You don’t need a stellar credit score to qualify for a mortgage

When lenders say their doors are open to home buyers who don’t have the best credit profiles, should you believe them? If you’re a first-time buyer, qualified on income and other key criteria, but you happen to have a FICO credit score in the mid-to-upper 600s, do you really have a shot at getting a mortgage?
The answer is probably yes. But the latest statistics on credit scores and mortgages overall are sobering. Not only are average scores on new loans closed by lenders continuing to rise, there’s also growing evidence that large numbers of people with middling credit scores are simply not applying for mortgages. It’s not that they’re getting turned down; rather, they’re self-selecting themselves out of the mortgage market, possibly because they assume their credit scores will get them rejected wherever they apply. In the process, they may be needlessly missing a chance to nail down 30-year fixed-interest rates in the mid-3-percent range to buy a home.

●FICO scores on mortgages closed in May were up in all loan categories. The average score on conventional loans — those eligible for sale to giant investors Fannie Mae and Freddie Mac — was 754, according to Ellie Mae, a software firm that tracks the field. That’s high by historical norms and is up two points since February. FICO scores run from 300 to 850. The higher the score, the lower the perceived risk of default.
●Scores on Federal Housing Administration and Veterans Affairs mortgages also have risen, but they are significantly below those at Fannie and Freddie. The average score at FHA last month on loans to purchase homes was 686. At VA, it was 707. The average American has a credit score around 695, according to FICO.
●New research from the analytics firm CoreLogic found that dramatically fewer people with FICO scores in the mid-600s are applying for loans compared with earlier decades. In 2005, roughly 25 percent of applicants had FICO scores of 640 or less, but by 2015 that had dropped to just 5 percent. Rejection rates for these applicants have not risen significantly — lenders “are matching the market” with loan approvals, according to CoreLogic deputy chief economist Sam Khater. The problem is “that people with lower credit have not come back” in the same numbers as before the financial crisis, he said in an interview.
What’s going on? Have home mortgages become the exclusive preserve of the credit elite? Or have potential buyers with middling credit scores somehow gotten this message from banks and other lenders: “We don’t make mortgages to folks with scores like yours anymore, so don’t bother to apply”?
John Taylor, president and chief executive of the National Community Reinvestment Coalition, an umbrella group representing hundreds of local community organizations, thinks it’s definitely the latter. “The spigot’s been turned off for working-class people” who want to buy houses, he told me. “People are being turned down, and they don’t believe the banks are going to make loans to them.”
Mike Fratantoni, chief economist for the Mortgage Bankers Association, disagrees. He thinks the mortgage market overall is strong, rejection rates have not increased and the high credit-score averages on Fannie-Freddie loans reflect an important shift that is underway. Premium reductions at FHA, coupled with premium increases by private mortgage insurers, have driven more sub-700 FICO buyers to FHA and away from Fannie and Freddie, he suggests. Nearly 40 percent of new-purchase loans at FHA last month had scores between 650 and 699, and 20 percent were between 600 and 649.

Bob Walters, chief economist for Quicken Loans, one of the highest-volume mortgage lenders, says “there’s a misperception,” especially among millennials, “that you need 20 percent down and great credit” to qualify for a mortgage in 2016. Yet with FHA loans requiring just 3.5 percent down, generous underwriting rules on debt-to-income ratios and other application factors, that’s just not the case.
Bottom line here: There’s no reason to be a no-show in the home-purchase market if you know where to target your application. If your FICO score is well below 700, you can pretty much forget about Fannie and Freddie. Apply to lenders that specialize in FHA-backed mortgages, where your odds of success are much better. Lenders insist that they want your business and are not looking to turn you down, as long as you’re qualified. So call their bluff: Give it a shot.

Author: https://www.washingtonpost.com/
Reposted By : http://www.credit4loan.com/

IT dept to block PAN, LPG subsidy of defaulters

In order to cripple and check the activities of wilful tax defaulters, the Income Tax department has decided to "block" Permanent Account Number (PAN) of such entities, get their LPG subsidy cancelled and take measures to ensure that they are not sanctioned loans.

A number of such measures have been mooted by the tax department, to be undertaken this financial year, in order to curb the menace of large-scale tax avoidance and evasion.
As per a strategy paper prepared by the department, also accessed by PTI, the taxman will block PAN in such a way "that these defaulters are not sanctioned any loans or overdraft facility by public sector banks, as the same is bound to become non-performing assets".
Further, it said, "Ministry of Finance can be suggested to withdrawn facility like LPG subsidy which is directly credited in to the bank accounts of the said defaulters." This step, the strategy paper said, will act to "disincentive" the defaulters.
The taxman also proposes that the identities of such blocked PANs be circulated to the Registrar of Properties "with a request for not allowing any registration of immovable properties where such PANs are involved." Such defaulters' information has also been recommended to be circulated across tax offices so that their activities loans or government subsidy can be plugged country-wide.
The department has also decided to subscribe to the Credit Information Bureau Limited (CIBIL) data, on a possible payment basis, to check out the financial activities of defaulters and undertake action against them for recovery and freezing of assets.
CIBIL is an agency to collect and maintain records of an entities' payments pertaining to loans and credit cards.
The department, beginning last year, has also started to 'name and shame' large tax defaulters (over Rs 20 crore default) by publishing their names and other credentials in leading national dailies and on its official web portal.
Till now, 67 such entities have been put in public domain by the department.
The IT department, beginning this financial year, has also decided to publicly name all category of taxpayers who have a default of Rs one crore and above.
"Tax default is a major menace that the department is grappling with.These new measures are aimed to curb these instances in the right earnest," a senior IT official said.


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

How to build your credit score & protect it

Finance is the fundamental requirement for individuals and enterprises to grow. Today we have the freedom and opportunities to access finance for our goals and economic development in the form of loans and credit cards. Banks and lending institutions are willing to provide loans to individuals to fund their education, buy a house, car or even a holiday overseas.

A vibrant lending culture is gradually bringing more and more people under the umbrella of banking and credit operations. Both the government and the private sector are working towards making credit opportunities available to one and all, so that access to finance becomes easier by the day.

