What does the new bank locker guidelines mean

What does the new bank locker guidelines mean

What does the new bank locker guidelines mean

bank Locker

The RBI has announced a few changes in the starting and keeping a bank locker. As the news guidelines are going to be affected from January 1, 2022, let us take a quick look of what it necessitates. 

Subas Tiwari

Under the new guidelines, the liability of the bank towards locker in case of fire, theft, building collapse and fraud by bank employees will be limited to 100 times of its annual rent. The revised locker guidelines will come into effect from January 1, 2022. Banks will have to include a provision in the locker agreement under which the person renting the locker will not be able to keep any illegal or dangerous goods in it.

The Reserve Bank said that on the basis of various developments in the banking and technology sectors, nature of consumer complaint and information provided by banks and Indian Banks’ Association (IBA), it has decided to “deposit lockers/safe custody items provided by banks” facility’ is reviewed.

Let us know here about the new rules and how they are going to affect you.

  1. The responsibility of the banks will be fixed

According to the new RBI guidelines, banks will have to implement a board approved policy, in which their responsibility can be fixed for the goods kept in the locker due to negligence. According to the rules, the bank will not be responsible for any loss in case of natural calamity or ‘Act of God’ i.e. earthquake, flood, lightning and storm.

  1. If theft, fraud happens, the bank will give compensation

But this does not mean that the bank is free from its responsibilities. Banks will have to ensure proper arrangements to protect their premises from such calamities. Apart from this, the entire responsibility of the security of the premises where there are safe deposit lockers will be with the bank itself. According to the new rules of the Reserve Bank, in case of fire, theft, building collapse or fraud on the part of bank employees, the liability of banks will be limited to 100 times of their annual rent.

  1. If payment is not made

If the rent for the locker has not been paid by the customer for three consecutive years, then the bank can take action on it and can open any locker following the due process.

  1. Cannot store illegal goods

According to the RBI new rules, banks will have to include a provision in the locker agreement, under which the locker rental customer will not be able to keep any illegal or dangerous goods in the locker.

  1. Waiting list number will be released

According to the new rules, it will be necessary for banks to send SMS and email of locker operations to the customers. Banks will have to provide receipt for all applications for locker allotment. If the locker is not available, the banks will have to give the number of the waiting list to the consumers. The branch wise locker allotment information and waiting list of banks will be linked to Core Banking System (CBS) or any other computerized system compliant with cyber security framework.

  1. These customers will also get the facility

As per the new guidelines, the existing customers of the bank who have applied for locker facility and who are fully compliant with CDD (Customer Due Diligence) norms can be given the facility of Safe Deposit Locker/Safe Custody Article. According to the new rule, the facility of Safe Deposit Locker/Safe Custody Article can be given to the customers who do not have any other banking relation with the bank.

  1. Shifting of lockers

Banks will be able to shift the locker from one place to another only after informing the customer. Term deposit can be used as locker rent. The bank will have to take adequate steps to protect the strong room/vault. It will be necessary to keep the CCTV footage of entry and exit for at least 180 days.

Why a common man needs bank lockers?

In the earlier centuries, people went to the banks demanding a personal locker facility in view of a spate of robberies which were happening in their households. Their take that banks usually are safe havens with high-end security systems in place, security guards, alarms, etc-so banks were the safest places on earth to keep one’s valuables such as gold ornaments. But this high-end security systems in banks have spurred a burning question nowadays!

Everyone is reviewing their decision to continue to hold a locker in a bank in the light of recent incident of stealing of contents of bank lockers in Haryana by burglars. Readers might also remember the 2014 fire which engulfed one of India’s leading banks in Chennai (fortunately, the locker cabinets escaped the fire) which stoked media discussion about the safety of bank lockers under these circumstances.

So, we venture here to try and understand the way to go about hiring a bank locker and the responsibilities which come with being a locker hirer and the limited uses of this service which are offered by banks under public utility services 

Why banks hire out lockers?

During earlier times, banks were letting out lockers as a favor to high-end customers who were even otherwise dealing with the bank in the matters of deposit/loans/remittances. However, during the latter part of 1970s, after nationalisation of private banks, banks were looking to increase their customer base while looking into ways of accruing non-fee- based income to boost profits. This hunger for additional business threw a slew of public utility services such as issuance of letter of credits, guarantees and of course hiring out bank lockers.

How does one hire a locker?

It is as easy as opening a bank account. Request in writing for a bank locker of the size you need; request for a free personal look-in to the locker cabinets to know the depth of the locker you wish to hire; sign an agreement for locker-hiring; open a bank savings account to deposit locker rent and locker deposit; obtain the key to your allotted locker and come some other day or same day to keep the contents in the hired locker. You would also have to sign the locker visit register to mark your presence.

