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Module-A Module-B Module-C Module-D Home Loans
[10 Marks] [30-35 Marks] [20-25 Marks] [20-25 Marks] [10-15 Marks]
Importance of Wealth Lender's Appraisal Procedure
Retail Banking: Introduction Customer Requirements Marketing Introduction
Management Theory
Delivery Channels in Retail Housing Finance and Tax
Branch Profitability Product Development Process Investment Management
Banking Planning Theory
Application of Retail Banking Credit Scoring Delivery Models Tax Planning Mortgage Advice Numerical
Important Retail Liability Customer Relationship Other Financial Services Valuation of Real Property
Products Management Provided by Banks Theory Numerical
Important Retail Asset Service Standards for Retail
Products Banking
Credit and Debit Cards Marketing Information
Remittance Products Systems
Digitalization of Retail
Banking Products
Role of AI and Technology in
Retail Banking
Recovery of Retail Loans
Management Information
Systems/ Securitization

Download Oliveboard App

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Retail Banking and wealth

management
Module C UNIT 21
SERVICE STANDARDS FOR RETAIL
BANKING

www.oliveboard.in
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In November 2003, RBI had constituted a committee on "Procedure &

Performance Audit of Public Services" under the chairmanship of Shri
S.S. Tarapore (Former Dy. Governor).
The main objective of the committee was to address the issues relating to
availability of adequate Banking Services to common people.

The mandate to the Committee included identification of factors that

inhibited the attainment of best customer services and suggesting steps to
improve the quality of banking services to individual customers.
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After an in-depth study at the grass-roots level, the Committee concluded that there was
an institutional gap for measuring the performance of banks against a bench mark
reflecting the best practices (Code and Standards).

Therefore, the Committee recommended setting up of the Banking Codes and Standards
Board of India (BCSBI).

Accordingly, the Banking Codes and Standards Board of India (BCSBI)

was set up on 18th February 2006 as a collaborative effort of RBI and
Banks.
BCSBI is a voluntary Code which sets the minimum standards of banking practices for
banks to follow when they are dealing with individual customers.
The code does not replace or supersede regulatory or supervisory instructions of RBI
and banks will comply with such instructions/ directions issued by RBI from time to
time.

BCSBI is not a forum for redressal of individual grievances.

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As per Annual Report of RBI dated 25th August 2020, Reserve Bank
of India (RBI) has decided to dissolve the Banking Codes and Standards
Board of India (BCSBI).

BCSBI was set up by the Reserve Bank in February 2006 as an

independent and autonomous body, assigned to formulate codes of
conduct to be adopted by banks voluntarily for ensuring fair
treatment of customers.

Is BCSBI still working?

However, on 28 September 2021, the member banks passed

resolutions approving BCBSI dissolution.
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Initially the membership of BCSBI was open to scheduled commercial
banks and has now been extended to include Regional Rural Banks,
select Urban Co-operative Banks and Small Finance Banks also.
Banking Codes and Standards Board of India was registered as a
society under the Societies Registration Act, 1860 in February 2006.

It functions as an independent and autonomous body. Registered

office: Mumbai
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Main objectives of the BCSBI
To plan, evolve, prepare, develop, promote and publish
comprehensive Codes and Standards for banks, for providing for
fair treatment to their customers.
To function as an independent and autonomous body to
monitor, and to ensure that the Codes and Standards adopted by
banks are adhered to, in letter and spirit, while delivering services
to their customers.

BCSBI has in collaboration with the Indian Banks' Association

(IBA), evolved two codes - Code of Bank's Commitment to
Customers and the Code of Bank's Commitment to Micro and
Small Enterprises
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CODE OF BANKS' COMMITMENT

A comprehensive Bankers' Fair Practice Code prepared

by an IBA Working group was used as a standard by
BCSBI.
This code would be a covenant[rule] between the BCSBI and the
banks joining as members of the BCSBI.

Through the covenant[Rule] the member banks bind themselves

for implementing the Code and supervision by the Board.
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BCSBI had brought out two codes, viz.,

1:-Code of Bank's Commitment to Customers

2:-Code of Bank's Commitment to Micro and Small Enterprises'

Code of Bank's Commitment to Customers January 2014 is available in 10

Regional languages other than in English and Hindi.
Code of Bank's Commitment to Micro and Small Enterprises 'is available in 11
Regional languages other than in English and Hindi.
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The 'Code of Bank's Commitment to Customers' was released by Dr. Y.V.

