Score changes in cibil will get lessor by a week..!

In a recent interview with Livemint, Harshala Chandorkar (chief operating officer), TransUnion Cibil said currently data is submitted and updated two weeks after the month end. Wherein banks and cibil, working together to send the data to the cibil credit bureau within a week of every month end, instead of a fortnight at present.

In 2015, RBI has directed all the banks and NBFCs to become a member of all Credit Institutions Company (CICs) such as CIBIL, Equifax, Experian and High Mark and share all credit data with them.

Central Bank has also asked all the banks and NBFCs to update all credit data every month or shorter interval mutually agreed by both the parties.

We have also heard where there is data, they are prone to erros. So if you find that you’ve some data missing or incorrectly updated in your credit report you can approach Credit 4 Loan, Who has assisted individuals with the required solution to ensure they become tension free again.

What else directly you can do: directly contact cibil, respective banks or NBFCs or banking ombudsmen for the required correction.

Following are important website links:

1.       CIBIL: www.cibil.com

2.       Credit 4 Loan: www.credit4loan.com

3.       RBI: www.rbi.org.in

Some banks and NBFCs website links if required:

1.       HDFC Bank: https://hdfcbank.com/

2.       ICICI Bank: https://www.icicibank.com/

3.       SBI: https://www.onlinesbi.com/

4.       BAJAJ FInserve: http://bajajfinserve.in

5.       DHFL: https://www.dhfl.com/

Above links will help you to get the required help, still if you need any suggestion do write a comment or contact Credit 4 Loan for the same.

RBI to review bank's MCLR: Borrowers may get some relief

While borrowers hoping for another rate cut in today's monetary policy announcement were disappointed but RBI's promise to review how banks have implemented the Marginal Cost Lending Rate (MCLR) framework may bring some cheer for them.

As per RBI's announcement today more monetary transmission to support the revival of growth continues to be critical. "The government's reform measures on small savings rates combined with the Reserve Bank's refinements in the liquidity management framework should help the transmission of past policy rate reductions into lending rates of banks. The Reserve Bank will shortly review the implementation of the Marginal Cost Lending Rate framework by banks."

Many borrowers have felt that their banks have passed on very little of the previous interest rate cuts and their EMIs have not really reduced very much. The review by RBI of how banks have implemented MCLR may put some pressure on banks to pass on the previous rate cuts more fully. One of the aims of introducing MCLR was to try to make banks pass on policy rate cut benefits to borrowers. The new methodology has become effective 1 April 2016.

In its last credit policy review in April this year, the RBI cut the repo rate by 0.25 per cent to 6.5 per cent. The repo rate is the rate at which RBI lends to banks. A cut in the repo rate means lower cost of funds for the banks. Prior to this, the RBI had cut the repo rate by 1.5 per cent over an 18-month period.

The 0.25 per cent cut in repo rate in April taken together with reduction in small savings rate and the introduction of MCLR-linked lending was expected to push banks to cut lending rates. However, despite all this most borrowers feel that they have not received the full benefit of these rate cuts from their lenders - banks.

Author :http://economictimes.indiatimes.com/
Reposted By : http://credit4loan.com/

Wilful defaulters: Working on new system for making list public, says RBI Governor