While the focus on credit penetration has increased, credit institutions are diligently assessing borrowers’ credit worthiness so that the quality of credit doesn’t suffer. Thus, the need to have a clean credit history is of utmost importance for any credit aspirant, as without one, there is possibility of being denied fresh lines of credit.

A good CIBIL report and score are important for the following:

• Home loans, education loans, credit card and personal loans may not get approved if the financial institution feels your CIBIL report and score are not up to the mark

• You may have to borrow at a higher rate of interest from other financial institutions

As a borrower these are some of the cardinal duties you need to follow to maintain a sound credit health:

• Make payments on time

This is the first step in maintaining a healthy CIBIL report and score. Whatever you owe in the form of loans or credit cards, if you continue to pay on time, there is a high possibility of maintaining a good report and score. If you cannot pay the entire sum at one go, make the minimum monthly payment that the credit card bill mentions below the total outstanding in a monthly statement. If you have a payment issue on your home loan or credit card payment, contact the financial institution for a solution. It is prudent to keep your creditors informed about any payment issue you might face so that they can help you by offering easier terms and options for repayment.

• Monitor loans you have guaranteed, co-borrowed or co-applied

In case you have guaranteed a loan taken by a relative or spouse, you must monitor if the principal borrower has been repaying on time. Though the loan is not on your name, technically by being a guarantor you have signed for paying up the dues in case there is a default. So any delay or non-payment will affect your CIBIL report and score. At the same time, if you are a co-borrower, you must monitor your partner’s payment behaviour. Though you pay on time, if the other person doesn’t pay, it will still affect your credit report and score directly as you are one of the borrowers.

• Review your credit history time to time

To be able to access credit without any hindrance or delay, you must check your CIBIL report and score at regular intervals, like once in six months at least. It is better to take corrective actions in case the CIBIL report shows any deviations.
If one follows the above-mentioned as a rule of thumb, he/she in all likelihood will have a good CIBIL report and score.

Checking CIBIL report and score should be treated as a credit health management exercise, and not only as one undertaken when you need loans.

As a customer you must understand your rights too and exercise them if required-

• Raise a dispute if you find incorrect information on your CIBIL report

If you find any incorrect information or discrepancy on your CIBIL Report you must raise the same with CIBIL. You can go online and raise the issue by filling the online dispute form. It is very important that you take corrective actions before it is too late and your credit worthiness is affected.

• You deserve a clear explanation on why your loan was rejected

If a lender rejects your loan, it is well within your right to seek an explanation. This will help you understand what the core reason for rejection is and make course corrections accordingly. If the lender cites your CIBIL report and score as the reason for loan rejection then you can request them to provide a copy of your report and score. This exercise will help you prepare better for future loan approvals.

Seeking information and guidance on improving your credit score and report is your right. A healthy CIBIL Report and Score is your key to accessing finance when you most need it.


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

Points to keep in mind when lending to friends and family

When 32-year-old Sourabh Thanekar's friend desperately sought money from him for a medical emergency in the family , the Ahmednagar-based finance executive did not think twice about parting with Rs 40,000 immediately. Two days later, a shocked Thanekar realised his friend had lied and had taken the money only to buy the latest model of a high-end smartphone.
While Thanekar was unfortunate enough to have been conned by someone he considered a friend, lending money to friends and relatives is common practice in our country. From small hand loans given to meet real and imagined emergencies to large sums meant for setting up business ventures, money changes hands with little or no paperwork and an often misplaced sense of trust.

The open-ended nature of the agreement usually ends in defaults, with money lost and a relationship broken in the process. While it is difficult to say no to requests for money from loved ones, here's how you can handle the situation without burning any bridges.

Before you lend money, ask yourself if you can afford it. Remember that you are unlikely to getthe money back for a long time to come, if at all. Figure out if you can deal with an emergency with whatever you have left. If you are working towards a financial goal such as buying a house or saving for your child's education , consider to wha extent your generosity can set your plans back.

Manoj Kalwar, 31
Lent Rs 40,000 to a friend who claimed a medical emergency and instead blew the money on partying.
"Today, I cross-check with common friends and relatives before giving anything to anyone."
Says Tarun Birani, Founder and CEO, TBNG Capital Advisors: "Keep 5% of your savings in liquid funds to help dear ones in the event of a financial emergency." Allocating a fixed portion of your money to cater to such situations won't affect your other goals. Even if you know the borrower well, do a due diligence. Don't accept their reasons for needing the money at face value, like Thanekar did. Mumbai-based IT engineer Manoj Kalwar found himself in a similar situation.

Hounded by a friend who wanted money for a family member's medical treatment, Kalwar lent him Rs 40,000 over three months in 2014. Later he learnt that his friend had taken Rs 1 lakh on the same pretext for some others as well. Only, no one ill in his family was ill. He had blown the money on luxuries.

Not the one to give up, Kalwar pursued his friend for six months and recovered the amount. "I keep my emotions aside while lending money now. I also cross-check with common friends and relatives before I lend," Kalwar says.

Hounded by a friend who wanted money for a family member's medical treatment, Kalwar lent him Rs 40,000 over three months in 2014. Later he learnt that his friend had taken Rs 1 lakh on the same pretext for some others as well. Only, no one ill in his family was ill. He had blown the money on luxuries. Not the one to give up, Kalwar pursued his friend for six months and recovered the amount. "I keep my emotions aside while lending money now. I also cross-check with common friends and relatives before I lend," Kalwar says.

Shounak Potdar, 31
Gave Rs 50,000 to a friend as downpayment for a car.
"I now discuss the repayment schedule so that the borrower understands that I need the money in future."

According to Viral Bhatt, Founder and Advisor, Money Mantra, compulsive borrowers are to be avoided. "Learn to turn down requests after lending money a couple of times. Also, politely ask them to first repay the outstanding amount when they approach you for new loans," he says.
Another factor to consider is how close you are to the person seeking the loan . Sapna Tiwari, Chief Financial Planner, Rupeewiz, says, "Ask yourself how long you have known the person and how often you interact. It will help you decide whether the person is really a close friend or an acquaintance."
The reasons for borrowing can appear pressing sometimes. IT professional Koyel Ghosh found herself helping her friend, who had lost a job, pay off an education loan EMI of Rs 25,000. She never got the money back. "Check the financial status of the borrower before you lend," she says today.