Reddy, Governor, Reserve Bank of India, in an inaugural function held at
RBI on 1 July, 2006.

The Code has been revised in August 2009, in 2014 and again in January 2018
in order to bring about greater transparency, further enhancements in banking
practices relating to customer service, a more responsive grievance redressal system
in banks and provide additional protection to customers.

Member Banks will comply with such instructions/directions issued by RBI

from time to time.

Provisions of the Code may have set higher standards than those prescribed in
the regulatory instructions and such higher standards will prevail as the Code
represents best practices voluntarily agreed to by the member banks as their
commitment to customers.
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Objectives of the Code

The Code had been developed to:
a. Promote good and fair banking practices by setting minimum standards in
member bank's dealings with customers;
b. Increase transparency so that customers can have a better understanding of
what they can reasonably expect from member banks;
c. Encourage market forces, through competition, to achieve higher operating
standards;

d. Promote a fair and cordial relationship between customers and their banks;

e. Foster confidence in the banking system;

f. Promote safe and fair customer dealing in case of banking in a digitized
environment;
g. Increase awareness of customers and to enhance customer protection.
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Application of the Code
This Code applied to all the products and services listed below, whether they are provided by
member bank branches or agents acting on their behalf, whether across the counter, over the
phone, by post, through interactive electronic devices, on the internet or by any other method..
Products covered
Current accounts, savings accounts, term deposits, recurring deposits, PPF accounts and all
other deposit accounts

Payment services such as pension, payment orders, remittances by way of Demand

Drafts, wire transfers and all electronic transactions e.g. RTGS, NEFT

Banking services related to Government transactions

Demat accounts, equity, Government bonds
Indian currency notes/coins exchange facility
Collection of cheques, safe custody services, safe deposit locker facility
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Application of the Code
This Code applied to all the products and services listed below, whether they are provided by
member bank branches or agents acting on their behalf, whether across the counter, over the
phone, by post, through interactive electronic devices, on the internet or by any other method..
Loans, overdrafts and guarantees;
Foreign exchange services including money changing;
Third party insurance and investment products marketed through bank
branches and/or their authorized representatives or agents
Card products including credit cards, debits cards, ATM cards, smart cards
and PoS services (including credit cards offered by subsidiaries of member
banks/companies promoted by member banks)
Digital products such as e-wallet, Mobile Banking, Internet Banking, UPI,
BHIM, Aadhaar Pay.
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1. Right to Fair Treatment.

2. Right to Transparency, Fair and Honest Dealing.
3. Right to Suitability.
4. Right to Privacy.
5:-Right to Grievance Redressal and Compensation
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Batch 2025of member banks to customers
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1. Right to Fair Treatment

Act fairly and reasonably in all banks' dealings with customers by:

a. Providing minimum banking facilities of receipt and payment of cash/cheques,

remittances, exchange of soiled notes, etc., at the bank's counter and also providing
cashless transactions through alternate delivery channels.
b. Meeting the commitments and standards set in this Code, for the products and
services Member Banks offer, and in the procedures and practices they follow.

c. Making sure Member Bank's products and services meet relevant laws and
regulations in letter and spirit and are appropriate to customer needs and in line with
the banking scenario, including digital banking.
d. Ensuring that member banks dealings with customer rest on ethical principles
of integrity and transparency.
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1. Right to Fair Treatment

e. Offering digital banking and payment systems in a secure, convenient and

robust technological environment.
f. Not discriminating against customers on the basis of age, race, gender, marital status,
religion, disability or financial status when offering and delivering bank's products and
services.
g. Promoting good and fair banking practices by setting minimum
standards in all dealings with customers.
h. Promoting a fair and equitable relationship with customers.

i. Training bank's staff attending to customers adequately and

appropriately and ensuring that bank's staff attends to customers promptly
and courteously and to deal quickly and sympathetically with things that
may go wrong by correcting mistakes and handling customer complaints
expeditiously.
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2. Right to Transparency, Fair and Honest Dealing

