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Wednesday 26 August 2015

CitiBank - Home Credit Options, Vanilla and Fast Track - Which one to choose

Citibank believes in understanding the different life stages and need of different types of home loan products and features to complement both the lifestyle and financial goals. Whether you are looking at buying a new house, renovating your existing home, investing in property or transferring your existing loan, Citibank presents to you the widest range of mortgage solutions to make your dream home a reality. No matter whether you're a first-time home buyer, investing in your dream home or changing homes - they have the right home loan offering to suit your needs.

Features :



  • Attractive Interest Rates.
  • Easy Home Loan up to Rs. 10 crore.
  • Flexible repayment tenure up to 25 years.
  • Home Loans up to 80% of the property value.
  • Flexibility to pay interest only during construction period.

Benefits :

  • Interest calculated on daily reducing balance.
  • No co-borrowers/guarantors required.
  • Convenient repayment through Standing Instruction or Electronic Clearing System.
  • CitiPhone platform to answer all your queries.
  • Online access to your Home Loan account.

Citibank offers you to power pack your loan through the unique Home Credit option which lets you decide what interest you pay on your loan.
Home Credit loans operate through Home Credit Account which is a current account linked to your loan. All amounts deposited in the Home Credit account in excess of the threshold amount and subject to a maximum of your outstanding loan is transferred on a daily basis to your loan account to offset the interest being charged on your loan. This amount is always available for withdrawal by you as an overdraft line.
Citibank offers you 2 options in Home Credit loans that you can choose depending on your needs:
Home Credit Vanilla Option :
Home Credit Vanilla option gives you the option of maintaining liquidity. An overdraft line is set on the Home Credit account and interest savings arising out of the Home Credit facility go towards increasing this line, which is always available for withdrawal by you.
Home Credit Fast Track Option :
Home Credit Fast Track gives you the option of repaying your home loan faster. Interest saves are adjusted towards reducing your loan outstanding, which effectively reduce the tenure of your loan and help you close your home loan faster.
Interest Rates for Home Loan/ Home Loan Takeover :

  • Loans up to Rs. 25 lacs                                                   -   9.85% p.a. to 10.00% p.a.
  •  Loans > Rs. 25 lacs (without home credit facility)      -   9.85% p.a. to 10.25% p.a. 
  • Loans > Rs. 25 lacs (with home credit facility)             -   9.95% p.a. to 10.35% p.a. 
Home Loan Takeover with Enhancement/ Home Loan Top-up (with cash out portion within 100% of Home Loan amount) 9.90% p.a. to 10.65% p.a.
Tenors - MCLR

O/N - 8.65% 
1M - 8.95%
3M - 9.00%
6M - 9.00%
12M - 8.85%


Which One to Choose :


Citibank Home Credit
FeaturesHome Credit Vanilla optionHome Credit Fast Track option
Product BenefitYou maintain Liquidity.Allows you to repay your loan faster.
Who should opt?Self-employed customers who have funds lying idle from time to time and would want the option of liquidity.Salaried customers who want to better utilize their monthly savings to ensure their loan gets paid off faster.
Interest SavesYou can withdraw interest savings arising out of Home Credit. The overdraft line is increased appropriately.Interest savings are adjusted towards reducing loan outstanding.
Overdraft Line Amount (Amount that you can withdraw)Net amount deposited by you plus the interest savings arising out of Home Credit.Net amount deposited by you.




Promotional Activities : 

You can refer your friends, close associates or relatives who are looking for a home loan, loan against property, or want to transfer their existing home loan. As a token of Citi Bank's appreciation you will get rewarded upto Rs. 75000/- per successful conversion.
Get Cash Reward for every referred loan booked and disbursed before 31st March 2016^
Cash Reward Payout Grid
Disbursed Amount (in Rs.)^Referral Rewards on Disbursal*
30 Lakh - 50 LakhCash Reward of Rs.9999
>50 Lakh - 1 CroreCash Reward of Rs.25,000
>1 Crore - 2 CroreCash Reward of Rs.50,000
>2 CroreCash Reward of Rs.75,000
*Subject to tax deduction at source under Section 194H of the Income Tax Act.

If you are looking for information and haven't found an answer in the other sections:
Login to Citibank Online and send  your question.
In the logged-in section, go to Quick Links > Your Queries > Compose Mail.
Or

Mail :
If you have a query or complaint to
  • Ordinary Post
    Citibank N.A.,
    P.O. Box No. 4830,
    Anna Salai Post Office,
    Chennai - 600 002.
  • Registered Post
    Citibank N.A.,
    Mail Room,
    No. 2, Club House Road,
    Chennai - 600 002.



