The Delhi police crime branch Special Operations Squad (SOS) arrested three persons who were alleged involved with an inter-state gang and cheated people by offering fake loans at lower rates. The gang allegedly used to give advertisement in local regional newspapers to lure the victims.
The three accused are Neeraj Kumar Chauhan (29), who posed as the supervisor of their fake firm, Amit Kumar Sagar (29) and Sachin Kumar Nigam (26). Neeraj has graduated from Delhi University; the other two are classmates, who are school drop out. As per police report all three are residents of Tagore Garden in west Delhi. But police have to still arrest the key player of the gang, Anuj Makkad, who has been carrying out operations illegally from Jalandhar and had a major share of the service charges as a share for providing knowledge about the operation.
According to Neeraj Thakur, DCP (Crime and Railways), the gang advertised about its services in several dialect and regional newspapers in states like Assam, West Bengal, Bihar and Maharastra. “They used to offer loans from banks and they would charge a commission of 1-2 per cent of the total amount as their service charge in advance. The gang would rent an office and would mention only their mobile numbers in the advertisements. Most of these were from Assam and West Bengal. Until now, we have found the total fraud to be over Rs 60 lakh and with over a 100 people, mostly small-time traders, having fallen prey to this group,” said DCP Thakur.
DCP Thakur told that most of the victims sent their documents through couriers to their office after doing a brief verification. After few days, the alleged cheats would call up their victims and asked them to deposit their service charges, after which their loan will be sanctioned soon. They used to give their bank account numbers or took service charges in cash. The accused used to operate for five months and after that they would close down their office and disappear. The gang has been carrying out operations since 2004 and till now have changed 15 locations, out of which 13 are in Delhi, added DCP Thakur.
He told the gang was very careful that no Delhiite is included in their clientele. “In this manner, they avoided any detection,” he added.
The crime branch got a complaint from Subhodip Ghosal, a Kolkata resident, against one Gayatri Associates, having base in Sant Nagar near Amar Colony, in this regard. The police took the help of technical surveillance to trace the mobile phones and arrested the gang members.
“Various incriminating documents, one Skoda car, six mobile phones, SIM cards, rubber stamps and computers and accessories were confiscated from them. We are investigating the case and are on the lookout for Makkad and another associate of the group,” said DCP Thakur.
Thursday, August 28, 2008
Friday, August 22, 2008
Yes bank in tie –up with Cisco launched hi-tech phone banking services
Yes Bank the new-age private lender has tied-up with networking giant Cisco and launched a facility which will provide new communication technologies for banking services.
Through Yes Bank-Cisco Interactive Experience Centre set up at Gurgaon communication over voice, chat and email services will be provided. The bank's customers will also get the facility of accessing their accounts 24X7 via 'Yes touch' phone-banking services which will support business-related queries and transactions.
Yes Bank Country Head, Direct Banking, Ravishankar, told the reporters, "We are introducing Yes touch phone-banking services, using speech-enabled voice recognition for the first time in the Indian financial services sector for our customers". Speech-enabled voice recognition service will help customers to perform routine enquiries or transactions just by speaking pre-defined aided keywords.
Ravishankar added customers will be able to avail multiple channels currently - email, web-chat, IVR (integrated voice response) and voice to access these services.
In the next 12 months the bank will be launching a new telephonic voice identification system, called voice biometric, in collaboration with a US company
Ravishankar said, "We have the technology for speech biometric and just need fine-tuning for Indian voice recognition and vocabulary, which will have 90 per cent accuracy".
Through Yes Bank-Cisco Interactive Experience Centre set up at Gurgaon communication over voice, chat and email services will be provided. The bank's customers will also get the facility of accessing their accounts 24X7 via 'Yes touch' phone-banking services which will support business-related queries and transactions.
Yes Bank Country Head, Direct Banking, Ravishankar, told the reporters, "We are introducing Yes touch phone-banking services, using speech-enabled voice recognition for the first time in the Indian financial services sector for our customers". Speech-enabled voice recognition service will help customers to perform routine enquiries or transactions just by speaking pre-defined aided keywords.
