[PrasunBannerjee]

Some banks have peculiar methods and reasons best known to them. I have similar incidents, despite it being slightly off topic.

These cases were around the same time. I was looking to open a bank (current) account for a small WFH freelancing business, working on a computer almost half a decade back. All were private banks as I wasn't happy with online banking platforms in my personal savings accounts from PSU banks then. SBI YONO came later and I really find it much better than things available then.

Bank-1: Representative asks a couple of details then insists among all the documentation, for shop act papers and having a shop (dukaan ka alag se address chaiye sir, ghar nahi chalega). Tried explaining to him multiple times it is something which is done from a laptop from home, and is in experimental and beginning stage and not a huge investment thing that needs a shop establishment, etc. Then after 15 mins of conversation he said, I'll give you a number, they'll do it for you. I understood its a way of making money from a prospect customer via affiliates. Stepped back and ran away.

Bank-2: Apparently this bank has a policy where in order to open an account you need to get some stuff attested from a gazetted officer or a sarpanch/paarshad or something of similar cadre. Forgot the specifics but what's the point? My SBI account opened with lesser hassles than this. Where on earth will I find gazetted officers to sign on my bank account opening form.

Bank-3: Agent was personally known to me. Came home, and filled all forms for me and helped with everything. Yet, as per their policies, literally clicked pictures of my home and workplace desk and stuff via their KYC portal as part of physical verification.

I understand verification is ok but I am working out of my bedroom. Also, I am not going to take loan and run away. I faced these when I was going to open an account with them and give them my business/money, nomatter how small it was.

[vipul_singh]

Originally Posted by MadinMumbai

There is a kind view which you seem to subscribe to. Which is good.

But there is an opposing view, one that makes many people uncomfortable

A fundamental distrust in the government is a very popular American influenced view which I certainly don't subscribe to, especially after giving my iris image, fingerprints, name, photo and address to the government and linking them to everything from my tax returns, bank accounts, loan applications, vaccination cards, passport, driving licence, vehicle RC and phone numbers.

I haven't experienced any discrimination based on the data the governments already have, and I certainly don't expect any discrimination if I provide inputs into a particular field in what is yet another application form.

In my experience, governments have been working for the betterment of the country and its citizens in varying ways and to varying degrees. I don't have the evidence to cause me to get irritated with giving such details because some analysts or writers somewhere coined the expression 'data is the new oil', which I consider to be a massive exaggeration anyway. To me, privacy is not a 'be-all-and-end-all' in of itself and there are more important things at a macro level for which information can and should be aggregated and analysed.

[bravo82in]

I took two car loans with SBI in 2019 and 2020. None of these details were asked for.
Though I remember incidences where the dealer of a luxury car brand would politely refuse test drive to people from a particular community. Later I read in news that people from a particular place and may be community would rob cars after taking them from test drives.
May be bitter experiences with a particular caste or religion would be the reason to give loans with caution to a particular community.
Though in a country likes ours one cannot be biased on basis of caste or religion

[hrman]

Slightly on and off topic: My dad used to be in HR and in a couple of organisations he worked for, he took a bold step (at that time) to remove the Caste and Religion boxes from the employment application form. He did face some resistance but dug his heels saying, "In India, I am an Indian. How does it matter what is my caste or religion to decide whether I am worthy for a job or not!"
Fast forward to many years later, I did the same thing in my organisation's HR system and stopped tracking these fields.
But just a couple of years later, we got a notification from the State government to provide them caste based employee data. I think they were considering to introduce caste based affirmative action in private organisations. We had to suddenly gather this data and it was a royal pain. Explaining why we needed a piece of data which was long considered redundant in our organisation was not easy.

Have seen through these revolutionary change situations and experienced being pulled back. Personally I feel, for a loan this data doesn't make any sense, unless as some have been commented, it is used to decide demography wise loan re-payment or failure analytics. We have moved much ahead in our thinking in the world, where in some countries, the declaration of age or gender is not mandatory while applying for a job.
Or you could do what my father used to do: In the religion and caste box, he mentioned "Indian".

[MadinMumbai]

Originally Posted by vipul_singh

A fundamental distrust in the government is a very popular American influenced view which I certainly don't subscribe to, especially after giving my iris image, fingerprints, name, photo and address to the government and linking them to everything from my tax returns, bank accounts, loan applications, vaccination cards, passport, driving licence, vehicle RC and phone numbers.

Different people have different thresholds, I am uncomfortable handing over more than absolutely necessary information to a business. The bank is not government. There seems to be a misconception that the bank is the representative of government. It is not. It is a business offering a product/range of products. The person collecting information is also not necessarily an employee of the bank, many being third party agents hired to sell loans.

