IMPS: All you need to know about the advantages and limits

Banking is continuously evolving with the advancement of electronic media. With the emergence of smartphones and tablets, the banking process has also become simpler. Mobile banking and internet banking have become popular as well. A new mode of money transfer known as Immediate Payment Service or IMPS was also introduced. However, many people in India are still not aware of IMPS and what it stands for.

What is Immediate Payment Service and what are its advantages?

It is a form of digitized banking, which is available 24x7. Funds can be transferred even after the banks close for the day and even on bank holidays. It involves mobile banking. This means that the funds can be transferred securely from your mobile to the other person’s mobile. From the phone, the money is then deposited into the receiver’s account.

IMPS was accepted by the National Payments Corporation of India or NPCI in 2010. There is essentially no minimum limit of funds one can transfer using IMPS. However, to facilitate the transfer, you will need three important information about the receiver. Firstly, you will need to know the full name of the beneficiary. Next, you will need the account number of the receiver. Finally, you will also need to know the IFS code of the beneficiary.

Two other things are required to complete IMPS transaction. Upon registration to IMPS, the bank will generate a 7-digit MMID number. The MMID number of the beneficiary is required to complete the transaction. Lastly, the ten-digit mobile number of the receiver is also needed to complete the same.
This form of payment ensures instant money transfer in a safe and secure manner. Unlike National Electronic Fund Transfer and Real Time Gross Settlement, IMPS can be facilitated even when the banks are closed.

Disadvantages of IMPS

Even though IMPS has made life easy for everyone, there are still some limits to this mode of transaction. Firstly, the banks apply certain IMPS charges on every transaction. This charge varies from bank to bank and is also dependant on the amount being transferred. Higher the transfer amount, greater is the IMPS charge levied on the same.

Secondly, there is a limit to how much one can transfer through a single IMPS transaction. This upper limit varies from bank to bank. However, if you are looking to transfer a substantial amount of money using this method, it may not be a viable option.

What are the different types of banking cards available in India?

Indian banks offer a variety of options to individuals for conducting financial transactions. People can pay for items and services that they purchase through banking cards. There are primarily three types of cards in India – credit cards, debit cards and prepaid cards. Here is a detailed look at the features of these cards.

Debit cards

These are the basic banking cards, which are assigned to an individual when they open an account in a bank. Through the use of debit cards, people can pay for items and services without cash. However, to ensure that the payment goes through, the bank account must have the required funds in it. For instance, if you pay Rs.3,000 through your debit card, the bank account associated with the card must at least have the same amount in it.

Debit cards are the most common form of banking cards in India. This is because no addition eligibility criteria need to be met in order to qualify for a debit card. Aside from this, using a debit card is much safer since it does not require a repayment to the bank at a later date. You are essentially spending your own money and not lending out a sum from the bank.

Credit cards

Credit cards are the second most common type of cards. Credit cards are issued by banks and through these an individual can purchase items and services on credit. This means that you may pay a certain amount of money, which you may not have in your own bank account. The bank essentially lends out this money. However, the card holder will have to repay the entire amount to the bank along with interest on a later date.

Credit cards are not issued to every person in the country. Each bank has a list of eligibility criteria, which must be met before one can apply for a credit card. Since credit cards are a form of short-term loan, the banks check the income of the individual along with the bank statements prior to the application for the card.

Prepaid cards

Prepaid cards or prepaid credit cards are form of banking cards, which bear resemblance to both standard debit and credit cards. With such a card, you are responsible for depositing a sum of money into the account prior to making any purchases. This money can then be spent on the items and services that you wish to buy.

In case of such cards, you are the one setting the credit limit and at the same time, you are not borrowing money from the bank.

How to get the assurance of approval on your bank loan application

The reasons for taking a bank loan can greatly vary from person to person. While some take it to buy a car, others may apply for a loan to build a dream home or even renovate an existing one. Whatever the reason may be, applying for a loan is a tedious process as banks maintain very strict application standards. The high standards that banks set for borrowers can often make those who apply wonder whether their loan will be approved or not.

