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Get your friends to take bank loans... and get paid

By Shuchita Kapur

Instead of just relying on the old way of selling loan schemes to customers, an Indian bank, is now urging its existing customers to advise and introduce their friends to the various loans associated with property that the institution offers.

This is somewhat similar to what the loan agents get but can be more effective as friends will probably rely on the advise of a person close to them than entertain a cold call from an unknown agent.

In return, the existing customers will be offered a cut or a reward as they call it. Tagged as the reward scheme for referring loans (home loans and loan against property), Industrial Development Bank of India (IDBI), is offering commissions that can go up to Rs50,000.

For a loan amount of Rs15 to 40 lakh, the reward for the customer is Rs5000; If the loan amount disbursed is above Rs40 lakh and up to 60 lakh then the reward is Rs10,000; for Rs60to 80 lakh get Rs20,000; for Rs80 to 100 lakh get Rs 25,000; for Rs 100 to 200 lakh get 40,000 lakh. The commission goes on uptill Rs50,000.

The ongoing scheme is valid on every referral received up to March 31, 2014. Existing customers believe it is a good move by the bank but they would only recommend if they are happy with their own situation.

“I have a loan account with IDBI and their rates are better than many others in the market. I would refer it to a friend not because of the commission but because of the fact that I’m happy with their rates,” said an Indian resident in Dubai. He has taken a home loan with the bank to purchase a property back home.

India’s property market is poised to pick up later this year after facing a challenging 2013 and some banks are also reducing interest rates to get people to making a purchase.

Recently, State Bank of India (SBI) and HDFC, country’s two large lenders announced a reduction in the rate of interest on home loans for new borrowers.

The interest rates charged by IDBI are very similar to what other local banks offer but are better than what multinational banks in the country are charging.