Naan Mudhalvan Project
Naan Mudhalvan Project
Naan Mudhalvan Project
Submitted By
R.DHARANI
NM ID: 4FC4D5218A193D7A3F44A2B6A9330494
PG DEPARTMENT OF COMMERCE
TIRUCHENGODE
October/November 2023
BFSI PROJECT
Name Dharani R
Nan-Mudhalvan ID 4FC4D5218A193D7A3F44A2B6A9330494
Date 03.11.2023
I would like to convey my sincere thanks to Mr.M.Ravi, B.Sc., trainer from BFSI for
his valuable guidance in completing this project
DECLARATION
I hereby declare that this BFSI Training report submitted to Periyar University Salem
for the academic year 2023-2024 is a record of my original work done under the guidance of
Mr.M.RAVI Trainer
Place: (Dharani R)
INDEX
1 PROJECT-3
2 PROJECT-7
BANKING 26
3 PROJECT-8
HOUSING LOAN 37
4 DECISION MAKING 47
PROJECT-3
SAVING AND CURRENT ACCOUNT
CURRENT ACCOUNT
Savings Account
Savings accounts may have some limitations on how often you can withdraw funds, but
generally offer exceptional flexibility that’s ideal for building an emergency fund, saving for a
short-term goal like buying a car or going on vacation, or simply sweeping surplus cash you
don’t need in your checking account so it can earn a little interest.
Changes in the federal funds rate can trigger institutions to adjust their deposit rates.
Some institutions offer high-yield savings accounts with significantly higher interest rates for
larger minimum deposits, which may be worth investigating.
Some conventional savings accounts require a minimum balance to avoid monthly fees
or earn the highest published rate, while others have no balance requirement. Know the rules of
your particular account to ensure you avoiddiluting your earnings with fees.
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Money can be transferred in or out of your savings account online, at a branch or ATM,
by electronic transfer, or direct deposit. Transfers can usually be arranged by phone, as well.
Some banks limit withdrawals to six per month. The Federal Reserve set that limit as a
requirement for savings accounts, but then withdraw it in April 2020. Exceed six withdrawals
with some bank, and the bank may charge a fee, close your account, or convert it to a checking
account. The amount that can be withdrawn is limited only to how much is in the account.
Just as with the interest earned on a money market, certificate of deposit, or checking
account, the interest earned on savings accounts is taxable income. The financial institution
where you hold your account will send a 1099-INT form at tax time whenever you earn more
than $10 in interest income. The tax you’ll pay will depend on your marginal tax rate.
Pros
Fast and easy to set up, and to move money to and from.
Can be conveniently linked to your primary checking account.
Up to your full balance can be withdrawn at any time.
Up to $250,000 is federally insured against bank failure.
Cons
Pays less interest than you can earn with certificates of deposit, Treasurybills, or
investments.
Easy access can make withdrawals tempting.
Some savings accounts require minimum balances.
Can be conveniently linked to your primary checking account: This makes it easy to
transfer excess cash from your checking account and have it immediately earn interest—or
transfer money the other way if you need to cover a large checking transaction. Because of the
interest, it makes sense to keep any unneeded funds in a savings account instead of in your
checking account, where itwill likely earn little or nothing.
Up to your full balance can be withdrawn at any time: Your access to funds in a savings
account will remain extremely liquid, unlike certificates of deposit, which impose a hefty
penalty if you withdraw your funds too soon.
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Up to Rs.250,000 is federally insured against bank failure: Federal protection against
bank failures provided by the Federal Deposit Insurance Corp. (FDIC) will keep your money
safer than it would be under your mattress or in your sock drawer
Easy access can make withdrawals tempting: The ready availability of funds may tempt
you to spend what you’ve saved. Some savings accounts require minimum balances: Certain
savings accounts request a minimum balance to avoid monthly fees or earn the highest
published rate.
The key is to shop around, starting with the bank where you hold your checking account.
