Tagged: Customer Service

ATM :: Don’t worry about your low credit score

Adhil Shetty | Dec 19, 2016 | Deccan Herald

If you’re applying for a loan or a credit card, your lender would look into your credit history. A CIBIL score of 750 or more is considered desirable by most lenders. If you’ve been prompt in repaying your credit card bills and other loans, you should have a sturdy score.

But every now and then, people get a rude shock with their CIBIL score which prevents them from getting a loan product of their choosing. This means that their loan application may get rejected, or they may be offered a loan with a high interest rate.

Your CIBIL score could be low for broadly two reasons — Data in your CIBIL report is incorrect, and that you have defaulted on a loan or have been irregular with your repayments.

The first step towards ascertaining the details of your CIBIL report is to get a copy of it. You can do this for a fee of Rs 550 from the CIBIL website. Your report will be generated instantly and its details will be shared with you on your email.

Now, let’s dive deeper into these two issues.

Incorrect reporting of personal and credit history
*Check personal details: Your CIBIL report carries your personal details such as name, PAN number, contact information, employer’s address, employer information such as salary and occupation.

Next, it carries details of every credit card account or loan account you’ve opened with regulated entities such as banks and NBFCs. Any discrepancy in this data needs to be checked and challenged. Ascertain that the details in your report pertain to you and your own credit history. If you’ve mistakenly been assigned someone else’s credit history — especially an adverse credit history — your credit score would suffer.

*Check repayment details: Next in your report, go through the details of all the borrowing accounts you’ve opened: Credit cards, personal loans, home loans, car loans, etc. You also need to check the monthly repayment details of all these accounts. The CIBIL report would reflect any delays in repayments (as ‘days past due’), defaults, settlements, write-offs, value of collaterals offered, etc. Ascertain that all the details are correct and that these accounts actually belong to you. This data is reported to CIBIL by your lender. If any detail has been reported in a way that adversely impacts your borrowing history, your credit score would suffer.

*Raise a complaint: CIBIL allows you to challenge incorrect reporting through its website. You can also contact them through post. When you access the online copy of your report, you can go over your personal and financial details. Any details that you want to be corrected need to be reported to CIBIL, which will then contact your lending institution for amends. This process may take up to 30-45 days. If the lender accepts the corrections, they will reflect in your report. If the lender refuses to accept your corrections, you will have to get in touch with them directly. This is because CIBIL prepares your report from information received from your lender. Therefore, CIBIL cannot directly change the contents of your report.

Defaults, Delays In Repayments, Credit-Hungriness
If you have neglected repaying your loans, it would hurt your credit score hard. Let’s take a quick look at your options to address this problem:

*Repay loan balances on time: Whether you have loans or credit card dues, always aim to settle them as per your repayment plan. If there are difficulties in repayment, always keep your lender in the loop so that the lending terms may be made easier. With credit cards, always pay the full due amount rather than the minimum amount.

*Don’t be credit-hungry: Don’t apply for too many loans or credit cards, especially within a short time. With application, the lender will check your credit history. Too many queries into your credit history would reduce your credit score since you will be seen as a credit-hungry person. Also, having too many loans at the same time means you will have to manage several EMIs every month, which would adversely impact your liquidity and could lead to default.

*Increase credit limit on card: Try and spend no more than 20% of your credit card limit. For example, if your monthly spending limit is Rs 1,00,000, restrict your spending to Rs 20,000. It means that your credit utilisation ratio (CUR) is 20%, which is ideal. A frequently high CUR would portray you as being in constant need of short-term credit.

Asking your credit card provider to increase your spending limit, or having multiple credit cards, can help reduce your CUR. For example, your increased spending limit could be Rs 2,00,000, whereas your monthly spending is Rs 20,000, thus bringing your CUR to 10%. Also, if you have multiple credit cards, you could divide your spending between them, thus maintaining an optimum CUR on all cards rather than increasing the CUR on a single card.

