RBI's new guidelines have given the domestic scheduled commercial banks a big fillip in their branch opening plans. As per the new guidelines, domestic scheduled commercial banks do not need explicit permission(license) to open new branches in cities with less than 50,000 population.
what this means for some of the banks
- PNB can open 440 more branches this year without bothering about RBI approval
- UCO plans to open 140 branches this year but would need licenses for only 89

Clearly, RBI wants the financial system to reach smaller towns & cities and this would be a big step in that direction.

The Home Loan market is getting hotter with each new scheme launched by the biggies in the space. And it seems the dual rate game is here to stay.

Axis bank has just launched ‘Power Advantage Home Loan’ scheme- wherein customers can lock in their home loan rates at 8.25 per cent for the first two years followed by a floating rate.

The Raghuram Rajan Committee has recommended that RBI allow private companies to launch Local Area Banks (LABs) which will have a jurisdiction of 3 contigous districts.
This move which is aimed to increase the population under banking system will in all probability see a lot many financial institutions mushroom up in the semi-urban & rural areas.
The LABs will have an option to become small finance banks with a capital base below Rs 300 Crores if they show a good track record & want to raise their own deposits.

HDFC has followed SBI in launching a dual rate offer for Home Loans.

SBI had offered- 8% for 1st Year | 8.5% for 2nd & 3rd years | From 4th year the consumer had a choice between fixed & floating (SBI's floating rate is 275 basis pts beloe its benchmark rate)

Now HDFC has come into the market which sounds very similar- fixed rate of 8.25% till March 2012 and then a floating rate which is 500 basis points below the PLR.

HDFC had made a lot of noise about the SBI scheme when it was launched. They had attacked the scheme as being opportunistic and a sure shot path to higher default ratio in the portfolio.

As per Indian Bank’s Association new guidelines- Days of free ATM usage came to an end on October 15. From now on any transaction that you do on another bank’s ATM would cost you anywhere around Rs 20 . Also withdrawals will face a limit of Rs 10,000.

The guidelines, also recommend that the banks can offer
- savings-account holders 5 free 3rd party withdrawals every month and charge from the 6th transaction onwards.
- Current account holders can be charged the fees, which ranges from Rs 18 to Rs 20, from the very first transaction.

Axis Bank, which has the third largest ATM network in the country, has decided to not charge any customer for third-party withdrawals. A part of the bank’s strategy to attract low-cost current account and savings account (CASA) customers.

September 2009 saw the Car Loans market reaching a new high with Rs 3400 Cr worth of loan disbursals. This is almost 25% higher than the monthly average taken over last 4 months.

Commerical property loans will see a northward movement with the new RBI guidelines wherein the risk load has been increased.

Axis Bank has slashed the car loan rates in Hyderabad, Bangalore & Chennai to 9% for all vehicles. It has also waived off the processing fees and this scheme is applicable upto the end of this month.

SBI had already started being aggressive in the Car loans market. In June 09, SBI had slashed its car loan rates to 8% for the first year and 10% for the next two years. For the remaining years, borrowers would be charged 25-75 basis points below the bank's PLR.
Axis Bank's rate in comparison are fixed for the complete tenure of the loan.

Similarly HDFC bank had reduced its rates by 50 basis points to 10.5-11% range.

The Banking Codes and Standards Board of India has issued a directive to all its commercial member banks to be more transparent with regards to retail loans.

Few specific directives that loan seekers should be aware of are:

1. Inform all those who avail Floating rate home loans, of the reference rate to which the floating rate is anchored.

· This Policy is a special group policy that HSBC has arranged from Tata AIG Life Insurance Company, especially for its loan customers.

A leading player in the Indian housing finance sector has decided to start an attractive fixed deposit for the public i.e. Totally Safe with ’’AAA’’ Rating, Stable by CRISIL indicating the highest degree of safety.

Following are the Interest Rates
1.9%p.a for Tenure of 3Years
2.9.25% p.a for Tenure of 5 Years

Min Deposit Should be Rs.10,000 with (Multiple of Rs.1000)

Tough to get a Credit from Bank’s

LIC is in the process of finalizing the partner and in all probability it would be introduced next month.

Will this mean that giants of Credit Card Industry in India like Icici and Hdfc would get more competition or it will be just another company.With the credit default hurting all Banks, will Lic be abl;e to control bad debts , thats another question, that industry is seeking.

Cash Back Credit cards:
-Cash Back credit card allows you to earn cash rewards for making purchases. The more you use the card, the more cash rewards you receive. Depending upon how you’re your balance if and how often you use.

Debit card
It is a deposit access product to use your money from your bank account through debit card .It deducts the balance directly from your account, like checking account. It can be used both as ATM Card and a method of payment (instead of cash / cheques) when purchasing goods and services, in India and overseas.

Credit card

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