Tax benefits one can avail while buying a Car.


 If you planning to purchase a new vehicle, one of the most exciting things to uncover is if you can get a tax deduction. There's always a welcome way of saving a few extra rupees to help offset the high price paid for a new vehicle. Not many know that we can avail tax benefits on buying a car. 

Many of us don't even know that car loans come with tax advantages and miss out on this benefit. However, all car loans do not come with tax benefit. A car loan is a good tool for the self-employed to claim some tax deduction as well as depreciating assert in the balance sheet.

Tax benefits that can be availed by self-employed while buying a Car.
How do you benefit?
Deductions from payable tax through a car loan can be availed only if you are a business man and declare the profit or capital gains earned from your business. Another condition attached to this is that the vehicle has to be purchased in the name of your business. In that case, you get exemption on the interest as well as depreciation of the vehicle.
Under these conditions, you can include the interest paid for your car loan for tax exemption.
Besides this, businessmen can avail deductions on personal loans too under certain conditions, like the loan being taken as a business loan or for capital investment in business.
Loans taken wisely and within our limits would save us from a never ending debt spiral, which many fear. While loans affect your monthly as well as annual finances for other expenditures, the beneficial side of it in the form of tax saving, reduces their overall impact considerably.


Tax benefits that can be availed by employees while buying a Car.

I am not self-employed, I am working for a company, how can I avail the tax benefits? 

Don't worry. Most of the employers in India design a company policy for car leasing that would give a tax benefit employees. Check with your employer if you can avail car  lease.

Car leasing is becoming popular among employees who are planning to buy their car through bank loan. Company provides option to employees to buy car- any make any model as per employee eligibility accordingly to company car lease policy depending upon employee’s grade. Best thing is that employee needs not to pay any down payment. Employee simply starts paying lease amount on monthly basis. It is becoming a prominent option in compensation structure of high paid employees. This is offered to employee as an option and it is employee wish to choose or not to choose.

Now question is “Car leasing is a good option for employees? Lets understand first, what is this car leasing plan all about?

Employer ties up with a car leasing company which provides cars on lease and design a company policy for car leasing. If an employee who is eligible for car leasing option can express his willingness and mention model and make of car to buy. Leasing company will buy the car for employee and give it to employee for use – both official and personal. Car will be in name of leasing company. Employee will pay monthly lease amount to leasing company which is normally lower than EMI, if employee goes with bank loan option. Car lease period normally range from 3 to 5 years. After lease period is over employee can either choose to buy the car by paying agreed residual price (20% to 45% of car purchase value) depending upon company policy or let the leasing company keep it. Employee can go for another lease or buy a new one.

What are the benefits to employee?

No down payment is required
Employee need not to make any down payment to lease the car. This is a clear cut saving and employee can use this amount anywhere else. Employee can also make a fixed deposit of this down payment amount and can get good interest rate. Employee enjoys his new car from day one without being worrying arrangement for down payment.

Lower monthly lease amount as compared to Bank EMI
Lease amount paid to lease company is always lower than Bank EMI. Lease amount is calculated after reducing projected sale value of car after lease period wherein Bank EMI is on full value of Car.

Employee need not to worry about car maintenance, service and insurance etc
Employee need not to worry about any paper work, car maintenance, regular service, insurance etc. Leasing company take cares of the same and it is including in monthly lease amount payable by employee. There are options available to not to take maintenance option where monthly lease amount will further reduce but employee need to take care of maintenance of vehicle. Lease companies do also provide break down assistance, replacement car in case car service take more than 24 hours, Chauffeurs etc.
It saves a lot of time of employee.

Tax saving on lease amount paid by employee
In case an employee pay Rs 20,000/- per month as car lease and employee falls in 30% tax bracket then employee clearly saves Rs 6,000/- per month on tax (30% of Rs 20,000). Hence it is clear that car leasing is more beneficial to employees who fall under higher tax bracket. Employee who falls in lower tax bracket like 10% will not be that much beneficial.
Wherein if an employee takes bank loan and pay EMI of Rs 20,000/-, then employee will not get any tax benefits as employer will deduct tax on Rs 20,000.
Further, employee can also take fuel expenses and driver salary from company if an employee use the car for official purpose and this will be non taxable money. Hence further tax saving. Commuting from Office to home and vice versa will not be considered as an official travel and fuel expense can not be claimed against the same.

Benefits are more if employee stays with company for longer period
Return on Car lease option is higher if employee stays with company for longer period and do not change the job again and again.

