Many banks raised their lending rates last month. Will this affect existing borrowers? Will the quantum of my equated monthly instalments (EMIs) increase? If yes, what are my options if I can’t afford to pay a higher EMI?
Many banks have raised their housing loan interest rates for both new and existing borrowers. The interest rate rise is passed on to customers in the form of a tenure increase or an increase in EMI amount, or a combination of both, according to the policy of the bank. If you find it difficult to pay a higher EMI amount, you can approach your bank with a request to increase the tenure to the maximum extent possible and maintain the existing amount of EMI.
Three years ago, I took a personal loan from a private sector bank. Since I was unemployed last year, I was unable to pay the EMIs. Last week onwards, I have started working again. I have been asked by the employer to open a salary account with the same bank. Can the bank deduct the entire outstanding amount towards the loan’s repayment from my salary account?
Generally, all loan agreements have a clause that gives the bank the right of general lien on the balance in any other account maintained with the same bank, in case of default. If your loan agreement has the clause, your bank can recover the outstanding loan amount from your account. However, you should repay your outstanding loan at the earliest, to keep your credit history clean. Alternatively, you can negotiate with the lender bank for revision in repayment schedule of your loan.
My son will apply for a student’s visa for the United States in July this year. As a visa requirement, we need to maintain a balance of at least one term’s fee (Rs 5 lakh) for six months till the visa interview. Since the amount is quite high, I do not wish to keep the money idle in my account. I would like to convert it into a sweep-in deposit. Will the amount in the sweep-in deposit be considered a part of my account?
Yes, the amount lying in the sweep-in deposit account will be considered as a part of the savings account balance. However, ensure that you ask for a consolidated bank statement while submitting the same to the US embassy.
I am shifting to London in May. I hold a savings account with a private sector bank in India that has branches in London as well. Can I transfer my account to a branch there?
No, you cannot shift your existing bank account in India to a branch in London. You will have to open a new account in London after fulfiling the regulatory requirements for opening of a bank account in London. Additionally, in line with the Reserve Bank of India guidelines, you will have to convert your existing savings account in India to a non-resident external rupee account or non-resident ordinary account.
The writer is managing director & head, private & business clients (India), Deutsche Bank. The views expressed are his own. Send your queries to yourmoney@bsmail.in
