This Public Sector Bank was top lender to state-backed corporations and PSUs in FY23

Public Sector Banks (PSBs) lent ₹4.12 trillion to state-backed corporations and public sector undertakings during 2022-23, down from ₹4.93 trillion during the previous year, finance minister Nirmala Sitharaman informed Parliament in a written response on Monday.

Responding to questions by member of parliament, Velusamy P, Sitharaman informed the Lok Sabha that Canara Bank led the lending during 2022-23 to government backed entities at ₹187,813 crore during the recently concluded fiscal year, followed by Punjab National Bank ( ₹70,142.5 crore), State Bank of India ( ₹66,523.2 crore), Bank of India ( ₹25,147 crore), Bank of Baroda ( ₹15,706.8 crore), Union Bank of India ( ₹12,584.8 crore), Bank of Maharashtra ( ₹10,822.7 crore), Indian Bank ( ₹9,021 crore), Indian Overseas Bank ( ₹7,490 crore), Central Bank of India ( ₹3,949 crore), UCO Bank ( ₹2,939.4 crore), Punjab and Sind Bank ( ₹87.7 crore).

Meanwhile, the finance minister informed the Lok Sabha that public sector banks (PSBs) will have to take steps to adopt a focused approach on ease of service delivery and customer protection, follow regulatory norms, adopt robust risk management practices, focus on increasing rural, agriculture and sectoral credit to meet the Priority Sector Lending targets.

In  a meeting held between the top PSB bank executives and top finance ministry officials, including the finance minister, on 6 July, it was decided that the sponsor banks of the Regional Rural Banks (RRBs) will take steps for technological upgradation of the RRBs to make them more efficient, Sitharaman said in a written reply.

“Performance under PM SVANidhi scheme, which was started to support COVID affected street vendors to restart their businesses, was noted, wherein 50.57 lakh loans have been disbursed, amounting to ₹6,482 crore, to 38.5 lakh street vendors as on 20.7.2023," she said.

Financial performance of PSBs was also noted which showed that all the major financial parameters have significantly improved, she said.

The PSBs have posted record aggregate net profit of ₹1.04 trillion in FY2022-23, she added.

Meanwhile, Sitharaman also informed parliament that The National Asset Reconstruction Company Ltd (NARCL) has as of 17 July acquired three borrower entities -- Jaypee Infratech Ltd, SSA International Ltd, Helios Photo Voltaic Ltd-- with an aggregate debt exposure of ₹21,349 crore.

“NARCL has further informed that these assets have been acquired only in the fourth quarter of the financial year (FY) 2022-23, and no recovery has been made in these accounts as of 17.7.2023," she said.

“Further, in respect of one more account, i.e. SPML Infra Ltd, letter of approval for debt acquisition of ₹1,994.90 crore has been issued by the lenders, and in-principal approval for the government guarantee has also been issued," she added.

Sitharaman further added that comprehensive measures have been taken by the government and the Reserve Bank of India (RBI) to recover the bad debts, due to which scheduled commercial banks have recovered a total amount of ₹ 7.16 trillion (provisional data for FY 2022-23) during the last five financial years.

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10 banks offering lowest home loan interest rates

Home loan interest rates vary and depend on a variety of factors; this is critical since even minor changes in loan interest rates can have a significant impact on borrowers. Changes in the lending rate, which the RBI regulates, may have an influence on home loan EMIs in particular.

The RBI implemented the Base Lending Rate (BLR) system in 2010, and subsequently transitioned to the Marginal Cost of Funds-Based Lending Rate (MCLR) scheme in 2016. It has now implemented the Repo Linked Lending Rate, or RLLR, since October 2019.

Loans that are liked to the RLLR change depending on the repo rates announced by the Reserve Bank of India. Here are banks offering the lowest interest rates on home loans and note that rate may vary depending on the loan amount, credit score amongst other factors.

Cheapest home loan interest rates

MISSING: summary MISSING: current-rows.