Even if that institution doesn’t offer a competitive savings account rate, it will give you a
frame of reference for how much more you can earn by moving your savings or opening an
additional account elsewhere.
As you shop for the best rates, however, beware of account features that can curtail your
earnings, or even drain them. Some promotional savings accounts will only offer the attractive
rate they’re advertising for a short period of time.
Others will cap the balance that can earn the promotional rate, with dollar amounts
above that maximum earning a paltry rate. Even worse is a savings account with fees that cut
into the interest you earn each month.
Some institutions will require you to make an initial minimum deposit at the time
you open the account. Others will allow you to open the account first and fund it later.
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How Much to Keep in Your Savings Account
The amount you keep in your savings account will depend on your goals for the funds,
or your use of the account. If you’ve set up the savings account to sweep excess funds
from your checking account, your balance is likely to vary regularly.
In contrast, if you are building up to a savings goal, your balance will likely start low and
increase steadily over time.
However, some analysts recommend keeping only some of that emergency fund in a
simple savings account, while moving the rest of it to an account or instrument that earns a
higher return.
In any case, note that deposits at banks are covered by FDIC insurance and, at credit
unions, by NCUA insurance. Both of these protect each individual account holder at the
institution for up to Rs.250,000 in deposit balances, should the institution fail. For most
consumers, this more than covers what they have on deposit. But if you are holding more than
to Rs.250,000 in deposit accounts, you’ll want to split your balance across more than one
account holder or institution.
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How to Open a Savings Account: Step by Step
Knowing how to open a savings account means knowing how to make your money work
for you. Cash in a savings account typically earns interest potentially near 4%, which is better
than the national average savings rate of 0.46%. Ready to get started? Here are the steps to take,
followed by tips on finding the best option.
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5. Accept the terms and conditions
This is where the bank asks you to confirm that you read disclosure documentation
describing fees, liabilities and how account interest is calculated. Ideally, you have selected an
account that earns high rates and has no or low monthly service charges. This is your chance to
double check.
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Types of Current Accounts
Banks provide different types of current accounts keeping in consideration the different
banking needs of their customers. One should choose the type of account best suited for the
nature of transactions one wishes to carry. Below mentioned are the different types of current
accounts provided by majority of the banks. However, it is to be noted that the type of current
account may vary from one bank to another.
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4. Packaged Current Accounts
This current account type provides the account holders with lots of perks and benefits.
It comes with exclusive features like medical support, travel insurance and more.
Current Account has been provided by banks to cater to the banking and
financial needs of businessmen, traders, professionals etc. Listed below are someof the basic
features and benefits of a current account:
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Current Account - Eligibility Criteria
All individuals possessing acceptable KYC documents are eligible to open a current
account at a bank. One can approach any bank with the requisite documents to open a current
account. Current account holders are required to maintain minimum monthly average balance
(MAB) in their account, failing of which they can attract penalty.
Following is the eligibility criteria that individualsneed to fulfill to open a current account in
India:
Sole Proprietor
Partnership Firms
Limited Companies
Societies / Clubs / Associates
Hindu Undivided Family (HUF)
Trusts
Individual
Executors, Administrators and Liquidators
Step 1:
Visit the official bank’s website in which the customer wishes to open anaccount.
Step 2:
Go to the online Current Account opening form.
Step 3:
Fill all the required details in the ‘Personal Details’ & ‘Account Details’section.
Step 4:
Download the filled Current Account opening online form and take a printout.
Step 5:
Visit the nearest bank branch along with the filled form and the requiredKYC
acceptable documents required to open Current Account.
One can also visit the nearest bank branch along with all the documents and fill out the
application form offline. It is to be noted that the steps may vary from one bank to another. The
list of documents varies in accordance with the chosen account type.
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Documents required for opening a Current Account
Below mentioned is the list of KYC documents (proof of name, address and activity of
the concern) required for Current Account opening. However, the current account opening
documents may vary from one bank to another and the type of account chosen.
