Banking: Prashant Joshi

Are interest rates on a housing loan and a commercial property loan the same?
The interest rate on a commercial property loan is generally higher than that of a housing loan. Where home loans are available at eight-nine per cent, loans for commercial property cost 10-13 per cent.

According to the public provident fund (PPF) rules, interest is payable for the entire month if the amount is credited in the account by the 5th of the month. I have a PPF account with State Bank of India, Middleton Row, Kolkata. April 1 and 2 were bank holidays in Kolkata. Hence, the earliest date I could have deposited a cheque of Rs 70,000 was April 3, which was a Saturday. Typically, the amount should have been credited on April 5 (Monday), as it was a local cheque. Instead, the amount was credited to my account on April 10. I wrote to SBI on April 21 to ensure that the interest was paid to me for the entire month. I received no response. When I approached the regional office of the bank, it refused to accept the delivery of my letter, and advised my representative to sort out the issue with the branch concerned. How do I resolve the matter? Should I approach the bank’s ombudsman?
It seems there was a delay in cheque collection. Since you are not satisfied with the handling of your grievance by their local/regional office, you can write to the nodal officer of the bank, whose details you will find on the bank’s website. If you do not receive a satisfactory response from the nodal officer, you should then approach the bank’s ombudsman.

I plan to open a fixed deposit (FD) for my five-year-old daughter. Recently, I read that several banks have raised their FD interest rates after the latest credit policy. The Reserve Bank of India (RBI) has hinted that a hike in repo and reverse repo rates will continue in the subsequent policies this financial year. Do you think FD interest rates will increase after the next credit policy review? Will it make sense to wait for a few months?
A few banks raised deposit rates after the hike in repo and reverse repo rates by RBI. A further increase in repo or reverse repo rates could mean that more banks might increase their deposit rates. However, if the inflationary pressure ceases to exist, it can turn out that the benchmark rates are not increased, and so banks also do not raise their FD rates.

You can take a decision of opening an FD, depending on the interest rates being offered and your liquidity requirement. However, if you find that FD interest rates have been increased by the bank, there is an option to prematurely withdraw the money and re-invest in a new FD at a higher rate, provided this is beneficial considering the premature withdrawal penalty.

I am the guarantor to a home loan that my friend took a few years ago. Recently, he got married. Can he make his wife a co-applicant, and replace me as the guarantor? Will the bank allow this at a later point in the loan tenure?
Your friend can apply at the bank for replacing the guarantor with a co-applicant for his home loan. Based on its internal policies and terms of the guarantee, the bank will evaluate the merit of replacing you as the guarantor, with his spouse as the co-applicant. The bank may consider your and the proposed co-applicant’s income levels as an important factor, but this will be at the sole discretion of the bank.

The writer is MD & head, private & business clients (India), Deutsche Bank. Send your queries to yourmoney@bsmail.in