Koyel Ghosh, 30
Ended up paying an EMI of Rs 25,000 for a friend who did not have a job. She never got the money back.
"It's important to check the financial status of the borrower before you lend."

A common problem faced by most lenders is the inability to ask for their money back. Pune-based engineer Shaunak Potdar lent a friend Rs 50,000 as down-payment for a car. He never saw the money again. When the transaction is among friends and family, the borrower rarely feels a sense of urgency to repay the loan. As there is no deadline, repayment becomes last priority. There is no late payment fee, no stiff interest rates or penalties. The borrower has no motivation to take the repayment seriously. "When I lend today, I politely discuss the repayment schedule so that the borrower understands that I need the money in future," says Potdar.
When you are approached for money, don't part with it immediately. Buy time to verify the need. During that time, the borrower could approach others for help and get it, bringing down the quantum of loan he needs from you. Even then, do not give the entire amount sought. Rohit Shah, CEO of financial advisory firm Getting You Rich, says "Give 30% to 40% of the requested amount. That way, in case the borrower fails to repay, you will not be left with a massive bad debt."
Sometimes a lender unwittingly plays into the hands of compulsive borrowers. For instance, pleas for loans from distant relatives and acquaintances. Ankur Kapur, Founder, Ankur Kapur Advisory, explains, "The reason why the borrower is knocking on your door could be your lavish lifestyle and habit of discussing your financial status in social gatherings." Word spreads quickly and unscrupulous elements try to cash in.

Rohan Dhulla, 35
Loaned Rs 2.5 lakh to a friend to start a new business.
"Now I study the feasibility of a business plan before lending money for new ventures."

When distant relatives or colleagues seek financial help, try to resolve the issue for them rather than helping them to take an easy way out with a loan from you. "Advise them to take loans against fixed deposits or gold at low interest rates from NBFCs. Also explain the importance of contingency funds," says Kapur. You can play mentor to a colleague who needs money. "Ask your colleague to approach HR for advance salary if the amount required is large," says Shah.

Adds Tiwari, "If there is no financial awareness among colleagues, arrange a workshop on financial planning for them." In this age of startups, seeking money from relatives to start a venture is common. This not only helps the borrower avoid high interest bank loans, but also serves as a safety net against harsh penalties, should the business fail, making repayment difficult.

In 2014, a friend of Mumbai-based entrepreneur Rohan Dhulla approached him for Rs 2.5 lakh to set up a business. Dhulla agreed to lend. An agreement was drawn up, whereby Dhulla got 15% stake in the company, and the loan had to be returned within two years with 10% interest. In the first five months, Dhulla got back Rs 55,000 before the venture sank. Now he is contemplating buying out his friend's share and getting the business back on track.

If a friend or relative asks you to be guarantor when they seek bank loans, don't agree unless you are sure about the borrower's ability to repay. If the borrower defaults, the bank will recover the amount from you.

If you must lend
1. Draw up a written agreement. Give the document legal sanction by getting it notarised.

2. Work out a repayment schedule. Mention a time frame within which you want the money back and how much needs to be returned monthly.

3. Remind the borrower politely if repayment schedule is not followed. If the problem is chronic, help borrower resolve money issues by guiding him.

4. Don't hesitate to charge interest. It would obviously be less than what is charged by banks and credit card companies.

5. If the relationship is really important, treat the loan as a gift. Lend only an amount you can write off.

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

Reposted By : http://credit4loan.com/

CIBIL to look at bringing in more data on credit behaviour

With its MFI credit information bureau getting ready for launch in the first quarter of 2016-17, the Credit Information Bureau (India) Ltd (CIBIL) is looking at possibilities to bring in more credit behaviour data by taking information from the telecom and utility service providers.
The trends are in such a way that even the social media behaviour of the customer could be used to analyse the credit behaviour, used by the banks, said senior officials from CIBIL.
Speaking to reporters on the sidelines of the Sixth Annual Credit Information Conference in Chennai, presented by CIBIL and TransUnion, M V Nair, chairman of CIBIL, said, "We are looking at launching the MFI Bureau in the next quarter."
The bureau is expected to help the Micro Finance Institutions (MFIs) to offer credit faster and better based on the credit reports and scores of CIBIL. This would also increase CIBIL's database, adding more customers of MFIs to it.
The way forward could be getting credit behaviour of the customer from their payments to the telecom service providers, as a large number of population in the country has mobile phones, and payment to the utilities such as the electricity board, said Satish Pillai, managing director and CEO of CIBIL. He added that a committee set up by Reserve Bank of India (RBI) to look into the alternate data available from the telecom companies and utilities has submitted its report and is under the consideration of the banking regulator now.
There are also possibilities of analysing customer behavior patterns of new customers if they have presence in social media, they added.
The company said that the way forward is to support financial inclusion and making customers aware of the credit scoring and its importance so that there would be credit discipline.
The credit story of the retail customers, especially in the credit card segment, has been better in the last two to three years and the non performing assets (NPAs) in some of the credit card segment is in a historical low, they said. This, along with a segment growth of 30 per cent offers good opportunity for credit cards at present.
The company has also launched a new product, CIBIL iScan, to help the banks to reduce the risk in current account business. The product, leveraging the repository of Commercial Bureau information to provide CIBIL members with precise credit history details of their current account applicants.
The RBI has laid down mandatory processes for curbing losses to the industry due to diversion of fund and as per the mandate, banks are required to obtain a No Objection Certificate from the financial institutions extending credit facilities to the customer before opening of a current account.



Author :- http://www.business-standard.com/
Reposted By :- http://www.credit4loan.com/

Social Worth: New metric to assess creditworthiness takes shape

"You are being watched."