Documents Required
PAN Card
Partnership Deed (in case of Partnership Firm)
Certificate of Incorporation, MOA & AOA (in case of Companies)
Certificate by Sales Tax or Service Tax authorities (in case ofProprietorship
Firm)
Address Proof of the Firm / Company / HUF
ID Proof and Address Proof of all directors / partners
A cheque for opening bank account
Photograph
Any one of the below mentioned list ID and Address proof needs to besubmitted along
with the current account opening form:
Passport
PAN Card
Driving License
Voter ID Card
Aadhaar Card
Employee Identity Card (in case of government employees)
Address Proof
Rent Agreement
Bank Statement
Voter ID Card
Ration Card
Passport
Driving License
Utility Bills (water, electricity etc.)
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How to make the correct Current Bank account choice?
The main purpose of opening a current account is to perform all the business
transactions smoothly. It allows the customers to manage bulk transactions and large value
payments conveniently. Therefore, it is rather important to make the correct account choice. All
the parameters should be kept in mind while choosing the most suitable account option. Given
below are the essential parameters one should keep in mind while making the correct current
bank account choice-
Minimum Balance:
Minimum balance is the amount of money which must always be present in the user’s
account in order to prevent the account from deactivating or lapsing. For current bank account,
the minimum balance value is relatively higher in comparison to savings account. The user
needs to keep in mind this factor as the minimum balance requirement varies from one account
variant to another.
A Savings Account is different from a Current Account in many aspects. Below are
some of the key pointers:
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Interest earnings
Under Savings Account, interest on savings is earned by the account holder, but in a
Current Account, you don’t get interest pay-outs as the deposited money is used for business
transactions. If you open an AU Savings Account, youcan earn high interest rate.
Suitability
So, with a Current Account vs. Savings Account, which one is suitable for you? A
Savings Account is suitable for you if you are a salaried employee or someone with a
continuous monthly income. If you are running a business, a Current Account will be suitable
for you.
Transaction Limit
Transaction limit is one of the main differences between a Current Account and a
Savings Account. You have a transaction limit when you use a Savings Account. You can carry
out about three to five transactions per month with a Savings Account without attracting any
charge. You can transact without limit with a Current Account. This is because a Current
Account serves entrepreneurs who need to carry out frequent transactions.
Overdraft Facility
When it comes to managing finances, the choice between a Savings Account and a
Current Account can significantly impact your ability to navigate unexpected financial
challenges. A Current Account offers the advantage of an overdraft facility, allowing you to
withdraw more funds than the available balance, providing a safety net for businesses and
entrepreneurs. In contrast, a Savings Account typically lacks this feature.
Conclusion
If a individual need to open account in bank means he can open saving account, the reason is
saving accounts are liquid bank account that you to invest funds and earn interest. And if a
businessman need open account in bank means he can open current account because there is no
limit for number of transaction and more facilities can be available.
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PROJECT-7
BANKING
If I have ₹2,00,000, I will invest the money in the following method.
Decision
I will prefer to invest more amount in government banks and private bank because the
return of amount in government banks are more compare to the other banking services.
The risk factor in government bank is safe and even in private bank the risk factor is
less. I will not prefer post office because the interest rate is less compared to the other bank so
the return will also be less.
Risk factor
Nationalized banks are regulated by the RBI, so the money invest in it is more than
likely safe. The Reserve Bank of India (RBI) has made deposit insurance compulsory for all
banks.
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Calculation
The Reserve Bank of India is the apex bank and the monetary authority, which regulates
the banking system of the country. It is the banker’s bank, it governs all the banks of the
country, like cooperative banks, commercial banks
and development banks. The commercial bank includes public sector banks,
private sector bank, foreign bank, regional rural bank, local area banks, etc. Before 1969, except
eight banks (SBI and seven associate banks), all the banks in India were private sector banks
after which 14 commercial banks got nationalized in July 1969 and 6 in 1980.
