I have applied for a business loan. Before processing my loan application, I have been asked by the bank to obtain No Objection Certificate from various bank branches. This is a time consuming process. Is there any other alternative, like submitting of affidavit, to this tedious process of obtaining NOC?
(Sheikh Suhail, Budgam)

 First let me clear that as a prelude to consider fresh loan proposal, obtaining “No Objection Certificate” (NOC) about the applicant from various bank branches in the vicinity of your area of business activity is mandatory. In fact, you have to get NOC in favour of your guarantors too. No doubt, this is a hectic process and is time consuming exercise.
 If you have applied for loan in J&K Bank branch, then you don’t have to go physically to other branches of the bank and obtain NOC. For greater convenience of its customers, obtaining ‘No Objection Certificates (NOCs)’ from the bank’s own networked business units has now been made simpler and less time consuming. A web based software application (E-NOC) has been developed by the Bank used to obtain all the necessary information regarding the applicant(s), guarantor(s) and mortgagor(s) along with their photographs. This means the branch where you have applied for the loan shall itself obtain the NOC from other branches.
 However, for branches other than the JK Bank, the NOC shall have to be obtained physically.

We have observed that the banks continuously revise interest rates on fixed deposits from time to time, but the rate of interest on Savings Bank Account has remained unchanged for long. Why is it so? Also tell us about the current rate of interest on such accounts?
(Joginder Singh, Rehari, Jammu)

 Prior to reforms, Reserve Bank of India (RBI) used to prescribe the deposit rates and the maturities on deposits that could be offered by banks. But as a result of deregulation, barring saving deposits, banks are free to fix their own deposit rates for different maturities, which implies choices for the depositor. Even as banks are now also free to offer varying rates of interest for different sizes of deposits above a cut-off point, the interest rate on savings bank account continues to be regulated by the RBI. That means banks have no authority to change rate of interest on savings bank deposits. Currently, the rate of interest on these kind of deposits is 3.5 per cent.

Readers can send their queries to
sajjadbazaz@gmail.com,
sajjadbazaz@greaterkashmir.com)

(The views are of the author & not the institution he works for)

Lastupdate on : Sat, 26 Jun 2010 21:30:00 Makkah time
Lastupdate on : Sat, 26 Jun 2010 18:30:00 GMT
Lastupdate on : Sun, 27 Jun 2010 00:00:00 IST