What are the cons for employee in car leasing?

Car is not owned by employee even after lease tenure is over
Even after your car lease tenure is over car do not belongs to you. It is still company’s property. After lease period is over employee can either choose to buy the car by paying agreed residual price (20% to 45% of car sales value) depending upon company policy or let the leasing company keep it. Employee can go for another lease and buy a new one where in case of Bank Loan, Car is owned by person after loan period is over.

Interest rate is higher in leasing as compared to Bank Loan
Interest rate is higher in leasing as compared to Bank Loan. Monthly Leasing amount is lower because it is calculated on car value after reducing projected sale value of car after lease tenure wherein Bank Loan EMI is calculated on 100% car sale value from day one. That’s the reason lease amount is lower wherein lease interest rate is higher.
Example : If Car sale value is Rs 10,00,000 and lease tenure is 5 years and projected sale value of car @ 20% i.e. Rs 2,00,000 at end of 5 years then lease amount will be calculated on Rs 8,00,000 ( Rs 10,00,000- Rs 2,00,000).

Employee still needs to pay some tax
As per tax laws, when you use a company car, the employee has to pay a perquisite tax. For a car which is less than 1.6cc, the perquisite value is .Rs 1,800 per month; while for cars more than 1.6cc, the perquisite value is .Rs 2,400 per month. This means for a car greater than 1.6cc the employee will pay a tax of Rs 741.6 per month.

Employee cannot take tax benefit on conveyance allowance
If an employee chooses for car lease option then conveyance allowance paid to employee automatically becomes taxable. Rs 800 per month conveyance allowance paid to employee to travel between office to work and vice versa is non taxable but becomes taxable if an employee choose car lease option.

Car leasing is costlier deal if you leave the company in between or want to terminate the lease before lease tenure completion
Although, there is option available to employee to terminate the lease in between but It is always costlier affair. If an employee leaves the company then employee is left with following options:
  • Employee need to pay amount asked by leasing company if employee want to buy the car
  • Employee can transfer the lease to some other employee provided some other employee is willing to take that car.
  • Employee leave the car for leasing company
Some companies do also keep penalty charges in case of mid termination of car leasing.

You become second owner if you choose to purchase your leased car
As mentioned earlier that car you choose to lease is in name of the leasing company however you have purchase option after lease period is over but in that case car will be registered in your name again and you will become second owner. For many people, this does not matter but for some it does.

Car leasing can be a good option depending upon in which tax bracket you fall into, what are your plans to be with same company for longer period or do you have money for down payment etc. It can be good deal or bad deal depending upon your case. Hope above information will help you to take your decision. Please write back to me in case you have any query.

Tuesday 25 August 2015

What is Electronic Clearing Service (ECS) ? 26 question one need to know about ECS.

Updated on 28/Sep/2015

As the name suggests, it's an electronic process through which money can be transferred from one bank account to another. According to RBI, this mode is usually used for regular payments and receipts, like distribution of dividend, interest, salary, pension etc. This mode is also used for collection of bills for telephone, electricity, water, various types of taxes, payment of EMIs, investments in mutual funds, payment of insurance premium etc. 

There are two types of ECS, like most other banking transactions, ECS credit and ECS debit. 
An ECS credit is used by a bank account holder, usually a large company or an institution for services like payment of dividend, in terest, salary, pension etc. If your mutual fund pays you dividend to your bank account, of all probability it is being paid through ECS credit.

ECS debit, on the other hand, is used when a company or an institution is getting money from a large number of people. 
For example if you are investing in a mutual fund scheme through systematic investment plan (SIP), and every month a fixed amount of money goes out of your bank account, it must be through the ECS debit process.This could be used for payment of utility bills like electricity, telephone etc.



Q.1. What is Electronic Clearing Service (ECS)?
Ans : ECS is an electronic mode of payment / receipt for transactions that are repetitive and periodic in nature. ECS is used by institutions for making bulk payment of amounts towards distribution of dividend, interest, salary, pension, etc., or for bulk collection of amounts towards telephone / electricity / water dues, cess / tax collections, loan instalment repayments, periodic investments in mutual funds, insurance premium etc. Essentially, ECS facilitates bulk transfer of monies from one bank account to many bank accounts or vice versa. ECS includes transactions processed under National Automated Clearing House (NACH) operated by National Payments Corporation of India (NPCI).

