Tuesday, June 23, 2009

Advance against fixed deposit




Advance against fixed deposits
Nature of fixed deposits at the hands of banks
When banks mobilize fixed deposits from their customers, in effect, banks borrow money from them. The relationship between the bank and the depositor is, therefore, that of a debtor and a creditor. By accepting the deposit, the bank agrees to repay the loan due to the depositor on the due date i.e. on its maturity. It is very important to note that the legal relationship between the banker and the depositor is not that of a trustee and a beneficiary.
The Indian Trusts Act defines a ‘Trust’ as an obligation annexed to the ownership of the property, and arising out of a confidence reposed by the owner i.e. ‘author of the trust’ for the benefit of somebody called the ‘beneficiary’. If the legal position of the bank is that of a trustee (as an acceptor of the deposit), the very legal validity of the practice of providing credit against fixed deposit by banks may become doubtful. This is because, no trustee can use the trust property for his own benefit, and in case of an advance against fixed deposit, banks need to exercise the right of appropriating the proceeds of the fixed deposit, in case the loan remains unpaid. A bank plays the role of a trustee when it takes the responsibility of collecting the proceeds and remitting the same to the rightful beneficiary. The role of trustee does not come to play when the bank uses the money on maturity to the depositor.
To APPLY FOR ADVANCE AGAINST FIXED DEPOSIT

Against Life Insurance Loan



Against Life Insurance Loan
Advance against Life Insurance Policies
If a survey is conducted on the common forms of investments made by salaried people across all the cross- sections of the society, life insurance policies will perhaps top the list. One of the important reasons for the popularity of life insurance policies is the Income Tax exemption available on the premium paid on such policies. Besides being a financial instrument to cover the life risk of policy holders, life insurance policies also play an important role as an investment made during one’s entire working life. It is, therefore, not surprising that bank customers offer life insurance policies as collateral securities, be it a proposal for retail credit or a big ticket finance. Collateralization of loans by way of assignment of life insurance policies have, of late, become more important in view of the surge in home finance, where the financial institution insists on an insurance on the life of the borrower, duly assigned in its favour, Also, in financing ventures where the role of a particular person is important for the very survival of the venture as well as the safety of the bank loan, life insurance policies have emerged as a key security instrument. The importance of loans against the security of life insurance policy has acquired a new dimension.
To APPLY FOR AGAINST LIFE INSURANCE LOAN

Thursday, June 18, 2009

Personal Loans




Personal Loans
Personal Loans/ Mortgage loans
Personal/ Mortgage loans are essentially consumption loans provided by banks in clean or secured form. Personal loans are clean loans generally provided to high networth individuals or to salaried persons falling in the higher income bracket. There is an intense competition amongst banks in this sector as well as and innovative marketing techniques are being used. Many banks have established call centers for this purpose. A very common mode of marketing personal loans by call centers of these banks is contacting a cardholder of the bank (credit/ debit cards) and offering him a personal loan with seemingly attractive terms. These banks shortlist those customers who have a record of no- default by searching the customer- wise payment records maintained by them in an electronic form.
Sometimes, these marketing techniques can take extreme forms. For example, a reputed bank enclosed cheques for specific amounts to their selected customer’s alongwith statement of accounts, and stated that these cheques represented personal loans provided to them. The loan would become operational as and when the customer encashes the cheque within the specified period. Still another method is alluring the customers to pay the credit card payables in suitable installments (EMIs) for which they would charge a very low flat rate of interest! Such innovative and aggressive marketing techniques may be quite annoying for a customer. In a recent judgment, the National Commission on consumer disputes has imposed a heavy fine on one of the large private sector banks and a mobile service provider on the ground of making unsolicited calls. RBI also has taken stringent steps in curbing the practice of unsolicited credit card marketing practices.
Mortgage loans are essentially personal loans against mortgage of immovable properties, usually in metro/ urban centers. The valuation of property is done by experts and the lending banks stipulate a margin. Though urban properties fetch a high valuation, the incidence of a high stamp duty required for the mortgage may adversely impact the acceptability of mortgage loans. An important point to note in this regards is that Mortgage loans are not Housing loans which come with Income Tax exemption, unless such loans are given specifically for the purpose of construction/ acquisition of housing properties.








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HOME LOANS


Home Loans
Evolution of Housing Finance Industry in India
As an industry, housing finance had its roots in India way back in 1977 with the establishment of the first housing finance company, Housing Development Finance Corporation Ltd. (HDFC). Subsequently, the National Housing Bank was set up by RBI as its subsidiary in 1987 for the purpose of regulating and providing refinance support to housing finance companies. Presently, about 350 housing finance companies (HFCs) operate in the country, out of which only 30 have been approved by the NHB for providing refinance. According to an estimate, the HFCs approved by NHB account for over 95% of the assets of all the HFCs in the industry. The commercial banks were late entrants to the India housing finance industry. Prior to 1998, commercial banks were not allowed to provide housing loans directly to retail clients. They were allowed to provide housing loans only through special RBI schemes, NHB/ HUDCO bonds or through their subsidiaries. This had prompted a few banks like SBI, Bank of Baroda and Corporation Bank etc. to set up their own housing finance subsidiaries.

Even though RBI allowed commercial banks to directly enter in to the housing loan business thereafter, commercial banks became aggressive in this segment of retail finance w.e.f. 2000 onwards. The private banks were the first to capitalize on the opportunity, followed by the foreign and public sector banks. Today, commercial banks account for a majority share of housing finance disbursements, which were earlier dominated by the HFCs. In fact, housing finance subsidiaries of commercial banks are now gradually merging with their parents, on account of the fact that these subsidiaries, left to themselves, have not been able to face the competition in this highly competitive scenario.

