LoanZen partners with Treebo to offer loans to hoteliers

LoanZen partners with Treebo to offer loans to hoteliers
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11 Apr, 2016, 1921 hrs IST, ET Bureau

MUMBAI: LoanZen, an online platform for offering unsecured loans to small businesses, has tied up with Treebo Hotels, to offer credit support to the latter's hotel partners. The company would use the data maintained by Treebo to assess the hoteliers' credit-worthiness. Treebo's partner hotels will be able to get quick, unsecured loans through this partnership.

"Treebo is a tech-and-analytics-enabled hotel chain that provides us a robust data layer using which we can easily assess the credit-worthiness of their partner hotels. We use information like past booking history, future bookings for the property, guest feedback collected digitally, and quality performance data. This allows us to offer credit to a segment of small hotel owners that has so far not had access to such lending", Madhu Sudhan, co-founder, LoanZen said in a press statement.

These loans are to be used by hotel owners for managing their working capital and for making quality upgrades to meet Treebo's brand standards.

"We are building a strong ecosystem of external service providers for our partners that allows them to carry out their operations more effectively. This is another way in which we add value to our partners. Loanzen is an important partner for us in this effort. Through them our partners not only get access to loans, they do so in a manner that is quick and hassle-free which is important for business," Treebo's director of partner experience, Bhargav Bhamidipati said in the statement.

One of Treebo's partners, Ajoy Avikara, who has availed of this facility said, "I value the competitive interest rates, which are on par with mainstream banks and much lower than alternative channels. At the same time the disbursement process is so fast and convenient."

Founded in 2015, Treebo Hotels is currently present in 12 cities with 65 hotels.
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Home, car loans unlikely to get any cheaper till March

Home, car loans unlikely to get any cheaper till March
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03 Feb, 2016, 0446 hrs IST, Saloni Shukla, ET Bureau

Home loan and car loan applicants may have to wait at least till March to see whether they get any relief on their interest payment as banks are unlikely to cut rates immediately with the Reserve Bank of India holding policy rates unchanged.
MUMBAI: Home loan and car loan applicants may have to wait at least till March to see whether they get any relief on their interest payment as banks are unlikely to cut rates immediately with the Reserve Bank of India holding policy rates unchanged and expecting fiscal reforms to ease supply bottlenecks.

Many people who track the market are expecting the RBI to cut policy rates only after the Budget, which is expected on February 29. "We expect the RBI to deliver a 25 bps rate cut after the Budget is released, although we do not rule out an earlier intermeeting cut," said Sonal Varma, India economist at Nomura.

RBI Governor Raghuram Rajan said he was awaiting further data on the development of inflation. "Structural reforms in the forthcoming Union Budget that boost growth while controlling spending will create more space for monetary policy to support growth, while also ensuring that inflation remains on the projected path of 5% by the end of 2016-17," he said in the policy statement.

However, the impact of the 7th Central Pay Commission could derail all the previous inflation projections. The RBI cut the benchmark repo rate by 125 basis points in 2015, but lending rates have come down only by 60 basis points as banks were slow to transmit. At present, the base rate for banks ranges between 9.3% and 9.7% with both State Bank of India and HDFC Bank having the lowest of 9.3% while ICICI Bank's base rate is 9.35%.

"I would tend to think that there is still some room for a rate cut," said Ashish Parthasarthy, treasury head at HDFC Bank. "According to me, rate transmission has already happened. The base rate is not the only benchmark to see whether rate transmission is happening or not."

Banks will move to a new marginal cost-based loan pricing mechanism from April 1, which is expected to make them react faster to Reserve Bank of India rate actions. "I do believe that we will see a significant change in transmission process when that (new pricing system) comes in," the RBI governor said. "I think transmission will happen and eventually banks will be forced by competition to transmit."

Bankers on the other hand are expecting the Reserve Bank of India I to continue its accommodative stance and further cut repo rate by 25-75 bps in FY17.

"A 25 bps rate cut over the next six months should provide some respite to retail borrowers, besides Corporate India, on the cost of funds and it may trigger them to start investments," said Umesh Revankar, MD, Shriram Transport Finance.

Five rights of loan defaulters

Five rights of loan defaulters
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11 Apr, 2016, 0800 hrs IST, Preeti Kulkarni, ET Bureau

If you have defaulted on a loan, the rules don't give lenders a complete walkover. Here's what to bear in mind if you find yourself in such a situation.
If you have defaulted on a loan, the rules do not give lenders a complete walkover. ET Wealth tells you what you should bear in mind if you find yourself in such a situation.

1. Right to ample notice

A default does not strip you of your rights or make you a criminal. Banks have to follow process and give you time to repay dues before repossessing your assets to realise the arrears.

Typically, banks initiate such proceedings under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interests (Sarfaesi) Act. If the borrower's account is classified as a non-performing asset (NPA), where repayment is overdue by 90 days, the lender has to first issue a 60-day notice to the defaulter.

"If the borrower fails to repay within the notice period, the bank can go ahead with sale of assets. However, in order to sell, the bank has to serve another 30-day public notice mentioning details of the sale," says banking and management consultant V.N. Kulkarni.

2. Right to ensure fair value

The lender starts the process of auctioning your property to recover dues if you fail to clear what you owe or respond during the 60-day notice period. However, before doing so, they will have to issue another notice specifying the fair value of the secured asset as assessed by the banks' valuers, along with other details like reserve price, date and time of auction. "The borrower can object if the property is undervalued. He can justify his objection by conveying any better offer that he may have so that the bank can make a decision," says Kulkarni. In other words, you can look for prospective buyers on your own and introduce them to the lender if you think that the property can yield a better price.

