Friday, 22 August 2014

Home Loan: How To Pick The Right Bank

Savita, a Kolkata based engineer, decided to apply for home loan in order to fulfil her long-cherished dream of owning a house. Tired of knocking the doors of several financiers, she chose a lender having convincing salespersons, without really conducting any prior research. As a result, she has to deal with several ordeals while repaying her debt, including dealing with scores of hidden charges, inflexible loan options and heavy penalties.
 
Though financial insight proves to be helpful, it is not required so often. Consumers search for the most reputable home loan providers and often end up getting trapped in the wordy circles of the best salesperson.
 
It, thus, becomes important to do your homework and take into consideration every factor before opting for a particular lender.
 
Importance of taking a home loan from a reliable lender
 
Stringent terms and conditions and absurd policies are the trademark of financiers that every potential borrower must avoid. It is only a reliable lender who would offer the needed flexibility when it comes to terms and conditions of the loan.
 
Apart from that, only a reliable bank would provide superior customer service and be willing to go down that extra mile for keeping its customers satisfied.
 
It is wise to check the reputation of a lender if you don't hold any relation with the bank.
 
FACTORS TO CONSIDER
 
Considering every possible, decision-affecting factor, planning out everything and following it systematically is the key to a smooth, hassle-free journey to owning your dream abode.
 
There are numerous factors that help make a better decision when selecting the right provider for your home loan. Six of them are discussed below:
 
1. Processing and disbursal speed
 
Dealing with a lender that rules out the possibility of any delays and is quick in processing a home loan application always proves beneficial in the long run. Normally, if everything is in order, it takes 10-15 working days for banks to process an application.
 
Once approved, the lenders take additional 3-5 days for disbursing the amount of sanctioned loan.
 
2. Loan qualification
 
Internal lending criteria vary from one bank to another and it is on the basis of these that a particular amount of home loan is approved for the borrower. The criteria might cover the borrower's age, job profile (preferably salaried, because of easily understandable salary slips and ITRs), employment stability, credit history, among other aspects.
 
There are several calculators and eligibility charts, for instance the one offered by ICICI Bank, which help the borrowers in apprehending their eligibility well in advance.
 
3. Repayment terms
 
There are certain terms and conditions pertaining to repayment of the home loan imposed by banks on customers. Potential borrowers must clarify the terms related to settlement/foreclosing the outstanding amount, transferring the balance to another lender's account, prepaying a part or full amount of home loan, and other things, before finalising a lender.
 
4. How much should you pay?
 
The cost of taking a home loan would certainly vary from one bank to another. It depends upon the decision-making abilities of the borrower whether securing a home loan would prove to be an economical affair or a cost laden one.
 
However, there are certain things that one must weigh carefully at the cost front.
 
5. Fixed vs. floating rates
 
The rates vary from time to time, and as in the case of a well-planned investment portfolio, one must analyse the liability portfolio and plan on getting the maximum out of it. As a rule of thumb, if the loan period ranges between 2 to 5 years, going with a fixed interest rate is considered an ideal move.
 
Otherwise, floating rates are considered ideal for long tenure loans.
 
You can even go for a hybrid loan, which enables the borrower to enjoy the best of both fixed and floating interest rates. (Read more about the hybrid loan option)
 
6. Hidden charges
 
Hidden charges is something that tends to prick the pocket of borrowers the most. Thus, while narrowing down the options, it is advisable to compare the processing fee, down payment, valuation fees, prepayment costs and other charges levied by different lenders.
 
Making the choice
 
Different lenders use different yardsticks for measuring the borrower's eligibility. Why shouldn't borrowers consider doing research and compare several competitive features of home loans offered by different lenders? It is better to have the policies, facts, terms and conditions clarified well in advance before locking in a seemingly ideal home loan with any lender.

Credit Sudhaar is India's first Credit Health management & improvement company whose goal is to help clients to Restore, Enhance and Protect their Credit and make them credit healthy.

Courtesy: Profit.NDTV

Thursday, 21 August 2014

How To Identify And Prevent Credit And Debit Card Scams

The rise in the number of reported credit and debit card fraud cases, has made users wary of their own financial safety. Here are some tips on identifying and preventing card fraud
 
The most common form credit/ debit card frauds are perpetrated through ATMs and card swiping machines, and is referred to as 'skimming'.
 
