You may not be able to switch your loan to another bank in case you have faltered in paying a few of your equated monthly installments (EMIs) of your loan to your original lender.
To keep a check on non-performing assets (NPAs) or bad loans, banks have decided to exchange information pertaining to the performance of all loans. The Reserve Bank of India recently allowed borrowers to switch their loans from one bank to another without incurring charges
The finance ministry is also keeping a close watch on the same. “This issue of NPA has been discussed at length with bank chairpersons and all steps would be taken to address it,” an official source who did not wish to be identified told HT.
The gross NPA level touched 5% in 2013 causing headaches for the RBI as well as the government.
Despite an economic slowdown leading to salary cuts and job losses, 75% borrowers across India who have taken loans to purchase homes or cars, have been rated as very safe by Credit Information Bureau India Limited (Cibil).
“The retail loan portfolio is under control and we share and pass on all relevant information relating to retail loans such as home, auto and personal,” said M Narendra, chairman and MD, Indian Overseas Bank.
Meanwhile, a few domestic banks have also decided to put up photographs and other details of wilful defaulters in an attempt to recover outstanding dues. If that does not work and the borrower does not clear dues within 15 days, banks could even publish the photographs of the guarantors, who would then be debarred from getting credit.