3. Realise balance proceeds

Do not write off your asset mentally the moment it is repossessed. Keep track of the auction process—it's easier to do so now as most lenders conduct e-auctions. Lenders are required to refund any balance after recovering the dues, which is a real possibility given that property prices can shoot up beyond the owed amount. "After recovering the dues and all expenses of conducting the auction, the bank has to refund the amount to the borrower as the money belongs to him legitimately," says Kulkarni.

4. Right to be heard

During the notice period, you can make your representation to the authorised officer and put forth your objections to the repossession notice. "The officer has to reply within seven days, giving valid reasons if he rejects the representation and objections raised by the borrower," says Kulkarni.

5. Right to humane treatment

Do not forget that banks are regulated entities that cannot behave like moneylenders while trying to collect dues. Following adverse reports about the conduct of recovery agents, the RBI had pulled up banks over the issue a few years ago. Banks too decided to voluntarily commit to certain best practices as part of their code of commitment to customers.

For one, agents can contact borrowers at a place chosen by the latter. In case they have not specified a place, the agents can visit either the borrower's residence or place of work. They are required to respect borrowers' privacy during these visits and ensure civil and decent behaviour. They also cannot land up at unearthly hours. The window available is 7 am to 7 pm, unless the borrower's working hours necessitate different timings. Agents cannot resort to harassment or intimidation and nor can they humiliate the borrowers or their family members.

Paisabazaar.com ties up with banks and NBFCc to offer car loan

Paisabazaar.com ties up with banks and NBFCc to offer car loan
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09 Feb, 2016, 1736 hrs IST, ECONOMICTIMES.COM

Paisabazaar.com ties up with India's leading banks and NBFCs for offering car loan product to private and commercial customers.
NEW DELHI: Online financial marketplace, Paisabazaar.com has expanded its product line by tying up with HDFC Bank, ICICI Bank, Kotak Prime, IndusInd Bank, AU Financiers and L&T Finance for offering car loans to private as well as commercial customers, according to a company press release.

These partnerships allow Paisabazaar.com to reach out to existing and potential customers across all segments and offer car loans to them on the basis of their individual requirement. While the tie-up with banks would enable the company to offer loans to the masses, joining hands with NBFCs would provide the opportunity to reach out to those who seek loans within niche segments such as used and commercial car loans.

In addition to getting loans for new cars, customers can also apply for used car loans through the website, thereby allowing Paisabazaar.com to enter untapped markets in India.

The car loan option is available at www.paisabazaar.com. On selecting the option, the consumer will be directed to car loan requirements page. The applicant will then have to specify his/her requirements and proceed to view and compare the loan offers available by different banks and NBFCs. Once the consumer chooses an offer, it is shared with the bank/ financial institution. The Paisabazaar.com team will provide all necessary assistance in the documentation and application process.

Commenting on the partnership, Naveen Kukreja, Managing Director of Paisabazaar.com said: "Our decision to venture into car loans segment is in sync with our plan to create one stop destination for all kinds of loans. We are excited to partner with some of India's largest banks and NBFCs and look forward to enhancing value proposition for those who are looking to buy car loans through our website."

Home, car loans may get cheaper from April

Home, car loans may get cheaper from April
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21 Mar, 2016, 0713 hrs IST, Saikat Das & Saloni Shukla, ET Bureau

The switchover to the marginal cost-of-funding formula, coupled with sharp cuts in small savings rates, will force lenders to pass on the benefits to customers.
MUMBAI: Come April and the cost of taking loans for homes, cars, televisions and washing machines is likely to become cheaper, regardless of whether Reserve Bank of India Governor Raghuram Rajan cuts interest rates or not.

The switchover to the marginal cost-of-funding formula, coupled with sharp cuts in small savings rates, will force lenders to pass on the benefits to customers.

"The transmission framework is being put in place," said Srinivas Varadarajan, head of fixed income and currencies (India) at Deutsche Bank. "This should now enable banks to bring down deposit rates. With the latest round of (public savings) rate cuts, the government has done its bit." The government reduced interest rates by 60-130 basis points for some term deposits, public provident fund and Kisan Vikas Patra.

The quarterly revision will ensure that interest rates under small savings schemes are more dynamically related to current market rates, thereby enabling banks to move their interest rates in line with current money market rates, the finance ministry said on March 18.

According to Varadarajan, there are three elements of this structure - calibrating public savings rates to the market, the marginal cost of lending and changes to the liquidity framework. The RBI has mandated banks that all rupee loans should be priced with reference to the Marginal Cost of Funds-based Lending Rate (MCLR).

Lenders until now mostly followed the average cost of deposits formula, while MCLR brings down the cost of deposits faster in a falling-interest rate regime. This, in turn, gives lenders leeway to cut lending rates. "Obviously, the deposit rate cut has to precede the lending rate cut," said Rajnish Kumar, a managing director at State Bank of India.

"As per the formula, unless you determine the marginal cost of deposit, you cannot arrive at the marginal cost of lending rate." The MCLR formula calculations are yet to be finalised in most banks.

No lender has arrived at a figure or a fool-proof methodology, bankers said. "Bond yields will now come down by about 25 bps in the next three to six months, leading to lower corporate borrowing costs," said Badrish Kulhalli, fund manager - fixed income at HDFC Standard Life. "Small savings rates have been quite sticky and the cut in these rates signals a lower interest rate regime."