The member banks will help customer to understand how former's financial products
and services work by:
a. Giving the customers timely and adequate information about them and the
necessary safeguards in any one or more of the following languages Hindi, English or
the appropriate local language.
b. Ensuring that bank's advertising and promotional literature are clear and not
misleading. The member banks will make every effort to ensure that the contracts or
agreements they frame are transparent, easily understood by and well communicated to
customers. The price of their products, the associated risks, the terms and
conditions that govern use over the product's life cycle and mutual responsibilities
will be clearly disclosed.
The member banks will ensure that customers are not subjected to unfair business or
marketing practices, coercive contractual terms, negative confirmations or misleading
representations.
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2. Right to Transparency, Fair and Honest Dealing
c.Ensuring that customers are given complete
information about the member banks' products and
services, minimum balance requirements, the interest
rates and service charges, besides the terms and
conditions applicable to customers in a transparent
manner through the following methods as per the
preference of the customers.
1. By sending SMS or e-mails
2. Through electronic or print media
3. Display on our website
4. Display on branch notice board
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2. Right to Transparency, Fair and Honest Dealing
d. Giving customers' information on the facilities provided to them and
how they can avail of these and whom and how they may contact for
addressing their queries.
e. Displaying in the Member bank branch, for customer information.

i. Services banks provide.

ii. Minimum balance requirement, if any, for Savings Bank Accounts

and Current Accounts and the charges for non-maintenance thereof.

iii. Information available in booklet form.

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2. Right to Transparency, Fair and Honest Dealing

f. Displaying on banks' website their policies on:

1. Deposits
2. Cheque collection
3. Grievance Redressal
4. Compensation
5. Collection of Dues and Security Repossession
6. Charter of Customer Rights
7. Customer Protection Policy (including protection from cyber fraud)
8. Limited Liability in respect of unauthorized electronic banking
transactions
9. Facilities for senior citizens and differently-abled persons.
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3. Right to Suitability

We will offer you products appropriate to your needs

and based on an assessment of your financial
circumstances and understanding on Advertising,
Marketing and Sales and Third Party Products
4. Right to Privacy

The member banks will treat all the personal

information of their customers as private and confidential
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5:-Right to Grievance Redressal and Compensation
We will deal quickly and sympathetically with things that go
wrong by:
A. Correcting our mistakes promptly and cancelling any bank
charges that we apply by mistake and compensate you for any
financial loss you may have incurred due to our mistake, in terms
of our compensation policy.
B. Handling your complaints promptly.
C. Telling you how to take your complaint forward if you are still not
satisfied
D. Providing suitable alternative avenues to alleviate problems
arising out of technological failures.
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5:-Right to Grievance Redressal and Compensation

E.We will display in our branch for your information

1:-Name of the official at the branch whom you may approach

if you have a grievance.
2:-Name and address of the Regional / Zonal Manager /
Principal Nodal Officer (PNO) whom you can approach if your
grievance is not redressed at the branch.
3:-Name and contact details of the Banking Ombudsman
under whose jurisdiction the branch falls
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CODE OF BANK'S COMMITMENT TO MICRO AND SMALL

ENTERPRISES

This code was brought out by BCSBI in May 2008 and sets
minimum standards of banking practices for banks to follow
when they are dealing with Micro and Small Enterprises
(MSES) as defined in the MSMED Act, 2006.
The code had been revised in 2015.

It provides protection to MSEs and explains how banks are expected

to deal with them for their day to day operations and in times of
financial difficulty.
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CODE OF BANK'S COMMITMENT TO MICRO AND
SMALL ENTERPRISES

Objectives of the Code

A:-To give a positive thrust to the MSE sector by providing

easy access to efficient banking services.

B:-To promote good and fair banking practices by setting

minimum standards in dealing with MSE customers.

C:-To increase transparency so that MSE can have a better

understanding of what they can reasonably expect of the
services.
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Application of the Code

As defined in the MSMED Act, 2006, MSEs cover Micro and

Small Enterprises engaged in the manufacturing or
production or processing or preservation of goods and those
engaged in providing or rendering of services.

This Code will apply to all the products and services listed
below, under current regulatory instructions, whether they are
provided by branches, subsidiaries, joint ventures or agents,
across the counter, over the phone, by post, through interactive
electronic devices, on the internet or by any other mode.
However, all products discussed here may or may not be
offered by member banks.
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Current accounts, term deposits, recurring deposits, and all other deposit accounts.

