BANKS IN NEWS

Banks are planning to focus more on home loans below Rs 25 lakhs. Andhra bank is targeting home loans between Rs 10 and 15 lakhs with 0.75% reduction in interest rates. State Bank of Hyderabad is pushing home loans above Rs 20-25 lakhs.( source BL 211108)

Lakshmi Vilas Bank has effected upward revision in its deposit rates on 1to 2 years bucket to 11% for all except senior citizens who would get 0.5% more. Rate revision is effective 21-11-08.( source BL 211108)

SBI is organizing Lok Adalats to recover stressed retail loans not exceeding Rs 5 lakhs. These would be personal ,auto loans which are non performing as on 31-03-2007. Under this one time settlement borrowers are required to pay the principal loan amount with interest waiver depending on the repaying capacity of the borrower.(source BL 221108)

HDFC Bank opens counter for exchange of soiled and mutilated notes at branches in Secunderabad from 25th to 28th November 2008 ( source BL 221108)

Federal Bank in these difficult times is planning to recruit 3000 persons in next 2-3 years. It will be 1000 every year for the next 2-3 years. They are likely to increase their branches to 1000 by 2011 from just over 600 as of now. ( source BL 231108)

Corporation Bank is expanding in states like Rajasthan, MP, WB, Bihar, Haryana, Punjab and HP where presence is poor. From 1026 branches at present they are likely to reach 1400 within 2 to 3 years. ( source BL 231108)

Often there is mention of limitation period. Please clarify

Limitation period is governed by the Limitation Act which specifies the time limit within which the parties to a legal agreement can take action in a court of law to enforce their legal right. On expiry of limitation period the filing of legal suit is barred. In most bank loan agreements the limitation period is 3 years except in mortgage where it is 12 years

We hear of Negotiable Instruments but are not clear about it. Can you elaborate.

Cheques ,bank drafts, bills of exchange and promissory notes are known as negotiable instruments. Negotiation means transfer of an instrument through endorsement and delivery with the transferee getting better and absolute title provided it is taken in good faith and for value. All bank payments are based on this requirement to be fulfilled.

What are Lok Adalats?

RBI approves of compromise settlement of dues through Lok Adalats. They are convened to hear disputes where disposal of the cases are quick and concessions for one time settlement is offered by banks. It is an effort to settle large number of cases at a single forum in an expeditious manner where clients and banks are willing to settle the issue.

Home Loans are mostly against equitable mortgage. Please explain equitable mortgage

Where the mortgager i.e. the borrower delivers to the mortgagee i.e. the bank, at notified places, the documents of title to immovable property with intention to create a security thereon for availing a loan or credit facility it is known as equitable mortgage of the immovable property. It is also known as mortgage by deposit of title deeds. In case of non payment of the loan amount the bank can sue for sale of the property but cannot confiscate.

What is Right to Information ?

Right to Information Act 2005 empowers the central information commission to receive complaints if a Public Information Officer does not provide timely and correct information.  It is the right to  information available to Indian citizens to access the information under control of the public authorities.  RBI and public sector banks are a public authority under the Act and as such are obliged to provide information to members of public.