No. This statement doesn’t refer to a warning that a fictional television show starts with. A new metric to track a person’s financial credibility — social worth — is taking shape. At the helm of utilising this metric is EarlySalary.com — a non-banking finance company (NBFC) — which doles out loans of up to Rs 1 lakh to salaried professionals, especially first-time applicants who find it hard to find lenders willing to disburse quick loans or even issue a credit card.
What is Social Worth?
EarlySalary homes in on a loan amount to be disbursed to a borrower on the basis of his activity on Facebook and LinkedIn. The NBFC has deployed an algorithm that takes in to account about 4,000 data variables from the applicant’s social media profiles. The variables include details like which schools and colleges the applicant attended, the organisation that the applicant is employed with and her location.
Co-founder and Chief Executive Akshay Mehrotra stresses that EarlySalary’s loan disbursal process happens with minimum human interference and in a speedy manner. “First-time borrowers can avail loans in less than an hour on EarlySalary platform. The idea was to help those faced with mid-month and month-end cash crunch,” he says.
The algorithm also tracks the social circle — friends, peers and colleagues — to establish the applicant’s credibility and creditworthiness, Mehrotra says. “It is not easy to lie about particulars like education and workplace on social media.”
Rajiv Raj, co-founder of CreditVidya, a portal that educates customers on managing finances and provides credit counseling, echoes Mehrotra’s views. “Going forward digital banking will make greater inroads in India. In Big Data, you have so many data variables that help you profile a customer. Hence, the probability of fudging data on social networks or other digital mediums becomes hard,” Raj says.
Calculation of a person’s social worth also factors in other variables like geo-positioning — data on how many people have taken loans in the area the application was made in and the repayment capacity of the group which has secured loans can enhance or lower the amount of loans.
When people transact online — bill payments, utility payments, transferring funds, etc. — several data profiles are created. “These data profiles help estimate the life style index of a person in a given area,” says Raj. Features on mobile phones like geo-tagging also help track a person’s activity which also plays a part in assessing the creditworthiness of a person, he adds.
It is Legit
By the dint of being an RBI-registered NBFC, EarlySalary loanees get a CIBIL score once they transact on the platform. A good credit score can then boost borrowers’ chances of getting other loans or credit card, says Mehrotra
EarlySalary is operational in Pune, Chennai and Bengaluru and plans to expand to other cities going forward. Within 90 days of being operational the platform has disbursed over 1,000 loans, says Mehrotra. “Average ticket size (for loans disbursed so far) is Rs 22,000, while the tenure is 22 days and the average age of borrowers is 26 years,” he says.
“The penalty in case of delay is Rs 500 on an average. Currently, all customers have paid within the repayment window to our delight,” he adds.
Also, applicants need to be salaried professionals drawing a take-home pay of Rs 30,000 to avail loans from EarlySalary. The platform charges an interest of less than Rs 9 per Rs 10000 a day. For example: A 10-day loan worth Rs 10,000 would fetch an interest of Rs 82.


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

Hospitals want patients to be rated on CIBIL lines

Private hospitals in the city wish to maintain "credit score" of patients and their families on the lines of CIBIL as a deterrent to refusal to pay up any bill.

It is one of the proposals that the Association of Hospitals, which represents over 50 private hospitals in the city, plans to submit to the government-appointed committee appointed by the Bombay High Court to look at workable solutions in case of non-payment of bill. Association officials met on Friday to discuss the issue.

The issue of non-payment came into focus in 2014 after a petition was filed in High Court by 25-yearold Sanjay Prajapati who alleged that his brother was detained by Seven Hills Hospital for not paying his bills. The court made scathing remarks against hospitals terming their practices as "inhuman" and "commercialisation of health". It then said that there needs to be guidelines spelt out by a government committee in which hospitals' representatives too can come up with suggestions to find a solution.

Other solutions include getting patients and relatives to sign an undertaking on stamp paper so that in case of non-compliance, civic or criminal action can be initiated. The association has also suggested having a quick-redressal board to settle such matters speedily outside the courts.

Activists say that such clashes take place because of the lack of transparency on the part of private hospitals in the billing process.

"It was a preliminary meeting where we discussed a few possible options. We have to suggest these solutions to the government committee that has been appointed to resolve the ongoing petition between a patient and a hospital that has snowballed into a big debate," said Dr PM Bhujang, president of Association of Hospitals.

Other solutions include getting patients and relatives to sign an undertaking on stamp paper so that in case of non-compliance, civic or criminal action can be initiated. The association has also suggested having a quick-redressal board to settle such matters speedily outside the courts.

A doctor who attended the meeting on condition of anonymity said, "We have at least three such cases where patients/relatives refuse to pay up after treatment. The patients know that the doctor cannot do anything. Legal recourse can drag on for years. So doctors and hospitals are left in the lurch," he said citing a case of a woman who came for a C-section and chose the best room in a hospital. "They had paid Rs 20,000 deposit. The total bill went up to Rs 45,000 but the relatives simply refused to pay up saying that they were overcharged," he said.



