In the second quarterly review of the credit policy, the Reserve Bank of India (RBI) revised the risk weight for residential housing loans of Rs 75 lakh and above upwards at 125 per cent, compared with 100 per cent earlier. What does it mean? How will it affect borrowers?
The revision in risk weight implies that banks will have to increase their capital for loans disbursed in the specified segment. Simply put, banks will have to keep more money aside as capital when they disburse home loans of Rs 75 lakh and above. Borrowers get impacted indirectly by way of marginally higher interest rates due to the increased cost of funds, as capital is a costlier source of funds.
My uncle and aunt were servicing a joint home loan for the past nine years. Unfortunately, both of them passed away recently in an accident. They are survived by their 11-year-old son. There is nobody who can service their loan. I am, however, interested in the property and willing to take over the loan and service it. Can this be done? What are the legalities involved?
You would have to purchase the property from the legal heir (if he is willing to sell the property) and approach the bank for a home loan in your name. The bank would sanction the home loan to you, if you fulfil the client eligibility and credit norms. The current home loan was extended based on the bank’s assessment of your uncle and aunt, and hence, it cannot be transferred to you.
My son has taken up a job in the US and will soon send dollar cheques. Do I need to open a separate account to encash them, or will my savings account have the facility? What is the procedure and charges for encashing the amount?
You can encash dollar cheques in your resident savings account by visiting your bank branch and depositing the cheques for collection. Usually, banks charge a minimum of 0.25 per cent of the Indian rupee value of the cheque as collection charges. The charges vary from one bank to another. Your son may also explore the option of remitting money to you through ‘online money transfer’. Major banks in India provide this money transfer option to their customers at rates much lower than cheque collection charges.
I have been banking via the internet to transfer money, mostly on Sundays. Recently, a friend said all online transactions were National Electronic Funds Transfer (NEFT) transactions, routed through RBI and do not take place on Sundays, as RBI is closed. Is this information correct? I always got mail and text message alerts from my bank, saying the transaction had taken place. How does it work? Is it safe to transact online?
Real time gross settlement (RTGS)/NEFT are fund-transfer methods operated by RBI in order to facilitate transfer of funds between banks. RTGS/NEFT work full day between Monday and Friday, and half day on a Saturday. Transfers do not happen in the second half of Saturday, Sunday and banking holidays. If you make a transfer in any of these days, the payment is scheduled to the next working day. In addition, no debit happens in the customer’s account until then. Over the years, banks have put in place several measures to make the customer’s internet banking experience safe and secure. However, the customer has to take necessary precautions such as not sharing his password with anyone and logging out after a session is over.
I have been reading in newspapers about mobile banking. How does it work? What are the charges it entails?
Mobile banking involves transacting through mobile phones by bank customers, which involve credit/debit to their accounts. RBI has permitted banks to offer mobile banking services in India. If you want to use this facility, you first need to check with your bank whether they offer mobile banking. If they do, you need to subscribe for it. The bank will provide a separate password to operate an account through a mobile phone.
The writer is the managing director & head, private & business clients (India), Deutsche Bank. Send your queries to yourmoney@bsmail.in
