Bank Of Rajasthan Home Loans Review

Corporate Profile

The Bank of Rajasthan was founded on May 8, 1943, at Udaipur. The bank started with a capital of only Rs. 10 Lakhs. Late Seth Shri Govind Ram Seksaria, an eminent Industrialist, was the founder Chairman. It was, in 1948, that the Bank of Rajasthan became a scheduled bank.

The Bank became one of the earliest banks in private sector sponsoring any rural (Gramin) bank, when it established the Mewar Anchlik Gramin Bank in Udaipur District in Rajasthan on January 26, 1983. Further in 1997, the bank achieved distinction, when its Jaipur branch qualified for ISO 9002:94 certification by Det Norske Veritas (DNV), London.

Presently, Bank of Rajasthan has a network of 398 Branches, with 37 Extension counters spread all over India. All of them are linked through computerized network. It has specialized Forex, and industrial finance branches. Bank of Rajasthan has a tie-up with Corporation Bank, Axis Bank, member banks of Cash Tree Group and SBI for ATM usage.

Bank of Rajasthan offers a basket of products & services including Personal Banking, Commercial Banking, NRI Banking and Internet Banking. Under Personal Banking, the bank offers home loans for purchase of ready built house/flat, land and construction thereon and/or repairs and renovation and/or shifting/take-over of loan availed from other Financial Institutions.

Analysis

Loan to Value Ratio – Bank of Rajasthan home loans can be applied for a maximum of 80% of the property value upto Rs. 20 Lakhs whereas; it can be applied for a maximum of 75% of the property value above Rs. 20 Lakhs, both, accompanied by a specially-designed insurance cover. This feature is very much comparable to other products in the market; other banks like PNB, SBI, Standard Chartered, HSBC, Bank of India and Canara too offer loans up to 80% of the property value. Few banks are more lenient when it comes to loan to value ratio.

Tenure – Bank of Rajasthan offers a flexible tenure of upto 20 years in case of purchase/construction of house/flat/apartment inclusive of moratorium period and upto 9 years in case of repairs and renovations.

Interest Rates –
Floating @ 8% for loans upto Rs 30 lakh; floating @ 8.5% for loans above Rs 30 lakh.
Fixed @ 9.5% for any loan amount.

Prepayment Charges – Bank of Rajasthan charges 2% of prepaid amount at the time of premature closure of account. However, prepayment up to six installments will not attract foreclosure charges. In other words, if account is prematurely closed before last not more than six installments are outstanding, the foreclosure charges will not be levied. This feature can be compared to other banks like IDBI, PNB and SBI.

Processing Fee – For loans up to Rs. 2 Lakhs, Bank of Rajasthan levies 0.50% of sanctioned loan amount as processing fee whereas for loans above Rs. 2 Lakhs, the bank levies 1% of sanctioned loan amount. Considering this, IDBI Bank’s processing fee, one of the lowest in the market at 11,000/- or 0.5%, whichever is lower; is at par with Bank of Rajasthan’s offering.