Ravishankar added customers will be able to avail multiple channels currently - email, web-chat, IVR (integrated voice response) and voice to access these services.
In the next 12 months the bank will be launching a new telephonic voice identification system, called voice biometric, in collaboration with a US company
Ravishankar said, "We have the technology for speech biometric and just need fine-tuning for Indian voice recognition and vocabulary, which will have 90 per cent accuracy".
Wednesday, August 20, 2008
Indian saving bonds can be used as collateral for obtaining loans
In a notification released by finance ministry stated the Indian savings bonds, can be used as collateral for getting loans from banks.
The savings bonds were issued by the government to its officials in those years as a saving avenue who took voluntary retirement or retired at the time.
Notification stated that the scheme will be applicable for 7 7 percent Savings Bonds issued in 2002, 6.5 percent Savings Bonds issued 2003 and for 8 percent Savings Bonds issued in 2003.
The savings bonds were issued by the government to its officials in those years as a saving avenue who took voluntary retirement or retired at the time.
Notification stated that the scheme will be applicable for 7 7 percent Savings Bonds issued in 2002, 6.5 percent Savings Bonds issued 2003 and for 8 percent Savings Bonds issued in 2003.
Thursday, August 14, 2008
Banks see rise in bad loans
Inflation has reached at 12%, RBI has increased repo rate and CRR the banks have started getting a feel of bad loans. Even the admissions have begun. Facing the denial for the better part of the current financial year (2008-09), bankers have started admitting rise in bad loans is going to pose a huge challenge in the next few years. Some of the foreign and private banks are already experiencing a rise in delinquencies. Meera Sanyal, country executive, ABN Amro Bank, India, claimed that there is a slight increase in delinquencies for the bank in the credit card and personal loan segments.
Speaking at the sidelines of a banking conference Sanyal said, “But the medium-term outlook remains positive”
Naina Lal Kidwai, country head for HSBC India, also agreed.
Kidwai said, “There could be delinquencies in credit cards, consumer finance and personal loans and maybe mortgages. Retail loan growth could also slow down”.
The cause for increase in the possibility of defaults especially among customers holding credit cards is the rising interest rates.
Banks fearing higher defaults have already stopped or tightened lending norms for consumer finance and auto loans.
Although ICICI Bank, the leader in retail lending in India, is expecting retail lending this year to grow 5-10% after it has seen a frenetic growth in the last couple of years in its retail lending.
Chanda Kochhar, joint managing director and chief financial officer, ICICI Bank, said corporate credit growth will perform better at 16%.
She does not see any impact of higher interest rates on bank’s loan portfolio. “Business growth for the industry may be impacted, but not ICICI’s loan quality,” Kochhar said.
The banks are facing rise in bad loans.
In the same period earlier its net non-performing assets have increased to 1.74% of total assets in the quarter ended June 2008 from 1.33%.
According to analysts bad loans will be a major challenge for domestic banks even though regulators prepare to give relaxation in the restrictions on foreign banks operating in India in 2009.
“We will have to go through some pain because the right processes were not followed earlier and it may impact the industry,” said Ravi Trivedy, executive director, business advisory services, at KPMG, the audit giant and consultant.
He said, “For example, financing for white goods has more or less stopped. Now, if electronic goods are not sold, their makers face losses because they have invested a lot in producing the goods”.
Trivedy added banks can’t avoid the pain. “Reserve Bank of India has no choice but to hike rates if inflation is at 12% and that will be a problem because if people have taken a loan of Rs 50 lakh and paying 7% interest two years ago, now they are paying 14% which means paying double the interest now,” he said.
However Trivedy said the number of defaulters on their home loans in India will be less because, unlike the US, as the home-loans market in India is a “user’s market.”
Speaking at the sidelines of a banking conference Sanyal said, “But the medium-term outlook remains positive”
Naina Lal Kidwai, country head for HSBC India, also agreed.
Kidwai said, “There could be delinquencies in credit cards, consumer finance and personal loans and maybe mortgages. Retail loan growth could also slow down”.