Locker operation conditions

  • Banks recognise you only by your signature; so, make sure you sign as normally as you always do
  • Locker deputy’s signature would also have to be affixed in the allotted page of the locker register (in case you appoint one)
  • Locker agreement provides for repaying the contents of the locker to you or your nominee (in case of the deceased of the locker-hirer) or either-or survivor clause in case the locker is hired jointly (with a blood relative) or against all the locker-hirers jointly
  • Some banks insist on a declaration from one other person accompanying you (non-locker-hirer) to request for bank’s permission to enter the locker room along with the locker-hirer
  • Quite a few banks are also obtaining a declaration to the effect from the locker-hirer that he/she has personally verified that the locker allotted to him/her has been safely secured with the locker key, after completing the operation of the locker

Benefits of a bank locker

  • In spite of the hullabaloo created in the media questioning/debating on the safety of bank lockers, it is still the safest place to keep your valuables, till some other alternatives come to replace them
  • Banks still provide a secured environment by providing bank lockers which are made of high-quality steel plates with MS screws fitted on them and difficult to penetrate
  • Bank lockers come cheap for the space you hire, which is incomparable with any other alternative system
  • Bank lockers are secured by insurance cover against fire and other hazards and nowadays are backed by internal circuit TV (CCTV)
  • Locker-hirer(s) can nominate/appoint a locker deputy to operate the locker in his/her absence (which acts as a Mandate as in a deposit account as POA holder)
  • Bank officials do not see as to what is being kept in the bank locker; they at best take a declaration that the locker contents are not opposed to public policy. So the secrecy of the customer is maintained

 Disadvantages/drawbacks of a bank locker

  • One can operate the bank locker only during the time the business hours

of a bank which severely restricts the freedom to get the locker contents in case of an emergent situation; incidentally, bank holidays in an area often coincides with a religious public holiday, thereby denying access to bank lockers (to enable the locker-hirer to take out the ornaments for wearing on such important occasions)

  • Normally, banks charge locker rent in advance for a specific period (eg., say for 1 year) and in case the locker-hirer vacates the locker in the middle of the year, banks mostly do not refund the locker rent for the unexpired (broken) period to the detriment of the customer
  • Banks usually insist, albeit orally, on depositing a sizeable sum as fixed deposits to be held with them for a longer period for letting out a locker
  • Lockers are not available at small/medium-sized branches in urban/semi-urban and rural centres where the fear of theft is the maximum due to the of the remoteness of the place
  • The RBI has recently come out with a response to an RTI filed wherein it has clarified that bank locker hirer in India  is that of  a lessee (tenant for that space he hired) while the bank acts in the position of  a lessor (landlord-the owner of the bank locker which is let out for hiring). So in case of a locker theft where the contents were removed without the connivance of the bank officials, the bank is under NO LIABILITY FOR LOSS OF VALUABLES IN LOCKERS.

Do insurance companies give locker insurance?

Insurance companies dealing with non-life (general) insurance products do not cover bank lockers for the purposes of extending insurance cover under a household package policy. However, in case one wishes to have insurance cover on the jewellery items (such as ornaments in gold, silver, platinum; precious stones, diamonds, etc)  and/or currency notes kept in bank locker(s), insurance cover under Jewellery Block Insurance Policy (as a part of the Household Package Policy) is being made available by most of the insurance companies in India.

However, this insurance cover is only for ornaments and other pieces of jewellery as well as cash. Also, one may have to show supporting receipts for having purchased them with their purchase value (other than what was acquired from marriage gifts).

A handy guide to start a term insurance plan

A handy guide to start a term insurance plan

A handy guide to start a term insurance plan

Health Insurance

Term insurance plans work as recourse to face different uncertainties. If you are planning to take term insurance plan, make sure to gather information about the cover amount, policy term, premium etc. The following article gives you an in -depth coverage of all things essential to start a term insurance plan. 

Subas Tiwari

Term insurance brings additional benefits such as posthumous family financial protection, tax savings, critical illness, accidental death etc. If we talk about the types of term plans, then there are pure term plans, return on premium term plans and term plans with income benefits. But first, let us understand what is a term insurance policy. 

What is term insurance?

One of the most misunderstood financial products in India is “Term Insurance”. In fact, “Insurance” in itself is not understood or appreciated enough. Most people consider insurance as just another form of savings or tax savings instrument, which can earn them safe, stable returns over the long run. Some products in the insurance space do provide this regular saving facility, but that is not the purest form of insurance.

The true and simplest meaning of insurance is – protection against risk. Now this risk may be to life or property or many other things. But in this article, let’s focus on life insurance, and specifically term insurance. It’s a policy where you pay premiums in return for a benefit to your family in case you die, and you get nothing if you survive the insurance period.

Tell this to people and most will ask, “Why should I pay annually for a product if I am not going to get anything back?” Very few understand that you pay premiums because there is a guarantee that if something happens to you, your family will be paid the pre-decided amount. Therefore, you have the peace of mind that even if you are not there; your loved ones will not have to bear a financial loss as well.