Government bank
Government banks are also called Public Sector bank. Public sector banks are those
banks where the government holds more than 50% ownership. With thesebanks, the government
regulates the financial guidelines. Because of government ownership, most depositors believe
that their money is more secured in public sector banks. As a result, most public sector banks
have a large customer base.
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For example, The State bank of India (SBI) is the largest public sector bank in India. In
this bank, the Indian government holds more than 63% share. A large part of the remaining share
is also traded in the Indian stock market.
Relative to other banks, the employees of public sector banks enjoy more job security.
They also enjoy other perks like pension after retirement. For this reason, many of these
employees are reluctant to give their best service. As a result, the rate of loan defaulter is much
higher in public sector banks. The promotion in the public sector banks is based on seniority,
which de-motivate many employees.
The public banking business has advanced significantly since the nation’s existence.
Basic banking facilities were established in the nation with the introduction of technologies and
since then has spread to each and every nook and corner. It has simplified several processes for
both customers and bank employees.
Every public sector bank’s principal job is to mobilise the funds and resources gathered
via numerous plans and deposits over diverse periods and lend them to its clients at
increased interest rates in order to make a profit from the funds.
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Along with loan programmes and monetary savings, it offers mutual fund schemes and
lending programs to its customers.
The majority of public-sector banks offer less customised services to their clients.
Therefore, consumer complaints about poor service are common at public- sector banks.
But users of public sector banks earn greater interest rates. Users can also receive a
variety of low-interest loans.
High-yielding deposits.
They offer financial services to the nation’s rural areas via a variety of branches.
Along with these pros, public sector banks possess a few drawbacks as well.
There have also been way too many accusations regarding the poor service
provided by the personnel.
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5. Indian Bank (79.86%)
Private Banking
Private banking is a banking service that caters to the banking needs of high-net-worth
individuals (HNWIs). Private banking services include privatebanking accounts, investment and
wealth management services, and specialized credit services, as well as other financial services
tailored to meet the specific needs of select clients.
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How Does Private Banking Work?
Private banking services also extend beyond traditional banking, offering access to
exclusive products, specialized lending, and tailored financial solutions. The ultimate goal is to
provide comprehensive financial management, helping clients grow and preserve their wealth
while meeting their unique objectives.
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Advantages and Disadvantages of Private Banking
Advantage Disadvantage
A dedicated private banker is assigned who It might get tough to find the right fit for your
can help address all queries, and concerns and banking needs without a clear picture of the
help supercharge all banking and financial needs product.
with no stress.
Personal finance as well as business finances There might be a conflict of interest as the
can be taken care of by a private banker who can private bankers might prioritise their interest
help you maintain a balance between the two. before yours.
Private banking can also help with private While a certified private banker may be able to
capital opportunities. connect you to a private mortgage or investment
banker, you could receive better service if you
assemble your own team of financial advisors,
CPAs, mortgage brokers and business
consultants.
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Functions of Non-Banking Financial Company (NBFC)
NBFCs lend and make investments and hence their activities are akin to that of
banks; however there are a few differences as given below:
NBFCs do not form part of the payment and settlement system and cannot issue
cheques drawn on itself.
Non-transparent operations
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Post Office Savings
As the name suggests, the post office savings scheme includes saving instruments,
offering several reliable and risk-free returns on investments. In India, you can open a savings
account at a post office in several ways. These offer fixed or recurring deposit policies and
attractive fixed interest rates. It is a beneficial scheme for the investors to securely earn a fixed
interest on their deposit amount inperiodic.
There are a plethora of benefits to opening a post office savings account. A few ofthem have been
listed below:
Post office savings schemes are highly secured since they are under the government's
supervision, and the returns are fixed and guaranteed.
Post offices are situated almost everywhere; hence there is higher reach, even in rural
locales around India.
