BL ;Chennnai:26th july 2012

 

Indian Bank has made a provision of Rs 32 crore against its Rs 800-crore loan to Air India, the bank’s Chairman and Managing Director, Mr T. M. Bhasin, said at a press conference here today.

He said the bank was required to make Rs 8 crore of provision for each of the four quarters of the year, but it decided to take the entire provision in the first quarter itself.

Except for Air India, the bank has no other exposure to the aviation sector.

Indian Bank has restructured loans worth Rs 9,918 crore (loans for which payment terms have been reset to help the borrower.)

Two loan accounts are chunky, incidentally, both are public sector — Air India, and the one to the Rajasthan State Electricity Board (about Rs 1,200 crore).

Indeed, most banks have exposure to RSEB, but it is generally believed that the loans would be paid back as they are backed by a Government guarantee.

Get credit score before applying for home loan, says CIBIL

BL:Virendra pandit:26th july 2012

Stressing that borrowers with a credit score of 750 and above have a higher chance of getting a home loan, the Credit Information Bureau (India) Ltd (CIBIL) on Wednesday urged consumers to get their credit scores before applying for loans with banks and financial institutions.

Citing CIBIL data that show 88 per cent of home loan borrowers in 2011 had a credit score of 750 and above on a scale of between 300 and 900, Mr Arun Thukral, Managing Director, told a news conference here that home loan inquiries had doubled since 2007, indicating the huge demand. These inquiries increased more than 18 per cent in the first quarter of 2011-12 compared to the same quarter the fiscal before.

“According to CIBIL data, about 75 per cent of new accounts opened in 2011 had sanctioned amounts between Rs 5 lakh and Rs 50 lakh. This also means that the shift is clearly towards higher value loans, indicating the rise in property prices and higher borrowing affordability,” he said.

In 2011, 48 per cent of the total home loans sanctioned in the metro cities had a ticket size of more than Rs 20 lakh. Moreover, loans with a ticket size of less than Rs 50 lakh increased from around 7 per cent in 2007 to over 12 per cent in 2011.

More than one-third of borrowers sanctioned home loans in 2011 were less than 35 years of age and 70 per cent less than 45 years of age, Mr Thukral said.

The trends in acquisition of new home loans by banks based on the CIBIL TransUnion Score show that in 2008, 23 per cent of new home loan borrowers acquired had a credit score of 800 and above. In Q2 2011, more than 62 per cent borrowers acquired had a score of 800 and above.

This indicates that the CIBIL TransUnion Score has now become an integral risk assessment tool for banks and financial institutions for sanctioning any new credit. All the banks and financial institutions have started accessing CIBIL reports and CIBIL TransUnion Scores before sanctioning a loan, he said.