And as you probably might already be aware the government already has all my details. If the government wants to gauge demographics and see what communities are getting loans, all they have to do is run a search through their computers. I am linked to various databases through my Aadhar/PAN/passport/Ration Card/Voter id and some half a dozen other KYC documents. Today the government knows every financial detail of every individual.

Originally Posted by MichaelBallack

Why banks need number of dependants is pretty self explanatory since it may adversely affect your repayment. If you are having more children, then loan repayment would be at the bottom of your priority. It is the bank's money at stake, liquidating a car after loan becomes NPA is a cumbersome procedure for the bank. So proper due diligence of the customer with respect to repayment ability is mandated.

The assumption is that one size fits all. Children = dependants? Right? Wrong.
My children are grown ups. Now where is the column in the 'well thought through form' for that? Or should I explain to the bank representative that I have grown up kids and the information might not be pertinent?

[TheBigV]

Originally Posted by MadinMumbai

In July 2021 we were ready to purchase a new car. Decision was made and, like we have done over the last 25 years, we started enquiring about car loans. The best deal was offered by a nationalised bank so we contacted the loan officer and he promptly dispatched an application form.

So far so good.

One evening I sat down to fill up the form and my blood pressure started shooting up. Insane and inane details needed to be filled in. In addition to the usual KYC and income details the form had columns about Religion, Caste, Children etc...

Why does a bank need to know my religion or caste? And what will they do with details about my children? This is a business deal. I borrow money and the only thing they need to know is my ability to pay back the loan. But clearly the details needed to be filled as per the loan officer. I flatly refused. We then broke the piggy bank and bought the car.

Have any of you faced this kind of form? Is it even legal for a bank to ask for these details? What will they do if I am from a certain religion or caste? Or if I have 1 child or 16 children? Will they deny me a loan basis these details?

As a banker working in a Government bank, I think I am qualified to answer. Apart from financial details, whatever details the bank is asking are mandated by the RBI who in turn are required to furnish the data to Government of India. You see every year , specially while formulation of budgets for various social schemes, Government requires data regarding the financial conditions of various sections of society. Say for example, average spending per year by members of a minority community,number of dependents in a single earning family etc. Banks provide plethora of such information. Every year during our annual closing, we submit various returns which document such facts like loans given to minority communities, loans given to the members of Scheduled castes/tribes etc. Nationalised banks have the largest consumer base in our country, so the consolidated reports from all the banks provides a fair picture to the economists involved in planning, such as members of the Niti Ayog.

[livetodrive]

I think the matter of discussion here points to increasing distrust among banks and borrowers and recently me and my family suffered due to this. Me, my sister and father all three being good earning members, failed to get the loan pass, rather the bank eliminated my sister as a co-borrower, most probably because she is a NRI research scholar. They were ready to give the loan only to me and Dad which we denied since we wanted sister to be an equal stakeholder.

But whatever they asked for were furnished diligently. Be it our salary slips, ID proofs, IT returns and even all smallest details of our closest relatives.

I had to share a snap wearing my company T Shirt, which I did and then they requested to send a selfie with my company logo from my office premise. Sorry, I did not oblige to that request.

The frustration is obvious and increases nowadays when we see multiple fugitives swindling thousands of crores and we keep thinking is it because of them we are guilty?

[RGK]

"How many times have you been to the restroom today?" the AI, ML model began to inquire. This is the level at which information is gathered.

The human value that existed previously has vanished (offcourse due to various reasons).

[Raghu M]

I did not fill up any forms of that sort. I had a pre-approved loan with my salary account. I just had to tell them that I need it. It was activated in 15 mins. The funds were transferred to the showroom's account. But, the details that are asked when you go to a bank where you do not have an account are high. I don't blame the banks, it's something that is needed with the increasing pressure on NPAs and bad loans. Once you default a payment, all banks share those details and that is when it will be hard for you to even open a bank account leave alone getting a loan. There is also a provision in the law now that gives banks the right to take money from your account if you have defaulted your previous payments. They serve you notice and your pan is on radar. Just in case you have some deposit in your account, they can take it right before you even lay your hands on it.

[fordday]

Originally Posted by livetodrive

I had to share a snap wearing my company T Shirt, which I did and then they requested to send a selfie with my company logo from my office premise. Sorry, I did not oblige to that request.

This is hilarious and dangerous as well. If I share a picture of my company premises to third party, company may terminate my services in the name of compromising security.

Good that you did not oblige. These guys are going overboard.

