

TABLE 18 CUSTOMER VIEW ABOUT PROCEDUTAL ASPECTS Procedure Highly complicated Complicated Simple Total No. of persons 15 60 125 200 Percentage 8 30 62 100

INFERENCE It is observed from the table that about 62% of customers views about the procedural aspects of the bank was simple compared to 30% of the customers view is complicated and 8% of the customers view is highly complicated. This may be due to various reasons whoch may not be relevant procedural policies.

8% Highly complicated 30% 62% Complicated Sample

63(C)

TABLE 19 LOANS SANCTIONED AS PER QUANUM OF AMOUNT Quantum of loan Up to 50,000 50,001 1,00,000 1,00,001 2,00,000 2,00,001 3,00,000 3,00,001 4,00,000 4,00,001 5,00,000 Total No. of persons availed 32 62 60 23 6 17 200 Percentage 16 30 30 12 3 9 100

INFERENCE It is observed that the table that 60% loans were sanctioned to 50,001 - 2,00,000 followed by 16% loans up to Rs.5,00,000 as indicated in the table.

3% 12%

9%

16%

Upto 50,000 50,001 - 1,00,000 1,00,001 - 2,00,000 2,00,001 - 3,00,000 30% 3,00,001 - 4,00,000 4,00,001 - 5,00,000

30%

64(C)

TABLE 20 LOAN SANCTIONED PURPOSE WISE Purpose Construction of houses Repair / renovation Total No. of persons 93 107 200 Percentage 47 53 100

INFERENCE It is observed from the table that 53% of persons availed loans for the purpose of repairs and alterations of houses and 47% of persons availed for constructing the houses.

0%

47% 53%

Construction of houses repair/Renovation Purchase of plots/houses

65(C)

TABLE 21 OUTSTANDING DUES - AS PER INSTALLMENTS Outstanding installments 15 6 10 11 and above Total No. of persons 33 29 13 75 Percentage 44 39 17 100

INFERENCE It is observed from the table that out of 200 persons, 75 have outstanding dues. The table shows that 44% of OD installments between 1 5 and 39% between 6 10.

17% 44% 1 to 5 6 to 10 11 and above 39%

66(C)

TABLE 22 CUSTOMER VIEW SOURCES OF IDENTIFICATION Sources of identification Through friends Through advertisements Through officers Total No. of persons 93 30 77 200 Percentage 46 15 39 100

INFERENCE It is observed from the table that 46% of customers identified the bank through friends and 39% of customers through other sources.

39%

46%

through friends through advertisements Through others

15%

67(C)

TABLE 23 LIKERT SCALE TO SERVICES / PERFORMANCE OF THE BANK Views Highly satisfied Satisfied Neither satisfied not dissatisfied Dissatisfied Highly dissatisfied Total No. of persons 40 25 60 38 37 200 Rank 2 1 0 -1 -2 Likert scale 80 25 0 -38 -74 -7

INFERENCE Likert scale shows negative balance that is out of respondent most of the people view is they are not satisfied with the performance of the bank. No comments by 60 persons about the performance of the bank. So the bank should take steps to identify the customers at their maximum level. TABLE 24 LIKERT SCALE ON INTEREST RATE OF THE BANK Views Very important Important Ok Not important Not very important Total No. of persons 53 44 25 38 40 200 Rank 2 1 0 -1 -2 Likert scale 106 44 0 -38 -80 32

INFERENCE The likert scale shows positive result so most of customers view is interest rate is very important so the bank has to take necessary steps with regard to the interest rate up to their level.

FINDINGS AND SUGGESTIONS

CHAPTER 8 FINDINGS AND SUGGESTIONS 1. For professionals, agriculture loan sanctioning is very poor. During the first year, business people sanctioned more than others and non-governmental employee are very low. In the second year non government employee loan sanctioning are more compared to the others. In the third year business people sanctioned more. During these three yearsloans to professionals and agricultural sectors are too low. This may be due to lack of awareness of the people about the bank or less concentration of the bank towards this segment or competition from other banks/financial institutions. The bank may take steps to attract the above segments by giving huge advertisements liberalizing the proceeds at par with the competitors. 2. The banks maximum limit at loan is Rs.5,00,000 but very least people availed the maximum limit. Most of the people availed loans up to Rs.2,00,000 only. This may be due to locational aspect i.e., Chengalpattu is an area of less locational advantage. The bank may take steps to encourage that they may utilize the maximum kimit by liberising the procedures to avail the maximum limit. 3. Customers availed loans from the bank mostly for repair and renovation of existing houses compared to the new construction of houses. There are no loans sanctioned for purchase of the plot ot flat. Bank giving housing loans as mortgage loan. For new purchase of flat or plot customers initially need of money, so they go for other financial institutions and co-operative housing societies. So, the bank may give loan for the purchase of plot/flat. 4. Bank over due is higher. This will affect the bank more. So, to reduce OD, the bank may take steps to give some special concessions to the regular customer without any OD. Then, to take serious steps to the OD customers to collect the amount. 5. Bank advertisements are very low compared to the other financial institutions. It may be suggested that the bank may go for small advertisement within the city limits to make awareness of the general public about their housing finance schemes. So that it can increase the housing finance business substantially. 6. Most of the customers feel that the banks procedural aspects are apparently simple but the formalities are difficult to understand and are complicated. The bank may take steps to satisfy their customers by liberalizing the procedures. 7. 12% of customers comment about interest rate of bank as no comments. This is because the interest rate of the bank is higher than the other financial institutions, banks and co-operative societies.

