PRESTIGE INSTITUTE OF MANAGEMENAND

RESEARCH, INDORE

Session – 2020-21

PROJECT
OF

BANK MANAGEMENT
TOPIC : A Comparative Study of Home Décor Loan provided by
Punjab National Bank and HDFC Bank

Submitted To:- Submitted By:-

Prof. Shailendra Gangrade Eshee Jain (1121212785)
Taniya Pandey (1121213103)

MBA FT-B III semester

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 INDEX

S. No. Content Page No.

1. Introduction

2. Conceptual Framework of the Topic

3. Reason for selecting the topic

4. Observation of Topic

5. Facts analyzed after visiting to the bank

6. Comparison from opted bank

7. Learnings

8. Conclusion

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 1.INTRODUCTION

PUNJAB NATIONAL BANK

Key Persons - Dyal Singh Majithia

Lala Lajpat Rai (Founder)

CH S.S. Mallikarjun Rao (CEO)

Punjab National Bank, abbreviated as PNB, is an Indian government owned bank. It is under the
ownership of Ministry of Finance, Government of India headquartered in New Delhi, India. The bank
was founded in 1894 and is the second largest government owned bank in India, both in terms of
business and its network. The bank has over 180 million customers, 12,248 branches and 13,000+
ATMspost-merger with United Bank of India and Oriental Bank of Commerce, effective from 1
April2020.

PNB has a banking subsidiary in the UK (PNB International Bank, with seven branches in the UK), as
well as branches in Hong Kong, Kowloon, Dubai, and Kabul. It has representative offices in Almaty
(Kazakhstan), Dubai (United Arab
Emirates), Shanghai (China), Oslo (Norway), and Sydney (Australia). In Bhutan it owns 51% of Druk
PNB Bank, which has five branches. In Nepal PNB owns 20% of Everest Bank Limited, which has 50
branches. Lastly, PNB owns 41.64% of JSC (SB) PNB Bank in Kazakhstan, which has four branches.

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 HISTORY

Punjab National Bank is a PSU working under Central Government of India regulated by Reserve Bank
of India Act, 1934 and Banking Regulation Act, 1949. Punjab National Bank was registered on 19 May
1894 under the Indian Companies Act, with its office in Anarkali Bazaar, Lahore, in present-day
Pakistan. PNB is the first Indian bank to have been started solely with Indian capital that survives to the
present earlier Oudh Commercial Bank was established in 1881 but failed in1958.

PRODUCT AND SERVICES

 Consumer banking
 Commercial banking
 Credit cards
 Finance and insurance
 Investment banking
 Mortgage loan
 Private banking
 Private equity
 Wealth management

PNB has constantly been achieving National Goals and Targets allocated under flagship schemes of the
nation for upliftment and employment of targeted groups.

1
 HDFC Bank

Key Person: - Atanu Chakraborty (Chairman)

Shashidhar Jagdish (CEO).

The Housing Development Finance Corporation Limited or HDFC Bank Limited is an Indian
banking and financial services company, headquartered in Mumbai, Maharashtra. HDFC Bank is India’s
largest private sector bank by assets and by market capitalization as of April 2021. It is the third largest
company by market capitalization on the Indian stock exchanges. It is also the thirteenth largest
employer in India with nearly 120,000 employees.

HDFC is India's premier housing finance company and enjoys an impeccable track record in India as
well as in international markets. Since its inception in 1977, the Corporation has maintained a consistent
and healthy growth in its operations to remain the market leader in mortgages. Its outstanding loan
portfolio covers well over a million dwelling units. HDFC has developed significant expertise in retail
mortgage loans to different market segments and has a large corporate client base for its housing related
credit facilities. With its experience in the financial markets, strong market reputation, large shareholder
base and unique consumer franchise, HDFC was ideally positioned to promote a bank in the Indian
environment.

2
HISTORY: -

HDFC Bank was incorporated in 1994 as a subsidiary of the Housing Development Finance
Corporation, with its registered office in Mumbai, Maharashtra, India. Its first corporate office and a
full-service branch at Sandoz House, Worli were inaugurated by the Union Finance Minister,
Manmohan Singh. As of 30 June 2019, the Bank's distribution network was at 5,500 branches across
2,764 cities. The bank also installed 430,000 POS terminals and issued 23,570,000 debit cards and 12
million credit cards in FY 2017. It has a base of 1,16,971 permanent employees as of 21 March2020.

PRODUCT AND SERVICES: -

HDFC Bank provides several products and services including.

 Consumer banking
 Commercial banking
 Credit cards
 Finance and insurance
 Investment banking
 Mortgageloan
 Privatebanking
 Privateequity
 Wealth management

HDFC Bank operates in a highly automated environment powered by information technology and
communication systems. All branches have online connectivity which enables speedy funds transfer for
customers. Multi-branch access is also provided to retail customers through the branch network and
Automated Teller Machines(ATMs).

