RBI AUDIT 2014- Big Loan Defaulters to Face RBI Audit

RBI AUDIT 2014- Big Loan Defaulters to Face RBI Audit

Reserve Bank of India has taken upon itself the task of investigatinf bank frauds after a series of inquiries by banks themselves i high profile cases such as those involving Deccan chronicle and Kingfisher Airlines yielded very little.

The Board of Financial Supervision chaired by RBI Governor Mr.Rajan, has in fact cleared a proposal that the central bank will conduct an independent forensic audit of corporates declared fraudulent by banks. Independents audit ,however will be restricted to corporates that have borrowed more than Rs. 1000 crore.
The Hyderabad based Decan Chronicle borrowed Rs.4000 crore from a consortium of 18 lenders ,who allege the company misused the banking system by borrowing from  one set of lenders without keeping others.

Banks officials say the central banks move reflects poorly on the banks and reaffirms the fact that banks and some promoters have developed cozy ralationship that has  led to thousands of crores of bad loans.

Independent forensic audit is one of the many steps taken by the RBI to check the rise in stressed assets in the banking system for instance RBI decided to incentivise lenders who take quick action to resolve such cases and penalise those who sit on them. Banker say the findings from forensic audit will enable RBI to devise policies that will help it keep a close watch on the creditor borrower relationship and quickly step in when there is misuse. 

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RBI Prepayment charges for floating rate home loans

RBI GOING TO SCRAP  PRE - PAYMENT CHARGES:

The Reserve Bank of India is going to order to the Banks to scrap the pre -payment charges on all the small and corporate loans.

RBI observed that there is no justification for banks to charge pre-payment charges on any loan since the entire system has moved to floating rates .
Banks are seen to be discriminatory between retain and big corporate clients who often arm twist lenders to charge them lower because of their sheer size and have no penalty clause.The tenure is extended when big corporate default and they restructure their loan portfolio and pay lower rates of interest.
Central Bank told that all the prepayment be abolished who did not wish to be named when all the loans are based on floating rates where is the question of penalty.

Bank loan are retail loans while the share of small and medium enterprise loan is about 15% .In the monetary policy review last week ,RBI Governor Mr.Rajan had advise bank to stop charging prepayment charges on floating rate loans and non maintenance of minimum balance.Bank may argue that there is a cost involved in offering services such as cheque book charges ATM charges( transaction ) and Account Statement necessitating a minimum balance of Rs.20000/-.Charges for non maintenance of minimum balance vary between Rs.500 to 2000 .this is not the first time bank and the sector regulator may be on collision course .

Three years ago Reserve Bank of India had directed banks not to charge any penalty on prepayment of home loans ,after a similar nudge did not work.However banks continue to charge prepayment penalty on other floating  rate loans products sch as education,personal and car loan.

Mr.Mahajan said that if a customer is unable to maintain minimum account, banks should migrate such accounts to basic banking accounts,where they phase out value added services.

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Axis Bank new loan plan 2014- Axis Bank new plan 30-year home loan for lower income Group

30 YEAR LOAN FOR  THE LOWER INCOME: 

Axis Bank has launched "ASHA " Home Loan a 30 year loan product for first time in the lower income segment.The risk factor is higher in this segment so that the rate of interest will be 10.75% in variable rates and 11.75%at fixed rate for the entire 30 years.

ASHA home loan will offer loans to customers even with family income from Rs.8000-10,000 per month and above.Customer can pool their family income instead of depending upon their individual income.

The product offers loans as small as Rs.1.0 lakh and up to RS.15 lakh in small town and up to Rs. 25 lakh in big town .

ASHA Home loan can be enjoyed by both salaried and self employed resident Indians.The product offer loan up to 90% of the property value.The product enables customers to purchase properties an area measuring 325 sq.ft. and above.

Loan can be taken under this scheme for new house ,resale ,ready ,under construction property .If you have a plot and you want to construct your house thereon , it also apply on that. 

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2014-15 HOME BUYERS Loan- IN 2014-15 HOME BUYERS MAY GET SOON 90% LOAN:

IN 2014-15 HOME BUYERS MAY GET SOON 90% LOAN

At present lenders offer maximum loan up to 80% of the property value. The National Housing 
Bank is considering proposal that seeks to allow lenders to give loan up to 90% of the property
value as home loan. 

The proposal is for above Rs.20 lakh loans that carry mortgage guarantee cover.Housing finance companies enter into a contract with mortgage guarantee companies at the time of loan origination.

Recently Dewan Housing Finance concluded the first ever mortgage guarantee backed securitisation deal for a pool of Rs.37.83 crore home loan coming from 288 loan accounts a person familiar with the matter .Each loan is below Rs.25 lakh falling in the category of Priority Sector Lending.

According to the Mr. Verma , Managing Director of National Housing Bank ,mortgage backed guarantee provides protection from possible defaults long term lending for housing loan up to 20-25 years.  

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