Reserve Bank Governor Raghuram Rajan on Saturday said the central bank is working on a new system for making public the list of wilful defaulters and new mechanism for out-of-court settlement of bad loan-related disputes. “We have no intent or desire to protect malfeasance. We are very happy to make that list public. In fact my people are working on making sure that we can put that list up in an accessible way and also of defaulters against whom suit has been filed because that is already public information,” he said. As of now credit information bureaus are maintaining a list of wilful defaulters — borrowers who default despite having the capacity to make repayments.
Data from Cibil, the agency which collates information on credit, show 6,819 wilful defaulters owed banks Rs 74,699 crore until December 2015, up from Rs 22,332 crore that 3,703 wilful defaulters owed until December 2012.
We are creating a structure to help out-of-court resolution and we are still at work. It’s work in progress. We are fine-tuning it, making sure it works,” he said. The RBI is in favour of protecting privacy of loan defaults where there are no wrongdoings. A blanket edict that everybody’s name should be made public on the website might not be desirable, he said. Rajan said said it might not be correct to flash the name of all and sundry, including those who forgot to pay their credit bills. “We have to be weary of killing entrepreneurship in this county by putting all unsuccessful risk taking in the same basket. We need risk taking, we need people to take risk,” he said. Rajan added the RBI is creating a structure for an out of court settlement of the disputes relating to bad debts. He said early enactment of the bankruptcy code would give a ‘serious’ instrument in the hands of bankers, who till now lacked any such law to recover their loans in a meaningful way. “Till recently the threat that banks could make to promoters was meaningless, which is why promoters could go to bankers and say take 25 paise on the rupee, otherwise I will see you in a court for the next 15 years,” he said. Rajan said the RBI accorded priority to protecting jobs by trying to put stressed assets back into health, while investigative agencies deal with cases of malfeasance. “I think we have it (NPAs) contained,” Rajan said while speaking at a memorial lecture. The RBI had asked banks to start recognising all stressed assets from October-December quarter. The move led to a spurt in gross NPAs in the PSBs by about Rs 1 lakh crore to about Rs 4 lakh crore at end-December 2015. “But I also want workers in plants today, who are in danger of losing their jobs, to have that job, to be able to produce, because non-functional assets are in nobody’s interest, certainly not in the nation’s,” he said. RBI Guv calls money a great equaliser Stating that money empowers the society more than many other forms of affirmative action, RBI Governor Raghuram Rajan on Saturday argued for increasing society’s tolerance for its use rather than prohibiting the use of money and wealth. Rajan said making it easy for Dalits to start businesses may do more for their social status because money empowers than many other forms of affirmative action. “It is the great equaliser, that so many people across history have been able to acquire resources and invested them to make the world we live in,” Rajan said at a function organised by the Shiv Nadar University. “Income inequality is on the rise, with some having colossal incomes and others worrying about the next meal,” Rajan said about the widening rich-poor gap. Unfortunately, even while inequality between countries is diminishing today, inequality within countries is increasing, he said. In part, this is because skills and capabilities have become much more important in well-paid jobs, and those born in good circumstances have a much better chance, he said. According to him, the winner-take-all nature of many occupations accentuates the value of early childhood preparation; and hence the benefit of being born to the right parents. Rajan also cautioned students about unscrupulous schools which leave students with high education loans and ‘useless degrees’. “We should make sure that unscrupulous schools do not prey on uninformed students, leaving them with high debt and useless degrees,” he said. “The bottom line is that education at high quality research universities will remain expensive for a while, certainly till we learn to combine technology and people better,” Rajan said. ENS

Author :- http://indianexpress.com/
Reposted By :- http://www.credit4loan.com/

For loans over Rs 5 cr: RBI may share defaulter details if probe agencies want the info

THE Reserve Bank of India has indicated its willingness to share details regarding borrowers who have taken large loans of over Rs 5 crore with the government if such information were to be sought by vigilance and investigative agencies, or for court cases. A database of loans of over Rs 5 crore is currently maintained by the Central Repository of Information on Large Credits (CRILC), which was set up the RBI last year. The repository has been set up to improve assessment of credit risk by the banks, early detection of non-performing assets (NPAs), and to improve recovery of loans. While refusing to share the entire database of large loans with the government, the central bank will provide details as may be needed by the investigative agencies, Finance Ministry sources said.

Such information will enable these agencies to ascertain the entire credit history of large borrowers and help with investigation of loan cases where proper due diligence was not followed, they said.


