While the Vijay Mallya-owned Kingfisher Airlines is offering up to three instalments of salary dues before Diwali, the striking employees insisted on a written assurance alleging that the management had earlier backtracked
United India Insurance was told by a CIC order to put data on policy issue date and transfer date to TPAs on its website. It has not done this for over two months. Does it need high-tech to give such basic information or was it is busy developing M-Power, the app which helps its get premium through mobile phones?
United India Insurance Company (UIIC) has not complied with the Central Information Commission (CIC) June 2012 order to start putting information on policy issue date and transfer date to TPAs (third party administrators) from 16 August 2012. As this order is not for retroactive data, there should not be any difficulty to conform. Yet, UIIC has scuttled the issue by saying that the information will be available only when they have implemented Comprehensive Online Real-Time Environment (CORE) software. Is UIIC deliberately not putting the obligated data as it will point to the ongoing bungling of the UIIC promised cashless feature?
As per the Right to Information (RTI) reply to Dr Anshu Agrawal, there can be a one-two month delay in giving policy renewal information by the branch office to the TPA. It means that the cashless feature is denied to customer during this period even after policy is renewed. When a customer pays premium for mediclaim policy, there is very less chance of a cheque bouncing. Why is customer penalised for inexplicable inefficiencies of UIIC? While UIIC has developed M-Power, a mobile application for ease in premium payment, why has it not taken any steps for really helping the customers?
At the 28 August 2012 CIC hearing, UIIC Chief Public Information Officer (CPIO) told Information Commissioner following important points:
It’s bizarre that the TPA has to physically visit branch office once in a week to get updates on policy renewal or purchase. Even more astonishing is that a simple solution of electronic data transfers between bank to UIIC and then to TPA needed activists like Dr Agrawal to knock on CIC doors. It opened a UIIC Pandora’s Box.
Hapless policyholders end up with cashless denial just because UIIC is living in pre-computer age of manually getting cheque credited information from bank and making the TPA show up at the branch doors to get policy renewal information. Not to talk about the delays in TPAs putting this updated information on their computer systems. Till that happens, the policyholder is told that you are not our customer; you will not get cashless and we cannot even take hospitalisation intimation. In short, we may not pay your reimbursement claim as we did not take your hospitalisation intimation.
It will have to been seen when the self-revelation of UIIC is actually implemented. UIIC needs to empower the customer with quickly doing what they said at CIC hearing and not just offering M-Power mobile application for premium collection.
Banks and finance companies are trying to gain business by offering lower interest rates. But you, as a borrower, need to look at other aspects as well, before moving your loan from one bank to another. Here are the six things you must consider
“You can transfer your high-cost home loan from any other bank to our bank and not only save on interest but also avail a higher loan amount” is the pitch from one of well-known banks. Most of us would definitely be tempted to go in for such a transfer. And why shouldn’t we? For the double benefit that is being provided, why would anybody not avail such an opportunity and that too when interest rates are so high? But stop and think. Is it all so simple? Should I actually go a step ahead to find the details? The answer is “yes, you should” and here is WHY and WHAT you should look at.
Technically called “takeover of loan”, transferring a loan means approaching a bank and asking it to issue a loan amount that is the outstanding amount with the current bank, repaying to the current bank and continuing the loan with the new bank. You will benefit from the lower interest rates or lower EMIs. And the bank? It gains new business. But, is the interest rate or a lesser EMI the only consideration? Not really. Here are six important factors that help you take the final decisions:
Although the new bank tries to attract you by reducing your monthly EMI and giving you a longer span to repay (increasing your tenure), you should be clear that such facilities increase the total amount you pay to the bank because the interest keeps on adding to the outstanding loan amount. If you are paying higher EMIs with your current bank, compare the total outgo for both banks and then take a decision. If you are not hard-pressed for cash, you should prefer staying with your bank, pay a larger EMI and finish off your loan as soon as possible to save all the money you would overpay, by opting for a longer tenure.
Take into consideration the processing fee, stamp duty, legal charges, valuation fee, technical charges and other allied charges that your new bank would charge and compare it with the benefit in terms of reduced interest rates. Is there a net benefit or a net loss?
For some banks, processing fee is a percentage of the total loan amount, while for others, it depends upon whether you are salaried or run a business. Still others have a fixed amount, uniform for all. If the bank calculates it on the basis of the outstanding amount, calculate it in rupee terms to find the cost. Also, your existing bank may jack up the costs of closure of accounts if it finds out that yours is a case of takeover. One of the complainants in an online complaint forum talks about how the bank officials refused his request to charge the interest rate on floating basis and insisted for recovery on a fixed rate of interest if the customer opted for takeover. They wanted the customer to pay at fixed interest rates, much higher than the floating rates applicable.
If you have already repaid a huge chunk of your loan, do not offer the complete original collateral to your new bank. Why would you want to give a security which is double the amount of your loan outstanding? You would use it to take a separate loan instead, if the need arises. Offer your new bank a lesser amount of collateral. And if the bank still insists on the same, negotiate for lessening the interest rate further.
When you take a loan, banks generally require you to open a savings account and route your money through that account. In case it does so, find out the charges applied and the facilities provided to you. For example, a Canara Bank education loan account does not accept EMIs through net banking. HDFC net banking allows you to make NEFT only 24-hours after you have submitted the request, the first time.
You should consider such provisions and your requirements before taking the final decision. Also, if your current bank is the one where you do all your banking, you become a premium customer for them; know a lot of their staff, are well-versed with their processes and may also be given services faster than others in queue. These softer aspects go a long way for ease of use and comfort banking, and should be thought about before foregoing them.
Before signing on the dotted line, you MUST read all terms and conditions of both banks. Some banks include buying insurance from specific company or depositing a certain amount in fixed deposits or opening a number of saving accounts for self as well as family, etc. Read the “terms and conditions” part of the sanction letter and understand the pros and cons of such conditions.
Attracting customers by offering them frills with loans is a fad. Free credit card and personal accident insurance tops the list of offers. Before falling for these, analyse whether you really need them and ask for more information about terms and conditions governing them. A well-known friend was sold a ‘free’ credit card. He woke up the next year only to realise that the card was free only for one year. That is the extent of mis-selling being done.
Do not fall for an interest rate, or benefit, that is only marginally better. After all banks are into the business of lending. Why would one want to give you loans at a lower interest rate and lose profits when others in the market are earning a higher rate of interest? In your best interest, it is good to be suspicious and ask and consider all the issues mentioned above.