Tip Tuesdays: Did You Know that Your Bank Should Compulsorily Tell You — in Writing — Why Your Loan/Credit Card Application was Rejected?

by Vinaya HS on December 30, 2008

in Finance

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I’d written about this before, but felt it important to bring up again.

According to the Reserve Bank of India’s Guidelines on Fair Practices Code for Lenders, Banks and Financial Institutions should convey in writing the main reason(s) which, in the opinion of the Bank or Financial Institution have led to rejection of the loan applications for all categories of loans irrespective of any threshold limits, including credit card applications.

We (my brother-in-law and I) once had a manager at the local State Bank of Mysore branch give us an once-over and simply shake his head when we’d been there to enquire about an education loan. Prior to that, a lady at the teller had said that “approving loans was at the manager’s discretion.” I so wish I had a print of this circular with me then.

What’s your experience been?

Tip Tuesdays is my initiative to share practical personal finance tips — every Tuesday. I’d be delighted if you could share a tip or two from your own experiences. Drop a comment or use this form to submit your tip. And, as always, do spread the word if you find this useful.




Thanks for reading this article. I'd love to hear your opinion. Please use the comments section below to share your thoughts. I frequently write new articles that also cover several other aspects of personal finance including credit cards, financial goals, health insurance, income tax, life insurance, mutual funds, retirement planning, and much more. You can Subscribe through Email and receive new articles directly in your Inbox or you can Subscribe through the RSS Feed and receive new articles in your feed reader.

{ 1 comment… read it below or add one }

Dinesh January 1, 2009 at 3:38 PM

I am holding ICICI savings (salary) a/c. Few days back, they offered me the FlexiCash Overdraft facility. Without knowing much details, I agreed and signed the application form and submitted the same. Now, it is in the verification process. But after going through these useful complaints, I would like to cancel it immediately. Please suggest me that my decision is right? And how will I approach for doing the same. Thanks in advance.

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