Just consider this – in the unfortunate event of one’s death, the immediate family will receive sufficient amount to maintain their standard of living. This payout can also fund their child’s education, help pay off dues and even provide capital in case the spouse wants to start a business to support the family. This is the reason term insurance is also known as a “pure risk” plan – simply because it mitigates the risk of you not being there to provide financial support to your family.

Term insurance is the oldest form of insurance and is the least expensive plan to cover the risk of death. Term plan is a no-return plan just like your medi-claim or car insurance cover. If claim is made within the insured period, the nominee will get the full sum assured as otherwise there is no maturity value or cash value for this plan. It provides coverage for a specific period or term say 10 to 30 years. Term insurance plan is a must for a person who has dependents or a family of which he is the sole bread-earner. If you have family members dependent on your income, you need term insurance.

It’s a hedge for the protection

One should not make the mistake of taking term insurance premium as an expense but treat this as a hedge for the protection and security of your loved ones. You need to compare the premiums before selecting the right company and also have to go through the exclusions in the plan. This will help you in selecting the right term plan. Looking at all the facts available, term insurance is the obvious choice for insurance for life.

Term insurance is the simplest or the purest form of life insurance. In this case, there is a provision that in the event of the demise of the insured person, the family of the deceased is paid a pre-determined amount as part of the coverage.
For example, a person bought a term insurance plan for a sum of Rs 30 lacs. The tenure or the term of the policy is 20 years. So, if the insured person passes away in the duration when the policy is valid, the family (the nominee or the legal heirs as the case may be) will be paid a sum of Rs 30 lacs.
Another important aspect of term life insurance is to ascertain the safety net which the family of the insured will require in the event of the demise of the insured. The calculation is done by keeping a view on the existing standard of living of the family and the funds that would be required in order to continue to live with the same standard of living. Also, to be considered are the various important events like marriages, higher education etc; and the debt that the deceased must have left behind to the legal heir(s). 

After the calculation of the aforementioned future expenses, the person can come to a definite number or the coverage which he/she may require in order to provide for the family or dependents so they can continue their existing standard of living. 
But one thing is very clear. The earlier the insured takes this policy to benefit his family after the unexpected death, the lesser is the cost of premium he/she has to pay to keep the policy alive.   

One should look at the best term insurance plan in India depending on age, income and life insurance need. The online premiums are cheaper than off-line term plans and are quite easy to avail also. In the recent past, online term plans have gained immense popularity due to their easy access. 
Some of the insurance companies are offering discounts on online purchase of term plan policies, because it saves the companies a lot of labour and man-hours trying to sift through hordes of paper/documents, which can be easily viewed online and preserve it for future use without much difficulty.
We have brought out the salient features and workings of term plan insurance online in this article (SEE BOX) for the information of our readers.

Advantages/benefits of term plan insurance

  • Term insurance is the cheapest form of insurance.
  • It’s simple to understand.
  • Select the length of the term for which you would like coverage, say up to 35 years. So, payments are fixed and do not increase during your term period.
  • During the early years of a term policy, the premium will usually be significantly lower than for cash value life insurance.
  • In case of an untimely death, dependents will receive the benefit amount specified in the insurance agreement directly on filing the claim with supporting documents.
  • You can customise term life insurance with the addition of riders, such as Child Benefit or Accidental death.
  • Another popular feature of term insurance is the return of the premium. They may give the benefit of returning 100 per cent of whatever you have paid.  


  • There is a downside in that, if the insured person happens to outlive the tenure of the policy, all the amount paid in the form of premiums will be forfeited by the insurance company without any benefits to the insured or to his/her family. Essentially all the premium will go down the drain, except for tax benefits he/she would have availed on the amount paid as term insurance premium.
    • There is one major hurdle that prevents people from purchasing a term insurance plan; it tends to create a mental block as it deals with the death of the person taking a policy. But it is morbid, as the rationale behind buying car insurance is exactly the same as buying a term insurance plan. 
      If a person meets with an unfortunate car accident while driving, he/she has to pay damage charges to the other party or the insurance provider will compensate him/her. On the other hand, if the person is a relatively safe driver and avoids any accident, the premium acts more like a hedge (cover) against any event which might/might not occur.
  • Consumers resort to consulting their agent as they either do not have the time to go through the brochure of this product or they believe that the agent is in the trade and hence should know more of the product- so it is easy to ask him questions and get answers from him without counter-verifying with the insurer. Unless one is aware of the features of the insurance plan himself/herself, do not expect the agent to explain the plan in detail (some of the agents do not give proper advice to their clients and run behind commissions).
    • Term insurance provides coverage only for a limited period of time.
    • Premium rates are guaranteed only until the end of the term. Depending on the policy, premiums may be level for a period of 1, 5, 10, 15, 20, 25, or 30 years and then cease without any renewal option, or offer a fresh cover at the end of the plan period at a higher premium rate.
  • Deteriorating health can trap you in a policy with rapidly increasing premiums.
  • No insurance company offers term plan insurance over 75 years of age, which means it is not very beneficial to the insured after attaining 75 years. 