*Don’t settle: If you’ve defaulted on your payments, your lender may offer you an option to ‘settle’ your loan. This means paying a percent of your principal and interest due, and considering the loan account closed. Taking this option would reflect in your CIBIL history and it would adversely impact your credit score. Any lenders you approach would see that you were unable to repay your loan. Therefore, do not take the settlement option if you can settle loans in full.

*Repay a mix of credit: You should have a history of repaying a mix of short-term or unsecured credit such as credit card balances and long-term or secured credit such as home loan. The timely repayment of a mix of credit instruments would reflect well on your credit history.

(The writer is CEO at http://www.BankBazaar.com)

Source: https://goo.gl/HlhFXw

ATM :: Know Your Credit Card Better: Ten Most-Used Terms Explained

Creditvidya.com | Updated On: March 15, 2015 12:27 (IST) | NDTV Profit
If you are new to using credit cards or have been using one without knowing what a bunch of things mean on the credit card statement, let’s make things a little simpler for you. Let’s de-jargonise some credit card terms for you so that you can handle your credit responsibly and in turn help you keep up a good Cibil score.Many financial terms on your statement stand for basic things that are easy to understand. Here’s a closer look.

Credit limit:

The credit limit is the maximum amount of money that you can swipe or borrow on your credit card. This is a prestipulated amount that is fixed by the card issuer. How much of the credit limit you utilise, also has a large bearing on your Cibil score. Ideally the utilisation rate on your card should not exceed 30 per cent of the total limit that has been allotted to you. If you display good credit behaviour your credit limit may be enhanced by the lender, but do not use it as an excuse to become reckless on your spend. Reckless spending may lead you to penalties and as has been noted in some cases, even account suspension by the bank.

Cash limit:

The cash limit on your credit card should not be confused with the credit limit. The cash limit is the maximum amount of cash that you can withdraw from the ATM using your credit card. Issuers of credit cards often allow cardholders to obtain a maximum amount of cash with their cards where the cash limit is usually a per cent of the overall credit limit. This feature makes credit cards similar to bank debit cards. However, the striking difference between debit and credit cards cash withdrawal is that in the case of debit cards the cash belongs to you and is at your disposal whereas in case of credit cards, a very high rate of interest is applicable from the day the cash is withdrawn to the day it is repaid.Therefore, cash withdrawal through credit cards should be made only in emergency situations.

Annual percentage rate (APR):

The annual percentage rate (APR) is the interest rate charged on outstanding credit card balances outside the due date. APR is expressed in per cent per annum. A common misunderstanding about credit cards is that interest is charged on everything you swipe or borrow through your card. However, the truth is you will be charged for keeping an outstanding balance on your account over the interest-free grace period, which is usually 30-45 days from the payment due date (differs from bank to bank). So effectively if you pay the entire outstanding amount within the billing cycle, you will never have to pay interest on the money you use on credit.

Billing cycle:

The billing cycle is the time between the credit card bill statements. The billing cycle and credit card statement dates are confirmed to you at the time of the issue of your card by the card issuer. The due date remains the same each month. Since you already know the due date, it gives you the headroom to plan your credit in a smarter way and avoid making late payments.

Minimum amount due:

This is usually a small per cent (usually 2-5 per cent) of your total amount outstanding. This is the minimum amount a cardholder should pay within the pay-by date to keep the account from going into default.

Due date:

The due date is the date by which you must make at least pay the ‘minimum amount due’ in the case where you are not able to pay your bill in full. Paying outside the due date will cost you late fee charges as well as get reported on your Cibil report as a negative mark. Some card issuers allow you to set your convenient date for card payment and others set a standard due date. For payments whose due dates fall on weekends or holidays, the due date would be the next business day.

Charge back:

Sometimes during online transactions, purchases may not go through for various reasons – including the transaction being non-compliant with the merchant account rules or a dispute by cardholders. In such cases, the amount charged previously on the credit card is credited back to the card holder through a reverse (credit) entry. This is called a charge-back.

Late payment fee:

A late payment fee is charged when you miss paying the minimum amount due by the payment due date. Late payments may affect your Cibil score negatively even if your entire outstanding balance is paid in full at a later date.