Q.2. What are the variants of ECS? In what way are they different from each other?
Ans : Primarily, there are two variants of ECS - ECS Credit and ECS Debit.
ECS Credit is used by an institution for affording credit to a large number of beneficiaries (for instance, employees, investors etc.) having accounts with bank branches at various locations within the jurisdiction of a ECS Centre by raising a single debit to the bank account of the user institution. ECS Credit enables payment of amounts towards distribution of dividend, interest, salary, pension, etc., of the user institution.
ECS Debit is used by an institution for raising debits to a large number of accounts (for instance, consumers of utility services, borrowers, investors in mutual funds etc.) maintained with bank branches at various locations within the jurisdiction of a ECS Centre for single credit to the bank account of the user institution. ECS Debit is useful for payment of telephone / electricity / water bills, cess / tax collections, loan installment repayments, periodic investments in mutual funds, insurance premium etc., that are periodic or repetitive in nature and payable to the user institution by large number of customers etc.

Q.3. At how many places in the country is ECS Scheme available?
Ans : Based on the geographical location of branches covered, there are three broad categories of ECS Schemes – Local ECS, Regional ECS and National ECS.These schemes are either operated by RBI or by the designated commercial banks. NACH is also one of the form of ECS system operated by NPCI and further details about NACH is available at NPCI web site under the linkhttp://www.npci.org.in/clearing_faq.aspx.
Local ECS – this is operating at 81 centres / locations across the country. At each of these ECS centres, the branch coverage is restricted to the geographical coverage of the clearing house, generally covering one city and/or satellite towns and suburbs adjoining the city.
Regional ECS – this is operating at 9 centres / locations at various parts of the country. RECS facilitates the coverage all core-banking-enabled branches in a State or group of States and can be used by institutions desirous of reaching beneficiaries within the State / group of States. The system takes advantage of the core banking system in banks. Accordingly, even though the inter-bank settlement takes place centrally at one location in the State, the actual customers under the Scheme may have their accounts at various bank branches across the length and breadth of the State / group of States.
National ECS – this is the centralized version of ECS Credit which was launched in October 2008. The Scheme is operated at Mumbai and facilitates the coverage of all core-banking enabled branches located anywhere in the country. This system too takes advantage of the core banking system in banks. Accordingly, even though the inter-bank settlement takes place centrally at one location at Mumbai, the actual customers under the Scheme may have their accounts at various bank branches across the length and breadth of the country. Banks are free to add any of their core-banking-enabled branches in NECS irrespective of their location. Details of NECS Scheme are available on the website of Reserve Bank of India at http://www.rbi.org.in/scripts/bs_viewcontent.aspx?Id=2345
The list of centres where the ECS facility is available has been placed on the website of Reserve Bank of India at http://www.rbi.org.in/Scripts/ECSUserView.aspx?Id=26. Similarly, the centre-wise list of bank branches participating at each location is available on the website of Reserve Bank of India at http://www.rbi.org.in/scripts/ECSUserView.aspx?Id=27
ECS (CREDIT)

Q.4. Who can initiate an ECS Credit transaction?
Ans : ECS Credit payments can be initiated by any institution (called ECS Credit User) which needs to make bulk or repetitive payments to a number of beneficiaries. The institutional User has to first register with an ECS Centre. The User has to also obtain the consent of beneficiaries (i.e., the recipients of salary, pension, dividend, interest etc.) and get their bank account particulars prior to participation in the ECS Credit scheme.
ECS Credit payments can be put through by the ECS User only through his / her bank (known as the Sponsor bank). ECS Credits are afforded to the beneficiary account holders (known as destination account holders) through the beneficiary account holders’ bank (known as the destination bank). The beneficiary account holders are required to give mandates to the user institutions to enable them to afford credit to their bank accounts through the ECS Credit mechanism.

Q.5. How does the ECS Credit Scheme work?
Ans : The User intending to effect payments through ECS Credit has to submit details of the beneficiaries (like name, bank / branch / account number of the beneficiary, MICR code of the destination bank branch, etc.), date on which credit is to be afforded to the beneficiaries, etc., in a specified format (called the input file) through its sponsor bank to one of the ECS Centres where it is registered as a User.
The bank managing the ECS Centre then debits the account of the sponsor bank on the scheduled settlement day and credits the accounts of the destination banks, for onward credit to the accounts of the ultimate beneficiaries with the destination bank branches.
Further details about the ECS Credit scheme are contained in the Procedural Guidelines and available on the website of Reserve Bank of India at http://www.rbi.org.in/Scripts/ECSUserView.aspx?Id=1

Q.6. What is a MICR Code?
Ans : MICR is an acronym for Magnetic Ink Character Recognition. The MICR Code is a numeric code that uniquely identifies a bank-branch participating in the ECS Credit scheme. This is a 9 digit code to identify the location of the bank branch; the first 3 characters represent the city, the next 3 the bank and the last 3 the branch. The MICR Code allotted to a bank branch is printed on the MICR band of cheques issued by bank branches.

