Monday, September 27, 2010

RPCB charges higher interest from loan borrowers who consume tobacco

Rajkot People's Cooperative Bank has derived an innovative idea to motivate people to say no to tobacco. It is the sole bank to take a lead in ‘No tobacco’ campaign from the banking sector. In Gujarat it is the first bank to enforce such a policy that discourages tobacco usage at all levels of operations.

Founder Chairman of Rajkot People's Cooperative Bank (RPCB) Shamji Khut told PTI, "As a policy, we charge one per cent higher interest from loan seekers who happen to be tobacco chewers."

He said, "The bank's board had passed a resolution to this effect around two and a half years ago, and since then it’s in force."

Khut said, "Till now only one customer has refused to take loan from us stating that I cannot quit tobacco chewing even if you charge me two per cent higher interest."

It has been over a decade the bank started operations in Rajkot district of Gujarat, RPCB since its set up has implemented a clause that empowers the management to terminate the services of employees who have a habit of taking tobacco. Khut said, "The bank does not recruit any persons who have any kind of tobacco addiction. We at present have strength of 74 employees."

Khut added, "As a rule we can terminate the service of an employee if he is found consuming tobacco in any form. Even a board of director has to submit his resignation if found consuming tobacco."

Thursday, September 23, 2010

Corporation Bank launches Grand Festival Offer on loan and deposit products

Corporation Bank has launched Grand Festival Offer on loan and deposit products. Mr. Murugesh R Nirani, Honble Minister for Large and Medium Scale Industries, Government of Karnataka launched the Festival Bonanza offer in Bangalore.

On the occasion Mr. Ramnath Pradeep Chairman & Managing Director of the Bank, Mr. Asit Pal and Mr. Narendra Singh, Executive Directors, Mr. U B Bhat, Chief General Manager, Mr. C G Pinto & Mr. S M Swathi, General Managers, Other General Managers and Executives of the Bank were also present.

Under this festive offer bank is offering special interest rate on Home and Vehicle loans - Corp Home Smart and Corp Vehicle Smart. This special scheme will be for a limited period from 21st September 2010 to 31st December 2010.

Under Corp Home Smart Scheme, for loans up to Rs30 lakhs for the floating tenor, the bank is offering 7.75% interest for the first year and for the next two years the rate of interest will be 8.25% p.a. Processing charges have been fully waived.

Under Corp Vehicle Smart Scheme, for the first year the interest rate is 8% p.a. and 50% of the processing charges have been waived.

In the deposits segment bank is offering a new short-term deposit scheme called "Corp Diamond” for a period of 275 days. The interest rate of 7% (simple interest) per annum is being offered.

This interest rate will be applicable for a minimum deposit of Rs 500/- in case of Rural & Semi Urban Branches, in case of Urban, Port Town & Metro Branches the minimum amount is Rs 1000/- and has been restricted to less than Rs 5crore. This new offer will be effective from 21-09-2010 and will be applicable for a limited period of 3 months. The senior citizens will get an additional interest rate of 0.50%.

The bank is also offering a unique hi-tech, hassle-free Savings Bank account – Corp Classic under the festive bonanza. This unique scheme combines the high liquidity of a savings account and the flexibility of a term deposit.

In this account bank has reduced the minimum balance from Rs. 25,000/- to Rs. 15,000/-. The surplus over and above the minimum balance of Rs15,000/- will be converted into Term Deposits in units of Rs 1,000/- each.

Monday, September 13, 2010

PSU banks introduce festive offers for loan borrowers

A month’s time is left for festival season to start and banks have started introducing new schemes to attract more customers. Punjab National Bank (PNB), Allahabad Bank, Uco Bank and Bank of India have launched festival offers, such as loans at concessional rates and waiver of processing and documentation charges. These offers will be available till December end.

In its festive offer PNB is offering home loan at 8.5% - a teaser rate to attract new customers. Under this scheme the concessional rate of 8.5% will offered for three years for housing loans up to Rs50 lakh. Currently, lender is offering 9.25% for loans up to Rs30 lakh with a repayment period of 5 years, and for loans above Rs30 lakh bank is offering interest rate of 10% for similar maturity. For new car loan borrowers also bank is offering a rebate of 0.5 per cent under the fixed option.

Another public sector bank UCO has waived the processing and documentation charges. Bank will offer new car loans at 10.5% for the first three years, with an additional concession of 0.5% in cases where full collateral coverage or salary tie-ups were available, and for doctors and medical practitioners.

S . Srinivasan, general manager, finance, UCO Bank said, "Festive season is a good time to attract new customers as people buy new houses and vehicles."

Allahabad Bank is offering an interest concession of up to 1% on loans under its festive offer. The interest concession offered on housing loans under the floating rate scheme will vary from 0.25% to 1%, but for fixed rate scheme the new borrowers will get a concession of 0.50% to 1.75% for a limited period.

Bank of Indian has introduced a different offer – a deduction of Rs7per gram of gold coin and most probably waive off processing charges.

Friday, September 10, 2010

Policyholders can avail loan against ULIPs

The Insurance Regulatory and Development Authority (IRDA) has allowed life insurance companies to give loans against unit-linked insurance plans (ULIP), this will help those policy holders who are in need of short-term funds. However some companies have started offering this feature along with their new products. Before this, insurers used to sanction loans only against traditional plans, barring term insurance policies.

I Sambasivarao, appointed actuary, Star Union Dai-ichi Life Insurance told, “Earlier, policyholders were allowed to make partial withdrawals from their ULIPs after three years. Now, the lock-in period has gone up to five years, which means that policyholders who are in need of short-term funds will not have access to their money till then. Therefore, a need to offer the loan facility was felt. ” On Thursday Life Insurance launched its two new ULIP products with this option. Under these plans, policyholders can avail loan after completion of three policy years at an interest rate of 10% per annum, with half-yearly compounding. The loan repayment can be done during the policy term, but partial withdrawal from ULIP is not allowed unless the loan is closed.

Meanwhile LIC is providing loans against its traditional policies at 9% and the repayment of loan is to be done on a half-yearly basis. This year, in June the insurance regulator had issued a circular in which it had introduced sweeping changes in the ULIP charge structure, the insurance regulator had also specified the norms for sanctioning the loan. The maximum loan amount was set at 40% of the net asset value in ULIPs where equity accounted for over 60% of the total portfolio. In case of policies the limit was set at 50% where debt instruments accounted for more than 60%.

P Nandagopal, CEO of IndiaFirst Life Insurance said, “The rationale behind permitting the loan facility is to prevent policyholders in need of short-term funds from surrendering the policy. They can take a loan against the policy instead and stay with it through the original tenure.”

IndiaFirst Life Insurance Company will give loan against its ULIP products before the completion of five years. The interest rate on loan is benchmarked to the SBI’s Base Rate + 7%.

Both the companies do not give loans after five years, as the policyholder can avail the partial withdrawal facility then, in case there are any outstanding dues, are cleared.