RBI on Thursday (21.04.2022) extended the guidelines on Legal Entity Identifier (LEI) to Primary (Urban) Co-operative Banks (UCBs) and Non-Banking Financial Companies (NBFCs). According to RBI’s circular ‘Non-individual borrowers enjoying aggregate exposure of Rs 5 crore and above from banks (excluding RRBs) and financial institutions (FIs), who fail to obtain LEI codes from an authorized…
A microfinance loan is defined as a collateral-free loan given to a household having annual household income up to Rs300000 (Rupees Three Lakhs). For this purpose, the household shall mean an individual family unit, i.e., husband, wife, and their unmarried children. The collateral-free loan under microfinance shall be irrespective of end-use and mode of application/…
This post provides you the key legal checklist for buying and selling a house property; method of title deed verification, database available with CERSAI and RERA, EMI calculation, associated costs of home loans, teaser rates, risks involved in transferring of loan to other banks, rules regarding funds transfer abroad after disposal of properties in India;…
The right of subrogation is an equitable and natural right of the guarantor against the principal borrower on whose behalf he has paid the money. Section 128 of the Indian Contract Act 1872 provides that the liability of the guarantor is co-extensive with the principal debtor. It means the guarantor of a loan is liable…
Government of India (GoI), vide Gazette Notification S.O. 2119 (E) dated June 26, 2020, has notified new criteria for classifying the enterprises as Micro, Small, and Medium enterprises. The new criteria came into effect on July 1, 2020. According to the new notification, these enterprises are reclassified under composite criteria (investment and turnover). and there…
RBI today clarified banks and other financial institutions about the definition of ‘out of order’, as clarified in the earlier circulars, shall be applicable to all loan products being offered as an overdraft facility, including those not meant for business purposes and/or which entail interest repayments as the only credits. “The ‘previous 90 days period’…
Most banks allow you to repay both part and full prepayment of a home loan. You are also allowed to pay a certain portion of the outstanding balance and go with the same EMI afterward. However, many banks charge early repayment penalties up to 2-3% of the principal amount outstanding. Prepayment penalty may vary according…
It is not mandated by any authority like RBI or IRDA to buy a life insurance policy from a bank in order to get a loan. However, if you buy a life insurance policy equivalent to the loan amount it is beneficial to family members in case of your unfortunate death. The loan amount will…
Switch over or Balance transfer of Home Loan means you can switch the loan amount from one bank to another. If you are facing the problem of the high rate of interest charged on your existing home loan, whereas other banks are charging a lower rate of interest, you may prefer to close your account…
In terms of the recently amended Factoring Regulation Act, 2011which widens the scope of companies that can undertake factoring business, permits Trade Receivables Discounting System (TReDS) to file the particulars of assignment of receivables transactions with the Central Registry on behalf of the Factors for operational efficiency. The Act empowers the Reserve Bank of India…