A top official of the public sector Vijaya Bank informed at Bajpe, about 18 km form Mangalore the bank has plans to introduce new schemes – Reverse Mortgage and Online trading from the next month.
On Saturday the public sector Vijaya Bank opened its 1047th Branch. The branch was inaugurated by Mr Prakash P Mallya, CMD of the Bank. Speaking at the occasion the Mallya said the bank is planning to introduce Reverse Mortgage scheme to help senior citizens and the On-Line trading as a value added facility to the customer from April this year.
He said Reverse Mortgaging is a strong support for house owing senior citizens. He added many elderly people despite having immoveable property as a strong asset; do not have adequate income to support them and with the increase in longevity, the need for a regular source of income or cash flow in old age has become a necessity.
He said with the launching of this scheme the senior citizens above 60 years of age will be benefited, owing a self-acquired and self-occupied residence with the clear title can avail the facility.
He said the married couple (subject to one of them being above 60 years) would be joint borrowers. The quantum under the scheme is Rs two lakh to Rupees one hundred crore under periodic monthly payments and or lump-sum-payments, he said adding that the lump sum payment shall not exceed 30 per cent of the qualifying amount and the remaining amount shall be released in monthly installments.
He told the rate of interest is fixed at 10.5 per cent per annum with reset clause once in every five years.
Monday, March 31, 2008
Wednesday, March 26, 2008
RBI gives flexibility to banks in loan recovery
The Reserve Bank of India (RBI) had been looking recovery methods of loans adopted by the banks very seriously and had come out with draft operational guidelines in which restrictions were put on the banks method adopted and on the recovery agents. Again the RBI has drafted new guidelines for the banks regarding bank recovery agents it may allow banks to continue the loan recovery proceedings if the borrower persistently makes frivolous complaints.
In the second draft guidelines on banks’ recovery agents The Reserve Bank of India (RBI), said, “If a customer has filed a complaint, the bank should not forward the case to recovery agents till it has disposed the complaint. However, in cases where the bank has appropriate proof that the borrower is making frivolous/vexatious complaints, it may continue with the recovery proceedings despite the pending complaint.”
“In cases where the subject matter of the borrower’s dues might be sub-judice, banks should exercise utmost caution, as appropriate, in referring the matter to the recovery agents, depending on the circumstances,” said the RBI.
In its guidelines the regulator has also suggested that banks can use the services of credit counselors if the borrower deserved sympathetic consideration.
The apex bank has asked the Banks that they have to periodically update the list of recovery agents on their website and verify their history. They could insist on police verification, besides additional conditions for repossession of assets.
To meet the training needs of agents across the country, in the revised guidelines the banks have been suggested to tie up with the Indian Institute of Banking and Finance (IIBF) and other institutes and conduct their own courses to ensure that all agents clear the examination conducted by IIBF within a year.
In the second draft guidelines on banks’ recovery agents The Reserve Bank of India (RBI), said, “If a customer has filed a complaint, the bank should not forward the case to recovery agents till it has disposed the complaint. However, in cases where the bank has appropriate proof that the borrower is making frivolous/vexatious complaints, it may continue with the recovery proceedings despite the pending complaint.”
“In cases where the subject matter of the borrower’s dues might be sub-judice, banks should exercise utmost caution, as appropriate, in referring the matter to the recovery agents, depending on the circumstances,” said the RBI.
In its guidelines the regulator has also suggested that banks can use the services of credit counselors if the borrower deserved sympathetic consideration.
The apex bank has asked the Banks that they have to periodically update the list of recovery agents on their website and verify their history. They could insist on police verification, besides additional conditions for repossession of assets.
To meet the training needs of agents across the country, in the revised guidelines the banks have been suggested to tie up with the Indian Institute of Banking and Finance (IIBF) and other institutes and conduct their own courses to ensure that all agents clear the examination conducted by IIBF within a year.
Monday, March 24, 2008
Congress-NCP govt. announce reduced interest rate for farmers
Looking at coming elections the political parties are trying to grab vote banks. Working on this farmer continues to get help. Before UPA announced a massive loan write-off, now it is the Congress-NCP government turn. The finance minister Jayant Patil announced reduced interest rate on fresh loans for the farmers who have paid off their debt in time.
In the legislature Mr Patil stated that farmers who will apply for loan up to Rs 25,000 from the three-tier co-operative structure in the state will get a subsidy of 4% in the rate of interest. He added that this subsidy will help them avail loan at 2% effective rate of interest, as the Centre has announced farm loans at 7% rate of interest since 2007 and the state has offered a concession of another 1%. Farmers taking loans in excess of Rs 25,000 but less than Rs 3 lakh would be eligible for a 2% cut in the rate of interest.
Mr Patil informed the Assembly that the state government in its budget had made a provision of Rs 63.64 crore for the next fiscal to bear the cost of this interest subsidy. He said the state has also reserved Rs 204 crore for the co-operative lending institutions to settle all outstanding claims under this scheme. “I am confident that the farmers repaying the loans of the co-operative bodies would be enthused by this decision,” Mr Patil said.