Tips to get on a term insurance plan

First decide the cover amount

Choosing the cover amount is the most important thing to do before buying a term insurance policy. It depends on the individual, how much minimum cover he needs. Going by the thumb rule, salaried people should take a cover of 10 times of their annual income and at the same time keep increasing it with increasing income. You can also calculate the cover amount online. There are many online tools available in which you can calculate the cover amount as per your income and profession.

Deciding policy term is very important

Selecting the term of the policy is the second most important task in the selection of a term plan. If you are taking the policy at a young age, then choose the longest-term policy. This will also give you an opportunity to buy the policy at a lower premium.

Online or offline?

You can buy the term policy through an agent or online. You may also have to pay a lower premium if you do it directly through the company’s website or aggregator website. At the same time, if you take it from the agent, you will have to pay a higher premium.

Choosing the company

Choosing a good company is very important before buying a term insurance policy. Before taking a policy from any company, check its claim record ratio. Along with this, also know the financial position of that company and keep in mind the company’s service, method of payment, etc.

Choice of rider

Even after a term plan, there is also a possibility that the policyholder may become a victim of disability due to an accident or he may lose his hearing. In such a case, a rider should also be taken for financial security. However, for this you have to pay an additional premium.

Some more important aspects of term insurance

The public, consisting of the common man, the office-goer, the professional are mostly aware of life insurance products in the insurance sector. But many don’t know or aware, is the topic of discussion in this article. May be, the professionals and the babus in the corridors of power, will have the benefit of knowing this product, which is term plan insurance.

Most of us know that there are 24 life insurance companies operating in India out of which Life Insurance Corporation of India corners almost 70 per cent of the total life insurance business. There is no best investment product anywhere; the answer is a relatively better product based on offering benefits with reasonable costs. 

Types of term insurance plans

There are basically three types of insurance plans available in the market. They are:

(1) Traditional or conventional plans

Traditional plans are mostly saving products and give guarantee of sum assured and also give bonus every year depending on the profitability of the company. The investment options are with the insurer and they take a call where to invest on the plans available in the market.

(2) Unit linked insurance plans  

ULIP plans are market-related and the risk of investment is borne by the policyholders. Policyholders have the right to choose the investment option available in the plan i.e. from 100 per cent in debt to 100 per cent in equity.  ULIP products are more complex than traditional plans.

(3) Term insurance plans

First, think about why you want to buy a term insurance plan? Of course, like everyone else, you also believe that nothing will happen to you. We, too, would wish the same for you. But the harsh truth is that this life is highly uncertain. There is always an element of concern or risk which leads you to ask the “What if?” question. You must buy term insurance to answer this very question as the entire financial trauma arising out of that question will remain unanswered.

Have you ever realized the value of a term insurance plan? Don’t just take a term plan just because everyone is going for that or that you might be considered as a prudent wise man! But do a cross- check whether your family can be benefited easily if required so in future. So, feel the necessity and then proceed further to choose the best product.

What is claim settlement ratio?

This gives us an idea about the claim solving ability of the insurance company. If claims are intimated and the insurance company settles those, claim settlement ratio would be good. In simple words, claim settlement ratio is the number of claims settled by the insurance company out of every 100 claims it has received. Higher claim settlement ratio implies that majority of claims are getting settled. Higher the claim settlement ratio for the company, the better rated the company is in the eyes of the public.

Claim settlement ratio 

One should go with the company who has a better claim settlement ratio and a good reputation. So that after the death of the insured, his family does not have to face much trouble to get the money. In simple words, with better claim settlement ratio, you can understand the ability of the company to pay the amount to insurer’s family. How many policies were settled successfully and if company denied paying the amount showing some reason, then you will ask in how many policies and claim amount was done? So, it’s better to stay with the company who generally or mostly paid out all insurance claims.

Care to be taken while taking a term plan policy

Generally, 99 per cent of insurance business are canvassed by agents only- mostly by our uncle, aunty and relatives, etc. Don’t believe any one while filling the form. Most of the time people just sign the policy document and then leaves the rest of the details to be filled in by the insurance agent. You are the best person to fill up your personal details. Any wrong information which you might think as a negligible factor can be pointed out later by the insurer to your family to find a reason for rejection of claim in favour of the nominee/legal heirs.

How online term insurance plan works?

