Banking: Sumant Kathpalia

Last Updated: Thu, Sep 27, 2012 05:10 hrs

Which is a better mode of raising funds - loan against property or loan against shares? And why?
Almost all banks offer both these products as these are fast and easy modes of raising funds. The choice of facility depends on the end use of the loan and repayment. Loan against property is usually availed of when you need long-term funds and ease in repayment, with EMI spread over longer tenure. Whereas, a loan against shares is given for shorter duration. It is usually in the form of an overdraft and helps meet one's short term requirements.

I am a guarantor for a friend's home loan and I am not comfortable with it. Can I inform the bank and step out?
You will be required to inform the respective bank in writing about your intention to disassociate yourself from your friend's loan liability. Only after the bank confirms to you in writing will you be out of the responsibility. Till such time, you will continue to be a guarantor for the loan your friend has taken.

A relative has not nominated anyone on his investments, which are largely fixed deposits. Investments are around Rs 10 lakh. He passed away last month and there is no will in place. How can his wife and children claim the money? Please explain.
The balance outstanding will be paid to the legal heirs (or any one of them as mandated by all the legal heirs) on verification of the authority of the legal heirs. The wife and children should apply to procure a 'succession certificate' from the court. Certain documents are required to be filed with the claim form. Documents like, a copy of succession certificate, death certificate of depositor, identity and address proof of all the legal heirs. The bank would exercise due care and caution in ascertaining the identity of the legal heirs as mentioned in the 'succession certificate' and the fact of death of the account holder, through appropriate documentary evidence. The claim is usually settled within one month from the date on which the documents in support of the claim have been submitted to the bank.

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