What Happens to Bankers’ Bonuses in 2020? Sudden Decrease or Frugality?

As we can all learn from the comprehensive text published in May by Disruption Banking, the global financial crisis triggered by a long lockdown preventing the spread of the pandemic has caused a huge shift in traditional banking.

bankers’ bonuses

The author of the piece, Andy Samu, makes a great point by reminding us of the abundant mythical bonuses and remunerations received by the greatest bankers and how the new “moderation” policies have taken pole position in 2020.

While this “traditional” picture seems to have been influenced somewhat by the film industry, collect with inspiring “from rags to riches” stories, it is often hard to imagine the value of incentives acquired over the years by the best bankers.

The changing priorities surrounding bounties for bankers in the global pandemic

The idea that bankers should be held accountable to wider society and that their firms should “serve a purpose”, like Laurence Fink, the Chairman and CEO of BlackRock said, is nothing new. While this type of statement might have been perceived as empty words uttered to pander to an audience in the past, the crisis has given it a whole new level of importance.

This is the reason (as well as the crisis) that we are hearing voices praising “extreme moderation” in terms of bonuses and dividends paid out in the banking industry. Andrea Eria, the Chairman of the European Central Bank was also heard repeating sentiments that seem to correspond with Fink’s message. Shortly after this, Enria added an emphasis on the role the banks have in the fight to stem climate change.

Right now, as Andy Samu implies, there are three main points of focus that the banking leaders will most likely be considering, and, even in times of pandemic, be pursuing. That means focusing on the urgent issues that the world is struggling with, and not just concentrating on increasing wealth:

  • Diversity
  • Climate change
  • Positive contribution to society

The global shift away from rewarding bankers

You can find more details regarding this subject in the post by Disruption Banking, where the author considers different cases and analyses the topic from different angles and perspectives. One of the points that he introduced, is the sudden change in the behaviour of the biggest banking firms, Goldman Sachs for instance.

Moderation policy in terms of bonuses is now clearly influencing companies and it is something that may have seemed unlikely during the previous Financial Crisis. It is also clear that while some bankers have struggled following investigations, others are thriving and have been multiplying their assets year-on-year now, Michael Platt for example.

The most successful companies like JPMorgan, have noted impressive results at the beginning of 2020 and would typically have rewarded their Fixed Income Team. Instead, they had to reconsider their whole approach to rewarding their traders, in order to show “moderation” and “restraint”. Other entities like Barclays have instead decided to focus their efforts on charitable work, something you’ll read more about here.

Things Salaried People should keep in Mind before Taking a Personal Loan

Personal loans are very helpful in the financial crisis. The concept of personal loan attracts people more than any other loan as you can take it for any personal reason without worrying about collateral security.

Taking a Personal Loan

Especially, the salaried employees who normally can’t fulfill their wishes and needs in a fixed salary choose personal loans. Banks and other lending agencies often contact these salaried employees in order to offer pre-approved personal loans. However, after applying for it, they come to know that there is a lengthy pre-loan process.

The personal loan can assist you but, sometimes it can also turn into a big burden if you don’t keep certain things in mind while borrowing it. Today, we are going to share some useful tips that can help the salaried employees for a hassle free and fast personal loan approval.

#1 Choose your Loan Amount Carefully:

You have to be cautious while deciding the loan amount. Go only for an amount which you actually require. Don’t get persuaded by the bank salespersons in this matter as it’s their job to motivate the individuals to go for higher amounts.

Furthermore, there is a limit set by every bank for salaried individuals on the basis of their employment history, salary, and organization. It’s not necessary to choose the highest amount only because it’s available to you.

The higher the loan amount, the higher will be the EMIs, processing fee upfront fees etc. So, be wise while deciding your loan amount so that it won’t become burdensome at the time of repayment.

#2 Check the Minimum Salary Required for Loan in Eligibility Terms:

You should be vigilant enough to check the eligibility criteria of the bank in which you are applying for a personal loan. For salaried individuals, the monthly salary and employment period in a company affect eligibility. If you will apply for the loan without checking these things beforehand then, there are chances of loan rejection.

Rejection can affect you in many ways. Initially, in need of immediate funds, it becomes a big tension. Secondly, rejected personal loan application affects your credit score negatively. Finally, starting the process all over again will be time-consuming. To avoid all this, you have to run a preliminary check about the bank’s terms.

Don’t apply for a personal loan if you are not a right fit as per the terms. There are plenty of other banks in which you can try your luck. For instance, the employees having a salary between INR 4,000 to 20,000 can avail Citibank Personal Loan.

#3 Check for the Hidden Costs:

You should be aware of the extra charges that banks directly cut from your loan amount. These are the upfront fees, processing fees, pre-closure fees and some other charges varying from bank to bank.

These charges are a total of 5% – 7% of your loan amount. So, you can fall short of desired funds in case you don’t know about them. For example, if you have applied for a loan of INR 100,000 and the bank cut 7% extra charges then, you will only get INR 93,000 as the loan. It can highly effect in some cases where the exact amount is required.

Thus, ask the bank representatives clearly about these hidden costs so that you can keep a margin in the loan amount. People usually skip such points in haste and due to unawareness which leads to undesirable consequences.

#4 Adjust your EMI Amount Wisely:

Remember that, the monthly payment of the personal loan is going to be reduced from your monthly income. This is one of the most important things that trouble the salaried individuals after taking the personal loan.