He added that under the relief measures announced by the prime minister for Vidarbha farmers, the government has waived interest amounting to Rs 828 crore on rescheduled principal of farm loan in 2006-07 and 2007-08. This scheme has been announced for six districts of Vidarbha reporting highest number of suicides.
The state will bear a share of Rs 414 crore in this scheme. In 2007-08, the state government had given Rs 130 crore to facilitate farm loan disbursal at a subsidized 6% rate of interest. “This scheme will be continued in 2008-09 with special cut on rate of interest for farmers who have paid their debt as per schedule,” Mr Patil added.
In the legislature Mr Patil stated that farmers who will apply for loan up to Rs 25,000 from the three-tier co-operative structure in the state will get a subsidy of 4% in the rate of interest. He added that this subsidy will help them avail loan at 2% effective rate of interest, as the Centre has announced farm loans at 7% rate of interest since 2007 and the state has offered a concession of another 1%. Farmers taking loans in excess of Rs 25,000 but less than Rs 3 lakh would be eligible for a 2% cut in the rate of interest.
Mr Patil informed the Assembly that the state government in its budget had made a provision of Rs 63.64 crore for the next fiscal to bear the cost of this interest subsidy. He said the state has also reserved Rs 204 crore for the co-operative lending institutions to settle all outstanding claims under this scheme. “I am confident that the farmers repaying the loans of the co-operative bodies would be enthused by this decision,” Mr Patil said.
He added that under the relief measures announced by the prime minister for Vidarbha farmers, the government has waived interest amounting to Rs 828 crore on rescheduled principal of farm loan in 2006-07 and 2007-08. This scheme has been announced for six districts of Vidarbha reporting highest number of suicides.
The state will bear a share of Rs 414 crore in this scheme. In 2007-08, the state government had given Rs 130 crore to facilitate farm loan disbursal at a subsidized 6% rate of interest. “This scheme will be continued in 2008-09 with special cut on rate of interest for farmers who have paid their debt as per schedule,” Mr Patil added.
Wednesday, March 19, 2008
Loans taken through Kisan Credit Card will be covered under loan waiver scheme
In the budget the finance minister had announced for the loan waiver for the farmers. On Tuesday the government issued a statement in which it said the farmers, who had taken agriculture loans through Kisan Credit Card, will be covered under the Rs 60,000 crore loan waiver scheme announced in the Union Budget.
Giving reply to supplementaries during Question Hour in Rajya Sabha, Minister of State for Finance Pawan Kumar Bansal said the loan waiver scheme would be applicable to production credit and short term inventory credit taken on the Kisan Credit Card.
Since the beginning of the Kisan Credit Cards in 1998, till date over 7 crore Kisan Credit Cards have been issued to farmers. In 2006-07, around 85.11 lakh cards were issued an Rs 46.72 lakh credit was extended to farmers through these.
"The aim of the Government is to extend the Kisan Credit Card to all eligible farmers in the country," he said. "All categories of farmers including tenant farmers, share croppers, oral lessees are eligible for a Kisan Credit Card from the co-operative banks, regional rural banks and commercial banks throughout the country."
Bansal informed though the Kisan Credit Card scheme was launched by the previous NDA government, only 1.14 crore cards were issued when in 2004 when it demitted office.
He added loans to farmers, was offered at 7 per cent interest rate, which is two percentage points less than the prime lending rate of 9 per cent.
He told that the government is giving two per cent subsidy to farmer loan and this has amounted to Rs 875 crore in 2006-07.
Farmers have been given the facility of taking timely credit through Kisan Credit Card which they can repay anytime to reduce their interest burden.
Crop loans paid under KCC scheme for notified crops are covered under National Agricultural Insurance Scheme.
Giving reply to supplementaries during Question Hour in Rajya Sabha, Minister of State for Finance Pawan Kumar Bansal said the loan waiver scheme would be applicable to production credit and short term inventory credit taken on the Kisan Credit Card.
Since the beginning of the Kisan Credit Cards in 1998, till date over 7 crore Kisan Credit Cards have been issued to farmers. In 2006-07, around 85.11 lakh cards were issued an Rs 46.72 lakh credit was extended to farmers through these.
"The aim of the Government is to extend the Kisan Credit Card to all eligible farmers in the country," he said. "All categories of farmers including tenant farmers, share croppers, oral lessees are eligible for a Kisan Credit Card from the co-operative banks, regional rural banks and commercial banks throughout the country."
Bansal informed though the Kisan Credit Card scheme was launched by the previous NDA government, only 1.14 crore cards were issued when in 2004 when it demitted office.
He added loans to farmers, was offered at 7 per cent interest rate, which is two percentage points less than the prime lending rate of 9 per cent.
He told that the government is giving two per cent subsidy to farmer loan and this has amounted to Rs 875 crore in 2006-07.
Farmers have been given the facility of taking timely credit through Kisan Credit Card which they can repay anytime to reduce their interest burden.
Crop loans paid under KCC scheme for notified crops are covered under National Agricultural Insurance Scheme.
Thursday, March 13, 2008
Students of Bihar to get easy loan system
The Bihar government will be providing loans to the students who want to pursue for higher studies. On Tuesday Chief Minister Nitish Kumar said the state government has made plans to start a single-window loan system that would allow the needy students to skip the traditional bank hoops and acquire a loan at considerably low interest rate.