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

Your money: 4 top ways to boost CIBIL score

You are no stranger to the fact that, it is essential for you to maintain a high CIBIL score to have access to loans when you need them. Just like maintaining your fitness profile you must also attend to your credit profile to ensure that your CIBIL score remains satisfactory. Here’s a closer look at how it can be done.
Your financial health is just as important as your physical health these days. In the modern times that we live in, each of your financial activity is being tracked not just by your bank, but the premier credit bureau in the country CIBIL that is keeping score based on your credit behaviour. Each time you apply for a new loan or credit card, your CIBIL score becomes a barometer of how creditworthy you are. Moreover, potential employers these days are increasingly asking for the CIBIL report of potential recruits. This is to assess how responsible they are with their finances and thus how trustworthy and responsible they will be in their jobs.
There are a whole host of factors that impact your CIBIL score. The most important factor that has a 35% bearing on your CIBIL score is your payment history. The other factors that impact your CIBIL score are credit utilization or how much of your total credit you have used, how long how you been servicing debt, the amount of new credit you have taken or applied for and the mix of your credit. Today, we are here to talk about how your credit mix can improve your CIBIL score:
1. Having a good mix or secured and unsecured loans 
One thing that helps you attain a high CIBIL score is a good balance of secured and unsecured credit. A mortgage or an auto loan qualifies as a secured credit. But you cannot rest your laurels if you have only one of these and have no unsecured credit. A credit card with a  reasonably high credit limit, or a personal loan qualifies under the head of unsecured credit. Unsecured credit means that no collateral or advance payment is required to be paid by the consumer at the time of the disbursal of such credit. Having a mortgage or an auto loan and credit card that you service on time is thus a good way to diversify your credit mix and thus keep a high CIBIL score.
2. Installment credit 
Another type of credit that helps you score with CIBIL on the credit mix front, is having some exposure to installment credit. If you have do not have a mortage or a loan for a vehicle, you student loan too qualifies as installment credit. In other words, any kind of loan with a fixed amount of repayment each month under a pre-specified time frame qualifies as installment credit. So if you are in your first job and still servicing a student loan for a management degree or a vocational degree that you have recently completed, you are still scoring high with CIBIL as far as your credit mix is concerned.
3. Finding the right balance 
The trick to have a good credit mix is to have a good balance of active credit. If you do not have a student loan and are not in a position to apply for a mortgage or an auto loan just as yet, do not be under the impression that no credit will help you have an impeccable CIBIL score. While we are not asking you to be reckless and apply for loans, you may want to start out small and prove that you are creditworthy by applying for a credit card at first when you just start about in your professional life. A credit card is a a great way to build your credit profile if you are using it responsibly. Spending within your means on the credit card and making outstanding payments in full is a great example of prudent use.
4. A word of caution 
While we are reiterating the fact that you must diversify your credit mix, you should not consider it to be a green flag to go and apply for every loan on offer. In this intensely competitive financial world, telemarketers and even direct mailers are always trying to lure you with loans on “low rates of interest” or “lifetime free” credit cards, but do bear in mind that things are being sugar coated and you are not being given the full picture upfront.
So don’t bite the bait easily. Not only will you end up with a loan that you do not need, your CIBIL score may drop as a result of too many hard inquiries. A hard inquiry on your CIBIL report happens when a lender accesses your CIBIL score and report to see how creditworthy you are. Therefore your aim to diversify your credit profile may backfire against you!
Thus, as you can see diversification of your credit mix is a great way to improve your CIBIL score. It has a important bearing on your CIBIL score. But when you set out to diversify your credit profile, do so  carefully so as to avoid it boomeranging on you and so that you don’t end up with a lower score instead!

Author : http://www.financialexpress.com/
Reposted By : http://www.credit4loan.com/

Four things that build & maintain high CIBIL score in 2016

As a conscientious individual you probably know that you need to maintain a CIBIL score of 750 and above (out of 900). This will ensure that you get easy access to credit, as lenders will deem you creditworthy. A good CIBIL score backed by good credit history in your CIBIL report will help you move forward economically and ensure your financial well-being. A new year round the corner is the best time to begin the journey to your attractive credit profile – high credit score. Here is how to go about building and keeping up a good CIBIL score.

Credit card- The first stepping stone

If you just started out in life with your first job, and have no credit history, it is prudent to begin building credit with a credit card. However, do not leap at the first offer that you come across. Compare the fees and reward points on each and pick up a card that is best suited to your needs. A credit card, when used judiciously can indeed be a stepping stone to a good CIBIL score. Spend small amounts on your credit card and ensure that you repay the whole outstanding within the billing cycle. The golden rule of using a credit card is, never to go beyond your means, i.e. not buying anything on the credit card that you think you will not be able to repay within the stipulated time frame of your billing cycle.

Make all repayments on time and clear loan outstanding

This is applicable not just to your credit card, but also to any other credit that you may have availed of. For instance, if you have a student loan running when you have begun your career, make it a priority to make the repayments on time. In fact, it is a good idea to make bullet payments and clear the loan outstanding, if you can afford to do so.

Most people get too overwhelmed in the transition phase between the life of a student and a life of an individual who is financially independent and tend to go overboard in a pursuit of “living well”. It is financially prudent not to give in to the lure of luxuries right away at such times and continue living the way you used to as a student till you find a foothold in your career.

Have a good mix of credit

When you begin your life as an independent individual your needs begin to change. You would probably want to avail of credit to purchase a two wheeler or a car and do up your home. Based on your cash flow, avail of credit prudently based on your needs. A good mix of credit, meaning a combination of secured and unsecured loans will augur well for your CIBIL score. However, do not opt for all such credit all at once as that will make you seem credit hungry to a prospective lender and bring down your CIBIL score on account of too many “hard inquiries”. Each time you make an application for fresh credit to a bank, the bank accesses your CIBIL score and CIBIL report in order to assess your creditworthiness. These requests from the banks gets recorded in your CIBIL report as “hard inquiries” and bring down your CIBIL score a few notches each time.

Check your CIBIL score and CIBIL report periodically

This is the part where most people tend to falter. Apart from maintaining good financial habits it is also of utmost importance to keep a tab on your CIBIL score and CIBIL report. This is to ensure that there are no discrepancies that have crept in. There can be errors like a wrong entry under your name, incorrect personal information on your CIBIL report. If you do not check your CIBIL score or CIBIL report periodically, these errors may surface when you are applying for fresh credit and may mar your chances of getting a loan when you need it the most. To ensure that things are in order thus, pull out your CIBIL score and CIBIL report at least once or ideally twice in a year and ensure that all your records are in order.

Thus as you can see, building a good CIBIL score and keeping it up is closely connected to good financial habits. Just as you would take care of your physical health by eating right and adequate exercise, take care of your financial health too by keeping up a good CIBIL score. Not only will this open up doors for you when you need credit, it will also give you perennial peace of mind!



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

IBM Security to safeguard CIBIL data against cyberattacks

NEW DELHI: Credit Information Bureau India Limited (CIBIL) has partnered with IBM Security to secure its critical business systems against cyberattacks. Under the agreement, IBM Security Services will provide a customized security operations framework to monitor real-time threats and help CIBIL proactively identify fraud.

CIBIL collects credit information pertaining to borrowers from banks and credit institutions which are its members. It then collates this information into credit reports and credit information solutions and provides them to banks and credit institutions to help evaluate risks, while lending to customers.

IBM Security Services will provide round-the-clock proactive security log monitoring and real-time validation of suspicious threats using IBM X Force Intelligence. The company has also built an integrated Security Operations Center (SOC) for incident reporting and management, which will detect and monitor security events and phishing attacks in real-time. The CIBIL website will also be monitored in real-time with daily scanning for signs of malware infections.