Indian Bank	9.20	8.45%	9.1%
HDFC Bank	--	8.45%	9.85%
Indusind Bank	--	8.5%	9.75%
Punjab National Bank	9.25	8.6%	9.45%
Bank of Maharashtra	9.30	8.6%	10.3%
Bank of Baroda	9.15	8.6%	10.5%
Bank of India	9.25	8.65%	10.6%
Karnataka Bank	--	8.75%	10.43%
Union Bank of India	9.30	8.75%	10.5%
Kotak Mahindra Bank	--	8.85%	9.35%

Interest rates as on June 1, 2023

Transferring your debt to a lender offering low home loan interest rates may be a good solution if you are finding it tough to pay your mortgage due to rising interest rates. However, one should weigh the benefits and drawbacks and determine the extra savings that come from selecting a house loan balance transfer.

As you may be aware, a home loan has additional costs in addition to interest, such as processing fees, stamp duties, legal fees, valuation fees, and other transfer-related technical fees. So, when considering transferring your house loan balance, be sure the advantages exceed the disadvantages.

When to switch or transfer your old regime loan

If you find that your interest rate is significantly higher than the current one offered under EBLR after comparing it to the rates of new borrowers from the same lender, it can be advantageous for you to convert to the new regime by paying the necessary minimal costs. Transferring your loan to a new lender is preferable if your current lender does not provide this benefit or if competing lenders are providing rates that are significantly cheaper.

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Moratorium extension of 3 months by RBI has two sides; the second one is ugly for banks

Governor Das had announced a three-month moratorium for all term loan repayments between March 1 and May 31 at his last address in April.

The loan moratorium will be extended till August 31, says RBI governor Shaktikanta Das. This makes it a six-month moratorium. He added that the lending institutions are being permitted to restore the margins for working capital to the origin level by March 31, 2021.

"The surprise move by the RBI to reduce repo rate to 4 percent from 4.4 percent followed by an extension of the loan moratorium by another three months is a welcome step and can provide solace to the ailing economy whereby EMI burden for the borrowers would be somewhat lowered and would also allow them to defer EMI payments by another three months. For corporate borrowers too, the increase in group exposure limit of banks to 30 percent from 25 percent will bring some relief," said Rajesh Agarwal, Head of Research at Aum Capital.

"The fall in bold yield after the announcement is positive news, the committee's decision to continue with its accommodative stance is further good news but the point remains that even after so much of liquidity, the banks are reluctant to take additional risk and that has resulted in a muted credit growth," he added.

"RBI, which has been proactive in recent times, has risen to the occasion by advancing the policy meet to cut policy rates by 40bp. Also, the unequivocal statement that monetary policy will continue to be accommodative till growth revives sends positive signals. The fact that the central bank has refrained from giving a GDP growth figure is a reflection of the complexity in giving projections with the present growth models," said VK Vijayakumar- Chief Investment Strategist at Geojit Financial Services.

"Extension of the moratorium announced earlier by another 3 months is a relief. A takeaway from the policy announcement is that the stress in the banking sector will continue," he added.

For banks, the extension of moratorium by another three months has two sides. A clear picture on the asset quality of the lenders will now emerge only by March 2021, instead of September 2020. There is a risk of the moral hazard issue creeping in, as borrowers who have the ability to pay, may even opt for moratorium. And for MFIs and NBFCs catering to the bottom-of-the-pyramid customers, the risk of repayment behaviour getting disturbed is higher.

On the positive side, the moratorium extension gives more time to customers (professionals, small businesses, MSMEs and corporates) for recovery in earnings/repayment capacity in an easing lockdown scenario. Thus, the probability of them slipping buckets after the end of moratorium on August 31 diminishes, and therefore the NPL spike for lenders could be lower than what is anticipated now.

The moratorium extension also gives time to lenders to strengthen their collection infrastructure for retail products as restrictions on physical collection/follow-up eases out and collection agencies would have had their migrant workforce back.

For working capital facilities, interest payment has been deferred by another three months, in line with extension of moratorium on terms loans. The accumulated interest for the deferment period can be covered into a funded interest term loan payable be end of the current fiscal. Thus borrowers need not pay accumulated interest in one shot immediately after the deferment period, which is a big relief for them.

