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The RBI has stated two primary reasons for taking such a step in the current financial situation. Firstly,this will discourage speculation in the housing sector and people will use home loans for buying houses to reside and not as an investment in this booming sector. The second aim of the RBI in this guideline is to keep the lending market protected in case of a surge of defaulters and delinquency. Such a move will ensure that the borrower who is taking a loan is actually capable of repaying and in case he does not,the bank is in a position to retrieve its money by disposing the property to recover the loan amount.

I want to open a bank account for my 11 year old son. Can he open and operate a  bank account independently?

—Satbir Arora,Delhi

A savings bank account can be opened in the name of a minor jointly with a guardian. Here,only the guardian is supposed to operate the account on behalf of the minor. The guardian should be parents or in special cases,a legal guardian,as appointed by court. Some banks allow minors above the age of 12 to open and operate accounts independently.

So perhaps you can check with your bank and open an account for your son,next year when he turns 12.

I have never invested in equity. I have always invested into safe instruments like bonds. What are the investment options that will be safe to invest.

—Subir Sen,Kolkata

Well,it depends on what is your concept of safe. Being too safe would mean less capital appreciation,though your initial investment is bound to be safe. Debt instruments offer preservation of initial investment while this is no guarantee with equities but returns could be amazing if it works in your favour. However,the key is to try and increase your risk appetite when you are young and starting to save and then slowly opt for capital preservation by leaning more towards debt instruments as you approach retirement.

—The expert is CEO,Bankbazaar.com
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