Balance transfer:

It is the process of moving outstanding credit card balance from one card issuer to another, usually from a high APR issuer to a low APR issuer in order to reduce the interest charges for the cardholder. However, balance transfer also involves payment of fees to the low APR issuer.

Cash back:

It refers to rewards program on your card that return to you (by crediting your card account) a percentage of the total amount spent on your credit card over a specific period of time. This feature can be beneficial only if you use your credit card regularly and pay the entire outstanding amount on your bills every month.

CVV (card verification value):

It is a 3 digit number printed on the back of the card. It stands for “card verification value” code and helps verify the legitimacy of a credit card. The CVV number is essential while making payments online. Since this is sensitive information you must never reveal this number to anyone including your Financial Planner to the customer care executive at the bank.

Chip-and-PIN cards:

These cards use computer chips to store and process information instead of, or in addition to a magnetic stripe. A personal identification number (PIN) is required at the point of sale for the card payment to go through.Similar to CVV, this is also classified information that you should not be share with anyone.

Once you have these jargons demystified, it will be easier for you to understand how your credit card works and thus plan to make repayments accordingly.

Disclaimer: All information in this article has been provided by Creditvidya.com and NDTV Profit is not responsible for the accuracy and completeness of the same.

Source : http://goo.gl/3FrGf8

NTH :: RBI directs banks to display all loan costs

TNN | Jan 23, 2015, 02.32AM IST | Times of India
The significance of this fact sheet is that it will make it possible for borrowers to compare loans from two lenders. Also, by making the charges a part of the contract, the central bank has reduced leeway for lenders to vary pre-payment charges subsequently.
MUMBAI: Borrowers availing home, auto and personal loans can now be assured of a fair deal with the Reserve Bank of India (RBI) making it compulsory for banks to set out every possible cost in respect of the loan in a fact sheet at the processing stage. Banks will also have to publish the ‘annual percentage rate’ representing the total cost of credit to an individual borrower. Besides, they will have to display on their website the interest rate range for various contracted loans for the past quarter for different categories of advances.

The fact sheet drafted by the central bank requires lenders to spell out the interest rate, the spread above the benchmark rate, date of reset of floating rates, mode of communication of interest rate changes, all fees payable, refundable fees, charges for conversion from floating to fixed rate loan and penalty for delayed payments.

The significance of this fact sheet is that it will make it possible for borrowers to compare loans from two lenders. Also, by making the charges a part of the contract, the central bank has reduced leeway for lenders to vary pre-payment charges subsequently.

Today, an objective comparison is difficult because terms differ vastly. For instance, some of the personal loans have deleterious charges for pre-payment in the first year. Asking banks to disclose an annual percentage rate representing the total cost of credit ensures that customers are not taken in by deceptively low rates with a step-up structure. At the same time, it does not take away the ability of banks to innovate in product design.

The new norms on transparency follow the central bank’s revised guidelines for calculating the benchmark base rate to ensure that changes in interest rates are passed on to all borrowers fairly. The new norms are based on recommendations by a working group on cost of the pricing of credit. The committee – which had submitted its report a few months ago – had said that despite efforts via policy to usher in transparency and fairness to the credit-pricing framework, there have been certain concerns from the customer service perspective. These mainly relate to the downward stickiness of the interest rates, discriminatory treatment of old borrowers vis-a-vis new borrowers, and arbitrary changes in spreads.

One of the major recommendations by the committee was that the Indian Banks’ Association should develop a new benchmark for floating interest rate products, namely, the Indian Banks’ Base Rate, or IBBR. It had also proposed a penalty for banks that refuse or delay transfer of loan for refinance. RBI is yet to take a stand on these two recommendations.

Source : http://goo.gl/8acJlp

ATM :: Loans will be cheaper, but banking services to be expensive in 2015

Bindisha Sarang, ET Bureau Dec 29, 2014, 08.00AM IST | Economic Times


The banking space was a mixed bag for retail customers in 2014. Interest rates remained decidedly high during the year, delighting depositors but dismaying borrowers. HDFC reduced its home loan rates by a marginal 15 basis points.