However, individuals can ensure their loan gets the assurance of approval. Here’s how-

1. Check your credit score

Whether you take an online loan or an offline one, the bank you apply to will check your credit score to determine whether your loan will be approved or not. The credit score is calculated on the basis of previous loan repayments (if any). Those who have a high credit score are generally given preference by banks than those with lower ones as it shows their ability to repay the loan in time. Hence, you should try to increase your credit score to ensure that your loan is approved.

2. Reduce your debt

If you want to improve the chances of your bank loan getting approved, it will be a wise idea to reduce existing debt. Large amounts of existing debt hold the potential to hurt your chances of qualifying for as well as getting an approval on your loan as it’s taken into account when analyzing your debt-to-income ratio. Hence, if you cannot clear out any existing loan entirely, consider reducing it to be on the safe side.

3. Apply for an amount you can manage

One common thing most people overlook, or rather overestimate when applying for an online loan is the amount. For example, if you require 10 lakhs to renovate your home but ask for a loan of 20 lakhs, the bank will question you about your intentions for the rest of the loan amount. In such a case, the bank may decide to reject your application, deeming it to be a risk in comparison to those who apply for an amount that is not above what they need. Hence, before applying for a loan, fix the right amount.

4. Get all the documents ready

Gathering as well as furnishing all the right documents as and when the bank asks can go a long way in getting your loan approved. Key documents that can help in getting your loan approved include tax returns, pay slips, bank account statements, KYC documents and whatever else your bank requires.
In the end, as long as one prepares well, their loan will get the stamp of approval without much problem. In case of any questions, be sure to consult an expert.

Getting an online personal loan is now made easy

A personal loan is the best way for one to purchase an expensive item that one always wanted but couldn’t afford to, such as a bike, an expensive gadget or even a piece of jewelry. Earlier on, getting a personal loan used to be quite a hassle as one had to make several visits to the bank. On top of that, the filling of several complex forms was a mandate and then there was the waiting time for approval.

However, now getting a personal loan is very easy as one can just apply online and get instant approval. Here’s how-

1. Check your eligibility criteria

The eligibility criteria for an online personal loan is fairly simple. Qualified individuals include salaried professionals such as CAs, salaried doctors, engineers, any employee of a private limited company or a public sector employee. Applicants should also be aged between 21 and 60 years and should have had a job for at least last 2 years with a minimum of the last 1 year with the current organization. A minimum net income of Rs 15, 000 per month is generally considered acceptable.

2. Register yourself

The first thing you have to do is get on the website of the bank you wish to take a loan from. In the menu section of the website, you’ll see an option for personal loan. Click on the apply button (or whatever the option is on the website). You will be taken to an online form which you will have to fill in correctly.
Details you may be asked to furnish include your basic KYC (know your customer) information such as your name, address, date of birth etc. along with your annual/monthly income.

3. Get your documentation in order

Fortunately, to get an online personal loan, you do not have to furnish a long list of documents. Simply uploading the scanned copies of basic documents is enough. That said, the documents you have to furnish include
• ID proof, which could be a copy of either your Aadhaar, passport, voter ID card or driving license
• Your address proof, which can be a copy of any one of your ID proofs
• Your bank statement of the last 3 months
• And your latest salary slip or salary certificate

4. Choose your offer and apply

Banks may offer several personal loan schemes with varying rates of interest. Generally, the details of these schemes will be available on the website and you must go through them before making your choice. Also, search the website for the details of the fees of the loan. Once you’re done making your choice, and have already carried out the above steps, apply for your loan.

Most banks process the loan instantly or in 4 to 5 hours. That’s how easy it is to get an online personal loan.

The convenience of personal loan calculator and how you can benefit from it

Personal loan is one of the most common forms of financial loan that an individual takes. These loans may be taken for a host of different reasons, such as the marriage or education of children, family vacation and more. However, each bank offers the same loans at varying rates of interest. The tenure for the repayment of such a loan may also differ from one bank to the next. These variable factors make it very difficult for a personal loan applicant to figure out the EMIs that they are likely to pay.

This is where the personal loan calculator comes in handy. Through these specialized tools, one can check exactly how much they would have to pay each month if they take a loan from a certain bank.

How to use personal loan calculators?

These days, each bank’s website provides such a calculator for the loan applicant’s convenience. Once you get to the calculator page, you only need to enter certain figures to calculate the total interest that you would have to pay on the loan and also the monthly payments or EMIs that would have to be made.