The cause for increase in the possibility of defaults especially among customers holding credit cards is the rising interest rates.
Banks fearing higher defaults have already stopped or tightened lending norms for consumer finance and auto loans.
Although ICICI Bank, the leader in retail lending in India, is expecting retail lending this year to grow 5-10% after it has seen a frenetic growth in the last couple of years in its retail lending.
Chanda Kochhar, joint managing director and chief financial officer, ICICI Bank, said corporate credit growth will perform better at 16%.
She does not see any impact of higher interest rates on bank’s loan portfolio. “Business growth for the industry may be impacted, but not ICICI’s loan quality,” Kochhar said.
The banks are facing rise in bad loans.
In the same period earlier its net non-performing assets have increased to 1.74% of total assets in the quarter ended June 2008 from 1.33%.
According to analysts bad loans will be a major challenge for domestic banks even though regulators prepare to give relaxation in the restrictions on foreign banks operating in India in 2009.
“We will have to go through some pain because the right processes were not followed earlier and it may impact the industry,” said Ravi Trivedy, executive director, business advisory services, at KPMG, the audit giant and consultant.
He said, “For example, financing for white goods has more or less stopped. Now, if electronic goods are not sold, their makers face losses because they have invested a lot in producing the goods”.
Trivedy added banks can’t avoid the pain. “Reserve Bank of India has no choice but to hike rates if inflation is at 12% and that will be a problem because if people have taken a loan of Rs 50 lakh and paying 7% interest two years ago, now they are paying 14% which means paying double the interest now,” he said.
However Trivedy said the number of defaulters on their home loans in India will be less because, unlike the US, as the home-loans market in India is a “user’s market.”
Tuesday, August 12, 2008
Banks come up with innovative schemes to boost car loans
There has been considerable downfall in the car sales because of high prices of raw materials and inflation. Even the interest rates have gone up so there are only few takers of car loan india. The auto financers have started coming up with innovative schemes to boost sales. Lenders are making all their efforts of resorting to lower interest rates, floating rate loans and cutting dealer commissions to increase demand.
Recently two of the largest players in car financing have decided to cut down interest rates by 2% to step up the demand. For this the commission paid by the bank to the automobile dealers has been reduced therefore retaining the rates at a level which makes it affordable to buyers.
HDFC Bank and Kotak Mahindra, both figures among the top three financiers of four wheelers, will be reducing their rack rates by 2%. Kotak Mahindra Prime at present is charging an interest rate of close to 16%, which will now be brought down to 14%.
According to HDFC Bank official’s bank will be bringing down its rates from 14.75-15.5% to 12.8-14.16% depending on the tenure of the loan. Currently lender is giving a commission nearing to 5% to the dealer. Dealers, in turn, used to pass on part of this commission to customers. Thus, the final rates to customers would be 13.75-15%.
Interest rates for car loans have gone up by close to 1.5-2% this year, impacting sales. In July, for the first time, sales of four-wheelers fell for the first time in absolute terms. Sales growth has been decelerating since April.
“The move will help the industry. Earlier, the payouts were as high as 500 bps. It will be now capped at 200. The payout reductions will be passed on to the customer. We will try and come out with new rates next week. The move would also make the portfolio safer. When the payout was 4-5%, dealers used to pass on some of his subventions to fund the margin requirements of customers,” says Kotak Mahindra Prime CEO Sumit Bali.
Adds HDFC Bank EVP Ashok Khanna, “Not all dealers were passing on commissions to the customers. In bigger cities, dealers may pass on more commissions, but in smaller cities, that was not the case. Moving forward, the move would bring in more transparency, as the customer will be more aware of the rates.”
Financers feared that higher interest rates might leave the lenders with the wrong type of customers. In other words, default would be higher if the financers were to sign up buyers who were willing to pay such high rates.
Apart from this Axis Bank, has also reduced dealer commissions, will not be lowering interest rates now, said a senior bank official. From now dealers will be passing around only 1% of the commission to the customer.
Besides from reducing the interest rate as planned by some financiers, ICICI Bank has plans to launch a floating rate product in the next one week to ten days. Kotak Mahindra is also working on similar product, although it has not yet finalized the date.