Payment services such as payment orders, remittances by way of Demand Drafts and wire transfers,
electronic transactions like Real Time Gross Settlement (RTGS), Electronic Funds Transfer (EFT), National
Electronic Funds Transfer (NEFT) or any other mode.
Banking services related to Government transactions.

Demat accounts, equity, government bonds.

Indian currency notes exchange facility.

Collection of cheques/instruments, safe custody services.

Loans and other credit facilities which include fund based such as cash credit, overdraft, cheque and
bill purchase/discounting (both inland and foreign), negotiation under reserve of documents tendered
under Letter of Credit (both inland and foreign) and non-fund based such as establishment of inland
and/or foreign Letter of Credit (D/P or D/A), issuing of Guarantee (both inland and foreign), Inland or
foreign bill or cheque for collection, Co- acceptance and validation of bills, buyer's credit, etc.
Foreign Exchange Services as permitted under Foreign Exchange Management Act (FEMA)/ Reserve
Bank of India's guidelines including money changing.
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• CODE COMPLIANCE RATING

• BCSBI had been monitoring, as part of its mandate, compliance with
the Codes of "Bank's Commitment to Customers" and "Bank's
Commitment to Micro & Small Enterprises" by carrying out survey of
select branches of member banks for verifying implementation of the
Codes by the banks.
• For this purpose, BCSBI's authorized representatives collected
information in a structured questionnaire on implementation of the
Code provisions by visiting a sample of branches and Central
Processing Centres (CPCs) of major banks both in semi-urban/rural and
metro/urban category.
• Feedback from a few customers is also obtained to understand their
experience with the Bank. The data/information so obtained during
branch visits and feed back of customers is used for rating the member
banks.
• BCSBI takes the technical assistance of rating agency CRISIL.
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❑The
TOPIC methodology
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convert the data obtained during branch visits and customer responses in to
numerical score assigning different weightage out of 100 to the parameters.
❑The parameters for rating along with the weightage for each
parameter are as under:
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The categories of rating, based on the score so obtained and the scoring scale
out of 100, is as under____
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CUSTOMER GRIEVANCES HANDLING MECHANISM
A. If a customer wants to make a complaint, the bank will help the customer
and tell the customer
I. How to do so
II. Where a complaint can be made
III. To whom a complaint can be made
IV. When to expect a reply
V. Whom to approach for redressal
VI. What to do if you are not satisfied about the outcome.
B.The Banks will display the name of the official at the branch whom customers
may approach if they have a grievance. If the complaint is unresolved at the
branch level, the branch will ensure to escalate it to the top most level of
grievance redressal authority within the bank and give a final response within 30
days.
The customer may approach our Regional/Zonal Manager/Principal Nodal
Officer (PNO) at the address displayed at the branch, if so desire.
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C:-If a written complaint is hand delivered, the bank shall immediately provide an
acknowledgement and a "complaint reference number" will be separately sent by SMS on the
registered mobile number.
If a complaint is relayed over phone at bank's designated telephone helpdesk or customer
service number, the bank shall provide a complaint reference number and keep customer
informed of the progress within a reasonable period of time.
D:-After examining the matter, the bank will send the final response or explain why the
bank need more time to respond and shall endeavor to do so within 30 days of receipt of the
complaint and will tell customer how to take their complaint further, if still not satisfied.

E:-Within 30 days of lodging a complaint with the bank, if the customer does not get
response/ satisfactory response and wish to pursue other avenues for redressal of grievances, they
may approach Banking Ombudsman appointed by RBI under the Banking Ombudsman
Scheme.
The bank staff would explain the procedure in this regard.
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GENERAL INFORMATION

With the adoption of 'Code of Bank's Commitment to Customers'

by member banks, who were members of BCSBI, the following
voluntary codes of IBA would not be applicable to them:
A:-Bankers' Fair Practice Code - w.e.f. June 2004.

B:-Fair Practice Code for Credit Card Operations.

C:-Model Code for Collection of Dues and Repossession of Security.

However, member banks who are not members of BCSBI or eligible

to become members of BCSBI would continue to follow these codes.
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The Reserve Bank has since set up CEPD (Consumer

Education and Protection Department), issued the Charter of
Customer Rights (COCR), and considerably strengthened the
Ombudsman mechanism to enhance consumer protection.