There is a low minimum deposit that amounts to 50 rupees only, so even underprivileged
people can avail of its benefits.
There are many types of savings accounts to choose from that cater to almost every kind
of individual.
Most of these accounts don’t have a maturity period and can be withdrawn at any time and
by anyone by producing the relevant documents and customer ID.
These accounts can be transferred from one post office to another without much hassle.
Most post office savings accounts also come with the benefit of ATM/Debitcards, so
there is greater accessibility.
Even minors can create a post office savings account, but the guardian orparent
would manage the funds.
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A person can be nominated to whom the funds will be transferred on accountof any
unforeseen death of the account holder.
An individual post office savings account can be converted into a jointaccount
and vice versa.
You can also open a post office savings account online through the IPPBapp. So, it
is quick and hassle-free.
Conclusion
Investing in government bank is safer as there are only less risk and even investing in
private bank is safe as there are only few risk. But investing in Non Banking Financial Company
has more risk of return and in Post Office Saving the rate of interest is less. If they consider more
return means they can invest in Non Banking Financial Company and in government Banks. But
if they consider only less risk means they can invest in Government Banking and Post Office
Savings.
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PROJECT-8
HOUSING LOAN
Imagine If I am working in a bank and I get a application for a housing loan ofRs.25lakhs
A. From a government employee with annual income of Rs.10lakhs
B. From a private sector with annual income of Rs.15lakhs
C. From a businessman with the turnover of Rs.50lakhs
D. From a farmer with land worth over Rs.1crore
The dream of owning a house can now be fulfilled with ease due to the ever booming
market of home loans. Although relatively easy to obtain in this present day and age, there are
criteria that banks look at before they approve a housing loan. Following the list mentioned
below will ensure that you don't have your home loan rejected.
Documentation - The first thing the bank looks at is the documentation that you have
provided. This is arguably the most important process for the bank when it comes to
approving a home loan. Even a slight discrepancy in your documentation may result in
your home loan being rejected.
Credit history - Your credit history is what determines your credit score, and your
credit score is one of the major criteria that banks look at before approving your home
loan. A low credit score is almost certain to get your home loan rejected. Not only that,
a rejection in your home loan will deplete your credit score even further, making it
harder for you to get futureloan applications approved.
Your income - Your income plays an important role in your home loan approval
process. The bank processes your income with regard to your loan amount and accesses
whether you will be able to pay off the loan on time. If the bank feels that you may not
be able to pay off your loan, your application will certainly get rejected. One must
always keep in mind their repayment capacity before applying for a home loan.
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Debts - In the event that you have other debts at the time of availing a housing loan, the
chances of your loan getting approved reduces drastically. This is simply because that it
is more risky for a banker to lend out money to someone who is already committed to a
loan.
Age of the borrower - The younger you are, the more likely it is that your home loan
application is approved. This is so because a younger applicant has more time to repay a
loan as opposed to an older applicant. For example, an applicant that is 55 years old
may have only 5 - 10 years to payoff a loan, while an applicant that is 30 years old has a
relatively longer time frame to pay off his debts. Again, one must figure out his/her
repayment capacity before applying for a home loan.
Credit utilization ratio - This is defined as the amount of credit used in comparison
to your total credit limit. The higher your credit utilization ratio, the lesser your
chances of obtaining a home loan. One must alwaysensure that their credit utilization
ratio doesn't exceed a particular limit, depending on financial needs.
EMI on the loan - Banks make sure that the EMI payable on all the loans you are
currently paying off doesn't exceed 40% - 50% of your income. If the EMI on your
home loan goes beyond this percentage, chances are that your application may get
rejected.