The latest buzz in term plan industry is the online term plans. You can simply provide the data online and subscribe to your term plan instantly with a lower premium. The insurance companies extend cheaper premiums on on-line term policies as it saves them a lot of paperwork and physical labour of verifying the documents. But the problem here is, most of the term plans do not involve a proper procedure to check individual’s health condition and other factors. Due to that, it is very risky to subscribe to a term plan although the premium is lowest. Your family might be in trouble in future. So, it’s better to pay the premiums and subscribe the same term plan through agent/sales officers by following every procedure clearly. Companies can have a better and clear record about your insurance to track in future.

One can go online and calculate the premium, then can start the process of buying the policy and submit details such as name, age, tenure, sum assured and medical information which can affect the premium. After all this, one gets a premium quote and then it is paid online. 

After the premium is paid, there are few things which are yet to be completed. The proposer will get a mail from company or get a call from company that some representative of the insurance company will come to the residence and collect the important documents; the documents are also required for Know Your Customer (KYC). Based on the age and given information, the insurer can decide if one will have to appear for medical test or not. If there is anything wrong in medical examination which can affect the premium (and consequently can increase company’s risk of insuring), then they can increase the premium (loading) or choose not to offer the policy. One can then decide to continue with them by paying the additional premium or cancel the policy.

Credit and debit cards

Credit and debit cards

Credit and debit cards

Today life is about credit and debit!


Even 10 years before having a credit card or a debiit card was considered a welathy choice. It has become an essential and almost mandatory commodity these days.

All banks issue credit and debit cards to their customers. Charges vary from bankand bank.

Consumer VOICE financial experts analyse various cards from time to time.



There are various types of credit cards when you apply for credit card and you are offered one based on your needs and repayment power.

If you are a credit card owner there is a chance that you may be subject to credit card frauds like thousands of others around the world.

A credit card offers unlimited financial freedom. But as all freedom, a credit card too comes with its own set of responsibilities.

If you are an Indian consumer who often wonders is it safe to shop online with a debit card then you should know the answer is yes.

If you have never used a debit card before and you have questions like how to use a debit card online or how to use a debit card online safely, then you must read on.


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Looking for more than a grain of truth There is rice and more rice, and there is basmati. Some would say eating basmati rice is a complete  sensual experience. There is appetite-inducing aroma, visual appeal, great taste, and an utter and  inexplicable sense of...

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Ways to secure a Covid-19 personal loan

Ways to secure a Covid-19 personal loan

Ways to secure a Covid-19 personal loan

Covid Loan

The need of taking a personal loan has increased immensely facing many unexpected situations including job loss, pay cut or any medical emergency/treatment. Small businesses too have faced closures or less revenue generation due to the ongoing situation. Personal loans thus have emerged accessible to encounter any such instances. In the following article, we’ve talked about the steps of availing a personal loan including choosing a bank, interest rates to consider, documents to prepare along with many such relevant information.

Subas Tiwari

There are several banks and financial institutions providing attractive deals on personal loan offers with lucrative interest rates. Each personal loan lending institution has different eligibility criteria, rate of interest, and repayment tenure, which should be reviewed and compared to make an informed and smart decision before applying.

Government banks (PSU Banks) have launched a very good initiative by offering personal loans for Covid-19 treatment. They have started a special project of unsecured personal loan. Under which, a personal loan of up to Rs 5 lakh can be taken to mitigate any such mentioned expenses or emergency cases. The interest rate for this category of personal loans is low. Generally, interest rates for an unsecured personal loan range between 11 to 17 per cent. Here, the interest rate is cheaper. The country’s largest bank SBI is offering this personal loan at 8.5 per cent. However, presently there is no uniform interest rates for Covid personal loans as different PSU banks ask different rates. Along with the lot, Union Bank of India and Canara Bank have also announced Covid personal loan, lately.

A person can take this personal loan for himself or for any family member from government banks. The loan can be availed for a period of up to 5 years which implies that the banks will have to repay the loan amount within 5 years. In recent times, we have seen a lot of people taking personal loans at a very high rate to meet Covid treatment. Here, the Covid personal loans come handy.

How to apply?

You need to visit a government bank branch and apply for this loan. Presently, this can’t be done online. Once you’re sure of availing this loan, know that there are two ways to go for the same. The first is- after hospitalisation. Once you’re hospitalised, you will need to visit the bank branch with the hospital bill and the bank will decide the loan amount based on your repayment capacity. Second is, the hospital gives an estimated amount of the treatment cost to the concerned person, which will have to be taken to the bank and apply for the loan. In this type, banks can give loans ranging between Rs 25, 000 to Rs 5 lakh. However, it is up to the bank authority to approve or reject your loan application.