[novice_alto]

Not exactly replying to the OP, but my thoughts related to this.
Our names (at least Indian names) can tell you about religion and caste, region from which you belong.

The data that is being collected in the name of inclusivity can easily be used to exclude people. All the bankers here can confirm, banks easily have black listed localities and communities, which they do not tell you officially but implement rigorously.

I might be wrong on this point, but the largest NPAs do not come from retail loans, but yes agree that banks want to do due diligence before giving out small loans.

I took a home loan some 10 years ago. I had accounts only in private banks (ICICI and AXIS). I was a small business owner and all my transactions happened with ICICI, but they flatly refused my home loan application. Apparently, small businesses have low credibility as opposed to salaried people. I had to take a loan from a cooperative bank. They agreed to disburse a loan only after I deposited 30% of sanctioned amount as additional collateral, in addition to the flat itself. Number of forms and signatures and pictures, I would not even go into.

I understand the bankers here feeling uncomfortable with the comment but from a customer's perspective, a lot of these procedures seem weird and unnecessary sometimes.

The guy who came to inspect my house for home loan asked my wife his address and then asked for the marriage certificate and then asked her if she actually lived at the same address. We were both co-borrowers. Because we needed that loan, we played along but it was a humiliating process.

As for loans for un-dug wells and single tractors being shown for multiple applicants etc. , there is a bit of collusion. A fraudster cannot pull it off alone. This is my belief.

[NiInJa]

Here is my short story:

My wife (then Girlfriend) and I were in Bengaluru when she got a loan on for the car. The process was extremely smooth and despite our income being not that great, we got the loan approved. Within a year, we decided to shift to Pune and wanted the NOC, so we called SBI and the guy on the other side literally shouted 'You repay the loan first and then get NOC'. Furious, we both headed to SBI main branch deciding to give a mouthful to him and the higher ups, but upon looking at both of us in office, his tone changed completely and were welcomed graciously. As we were young and ready to unleash whatever fury we had, the Branch head herself called us in the office along with the person with whom we had spoken. She explained the situation very politely, apologising for the call first.

Here is Bank's side of the Story:
Cars unlike real-estate are difficult to repossess if any one defaults on the loan. Many Ola/Uber cab owners had taken hefty loans on cars and when the business became unviable for some reason, they simply abandoned the cars on roadside after much abuse. Most of them vandalised and declared total loss. Some stopped repaying and simply disappeared with their cars, the addresses given were of no use and the cars were probably sold in other states. They were having a hard time with such cases and were trying to come up with plans to mitigate it. So she was ready to give NOC to us but she said it was being done on case to case basis.

This was back in 2013. Since then, Banks have become strict with approval and disbursal process. Using tech like AI is helping them find bad loans and this tech requires information, the more the better. I remember filling in religion and caste category for a loan application recently. Didn't ring any bells except knowing that it will be used for demographic purposes. I guess working in this tech field has made me dumb

Many people of previous generation will find this information gathered a bit offensive and question the processes often comparing it with 'their' times. But they fail to understand that crooks too have become smarter so banks have to do what they have to do even for honest re-payers. My dad too found it offensive when we got a loan for real estate recently, but the good part was that the executive was calm and composed and explained each and everything to him patiently.

[Logan2007]

My view is that the loan is not a right and banks can do whatever they want as long as it's legal.

As noted by many, banks are asking for these data points for various reasons. If customers are not comfortable, they can explore different options.

I personally have taken many loans over years and have seen variety of questions and checks. If I didn't like the process or the deal, have simply walked to another bank and got the loans easily elsewhere (both private and sbi).

[GutsyGibbon]

Originally Posted by MadinMumbai

Why does a bank need to know my religion or caste?

Valid point. For the purposes of bank loans, cant they mark it as NA (not available, or not applicable)? Also are Naastika - Naastika, or Hindu Naastika officially valid options? Is there a list of valid castes? As castes were based on occupation, can I make up a new caste of Software Engineer? Wouldn't this be more helpful for the bank's risk logic than someone who is a code monkey saying he is a Kuruba/goat herder or a barber? This data point makes no sense in this context.

[Altocumulus]

For me the only irritation is the number of questions and the signatures I have to give while getting the loan. I have to rest my hand in between so that the signatures don't get messed up.

As for details of religion and caste, how does it matter if I give that. Not that they can do anything with that. If one is informed enough they will get it anyways from my surname.
At the end of the day its a business transaction. Banks are sitting to give loans. Ultimately what will matter is my CIBIL score, my income, my dependents and the locality where I stay in.