Can you be a guarantor? Asses yourself !!!

           If u have the ability to repay the loan amount, then accept yourself as guarantor. Why is it so?? Read on...

                    A Guarantor is a respectable person for both the parties of the contract. Generally a guarantor is required for availing any loans from any person. Assuming a bank gives a housing loan to a person, who sanctions a loan of Rs.15,00,000/- bank has to take due care to get that amount back from the Customers. One of the tools which the financial institution executes is Guarantor.

What does a Guarantor do actually?

                      Physically a guarantor is made to sign a document which runs 20 to 25 pages and he is supposed to sign the documents before the officials of the financial institutions. He generally signs in 10 to 15 columns, generally people does not read what it actually says. What those documents says is that if the borrower fails to repay the full amount or part amount or any of the amounts borrowed including interest,

the guarantor undertakes to pay those dues fully by him which has been accepted on behalf of the officials of the financial institutions. Therefore from the day of signing he may be made liable for the whole amount borrowed of part of the amount what so ever be if the original borrower fails

By this action, the financial institution gets a sturdy assurance towards their money lent. The Banks or other financial institutions has the right to regain the property (if loan is taken for house) or has the right to get back their loan amount for sure irrespective of the receiver of the loan. They may get either from the borrower or from the guarantor.

Actions towards guarantor:

                  The guarantor is bind by the actions of the borrower when the borrower fails to repay. Therefore the guarantor is held liable. If u really know all these facts and if you are supported with Money at your back end, u can proceed towards guaranteeing a person. If not you will be falling in trench.

Hereafter be alert when you sign any document. Signature acts as a sole proof of accepting. Therefore be careful while u sign anywhere at any time. This is not only for a guarantor, but for all who is not aware of any of these things.

Now, what is the assessment result??

                   Are u aware of all these already before signing?? If so great@!! God Bless!! If not, please revert back those where you gave guarantor.

Reverting back is another task which people might not know. According to the provision laid, a guarantor can revoke at any time if he wishes not to continue as a guarantor. But generally the financial institutions will release the guarantor only when he gets a substitute or only when he satisfies that his money lent, will be back without fooling them. Be careful in these issues.

10:34 PM | 0 comments | Read More

hip hip hurray!!! to RBI---ATM(Any teller machine)

Here am, with an interesting hot news for you all. We all have an account and an ATM card. Those cards are provided for us to withdraw money at any time. However the purpose of these cards were not solved in full, because having an ATM card of one bank you can not withdraw money in another bank.

It was not possible because of 2 main reasons,
1. Not all the banks were interconnected with each other, that is, one banks ATM card will not be accepted by other bank.
2. The surcharges, that is, every withdrawal will of money with some other bank will be charged considerably.
To make my point more clear, if u are a account holder of KVB and if you withdraw from INDIAN BANK you will be charged Rs.20 for Rs.10


With the above two points we were literally worried to withdraw our money from banks.
you need not feel for these reasons from now. From today(1st april 09) you can walk into any bank withdraw cash without any charges.

Some banks charged as high as Rs. 57 for every single transaction, which was then reduced by Rs. 20 by Reserve Bank of India which came into immediate effect with all banks.

RBI gave guidelines to all banks to operate free ATM all over the nation from 1st april 2009. This is a great move by RBI. We need not pay extra charges to withdraw our own money.

There might be some glitches in the beginning in withdrawal but its really a good move. On 1st April which is considered to be a new year of every accountant RBI has came out with a brilliant suggestion which will really be useful.

As often some banks have refused to agree to this free withdrawal issue, but i firmly believe that Reserve bank of India wont be partial and it will implement its decision in full flow from today( 1st April 09).From now its not Automatic Teller machine, its Any teller machine.

1:08 PM | 0 comments | Read More

RBI relaxes...

RESERVE BANK OF INDIA FINDS ITS NEW WAY TO IMPROVE BANKING IN INDIA

Reserve Bank of India the controller of the banks in India is now thinking to relax its restriction on the other commercial banks. This seems to be a good and healthy sign of the development of banking sector in India and hope to get more foreign exchange investments in banking sector.

Banks in India(including foreign banks)need not wait for Apex bank of the nation to approve its new branch opening nor wait for its license to open a new ATM.This is the on going discussion in the minds of central bank of India.



A larger part of the finance department is with the view that both Indian banks and foreign banks must be treated equally. so that its easy the for sub continent to meet its unmet ends in the field of banking.


We should give equal rights to foreign banks and instead of waiting for other nations to do the same.so that we easy attract more investors so that purpose of banking to attract investments and to lend loans happens very easily.

Same time, I hope RBI will vest its power to control the commercial banks so that it can easily control the banks if RBI finds commercial banks to be out of their way. Most attractive feature of this is it can easily liquidate money so that it will help RBI to handle the financial crunch.

RBI circle says that liberalization of banks is has been suggested by various panels including the very resent RAGHURAM RANJAN panel. RBI also speaks that, this is not a way to address the present financial crunch.

Another information form the side RBI is that, this is a way to have healthy growth and good competition. RBI can have the right to impose restriction for some reasons and this must be an exception and not a norm.

This relaxations may find an improvement in banking sector. Like those banks which have a lot of branches in south can concentrate its improvement the other part of the nation.

A notable point is that this relaxations may not have much impact now because most of the banks now are facing a major financial problem. This will have a great use after the time of recession, it will also prevent banks form falling into deep recession, as we saw that those banks which have a lot of branches didn't fall in the trouble of recession as compared to those branches which had less number of branches.

This is one way to have a good banking facility in rural areas. This relaxation has paved many ways of development and seems to have a good sign in banking sector. Might be its one good step taking by the central bank improve banking and also to have investments and to make the basic purpose banking easy. I feel this step will take banking facility as well as banking sector to have a good growth.

12:22 PM | 0 comments | Read More

Lending Rates Forced to Cut For Private Sector Banks

Reducing Lending Rates - Private Sector the Sufferer
Due to high competition in the Public Sector, the Lending rates of the private sectors will be reduced sooner. The Public Sector banks have reduced their Lending Rates by 75 Basis points. This has been altered by giving personal loans, Home loans etc. by the public sector Banks to the needy.

This has become an important measure for the Reserve Bank Who, should get recollected when they do a move in this Regard.

Alike the Public Sector Banks the Private Sector Banks should also be shown some interest in reducing their Lending rates.

Mr. P. Chidambaram, Finance Minister has given an added opinion about this Situation as not to blame the Private sector banks. The Private sector Banks has its own reasons for this level of cutting the lending rates, but he did not comment on those regard.

The Fast improvement in the Public sector Banks by slashing the Lending rates to 75 basic points made the Private sector Banks to blame. The Changes made in this Public Sector Banks will have an adverse effect over the Private sector Banks, by bringing down the lending rates. He also assures that this revolution in the Public Sector Banks will happen sooner or later.

Being the Fastest Growing Economy, When we take a look at the top 20 Banks in India, all the top 20 Banks are only the Private Sector Banks and not the Public Sector Banks. By just reducing the lending rates does not fetch up a good output for the Banks. But by making the Private Sector Banks to reduce the lending Rates may result in the good output as they were already at the top 20 among the people's Minds in India.

Though the Recession made a drastic change in the U.S Economy, It does not made any change in our Country. Our Finance Minister Said "Our Banks are 100% Safe".

It is not just a saying by the Lips, he mean What he says. The flow of foreign capital into India has slowed down will eventually reverse and rupee will find its true level as India remains the most attractive investment destination among the world.

12:17 PM | 0 comments | Read More