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1) Completed and signed home loan application form
PAN Card
Passport
Aadhaar Card
Voter’s ID Card
Driving License
Aadhaar Card
PAN Card
Passport
Birth Certificate
10th Class Marksheet
Bank Passbook
Driving License
4) Proof of Residence: (Any one of the below)
Bank Passbook
Voter’s ID
Ration Card
Passport
Utility bills (Telephone Bill, Electricity Bill, Water Bill, Gas Bill)
LIC Policy Receipt
Letter from a recognized public authority verifying the customer’saddress
Form 16
Certified letter from Employer
Payslip of last 3 months
Increment or Promotion letter
IT returns of past 3 years
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6) Proof of Income for Self Employed:
7) Property documents:
8) Other Documents:
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Step-by-Step Guide to Home Loan Application Process
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1) Fill the Loan Application Form & Attach the Documents
The procedure to take Home Loan begins with an application form. This loan
application will require a few basic pieces of information about the applicant. Usually, this
includes:
The personal details of the applicant (Name, Phone number, etc.)
The residential address of the applicant
The monthly or yearly income of the applicant
The educational information of the applicant
The employment details of the applicant
The property details on which the loan is applied
The estimated cost of the property
The present means of financing the home property
Once the formal application is filled, the next step is to attach all the validdocuments required
by the bank with it. Usually, this includes the:
Income proof
Identity (or ID) proof
Age proof
Address proof
Employment details
Educational proof (school/diploma/degree certificates)
Bank statements
Property details on which the loan is applied (if finalized)Get
Details of Documents For Home Loan
Once the formal application and document submission process is done, the applicant has
to pay the processing fee to the bank. This is the amount collected for maintaining the
applicant's loan account. It includes sending some confidential paperwork (like IT certificates,
post-dated cheque, etc.) every year.
The processing fee of a bank usually:
Ranges from 0.25 % to 0.50 % of the requested loan amount.
Say, for example, the applicant has applied for a home loan of Rs. 15 lakh, then the processing
fee will be Rs. 3,750 (at 0.25%) and Rs. 7,500 (at 0.50%) respectively.
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A commission is then generated by the bank to the agent handling the applicant's home
loan process, which to an extent is taken from the processing fee paid by the applicant. Though
most banks have a proper fee structure, it can be negotiated. There is no crime in trying to
bargain with the processing fee.
Note. Every bank will have a processing fee for a loan. However, there are banks that
offer zero processing fee home loans. Well, don't fall for this because this advantage can call
for a higher rate of interest, stamp duties, and other legal charges.
Once the applicant has completed the application and documentation process, he or she
has to wait until the bank or the respective financial companychecks the papers. It usually takes
about 1-2 days or even less if the submitted paperwork is correct.
However, there might be times when the bank might want the applicant to pay a visit to
the bank for a face-to-face interaction before the loan is sanctioned.
This is done to collect more details about the applicant and to make sure if he/she will be
able to repay the loan with the interest amount.
Use: Home Loan Repayment Calculator
Keep in mind that millions of people apply for home loans on a daily basis and to
ensure that bank approves the paperwork as soon as possible, the applicant has to be genuine in
the entire procedure.
Any fake document or fraudulent activity is unacceptable by the bank. It is a criminal
offense and can lead to bigger troubles. As soon as the application form & documents are
submitted, and the processing fee is paid, the bank authority thenevaluates them.
A bank examines the following details of an applicant:
Residential address (previous and current)
Place where he/she is employed
Credentials of the employer
Workplace contact number
Residence contact number
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Note: A bank representative pays a visit to the applicant's residence or workplace to verify
his/her details. At times, the references listed by the applicantin the form are also checked. This
enables a clear trust between both the parties.
Check out: Loan to Value Ratio
One of the most important steps in the home loan process is the approval or sanction
stage. This stage can either lead to a positive outcome or it can lead to a negative outcome. It
all depends on the bank.
If the bank is not happy with any of your documents, your chances of approval decrease. On
the other hand, if all goes well, you will get your loan sanctioned orapproved very soon.
A bank usually deep-checks the applicant's following documents to approve ahome loan:
The qualification, age, and experience details.
The transactions made with the applicant's bank.
The monthly and yearly income.
