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Showing posts with label EMI. Show all posts
Showing posts with label EMI. Show all posts

Friday, 30 June 2017

07:44

GST: Bank and Insurance Companies

GST: Bank and Insurance Companies
From insurance premium to ATM transaction, banking will be expensive under GST
Ahead of the July 1 roll out of the Goods and Services Tax (GST), the government has repeatedly stated that the tax incidence on most goods and services will remain the same even if it does not come down. However, various sectors have raised concerns contrary to this claim.

One such area is of the financial services offered by banks and insurance companies, which are expected to pinch your pockets more under GST. Financial service charges include service charges on ATM transactions and Credit and Debit Cards, insurance premiums, EMI (Easy Monthly Installment) etc.
Under GST, financial services have been put under the 18 per cent slab, whereas currently customers pay 15 per cent service tax for them. Thus, a straight 3 per cent hike in your bills may be expected.
For example, if your annual premium for a Rs 1 crore term plan works out to Rs 25,000, GST will result in a tax burden of Rs 4,500, compared to Rs 3,750 currently.
Similarly, State Bank of India (SBI) charges Rs 50 plus service tax (15 per cent), for each withdrawal at banks beyond four free transactions. So, currently for withdrawing Rs 10,000, you need to pay a sum of Rs 1,550 ( Rs 1,500 as service charge plus Rs 50). Under GST, this transaction will attract a service charge of Rs 1,850.
Banks and insurance companies have already started to send out messages to its customers warning about the hike. SBI Card has sent SMS to its customers alerting about the higher incidence of tax.
"Important: The Government of India proposes to implement the GST which is likely to be effective from July 1, 2017. Consequently, the existing service tax rate of 15 per cent shall be replaced by a GST rate of 18 per cent," the SMS sent by SBI read.
An SBI official confirmed the same.
Banks like Standard Chartered and HDFC are also sending messages related to GST to their customers.
ICICI Prudential Life Insurance, in email messages to its customers, said premium payable on term policy and fund management charges on a Unit Linked Insurance Policy will attract 18 per cent GST post implementation of the new indirect tax regime.
GST is touted as the single biggest tax reform since India's independence in 1947 and is expected to add 2 per cent to India's GDP (gross domestic product). It aims to subsume the various central and state taxes that are currently levied on goods and services, bringing India under a uniform tax regime.
GST is set to be launched on the midnight of June 30 and July 1 by the President Pranab Mukherjee. Prime Minister Narendra Modi, Vice President Hamid Ansari, Lok Sabha speaker Sumitra Mahajan, members of Parliament and GST councils and chief ministers of all states have also been invited. Former Prime Ministers Manmohan Singh and H D Deve Gowda are also expected to grace the occasion.

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Sunday, 28 August 2016

06:42

Loans to lower Income group without guarantee

Loans to lower Income group without guarantee

Loans to lower Income group without guarantee

Purpose :

Housing Loans up to Rs. 5.00 lacs to new / existing borrowers in EWS/LIG Categories.
Housing loans means loans to eligible borrowers in EWS/LIG categories for house improvement, construction, acquisition and purchase of new or second hand dwelling units.

Eligibility :
Individuals following under Economic Weaker Section (EWS) or Lower Income Group as defined below :

Economic Weaker Section (EWS) means households with monthly household income upto Rs. 5000/- per month or as revised by the Ministry of Housing and Urban Poverty Alleviation, Government of India from time to time.
Lower Income Group (LIG) means households with monthly household income between Rs. 5001/- to Rs. Rs. 10000/- per month or as fixed by the Ministry of Housing and Urban Poverty Alleviation, Government of India from time to time.

Quantum of Loan :
Maximum Loan Rs.5 lacs for a housing unit of size upto 430 sq ft (40 sqm) carpet area.

Loan Cost Ratio :
Loan will be restricted to 75% of the estimate of construction/improvement acquisition and purchase of new or second hand dwelling units.

Installment to Income Ratio :

45% at Branch level
Above 45 to 50% at RO/CO Level

Security :

Exclusive charge on the property
Age of the property not more than 25 years and the residual life of the property should not be less than tenure of loan sanctioned

To know the list of documents required for loan approvals 

Source:Cent Bank
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Sunday, 3 July 2016

18:48

State Bank of India launches 3 new digital offerings

State Bank of India launches 3 new digital offerings 

SBI has partnered with Flipkart to offer its consumers the facility of pre-approved EMI Facility on purchases. Under this partnership SBI will provide overdraft facility to pre-qualified set of customers for transacting on Flipkart for a minimum purchase of Rs. 5000. 