The RBI set up CRILC in order to collect, store and disseminate information on large credits of banks and non-banking financial companies. CRILC collects information at one place and member banks can have access to this information. It enables banks to have a better view of the credit history and the status of all loans taken by the borrower. Banks are also required to report Special Mention Accounts, where principal or interest is overdue for period up to 90 days, to the repository. Such loan accounts are classified as NPAs. The Finance Ministry wanted access to the database to have a better view of large loans that are sanctioned and disbursed. Sources said private sector banks objected to the regulator sharing the entire information with the government, since the latter also being the owner of public sector banks has a conflict-of-interest in gaining data on commercial activities of its competitors. Data from Cibil, the agency which collates information on credit, showed that 6,819 wilful defaulters owed banks Rs 74,699 crore until December 2015, up from Rs 22,332 crore that 3,703 wilful defaulters owed until December 2012. The ratio of top 30 NPAs to NPAs above Rs 1 crore (large borrowers) as on March 2015 for scheduled commercial banks is 51.79 per cent, according to Finance Ministry data. An amount of Rs 1,30,156 crore was classified as NPAs in PSBs for borrowers exceeding Rs 500 crore as on December 2015, the data shows. Last month, the RBI submitted to the Supreme Court a list of defaulters owing Rs 500 crore or more to public sector banks just three months after the apex court ruled that the RBI is “clearly not in fiduciary relationship with any bank” and that it cannot hide information solely because of the embarrassment it may cause. But while submitting the list, the RBI said it was “extremely necessary” to keep these names confidential otherwise it would dent the “fiduciary relationship” between the RBI and the banks, and between the banks and customers. The RBI’s affidavit was filed in response to a reply sought by a bench led by Chief Justice T S Thakur, which had in March taken suo motu cognizance of The Indian Express report that Rs 1.14 lakh crore of bad loans had been written off by state-owned banks between 2013 and 2015.


Author :- http://indianexpress.com/
Reposted :- http://www.credit4loan.com/

Try credit info firms for data on defaulters: RBI to RTI query

The Reserve Bank of India (RBI) seems to be confused about how to respond to queries related to the disclosure of wilful defaulters.

While the regulator had earlier dismissed a query filed by BusinessLine under the Right to Information Act, 2005 saying it did not have the resources to compile the list of defaulters, a second reply from another desk in the RBI has passed the buck on to credit information companies such as Credit Information Bureau (India) Ltd (CIBIL).

“Banks and financial institutions have been advised to submit the data regarding wilful defaulters and defaulters to Credit Information Companies and not to the RBI from December 2014 onwards. Therefore, we do not have the information,” the RBI said, in response to an RTI filed by BusinessLine.

In an earlier reply, dated April 7, the regulator had said: “Compilation of the same (list of wilful defaulters) would disproportionately divert resources.”

This comes even as pressure builds on the central bank to put in place a system that would name and shame wilful defaulters. The Supreme Court had recently said that it was in favour of making public the list of defaulters. The apex court has observed that “the RBI is supposed to uphold public interest and not the interest of individual banks”, nor is the central bank in “any fiduciary relationship with any bank”.

However, the central bank has so far refused to make the names public on the ground that it would affect companies’ health if they are in genuine difficulty and “may accentuate the failure of the business rather than nursing it back to health”.

Various bank associations and unions are demanding a more pro-active response by the RBI. “If publication of the names of defaulters would defame them or result in loss of business, why is no such consideration being shown for the common man who avails a bank loan? …when it comes to industrialists, all soft options are being advocated,” said a statement from the All India Bank Employees’ Association.

More than 5,600 defaulters

According to one estimate, there are more than 5,600 wilful defaulters, who together owe more than ₹60,000 crore to banks.

Indian National Bank Employees’ Federation General Secretary Subhash Sawant said the RBI’s argument that it cannot allot resources to draw up a list of defaulters does not hold much water because banks have been computerising their operations for the past 15 years. All the information is available at the click of a button.

Author :- http://www.thehindubusinessline.com/

Reposted By :- http://credit4loan.com/

Should borrowers switch to the new MCLR regime for loans?

The beginning of the financial year has brought good news for borrowers. The Reserve Bank of India (RBI) reduced repo rate by 25 basis points on April 5, and Marginal Cost of funds-based Lending Rate (MCLR), the new methodology for computing benchmark lending rates, came into effect from April 1.
MCLR is expected to make banks respond faster to policy rate revisions announced by the central bank. Given the current falling interest rate scenario, the immediate impact will be the lowering of rates.
While MCLR will automatically apply to new loans, existing borrowers can choose to switch to the new methodology after paying a fee. Existing and prospective borrowers will have to decide on moving to the new benchmark rate and choose a lender who fulfils their requirements.

To switch or not to switch
Loan experts feel that it's an opportune time to move to MCLR. "It makes sense to shift to MCLR as interest rates are on a downward slope. You should take advantage of whatever is available now. Even if you have to pay some charges, it could be worth it," says V.N. Kulkarni, an independent banking and management consultant. You might have to pay a conversion fee of 0.5-1% of the loan amount if you decide to move to the new regime.  Take a call after a cost-benefit analysis, like you would while evaluating loan refinance options.

