The finance ministry of India has directed banks to waive of preclosure penalty charges on home loans. The directive has however not made bankers happy and they are reluctant over its implementation.
Friday, March 25, 2011
It's tough being a guarantor
Few years before, Nitin Bhalla had stood a guarantor for his friend’s home loan. Now, he wants to opt out, but the bank is unwilling to play ball. This is despite his friend paying his equated monthly instalments (EMIs) regularly. The bank wants him to continue as a guarantor for the current dues.
“The guarantor cannot shirk his responsibility now. The bank had taken both his and the borrower’s creditworthiness while disbursing the loan,” says V N Kulkarni, chief counsellor, Abhay Credit Counselling.
Friday, March 18, 2011
The cost of closure
Dipta Joshi / Mumbai March 15, 2011, 0:43 IST
Try prepaying annually as foreclosing your loan comes at a cost.
Suman Chandok’s home loan tenure has been extended for the second time — since January this year. Fearing another extension in the increasing interest rate scenario, Chandok wants to pay-off his entire outstanding loan balance of Rs 12 lakh.
Not a bad idea, but prepaying his six-year-old loan will attract a penalty of three per cent on the outstanding loan amount. The amount works out to Rs 36,000.
“Since banks lose out on their interest income in foreclosure, it leads to an asset-liability mismatch. This is the reason why they charge a prepayment penalty,” says V N Kulkarni, chief counsellor, Abhay Credit Counselling.
Try prepaying annually as foreclosing your loan comes at a cost.
Suman Chandok’s home loan tenure has been extended for the second time — since January this year. Fearing another extension in the increasing interest rate scenario, Chandok wants to pay-off his entire outstanding loan balance of Rs 12 lakh.
Not a bad idea, but prepaying his six-year-old loan will attract a penalty of three per cent on the outstanding loan amount. The amount works out to Rs 36,000.
“Since banks lose out on their interest income in foreclosure, it leads to an asset-liability mismatch. This is the reason why they charge a prepayment penalty,” says V N Kulkarni, chief counsellor, Abhay Credit Counselling.
Thursday, March 10, 2011
Guj. HC reserves order on IT Dept’s challenge to SARFAESI Act
Source :08.03.2011 | 14:49 Ahmedabad:Tejas Mehta:law et al news
The Gujarat High Court has reserved it’s judgment on the issue whether Income Tax Department has first charge over a secured property or not.
The Gujarat High Court has reserved it’s judgment on the issue whether Income Tax Department has first charge over a secured property or not.
Friday, March 4, 2011
Cabinet nod for Banking laws amendment Bill
The Union Finance Minister, Mr Pranab Mukherjee
The Union Cabinet on Thursday gave its approval for introduction of a Banking Laws Amendment Bill 2011 in Parliament. This Bill seeks to among other things lift the 10 per cent voting rights cap in private sector banks and pave the way for the Reserve Bank of India to give some additional banking licences to private sector players.
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