As per sources earlier this year ICICI, had discontinued its car and commercial vehicle floating rate product is now planning to re-launch a big-ticket supported by aggressive plans of migrating its entire car loan business to floating rate.
“Earlier, only about 2% of customers opted for this product which was offered as an additional option. The lack of demand prompted ICICI to roll it back. But now, with the uncertainty in the rate regime, the product will be relaunched and ICICI will try to increase the ratio of floating auto loans to 100%,” said a top executive with an auto financing firm.
As per sources ICICI is planning to offer a range based on the FRR (floating reference rate) used for its retail products. The FRR would be revised every quarter, depending on the change in the rate regime. HDFC Bank officials are of opinion that that they will not be going for a floating rate as this will make loans steeper.
“It is not in the customer’s interest. Rather we are looking at making the loans more affordable for customers,” said a senior HDFC official. Nevertheless, the latest move taken by the financiers to cut commissions has led to an uproar among car dealers, who play a vital role in the system, as most of the loans come from them.
When ET spoke to the dealers most of them expressed their unhappiness on this new change done by the lenders. In fact dealers are having trouble as these days car sales have been gone down and margins are under pressure.
Gautam Modi of Modi Hyundai, a Mumbai-based dealer said, “Even when the dealer commission (payout) was 5%, we retained only 1%. So, it is not going to be any different now. We will continue to retain 1% as there is stiff competition among car manufacturers and dealers.” While some other dealers avoided to comment on this comments saying that it is a sensitive issue.
At present HDFC Bank is the largest car financier with its monthly disbursements closing to Rs 900 crore. ICICI Bank, which used to be the market leader till a few months back, has come down to second position with disbursements at around Rs 600 crore.
While Kotak Mahindra Prime’s disbursement is close to Rs 250-275 crore. Manufacturers are expecting boost in sales with the cut in rates due to which in the past few months the sales had come down.
Recently two of the largest players in car financing have decided to cut down interest rates by 2% to step up the demand. For this the commission paid by the bank to the automobile dealers has been reduced therefore retaining the rates at a level which makes it affordable to buyers.
HDFC Bank and Kotak Mahindra, both figures among the top three financiers of four wheelers, will be reducing their rack rates by 2%. Kotak Mahindra Prime at present is charging an interest rate of close to 16%, which will now be brought down to 14%.
According to HDFC Bank official’s bank will be bringing down its rates from 14.75-15.5% to 12.8-14.16% depending on the tenure of the loan. Currently lender is giving a commission nearing to 5% to the dealer. Dealers, in turn, used to pass on part of this commission to customers. Thus, the final rates to customers would be 13.75-15%.
Interest rates for car loans have gone up by close to 1.5-2% this year, impacting sales. In July, for the first time, sales of four-wheelers fell for the first time in absolute terms. Sales growth has been decelerating since April.
“The move will help the industry. Earlier, the payouts were as high as 500 bps. It will be now capped at 200. The payout reductions will be passed on to the customer. We will try and come out with new rates next week. The move would also make the portfolio safer. When the payout was 4-5%, dealers used to pass on some of his subventions to fund the margin requirements of customers,” says Kotak Mahindra Prime CEO Sumit Bali.
Adds HDFC Bank EVP Ashok Khanna, “Not all dealers were passing on commissions to the customers. In bigger cities, dealers may pass on more commissions, but in smaller cities, that was not the case. Moving forward, the move would bring in more transparency, as the customer will be more aware of the rates.”
Financers feared that higher interest rates might leave the lenders with the wrong type of customers. In other words, default would be higher if the financers were to sign up buyers who were willing to pay such high rates.
Apart from this Axis Bank, has also reduced dealer commissions, will not be lowering interest rates now, said a senior bank official. From now dealers will be passing around only 1% of the commission to the customer.
Besides from reducing the interest rate as planned by some financiers, ICICI Bank has plans to launch a floating rate product in the next one week to ten days. Kotak Mahindra is also working on similar product, although it has not yet finalized the date.
