Aparna Ramalingam, TNN | Jun 3, 2014, 02.06AM IST | Times of India
CHENNAI: A recent survey on home loan in South India has revealed that 47% of the respondents have expressed delay of more than seven days for availing the loan from the bank. Moreover, 80% of the respondents have expressed that banks or home finance companies were asking for information in a piecemeal manner; after the loan application was submitted. The survey was conducted across the four southern states and across metro, urban, semi urban and rural areas by CONCERT (Consumers Association of India) under a grant from the Department of Consumer Affairs, Government of India.
Among other things, the parameters compared were processing charges, penal interest for delay in payment of installments and foreclosure charges for early closure of loan account. The banks and housing finance companies were clubbed into four categories; public sector banks, private sector banks, old generation private sector banks and housing finance companies.
Not only that. Of the 2,316 survey respondents, 609 (27%) said the bank or home finance company insisted on a opening of a deposit account and other investment products, 524 (23%) respondents said these institutions insisted on opening of a deposit account and investment in a life insurance scheme.
Also, 860 complaints related to public sector and private banks put together in terms of loan sanction but delay in disbursement. Around 555 complaints related to public and private sector banks together in terms of interest rate increase but no communication.
On their part, banks maintain retail lending is a priority for them. “Our turnaround time for retail loans is less than seven days. We have dedicated retail process centres across all major metros,” C VR Rajendran, chairman and managing director, Andhra Bank said.
Some officials state that the reason for customer complaints when it comes to loan sanction but not disbursal is outsourcing of the same by some institutions. “The problem is when aspects like valuation of property are outsourced to other agency. This results in delay in loan disbursal. In our case, everything is done in house,” Rajesh Makkar, president, DHFL said.
Some officials from home finance companies are of the view that home loan is one of the many product avenues for banks and sometimes there may be slippages in service on that account. “For public sector banks, home loan is one of their many businesses but for us that is the only business so we go into every detail from sanction to confirmation letter and interest rate revision,” a senior official from a home finance company said who did not wish to be identified.
“Even though our interest rates on home loans are currently 10-15 basis points higher than those offered by some large nationalized banks, our efficiency and experience stands as our differentiator. After all, home loan is a fairly long product (15 to 20 years),” said another official from a home finance company., when apprised about the findings of the CONCERT survey.
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