MCLR is also expected to usher in transparency in loan pricing and revision. "Existing borrowers should move to the available MCLR with their respective banks.The new system of benchmarking is more dynamic and better regulated with the end objective of transmitting the monetary policy in essence without manipulation or leakages and ensuring compliance by banks," says Vipul Patel, Founder, Mortgageworld, a loan consultancy firm. While pros and cons of the new system will come to light over the course of time, he does not foresee any adverse impact on home loan borrowers for now.

However, you cannot dodge the risk of an upward interest revision. If the RBI were to hike policy rates in future, MCLR will prompt banks to swiftly follow suit.

Tread with care
New borrowers do not have to make a choice between MCLR and Base Rate—all new loans will be linked to the former. However, if you are planning to apply for a loan in the coming days, you must closely read the terms and conditions of your contract. Under the new regime, banks will use their discretion to decide the reset period—daily, quarterly, half-yearly or annual MCLR—applicable to home and mortgage loans. So, your home loan interest rate will be pegged to the MCLR basket chosen by your bank.
For instance, the State Bank of India has prescribed an annual reset clause. You will find a change in your rates once a year on the date mentioned in your contract. While this means you will not derive benefits of subsequent rate reductions during the year, you will also be protected from any rate hikes during the period. Moreover, you always have the option of switching to banks that may slash rates later.

The flipside
Despite being introduced as the panacea for all ills afflicting the home loan space, the MCLR regime is not without its share of complexities and limitations. In fact, the flexibility that banks enjoy within the MCLR system could create a fertile ground for variable pricing, say experts. "Banks have the option to fix the margins between the MCLR and the lending rate, which is nontransparent. The actual rate for the consumer may vary even within the same bank, depending on various internal lending criteria and product constructs," explains Patel. Banks are yet to provide clarity on these issues.
Therefore, while new borrowers do not have to make a choice between Base Rate and MCLR, the variations in their banks' approach within the MCLR system necessitates careful evaluation of the loan contract. "An annual reset is a close equivalent of annual fixed rate and quarterly reset will fluctuate depending on policy decisions," says Patel. While pointing out that the decision will depend on the borrower's cash flows and risk appetite, he picks quarterly reset option over annual reset in the current declining interest rate scenario. This would be applicable even to existing borrowers contemplating shifting to MCLR.

 

Author :-http://economictimes.indiatimes.com/

Reposted By :- http://credit4loan.com/

Try credit info firms for data on defaulters: RBI to RTI query

The Reserve Bank of India (RBI) seems to be confused about how to respond to queries related to the disclosure of wilful defaulters.

While the regulator had earlier dismissed a query filed by BusinessLine under the Right to Information Act, 2005 saying it did not have the resources to compile the list of defaulters, a second reply from another desk in the RBI has passed the buck on to credit information companies such as Credit Information Bureau (India) Ltd (CIBIL).

“Banks and financial institutions have been advised to submit the data regarding wilful defaulters and defaulters to Credit Information Companies and not to the RBI from December 2014 onwards. Therefore, we do not have the information,” the RBI said, in response to an RTI filed by BusinessLine.

In an earlier reply, dated April 7, the regulator had said: “Compilation of the same (list of wilful defaulters) would disproportionately divert resources.”

This comes even as pressure builds on the central bank to put in place a system that would name and shame wilful defaulters. The Supreme Court had recently said that it was in favour of making public the list of defaulters. The apex court has observed that “the RBI is supposed to uphold public interest and not the interest of individual banks”, nor is the central bank in “any fiduciary relationship with any bank”.

However, the central bank has so far refused to make the names public on the ground that it would affect companies’ health if they are in genuine difficulty and “may accentuate the failure of the business rather than nursing it back to health”.

Various bank associations and unions are demanding a more pro-active response by the RBI. “If publication of the names of defaulters would defame them or result in loss of business, why is no such consideration being shown for the common man who avails a bank loan? …when it comes to industrialists, all soft options are being advocated,” said a statement from the All India Bank Employees’ Association.