The EMI facility will be available in 3 tenures - 6, 9 and 12 months. The bank will not charge any fees to process the facility.

The bank also launched 'SBI Mingle' - its social media banking platform for Facebook and Twitter users. Using SBI Mingle, its customers can do a host of banking services like checking balance and requesting mini statements on their Facebook or Twitter accounts. 

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Friday, 8 April 2016

21:54

Take more loan to reduce your EMIs, banks tell customers

Take more loan to reduce your EMIs, banks tell customers

Ankit Chaturvedi started his day as any other. He reached his office desk at 9 am and started sorting out his schedule. The month-end was coming near and the loan repayments were back on his mind. Just then, he received a phone call from an unknown number.
“Hello, am I talking to Mr Chaturvedi?” boomed the voice on the other end. Thinking it might be one of those tele-marketing calls, Chaturvedi replied in positive, albeit half-heartedly.
“Sir, I am calling from your bank. You have a personal loan with us,” the voice continued.
“Yes, I do,” Chaturvedi replied, this time, a bit more alert.
“Sir, as you know, the interest rates have been coming down over the past few months and you have a fixed interest rate loan. You are a valued customer for the bank, so we are offering you a reduction in your interest rates. Would you like to avail the offer?”
“Of course!” exclaimed Chaturvedi, reminiscing about the time he'd agreed to pay 16% interest rate on his personal loan because of an urgent need.
The repo rate, or the base rate at which the central bank loans money to retail banks in India was at 8% in January last year. Since then, the Reserve Bank of India (RBI), has substantially brought down the interest rates, with the latest cut of 25 basis points coming on Tuesday, April 5, 2016. The repo rate, as on the date, stands at 6.5%.
Naturally, the interest rates, too, have started to come down — although — not as much as the cut in repo. This has been a bone of contention for the RBI and its governor Raghuram Rajan as well.
During the first bi-monthly monetary policy announcement of the fiscal on Tuesday, Rajan said that the focus is on the transmission of these interest rate cuts. To facilitate this, the central bank has taken other measures as well, including linking loans to MCLR (Marginal Cost of Lending Funds). What this means is that the interest rates on loans will now be linked to the benchmark rates, bringing them down more swiftly in case of downward revisions.
ICICI Bank, HDFC Bank, IDBI Bank, Axis Bank, Punjab National Bank, State Bank of India, Andhra Bank, Bank of India, all cut their interest rates in the last year, making car and home loans cheaper. However, there is still room for more cuts, some reports suggest, up to 75 basis points more. One basis point is 0.01%.
Banks offer loans on fixed or floating interest rates. Long-term loans, like home loans, are usually linked to floating rates and car or personal loans are fixed rate loans.
Simply put, if the RBI cuts repo rates, the banks follow suit and your monthly loan payments to the bank comes down in case of a home loan. However, these rate cuts have no bearing on car or personal loans as they are based on a fixed rate of interest for the entire lifecycle of a loan.
Generally, the rate of interest for a personal loan are higher than the benchmark rates. Currently, personal loans offered by Indian banks are available at fixed interest rates ranging from 14-16%, more than a car or a home loan. The repo rate as on Tuesday, is at 6.5%.
It is this fall in interest rate that the banks want to cash-in on.
The bank executive, on the phone-line with Chaturvedi, continued, “Sir, as I said, the bank is offering you a revised and lower rate of interest for your personal loan. However, to avail that, you will have to take a ‘top-up’. The extra loan will be at lower rate than your earlier loan and so, your average cost of borrowing will come down,” the man said.
Chaturvedi felt cheated and rightly so.
The bank effectively tried to lure him into taking an additional personal loan in order to bring his interest rate down to match the new rates that are lower than when he'd taken the loan a year ago.
A senior official from one of the largest private sector banks in India agreed to this recent practice. The official, who declined to be named in the story, said, “Every bank offers top-up loans depending on the customer profile, his/ her relationship with the bank, and their credibility."
Clearly, banks have found a way to dole out more loans to their customers.
Offering a ‘top-up’ loan isn’t a bad practice per se but packaging it as a solution to lower your rate of interest by offering more loan is certainly a grey area.