The Indian housing industry is however, dominated by the unorganized sector, comprising of small builders and contractors, accounting for over 70% of the housing units constructed. The organized sector comprises of large builders and government or government- affiliated entities. There are two broad categories of borrowers in the housing finance market: retail borrowers and non- retail borrowers. Retail borrowers comprise salaried individuals and non- salaried individuals such as self- employed professional or private businessmen. Non- retail borrowers consist of corporate entities that borrow either for funding staff housing projects or office premises, and builders who borrow for funding construction activity.

Housing loan and the Priority sector
Till very recently, bank loans for housing up to Rs.10 lakh in the rural and semi-urban areas only were eligible for being considered as priority sector. Subsequently, in its mid- term credit policy for 2004-05. RBI raised the priority sector limit of housing finance to Rs. 20 lakh from Rs. 10 Lakh without any restrictions on the geographical area. However, there is a growing opinion that housing finance should no longer be accorded a priority sector status. In fact, an internal committee of the RBI had recommended for the removal of priority sector status to home loans up to Rs. 20 lakh. This group was set up with an objective to review the concept, segments and other related issues of priority sector lending. The report of the internal committee reiterates the concern voiced by RBI from time to time that banks are excessively exposed to home loans. This, in turn, is resulting in deceleration of the much needed credit flow to other priority sector areas like Small Scale Industries, Exports, Education and others. Expectedly, however, the Indian Bank Association (IBA) has opposed this move, According to IBA, housing is a critical need that requires a priority sector status. The exposure of most foreign and private banks in the housing loan segment is quite large as they do not have enough networks to extend loans to other priority sector areas.

Eligible activities for housing finance
Banks usually provide housing loans for the following purposes:
1. Purchase, construction of new house/ flat.
2. Purchase of land for construction of house.
3. Improvement/ extension of existing house/ flat.
4. Undertaking repairs/furnishing/ renovation of the house/ flat etc.
5. Takeover of loans availed for housing activity from other banks/ HFCs at higher rates of interest.
Reserve Bank of India has issued separate sets of guidelines for urban cooperative banks and other banks for undertaking direct loans in the housing loan segment. RBI has advised that besides the above, banks may also provide housing loans to individuals for the following purposes:
 For purchase of a plot- the lending bank has to obtain a declaration from the borrower that he intends to construct a house on the plot within a period of two years from the date of availing bank finance for purchasing the plot.
 For purchasing an old house where the applicant is presently residing as a tenant.
 For loans for buying/ constructing a second house to a person who is already owning a house in the town/ village where he resides. The second house should also be meant for self-occupation by the same person.
 Bank finance may also be extended for purchases of a house by a borrower who proposes to let it out on rental basis on account of his posting outside the headquarters or because he has been provided accommodation by his employer.

Other Conditions
Through RBI has prescribed the following conditions specifically applicable for the PUCs (Primary Urban Cooperatives) providing housing loans, these may serve as benchmark for other lending banks as well.
1. RBI has stipulated a maximum period of 15 years including moratorium or repayment holiday. The installments may be fixed in standard EMIs or in gradually increasing form. However, the repayment on account of principal & interest together should not exceed 30% of the borrowers’ income.
2. The builders/ contractors generally require huge funds, take advance payments from the prospective buyers or from those on whose behalf construction is undertaken and, therefore, they may not usually require bank finance in the normal circumstances. Any financial assistance extended to them by primary (urban) co-operative banks may therefore runs the risk of dual financing. RBI has accordingly advised these banks to refrain from sanctioning loans and advances to this category of borrowers.
3. These banks may also extend need-based credit up to a maximum of Rs. 1.00 lakh in rural and semi-urban areas and Rs.2.00 lakh in urban areas to the owner of a house/ flat only for repairs, additions, alterations, etc., irrespective of whether the house/ flat is occupied by the owner or by a tenant. They may obtain collateral security to their satisfaction.

To APPLY FOR HOME LOAN
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Tuesday, June 9, 2009

What is a Loan?

Loan is a type of borrowings or debt. It may be money or something. Usually it contains two or more parties. One is loan giver and other is loan taker. The loan giver is called as Lender and loan taker is called as Borrower. Sometimes it also contains a third party known as guarantor for Loan.
As per the terms of loan the lender charge some percentage of amounts on excess of the principal loan amount from the borrower generally known as interest on loan. Interest is a pre decided term between the Borrower and the lender at the time of taking loan. Many Banks and financial institutions are providing different types of loans to the general public for different purposes like personal loan, car loan, education loans, cash loans, home loans, business loans etc.
Sometimes the loan may be interest free. That is called interest free loans. These types of loans are mainly given in friends/relatives/family circles to help the borrower for a short term.

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Friday, June 5, 2009

BUSINESS LOANS


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We also consider take over cases from different banks / financial institutions on comparative rate of interest and schemes.
New business houses are also considerable under scheme.
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LOAN AGAINST RENT DISCOUNTING



Monei matters is providing a unique loan product called loan against rent discounting (LRD).We provides upto 200 crores rupees loan against future rents under this scheme. Any builder / property dealers profiles are also considerable under scheme. The loan under this scheme can be used for any business / personal purposes. Any Individual / company / firm having a property on lease with any MNC, Private limited company, Limited Company, Banks, Known Govt. Organisations or any legal entity and receiving rent / lease regularly can apply for this loan. A unique 5 star product.*****
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