The main objectives of this research are many fold. First, we try to f ind the nature of residential housing demand at present in India and estimate the major factors that drive the residential housing demand. Second, wecorrelate existing profile of housing loanborrowers of selected banks and housing f inance companies to understand the relationship between borrower characteristics and loan parameters etc. Third, we try to investigate how demographic and situational factors such as employment status, family type, income level, locations affect the perception of beneficiaries so also of bankers towards the home loan portfolios. In order to accomplish the above objectives, we use primary data from bankers and customers collected from various sources to examine the determinants of performance of home loan in India. In doing so, we used various descriptive statistics tools, correlation analysis, regression analysis, factor analysis and one way analysis of variance to realize the research objectives and arrive at a meaningful conclusion. The primary contribution of the research delineated in this thesis is to demonstrate the importance of borrower specific characteristics as well as perception of bankers in determining the effectiveness of home loan portfolio developed by public sector banks in India. From this study firstly, we concluded that in the post liberalized era where multiple number of private and foreign players are available to cater the home loan need of customers in India, public sector banks were most preferred by a home loan seeker. Secondly it was concluded that behaviour of a banker is highly prioritized over the other dimensions like repayment period, loan amount and the rate of interest etc. while selecting a bank for availing the home loan facility. Thirdly, we also concluded that the tax benefit is the most important reason for availing a home loan from a public sector bank and repayment in easy instalments is the least important reason for availing a home loan from public sector banks.
Our findings cannot be generalized to the entire banking industry of India. However, caution should be taken in interpreting the results. It must be noted that the home loan portfolio of public sector banks does not directly depend on perception and opinion of customers and bankers alone but moderated by thebank'sstrategies, RBIpoliciesand others. Conclusively, thisstudyshows thatopinion of customer and perception of banker have strong and statistical impact on the home loan portfolio of public sector banks in India, though not uniform across the selected demographic profile of the consumers and bankers.