Eligibility of personal loan

For salaried class
  • Should be having an active bank account where salary is being credited regularly. The bank account need not be with the bank where one is applying for a personal loan, but banks prefer to consider such loans to be given to their own clientele on priority.
  • One should have a job of permanent nature. Banks would not give a loan to a person whose job is temporary or who has no means of regular income even though he may be owning movable assets.
  • The length of service or employment also plays a part in expediting the loan sanction.
  • Place of residence should either be owned or rented with a lease agreement.
  • Residence proof (Voter ID card, Aadhaar Card, etc) and identity proof (employment ID card, PAN card, etc) copies should be produced duly self-attested along with bank application form and 2 photographs.
  • Though the reason/purpose of the personal loan is not mandatory, the bank would like you to state some reason.
  • If you already enjoy any other loan like car loan or home loan, those deductions will also be taken into account to calculate total deductions out of the salary and arrive at eligible loan amount.
  • Your CIBIL score (see box) will also play a significant part in bank’s decision in granting a personal loan.

There is no fixed criterion for arriving at eligible loan amount, as individual banks have different methods of calculation but the generally accepted practice is to fix a ceiling of about 50 per cent of deductions from salary including the repayment of the loan to be granted. If you are within this ceiling, then the eligible amount could be about 10/12 times the gross monthly salary or 6 times the total taxable income as declared in Form 16 or the Income Tax Return. This can vary amongst nationalized banks and can be different among private banks (private banks commute on the take-home pay).

For self employed

Certain additional conditions may apply for geek employees, individuals who run their own business or freelancing assignments in availing a personal loan from a bank. Since he does not get salary, the business income as reflected in the Income Tax Return would be the basis of ascertaining his total income. S/he may be required to submit details of his enterprise.

The performance of the business can also be a factor to influence his loan sanction. In case of new enterprise, banks can insist on collateral securities like bank deposits, bonds, etc in addition to providing one or more personal surety of adequate net worth.

For professionals

They are those who either have their own business/service like doctor, lawyer, etc or those who are technically qualified but are working in an organisation.

The following could be additional conditions to be fulfilled.

  • The attested copy of their Qualification would be required to be submitted alongwith the application form.
  • Since some of the banks have specialised personal loan scheme for such professionals offering lower rate of interest on such loan, the lending may ask some details of the profession as also copies of receipts/payments and/or income/expenditure account.

Advantages/ benefits of a personal loan to a consumer-borrower

  • The first and foremost benefit is the quickness with which the loan application is either sanctioned or disposed off (rejected). The icing in the cake is in the timing.
  • Secondly, in most of the sanctioned personal loans, the banks do not insist on any collateral security or in some cases, even personal guarantee/surety unless you have less than the minimum prescribed years of service or your take-home pay is lesser. So, it is advantageous for the loan-seeker, as he need not be under any obligation to his office colleague/friend into requesting for providing a personal surety.
  • Most of the banks do not ask for margin component (borrower’s stake in the risk). Hence, there is absolutely no need for the consumer to run around to arrange to provide for depositing margin money.
  • The purpose of the loan is immaterial in most cases. Hence, the consumer need not take pains to explain the genuineness of the purpose and submit proof for such purpose.
  • Simple documentation is assured with no elaborate procedures.
  • Making monthly repayments is now made consumer-friendly with banks agreeing to take post-dated cheques (PDCs) for the amount of each instalment and presenting the same on due dates of loan. The consumer need not visit the bank at all for such work. Where the loan instalment payable is to be taken out of the savings account of the customer, the banks obtain written instructions (ECS) and act on them.

Disadvantages/limitations to the consumer-borrower

  • The rate of interest is the highest for this type of loan. Due to its unsecured nature of the loan, interest rate is on the higher side. Whereas secured loans are comparatively cheaper.
  • Secondly, the period of the loan is normally limited to 60 months. Banks do not favour or take exposure for a longer tenure. This limits the consumers’ requirements, where, by getting a longer period of repayment, he could bring his work to completion.
  • According to bank sources, this type of loan is having higher risk and can end up as a Non-Performing Asset, if repayment stops midway either due to change of job/temporarily-unemployed status/death of the borrower/change of address without trace, etc. Hence, many banks do not consider giving a loan for non-customers, i.e., those who have no previous bank dealings with the lender. So, this severely restricts the options available to the consumer-borrower to seek a loan from any bank in the vicinity of his residence or place of work.
  • Most of the banks are not willing to grant personal loans of more than Rs 15.00 lakhs even though their website/brochure talks of maximum amount being much more than what they say they will give. So, the consumer/borrower will not get the benefit of more loan even if he is otherwise eligible!
  • Even though a couple of banks claim that they don’t need personal surety/guarantor for such loans, many of the banks insist on providing the same for the loan transaction to add trustworthiness to the loan contract.

Do not make these mistakes while taking a personal loan

One should be very careful in taking a personal loan as its interest rates start from as low as 11 per cent, which is very high. Higher interest rate can weaken your financial position. Let us know how to take a personal loan. What is its process and what precautions should be taken while taking personal loan?