Q.7. How does a beneficiary participate in ECS Credit Scheme?
Ans : The beneficiary has to furnish a mandate to the user institution giving consent to avail the ECS Credit facility. The mandate contains details of his / her bank branch, account particulars and authorises the user institution to afford credit to his / her account with the destination bank branch.

Q.8. Is it necessary for user institutions to collect the mandates from beneficiaries?
Ans : Yes, in addition to the consent of the beneficiaries, the mandate also provides important information related to bank account details etc. which are useful for the user institution to transfer funds to the right accounts . A model mandate form has been prescribed for the purpose and is available in the ECS Credit Procedural Guidelines.

Q.9. Is there scope for the beneficiary to alter the mandate under the ECS Credit Scheme?
Ans : Yes. In case the information / account particulars contained in the mandate undergo any change, the beneficiary has to notify the changes to the User Institution so that the correct information can be incorporated in its records. This will ensure that transactions do not get rejected at the beneficiary’s bank branch due to inconsistencies/ mismatch in the data sent by the user institution.

Q.10. Can ECS be used to transfer funds to Non Resident External (NRE) and Non Resident Ordinary (NRO) accounts?
Ans: Yes. ECS can be used to transfer funds to NRE and NRO accounts in the country. This, however, is subject to the adherence to the provisions of the Foreign Exchange Management Act, 2000 (FEMA) and Wire Transfer Guidelines.

Q.11. Will beneficiaries be intimated of credits afforded to their account under the ECS Credit Scheme?
Ans : It is the responsibility of the user institution to communicate to the beneficiary the details of credit that is being afforded to his / her account, indicating the proposed date of credit, amount and related particulars of the payment. Destination banks have been advised to ensure that the pass books / statements given to the beneficiary account holders reflect particulars of the transaction / credit provided by the ECS user institutions. The beneficiaries can match the entries in the passbook / account statement with the advice received by them from the User Institutions. Many banks also give mobile alerts / messages to customers after credit of such funds to accounts.

Q.12. What will happen if credit is not afforded to the account of the beneficiary?
Ans: If a Destination Bank is not in a position to credit the beneficiary account due to any reason, the same would be returned to the ECS Centre to enable the ECS Centre to pass on the uncredited items to the User Institution through the Sponsor Bank. The User Institution can then initiate payment through alternate modes to the beneficiary.
In case of delayed credit by the destination bank, the destination bank would be liable to pay penal interest (at the prevailing RBI LAF Repo rate plus two percent) from the due date of credit till the date of actual credit. Such penal interest should be credited to the Destination Account Holder’s account even if no claim is lodged to the effect by the Destination Account Holder.

Q.13. What are the advantages of the ECS Credit Scheme to the beneficiary?
Ans : ECS Credit offers many advantages to the beneficiary–
  • The beneficiary need not visit his / her bank for depositing the paper instruments which he would have otherwise received had he not opted for ECS Credit.
  • The beneficiary need not be apprehensive of loss / theft of physical instruments or the likelihood of fraudulent encashment thereof.
  • Cost effective.
  • The beneficiary receives the funds right on the due date.

Q.14. How does the ECS Credit Scheme benefit User Institutions?
Ans : User institutions enjoy many advantages as well. For instance,
  • Savings on administrative machinery and costs of printing, dispatch and reconciliation of paper instruments that would have been used had beneficiaries not opted for ECS Credit.
  • Avoid chances of loss / theft of instruments in transit, likelihood of fraudulent encashment of paper instruments, etc. and subsequent correspondence / litigation.
  • Efficient payment mode ensuring that the beneficiaries get credit on a designated date.
  • Cost effective.

Q.15. Are there any advantages of the ECS Credit Scheme to the banking system?
Ans : Yes, the banking system too benefits from ECS Credit Scheme such as –
  • Freedom from paper handling and the resultant disadvantages of handling, presenting and monitoring paper instruments presented in clearing. Ease of processing and return for the destination bank branches.
  • Smooth process of reconciliation for the sponsor banks.
  • Cost effective.

Q.16. Is there any limit on the value of individual transactions in ECS Credit?
Ans : No. There is no value limit on the amount of individual transactions.

