Blank cheque for home loan india


#1

Hello, I have recently applied for home loan with Bank of Baroda and I was asked to submit 13 blank cheques signed in favour of bank.
Is it ok to give blank cheques to banks?
If yes is 13 cheques usual?
If anyone here have gone through loan processing with bank of baroda please help me with these details

Thanks,
Ashok


#2

Hi Ashok,

Earlier it was common practice for banks to ask for blank cheques. Now, banks insist on post-dated cheques that are equal to the principal amount that you have borrowed. This is done for security reasons. In case you fail to pay your EMIs through auto debit, they will have a way of recovering the amount. Handing out blank cheques is not very safe. Inform your bank that there are other banks who insist on only post-dated cheques for security purposes and not blank cheques. Check with them to see why they need it and how they will ensure its safety.

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Cheers,
BB Expert