The bank may take steps to reduce the interest rate by seeking grants concessional loans from National level Housing Development Banks. 8. From the table about 20% customers view about the performance of the bank is highly satisfactory. 13% are satisfied and 19% of customers are dissatisfied and 18% are highly dissatisfied. This may be the views of the overdue customers. The bank should try to satisfy the customers at the maximum level. 9. While selecting the bank, 57% of people selected because of payback period and no person selected the bank for interest rate because, compared to the other banks and other housing finance institutions interest rate are high. So the bank should analyse about this and try to take the necessary steps. 10. From the table about 59% customers opinion is high interest and low pay back period. The middle income group people only availing the loans. So they cannot spend more amount to pay installments. So they like more years to complete the loan. 41% customers opinion is low interest rate and high payback period. Some people view is to repay the loan as early as possible. So they like low interest rate and high payback period. 11. From table, while ranking the priority of bank payback period takes first rank and simple procedures takes second place and interest rate takes only third place. So the bank should take steps to analyse and to reduce the interest rates. 12. From the table, about 35% of customers belong to the income group between Rs.50,001 1,00,000 and 29% belong to the income group between Rs.1,00,001 2,00,000. This risk indicates that low, middle and high income group customers availed this loan. The bank may take steps to increase the sanctioning of loans to the lower income group people.

CONCLUSION

CHAPTER 9 CONCLUSION Last few years have witnessed radical measures aimed at broadening the financial system in our country the fact remains that a significant proportion of financial transaction even now takes place outside the format financial system. This is much more so in housing finance. The problem traced by the industry and the first tale to which NHB addressed itself after coming into existence was to have a close look at the existing financial frame work for meeting housing needs. It found that the existing housing finance system had broadly two segments viz. formal and informal, the formal segments comprising the central/state government, financial institutions like the Life Insurance Corporation of India (LIC), General Insurance Corporation of India (GICI), Unit Trust of India (UTI), Provisional Funds, Commercial banks and housing finance institutions including Housing Co-operative accounted for less than 20% of the investment in housing. The rest 80% of the funds came from the informal segment which includes households themselves and public/private sector employers providing housing loans to their staff. But now with lot of housing companies entering the market this scenario is totally challenging and more people are preferring the formal sector for their housing loan and this now has lead to shortage of resources for the housing finance companies this is due to the depending of the housing finance companies on the low-cost funds which is becoming hard to mobilize and another problem faced by them mismatch of asset and liability, to up all short coming NHB has sent a team of officials to study the system of securitization provides the mechanism for mobilizing funds from the asset side of the balance sheet. This system has got a big potential and the responsibility of providing funds for the social security at a reasonable cost. Entry of foreign banks in the market has created a sift competition in the market for the existing players like HDFC, LIC,GIC and Canfin Homes even though the interest rate charges by the foreign banks are high they compensate it by providing innovative value added service which make the customer feel very important and satisfied and the service generally provided by the LIC and GIC are poor when compared to the services provided by the HDFC and foreign banks and the entry of other schedule banks like SBI. Indian Bank, Vysya Bank and other financial institutions entering the market will make the life hard for existing housing finance companies if they are not going to improve their services to their clients. Even though HDFC has a market share of 60% and LIC having another 20% now they have started to lose their share due to entry of other finance companies in the market.

The housing finance industry has got a big potential and the responsibility of providing funds for the social security at a reasonable cost. The industry is presently facing the problem of souring of funds. Most of them depend on NHB for low cost finance, the NHB has its own limitations on generating such large amount. Thus the key aspect of the growth of the industry is to try for new methods of funding, like following the example set by USA, where securitization has revolutionized the housing finance industry, the open body NHB should take immediate steps for developing the securitization concept and develop a market for securing debt instruments. Financing of urban housing, being so much difficult, deserves special consideration. A proper institutional structure for financing housing development is the key to its success. The difficult aspects of the housing problem whether it is in regard to land or to the rate of interest, whether it is pertaining to finance or building materials all these are difficult problems in themselves. The country has to progress, people will have to have housing and the means of mobilizing savings for housing and making the task of the people who want to build a house easier should engage lot of own attention, in the years to come. The government must give higher priority to funds following into housing through special incentives. To provide housing for all with adequate infrastructure facilities by 2010 to enable everybody to lead a dignified life, is the vision of ASSOCHEM. Policy recommendations are about legislature framework, outmoded laws are holding up development of the housing sector. These should be repealed or amended to give a boost to housing and construction industry. Some of these laws are given below: FORECLOSURE LAWS The present foreclosure laws are oriented towards the borrower. These place the lender at a service disadvantage, thus hampering the mortgage market as well as its securitization. STAMP DUTY Although a state subject stamp duties are exorbitantly high and need to be drastically brought down and rationalized. In some states, the rate of stamp duty is high as 15% stamp duty should be brought down to the uniform rate of around 1 3% in all states of the country. PROPERTY TAX There is a need to reduce excessive property tax burden on house owners by widening the existing narrow tax base in order to encourage house construction. SELF REGULATION

Seven years of intense efforts to professionalise the housing construction industry have led to the formation of National Real Estate Development Council (NAREDCO) an apex body of government policy and private sectors for ethical conduct and to self-regulate the nascent industry.