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Monday, 28 December 2015

12:50

Product crack: State Bank of India's Samadhaan app

Product crack: State Bank of India's Samadhaan app

This week, State Bank of India (SBI), the country’s largest lender, launched a mobile app, State Bank Samadhaan, for its customers. The app provides customers with information on various products such as deposits, advances, and tax related details. It also comes with an equated monthly instalment (EMI) calculator.

HOW DOES IT WORK?

Currently, the app is available only for Android users and can be downloaded from the Google Play Store. The bank is planning to develop it for iOS users as well. Once installed, you can start using the app directly. On the home page, you will get 12 options, which include deposits, advance, ATM, tax and complaints. This app doesn’t allow you to do any financial transactions and can only be used to get information. For instance, by clicking on the deposit option, you will be taken to a page with details about the bank’s interest rates, an FAQ section and videos. You can also share this information with your contacts on WhatsApp. The app allows you to request for bank documents such as account statement. Those who have housing and educational loans can ask for interest certificates. Once you send a request through the app, the documents will be sent instantly to your registered email address. You can even look for an SBI branch from the app. If you have a complaint, you can upload it on the app and track it as well.

When Mint tried the app, most of the features such as information on interest rate of deposits and advances were not available or the request didn’t go through. However, some basic features such as EMI calculator and the option to share information went through instantly .

OTHER SBI APPS

So far, SBI has launched at least six financial and non-financial apps with various features. The State Bank Buddy, State Bank Anywhere and State Bank Freedom allow you to carry out financial transactions, and SBI Quick and State Bank Samadhaan allow only non-financial transactions. The Anywhere mobile app lets a user do Net banking transactions. You can transfer funds, make bill payments, book a fixed deposit, and view bank account details.

State Bank Buddy is a mobile wallet, which can be used by the bank’s as well as other customers. Once you download the app, you have to register and then load money into the wallet. You can then start using it to send money to those in your contact list.

The SBI Quick app is basically missed call banking. It allows you to give missed calls or send an SMS with pre-defined keywords, to pre-defined mobile phone numbers to make balance enquiries, get account mini-statements, block ATM card, and also enquire about car and home loans. The service is currently free of charge, but available only to some of the bank’s customers.

State Bank Freedom app allows balance enquiries and money transfer. State Bank Secure OTP is a one-time password (OTP) generation app for verifying transactions. This is an alternative way to getting an OTP on the app instead of through an SMS.

Source:BankingUpdates
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Tuesday, 8 December 2015

08:29

Banks show compassion to Chennai flood victims and other top Banking news of the day

Banks show compassion to Chennai flood victims and other top Banking news of the day

The first bond purchases by India’s central bank in almost two years will probably be followed by even larger buying as lenders run short of cash and foreign money leaves. The Reserve Bank of India (RBI) said last week it will buy as much as Rs.10,000 crore of sovereign debt on Monday. (MINT)

Help is pouring in from various sources for residents of flood hit Chennai. SBI, Axis Bank, ICICI Bank, HDFC Bank, Canara Bank etc have come forward to address EMI & card payment related difficulties and ATM issues. (ET)

In view of difficulties faced by people of flood-hit Chennai, many financial institutions, including DHFL, have decided not to impose any penalty on the city's customers for delay in EMI payments. (ET)

The current problem of mounting bad loans on the books of PSU banks first caught public attention in early 2012 when a spurt, especially in their restructured standard loans (uncollectible loans that have been given a fresh lease of life) happened. As of end-March 2012, ratio of gross NPA plus restructured standard loans (for this combination, a creative and somewhat obfuscating term — stressed assets — was coined later) rose to 8.8 per cent from 6.6 per cent a year earlier. (HINDU)

Since taking over as the group chief executive of Standard Chartered Plc in June, William Winters has spearheaded the overhaul of the operations of the London-based lender. (MINT)

Cabinet approval for the recast of power distribution companies, converting their loans into state government bonds, will pare Indian banks’ pile of stressed assets—now around 14% of their loan portfolio. Once bank loans to such companies to the tune of about Rs.4.3 trillion get converted into bonds, there will be relief and banks’ stressed assets will come down to around 10%. (MINT)

Global regulators have “considerable room” to raise the Basel III leverage ratio for banks as high as 5% from its current “test” level of 3%, according to research from the Bank for International Settlements (MINT)

Source:http://www.indiainfoline.com/article/news-top-story/banks-show-compassion-to-chennai-flood-victims-and-other-top-banking-news-of-the-day-115120700190_1.html
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Saturday, 5 December 2015

12:05

Chennai rains: HDFC to waive off penalty on EMI delay in November

Chennai rains: HDFC to waive off penalty on EMI delay in November

With heavy rains causing havoc in Chennai, top mortgage lender HDFC has decided to waive off any penalty on its home loan customers impacted by the rains for any delay in EMI payments for last month.