The current employer and the type of job he/she pursues.
The nature of the business (applicable only for a self-employed).
The ability to repay the loan amount with the set interest rate.
Based on the information mentioned above, the bank finalizes and communicates the
maximum loan amount the applicant can receive. Finally, this proceeds with an official
sanction letter. It can be either unconditional or can contain a few policies, which has to be
fulfilled by the applicant before the disbursal.
Check: Reasons for Home Loan Rejection
As soon as the loan is sanctioned or approved, the bank then sends a certifiedoffer
letter, which mentions the following details:
The loan amount that is being sanctioned.
The interest rate on the total loan amount.
Whether the interest rate is variable or fixed.
The loan's tenure details.
The mode of loan repayments.
Terms, policies, and conditions of the home loan.
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Acceptance Copy
Once the applicant agrees to the offer letter, he or she has to sign a duplicate copy of
the offer letter, which is for the bank's records. Years back, this usually came with a specific
administrative fee. However, it is no longer practiced.
Note: Make sure to read all the details carefully. Check if the rate of interest is applied as per
the percentage discussed and decided with the bank. Remember thatthe interest rate on the home
loan can be negotiated. Always give it a try and use this as the best for your advantage.
Once the offer letter is officially accepted by the applicant, the bank next
concentrates on the home property he/she intends to purchase. Even if it is not finalized, the
applicant can request for a time duration to select one.
Once the property is selected, the applicant has to:
Submit all the original property documents to the bank. It remains with them until
the loan is repaid. Also, this serves as the security towards thehome loan the
applicant has applied for.
The original property papers will normally include the following details:
The name of the seller.
The identification and address proofs of the seller.
The name of the property.
The address of the property.
The chain of written documents if the seller isn't the primary or actualowner.
NOC (No Objection Certificate) from the primary legal owner (if any).
NOC from the statutory development board representative & cooperativehousing
society.
If the land is already on a lease, the bank will require a NOC from thelessor as
well.
Note: The original property papers stay with the bank until the home loan iscompletely repaid.
Legal Check
Once the property papers are submitted, the bank then validates them for
authentication. This process is termed as "legal check." In fact, the sale papers between the
applicant and the seller are verified.
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These original documents are sent to the bank's lawyer for an in-depth check. Only when
the lawyer approves all the submitted documents as clear, then everything related to home
loan is good. If not, the applicant will be asked to submit a few more documents for
verification.
Every bank is highly cautious with the loan it lends and the home property it plans to
finance. Hence, a technical check or a double check is further done. The bank sends a property
expert to check the premises an applicant intends to buy.
Now, this person could either be an employee of the bank or a civil engineer or someone
from an architect's firm.
The visit to the "site property" is basically conducted for verifying the detailsgiven below:
The stage in which the construction is.
Quality of the construction.
Work progression.
The time required to build the house.
The layout of the house and whether the governing authority has permittedit or not.
If the builder has valid requisite certificates for construction on the land.
Property valuation and the environmental areas.
If the construction is already for resale or in a ready stage, then the representativewill check for:
The building's age.
The internal or external property maintenance.
The loan tenure and if the building falls within the applicant's loaneligibility
criteria.
The quality of the construction.
The surrounding area.
The valid requisite certificates to hand over the flat/house's possession tothe buyer.
The existing mortgage on the home property.
The property valuation.
The building's approval plans, following the government laws, etc.
Note: A bank conducts a proper technical check to understand the constructionprogress and
to gain the trust of the applicant. This is an important phase of the home loan process and hence,
cannot be skipped by the applicant.
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Also bear in mind that there will be a fee for this technical check, which may be either
charged separately or might be taken from the upfront fee.
Decision Making
I will provide loan to Government Employee and to the Farmer because the Government
Employee has the fixed income and Farmer has the land. So if any risk arise the land of the
farmer can taken over for the non payment of loan. The level of risk for the banker is less for
Government Employee and Farmer.
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