More than 5,600 defaulters:

According to one estimate, there are more than 5,600 wilful defaulters, who together owe more than ₹60,000 crore to banks.

Indian National Bank Employees’ Federation General Secretary Subhash Sawant said the RBI’s argument that it cannot allot resources to draw up a list of defaulters does not hold much water because banks have been computerising their operations for the past 15 years. All the information is available at the click of a button.

Author :- http://www.thehindubusinessline.com/

Reposted By :- http://credit4loan.com/

Peer to peer lending: What you should know

While P2P platforms are gradually getting visibility, there is no regulation in place for such lending. While the RBI is constantly monitoring the growth of P2P lending, the borrowers and lenders remain at high risk until RBI comes out with a clear regulation policy.
If you are looking to raise funds for your business, bank loans are easily available under various lending schemes. However, procuring banks loans for business is not a cakewalk since business loans form a high risk category for banks.
So, if you are hoping to borrow funds without any collateral security or for a unique project which the bank may consider as high risk, you can consider a newly emerging alternative—peer-to-peer (P2P) lending, which is slowly becoming an acceptable alternative mode of lending. The numbers of P2P lenders have increased substantially, even attracting investments from angel investors.

Understanding Peer to Peer lending
Peer to Peer, or P2P, lending is a new concept in India, but has been active in the developing world for quite some time. It is based on the basic principle that you as a borrower get funded by multiple individual lenders. Therefore, unlike traditional loans, instead of borrowing one lumpsum from one lender, you borrow smaller amounts from multiple lenders.

So for example, if you need Rs. 5 Lakh for a project or for some commercial activity, you disclose your requirements on a P2P lending platform and investors willing to invest in your project will fund your project. The P2P platform will charge a processing fee from both the borrower and the lender.
Loans on offer by P2P Lenders

P2P lending offers micro finance, consumer loans and commercial loans. Personal and education loans are also available through P2P lenders under consumer loans. The popularity of P2P lenders, however, is for commercial loans where individual borrowers and lenders support one another financially.

Loan amount and interest rates

While there is no common body regulating the working mechanism of P2P Lending, each P2P lender has a different cap on the loan amount and interest rates. On an average, you can hope to get a personal loan between Rs. 25,000 to Rs. 5 Lakh. The upper limit for commercial loans can be as high as Rs. 30 Lakh. The loan tenure ranges from 6 months to as many as 5 years. Interest rates can be quite high and are in the range of 12-36% depending on the type of loan, the loan amount and tenure.

Working operation of P2P lending

To apply for a loan, you will need to register with a P2P lending portal. You can also sign up as a lender if you wish. To be eligible as a borrower, the P2P portal seeks your details, including your educational details, financial details, and employer details, etc. The portal will then check your credit worthiness by checking your credit reports like CIBIL etc, as part of their in-house verification.

Once the P2P lending portal verifies and lists you as a borrower, you will have to disclose all details, including the type of loan you need, the work you will be doing once you get the loan and all other details a possible lender should know. If any lender gets interested in funding you, he will approach you through the P2P portal.

RBI and regulatory concerns

While P2P platforms are gradually getting visibility, there is no regulation in place for such lending. While the RBI is constantly monitoring the growth of P2P lending, the borrowers and lenders remain at high risk until RBI comes out with a clear regulation policy.

For example, a borrower can go to multiple P2P lending portals and sign up and avail multiple loans for the same project. Any loans taken from P2P lenders will not get reflected in your credit score, which is again a high risk proposition for lenders. Each lender can offer you a loan at a different rate of interest as there is no regulation policy common for all P2P portals.

What you should do as a borrower or lender

Borrowing from banks or NBFC is a safer way of borrowing as compared to P2P portals. If you are still looking at P2P loans, or to register yourself as a lender, make sure you read the terms and conditions of the portal in detail. Each P2P lender will have different terms and conditions, so make sure you are fully aware of what you are getting into. Since there is no safety net for P2P lending, make a P2P loan your last priority unless RBI regulations are put in place.

P2P lending is gaining popularity and is a great way for people to raise money without the need for collateral security. However, without RBI regulation, such lending and borrowing remains a high risk affair.

Author:-www.moneycontrol.com
Reposted By:- Credit 4 Loan