You should check your EMI amount and adjust it as per your requirements if it’s high. Now, you must be wondering about how you can change the EMI amount. You can either do it by increasing your loan repayment tenure or by reducing your loan amount.

In recent times, banks are offering many facilities while taking a personal loan, one of which is flexible repayment tenure. You can decide your tenure as per your comfort. Some loans like Citibank Personal Loan offers you to stretch your repayment tenure even up to 60 months.

#5 Maintain a Healthy Credit Score:

Credit score plays a prominent role in the approval of any loan. The banks won’t provide the loan to candidates who have a low credit score as it can be risky. Every bank checks the CIBIL score and credit history before approving any loan application.

Does the question arise that how can you enhance your credit score? For doing this, you have to repay your existing debts (if any) and maintain a considerable balance into your bank account.

You have to be patient while trying to increase your credit score. It may take some time. If you already have a good rapport with the bank then, you don’t have to worry about it.  There are plenty of credit score calculators available online nowadays. You can take the assistance of these apps to check your credit score in advance.

#6 Check the Required Documents:

You should check the list of required documents for availing a particular personal loan before applying for it. For salaried employees, it’s mandatory to show evidence of their salary and employment in a certain company in some banks.

The problem arises when you are working with an organization that hasn’t provided you with an authentic offer letter or salary slip. It usually happens with small scale companies and start-ups. You should demand these necessary documents from your company if you are planning to take a personal loan.

Tell your company about the loan, and you will surely get these documents. But, this type of matters is somewhat time-consuming. So, check the documents beforehand and complete them on time.

Hence, you can get a personal loan and repay it smoothly by taking care of these things.

Online Money Transfers – Making Life Easy

When was the last time you visited a bank? Or deposited a check? Or even visited the nearest ATM for money withdrawal? It is surprising that how with the advancement of digital technology, our need for traditional banking facilities has reduced drastically over time. And it’s probably for the good?

Online banking does offer an uncontrollable convenience, which has actually made our lives much simpler and stress-free than ever before. Imagine getting off the couch on your weekly off, travel some god for sake kilometers to visit your bank branch, and deposit a minuscule amount and go through all that hassle for peanuts. It is only worthwhile when either you have millions of dollars in your bank account already, or you are about to deposit a million dollars into somebody’s bank account at least! In short, online money transfers are the epitome of truly advanced and digitized technology that is ruling the traditional and current banking system all over the world. And why mustn’t we exploit it?!

Online money transfer systems have opened its doors for mind-boggled people like us who either do not understand the technicalities of complex banking systems or simply just don’t have the time to visit a bank every now and then.

Online Money Transfers
And why you must opt for online money transfers? You will find the answers right below.

Shopping!

Shopping here refers to e-commerce. And online money transfers have successfully helped thee-commerce industry grow while acquainting consumers more with e-business and realize the online shopping and purchasing power. The online banking system has made it more than easy for us to purchase whatever we like from wherever we want, just by filling in some basic details, personal information, and your Social Security Number.

Also, online transactions on e-commerce website are completely safe and genuine, so your money is protected at all times. Most people love shopping online since online money transfers and banking system has made it so much easy for us!

E-Checks

Unlike the traditional way of signing a check and authorizing the other party to withdraw funds from your account on the basis of that check, e-checks again make you go online and do the same thing, but paperless!

In case you wish to generate a check for someone, you can just visit your bank’s website, input the payee’s name, account name and number and the money will be transferred to the other without you having to blink an eye! In other words, a check is now generated online which saves people the hassle of visiting the bank and having to go through the time-consuming procedures of depositing and authorizing the check.

Mobile transfers

This is one such online money transfer system that does not involve credit/debit cards, checks or any other form of traditional banking facility. Any online purchases or transaction details are sent directly to the customer’s mobile phone and the amount for which is also added to the monthly mobile bill payment of the customer. That’s cool, isn’t it?

The mobile payment system has become quite popular and common as everything becomes just a button away, right from receiving/sending money to paying off your bills and other charges. Thanks to the efficiency of communications technology and cellphone service carriers that have made it possible to transfer money solely through an SMS on our mobile phones and the added convenience of receiving online purchases and charges in the form of your mobile phone bill.

Email money transfer

Email money transfers are considered to be the safest of all! Any amount of funds can be transferred to a user’s account and the online bank service’s account just by an e-mail.  On transferring funds or any other online transaction, you receive a notification on your e-mail. Because only notifications are sent to email addresses, e-mail money transfer system is considered to be a safe and secure way of transferring funds and money online.

Using bank accounts

Funds can be transferred directly within and amongst bank accounts online and do not even require a credit or debit card most of the times. Although, debit card payments are mostly preferred by online sellers and e-businesses as apartof their e-commerce payment chain, online bank transfers are comparatively simpler and quicker. All authorization and verification are done on the seller’s bank, and ideally, all records and personal details pertaining to your bank account become void once the transaction/s have been completed. A pretty trustworthy and reliable banking procedure indeed!

Overall, online banking has opened a plethora of options for us, with online money transfer being one of the most promising of them all. With the increasing popularity and demand for online banking facilities, transferring money online has become quite a safe and secure indulgence these days. However, always ensure to exercise some precaution while making transactions online and try your best to steer clear of frauds, thieves, hackers, phishers, and other sources that might just take you for a ride!