  • Be careful in choosing lenders-banks and NBFCs market personal loans very aggressively. Everyone claims at least the interest rate. But do your research. One can check this by visiting some bank branches or on loan aggregator websites to find out who is offering the lowest interest rate personal loan.
  • Avoid flat rate. Banks claim to give loans at flat rates. But don’t fall for the flat rate. This is a strategy to mislead the customer. The flat rate does not tell you how expensive your loan is.
  • Personal loans can be for a tenor of one to five years. Usually, while giving a bank or NBFC loan, it is seen that your EMI does not exceed 40 to 50 percent of your monthly salary. Let us now see what precautions should be taken while taking a personal loan.
  • Avoid Zero Percent EMI. Banks offer loans with the lure of zero percent EMI. But in the name of processing fees and file charges, they charge a substantial amount. If you take a loan of 50 thousand for a period of six months and pay a processing fee of Rs 2 thousand on it, then your interest rate falls to 14 percent, not 12.
  • Find out other charges. There is a fee for processing a personal loan. It is one to two percent. You will think it is not much. But many banks also charge foreclosure charges. That is, if you get the money and you repay the loan ahead of time, then foreclosure fee is levied. Find out about it.
  • Take care of credit history. While sanctioning a personal loan, banks also look at your credit history. Many times, if you go to more banks or NBFCs, then you are considered more needy. This has a negative effect on your credit history. It is better that you find out the interest rate through the loan aggregator website or portal before visiting several banks or NBFCs to find out the personal loan interest.
  • First of all, decide what your real need is. Accordingly, decide to take a loan.
  • Find out how much loan you can get. For this, you can visit any bank branch or you can find out from the bank’s online loan eligibility calculator. Banks like HDFC Bank offer personal loans up to Rs 40 lakh.
  • Find out the EMI of the loan you want. This can also be ascertained from the existing EMI calculator on the bank site. Or you can get it calculated from the bank branch.
  • You can apply for personal loan directly by visiting the bank branch. You can apply for a personal loan through net banking, online app or ATM.
  • After this, the documents have to be submitted. In these, salary slip as income proof or income tax proof for self-employed people is required. Address proof, identity proof document or self-employed people also have to provide proof of degree or license.


The RBI has come down heavily on commercial banks for causing inordinate delays in conveying their credit decisions/credit disbursal. In its latest notification to all the banks, they have been asked to carry out due diligence before arriving at credit decisions to ensure timely and adequate availability of credit. RBI has further said that banks must put in place loan disbursal timelines within 30 days of the RBI circular. Banks are also expected to make suitable disclosures on the timelines for conveying credit decisions through their websites, notice boards, product literature etc.

Leading bankers have opined that this move could push banks to cut procedural delays. They said that already individual banks have their own internal guidelines and timelines for disposal of small loans. But a centralized system as suggested by RBI would help and speed up matters.

Under the RBI Guidelines on ‘FAIR PRACTICES CODE’ for lenders, it has been stipulated that time-frame for disposal of loan applications up to Rs.2,00,000 should be indicated at the time of accepting the loan applications.


Decoding the new gold hallmarking rules

Decoding the new gold hallmarking rules

Decoding the new gold hallmarking rules

Gold Hallmark

Gold hallmarking is the accurate determination and official recording of the proportionate content of precious gold metal articles. Hallmarking is done of six caratages of gold jewellery/ artefacts, viz. 14, 18, 20, 22, 23 and 24 carats. While, the mandatory hallmarking is surely a welcome move for the consumers, let us take a quick look at the set regulations.

Ashok Kanchan

Bureau of Indian Standards (BIS), the national standards body of India through its network of regional/branch offices all over the country operates the hallmarking scheme for gold and silver jewellery. Regular surveillance audit of assaying and hallmarking centres and testing of random market samples drawn from registered jewellers.

Hallmarking provides third party assurance and satisfaction that customer gets right purity of gold (or silver) for the given price (value for money).

 Hallmarked gold jewellery  has five marks: BIS mark, purity in carat, assay centre’s name, jewellers’ identification mark and year of hallmarking.

Points to take note while purchasing gold jewellery

  1. a) Check the BIS certificate of registration displayed in the shop. 
  2. b) Check hallmark, consisting of five marks, on the article with the help of a magnifying glass of 10 X magnification available in the shop.
  3. c) Do not forget to take the bill/cash memo which should mention hallmarking cost, net weight of gold, purity in carat and fineness on the bill/cash memo. 

The new gold hallmarking rules


The central government has made it mandatory for the jewellers to sell only hallmarked jewellery. The mandatory hallmarking of gold jewellery is coming into force from 16th June, 2021.