While the RBI governor Shaktikanta Das announced that the three-month term loan moratorium has been extended till August 31, it is to be noted that individual banks have the right to take a decision on whether this will be allowed for all borrowers. It is only an enabling provision and not a mandate.

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Common portal for retail loans by Public Sector Banks

State-run banks are mulling a common portal where they could offer competitive and instant personal, housing and other retail loans based on the creditworthiness of the borrower. The government is expected to help the banks set up such a portal which at some later stage can also be used for offering loans to small and micro industries.

“This is the next phase of banking where customers can avail of loans quickly and don’t have to run around waiting for approvals,” said a senior finance ministry official. The government first introduced the Pradhan Mantri Jan Dhan Yojana to make formal banking more inclusive and now it is time to scale it up, he added.

“There have been some discussions, PSBs (public sector banks) are encouraged by this idea and they will talk among themselves on how to get this operational,” said the official. “We will provide them support if so required.”

The initiative comes at a time when state-run banks have lagged way behind their private sector counterparts on expanding their loans portfolio despite a huge outreach. PSBs’ average credit growth in the year through March 2018 was 4.7%, compared with 20.9% for private banks. “PSBs will reverse this trend,” the official said.

As per the proposal, which is at a nascent stage, a borrower can fill in the required details online based on which he will receive competitive offers from interested lenders on personal loans, home loans or auto loans. “There could be a common checklist which the banks can use to assess the borrower’s creditworthiness,” the official said.

The government also wants PSBs to use new financial technologies to make business transactions quicker and hassle-free. Banks have already been directed to decide on loan applications from micro, small and medium enterprises in a fortnight. “Brick-and-mortar branches will progressively become redundant. This portal will have simplified forms and processes to help borrowers get faster approvals on their application,” he added.

Earlier this year, the government unveiled a reform agenda for PSBs, termed EASE — Enhanced Access and Service Excellence. It focuses on six themes: customer responsiveness, responsible banking, credit off take, PSBs as Udyami Mitra, deepening financial inclusion & digitalisation and developing personnel for brand PSB.

Source-bankersclub.in

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Why banks are giving loan insurance?

Why banks are giving loan insurance?  OR  Why you MUST have loan insurance?

What is loan insurance?

Loan protection insurance, or loan payment protection insurance, is a form of payment protection insurance. This type of insurance can help you protect your monthly loan payments if you become unemployed or suffer an accident or sickness.

Loan protection insurance will typically be used to protect a home loan, car loan or even sometimes personal loans.

Under a loan insurance cover, the lumpsum amount reduces as the outstanding loan decreases as per the loan schedule.

What are the benefits of loan insurance?

Loan insurance means during tough times, you'll have an insurance cover to take care of the EMIs or of the outstanding loan amount. This is especially useful:

• In case of death or disability due to an accident or sickness;
• In case of loss of job

This effectively reduces the burden on your family in case of any unfortunate event that occurs with you. They would be saved from the financial trauma of paying off the loans.

In cases of a joint loan application, a joint loan insurance plan can be taken which will effectively cover you and your partner.

Both will have the reassurance that if either of you should be faced with redundancy, illness, have an accident or even die, your repayments will be made for you.

What kinds of loans are covered under such an insurance schemes?

Loan insurance is offered mainly for home loan borrowers. However, some banks offer loan insurance for personal loans as well as auto loans.

Do I have to pay any premium for such insurance? If yes, how much?

Like any insurance you do need to pay premium for the insurance. There are only a few banks which offer this kind of insurance without any premium. Premium amounts usually vary from bank to bank and depend primarily on:

• The age of the person taking the loan: The premium is usually higher for older people.
• The loan amount: If the loan amount is high, the premium payment will also higher owing to the fact that the bank has a higher liability in such cases.
• The tenure of the loan: If the repayment period is longer, the premium to be paid is also higher.
• The medical record of the individual: If your physical health is good, the premium amount comes down. However, if you are suffering from any kind of serious ailments the premium amount will go high.