A scam watch web portal by the government of Australia explains, “Card skimming, is the illegal copying of information from the magnetic strip of a credit or ATM card. It is a more direct version of a phishing scam. The scammers try to steal your details so they can access your accounts. Once scammers have skimmed your card, they can create a fake or ‘cloned’ card with your details on it and can then run up charges on your account.”
 
The fraudster uses a small hand held device called the “skimmer” (hence, the crime is termed as skimming) and swipes your card on it, usually while you are making a payment for a purchase. In case of ATM frauds, this device is fitted into the machine. It allows them access to your all your data associated with that card, enabling them to counterfeit it.
 
Safecard.ie advices, “Your credit or debit card details can be used fraudulently, even when the card itself is safely in your care. As such it is vital to check your bank statements regularly. The sooner you spot and report any purchases that you didn't do, the sooner the bank or financial institution that issued your card can stop the fraudster buying goods and services on your account”
 
How to identify that your card is being hacked into?
 
Apart from monitoring unidentified charges on your account, there are other a few other things that should raise your suspicion.
 
Swiping on different machines: In case you have been asked to swipe your card on more than one machine, question the procedure and speak to the store manager. Alternately, if you see the attendant swipe your card on another machine, question them again.
 
ATM fraud detection: Notice your card slot machine, by wiggling your card in it. If it appears different that usual, as in, there is more space in there than usual or it feels there might be another device attached, raise an alarm.
 
Other useful points to remember:
 
Check the ATM you use for discrepancies: Signs of tampering could be right in front of you, such as exposed wires, broken seals, loose parts. Inform the bank of this and use another ATM.
 
How to pick an ATM: Pick an ATM that has cameras fitted inside or a company-hired guard. Try and use ATMs on more crowded and commercial streets, and avoid those is remote seclude areas as they are more prone to tampering.
 
Have the card swiped in front of you: Ensure that the store attendant swipes the card in front of you. Do not allow them to take it out of your sight or to another area.
 
Dispose off old cards: Cut the expired cards and ensure the magnetic strip has been scratched. Swipe new cards immediately.
 
Keep your PINs secret: It is needless to say that you must not share your ATM and other security PINs with anybody. Don't write it down anywhere, and ensure no one sees it when you are using the ATM or other machines.
 
What are the security measures you take to protect your self from potential financial fraud? Share your tips with us.

Credit Sudhaar is India's first Credit Health management & improvement company whose goal is to help clients to Restore, Enhance and Protect their Credit and make them credit healthy.

CS IdentityShield helps you to Monitor, Protect and Recover your Identity from multiple risks.

Courtesy: DNA

Wednesday, 20 August 2014

Tech Majors Building Cyberdefence

Independent directors at India's biggest software companies have put cybersecurity on top of their agendas, underscoring the growing threat perception about hacker attacks that could damage their reputation and affect their ability to win business. Their fears are not unfounded.
 
Recently, one of the top five Indian software firms faced unprecedented attacks on a customer's mortgage processing systems, a platform the company owns and manages on the client's behalf. An executive aware of the incident said the event went unnoticed for a week until it was spotted by a junior engineer.
 
"Sometimes, we tend to overlook potential threats," the executive said, requesting anonymity. Soon after, the incident was reported to the board's risk committee, which in turn made a pitch to all directors about the need to have monthly and sometimes real-time reviews of preparedness.
 
In another incident last month at a mid-sized IT firm, a customer's employee based in India was found to be copying sensitive corporate data onto his personal devices.
 
"We couldn't even trust the local staff and had to raise the flag with their headquarters. The stakes are high for us because we own and manage their systems," said a person familiar with the incident.
 
Although it is not clear how many data breaches were reported at homegrown IT firms, anti-virus software firm Kaspersky Labs estimated earlier this year that cybersecurity breaches over the previous 12 months led to 43% of firms losing data about their internal operations, 31% losing client data and 22% losing their financial data. "We are paranoid over this (cybersecurity)," said KK Natarajan, CEO, Mindtree. "Paranoid because if there is a breach, the reputational implication can be really substantive."
 
Last November, EXL Services lost its largest client, Travelers Indemnity, which terminated the contract over "breach of confidential client data" by a few of EXL's employees. A person familiar with the development told ET that a few EXL staff shared a client document with those outside the company.
 
"The risk is redefined now...today everybody is getting worried about cybersecurity," said Jagdish Sheth, Charles Kellstadt professor of marketing at Emory University and an independent Board member at Wipro.
 