"HDFC has also decided to offer Quick Home Improvement Loans to all people whose properties have been impacted by the rains. There will be no processing fees on all such loans," HDFC Ltd Managing Director Renu Sud Karnad said.

This will be valid only for all loan applications submitted on or before December 31, 2015, subject to HDFC's norms and eligibility criteria.

Torrential downpour has caused havoc and great difficulty to people in Tamil Nadu, especially in Chennai.

"Understanding the gravity of the situation, HDFC has decided to be sympathetic towards its home loan customers impacted by the rains for delay in EMI payments for the month of November 2015," HDFC said in a statement.

Separately, Reliance Life Insurance said it has asked all its agents and sales staff to call all the customers in Chennai and check for their well-being. The company has over 1.5 lakh customers there.

This is part of the 'best business practices' being brought in by Reliance Life Insurance's foreign partner Nippon Life.

Source:BankingUpdates
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Saturday, 19 September 2015

17:31

HDFC Bank plans to disburse loans in nano-second loans

HDFC Bank plans to disburse loans in nano-second loans

HDFC Bank, country's second largest private sector lender, is gearing up to disburse loans in nano-seconds. These loans will be offered as a top up on the existing car/two wheeler loans and will be available only for the bank customers.

"The nano second loan will be quick money for the customer. If you have a car financed by us then you get an offer from us which will flash on your cell phone also. You can log in via internet banking or mobile banking. It is a pre-populated application form so you just need to click on yes at about five places and the loan will be disbursed in nano-seconds," said a bank source who is directly involved in the process.

These top up loans on the auto loans will be available only to customers if the customer has paid the equated monthly installments (EMI) on the existing loan without a single default. The top up loans on cars will be called-Quick Money where as the additional loan on auto loans will be called-Quick Paisa.

This loan will also serve as an alternative to personal loan. Even though the rate of interest will be higher than auto loans, it is expected to be lesser than personal loans.
Currently, the interest rate on car loan ranges between 11.50-13.70 where as for two wheeler loans it is broadly in the range of 11.75-24.08%. On the other for personal loans the interest varies between 11.50-20.51%.

At the end of March 31st 2015, the bank's total retail advances stood at Rs 2,25,694 crore which grew to Rs 2,38,859 crore at the end of quarter ended June. Out of this auto loans accounts for the largest share at Rs 50,100 crore in the April-June quarter.

As per sources, HDFC Bank is believed to have 32% market share in car loans and up to 23% share in two-wheeler loans.

This is the part of the bank's overall strategy to transform itself into a digital bank and is in line with their "Go Digital-Bank aapki muthi mein" strategy. With this in view, the lender had earlier launched applications for disbursing personal loans under ten seconds and auto loans in 30 minutes using the biometrics device.

In FY15, about 63% of the total transactions were carried out on internet and mobile compared to 55% transaction via the digital medium in FY14.
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Monday, 31 August 2015

20:34

HDFC Bank Slashes Base Rate to 9.35%, EMIs Set to Fall

HDFC Bank Slashes Base Rate to 9.35%, EMIs Set to Fall

In a huge relief for consumers, private lender HDFC Bank cut its base rate, or minimum lending rate, from 9.70 per cent to 9.35 per cent on Monday, Press Trust of India reported. HDFC Bank is the country's second largest private sector bank by assets.

The surprise rate cut is likely to force other major lenders into reducing rates, analysts say. HDFC Bank competes with ICICI Bank and State Bank of India, both of which give loans at 9.7 per cent currently.

The revised rates are applicable from Tuesday, after which all loans linked to the base rate will become cheaper. The reduction in rates will help drive demand for auto and home loans, analysts say.

HDFC Bank's latest rate cut comes after continuous prodding by Reserve Bank Governor Raghuram Rajan, who has been nudging banks to cut their lending rates.

The central bank has cut its repo rate by a combined 0.75 per cent or 75 basis points this year, but commercial banks have been behind the curve in reducing rates.

The lack of transmission in interest rates has rendered Dr Rajan's repo cuts useless, analysts say.

Source :Banking Updates.
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