The government took this step after the failure of their request being made to the conventional financial institutions. Previously the state government has been requesting the conventional financial institutions to ease terms and conditions on students' loans but it had fallen on deaf ears making it nearly impossible for many to chase their educational dreams.
"We are working on this scheme that would help a number of deserving students who, in the lack of adequate financial help, are unable to realize their academic potential and are left to pursue other avenues in life," the Chief Minister said.
The government took this step after the failure of their request being made to the conventional financial institutions. Previously the state government has been requesting the conventional financial institutions to ease terms and conditions on students' loans but it had fallen on deaf ears making it nearly impossible for many to chase their educational dreams.
"We are working on this scheme that would help a number of deserving students who, in the lack of adequate financial help, are unable to realize their academic potential and are left to pursue other avenues in life," the Chief Minister said.
Wednesday, March 5, 2008
Finance Minister wishes more cut in loan rates but final decision rests with RBI
The Finance Minister P Chidambaram addressing the gathering of business leaders said he would like to see banks to cut interest rates further. He said "there is some scope for deposit rates to come down and hence, interest rates to drop".
And if this happens, it would account to be an added bonus for scores of urban Indians who are already feeling richer with tax concessions announced in the budget for 2008-09.
He added that the final decision will rest with the RBI, which has increased lending rates over the past two years to control inflation by leaving less money in the system.
The RBI's tight money stand brought down the sales of automobiles and consumer durables, which are driven by easy loans, and brought more hardship for middle-class families that have taken home loans with a floating-rate plan.
There has been no immediate reaction from the RBI to the minister's comments, but few have a hope for more cuts in interest rates, given that the inflation rate has firmed up in recent weeks. Last month on the persuasion of the finance minister Chidambaram several banks had slashed lending rates up to 50 basis points. MV Nair, Union Bank of India CMD, said banks might find it difficult to cut rates immediately.
And if this happens, it would account to be an added bonus for scores of urban Indians who are already feeling richer with tax concessions announced in the budget for 2008-09.
He added that the final decision will rest with the RBI, which has increased lending rates over the past two years to control inflation by leaving less money in the system.
The RBI's tight money stand brought down the sales of automobiles and consumer durables, which are driven by easy loans, and brought more hardship for middle-class families that have taken home loans with a floating-rate plan.
There has been no immediate reaction from the RBI to the minister's comments, but few have a hope for more cuts in interest rates, given that the inflation rate has firmed up in recent weeks. Last month on the persuasion of the finance minister Chidambaram several banks had slashed lending rates up to 50 basis points. MV Nair, Union Bank of India CMD, said banks might find it difficult to cut rates immediately.
Sunday, March 2, 2008
Bankers: Govt. might issue SLR bonds to compensate PSU Banks
Government is thinking of an option of issuing Statutory Liquidity Ratio (SLR) bonds to public sector banks for waiving off Rs 60,000-crore worth farm loans, a Government instrument for meeting financial commitments.
"We (public sector bankers) have received some strong indications that the government might opt for SLR bonds to compensate public sector banks. The decision may be announced in one week," Uco Bank Chairman and Managing Director S K Goel told PTI here.
As banks will no longer have any bad farm loan on their books, the exact mode of how they would get their money back is still not clear.
There are possibilities that might utilize a mix of options, including the SLR Bond route to provide sufficient liquidity to the PSU banks.
Another option might be a direct payment of cash but bankers feel that the Government might avoid this route as it would impose a tremendous burden on the exchequer.
In the budget for year 2008-09 Chidambaram announced that farm loans to marginal and small farmers owning up to two hectares will be waived off amounting Rs 50,000-crore.
For other farmers, he said a one-time settlement in which 25 per cent of their loans would be waived off if they pay the 75 per cent balance of the amount. This waiver would cost a further Rs 10,000-crore.
Chidambaram in his budget speech had stated that the Government will find a way of providing liquidity to the public sector banks, which bankers, have interpreted to mean that they would not be allowed to suffer a loss.
"We (public sector bankers) have received some strong indications that the government might opt for SLR bonds to compensate public sector banks. The decision may be announced in one week," Uco Bank Chairman and Managing Director S K Goel told PTI here.
As banks will no longer have any bad farm loan on their books, the exact mode of how they would get their money back is still not clear.
There are possibilities that might utilize a mix of options, including the SLR Bond route to provide sufficient liquidity to the PSU banks.
Another option might be a direct payment of cash but bankers feel that the Government might avoid this route as it would impose a tremendous burden on the exchequer.
In the budget for year 2008-09 Chidambaram announced that farm loans to marginal and small farmers owning up to two hectares will be waived off amounting Rs 50,000-crore.
For other farmers, he said a one-time settlement in which 25 per cent of their loans would be waived off if they pay the 75 per cent balance of the amount. This waiver would cost a further Rs 10,000-crore.
Chidambaram in his budget speech had stated that the Government will find a way of providing liquidity to the public sector banks, which bankers, have interpreted to mean that they would not be allowed to suffer a loss.
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