"It was, accordingly, decided to dissolve BCSBI, which is now in

an advanced stage of completing its dissolution process," the
central bank said in its annual report dated 25 th Aug., 2020."

Consumer Education and Protection Department (CEPD)

acts as a single nodal point for receipt and disposal of all
external complaints on deficiency of services provided by RBI
and RBI related entities.
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The major functions of CEPD include administering the Banking
Ombudsman Scheme; and acting as a nodal department for
erstwhile BCSBI.
All the three existing Ombudsman schemes :-

Banking Ombudsman Scheme, 2006

Ombudsman Scheme for NBFCs, 2018

Ombudsman Scheme for Digital Transactions, 2019 have been

integrated into one scheme, known as "Integrated Ombudsman
Scheme 2021".
Some of the salient It will no longer be necessary
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शिकायतकताा
Courses के शिए अब यह
features of the Oliveboard All
scheme are: she/he should file complaint with the Ombudsman.
पहचानना जरूरी नहीीं होगा कक उसे ककस योजना के तहत िोकपाि के पास
शिकायत दजा करानी चाहहए।
The Scheme has done away with the jurisdiction of each ombudsman office.

A centralized Receipt and Processing Centre has been set up at RBI, Chandigarh for
receipt and initial processing of physical and email complaints in any language.

The responsibility of representing the Regulated Entity and furnishing information in

respect of complaints filed by customers against the Entity would be that of the Principal
Nodal Officer in the rank of a General Manager in a Public Sector Bank or equivalent.

The Regulated Entity will not have the right to appeal in case where an Award is issued
by the ombudsman against it for not furnishing satisfactory and timely
information/documents.

The Executive Director -in charge of Consumer Education and Protection Department
of RBI would be Appellate Authority under the Scheme.
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Retail Banking and wealth

management
Module C UNIT 20
Customer relationship management

www.oliveboard.in
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What is Customer Relationship Management (CRM)

in banking in general and retail banking in particular?

Customer relationship management (CRM) is a combination of

strategies, practices, and technologies that businesses use to manage
and analyze customer data and interactions throughout the customer
lifecycle.
CRM system examples include marketing, sales, customer service,
and support.
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Customer optimization is the essence of CRM and can be addressed through 3

dimensions viz

1:-Acquisition of New Customers who are immediately

profitable to the bank.

2:-Retention of Existing Customers who are most

profitable and valuable to the Bank for the longest
duration.

3:-Expansion of the customer relationship with the bank

encouraging more purchases and shifting the less
profitable customers to lower - cost delivery channels
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The stages Get the whole staff members on board.
involved in a
CRM
Capturing the customers' profile through a technology
initiative are:
enabled model.
Create a 360 degree view of your customers. insert the
profiles into common information buckets.
Designing suitable products and services to cater to the
different information buckets.
Offering the products and services to the targeted and
segmented customers from the information buckets with the
right pricing.
Providing the right sales and service processes to achieve
total customer satisfaction.
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Features of CRM Software

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Implementation Stages In CRM 4 stages through which

CRM is implemented.
Identification of Customers

Classification of Customers

Interaction With the most Valued Customers

Customization of Bank's Products and Services for Different

Customer Segments
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BENEFITS OF CRM
An effective CRM implementation in retail banking will benefit the banks in more than way. The
following are some of the important benefits that accrue to banks and enhance the customer focus
of the banks:

i. Improves the customer satisfaction and cross selling potential for the banks.

ii. Helps the banks to derive increased share of wallet from the customer.

iii. Enhances the operational efficiencies of the banks.

iv. Helps to take on competition as CRM results in more customer focus and retention.

v. Helps to understand Customer Lifetime Value through the structured data base on a
dynamic basis.
vi. Help in cross selling its products.
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CRM Analysis and Findings in Banks in respect of Retail Banking
Data Warehouse and Data Mining
Data mining is since becoming more intelligent and
offer information on the customer in real time.

It is the database that holds the customer

information and serves as the central collective
memory of a bank.

Banks effectively utilize the data mining to support

their sales and service of the staff.
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CRM Analysis and Findings in Banks in respect of Retail Banking

OLAP (On Line Application Programming) analyses

are developed by means of Business Object in its
web version.