What are the things to keep in mind while checking about loan insurance?

Loan insurance is something that you need to give careful thought to. You need to check:

• What does the loan insurance cover? Does it cover death by accident or death by any cause? Does it cover temporary disability only or does it cover permanent disability as well?
• Eligibility for the insurance. Check out the eligibility criteria for the insurance. Check whether the loan needs to be of a certain amount.
• Payment of premium. Check whether you can pay the premium as part of the EMI or does it have to be made as a lump sum amount.
• Is a medical check-up necessary? Check whether a medical checkup is necessary in all cases.

Are there any tax benefits because of the insurance being a 'life insurance' scheme?

Yes, there are tax benefits that you can get with such kind of insurance. Since you are paying a life insurance premium, you can get deduction under Section 80C. However, if it is clubbed with your EMI payments, you will not get the insurance benefit.

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Required Documents for Personal Loan

One of the option to get money from reputed banks for all needs is through personal loan. Whether going for a vacation or to buy a best gift for your sibling, make use of the personal loan option! To apply successfully for a personal loan a borrower needs to provide certain set of documents. These documents helps lender (be it a Bank or a NBFC) to know and understand the financial stability of the borrower and analyse the credit risk. Apart from that it helps a lender know and verify all the details about the applicant such as age, income, address, employer and employment. It is on the basis of this a lender decides whether to lend or not to the applicant. As personal loans are unsecured loans, the lender does not takes anything as collateral for the lending amount, hence there is always a potential risk of borrower defaulting or absconding on the loan. Hence to be double triple sure a lender asks for a certain set of documents so that it can learn and analyse the applicant and then decide. Below are the checklist for all the required documents for a personal loan.

Checklist of Documents Required for Personal Loan

1. Photo Identity Proof
2. Residence Address Proof
3. Residence Ownership Proof
4. Income Proof
5. Job Continuity Proof
6. Bank Statement
7. Investment Proof
8. 1 passport size color photograph

List of Common Documents Required for Personal Loan

Here is the list of common documents that should be submitted irrespective of which bank you are applying and where you are located.

1. Complete loan application form with one passport size photograph.
2. Valid Proof of Applicant's Identity: Passport/ Driving License/ Voter ID/ Aadhar card/ PAN Card
3. Proof of Residence: Driving License/ Registered Rent Agreement/ Electricity Bill (up to 3 months old)/Passport/Telephone bill/ Voter ID/ Aadhar card
4. Proof of Age: Voter ID Card/Passport/PAN Card/Driving License/Aadhar card
5. Financial Documents: 
   a. Salaried Individuals: Latest 3 month's Salary Slips and Form 16, Bank Statements of 6 months
   b. Self Employed Individuals: Latest 1 year bank statement for both savings and current account

Calculate EMI for Personal loan

Documents Required for Salaried Individuals

1. Valid Proof of Applicant's Identity (any one of the following): Voter ID Card/Passport/PAN Card/Driving License/Aadhar card
2. Proof of Residence (any one of the following): Driving License/ Registered Rent Agreement/ Electricity Bill (up to 3 months old)/Passport/Telephone bill/ Voter ID/ Aadhar card
3. Proof of Age (any one of the following): Voter ID Card/Passport/PAN Card/Driving License/Aadhar card
4. Income Proof: Latest 3 month's Salary Slips and Form 16/IT return.
5. Job Continuity Proof: Current Employment Certificate or Current Job Appointment letter and Experience Certificate
6. Bank Statement: Latest 6 month's statement from bank
7. 1 Passport size color Photograph
8. If there are existing loans submit Payment Track Record and sanction letter