There was some relief for home loan customers in the Budget. The deduction limit for home loan interest was raised from Rs 1.5 lakh to Rs 2 lakh a year. But this won’t offer any benefit if your loan is less than Rs 15 lakh because the interest will not be more than Rs 1.5 lakh a year.

The RBI introduced several customer-friendly measures during 2014 and even took up cudgels on behalf of the aam admi by laying down a charter of rights. But all these got balanced by a new rule that allows banks to charge for ATM usage beyond five times a month.

Other banks’ ATM can be used for free only three times in a month. After that, transactions will be charged Rs 20. SBI, Axis Bank and HDFC Bank have already started charging customers for usage beyond the free transactions. However, in response to a PIL, the Delhi High Court has asked the RBI to explain why customers should be made to pay for taking out money from their own bank’s ATM.

Financial inclusion at 10

Another major change was the RBI’s nod to allow children above 10 to operate their bank accounts independently. Kids are permitted to use facilities like ATM and cheque books.

The objective is to familiarize children with banking procedures but many parents are skeptical about letting children handle money so early.

Rate cut seems imminent, but…

Though most analysts expect the RBI to cut rates in 2015, it is not clear if this will happen in the next couple of months. Till that happens, make best use of the high deposit rates offered by banks. If you do not have a large sum to invest in a fixed deposit, use recurring deposits to lock in to the high rates.

Bank deposits are not as tax efficient as debt funds, but the 2014 budget levelled some portions of the playing field. If the investment horizon is less than three years, there will be no difference in the tax.

Also, if you plan to take a home loan in 2015, opt for a floating rate loan. Given the imminent cut in rates, a fixed rate home loan will not be a good idea. Customer friendly steps by the RBI in 2014:

KYC norms eased

Customers may submit only one proof of address when opening a bank account or during periodic updation.

Prepayment charges

Banks not to charge foreclosure charges on floating rate loans.

Minimum balance in savings accounts

Instead of penal charges for not maintaining minimum balance, banks should limit services available on such accounts.

Minimum balance in dormant accounts

Banks not to levy penal charges for non-maintenance of minimum balance in any inoperative account.

Banking for minors

Minors above the age of 10 allowed to open and operate savings bank accounts independently.

SMS alert charges

Banks told to charge customers only on the basis of actual usage.

Source : http://goo.gl/8oiRHw

ATM :: Lost Your Wallet? What to do Next

Creditvidya.com | Updated On: January 04, 2015 15:12 (IST) | NDTV Profit
Imagine this: You go down to our local grocery store to pick up a packet of milk on your way back home from work, and when you dip your hand into your handbag you find your wallet missing!

Now, you are breaking out in cold sweat because you have lost all your credit/debit card(s) as well as your PAN card. Panicking at times like these is natural, but good news is you can go about cancelling all your cards and retrieving them in a short span of time. The money in the wallet, however, is gone for good.

If you find your wallet missing, first things first, don’t panic as it’s not the end of the world. You may have lost the money, but you can still still straighten it out. Read on to know about a step-by-step process to check, cancel and replace all the contents of your wallet (except money!).

1. Cancel all your cards immediately

It matters little whether your card issuer is a public sector bank or a private sector bank, because you have to cancel all your cards at once as soon as you can. Calm down and make a list of the banks that you hold cards of. If you do not have their customer service numbers handy, go to their websites and find out the numbers one by one. Once you are sure you have the contacts numbers of cards issuers jotted down, it’s time to start making the calls.

When you call them, mention/ask the following things clearly:

That you have lost your wallet and your card was in it
The date and approximate time of the incident
Ask if any transactions have appeared on your card ever since
Tell them to cancel your card immediately and apply for replacement

2. Wallet protection plans

The procedure mentioned above is the first thing you need to do if your wallet has gone missing, but needless to say, this is a time taking procedure that will take up at least half a working day if you have four or five cards. In the day and age that we live in today, you obviously would not like to spend a lot of time calling up your card issuers. A solution to this problem has been brought forth by service providers such as One Assist and CPP India which provide comprehensive assistance in the event of card loss.

