HSBC’s new home loan pay-back offer: Is it such a big deal?

The British bank promises to refund half the interest component on three EMIs. It’s a first in the home loan business. But does it amount to very much any way?

HSBC India has announced a new home loan package offering to pay back part of the interest to borrowers. Yes, like the foreign bank claims, it is a first in the home loans business. But if one takes a careful look it might not be such a big deal after all.

The scheme which was prominently advertised last week, promises to give back 50% of the interest on the 12th, 24th and 36th EMIs (equated monthly instalments). It reads, "If the interest on your 12th EMI is Rs50,000, you get Rs25,000 paid back to you after you pay the instalment." That does seem quite a large refund. According to figures available, the interest on the 24th EMI would be about Rs48,000 and the refund Rs24,000, while the interest on the 36th EMI would be about Rs47,000 and consequently the borrower would receive a refund of Rs23,500.

This adds up to a hefty refund of Rs72,500. Please note that this kind of refund would be available to borrowers taking a loan of Rs80 lakh. However, for the average home buyer taking a loan in the region of Rs30 lakh, the component of interest refund promised in the three instalments would add up to about Rs27,000 only. Is this such a big deal?

Of course, the first thing that a borrower looks for is the interest rate on the loan. HSBC's rates start at 10.25% on loans up to Rs30 lakh, 10.50% up to Rs75 lakh and 10.75% on loans exceeding Rs75 lakh. These rates are 25 basis points higher than the rates offered by HDFC, the housing finance market leader. But HSBC's rates are on level with State Bank of India's home loan rates.

There is one further condition, whereby a borrower must have a savings/current account with HSBC and maintain a minimum balance of Rs25,000. The bank says it will credit the refund to this account. While, most foreign banks have this minimum balance condition for savings/current accounts, HSBC says that it is willing to waive the minimum balance for home loan borrowers.

HSBC has a constant EMI for the entire loan period, in spite of the fact that some funds are parked in the savings/current account, and there is no compensation on the interest component. Perhaps, the only concession from HSBC is the flat Rs10,000 loan processing fee which is lower than the 0.5% on loan amount charged commonly by home finance companies.

HSBC also has a higher prepayment charge of 3% (against the industry average of 2%) when more than 25% of the loan amount is prepaid in one go.

HSBC will not finance under construction properties through this scheme and any new property must be ready for occupation at the time of the disbursal of the loan. The bank also allows loans under this scheme for existing properties as well. The special offer is valid on floating rate home loans, but it is not valid on Smart Home and SmartLAP schemes of the bank.

It is unclear whether the refund amount will be liable for income tax. And finally, the offer is valid only till 31 July 2011. So why is HSBC in such a hurry to pick up customers in this two months period? Perhaps, there lies the answer to this innovation.


Airtel 3G: Emotion over logic

The Airtel commercials cut out the tech talk and stick to basic human emotions, making the ads watchable; so much better than the rivals’ ads

Must say, so far the 3G communication from various telecom companies has been mighty unimpressive. Given that the tech is a revolution in cell phone internet, one expected some really kickass advertising. Vodafone's cute zoozoos, who otherwise do pretty zippy stuff, lost steam in the 3G ads. The super zoozoo, who represents Voda's 3G, is a super letdown. And Idea's Bachchan Junior ads for their 3G pitch are downright irritating. (Though the actor did work for them in the 'Get Idea' number portability series.)

However, Airtel's ads for 3G are much better and more focused. And that's because instead of resorting to gimmicks and juvenile ads, they have kept emotion at the core of the communication. And it's the correct strategy. However revolutionary the 3G technology might be, it must deliver on the ground in terms of connecting people. That's what really matters to the end-users.

There are three commercials on air. The first one deals with video calling. In this one, an Air Force officer on duty video-calls his girlfriend back home, and they enjoy a naughty (almost erotic) banter. It's shot well, the models act nicely and the ad packs in the right mix of emotion and passion. So you don't mind the repeated exposures.

In another commercial that talks of high-speed connectivity, a young dude is able to, through his FB pals, instantly locate the cad who dared kiss his granny's cheeks many years ago-much to the joy of his revengeful grandfather. This commercial is funny and endearing. And is in fact already a hit on Facebook.

In the third ad, a lad is reluctant to go to Bangkok for a family function, and this upsets his father. But on his tablet he discovers Bangkok to be a happening, rocking musical place. And suddenly agrees to join in. Of course, the daddy has no idea what's behind the change of heart. As an aside, must say that the son would have discovered massage parlours rather than opera singers; but of course Airtel can't feature that. The hyper active moral policemen and women would arrive at their corporate office at the speed of 3G.