Earlier this year, KPMG carried out a survey, 'The Cybercrime Survey 2014' based on the consultant's interaction with 170 CXOs. Some 89% of the respondents identified Cybercrime as a major threat, with more than half of them perceiving them selves to be an easy target for cyberattacks due to the nature of their business. "No matter who you are, you have to have processes in place. If it happens, how do you manage it? These are major strategic challenges ahead of risk management committee," said Sheth.
 
Experts argue that IT companies face heightened risk because most of their staff bring their own gadgets from smartphones to tablets and also because the advent of most data to cloud has increased the vulnerability of data.
 
"At the board level, the threat of cybersecurity is not related to if a company has proper security in frastructure in place. Rather, it is more to do with safeguarding in formation," said Tarun Kaura, director of technology sales for South Asia at Symantec.
 
Mindtree's Natarajan acknowl edges that a firm's employees pose a greater risk to firms' "sensitive data" than outsiders.
 
"If you look at it, invariably, when such things happen, there is an internal person involved. And that is why a lot not talk about it. But of people don't talk about it. But there are now whole tools to monitor any suspicious activities with in your team."
 
Cybersecurity is a challenge globally, and while there are pockets of excellence, nobody is really doing a 'great' job, said Jacob Ol cott who manages the cybersecurity practice at Good Harbor Security Risk Management. Good Harbor chairman is Richard Clarke, former senior White House adviser to three past US presidents on cybersecurity and counterterrorism.
 
"I think Indian companies absolutely have the technical expertise to improve the cybersecurity of their organisations, but think that many firms have only recently started confronting these challenges," added Olcott. "As cybersecurity is becoming an increasingly important business issue, I would not be surprised to see more Indian IT companies being asked to do more in secure developmentse cure coding, and provide evidence of their efforts to secure their own businesses generally."

Credit Sudhaar is India's first Credit Health management & improvement company whose goal is to help clients to Restore, Enhance and Protect their Credit and make them credit healthy.

CS IdentityShield helps you to Monitor, Protect and Recover your Identity from multiple risks.

Courtesy: Times of India

Tuesday, 19 August 2014

How The Credit Information System Can Be Made More Efficient

An efficient credit information system in any country is not about identifying the defaulter – though that is definitely a value add – the main purpose is to recognise good behaviour by a borrower and ultimately reward through a reduced risk versus reward play.
 
It has a positive influence on productive investment spending, induces positive credit discipline, creates awareness about the benefits of having a healthy credit life and the importance of proper management of liabilities.
 
It has been almost 10 years since the concept of credit information, credit bureaus and scores was introduced in the Indian financial sector. Credit Information Bureau (India) Ltd, or Cibil, started its operations in 2004 and the other credit information companies (CICs) -- Equifax, Experian and Highmark -- have been into operations for 3-4 years now. Although the Indian CIC industry has evolved in its own way, a timely review is important to understand where it stands.
 
The Reserve Bank of India (RBI) constituted a committee in March 2013 under the chairmanship of Aditya Puri, managing director of HDFC Bank, to examine reporting formats used by CICs and related issues.
 
The committee, comprising representatives from various stakeholders including the CICs, public and private sector banks, foreign banks, has presented its report to the RBI.
 
Its recommendations, if accepted, would have huge impact on stakeholders involved -- CICs, credit institutions and the consumer.
 
Some of the recommendations will require changes in the law (The Credit Information Companies [Regulation] Act, 2005) that governs this domain (points 1, 3 and 4 of the table) and some will require technology changes by the CIC/lender (points 5 and 6 of the table).
 
This will take time, effort and costs and the RBI should ensure that all recommendations it accepts are implemented immediately.
 
Some of the recommendations, which will make the Indian credit information industry more robust and complete, are:
Inclusion of information related to commercial paper & derivatives in the CICs data format
 
Linking consumer & commercial reports
 
Providing alerts to credit institutions to avoid multiple/fraudulent financing
 
Adding new fields in the reporting format
However, the RBI and the committee missed out on a few key areas, which include.
 
Reduction in the costs for a report and score, accessed by an individual, currently in the Rs 400+ range.
 
Treatment to be given if a credit institution sells its portfolio to a non-credit institution and an individual thereafter repays any outstanding, that transaction is not reported to any credit bureau, resulting in punishing an individual for no fault of hers.
 
