CAIIB retail banking case study

Retail Banking-Case study

Ms.A owned a land of area 600 square meter. She went to XYZ bank for loan against this property on which she wanted to construct a building with total built up area of 300 squere meter the bank manager said that she is eligible for loan for 60 of the value of the usable FSL.

01. the rate of land cost is Rs. 5000 per squre meter and if the permissible FSI is 1, then the cost of FS( floor space index) is?

a. 1500000*
b. 3000000
c. 1200000
d. 9000000

Cost of SFI=Built up Area*Rate of land cost

=300*5000

1500000

02. If the desire rate of return is 10% and the rate of construction is Rs. 7000 per square meter.Then the annual desired yield on investment is

a. 360000*

b. 325000

c. 326000

d. 327000

Solution

Cost of construction=Built up Area*Cost of construction

=300*7000=2100000

Cost of SFI=Built up Area*Rate of land cost

=300*5000=1500000

Total Cost=Cost of constructions +Cost of SFI

2100000+1500000=3600000

Desired Yield=Total cost*Rate of Return

=3600000*1/100= 360000