An individual's CIBIL report and CIBIL TransUnion score, other than his/her income, are two of the most important tools used by lenders to evaluate applications for any loans or credit cards.  

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

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

Product crack: CIBIL TransUnion Score and Credit Portfolio Insights on ICICIdirect.com

ICICI Securities Ltd and Credit Information Bureau (India) Ltd (Cibil) have started an online facility available through ICICIdirect.com, where customers can see their Cibil TransUnion Score and individual ‘Credit Portfolio Insights’. It enables customers to see their liability portfolio alongside their investment portfolio, and gives them a personal net worth that can help make better financial decisions.
WHAT IS IT?
This is an additional facility that ICICIdirect.com customers can access. If you go into your account and go to the portfolio tab, there is a link that says ‘My Networth’. Under that, along with assets or investments, there is a tab with liabilities or loans. Under this, you get an aggregate of all the current outstanding loans (credit card, home, personal and so on) from both banks and non-banking finance companies (NBFCs). Once you confirm your details and pay the Rs.499 annual fee, you will be able to get a monthly update of your outstanding liabilities along with the Cibil credit score in your ICICIdirect account.
The fee is applicable for 12 months and each month, the liabilities data gets updates automatically from Cibil’s database. As soon as you have paid, the database checks for a match at Cibil. If there is a match, within 24 hours you will be able to see details of all your loans.
WHAT’S GOOD...
For ICICIdirect.com customers, it works well to be able to see investments and liabilities in one place. Your net worth tells you what the balance value of your assets is after netting out liabilities. So, you can tell in one glance whether the assets you have are enough to cover your outstanding liabilities. This, in turn, can help you make your next financial decision in a more informed manner.
Typically, if your liabilities side is lighter, you may be more willing to take risk on your investment side. If, on the other hand, you find that your current investments aren’t enough for your liabilities side, then future investments might need to be in more safe and fixed return securities.
The liabilities and loans get aggregated across banks and NBFCs, and you are saved a lot of effort in getting the data from different banks and cards. Along with a summary of the loans you have taken, you also get to see your Cibil credit score—this will help in understanding your position if you want to take a new loan. A credit score above 750 is considered good by lenders.
...WHAT’S NOT
Seeing your liabilities and investments on one screen and being able to understand your net worth will enable you to make financial decisions in a more informed manner. But while liabilities have been included in the feature, for a complete net worth, investments in other asset classes such as alternatives and real estate have not been included. Hence, the picture is still not complete. Also, you need to be a customer with ICICIdirect and have a valid login for an account to be able to access this service.


Author :- http://www.livemint.com/
Reposted By :- 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/

A little financial planning will help you to study abroad

With the dollar remaining strong, studying in a reputed foreign institution seems to be a distant dream. While most banks are willing to offer education loans for higher studies, but is it enough for us to just sign the documents without any planning?

We list down a few tips for a better financial planning before you go overseas for your higher education.

Scout for the best loan option

It is a tedious job but it is extremely important for anyone to go through and compare the various loan options available to you. And once, you zero in on the offer that you feel suits you, you can negotiate the terms and conditions.

Remember fluctuating rupee

It is important to remember that fluctuation in rupee value will impact your loan. One must remember that the loan will be rupee denominated and hence on conversion into your desired foreign currency, the amount will be lower.

"A student has to be prepared to bear this foreign exchange risk. For example, a student applies for an education loan of Rs 20 lakh. However, if the rupee weakens further due to exchange rate fluctuations, there would be an increase in the cost of education from the rupee perspective," said Harshala Chandorkar, senior vice president, Consumer Services at CIBIL.

Plan your course of action

In most cases, parents often sign up as a guarantor for the loan availed by you. So, its better to plan your course of action beforehand because if you delay the EMIs or default on them, it will adversely impact their CIBIL report as well.

"Rupee depreciation also adds to the woes of many parents who fund their children's education from their savings as they have to shell out more money. As a guarantor on your education loan your father / mother is liable for its repayment in case you fail to pay the EMIs. His / her credit report will show the details of this education loan and defaults will also show if you do not repay the EMIs on the loan. Thus, your repayment behavior will also impact your parents' credit score," she added.

Spend carefully

While you are overseas, pursuing your higher studies, it is important to do budgeting and know how much can you spend. Becoming a spend thrift can put additional burden on your financials, thus forcing you to delay or default on your loan repayments, negatively affecting your CIBIL report. In case, you cannot avoid certain expenses, consider taking up a job to meet your additional expenses.

"If you have taken a loan to study abroad, timely repayment should be the top most priority. Like any other loans and credit cards, education loans are also reported to the CIBIL and get reflected in the borrower's CIBIL Report. Transactions related to repayment of your education loan will also get reflected in your CIBIL Report and impact your CIBIL Transunion Score. Irregular or non-repayment of EMIs on your education loan will lead to an unhealthy CIBIL Report which can hamper your chances of availing any other loan or credit card in the future," said Chandorkar.


Author :- http://www.businessinsider.in/
Reposted By :- http://credit4loan.com/

Peer to Peer Lending: $50 billion market in India

In the light of mounting Non-Performing Assets by banks, most of the financial institutions including banks have become wary of giving both secured and unsecured loans. "Due to limited availability of funds, a new form of crowd funding method of Peer-To-Peer (P2P) Lending has started in online space where those having excess capital can lend it to borrowers for an interest," said Prof. Saurabh Agarwal, Professor of Finance and Dean (Academics), Indian Institute of Finance, Greater Noida.
According to Prof. Saurabh, the portal which acts as an intermediary does not guarantee the payment and is only a medium where people can meet and lend or borrow. Both lenders and borrowers pay a commission to the online platform arranging this transaction.

From the legal perspective, crowd funding is regulated by SEBI and lending and borrowing is regulated by RBI. Hence, in this case both SEBI and RBI need to regulate the P2P lending. Lending through P2P has grown dramatically from 2.2 million GBP in 2012 to 4.4 billion GBP in 2015 according to P2PFA. Hence, this unregulated sector is growing many folds, said Prof. Saurabh Agarwal.