Recognition by the credit bureaus of credit counsellors as credit advisors to individuals and their role as facilitators to improve credit life cycles of consumers (widespread in developed countries).
 
Recommendation to increase the range of data being taken in by the credit bureaus to include telecom, insurance and non regulated bodies, thus making credit bureau data more complete.

Credit Sudhaar is India's first Credit Health management & improvement company whose goal is to help clients to Restore, Enhance and Protect their Credit and make them credit healthy.

Courtesy: DNA

Monday, 18 August 2014

46% Indian Credit Card Users Worry About Frauds

Nearly half of the Indian plastic money users are extremely concerned about frauds in case,payments are done through credit or debit cards,while 73 per cent are left shaken by media reports of such incidents,says a survey.
 
With 46 per cent respondents ‘extremely’ concerned about frauds related to payments through cards,consumers consider them as their biggest financial security concern,according to the Visa Payment Card Security Study.
 
Besides,a majority of respondents (73 per cent) said that reading about media reports of such frauds bothers them more than that of their personal experience,the report added.
 
The study found that consumers in India take a highly proactive approach to enhance security,while making electronic payments both in person and online.
As per the study,37 per cent respondents use different passwords for different purposes. 51 per cent change their password regularly as a prevention measure than anything else and 41 per cent change passwords once a month or more.
 
Meanwhile,67 per cent consumers said that they would register to receive alerts over their mobile phone in order to prevent such frauds in future,it added.
 
“Research gives us key data about attitudes towards risk and security as we take forward innovative solutions to enhance and increase security and trust all aspects of card payment transactions,” Visa International Head of Risk Michael E Smith said.
 
The study was conducted,among over 500 consumers between August-October,across Delhi, Mumbai, Bangalore, Chennai, Kolkata, Hyderabad.

Credit Sudhaar is India's first Credit Health management & improvement company whose goal is to help clients to Restore, Enhance and Protect their Credit and make them credit healthy.

CS IdentityShield helps you to Monitor, Protect and Recover your Identity from multiple risks.

Courtesy: Indian Express

Saturday, 16 August 2014

Companies Worried About Damage, Disruption By Cyber-Attacks: KPMG India

Enterprises are most concerned about reputational damage and disruption of businesses as a result of cyber-attacks, a report by consultancy firm KPMG said on Monday.
 
According to KPMG India's 'Cybercrime Survey 2014', 48 percent of the respondents indicated that they suffer disruption of their business processes and reputation damage as a result of a cyber-attack. About 45 percent said cyber-attacks led to financial losses (either direct or indirect), it added.
 
"With rise in the cybercrime, businesses are increasingly facing impacts not only on the financial front but also irreversible damage to their brands and market reputations," KPMG India Partner and Head of Risk Consulting practice Mritunjay Kapur said.
 
"As a result of this growing threat, there is a significant need for corporates to recognise cyber-threats and craft cyber-response plans," he added.
 
The Survey had over 170 participants from the likes of CIOs (Chief Information Officers), CISOs (Chief Information Security Officers) and related professionals from across India.
 
While 89 percent respondents acknowledged that cybercrime has emerged as a major threat, about 51 percent perceived themselves to be "easy target" for such attacks due to the nature of their business. Of these 51 percent, about 68 percent respondents claimed they monitor cybercrime threats on a daily basis.
 
"Cybercrime continues to remain a tough challenge for organisations. Over the years there has been a significant increase in the number of cybercrime attacks prompting organisations to stay alert, seek means to fight cybercrime threats," the report said.
 
Cybercriminals are also shifting their targets focussing less on theft of financial information and more on business espionage and accessing government information, it added. About 58 percent respondents said financial services sector is more likely to be attacked, while 11 percent said communications, entertainment and infrastructure sectors are prone too. The survey said the root cause of most cyberattacks now is monetary gain.
 
"Until recently, malware, spam emails, hacking into corporate sites and other attacks of this nature were mostly the work of computer 'geniuses' showcasing their talent. These attacks have gradually evolved into cybercrime syndicates siphoning off money through illegal cyber-channels," it said.

Credit Sudhaar is India's first Credit Health management & improvement company whose goal is to help clients to Restore, Enhance and Protect their Credit and make them credit healthy.

CS IdentityShield helps you to Monitor, Protect and Recover your Identity from multiple risks.

Courtesy: NDTV

Thursday, 14 August 2014

Dream Homes Turn Into Nightmares

CHENNAI/NEW DELHI: A big chunk of Ratna Misra's salary will disappear from her account this weekend when the bank debits her home-loan installment.
 