Q.17. What are the processing / service charges levied under ECS Credit?
Ans : The Reserve Bank of India has deregulated the charges to be levied by sponsor banks from user institutions. The sponsor banks are, however, required to disclose the charges in a transparent manner. With effect from 1st July 2011, originating banks are required to pay a nominal charge of 25 paise per transaction to the Clearing house and destination bank respectively. Destination bank branches have been directed to afford ECS Credit free of charge to the beneficiary account holders.
ECS (DEBIT)

Q.18. Who can initiate a ECS Debit transaction?
Ans : ECS Debit transaction can be initiated by any institution (called ECS Debit User) which has to receive / collect amounts towards telephone / electricity / water dues, cess / tax collections, loan installment repayments, periodic investments in mutual funds, insurance premium etc. It is a Scheme under which an account holder with a bank branch can authorise an ECS User to recover an amount at a prescribed frequency by raising a debit to his / her bank account.
The User institution has to first register with an ECS Centre. The User institution has to also obtain the authorization (mandate) from its customers for debiting their account along with their bank account particulars prior to participation in the ECS Debit scheme. The mandate has to be duly verified by the beneficiary’s bank. A copy of the mandate should be available on record with the destination bank where the customer has a bank account.

Q.19. How does the ECS Debit Scheme work?
Ans : The ECS Debit User intending to collect receivables through ECS Debit has to submit details of the customers (like name, bank / branch / account number of the customer, MICR code of the destination bank branch, etc.), date on which the customer’s account is to be debited, etc., in a specified format (called the input file) through its sponsor bank to the ECS Centre.
The bank managing the ECS Centre then passes on the debits to the destination banks for onward debit to the customer’s account with the destination bank branch and credits the sponsor bank's account for onward credit to the User institution. Destination bank branches will treat the electronic instructions received from the ECS Centre on par with the physical cheques and accordingly debit the customer accounts maintained with them. All the unsuccessful debits are returned to the sponsor bank through the ECS Centre (for onward return to the User Institution) within the specified time frame.
For further details about the ECS Debit scheme, the ECS Debit Procedural Guidelines – available on the website of Reserve Bank of India at http://www.rbi.org.in/Scripts/ECSUserView.aspx?Id=25 may be referred to.

Q.20. What are the advantages of ECS Debit Scheme to the customers?
Ans : The advantages of ECS Debit to customers are many and include,
  • ECS Debit mandates will take care of automatic debit to customer accounts on the due dates without customers having to visit bank branches / collection centres of utility service providers etc.
  • Customers need not keep track of due date for payments.
  • The debits to customer accounts would be monitored by the ECS Users, and the customers alerted accordingly.
  • Cost effective.

Q.21. How does the ECS Debit Scheme benefit user institutions?
Ans : User institutions enjoy many benefits from the ECS Debit Scheme like,
  • Savings on administrative machinery and costs of collecting the cheques from customers, presenting in clearing, monitoring their realisation and reconciliation.
  • Better cash management because of realisation / recovery of dues on due dates promptly and efficiently.
  • Avoids chances of loss / theft of instruments in transit, likelihood of fraudulent access to the paper instruments and encashment thereof.
  • Realisation of payments on a uniform date instead of fragmented receipts spread over many days.
  • Cost effective.

Q.22. What are the advantages of ECS Debit Scheme to the banking system?
Ans : The banking system has many benefits from ECS Debit such as –
  • Freedom from paper handling and the resultant disadvantages of handling, receiving and monitoring paper instruments presented in clearing.
  • Ease of processing and return for the destination bank branches. Destination bank branches can debit the customers’ accounts after matching the account number of the customer in their database and due verification of existence of valid mandate and its particulars. With core banking systems in place and straight-through-processing, this process can be completed with minimal manual intervention.
  • Smooth process of reconciliation for the sponsor banks.
  • Cost effective.

Q.23. Can the mandate once given by a customer be withdrawn or stopped?
Ans : Yes. Any mandate in ECS Debit is on par with a cheque issued by a customer. The customer has to maintain adequate funds in his / her account with the destination bank branch to ensure the ECS Debit instructions are honoured when presented. In case of any need to withdraw or stop a mandate, the customer has to give prior notice to the ECS user institution well in time, so as to ensure that the input files submitted by the user do not continue to include the ECS Debit details in respect of the mandates withdrawn or stopped by customers. The process flow to be followed for withdrawing / stopping mandates is detailed in ECS Debit Procedural Guidelines.