Yup, Airtel's doing the right thing: Creating disparate communications for various 3G applications, thus appealing to different consumer segments, each with their own needs. And cutting out the tech talk and sticking to basic human emotions is a sensible route. It also makes the ads watchable. So much better than the rivals' ads. Idea's Small B and Voda's super zoozoo have already become blind spots.




6 years ago

What are you talking about. Apart from the Kantilal ad I did not find any of the Airtel ads remotely amusing. Vodafone ads on the other hand still hold their charm. But I agree with you that the Idea ads dont work.


6 years ago

A soldier asking his babe to show the mole on her neck - actually suggesting to the young crowd what 'fun' they can have with their girlfriends thnx to video calling
A son seeing THAI MASSAGE video and agrees to his parent's demand of going to Bangkok... any son of a gun will die to go to bangkok but this dude decides only after seeing the HOT stuff available there... CHEAP again...
Oldie using his son's dude connections to locate an old foe and then kisses his 60+ wife... wow, what an example for your son

Way to go airtel, not only you are the worst cheater company EVAR, you are also the one with the CHEAPEST ADS around



In Reply to buzzz 6 years ago

I agree with you,especially,the Kantilal ad,wherein the wife of culprit is targeted,as if she is an object to retaliate.Whats the difference betwn uncultured people & so called educated one ?


6 years ago

Well the Airtel ads are nice. The kantilal godbole one is best of all. The first is nice mushy... but after the first few times you zap. Not so with the zoo zoos. The test of an ad is if you can keep watching it over and over again. The super zoo zoo is really super cute. I never zap!!
Another is the insurance ad with the cute blackmailing kid who extorts from grandma - the regular income one. But dashed if I remember whose ad it is. What a waste of money for them, even though the ad is terrific.
Ads are a matter of personal opinion ... what? but I like your reviews.


6 years ago

Paid ad...
Vodafone ads are by far the best.

HC notice to CBI on bail plea of Kanimozhi in 2G case

Ms Kanimozhi, who sought bail in the special court on ground of being a woman, had approached the high court seeking relief citing the need to look after her school-going child who is devoid of the care of his father working abroad

New Delhi: The Delhi High Court on Tuesday issued a notice to the Central Bureau of Investigation (CBI), India’s premier investigation agency, on the bail pleas of Dravida Munnettra Kazhagam (DMK) MP Kanimozhi and Kalaignar TV MD Sharad Kumar in the second generation (2G) spectrum allocation case, reports PTI.

“Issue notice to the CBI for 30 May,” justice Ajit Bharihoke, who yesterday (Monday) dismissed the bail pleas of five corporate honchos in the case, said.

The court also asked the probe agency to file a status report detailing the stage of investigation and the judicial proceedings in the case on the next date of hearing.

Ms Kanimozhi, the 43-year-old daughter of DMK supremo M Karunanidhi, and Sharad Kumar had approached the high court Monday with their bail applications after the special CBI court ordered their “forthwith” arrest on 20th May.

Rejecting their bail applications, the special court had said that the offence attributed to them was grave and the possibility of influencing the witnesses cannot be ruled out.

Ms Kanimozhi, who sought bail in the special court on ground of being a woman, had approached the high court seeking relief citing the need to look after her school-going child who is devoid of the care of his father working abroad.

“The petitioner (Ms Kanimozhi) has a single school-going child to be taken care of. Her husband is employed abroad and the court should grant bail to her,” said the bail plea, filed by the daughter of the DMK patriarch through advocates VG Pragasam, SJ Aristotle and Sudarshan Rajan.

Ms Kanimozhi and Mr Kumar were named in the CBI charge-sheet for allegedly receiving a kick-back to tune of Rs200 crore.

Both Ms Kanimozhi and Mr Kumar have 20% stake each in Kalaignar TV Pvt Ltd which received Rs200 crore through a circuitous route. DMK chief’s wife Dayalu Ammal owns the remaining 60% stake in the channel.

In her bail plea, the DMK MP claimed she is innocent and has been falsely implicated in the case due to “the biased media reporting concocted on the basis of conjectures and surmises.”

She said she had co-operated with the CBI in its investigation and also voluntarily complied with court’s summons.

She also referred to the special judge’s observation in the order that she had shown “extremely dignified conduct” in the court by appearing regularly and said she should be granted bail.

“She is a respectable person having roots in the society. Being a member of Parliament and a law-abiding citizen, she will neither flee from justice nor will tamper with evidence nor interfere with the course of trial,” she added in her plea.

“As a member of Parliament and whip of the DMK party in the Rajya Sabha (upper house of Indian Parliament), she has to attend Parliament sessions and all party meetings convened from time to time in connection with parliamentary business,” she said.


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