A few points of latest government order

  • The hallmarking scheme has started with 256 districts of the country, which have assaying and hallmarking centres. 
  • At present, 943 assaying and hallmarking centres are operational in the country.
  •  Jewellers with annual turnover of up to Rs 40 lakh will be exempted from mandatory hallmarking. Watches, fountain pens and special types of jewellery like kundan, polki and jadau will also be exempted.
  • Export and re-import of jewellery as per the Trade Policy of Government of India – Jewellery for international exhibitions, jewellery for government-approved business to business domestic exhibitions will not be hallmarked.
  • According to the government order, any manufacturer, importer, wholesaler, distributor or retailer engaged in selling precious metal articles has to mandatorily get registered with the BIS. The registration process will be one-time and there will be no fees charged from jewellers for it.
  • Artisans or manufacturers who are manufacturing the gold jewellery on job work basis for the jewellers and are not directly related to sale to anyone in the chain are exempted for registration, the government said.
  • Gold of additional carats i.e. 20, 23 and 24 will also be allowed for hallmarking.
  • The ministry in its release clarified that old un-hallmarked jewellery available in households can be sold to jewellers. It said that that, jewellers can continue to buy back old gold jewellery without hallmark from consumer and in order to give adequate time to the manufacturers, wholesalers and retailers of gold jewellery, there would be no penalties till August end.
  • BIS (Hallmarking) regulations were implemented with effect from June 14, 2018. According to BIS, hallmarking will enable jewellery buyers to make the right choice and save them from any unnecessary confusion while buying gold.

Is the order applicable to gold bullion and coins also?

No, the order is applicable for gold jewellery and artefacts only. Gold bullion/coins of 999/995 fineness are permitted to be hallmarked by BIS approved Refinery/Mints (39 licensed refineries are in operation at present as on 01 Jan 2021). The list of BIS licensed Refineries/Mints is available at BIS website www.bis.gov.in under the hallmarking tab.

Information on hallmarking

All the information regarding hallmarking in detail has been provided at BIS website, www.bis.gov.in under hallmarking section. The information includes procedure and guidelines for jewellers and hallmarking centre, all the forms and list of registered jewellers and hallmarking centres etc. 



ATM Facilities, Payment Utility services in ATM

ATM Facilities, Payment Utility services in ATM

What else you can get from an ATM?


Withdrawal of money, balance check or mini statements form a small part of a lot of ATM services. Read on what are the other services you can avail from an ATM.

                                                                                                                                                             Subhas Tiwari

Banks including SBI, ICICI, HDFC and Yes Bank offer you different facilities from their ATMs. Let’s look at some of the ATM services other than cash withdrawal and balance check.

FD and checkbook request

You can request for fixed deposit at an ICICI Bank ATM. Under which, request for FDs ranging from Rs 10, 000 to Rs 50, 000 can be put through. You must have a resident savings or salary account with ICICI Bank. It is also necessary to have a debit card and PIN. SBI and ICICI Bank ATMs also have the facility of requesting for checkbook. The check book will be delivered to the register address in your bank.

Mobile recharge and pin change

Debit/ATM card PIN can be changed by going to the ATM. Also, you can recharge your prepaid mobile connection from an ATM if you are facing internet connectivity issues. There are many other banks including SBI, which are providing this facility from their ATMs.

Card to card transfer

You can also transfer funds to a customer of your own bank or a customer of another bank. A card-to-card transfer of up to Rs. 40,000 per day can be done from one SBI debit card to another at an SBI ATM. Union Bank of India, Bank of India, Canara Bank, Yes Bank etc. also provide funds transfer facility to their customers using debit cards of other banks as well.

Payment of utility bills and credit card bills

Utility bills such as electricity, water, and mobile postpaid bill can also be paid from an ATM. This facility is available in ATMs of SBI, HDFC Bank etc. Besides, credit card bills can also be done from ATM. One will just need to keep the credit card number handy.

Tax payment and donation

Tax can also be paid from ATM. Union Bank of India and HDFC Bank ATMs have this facility. For this, one has to register the debit card for payment of tax from the ATM on his bank’s website. ATM will provide you a slip with SIN number on payment of tax. You have to submit this number on the bank’s website within 24 hours. On the other hand, if you want to donate to a temple or charity, then this work is also done from ATM. For example, SBI ATM will give you Vaishno Devi, Shirdi Saibaba, Gurudwara Takht Saheb (Nanded), Tirupati, Sri Jagannath (Puri), Palani (Tamil Nadu), Ramakrishna Mission (Kolkata), Kashi Vishwanath (Banaras), Tulja Bhavani and Mahalakshmi Mandir (Mumbai) like many other temples and trusts.

Deposit and mobile banking registration

This facility is available at Axis Bank ATMs. You can withdraw cash from here as well as make a cash deposit. For this, you have to put money in the ATM machine or deposit it by cheque. Through ATM, customers can also register for mobile registration. SBI, ICICI Bank ATMs etc. are providing such facility to their customers.

Insurance premium paid and loan applied

Many banks have the facility of paying the insurance premium by going to the services option in ATMs. Apart from this, you can also apply for loan from ATM. ICICI Bank and HDFC Bank ATMs have this facility. ICICI Bank is providing an instant personal loan of up to Rs. 15 lakh to the customer through an ATM.