InvestorQ : how to start finance and financial instruments in private banking
Naveen Kumar made post

how to start finance and financial instruments in private banking

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Niharika Kamble answered.
1 year ago

Your question does not express anything clearly. I think that your question must be how to raise funds from private banks, so my opinion will be on the same line.

Raising funds from private banks refers to taking a loan from private banks. Private banks come under the purview of RBI and so they also have to oblige the rule and regulations laid prescribed by the RBI. As a result, the basic criteria to define the loan eligibility for any applicant is by finding their CIBIL score. CIBIL score measures the credit-worthiness by looking at repayment history of the individual. Income proof of an individual represent the repayment ability and this is also essential for getting a bank loan.

The purpose of the loan is an important factor. For example, if someone wants to buy a home and car, then the raising loan will be easier as home loan and car loan can be easily availed. The same house and car will be used as collateral security by the bank for sanctioning the loan. As a result, the sanctioning amount will be more and also the interest rate would be low. However, in case of a personal loan, the loan amount might be less because other than the CIBIL score and income prove, there is no collateral. Thus, this increases the risk for a bank so the interest rate is also high to cover the high risk of the loan applicant.

Hope I have answered your question.