Documents Required for Self Employed Professionals

1. Valid Proof of Applicant's Identity (any one of the following): Voter ID Card/Passport/PAN Card/Driving License/Aadhar card
2. Proof of Residence (any one of the following): Driving License/ Registered Rent Agreement/ Electricity Bill (up to 3 months old)/Passport/Telephone bill/ Voter ID/ Aadhar card
3. Proof of Age (any one of the following): Voter ID Card/Passport/PAN Card/Driving License/Aadhar card
4. Office Address Proof: Property Document/Maintenance Bills/Utility Bill
5. Office Ownership Proof: Property Documents/Maintenance Bill/Electricity Bill
6. Business Existence Proof: 3 years old Salary Statement/Shop Establishment
7. Income Proof: Latest 2 years Income Tax Returns including Computation of Income/P&L Account/Balance Sheet

Documents Required for Senior Citizens/Pensioners

1. Photo Identity Proof: Passport/ Driving License/ Voter ID/ PAN Card/ Aadhar Card
2. Residence Address Proof: Driving License/ Registered Rent Agreement/ Electricity Bill (up to 3 months old)/Passport/Telephone bill/ Voter ID/ Aadhar card
3. 1 Passport size color Photograph
4. Age Proof Document: Pan Card or Passport
5. Income Proof: Pension Returns or Bank Statement

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Required Documents for Car Loan

If you are looking for a Car Loan from a bank in India, you would require the following Car Loan Documents to process your Car loan application. 

List of Car Loan Documents Checklist Required for Salaried Person

• Photo Identity Proof: Any One from the following;
1. Passport.
2. Pan Card.
3. Voters ID Card.
4. Driving License.
5. Aadhar card.
• 
  
• Residence Address Proof: Any One from the following;
1. Passport.
2. Ration Card.
3. Electricity bill(up to 3 months old)
4. Telephone bill(up to 3 months old)
5. Voters ID Card
6. Driving License
7. Aadhar card
• 
  
• Residence Ownership Proof: Any One from the following;
1. Property Documents.
2. Maintenance Bill.
3. Electricity Bill(up to 3 months old)
• 
  
• Income Proof: Latest 3 months Salary Slips and Form 16/IT return.
• 
  
• Job Continuity Proof: Any One from the following;
1. Current Employment Certificate.
2. Current Job Appointment letter (if it is more than 2 years).
3. Experience Certificate (including your previous job certificate or appointment and relieving letter).
• 
  
• Bank Statement: Latest 6 months statement where your salry is getting credited.
• 
  
• Down Payment Dealer Reciept.
• 
  
• Car Quotation.
• 
  
• 1 passport size color photograph
• 
  
• IF PROFESSIONAL: Please submit your Professional Degree Certificate.

Calculate EMI for Car loan

Documents Required for Self Employed Business Person

• Photo Identity Proof: Any One from the following;
1. Passport.
2. Pan Card.
3. Voters ID Card.
4. Drivnig License.
5. Aadhar card.
• 
  
• Residence Address Proof: Any One from the following;
1. Passport.
2. Ration Card.
3. Electricity bill(up to 3 months old)
4. Telephone bill(up to 3 months old)
5. Voters ID Card
6. Driving License
7. Aadhar card
• 
  
• Residence Ownership Proof: Any One from the following;
1. Property Documents.
2. Maintenance Bill.
3. Electricity Bill(up to 3 months old)
• 
  
• Office Address Proof: Any One from the following;
1. Property Documents (if any).
2. Maintenance Bill (if any).
3. Utility Bill.
• 
  
• Office Ownership Proof (if any): Any One from the following;
1. Property Documents.
2. Maintenance Bill.
3. Electricity Bill(up to 3 months old).
• 
  
• Business Existence Proof: Any One from the following;
1. 3 years old Saral Copy.
2. Shop Establishment Act.
3. Any Tax Registration Copy.
4. Company Registration license.
• 
  
• Income Proof: Latest 2 years Income Tax Returns including Computation of Income, Profit and Loss Account, Balance Sheet, Audit Report, etc.,
• 
  
• Bank Statement: Latest 1 year bank statement both current and savings.
• 
  
• Down Payment Dealer Reciept.
• 
  
• Car Quotation.
• 
  
• 1 passport size color photograph
• 
  
• IF PROFESSIONAL: Please submit your Professional Degree Certificate.
• 
  

* Above all documents applicable for Two-wheeler loan

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Required Documents for Mortgage Loan or Loan Against Property(LAP)

If you are looking for a Loan Against Property from a bank in India, you would require the following Loan Against Property Documents to process your Loan Against Property application.

