Festive Cheer:some banks to cut home, auto rates

Banks are getting into a festive mood. A few public sector banks have decided to reduce home and automobile loans till Dec 31.
State Bank of India(SBI), the country's largest lender, has decided to extend its fixed-cum-floating rate home loan scheme for 3 months. The hugely popular scheme, launched in Feb.2009 was scheduled to expire on September 30. Under the scheme, for the first year, home loans carry an 8% interest rate, which rises to 9% in second & third years. Mangalore- based Corporation Bank has gone up. It has bettered SBI's offering, at least for thr first year, by charging 7.75% on home loans. Corporation Bank, charging 8.25% for home loans less than Rs30 lakh, has now launched a fixed-cum-floating home loan product which charges 7.75% interest for the 1st year and 8.25% for the next 2 years.The Mangalore-based bank has also reduced auto loan rates. Another lender, Bank of Baroda is also planning to give 'better rates" on home and auto loan products.(BS 29092010)

RBI allows 'for profit' Cos to act as bank business correspondents

In a bid to give a fillip to financial inclusion, the Reserve Bank of India on Tuesday allowed banks to engage the services of ' for profit' companies as business correspondents (BCs). This move will enable banks to engage the services of companies ( registered under the Indian Companies Act, 1956) with wide distribution network to offer limited range of banking services at low cost at places where setting up a brick and mortar branch may not be viable.
When the BCs model of banking outreach was introduced in Jan. 2006, only entities such as non-government organisations or micro finance institutions set up under Societies/Trust Acts, Societies registered under Mutually Aided Cooperative Societies Acts or the Cooperative Societies Acts of States, Section 25 (not-for-profit) companies and post officies were eligible to act as BCs.
The list of persons who can be engaged as BCs was later expanded to include individuals like retired Bank employees, retired teachers, retired Government employees and ex-servicemen, individual owners of kirana, medical, fair price shops,individual public call office operaters, agents of small savings schemes of Government of India, insurance companies, individuals who own petrol pumps, etc.
BCs are retail agents engaged by banks for providing banking services at locations other than a bank branch/ATM. They are permitted to perform a variety of activities including collection of small value deposit, disbursal of small value credit, recovery of principal, collection of interest, sale of micro insurance, mutual fund products, pension products, other third party products and receipt and delivery of small value remittances/other payment instruments. Corporate as BC would be more suitable for rendering banking services in accordance with the bank's internal policies and standards than individuals and other small entities.(BL 29092010)