2.CONCEPTUAL FRAMEWORK OF TOPIC

HOME DÉCOR LOAN : -

Home décor Loans are secured loans taken against the mortgage of your property which is to be used for
a variety of reasons including remodeling, renovating, updating, or making repairs to your home Apart
from major work that needs to be done in a house, these loans can also be taken to help you furnish your
house and pay for things like bathroom fittings, fans, furniture,etc.

Every home demand periodic maintenance work like remodeling, painting, restoration, and many more
to keep it in a good state. Your house needs your care and attention to maintain its elegance and
robustness. Hence, it is imperative to refurbish your home at regular intervals because, with time,
natural calamities like rain, storm and normal wear and tear can adversely affect your property.
Home renovation can be a costly affair due to the rising cost of material and labor. Hence, at times it
becomes important to opt for home improvement loans offered specifically for home refurbishment.
There are many loans offers that you can avail for the renovation of your house.

Home décor Loans are one of the best options available if you are looking to spend a loan amount to
renovate your house and are willing to mortgage your house. These loans have a tenure up to years and
are available at attractive interest rates starting from 6.65%. Additional discount of 0.05% is applicable
if a woman is a primary applicant for this loan.
HOW TO APPLY: -
 Check eligibility: Use the bank’s eligibility calculator and will in your loan amount details, income,
current obligations, and property value to know the maximum loan amount you will be eligible for.
Estimate of the eligibility amount can help you determine the loan tenure and loan EMI best suited
toyou.

 Submit a loan application form: Fill an easy online application form which contains your personal
and loan related details to receive and check the offers based on your requirements andeligibility.

 Know your loan offer: The home improvement loan offer will detail the loan amount, interest rate, and
tenure that you are eligible to get from the bank. The same can be finalised on further discussion with
the bank representatives. The loan offer at this stage is tentative to the verification and checks
conducted by the bank of your income documents, property documents, property valuation and
verification.

 Submit documents: Submit all the required documents to the bank's executive. Post this, the bank’s
representative will call you for the verification of property. Once verified, you will receive a sanction
letter from the bank mentioning the details of your loan amount, tenure, andEMI.

 Approval and disbursal of loan: Once the bank completes its appraisal and documentation
formalities, it will give a yes or no decision on your home improvement loan application. If the loan
gets sanctioned, the bank will issue you a sanction letter. The sanctioned amount will be credited to
your bankaccount
 3. REASON FOR SELECTING THE TOPIC

 Now a days popularity of Home décor Loan is getting higher and higher, so the purpose behind this

study is to know the actual purpose of Home Décor Loan.

 Increase in income level of young generation is one the reason Home Décor loan is becoming popular.

 This study is done to know the Services of Public Sector Bank and Private Sector Bank.

 To know the different terms and conditions of both the types of banks regarding Home Décor Loan.

 To know the different criteria of eligibility to apply for Home Décor Loan.
 4. OBSERVATION OF THE TOPIC

PNB Home décor loan

 Provides an extensive range of home loan products like Home Purchase Loans, Home Construction
Loans, Home Extension Loans, Home Improvement Loans and Plot Loans.
 Pan India branch network
 Robust service delivery model – door step services ensuring easy and fast approval & disbursal of loans
 Excellent post disbursement services
 Facility of enhancement in loan amount in the event of escalations in cost
 Dedicated team of well-experienced employees who work on best-in-class information systems &
network to deliver and provide customer satisfaction
 High standards of ethics, integrity and transparency
 Various repayment options

HDFC Home décor loan

 Quick, easy approval process: You can get a Home Renovation Loan from HDFC Bank in less than 4
hours, with the process being almost instant for pre-approved HDFC Bank customers.
 Helps improve home value for future sale: Home improvement loans have made renovation and
refurbishment easier. As real estate prices keep soaring, investing in home improvement only helps add
to the value of your house in case you may wish to sell it in future.
 Flexible EMI repayment and loan tenure options: A Personal Loan for home improvement come with
loan tenure options of 1-5 years, and you can repay the amount in equated monthly installments (EMIs).
 Minimal paperwork, maximum ease: You only need basic documents to get loan approval, and even
those may not be required if you are already a pre-approved HDFC Bank customer.
 Improve aesthetic appeal: Coming to an aesthetically soothing, well-kept home after a hectic work day
is something most people wish to have. And with remote working becoming common these days,
people are likely to spend more time at home.
 5. FACTS ANALYSED AFTER VISIT TO THE BANK:

We analysed after visit to the bank regarding the Home Décor loan that there is not only one
type of Home Décor Loan available. There are many types of Home Décor Loans available.
Also, Home Décor loan rates differ from bank to bank. The bank we choose for the comparison
purpose has little changes but both the banks have different process for the Home Décor loans.
Even through after the study, I came to know that most of the banks provide special benefits to
the senior citizens. One more thing, I observed that the Punjab National Bank provides better
services than the HDFC. These were the main things we analyst after visit the bank.
 6. FEATURES & COMPARISONS OF HOME DÉCOR LOAN

A. The below table shows the eligibility criteria of PNB and HDFC bank required fortaking
Home Décor Loan

ELIGIBILITY REQUIREMENTS
CRITERIA
Applicant:
AGE Minimum Age: 18 years
Maximum Age: 65 years
The applicant must be (any one):
RESIDENT Resident Indian
TYPE
Non-Resident Indian
The applicant can be (any one):
EMPLOYMENT Salaried
Self-employed
The applicant must have (any one):
RESIDENT 7- A permanent residence
- Or a rented residencewhereth licant has resided for at least 12 monthsbefore
applying.
CREDIT SCORE A good credit score of at least 700 or more issued by a recognized credit bureau.
B. The below table shows the various criteria on the basis of PNB and HDFC bank grant Home
Décor Loan.
BASIS PNB HDFC
PURPOSE Complete renovation of already Home Renovation Loan covers-
owned residential property Internal and external repairs
Upgradation Tilling and roofing
Repair of your house/flat Painting
External & internalrepairs/paint Waterproofing
Water-proofing & roofing Borewell
Tiling andflooring
Plumbing & electrical work
False ceiling & woodwork (fixed to
the building)
AMOUNT Upto Rs 20 lacs Upto Rs30lacs 90% of
90% of marketvalue Renovationestimate
20 lacs above, upto75lacs 80% 30 lacs above, upto75 lacs 80% of
of market value Renovationestimate
Above 75 lacs Above75 lacs 75%of
75% of market value Renovation estimate
SECURITY Security for the loan is a first charge The property being financed by HDFC will be the
by way of an equitable mortgage of security to avail theloan
the property to be financed and/or or any other collateral or interim security asmay
such other collateral securities as be required by thebank.
may be deemed fit by PNB Housing. Security of the loan would generally be security
Additional/ interim security may be interest on the property being
required as acceptable to PNB financed and / or any other collateral / interim
Housing. security as may be required by HDFC.
DISBURSMENT Disbursement will be made after the You can take disbursement of the loan once the
property has been technically property has been technically
appraised and all legal appraised, all legal documentation has been
documentation has been completed. completed and you have invested
A loan will be disbursed in lumpsum your own contribution in full. We will disburse
or in stages based on the progress of your loan in installments based on the progress of
repair/ renovation. construction/renovation as assessed by HDFC.
MORATORIUM Moratorium or repayment holiday Benefits to borrowers from a three-month
may be permitted where the house is moratorium on payment of EMIs .
constructed till completion of
construction or 18 months
(6 months in case of
repair/renovation/addition/ alteration)
from the date of
disbursement of first instalment of
the loan, whichever is earlier.
PRE-PAYMENT NIL for floating-rate packages. 2% to Upon the expiry of 36 months, no prepayment
3% for fixed-rate and non-individuals charges will be applicable if the loan is prepaid
from own sources. If paid within 36 month then
charges will be 0-2%.
REPAYMENT Loan repayment is in Equated The bank offers several modes of repayment of
Monthly Installments (EMI) your loan:
comprising of ECS (Electronic Clearing System) - Issue a
principal and interest through Post standing instruction to your bank to make the
Dated Cheques/ Electronic Clearance instalment payments.
System over a maximum period of 30 Post-dated cheques – Issue this cheque from your
years. salary account.
Direct deduction from your employer – Your
employer will deduct your monthly instalments
from your salary.

