KARACHI, Oct 9: State-run National Bank is charging 13 per cent markup on leasing of LG televisions and other products of LG Electronics under its recently launched Ghar Ghar Television Scheme.
People who visited selected NBP branches or LG offices to make inquiries about this scheme told Dawn that they are supposed to pay 13 per cent markup for buying TVs or other consumer products under this scheme.
A senior NBP official also confirmed to Dawn that the markup was set at 13 per cent but he claimed it was just in line with what he called the market rates — referring to markup on lease finance on consumer goods. NBP is the first bank to enter into consumer financing after the State Bank allowed banks to do this to boost investment.
People who made inquiries at NBP branches for purchase of TV sets also told Dawn (and NBP officials did confirm) that the NBP is marking a lien on the customers account availing of consumer finance facility. “This affectively means that I will not be able to withdraw money from my bank account to a certain extent if I use that account to get consumer finance facility,” explained a customer — a money changer by profession who had gone to an NBP branch to seek consumer financing for an extra large screen LG TV. “This absolutely makes no sense. It may enable the National Bank to show a growth in its deposits for some time but it will not serve the clients.”
“Why should I keep an X amount in the NBP account for 12 or 24 months just to be able to buy a television on instalments. If I have enough cash with me I can purchase it from the market,” he cried.
A senior NBP official who asked not to be named admitted this and said the consumer finance scheme of the bank has just been laid down. “It will take us time to polish it further and make it acceptable to the people.”
Sources in NBP say on late payment of instalments of the loan taken under Ghar Ghar Television scheme the bank will charge a fee of Rs5 per day for the defaulted period up to instalments of Rs5,000. This will be a progressive rate rising to Rs10 per day when overdue instalment goes up to Rs10,000; Rs15 per day when overdue exceeds Rs15,000 and so on. They say that the amount of per day fee will be charged as and when the higher overdue instalment figure is achieved. “That is if the first instalment of Rs3,000 is over due for 30 days and then another becomes overdue (i.e. total overdue becomes Rs6,000) then for the first 30 days late payment fee of Rs150 will be payable and for the next 30 days late payment fee of Rs300 will be recoverable,” says an NBP circular issued to the branches handling the scheme.
Thus a customer will have to pay Rs450 as late payment fee if his instalments fall overdue for 60 days. “How taxing it is going to become,” exclaimed a man who showed a copy of the NBP circular to Dawn.
NBP officials owned this part of the circular as well but they said consumer financing being a risky business needs to be managed prudently. “Have you forgotten what happened to yellow cab scheme?,” he counter-questioned Dawn when asked to explain the rationale behind such strict conditions attached to consumer financing scheme.
Sources in NBP said under the Ghar Ghar Television scheme the share of LG in the markup earned under the scheme would be 11 per cent or two per cent less than what the NBP will be charging to the customers.