Since April 2010 loans against bank fixed deposits have scaled up by around 25 percent as recorded in April 2011 in accordance to the data compiled by Reserve Bank of India.
One of the driving factors behind such a sudden traffic in the stream is that that it is much less expensive as compared to the conventional loan schemes and not only that but it also shields them against the constant fluctuations in the market rates. The practice is gaining popularity and the figures under the section are expected to improve further.
A senior official from Union Bank of India said “The net outgo for the borrower is only 2 per cent in the case of loans against FDs. So, instead of breaking his FD, he could take a loan against it.”
1 comment:
Hi,
This is a great blog for fixed deposits. Under the current RBI guidelines can a foreign national hold a fixed deposit by investing USD in an Indian bank?
Thanks,
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