CRM analysts use this tool to issue complex SQL

(Structured Query Language) queries on the Data
Warehouse or on the Analytical Data mart and carry
out mono and bivariate statistics on the whole
customers' population or on selected groups.
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For Class PDF & Doubt Session Join Telegram

Channel
@RBWM WITH RAJEEV MISHRA
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Retail Banking and wealth

management
Module D UNIT 28
HOUSING FINANCE AND TAX
PLANNING

www.oliveboard.in
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Home Loan Tax Benefits

Tax deduction on payment of home loan interest –
section 24
Tax deduction on principal repayment of housing loan
section 80C
Tax deduction for first time home buyer – section
80EE
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Interest on housing loan can be claimed as a deduction from income from property, salary,
business/ profession, capital gains, or any other source up to a maximum of ₹2,00,000 under
section 24(b) of the Income-tax Act, 1961 every year subject to fulfilment of the following
conditions.
Loan has been taken on or after 1st April 1999.

Loan is for purchase or construction of a residential property or as re-finance (takeover) of the principal
amount outstanding under a loan taken earlier for purchase or construction of a residential property.

However, in case of loan for construction, the construction should get completed within - 5 Years of
raising the Loan.

Deduction can be claimed only from the financial year when the purchase/construction is completed.

The lender issues a certificate at the end of the financial year mentioning therein the interest and
principal paid during the year in respect of that loan.

Interest payment of home loan taken for a self-occupied property.

Note:-If the loan is availed for repair or renewal an amount of ₹30,000 is only allowed under
Section 24(b)
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Loan taken before Apr 1, 1999

₹30,000 (buying/
construction/repair/renewal/
reconstruction)
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The tax benefit under section 24 is reduced from 2 lakh to ₹30,000,
if the property is not acquired or construction is not completed
within 5 years from the end of Financial Year in which the loan was
taken.
The deduction for this interest is allowed in 5 equal instalments
starting from the year in which the house is purchased or the
construction is completed.
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Yes but different rule
Now Discuss pre-construction interest
Interest paid before construction of property can be claimed in 5 equal instalments in max 5
Fys (from the year when construction of house gets over)
Example :-Pre-construction period of house - 5 years

Total loan interest paid - ₹5 L

Year of completion of construction - May 2022

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Tax benefit on Home Loan Principal Repayment under section 80C

Maximum tax deduction allowed under section 80C is ₹1,50,000.

It can be availed for both self-occupied and let-out properties, up to a

maximum of ₹1.5 lakh every year from taxable income of Assessee on
principal repayment.
The tax deduction on principal repayment is also a
part of the various deductions allowed under section
80C which includes amount invested in PPF Account,
Tax Saving Fixed Deposits, Life Insurance premium,
National Savings Certificate, Senior Citizens Saving
Scheme, etc.
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Conditions for claiming deduction under section 80C
Only if the construction of property is complete and have
received a completion certificate for the same.

No deduction would be allowed under this section for

repayment of principal for those years during which the
property was under construction.
The benefit can also be claimed for more than 1
house property
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Reversal of tax benefits availed under section 80C

If a house property for which tax benefit was availed under section 80C, is sold
within a period of 5 years from the end of the financial year in which the
property has been received in possession
Tax benefit under 80C will not be eligible for claim in
that financial year.

The total amount of tax deduction already claimed in respect of

earlier years shall be deemed to be income of such year in which the
property has been sold and will be liable to pay tax on that income
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Tax benefit under Section 80EE: Deduction for First Time Home Buyers
Deduction under section 24, the deduction under section 80EE is
also available on the interest paid on the home loan by taxpayer or
Assessee

But his deduction is only available to first time home buyers.

The quantum of deduction is ₹50,000 for interest paid on the
home loan.

This deduction is available over and above the deduction of

section 24 and section 80C which are ₹2,00,000 and ₹1,50,000
respectively
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Tax benefit under Section 80EE: Deduction for First Time Home Buyers
Section 80EE: To claim this special tax benefit, the taxpayer must
satisfy the following conditions:
The deduction can be availed on home loans sanctioned only between
1st April to 31st March in the financial year.
The value of property for which the loan has been taken should be less than ₹50 Lakh.