Documents required for Salaried Person

• Photo Identity Proof: Any One from the following;
1. Passport
2. Pan Card
3. Voters ID Card
4. Driving License
5. Aadhar card
• 
  
• Residence Address Proof: Any One from the following;
1. Passport
2. Ration Card
3. Electricity bill(up to 3 months old)
4. Telephone bill(up to 3 months old)
5. Voters ID Card
6. Driving License
7. Aadhar card
• 
  
• Residence Ownership Proof: Any One from the following;
1. Property Documents
2. Maintenance Bill
3. Electricity Bill(up to 3 months old)
• 
  
• Income Proof: Latest 3 months Salary Slips and Form 16/IT return
• 
  
• Job Continuity Proof: Any One from the following;
1. Current Employment Certificate
2. Current Job Appointment letter (if it is more than 2 years)
3. Experience Certificate (including your previous job certificate or appointment and relieving letter)
• 
  
• Bank Statement: Latest 1 year statement where your salary is getting credited
• 
  
• Property Documents: Property documents to be submitted based on the purchase of your dream home.
1. Copy of agreement executed / Sales Deed.
2. Share Certificate.
3. Latest Maintenance Bill.
4. List of documents & sanction letter given by Existing Banker (If Applicable).
• 
  
• Advance Processing Cheque required to process loan documents for sanction.
• 
  
• Investment Proof (if any): please submit if any investment like, Fixed Deposit, Shares, Fixed Assets, etc.,
• 
  
• 1 passport size color photograph
• 
  
• IF EXISTING LOANS: If any existing loan, please submit sanction letter, Payment Track Record.
• 
  
• IF PROFESSIONAL: Please submit your Professional Degree Certificate.
• 
  

Calculate EMI for Mortgage loan

Documents required for Self Employed Business Person

• Photo Identity Proof: Any One from the following;
1. Passport
2. Pan Card
3. Voters ID Card
4. Driving License
5. Aadhar card
• 
  
• Residence Address Proof: Any One from the following;
1. Passport
2. Ration Card
3. Electricity bill(up to 3 months old)
4. Telephone bill(up to 3 months old)
5. Voters ID Card
6. Driving License
7. Aadhar card
• 
  
• Residence Ownership Proof: Any One from the following;
1. Property Documents
2. Maintenance Bill
3. Electricity Bill(up to 3 months old)
• 
  
• Office Address Proof: Any One from the following;
1. Property Documents (if any)
2. Maintenance Bill (if any)
3. Utility Bill
• 
  
• Office Ownership Proof (if any): Any One from the following;
1. Property Documents
2. Maintenance Bill
3. Electricity Bill(up to 3 months old)
• 
  
• Business Existence Proof: Any One from the following;
1. 3 years old Saral Copy
2. Shop Establishment Act
3. Any Tax Registration Copy
4. Company Registration license
• 
  
• Income Proof: Latest 3 years Income Tax Returns including Computation of Income, Profit and Loss Account, Balance Sheet, Audit Report, etc.,
• 
  
• Bank Statement: Latest 1 year bank statement both current and savings.
• 
  
• Property Documents: Property documents to be submitted based on the purchase of your dream home.
1. Copy of agreement executed / Sales Deed.
2. Share Certificate.
3. Latest Maintenance Bill.
4. List of documents & sanction letter given by Existing Banker (If Applicable).
• 
  
• Advance Processing Cheque required to process loan documents for sanction.
• 
  
• Investment Proof (if any): please submit if any investment like, Fixed Deposit, Shares, Fixed Assets, etc.,
• 
  
• 1 passport size color photograph
• 
  
• IF EXISTING LOANS: If any existing loan, please submit sanction letter, Payment Track Record.
• 
  
• IF PROFESSIONAL: Please submit your Professional Degree Certificate.

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