Banks

The Government under pressure on another front – getting back money stashed outside

The Congress (UPA) Government is already under pressure on a number of different fronts related to corruption, and the perception that the Government has started drifting on policy matters has been increasing to a large degree. With the recent disruption in the entire winter session of Parliament over the demand for a JPC probe in the 2G scam, and the recent utterances by Kapil Sibal against the report of the CAG, one can be sure that the budget session of Parliament is likely to be equally troubled unless the demand for a JPC is conceded. The Government is unable to get its legislative business through, and any impedances in the passage of the Union Budget is likely to cast a deep pall on the future of the Government, atleast in terms of policy.
Now, the Government is facing another pressure point, that of identifying the Indian nationals who hold money outside India, and start to getting this money back. The Government, because of all these corruption scams, has a much reduced credibility. Even the Prime Minister, who is supposed to be personally very honest, has a much blacker reputation because it is now being projected that this Government is incredibly corrupt and he is not seen as doing anything against this. This is contrasted with the attitude that many other Governments have taken. The US put incredible pressure on many banks in Switzerland and other such countries, to the extent that officials from many of these banks were hesitant of stepping outside their countries because of fear of arrest. Finally these banks had to settle with the US and provide the information they need.
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Personal Finance – What is a down payment ?

A term such as a down payment may seem obvious to many people who have experience in dealing with financial matters, but it makes a lot of difference to somebody who is getting into the matters of loans, EMI’s, etc for the first time. I know a lot of younger people who did not plan for a down payment when considering a loan, and had to scramble to arrange the funds for a down payment (and in their cases, since they did have much of a credit rating, there was no flexibility in down payment terms for them). Read more about what a down payment is, and what sort of planning is required (link to article):

Down payment is the amount of money that you have pay from your end. Typically, banks and other financial institutions expect buyers to pay around 15-20% as down payment. So, for a house costing Rs. 40 lakhs, the amount to be paid as down payment could be be something like Rs. 6-8 lakhs, which is a large amount of money. A lot of people do not really expect to pay this kind of money, and get into problems when they have to make such down payments. Banks can even increase this amount of down payment when times are bad, or the person has a lower credit rating.

Consumer: Bank charged penalty for charging older customer more than newer customers

It is an established business fact that when banks give loans to their customers, they normally treat newer customers more attractively than they treat older customers. The terms and conditions of the loan specify for floating rate loan that banks can charge customers more (either by increasing the EMI amount, or the loan duration) if the interest rate regime changes. Similarly, even in the case of fixed rate loans, the bank retains the right (if you read the complete legalese of the loan terms, you can confirm) to change the fixed rate loans if the rate of interest changes by a certain amount. This changing of fixed interest rate has not been challenged, however, somebody challenged the fact that they were being charged more than new customers, treating that as a unlawful practice. This was accepted by the consumer forum which fined the bank (link to article):

Imposing a penalty of Rs one lakh, which the bank will pay to Goyal, the forum said, ‘The bank is directed to overhaul accounts of all its loanees and bring the rate of interest at par with those at which the loan (home) is advanced to new customers from time to time, so that all its customers, whether old or new, who have opted for adjustable rate of interest pay the same rate of interest during any particular period.’
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