The home loan amount should not exceed ₹35 Lakh.

The tax benefit here can be claimed till the time repayment of loan continues.

Deduction is only applicable on home loan paid for first house property.

The property in question can be either self-occupied or non-self occupied

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Home loan in Joint Names
In case of home loan in joint names, the tax benefits get divided among
owners.

The division takes place in the same proportion in which the asset is
owned by each co-applicant.

Each co-applicant can claim a maximum tax rebate of up to ₹1.50 Lakh

for principal repayment (Section 80C) and ₹2 Lakh for interest
payment (Section 24).
The very first condition is the house property has to be bought by the
individuals jointly and this should be in their joint names.
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Home loan in Joint Names
The share of each holder should be clearly mentioned so that there is
absolute clarity on the percentage ownership of each co-owner.
Benefit, if available, under 80EE can also be claimed individually.

Therefore, a joint home loan can give more tax benefits.

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Tax implications in respect of NRI Home Loan

In case the salary earned abroad is the only

source of income, an NRI does not have an
opportunity to claim tax exemption on home
loan repayment as he is not taxable in India.

But, in case if a NRI earns an additional

taxable income from India apart from the
salary earned abroad, then he is eligible to claim
tax exemption for the home loan repayment as
available for resident home loan.
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Reverse Mortgage scheme is a loan which is specifically designed for

senior citizens who can use the equity value of their property in order to
avail funds.
A borrower must be aged 60 years or above to avail this advance.
When applying with the spouse, either one can be 60 years old, but the
minimum age for spouse is 55 years
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Differentiating between Mortgage and Reverse Mortgage

In a normal housing loan, where the property being purchased is

mortgaged to the lender, the borrower avails a loan to begin with and at
that point of time, his stake in the property purchased is low. As the
regular EMI is paid on due dates, the loan amount reduces and his stake
in the property increases.

However, in Reverse Mortgage, the position is exactly the reverse.

Under Reverse Mortgage Loan, the borrower initially retains a high stake
in his property and receives a regular cash flow. Over time, when the
loan amount increases, his stake in the property reduces.
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Reverse The scheme was introduced in India in 2007 and made applicable
Mortgage Loan with effect from April 01, 2008.
(RML) - Salient
features
Banks like State Bank of India, Central Bank of India,
etc., have issued guidelines under RML.
Reverse Mortgage Loan (RML) is a Scheme developed by the National Housing Bank
(NHB) to help Senior Citizens (persons above the age of 60 years) to avail of periodical
payments from a lender against the mortgage of his/her house while remaining the owner and
occupant of the house.
The borrowers are not required to service the loan during their
lifetime and, therefore, do not make monthly repayments of principal
and interest to the lender.
RMLS are extended by Primary Lending Institutions (PLIS), such as
Scheduled Banks and Housing Finance Companies (HFCs).
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a. Indian Citizen above 60 years of age.

b. Married couples will be eligible as joint borrowers for joint assistance. In such cases, the age
criteria for the couple would be at the discretion of the RML lender, subject to at least one of them
being above 60 years of age and the other not below 55 years of age.

c. Should be the owner of a residential property (house or flat) located in India, with clear title
indicating the prospective borrower's ownership of the property.

d. The residential property should be free from any encumbrances.

e. The residual life of the property should be at least 20 years.

f. The prospective borrower(s) should use that residential property as permanent primary residence.

g. Commercial property is not eligible for availing RML.

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The maximum monthly payments under RML have been capped at

₹50,000/- The maximum lump-sum payment shall be restricted to
50% of the total eligible amount of loan subject to a cap of 15 Lakh,
to be used for medical treatment for self, spouse and dependents, if
any.
The balance loan amount would be eligible for periodic payments.
The disbursement can be effected through monthly/quarterly/half-
yearly/annual disbursements or a lump-sum or as a committed line
of credit or as a combination of the three.

The maximum period of the loan is 20 years. (The maximum period

over which the payments can be made to the reverse mortgage
borrower).
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Tax Benefit on Reverse Mortgage Loan

All payments under RML shall be exempt from

income tax under Section 10(43) of the Income-tax Act,
1961.
The Reverse Mortgage loan can be prepaid at any time
during the currency of the loan.

On clearance of all the dues, all the title deeds will be

returned by the lender.
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