Top News

• Banks’ major step in lending
• Criminal record check of borrowers
• It will save a lot of time and money in recovery

Bank Loan New Rules: The bank is considering new strategies. To curb loan fraud, banks will now check the criminal records of loan applicants before disbursing loans. In the past, applicants had credit scores while granting bank loans. Also, collateral was verified before lending by assessing cash flow. Now the bank will come up with new rules for this. In which the criminal background of the applicants is to be checked. That is, now a person applying for a loan will take into account the criminal record check and legality before granting the loan.

The proposed measure was discussed at a recent bankers’ meeting. It was explained that the main objective was to prevent lending to borrowers with serious criminal records. By establishing a formal system for criminal record checks, it will filter out borrowers who violate the law, saving them a lot of time and money in recovery.

This decision will relieve them of the hassle of dealing with borrowers who are aggressive in collection or taking action against them, including those who are not concerned about foreclosing on their mortgages. Bankers feel that credit expansion is necessary, but this requires stricter regulations. Hence, banks are said to want to apply additional filters before disbursing all types of loans.

Once the loan is approved on the mobile app, borrowers have eliminated the system of collecting personal information. Lending was now faceless. For corporate credit assessment or market image of the borrower is also taken into consideration. However, bankers feel that specific input on borrowers’ criminal records will help them make better credit decisions. Experts believe that, if this is done with consent, transparency and compliance with data-protection rules, banks have full legal right to obtain information about criminal records.