According to him, from the regulatory perspective in China, Ecuador, Egypt, South Korea and Tunisia it is unregulated. China has the largest amount of P2P loans amounting to $150bn and about 2600 lenders. In countries like Australia, Argentina, Canada, New Zealand, United Kingdom, it is regulated like an intermediary requiring registration and following a proper conduct of business. In UK, P2P loans are about 2.2 bn with around 347 lenders. In France, Germany and Italy, P2P lending platforms have to obtain banking licence, and make complete disclosure.
European Union has 250 P2P platforms with $3.9bn of P2P loans. In United States of America, some states ban the practise of P2P lending, while some states permit it in a limited manner. Also, it is regulated by Federal regulation and Securities and Exchange Commission. Despite dual regulatory authorities US has $ 6.6 bn of P2P lending and borrowing. In some countries like Israel and Japan, it is prohibited, said Prof. Saurabh.

Prof. Saurabh opined that P2P lending is mainly advantageous to borrower as it has lower cost of financing than raising money in unorganised sector. Also, the documentation is far simpler making it easier to accesses the loan. The lenders also benefit as they get a higher return than bank deposits.
According to him, since this P2P lending is growing at a very fast rate with more than 20 companies in last one year itself, it will be prudent to classify them as a NBFC and they should be subject to all the requirements of a NBFC. This should take care of all concerns related to money laundering and adherence to FEMA provisions.
Prof. Saurabh said that the minimum capital requirement of 2 cores recommended by RBI is unjustified keeping in mind that these are start-up trying to provide loans to people who do not otherwise have access to unsecured loans. The brick and mortar requirement, experienced directors, reporting requirement etc. as proposed by RBI look good on paper as despite all prudential norms been present for Indian Banking sector, we are still facing a huge NPA burden of Rs. 1.14 lakh crore of debt. Total NPAs till now is over 8 lakh crore.
He opined that rather than having such requirements which are similar to a bank, RBI and SEBI should think of out of box and put restriction on the people who may lend. This way only those lenders will access these markets who are flushed with lot of money and are not much affected with losses to the tune of Rs. 20 to 30 lacs. Initially, also, small lenders who look for quick gains should not be permitted to lend through this mechanism. As regards borrowers, only those borrowers whose credit worthiness is positive with CIBIL should be permitted to access funds through these P2P companies.
Prof. Saurabh strongly feels that without prudential regulations in this sector, these P2P companies will become Pseudo banks without a banking licence facilitating flow of money outside the purview of either RBI or SEBI which may prove to be disastrous in the light of India being a victim of terrorist attacks and in-depth study of the existing P2P platforms like i2ifunding, Faircent, I-Lend.in etc is also recommended before implementing any rules or regulations.
Registration may facilitate growth to $ 50 billion in India. Registration may also help these financial intermediaries to exploit the market stating registered with RBI and recognized by Government of India. In case P2P financial intermediaries are registered and regulated, an interest range need to be determined by the regulators RBI or SEBI. P2P would also facilitate liquidity to MSME and use of excess cash funds, felt Prof. Saurabh Agarwal.

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

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

Applying for a job in SBI? Check your credit score with Cibil first

Hyderabad: If you want to apply for a job in State Bank of India (SBI), any default on loans or credit card payment will render your ineligible.
SBI, which is in the process of recruiting junior associates (customer support and sales) and junior agricultural associates in clerical cadre, has stipulated that candidates with poor credit record will not be eligible for jobs at the lender.
According to an advertisement released recently by the public sector lender, candidates against whom there is an adverse report regarding character and antecedents and moral turpitude are also not eligible to apply for the posts.
SBI has advised aspirants to check their credit history with the Credit Information Bureau Ltd (Cibil) before applying for posts in the bank. Cibil collects and maintains records of an individual’s payments pertaining to loans and credit cards.
“Candidates with record of default in repayment of loans/credit card dues and/or against whose name adverse report of Cibil or other external agencies are available are not eligible to apply for the post,” SBI said.
The move prompted some bank employee unions to request the bank to exempt students who have availed education loans from such rules.
The development comes against the backdrop of lenders, including SBI, facing flack for mounting bad loans, including the one related to United Breweries Group chairman Vijay Mallya’s Kingfisher Airline to which the SBI-led consortium extended loans amounting to Rs.9,000 crore.
“While we are well aware of, and fully appreciate, the concern for the alarming proportion of NPA (non-performing asset) severely affecting the financial health of banks, we think there would be a good number of candidates who have availed themselves of education loan from SBI or from any other bank for acquiring requisite qualification/s necessary to become eligible to get hired by potential employers, including banks,” the Bank Employees’ Federation of India (BEFI) said in statement.
“Such borrowers (those availing education loan) should not be equated and considered at par with wilful defaulters in the strict commercial sense of the term. It is very natural that this group of borrowers can start repaying their debts only when gainfully employed,” it added.
“Closing the doors of employment to them would not only put them to hardship but would also adversely affect the prospects of recovering the debts by the concerned lending institutions,” it said.
BEFI requested SBI to look into the matter and tell the authorities concerned to add an appropriate rider to ensure applicants who have availed education loan are not pushed out of the range of consideration for recruitment in SBI or in any other government lender.


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

Home loan delinquencies more than halve in last 5 years: Cibil

MUMBAI: The largest credit information company Cibil has said the proportion of bad loans in the housing segment has more than halved in the past five years.

The percentage of non-performing assets (NPAs) from the home loans segment has dropped to 0.57 in March 2015 compared to 1.06 at the end of 2010, it said in a report.
The company attributed the lower delinquencies to availability of timely credit information for lending.

It can be noted that all the lenders check the previous history of potential borrowers with a credit information company like Cibil before taking a call on the loan proposal. The past history also helps the lenders in pricing the product.



The Cibil report said Mumbai and Pune account for most such enquiries from banks for availing the details of potential borrowers, which is followed by Delhi and Bengaluru.

It said 3.9 lakh new home loan accounts were opened in the January-March quarter of this year.

It can be noted that in the face of slowing demand from the corporate segment, all banks have been focusing strongly on the retail segment, and within that the high value home loans have been a favourite.