Q.24. Can a customer stipulate any ceiling on the amount of debit, purpose or validity period of the mandate under the ECS Debit Scheme?
Ans : Yes. It is left to the choice of the individual customer and the ECS user to decide these aspects. The mandate can contain a ceiling on the maximum amount of debit, specify the purpose of debit and validity period of the mandate.

Q.25. Is there any limit on the value of Individual transactions in ECS Debit?
Ans : No. There is no value limit on the amount of individual transactions that can be collected by ECS Debit.

Q.26. What are the processing / service charges levied under ECS Debit?
Ans : The Reserve Bank of India has deregulated the charges to be levied by sponsor banks from user institutions. The sponsor banks are, however, required to disclose the charges in a transparent manner. With effect from 1st July 2011, originating banks are required to pay a nominal charge of 25 paise and 50 paise per transaction to the Clearing house and destination bank respectively. Bank branches do not generally levy processing / service charges for debiting the accounts of customers maintained with them.

Monday 24 August 2015

IDBI - Home Loan, Repayment Options, Home Loan Interest Saver

Owning a home is one of life’s biggest aspirations. IDBI home loan solutions are designed to offer you convenience and make the journey to your dream home a pleasant one. The home loan solutions cater to your home loan requirements in a customized manner and are based on the following traits.
  •  The expertise & in-depth knowledge of the Industry.
  •  Quality of Service
  •  Transparency
  •  Quick Processing
  •  Power Packed customized Features to suit your Home Loan requirements.

IDBI Home Loan Solutions Advantages:
  • Assistance in property search and due-diligence of property for acquisition.
  •  In-principle loan approval even before property is selected.
  • Extensive Range of Home Loan Products viz .Home Loan, Home Loan Interest Saver, Home Loan -Top up, Home Loan - takeover facility, Home Improvement Loan, Home Extension Loan, Home Loan - Booking Finance, Loan on second Charge/Pari-passu charge and Home Loan-Refinance Facility.
  • Customized Home Loan Features for Salaried (Including NRI), Self Employed Professional and Self Employed Non Professional (Business Category).
  • Already approved projects for convenience of Home Loan buyers.
  • Flexible Loan Repayment Option viz. Flexible Loan Installment Plan, Step up & Step down repayment facility, Tranche Based EMI.
  • Broad presence in India with1200 Branches and 66 dedicated Loan Processing Retail Asset Centers.
  • Loan from anywhere to purchase Home anywhere in India.
  • Most experienced personnel for smooth and easy loan processing.
  • Online application facility.

Features :

 Maximum Loan Amount:


Loan Amount
Maximum Funding*
Up to Rs 20 Lakh
Up to 90%  of Market value/ document cost of the property, whichever is lowest
Above Rs 20 Lakh to Up to Rs 75 Lakh
Up to 80%  of Market value/ document cost of the property, whichever is lowest
Above Rs 75 Lakh
Up to 75% of Market Value/ document cost of the property, whichever is lowest


 Maximum Loan Tenure:


CategoryLoan Tenure*
Salaried
Up to 30 years
Self Employed Professional
Up to 20 years
Self Employed Non Professionals
Up to 20 years

*Subjected to repayment capacity of the individual as assessed by IDBI Bank Ltd.

  •  Loan Purpose :

    1. Purchase of under construction and Ready possession Property by way of direct allotment/Resale.

    2. Composite Loan for purchase of Plot and construction of dwelling units thereon.

    3. Purchase of Plot of land for the purpose of construction of dwelling units.

    4. Construction Finance

    5. Home Loans for Improvement/Renovation of your existing Home.

    6. Home Loans for Extension of your existing Home.

    7. Takeover of an existing Home Loan from another financial institution.

    8. Refinance facility towards purchase/construction of the house within 12 months from date of transaction.

 Attractive & Flexible Interest rates:

Attractive Interest rates that will make your Housing loan affordable and convenient. Choose your own interest rate under floating or fixed type to beat the uncertainty of its movement in the future. 

As per RBI mandate, Savings Bank interest will be calculated on the daily balances maintained in your account, at a rate of interest decided by the Bank from time to time (existing rate is 4.00% p.a.).