C. The below table gives a brief about the documents required for taking Home Décor Loan from
thePNB and HDFCbank.

DOCUMENTS PNB HDFC

REQUIRED
SALARIED Duly filled Application Form Duly filled Application Form with Photograph Click here to
with Photograph Click here to download the application form
download the application form Age Proof (PAN Card, Passport, Any other Certificate from
Age Proof (PAN Card, Statutory Authority)
Passport, Any other Certificate Residence Proof (Passport, Driving License, Telephone Bill,
from Statutory Authority) Ration Card, Election Card,
Residence Proof (Passport, Any other Certificate from Statutory Authority)
Driving License, Telephone Education Qualifications – Latest Degree
Bill, Ration Card, Election Last 3 months' Salary Slips
Card, Last 6 months' Bank Statements, showing salary credits
Any other Certificate from Latest Form-16 and IT returns
Statutory Authority) All original Title Deeds of the property
Education Qualifications – Proof of no encumbrances on the property
Latest Degree An estimate of the proposed work from an Architect / Civil
Latest Salary-slips for 3 Engineer
months Employment Contract / Appointment Letter in case current
Form 16 for last 2 years employment is less than 1 year old
Last 6 months Bank Last 6 months' Bank Statements showing repayment of any
Statements(salary account) ongoing loans
Processing Fee Cheque in Passport size photograph of all the applicants / co-applicants
favour of ‘PNB Housing to be affixed on the Application Form and signed across
Finance Ltd.’ Cheque for processing fee favouring ‘HDFC Ltd.’
Photocopy of Title Documents Own contribution proof
of the Property, Approved
Plan
SELF- Duly filled Application Form Duly filled Application Form with Photograph Click here to
EMPLOYED with Photograph Click here to download the application form
download the application form Age Proof (PAN Card, Passport, Any other Certificate from
Age Proof (PAN Card, Statutory Authority)
Passport, Any other Certificate Residence Proof (Passport, Driving License, Telephone Bill,
from Statutory Authority) Ration Card, Election Card,
Residence Proof (Passport, Any other Certificate from Statutory Authority)
Driving License, Telephone Education Qualifications – Latest Degree (for professionals)
Bill, Ration Card, Election Income Tax Returns along with computation of income for
Card, the last 3 Assessment Years (of both the individual and the
Any other Certificate from business entity and attested by a CA)
Statutory Authority) Last 3 years’ Balance Sheet and Profit & Loss A/c
Education Qualifications – Statements, with Annexures / Schedules (of both the
Latest Degree (for individual and the business entity and attested by a CA)
professionals) Last 6 months' Current A/c Statements of the business entity
Certificate & Proof of business and Savings Account Statements of theindividual
existence along with Business All original Title Deeds of the property
Profile Proof of no encumbrances on the property
Last 3 years Income Tax An estimate of the proposed work from an Architect / Civil
returns (self and business) Engineer
with Profit & Loss Account & Business Profile. Latest Form 26 AS
Balance Sheets duly List of Directors and Shareholders with their individual
certified/audited by a shareholding certified by a CA / CS in case of the business
Chartered Accountant entity being a company
Last 12 months Bank Account Memorandum and Articles of Association of the Company
Statements (self & business) Partnership deed in case of the business entity being a
Processing Fee Cheque in partnership firm
favor of ‘PNB Housing Details of ongoing loans of the individual and the business
Finance Ltd.’ entity including the outstanding amount, instalments,
Photocopy of Title Documents security, purpose, balance loan term, etc.
of the Property, Approved Passport size photograph of all the applicants / co-applicants
Plan etc. to be affixed on the Application Form and signed across
Cheque for processing fee favouring ‘HDFC Ltd.’
Own Contribution Proof
The below table shows the interest rates of PNB and HDFC bank granting Home
Décor Loan. PNB Bank
 HDFC Bank
Adjustable Interest rates of Home Décor Loan

True Fixed Loan – 2-year Fixed Rate Variant

 7. LEARNINGS

 PNB customers can avail up to 90% of the renovation estimate up to

20 lakhs. On the other hand, HDFC customers have additional benefit
as they can avail 90% of the renovation estimate up to 30lakhs.
 Moratorium period refers to the period in which borrowers are
exempted from paying EMI’s. PNB offers a 6-month moratorium
period for its customers from the date of disbursement of first
installment of loan; however, this benefit is reduced to 3 months for
HDFC.
 In case of prepayment PNB charges 2%-3% from its customers. Upon
the expiry of 36 months period HDFC has no prepayment charges.
However, if the prepayment happens within the 36 months HDFC will
charge its customers0%-2%.
 HDFC customers also have the facility of direct deduction from
employers wherein the employer will directly deduct monthly
installments from their salary.
 PNB Home Décor Loans start from 7.35%; however, HDFC loans
start at a cheaper rate of 6.95% for women and 7.00% for other
applicants.
 8. CONCLUSION

While doing the Comparison between Both the Banks i.e. HDFC Bank
and Punjab National Bank it was noticed that HDFC home loans appear to
be better in all respects. It offers loan at a much cheaper rate and there is
also additional benefit for women applicants in terms of interest rates.
HDFC customers can avail 90% of renovation estimate up to 30 lakh and
there is ease of service associated with private banks. Private Bank
employers generally have a target to fulfill and therefore process to apply
for loan is less tedious and service is much faster. Additionally, the
prepayment charges are much lower for HDFC bank as compared to PNB.
Therefore, for Home Décor Loans of HDFC Bank is a better option than
PNB Bank.