The 40-year-old HR professional is paying the EMI knowing that she's unlikely to get her dream home. The under-construction building in Chennai's Moulivakkam area where she had booked an apartment collapsed recently, killing 61 people. The builder is behind bars, and what is left in place of the building — ironically called Faith—is a heap of debris.
 
She and the others who took loans to buy apartments in the project must continue paying their EMIs, or their credit scores will take a hit. A lower score will hurt the prospect of getting a loan in future.
 
"Even if a buyer stops paying EMIs because of such situations, banks will have to treat it as a default which will be reflected in the person's CIBIL score," said Renu Sud Karnad, managing director of Housing Development Finance Corporation, India's largest mortgage lender.
 
Credit Information Bureau Ltd, or CIBIL, compiles credit scores of borrowers based on their loan repayment history, and banks consider this data to give loans. There are many more who are trapped in situations where they are paying hefty loan installments every month with little or no hope of getting their homes.
 
Deepak Patil, a senior BPO executive, booked a home in a project on the outskirts of Bangalore in 2004. He was to get the house in December 2006 but is still waiting for it. The builder has fled after mismanaging funds. Karnataka Bank, which had funded the project, has sold its loan to the builder as nonperforming asset to Asset Reconstruction Company (India) Ltd, which buys stressed loans from lenders.
 
Nexus between banks, builders
 
"Most of us have paid over 95% of the cost of the house to the builder and have been paying our EMIs for the last 10 years even though there was no construction happening," said Patil. Misra too is going down the same path. The Rs 53,000 that the bank would debit this month is the second EMI since the building collapsed in June, and she is clueless about how many more EMIs will go before it stops.
 
It may become risky if she decides to stop paying, as Kavita Thonangi, who works with consultancy firm Deloitte, found out a few years back. Thonangi had bought a two-bedroom apartment in a Hyderabad project by Ramalinga Raju-owned Maytas Properties in 2006. It was to be delivered by December 2008 and in January 2009, the Saytam scam was unearthed and Raju, who also headed the software firm, was jailed. The project was still only at foundation level.
 
While Thonangi continued to pay her EMIs, in 2011 she informed the bank that she was filing a case with the AP State Consumer Disputes Redressal Commission and would stop her EMIs. "But the bank later filed a criminal case for cheque bounce on me," she says.
 
Though she won the case at the state commission, and the decision was upheld by the national commission as well as the Supreme Court, asking the builder to refund money with 12% interest, the irony was that she can't take another loan today."My CIBIL rating has fallen drastically, because I stopped paying my EMIs. I can't take a loan from any bank even though I have won the cases," she rues.
 
Lawyer Vaibhav Gaggar, partner at Gaggar & Associates, says the nexus between some banks and builders is so strong that no matter what a customer does, he will always be at the receiving end. In case of the collapsed Chennai building, at least three public sector banks had independently evaluated the structures. They had not only declared them safe, but also said they will be stable "for more than 60 years".
 
Most banks offer home loan insurance when home buyers take a loan and bankers say almost 60-70% people take them. In Misra's case, even that wouldn't have helped.
 
Advocate S Sethuraman, who has represented banks in many civil disputes, says there is no insurance that covers an under-construction flat. The cover in a home-loan insurance starts only after the home is registered in the buyers' name.Until construction is over, it is the responsibility of the builder to secure the building.
 
Most builders take a construction risk insurance, but some don't.HDFC's Karnad says the lender insists on the builder taking an insurance cover before funding projects. "Builders are funded only on condition that they have a construction risk insurance in place. For individual home loans, buyers are advised to check with their builders on this." There are also instances where the projects get into legal tangles and the buyer ends up on the losing side.The Allahabad high court recently ordered builder Supertech to demolish two 40-storey under-construction towers for flouting rules. The court ordered refund to buyers with a 14% interest, compounded annually.
 
Supertech gave three options to buyers — continue with them as it pursues the case, take a refund or take an alternative apartment in another project by the company. One of the buyers, Dhirendra Sharma, has decided not to go with any of the options.

Credit Sudhaar is India's first Credit Health management & improvement company whose goal is to help clients to Restore, Enhance and Protect their Credit and make them credit healthy.

CS IdentityShield helps you to Monitor, Protect and Recover your Identity from multiple risks.

Courtesy: Times of India