Banking...4 Q

Source :Prashant Joshi :BS :November 18, 2011, 0:25 IST


1.    My uncle and aunt had taken a joint home loan and have been servicing it for 15 years. But, they passed away recently. There is nobody who can service the loan. I am interested in their property and am willing to service it. Is this possible? If yes, what is the procedure?


You will have to get in touch with the bank to find the options available. In such cases, banks generally proceed on the basis of a legally valid will/succession certificate or look to the legal heir. If you are their successor, approach the bank (with other successors, if any) and express willingness to service the loan. Your ability to take it over would be determined by the bank, based on your financial capability and credit history


2.   While shopping for a home loan 10 days before, a leading private sector bank said it would charge two per cent above the base rate. When I went back to apply, it said I would have to pay 2.5 per cent over the base rate, without explaining. 
What could be the probable reason?


Interest rates offered by banks depend on the prevailing cost of funds (interest rates) and the promotional campaigns from time to time, which have a certain validity period. The change in cost of funds or expiry of a particular promotion may be the reason for increase in the rates quoted to you. However, do note that the actual rate applicable may vary, based on the loan size, legal and title checks of your property and financial and credit history checks.


3.  Does Cibil also take into account repayment of personal and education loans when keeping a record of one’s credit history?


The repayment track record for any credit facility, be it a credit card, home, personal or education loan, etc., is reported to Cibil or other credit bureaus by the participating banks.


4.    I know a bank account holder gets insurance of Rs 1 lakh for the money in the account. Can one take additional insurance for this?


All commercial banks, including branches of foreign banks functioning in India, local area and regional rural banks are insured by the Deposit Insurance and Credit Guarantee Corporation (DICGC). DICGC covers each depositor up to a maximum of Rs 1 lakh held by him in the same right and capacity. Under this arrangement, no additional insurance cover is available.


The writer is managing director & head, private & business clients (India), Deutsche Bank. The views expressed are his own.