Marginal Cost of Fund Based Lending Rate ( MCLR ) w.e.f. 01 Apr 2016
Tenor
Interest Rate( in % ) (MCLR+Spread (0.15))
Overnight
8.85
One Month
9.25
Three Month
9.35
Six Month
9.40
One Year
9.45
Two Year
9.75
Three Year
9.90


Retail Loans (w.e.f. May 11, 2015 till Apr 1, 2016)


Base Rate (BR)
10.00%p.a.
Home loans
Facility /Interest Type
For all loan amounts
Home Loan (Floating)
10.00% (BR+0.00%)
Home Loan Interest Saver (Floating)
10.15% (BR+0.15%)
Home Loan (Fixed ) for 3 to 10 years
Below Rs. 30 lac
Rs.30 lac & above
10.50% (BR+0.50%)
10.75% (BR+0.75%)
On completion of fixed period customer will be provided with an option to continue at the then Prevailing fixed Rate for next 3 years OR Switch to Prevailing Floating Rate.
Turnover based Loan (HL)
13.00% (BR+3.00%)(Floating)


Eligibility :
  • Salaried individuals who have at the time of loan application attended the age of 22 years and maximum age at the termination of loan should not be 70 years subject to establishment of satisfactory repayment.
  • Self Employed Professionals (viz.doctors, engineers, dentists, architects, chartered accountants, management consultant, company secretary, etc) who have attended the age of 25 years at the time of application and maximum age at the time of termination of loan should not be above 70 years.
  • Self Employed Non Professionals (Businessmen) who have attended the age of 25 years at the time of application and maximum age at the termination of loan should not be above 65 years. Maximum age under the category may be relaxed subjected to availability of proper succession plan of the business.

Documents Required :

Salaried Customers
Self Employed Professionals
Self Employed Non Professionals
Application form with photograph
Application form with photograph
Application form with photograph
Identity and Residence Proof
Identity and Residence Proof
Identity and Residence Proof
Latest Salary-slip for last 3 months
Education Qualifications Certificate and Proof of business existence
Proof of business existence
Form 16/ITR
Last 3 years Income Tax returns (self and business)
Business profile
Last 6 months bank statement
Last 3 years Profit /Loss and Balance Sheet
Last 3 years Income Tax returns
Last 3 years Profit /Loss  Balance
Processing fee cheque
Last 6 months bank statements
Last 6 months bank statements (self and business)
Processing fee cheque
Processing fee cheque


Repayment Option: 

In addition to Regular repayment option we have devised the following repayment options ensuring convenience to you for making repayment of your dream home.

1.Step up Repayment Facility :

The option is available to young executives who are professionally qualified and expected to have a regular career growth which will help them take a bigger loan today based on an increase in their future income. The income growth to be considered for this calculation is in the range of 6 to 8% p.a and the same will be slab of 5 years for a loan of 20 years.

2.Step Down Repayment Facility :

You can choose this facility when your income is going to reduce after a certain period during the loan maturity. The objective of this option is to recover maximum when income are at high level. This leads to 2 EMIs for different periods during the loan maturity. The Facility will help you to take bigger Home Loan by combining parent and children income together. Post retirement of the parent, children will make the payment of residual loan. The EMI in the initial period will be higher than the EMI in the later period.

3.Tranche Based EMI :

Customers purchasing an under construction property needs to pay only interest component to the extent of disbursement being availed by the customers based on level of construction and till the property is ready for possession. Accordingly, to facilitate you and to save your interest cost for starting of early EMI, Tranche Based EMI Scheme has been introduced. Under the option you can start your EMI even before property is not ready and is under construction stage.

How do you reduce your interest cost under Home Loan?

You can reduce your interest cost by availing the product Home Loan Interest Saver.

Home Loan Interest Saver :

You can decide what amount you want to pay for your Home Loan interest. The Product facilitates you to save the interest cost and repay the loan much faster.
  • How Does Home Loan Interest saver work?
Home Loan Interest Saver provides you the facility of linking your Home Loan account with the Flexi Current Account (The interest liability of your home loan comes down to the extent of surplus funds parked in the operative current account. You will be allowed to withdraw or deposit funds from this operative current account as and when required. Interest on Home loans will be calculated on outstanding balance of loan minus balance in the Current Account based on EOD balance. 
  • Advantage: Home Loan Interest Saver
 Use the Flexi Current Account to deposit your excess savings, annual bonus etc. You will have the flexibility to withdraw the idle/surplus money deposited in Flexi Current Account at any point of time 

 Just deposit these funds into your Flexi Current Account and enjoy interest saving on your home loan to the extent deposited.

 The Flexi Current Account can be used like a normal current account and you will be provided with a cheque book and an ATM Card. You will also have access to our online banking portal and our entire gamut of banking facilities


Customer Support :

For more details you can visit the website and enter your details to get a call back or you can even visit the nearest branch.

You can also write to 

Registered Office:

IDBI Bank Ltd. 
IDBI Tower, WTC Complex,
Cuffe Parade, Colaba, Mumbai 400005.