To increase demand for housing, easy availability of loans at low interest rates is essential to enable buyers purchase homes at the beginning of careers. Such long-term loans should be based on primary mortgages back by govt. insurance and guarantee programmes. Government should encourage the private sector to develop and construct housing projects as also townships with the government acting as the facilitator. While commercial housing can be left in the hands of the private sector, the housing needs of the poor will have to be met by the government. Infrastructural development is not possible without construction sector being accorded due importance. Construction sector should, therefore be accorded industry status in order to give a till up to housing construction; excessive sales tax on construction equipment should be reduced. High interest rates and builders demand for cash payment is keeping housing costs high. Unless prices fall further and interest rates go down, the boom may never come. Housing finance systems enjoys certain tax concessions, treatment of HFCS. They are not allowed to create a special reserve equal to an amount not exceeding 40% of the total income such a reserve is admissible as a deduction in computing taxable income of HFCs under the head profit & gains of business/profession under sec 36(1)(VIII) of the Income Tax Act. TREATMENT OF DEPOSITS, LOANS & DIVIDENDS Deposits with HFCs are exempted from wealth tax under sec 5(1)(XXVII) of the wealth tax act within the overall specified ceiling of Rs.15 lakh. Interest on deposits with them qualifies for deduction under 80L if the Income Tax Act. Interest on housing loan is deductable expense under income from house property under section 24 of the 80L Act. Dividends received on shares of HFCs quality for a deduction up to Rs.13,000 under section 80L of the Income Tax Act together with other eligible deductions to develop the house finance industry the government has taken many steps. People view is that the field of housing is the government responsibility. But this is not so. People and government are two sides of the same coin and the public should not try to run away from its responsibility by putting the entire burden on the government.

APPENDIX

A SURVEY OF CUSTOMER VIEWS ABOUT HOUSING LOAN TERM FROM THE CHENGALPATTU CO-OPERATIVE URBAN BANK LIMITED

QUESTIONNAIRE 1. Name & address of the customer

2. Age a. Below 45 years b. 45 50 c. 51 55 d. 56 58 3. Occupation a. Govt. employee b. Non govt. employee c. Business d. Agriculture e. Staff 4. Annual income (in Rs.) a. Up to 50,000 b. 50,000 1,00,000 c. 1,00,001 2,00,000 d. 2,00,001 and above 5. Purchase of loan availed a. Purchase of flat/plot (new or old) b. Construction of new house

c. Repair of house/flat

6. Amount of loan availed a. Up to 50,000 b. 50,001 1,00,000 c. 1,00,001 2,00,000 d. 2,00,001 3,00,000 e. 3,00,001 4,00,000 f. 4,00,001 5,00,000

7. How did you know the bank a. Through friends b. Through advertisements c. Through other sources 8. How do you feel about the procedure for obtaining loan a. Highly complicated b. Complicated c. Simple 9. Within how many months do you have to pay back the loan

10. How much importance do you give for interest rates a. Very important b. Important c. OK d. Not important e. Not very important

11. How did you approach the co-operative bank a. Directly b. Other sources 12. Are you satisfied with the services of the bank a. Highly satisfied b. satisfied c. neither satisfied nor dissatisfied d. dissatisfied e. highly dissatisfied 13. on what basis have you selected the bank a. interest rate b. payback period c. procedure

BIBLIOGRAPHY

BIBLIOGRAPHY Books 1. S.GIRIAPPA Housing Finance & Development in India, Mohit Publications, New Delhi, 1998 2. P.DAYAL, Housing development in India, Priteeksha Publication, Jaipur, 1991. 3. GARG Y.K, An Approach towards spatial planning standards for neighborhoods, shelter, a HUDCO Publications , October 1995 4. M.Y.Khan Financial service 5. PAREKH H.T, Writings of H.T.Parekh REPORTS 1. Finance for Housing schemes report of the working group rate of the banking system by RBI. 2. BECON 17th Bank Economist conference 94 3. ASSOCHAM India competing for the future policy recommendations July 99 4. Report on Trend and Progress of Banking in India 1994 95 by RBI 5. Annual reports of RBI 6. Annual reports of NHB 7. Report on trend and progress of Housing Finance by NHB in June 1992. JOURNALS 1. The Hindu 2. The Economic Times

3. The Financial Express 4. India Today 5. Business India