Over 95% home loans are floating: RBI

“Only 2-3 per cent of the loans are fixed rate loans today. Even though interest risk is managed by banks,the risk is ultimately forced on the customer in a rising interest rate scenario,” Rajeshwar Rao,chief general manager,RBI and banking ombudsman New Delhi area said on Tuesday.

Floating rate loans pass on the interest rate risk from banks which are much better placed to manage it to borrowers and thus banks only substitute interest rate risk with potential credit risk.

If a decision on this comes through it will be for both own source funds and borrowed source funds of banks.

The IBA has sought time to respond and is expected to give its view by month end.

Towards providing relief to customers facing problems with credit card transactions,the RBI has asked the ombudsman to place the onus of proving customer negligence on the banks and also to compensate the customers for losses arising out of unauthorised transactions.

Some of the other measures being taken under the banking ombudsman scheme of the RBI include providing compensation of up to Rs 1 lakh for mental harassment due to inflated or wrongly computed credit card bills by banks. However,clear guidelines on this are yet to emerge on account of the subjectivity of the matter and the RBI and IBA are both working on it.

According to data released by the RBI for the Delhi region (including New Delhi,Ghaziabad,Noida,Jammu & Kashmir and Haryana),over 10,500 complaints have been registered between July 2010 and July 2011. Maximum number of complaints in the region relate to the State Bank of India followed by ICICI Bank and HDFC Bank that are the three major banks operating in this region,said Rao.

“Majority of the complaints (32 per cent) were credit card related issues. Deposit account were 18 per cent and remittance glitches 9 per cent,” said Rao.