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Many banks have stopped disbursing vehicle loans to drivers on ride-hailing apps such as Ola and Uber due to the increase in the defaults on such loans. Fresh loan disbursals are on hold while recovery of dues is being dealt with on the forefront.

State Bank of India has stopped vehicle loans to drivers plying cars for Ola in Bengaluru as almost a fifth of its loan book is in defaults. Bengaluru tops the list for ride-hailing apps. Nearly Rs. 60 crore is the total loan default amount in this city itself. The bank has not yet taken a decision on vehicle loan disbursals in Hyderabad and Chennai for Ola drivers; the default rate in these cities is about 7%.

The reason being touted for loan defaults of Ola and Uber drivers is that these companies have decreased the incentives for the drivers which has in turn affected the income of these drivers’ to repay their loans. Other lenders for vehicle loans include ICICI Bank, Mahindra Finance and Tata Motors Finance. Typically the ticket size of these loans is Rs 5 lakh, with the most common cars being Tata Indica, Toyota Etios or Maruti Suzuki Swift Dzire.More
Posted on: 2017-04-26 12:51:55

State Bank of India (SBI) and CREDAI have signed a Memorandum of Understanding (MoU) to provide concessional loans to builders and customers for affordable housing projects. This MoU is for collaborating and working towards the development of the real estate sector, specifically through the affordable housing and green housing projects.

This MoU is for a duration of three years. The bank will provide 10 basis points concession to home buyers and 10-35 basis points to CREDAI’s developer members. SBI is a major player in home loans segment with 25 per cent market share.

SBI will support CREDAI as their national banking partner and provide loans at concesssional interest rate towards construction finance which will lower cost of interest to builders. SBI has also launched a scheme called ‘SBI Hamara Ghar’ which aims to ease the process to enable maximum number of consumers to avail home loans for projects.

In a statement, SBI spokesperson stated that “This initiative will help millions of home buyers fulfill their dream of owning a home. In the long run, it will give a boost to the real estate industry and economy as a whole, elevating the citizens from aspirants to actual home owners.”More
Posted on: 2017-04-25 12:03:21

HDFC has disbursed about Rs. 400 crore under the government’s Credit Linked Interest Subsidy Scheme (CLSS) and it believes this will boost affordable housing in the country. The government provides interest subsidy up to 6.5 percent to first time home buyer having a household income up to Rs. 1.5 lakh per month.

This scheme is purported to boost demand for affordable housing which can be a game changer and help revive the real estate sector, which is facing a multi-year slowdown, and other related industries, HDFC MD Renu Sud Karnad stated. She also said that “It could be a catalyst to bring about revival in the housing sector, which in turn will lead to very positive impact on the economic growth as almost 269 industries big and small depend on the housing sector.”

HDFC has provided loans worth Rs 400 crore to over 2,900 customers in EWS/LIG category under this scheme so far and has granted subsidy worth Rs 58 crore. HDFC is taking efforts to propagate the information regarding the PMAY (Pradhan Mantri Awaas Yojana) to the real beneficiaries by creating special teams across the country to educate the customers.More
Posted on: 2017-04-25 11:55:24

HealthCare Global Enterprises Ltd. (HCG) which is a cancer treatment network announced its plans to partner with Arogya Finance to provide interest-free loans for cancer treatment. This facility will be made available in Bengaluru, Kalaburagi and Mysore. HCG is headquartered in Bengaluru and it has 17 cancer centres spread across the country. Arogya Finance offers medical loans to needy people outside the formal banking system.

The chairman and CEO of HCG, B S Ajaikumar, stated that this project will immensely benefit cancer patients as there will be no interest for the first year. Patients can take loans either in the form of direct financial loans or in the form of loan cards with an embedded pre-approved loan.

Arogya Finance would be providing interest free health finance offerings up to Rs. 5 lakhs for a period of 12 months under the Direct Loan scheme. Beyond the period of one year, the patients will be charged a minimal interest rate.

Under Direct Loan scheme, Arogya Finance would provide interest free health finance offerings up to Rs five lakhs to treat needy patients for a period of 12 months.More
Posted on: 2017-04-25 11:51:08

With the advent of digitalization, getting a home loan has become a tad easier if you have a good credit score as most banks nowadays rely on the CIBIL score to sanction a home loan. The lending process prior to the digital era was totally dependent upon certain other factors and home loan process was very unpredictable.

A good credit score of 750 or above will help an applicant sail through easily while getting a home loan. CIBIL is now assisting borrowers and applicant to make a survey on the available home loan options available based on his / her credit scores and history. Coupled with low interest rates and IT benefits has made the dream of owning a house, a reality for many young people.

A good credit history involves repayment of earlier loans on time without any penalties and payment of credit card bills timely. If an applicant logs on to the CIBIL website, he is directed to check his credit score and he can also apply for a home loan.

An applicant should look for competitive rates while choosing a home loan plan for purchase of their property as buying a house is one of the most important decisions in life.More
Posted on: 2017-04-25 11:49:57

SS Mundra, the RBI Deputy Governor made a statement today that a mechanism will be worked out soon in consultation with the government to deal with the problem of mounting bad loans in the banking sector. He did not specify a time for the same but stated that it is imminent soon.