As per sources earlier this year ICICI, had discontinued its car and commercial vehicle floating rate product is now planning to re-launch a big-ticket supported by aggressive plans of migrating its entire car loan business to floating rate.
“Earlier, only about 2% of customers opted for this product which was offered as an additional option. The lack of demand prompted ICICI to roll it back. But now, with the uncertainty in the rate regime, the product will be relaunched and ICICI will try to increase the ratio of floating auto loans to 100%,” said a top executive with an auto financing firm.
As per sources ICICI is planning to offer a range based on the FRR (floating reference rate) used for its retail products. The FRR would be revised every quarter, depending on the change in the rate regime. HDFC Bank officials are of opinion that that they will not be going for a floating rate as this will make loans steeper.
“It is not in the customer’s interest. Rather we are looking at making the loans more affordable for customers,” said a senior HDFC official. Nevertheless, the latest move taken by the financiers to cut commissions has led to an uproar among car dealers, who play a vital role in the system, as most of the loans come from them.
When ET spoke to the dealers most of them expressed their unhappiness on this new change done by the lenders. In fact dealers are having trouble as these days car sales have been gone down and margins are under pressure.
Gautam Modi of Modi Hyundai, a Mumbai-based dealer said, “Even when the dealer commission (payout) was 5%, we retained only 1%. So, it is not going to be any different now. We will continue to retain 1% as there is stiff competition among car manufacturers and dealers.” While some other dealers avoided to comment on this comments saying that it is a sensitive issue.
At present HDFC Bank is the largest car financier with its monthly disbursements closing to Rs 900 crore. ICICI Bank, which used to be the market leader till a few months back, has come down to second position with disbursements at around Rs 600 crore.
While Kotak Mahindra Prime’s disbursement is close to Rs 250-275 crore. Manufacturers are expecting boost in sales with the cut in rates due to which in the past few months the sales had come down.
Friday, August 1, 2008
Banks to launch online service for loan seekers, pilot project in Haryana
In a State Level Bankers Committee (SLBC) Haryana Chief Secretary, Dharamvir put forward an idea before the members of introducing online service for loan applicants. While speaking in the meeting of SLBC he said, “With this service, loan seekers are not required to visit banks time and again and they would not have to go through the cumbersome process of knowing the status of their applications”.
In the meeting bankers showed their interest in launching an online service for loan seekers to enable them to know the exact status of their loan applications.
Punjab National Bank, Executive Director, JM Garg is also a chair person of State Level Bankers Committee (SLBC) of Haryana said, "Launching an online service for loan seekers is a good idea and it will be started a pilot project here".
Dharam Vir suggested the banks to encourage entrepreneurship among the students to use their young talent and encourage them to start their own business enterprise.
He also advised the banks should aim to make students as their clientele when they start earning, they would later become their investment. This will also instill the habit of cash management in the students at an early age. He suggested the banks to move ahead from mere lending and should work on to promote entrepreneurship.
He further added similarly, banks should also work for the empowerment of women. The banks should introduce some subsidy schemes exclusively for women entrepreneurs. The Haryana Government launched a scheme of registration of properties in the name of women has received good response. After the launch of the scheme the registration of properties in the name of women has increased.
In the meeting bankers showed their interest in launching an online service for loan seekers to enable them to know the exact status of their loan applications.
Punjab National Bank, Executive Director, JM Garg is also a chair person of State Level Bankers Committee (SLBC) of Haryana said, "Launching an online service for loan seekers is a good idea and it will be started a pilot project here".
Dharam Vir suggested the banks to encourage entrepreneurship among the students to use their young talent and encourage them to start their own business enterprise.
He also advised the banks should aim to make students as their clientele when they start earning, they would later become their investment. This will also instill the habit of cash management in the students at an early age. He suggested the banks to move ahead from mere lending and should work on to promote entrepreneurship.
He further added similarly, banks should also work for the empowerment of women. The banks should introduce some subsidy schemes exclusively for women entrepreneurs. The Haryana Government launched a scheme of registration of properties in the name of women has received good response. After the launch of the scheme the registration of properties in the name of women has increased.
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