In order to avail of such services, you need to be registered with them and pay them an annual subscription fee that may be around Rs 1,500-2,000 per annum.

In the event of card loss or theft, all you need to do is make a call to your wallet protection service provider and it will take care of blocking your cards on your behalf to prevent misuse. In case you find yourself in such a situation while travelling, they could even help you in settling your hotel bills and arranging a return ticket for getting back home. You would not have to worry about the replacement your PAN card or driving licence either as they go through the documentation required to replace the same for you even free of cost. While it is good to be optimistic and wish that your wallet will never get stolen, it is a good idea to sign up for such wallet protection plans. For a small sum of money you will be required to pay annually, you can be saved of a lot of hassle if you do happen to lose your wallet.

3. List out all your subscription services

These days, if you are an active netizen, chances are that you use your credit cards for a host of online services. It’s a good practice to maintain an excel sheet of all your online subscriptions generally, and in the event of the loss of your credit cards, this list will seem like a boon. You still have to take the trouble of notifying these service providers though and may lose out on a subscription or two till you update the information about your new card.

4. Check your Cibil report

Even after you have cancelled all your active credit cards, it may be a good idea to pull out your Cibil report after 30 days of the date on which you lost your card. Once you receive this report, comb through it for any suspicious transactions or enquiries for loans or credit cards that you have not applied for after the incident. If you find anything at all that seems like a fraudulent transaction, notify both the concerned card issuer or lender and Cibil about it immediately.


Going through these steps are by no stretch of imagination fun things to do, but if you do happen to lose your wallet, they may come in handy and reduce your stress.

Disclaimer: All information in this article has been provided by Creditvidya.com and NDTV Profit is not responsible for the accuracy and completeness of the same.

Source : http://goo.gl/Kw7OoS

NTH :: Don’t let your bank violate your rights

29 Dec, 2014 | Times of India
The Charter of Customers’ Rights released by the RBI lays down five basic things that you enjoy as a bank customer. You can file a complaint if these are violated.
Right to fair treatment
This right prohibits banks from discriminating against customers on grounds of gender, age, religion, caste and physical ability.Banks can, however, continue to offer differential rates of interest or products to customers. The financial services provider may have certain products which are designed for members of a target group or may use defensible, commercially acceptable economic rationale for discriminating between customers, the central bank says.

Right to transparency, fair and honest dealing
You can expect language in bank documents to be simplified and transparent. The charter requires banks to ensure that all contracts are easily understood by the common person. The onus of sending out effective communication about products will rest with banks. Information on the product, price, customer responsibilities and key risks will have to be clearly stated. Important terms and conditions should be clearly brought to the notice of the customer, the charter states.

Right to suitability
Despite several regulations, complaints related to mis-selling continue to plague the distribution space. Lured by higher commissions, sales officials tend to push products without ascertaining their suitability for the customer.With this charter coming into force, such officials might find it difficult to palm off say market-linked insurance products to senior citizens. The charter has made it mandatory for banks to sell products after keeping in mind customers’ needs, financial circumstances and understanding.

Right to privacy
Banks are duty-bound to keep customers information confidential. Customers have the right to protection from all kinds of communications which infringe upon their privacy, the charter states. Banks cannot pass on your details to telemarketing companies or for cross-selling. ‘There have been instances where bank officials have asked customers to route their investments through them (banks act as distributors for mutual funds and insurance firms).This is unethical’, says Roongta.

Right to grievance redressal and compensation
The charter makes banks accountable for their own products as well as those of third parties like insurance companies and fund houses. They will no longer be able to wash their hands of the responsibility once the product is sold. Banks will have to communicate the policy for compensating for mistakes on their part, lapses in conduct and non-performance or delays.The redressal and compensation policy will have to state the rights of customers.

Source : http://goo.gl/D5YUXM