He also stated that “My sense says there is so much of seriousness and engagement and so much of discussions have already taken place. It should not be something that which should be indefinite or very prolonged.”

He appeared on CNBC-TV18 during an interview and was responding to queries related to bad loans.

The gross NPAs of public banks rose to Rs 6.06 lakh crore in December 2016, from Rs 5.02 lakh crore at March-end of 2016.

Finance Minister, Arun Jaitley had earlier stated that a resolution to put pressure on borrowers to settle their dues was being worked out with the Reserve Bank of India. He had blamed the bad loans of public sector banks on just 30-50 companies, saying accounts of these would have to be fixed to solve the issue.More
Posted on: 2017-04-21 18:50:02

The BJP led government handed over a list of loan defaulters to the apex court on April 17 amidst full confidentiality without making the list public. This list is purported to include names of all corporate entities that owe the banks more than Rs. 500 crore each. The list was not made public in the ‘economic interest’ of the country on the advice by the Reserve Bank of India.

The government stated that the total default amount in repaying loans is Rs. 5 lakh in over 70,000 cases.

The Union Finance Ministry submitted an affidavit citing the list of corporate entities as evidence ‘in a sealed cover for the perusal of the court pursuant to a court order.
The government disclosed that almost 2,277 cases are pending for over 10 years in DRTs. The affidavit also revealed that on an average each of the 34 debt recovery tribunals had 67 cases that are awaiting decision on loan recovery for at least 10 years. Kolkata has the highest number of pending cases in over 10 years. Mumbai ranks in second followed by Hyderabad. These three cities alone make up for half of the total pending cases in India.More
Posted on: 2017-04-19 11:32:27

The rising trend of bank’s arbitrarily increasing fees on banking services, hidden charges, higher interest rates, and mis-selling of banking products has prompted almost one lakh Indian to sign an online petition on Change.org which will be sent to the Reserve Bank of India (RBI). This petition has been started by news publication Money life Foundation headed by journalist and author Sucheta Dalal.

The petition states that bank customers and non-governmental organizations (NGOs) are disturbed at the unfair treatment that bank customers suffer in the form of frequent, arbitrary and one-sided increase in banking charges, or the refusal of banks to automatically pass on contractual benefits such as lower interest to those with floating rate home loans, or the rampant mis-selling of third-party products such as insurance.

This issue has gained momentum after HDFC Bank raised its charges on cash transactions and State Bank of India started charging customers for non-maintenance of minimum balance in savings accounts from April 1.

RBI has so far not interfered with banks on the charges being levied upon its customers. Banks nowadays have started charging customers for some banking transactions to push digital banking and earn additional fee income. Banks are facing crunch due to bad loans.More
Posted on: 2017-04-18 10:51:30

Since the State Bank of India’s (SBI) announced its decision to levy charges for bank transactions and impose penalty for non-maintenance of minimum balance in all savings accounts, it has been criticized by both the banking sector as well as customers.

Earlier this week, the All India Bank Employees Association (AIBEA) and the All India Bank Officers Association (AIBOA) organised a protest against SBI’s decision to impose service charges on its customers. This move by SBI will lead to exclusion of the poor people from operating normal banking transactions as they may feel burdened to maintain minimum balance. There are also limits being imposed on cash deposits and cash withdrawals within a month.

Protests have been held this week outside the SBI branches by the organizations. Posters were also put up at the SBI branches asking the bank to withdraw its charges. Many also protested by wearing badges and carrying posters inside the SBI branches.

The SBI has started charging its customers from 1 April this year, including penalty for non-maintenance of Monthly Average Balance of Rs 5,000 for metro cities, and Rs 3,000, Rs 2,000 and Rs 1,000 for urban, semi-urban and rural areas, respectively. Penalties are also imposed if Monthly Average Balance is not maintained.More
Posted on: 2017-04-17 12:22:10

The World Bank has approved a $375 million loan to India for its first waterway project. The loan will be used to develop water transportation on a 1,360-km stretch of the Ganga river between Varanasi and Haldia - The National Waterway 1.

The waterway passes through a dense populated area and freight of about 370 million tonnes is generated annually in this region. Of this only about 5 million tones gets transported through water. This project will finance the construction of six multi-modal terminals, 10 RORO jetties, ship-repair facilities as well as passenger jetties along the river. It will also help modernise the ageing Farakka lock and add a new lock to allow for smoother passage of boats. The project will also help the Inland Waterways Authority of India acquire a state-of-the-art River Information System as well as navigation aids to make travel on the river safer and more reliable.

This project will not affect the environment as it does not involve any abstraction or storage of water. It will not affect the flow of the river either as there will be no dredging.

The US$375 million loan has a 7-year grace period and a maturity of 17 years.More
Posted on: 2017-04-17 12:19:49

Amazon India has received approval from the Reserve Bank of India (RBI) to operate a prepaid instrument or digital wallet. On March 22, Amazon Online Distribution Services (AODS), a subsidiary of Amazon Asia Pacific Resources, was awarded the license which is valid till the end of fiscal year 2022.