The first thing that you need to enter into the calculator is the principal amount or the loan amount that you would like to avail. Secondly, you would also have to enter the interest rate for the personal loan. In India, the rate of interest in case of a personal loan may range from 10% per annum to 20% per annum.

Lastly, enter the tenure or duration of the loan repayment. After this has been filled in, press the calculate button to determine exactly how much interest and EMI you would have to pay for the loa

Credit card apply – Enjoy a stress free application process with these steps

Credit cards are quite common these days and it is a service that is offered by most banks. Credit cards are essentially used to take out personal loans of a limited amount and then repay them back to the bank. For instance, one may buy a television set using their credit card. After a specified time, they have to repay the price of the TV along with the interest to the bank.

While credit cards are no doubt quite useful, applying for one may be quite confusing for some individuals. So, here is a look at some of the steps to help with credit card application.

Steps to follow to apply for credit cards

Before apply for a credit card, you must first choose the type of credit card that you are looking for. Each bank offers a wide variety of cards, each with its positives and negatives. Determine the kind of card which suits your need. The eligibility criteria for each card may be different along with the benefits offered by each. Similarly, the interest charged on the cards also tends to be different.

Next, you must fill out the form for the credit card application. Previously, you had to visit the bank in order to complete this step. However, now due to the internet, online credit card application is also a viable method of carrying out the same. Along with the application form, you must also provide your photograph.

You must provide a proof of income alongside your bank statement for the preceding six months from the time of the card application. This will help the bank judge whether you qualify for a credit card or not.

After the documents are submitted, the bank will perform a verification to check that all the data that you have provided is correct. Previously, an employee from the bank would drop by and personally perform the verification. However, now in case of online credit card application, the bank will merely call you and your reference contacts to perform the verification.

If you manage to clear the verification procedure, the bank will courier the credit card to you in a matter of 3 to 4 weeks from the date of the application. The courier will also include information regarding the deals you can avail using the card and also the credit limit. You cannot use the card to purchase items if you reach a certain credit limit in a month.

Following these steps will ensure that one easily gets hold of a credit card, which comes quite handy to make major purchases or in case of emergencies.

Wholesale Banking: All that you need to know

Banking is a diverse section of any financial system of the world. While most individuals are concerned with personal banking features only, many aspects mainly concern larger organizations. Unlike retail banking that mainly deals with smaller businesses and individuals, wholesale banking is primarily needed by larger organizations and by other banks.

What is wholesale banking?

Any financial transactions that occur between merchant banks and other financial institutions is known as wholesale banking. This kind of banking is mainly limited to very large organizations and equities. This form of corporate banking comes with added perks, which are not offered in case of retail banking. These perks include currency conversion, transactions in case of large-scale trade, financing for working capital and many others.

Aspects of wholesale banking

Wholesale banking is concerned with the lending and borrowing of money between two major, large-scale entities or organizations. These organizations may be government-controlled bodies, funds allocated for pension and other institutions with enough assets to be considered a large-scale business.

A transaction may also be referred to as wholesale banking if the lender and the borrower are two banks. This kind of transaction usually takes place in the interbank market and involves the exchange of very high sums of money.

Most ordinary banks also offer the wholesale banking services. These organizations act as merchant banks in case of such a transaction. This means that you can conduct corporate banking with the same bank under which you may have your personal account.

Why wholesale banking is beneficial?
Since in such corporate banking, the transaction revolves around much larger sums of money than in retail banking, there are a few benefits to wholesale banking. Due to the higher amount of transaction, most banks offer discounts in the form of lower interest rates and reduced transaction fees on a per rupee basis.

Aside from the added advantages, wholesale banking is vital for proper functioning of a larger business. For instance, a company operates 20 different branches across India and each of the branch needs to keep a reserve amount of Rs.10 Lacs. This means that in total the branches would need to maintain reserves of Rs.2 Crore. Maintaining and managing such cash using retail banking would be too difficult. So, to streamline the procedure, wholesale banking becomes essential.

Through such corporate options, the company has to maintain only one account through which all of the company’s transactions can go through. So, if one has a big business and are looking for a simpler procedure to handle the financials, try out wholesale banking.