Even though a longer tenure loan can result in potential asset liability mismatches, banks are interested in this stream as the segment is considered very safe because of the low probability of NPA.

On credit cards, which constitute a part of unsecured lending, the Cibil report said there was a growth in new accounts to 10.8 lakh for the January-March period, as against 8 lakh in the year-ago period.

On the asset quality in this segment, Cibil said there has been an improvement to 1.06 per cent as of March 2015 as against 3.27 per cent at the end of 2010.

The financial capital leads in the credit card applications as well, followed by Delhi and Bengaluru, it said.

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

Reposted By :- http://credit4loan.com

Applying for job in SBI? Check you credit historyApplying for job in SBI? Check you credit history

If you want to apply for a job at State Bank of India (SBI), any default on loans or credit card payment will render your ineligible.
SBI, which is in the process of recruiting Junior Associates (Customer Support & Sales) and Junior Agricultural Associates in clerical cadre, has stipulated that candidates with poor credit record will not be eligible for jobs at the country’s largest lender.
According to an advertisement released recently by the public sector lender, candidates against whom there is or are adverse report regarding character and antecedents, moral turpitude are also not eligible to apply for the post.
SBI has advised aspirants to check their credit history with CIBIL before applying for posts in the bank.
Credit Information Bureau Ltd (CIBIL) collects and maintains records of an individual’s payments pertaining to loans and credit cards.
“Candidates with record of default in repayment of loans/ credit card dues and/or against whose name adverse report of CIBIL or other external agencies are available are not eligible to apply for the post,” SBI said.
The move prompted some bank employee unions to request the banks to exempt students who have availed education loans from such rules.
The development comes against the backdrop of lenders, including SBI, facing flack for mounting bad loans, including the one related to Vijay Mallya’s Kingfisher Airline to which the SBI-led consortium extended loans now amounting to Rs 9,000 crore.
“While we are well aware of, and fully appreciate, the concern for the alarming proportion of NPA severely affecting the financial health of Banks, we think there would be a good number of candidates who have availed themselves of education loan from SBI or from any other Bank for acquiring requisite qualification/s necessary to become eligible to get hired by potential employers, including banks,” Bank Employees Federation of India (BEFI) said in statement.
“Such borrowers (those availing education loan) should not be equated and considered at par with “wilful defaulters” in the strict commercial sense of the term. It is very natural that this group of borrowers can start repaying their debts only when gainfully employed,” it added.
“Closing the doors of employment to them would not only put them to hardship but would also adversely affect the prospects of recovering the debts by the concerned lending institutions,” it said.
BEFI requested the SBI to look into the matter and advice the authorities concerned to add an appropriate rider to ensure the applicants who have availed education loan are not pushed out of the range of consideration for recruitment in SBI or in any other Government lender.
Author :-  http://www.dnaindia.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/

When netas are wilful defaulters, they cut across all party lines

If the Kingfisher Airlines loan default case unravels the alleged nexus between bankers and businessmen, a close look into the list of wilful defaulters disclosed by Credit Information Bureau (India) Limited (CIBIL) and banks spells out names of at least five politicians, across the political spectrum, who are directors in companies that owe around Rs 900 crore to Indian banks.
The Indian Express looked into cases where the default amount is in excess of Rs 50 crore for one individual.

A detailed questionnaire sent to the five individuals or their companies, seeking their responses over the defaults, went unanswered.
In terms of the loan default amount, Jivraj Surani of JB Diamonds tops the list. The former Gujarat BJP vice-president who was a close aide of former Gujarat CM Keshubhai Patel owes Rs 466 crore to three banks as per the CIBIL report.
In 2007 Gujarat state elections, Surani campaigned for Gujarat Parivartan Party headed by Patel and later joined the Congress.
Next on the list is Shibaji Panja who set up RP Infosystems in partnership with Kaustuv Ray. Reported to be an aide of West Bengal CM Mamata Banerjee (who in the past has denied any association with him), Panja was also a member of the task force attached to the state’s department of information and culture and a member of the tele-academy set up by the chief minister. Panja has been announced a wilful defaulter by five banks for loan default aggregating to over Rs 180 crore.

In February 2015, Panja was arrested for allegedly fraud related to a Delhi-based company amounting to around Rs 18 crore. Earlier, the economic offences wing of Delhi Police had issued a lookout notice in that regard. The arrest followed a complaint by an official of Delhi based IFCI Factors, an IFCI group company, where it alleged that Panja, who was the managing director of RP Infosystems, had taken a loan of Rs 10 crore against a bill pending payment in 2010.

Another politician on the list is Kadir Rana who was elected to the Lok Sabha from Muzaffarnagar seat in 2009 as a Bahujan Samajwadi Party candidate. Kadir Rana’s name appears on the list of wilful defaulters for loan default of over Rs 90 crore by two of his companies — Rana Udyog and Rana Global. Along with these two companies, Rana Alloys and Haridwar Iron and Ispat Rolling owned by his close relatives have also defaulted on loans amounting to around Rs 135 crore. In 2014 Kadir Rana, along with several others including his relative Noor Saleem Rana, were chargesheeted by the SIT for Muzaffarnagar riots. Noor Saleem Rana is also a director on one of the Rana Group companies. The list also includes the name of Jasbir Singh Khangura or Jassi Khangura, a hotelier and former Congress MLA from Halqa Qila Raipur constituency in Punjab (2007-2012), for having defaulted on a loan of Rs 70 crore taken by his firm Macro Dairy Ventures which sells products under the brand TruMilk. He contested from Dakha constituency of the state in 2012 but failed to get re-elected. Khangura came from UK to India in 1990s and set up Hotel Park Plaza in Ludhiana. He is married to Raman who is granddaughter of former Punjab CM Partap Singh Kairon. Another politician whose name figures in the list is Ashok Kumar Bajpai, a former Congress party member who later joined BSP in 2007 and then joined Janata Dal (United). Bajpai’s name has been listed alongside the loan default of Rs 63 crore by Parerhat Gas. Bajpai’s mother, Rajendra Kumari Bajpai, was also a Congree leader and she served as minister of labour and social welfare, was a close confidant of Indira Gandhi. Rajendra Kumari has also been the Lieutenant Governor of Pondicherry.

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