Trying to cash in the digital market space in the country, Amazon invested Rs. 150 crore in AODS last year with the objective of participating in this space. It has applied for a wallet license last year in March.

Amazon has been promoting Amazon Pay since early this year. This application allows users to pay online on the marketplace. The check-in and check-out process is made simple by using information already stored in the Amazon account.

Amazon stated that its focus is to provide the customers with a convenient and trusted cashless payments experience with the help of wallets for which it got its license. The RBI is in process to develop guidelines for the same. This will allow us to help customers adopt digital payments at scale and thereby contribute towards making India a less cash economy.

Paytm is the largest wallet player in India followed by Mobikwik and Freecharge.More
Posted on: 2017-04-17 12:11:38

A loan of Rs 115.36 crore has been sanctioned by Nabard to the Haryana government (under the Rural Infrastructure Development Fund [RIDF] for 2016-17) for developing and upgrading 27 rural roads in 10 districts. The districts being covered under this project are Bhiwani, Palwal, Hisar, Jhajjar, Mahendergarh, Rewari, Karnal, Panipat, Jind and Kaithal.

The aggregate length of the roads that will be covered under this project is 230.73 km. The roads will be reconstructed on account of raising, widening and strengthening by increasing the crust thickness and construction of minor bridges so that it can withstand increased traffic load.

The current roads need construction because two way traffic movement is being hindered due to the narrow roads which are currently 3.66/5.5 m wide.

The project aims to improve facilities in agriculture and rural development and improve the quality of life in the villages by providing round-the-year better connectivity with nearby hospitals, educational institutes, godowns and marketing centres.

The cumulative assistance sanctioned to the Haryana government under RIDF has reached Rs 5,910 crore involving 4,296 projects in various areas like irrigation, rural connectivity, water supply, anganwadis, girls’ toilet blocks, veterinary hospitals/dispensaries and solar power plants.More
Posted on: 2017-04-17 11:54:01

After the Reserve Bank of India Governor Urjit Patel raised his doubts over the waiver of farm loans, the National Bank for Agriculture and Rural Development (Nabard) also described farm loan waivers as a “moral hazard” which should be offered only to the needy.

Nabard Chairman Harsh Kumar Bhanwala stated that omnibus waivers are not advisable keeping in light the Uttar Pradesh loan waiver by Chief Minister Yogi Adityanath to the tune of Rs. 36,000 crore.

The farm loan waiver in Uttar Pradesh has raised demands for similar action in states like Haryana, Maharashtra and Tamil Nadu. Bhanwala also stated that every time a debt waiver is announced, it is taxpayers’ money which is used to help bail out the farmers hence should be provided only to the needy farmers and not everyone.

The comments come days after Reserve Bank Governor Urjit Patel also expressed strong displeasure over such measures.

Nabard primarily focuses on refinancing bank’s agri loans. Bhanwala stated that the financial sector is set to surpass the Rs 9 trillion agri loans target for fiscal 2017 set by the government and will repeat the performance in fiscal 2018 by exceeding the Rs 10 trillion target.More
Posted on: 2017-04-17 11:45:15


All cash payments of over Rs. 2 lakh for paying loans and credit card bills during the 50-day period post demonetisation will have to be disclosed in the new one-page Income Tax return form. The form has a new column for providing for declaration for any deposit of over Rs. 2 lakh in bank accounts made during November 9 and December 20, 2016.

This column is also to be used for declaring cash payments in excess of Rs 2 lakh for repayment of any loan or settlement of credit card bills during this 50-day period in a bid to catch tax evaders.

This move is being done to collate the data of cash payments made in excess of Rs. 2 lakh with the returns filed for a particular person, to match the income profiles with the cash payments made.  With concerns of unaccounted cash or black money being used to settle bills after credit cards were used to make heavy purchases. It could also be that black money could have been used to repay loans.

The new column of cash deposits would not be there in the ITR from next year onwards.




 

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Posted on: 2017-04-11 12:43:00


Uttar Pradesh Chief Minister Yogi Adityanath has set a precedence which is now being emulated by other Chief Ministerial candidates of other states. Congress is now trying to woo voters for the upcoming elections by promising farm loan waiver if the party will be voted to power. Gujarat Congress president Bharatsinh Solanki has stated this.  

Yogi Adityanath decided to waive off loans worth over Rs 36,000 crore in Uttar Pradesh in its first cabinet meeting. It waived loans of over 2.15 crore farmers totaling Rs. 36,359 crore.

The Congress party is trying to gain popularity by using the loan waiver card in seeking votes for the Assembly elections next year. It has been 20 years since the Congress has come to power in Gujarat.

Earlier, Solanki had promised to set up special economic zones in the tribal districts of Gujarat. He had led Congress's Adivasi Adhikar Yatra at Dahod in Gujarat. Dahod is a tribal-dominated district of the state.

Speaking at Dahod he early this week, Solanki had said that the Congress was confident of securing a two-third majority in the 182-seat Gujarat Assembly in the next year's election.


 

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Posted on: 2017-04-11 12:36:10