Ravi Karandeekar's Pune Real Estate Market News Blog: RBI

Showing posts with label RBI. Show all posts

Thursday, September 5, 2013

Do not sell homes to those people who can't afford to buy

Reserve Bank of India's (RBI's) Notification to All Scheduled Commercial Banks about 20:80 Schemes - a.k.a. - Advance Disbursement Facility (ADF) - No EMI (Pre-EMI) till Possession:

Reserve Bank Of India (RBI)

Collapsing Rupee, Collapsing Economy & RBI:

Yesterday outgoing Reserve Bank of India Governor D Subbarao did his last and best effort to save India from impending sub-prime crisis. RBI came out with a notification curbing 20:80 scheme.

Why RBI is aginst 20:80 scheme? Because, RBI knows the modus operandi of global financial firms - the criminal enterprises - which are on the verge of taking control of Indian Economy. To takeover any economy, these criminal enterprises have always crashed real estate market to trigger economic & financial crises.

You know how these criminal enterprises crash the real estate market? By selling homes to those who can not afford to buy! When these property buyers can not pay their EMIs, banking system collapses like a tower of cards and these sub-prime crisis trigger economic & financial crisis.

By this notification against 'Innovative Housing Loan Products' - upfront disbursal of housing loans - 20:80 Scheme - ADF - No EMI till Possession - RBI is trying to prevent the banks from selling homes to those people who can not afford to pay their EMIs and create the sub-prime crisis which will fully & finally collapse of Indian economy.

Builders & Politicians - Pimps of Global Financial Firms:

Last time, in the sub prime crisis of 2008 - world financial crisis - because of the strong RBI - Indian economy somehow managed to survive. But, now, in 2013, situation is different.

Indian rupee is collapsing. India's current account deficit - gap between import & export - is high. GDP growth has come down to 4 per cent. Government's spending on infrastructural development is not much. Government spending on ponzi social welfare schemes for the rural & poor people is high - which is not increasing productivity or GDP growth. but fueling inflation. Plus, now, Indian politicians & builders have become pimps of these criminal enterprises - global financial firms.

Today, Indian politicians, pimps of global financial firms, have already challenged the autonomy and accountability of Reserve Bank of India. The outgoing governor knows that if these pimps became successful in weakening the RBI, it would be difficult to avoid crash of Indian real estate market.

So, the only way to stop these global financial firms from creating sub-prime crisis is -
preventing their pimps - the builders - from selling homes to those people who can not afford to buy.

With this notification RBI insists on linking disbursement of home loan to stage of construction.
RBI says no 'innovative' housing loan products.
RBI says no 'No Pre-EMI till Possession' schemes.
RBI says no 'Pay Only 10% Now - Balance on Possesion' schemes.
RBI says book a home only if you can afford to pay Pre-EMI plus rent till you get the possession.

What say you?
Isn't the risk not limited to booking a flat?
Considering the current state of world economy,
do you think that you will remain employed for the next 20 years and would be able to pay EMI?
Please, share your views in the comments.

RBI's Notification:

Updates:

What happens if a lender takes over a housing project?

Last month, the State Bank of India took over a housing project in Kolkata because the developer had defaulted on repayment of dues to the tune of Rs 176 crore. The Teen Kanya project was promoted by the Bengal Shelter Housing Development, a joint venture in which the state housing board has 49% stake. Therefore, its repossession by the SBI % has come as a shock for the 400-odd families that have invested in the project.

Most of the buyers had put money in the project because the state housing board was involved. The project is only half complete and the investors are now contemplating legal action to safeguard their investments.

The incident brings into focus the RBI's decision to stop builders from offering 80:20 schemes. Under these schemes, the buyer services only 20% of the loan for the property while the developer pays the interest on the balance till the property is ready. The RBI warned that if the developer defaults on the interest payment, the buyer would suffer because the loan was in his name.

What are the options available to a buyer if a lender repossesses a property due to default in payment? Legal experts and housing professionals contend that the lender does have first right over the project. Let us look at the issues involved. Read More

Subscribe for Free!

To receive free emails or free RSS feeds, please, subscribe to Ravi Karandeekar's Pune Real Estate Market News Blog

Feel free to call me:

I enjoy talking, sharing my views and giving advice about buying property in Pune real estate market (so, i do not charge anything for the first 3 minutes!) Call 919860044110

If you like to chat, join me, RaviKarandeekarsBlogs on Google Talk.

Yes, my email id is RaviKarandeekar@RaviKarandeekar.com Feel free to write to me. I reply as soon as i can.

Join me on Google+

Tuesday, April 20, 2010

RBI's decision to tighten the monetary policy would not have a negative impact on housing demand

Real estate Developers do not foresee any increase in home loan rates:

In a move to rein in the runaway inflation, the apex bank today increased the repo and reverse repo rates by 25 basis points each and the CRR also by 25 basis points.

"It's a very balanced and calibrated announcement meant to control inflation. The signals from the PSUs as well as private banks are favourable and they expect no increase in home loan rates. This will be the ultimate interest of the home buyers," DLF Group Executive Director Rajeev Talwar said.

To read more, please, visit Realtors see no adverse impact of rate hikes on housing demand

Hike of over 2 pc in home-loan rates to affect realty sector

Subscribe for Free!

To receive free emails or free RSS feeds, please, subscribe to Ravi Karandeekar's Pune Real Estate Market News Blog

For my blogs on real estate projects near Hinjewadi, real estate investment, advertising and other related topics, please, visit and join my Ravi Karandeekar's Pune Real Estate Blog Group

Sunday, January 31, 2010

Rising real estate prices - RBI expresses concern

In addition to its concern about food inflation cascading into a wider increase in prices, the Reserve Bank of India is worried about burgeoning asset prices.

The concerns have arisen as both capital markets and real estate prices are looking up.

RBI governor D Subbarao expressed his concerns about the rising real estate prices. “Increasing optimism about the recovery and high levels of liquidity are driving up real estate prices although they are still some distance away from the pre-crisis peaks.”

This could mean that the central bank may raise risk weights/provisioning on bank loans to real estate going forward.

To read more, please, visit Not just food, RBI wary of asset price spiral as well

Subscribe for Free!

Monday, January 25, 2010

CRR hike for sure; interest rates may remain unchanged

Hike in CRR at this point may not immediately push up the borrowing costs for companies and individuals

I am fairly convinced that Reserve Bank of India (RBI) governor D. Subbarao will increase banks’ cash reserve ratio (CRR), or the portion of deposits that commercial banks are required to keep with the central bank, by at least half a percentage point in the 29 January review of monetary policy. This will probably be implemented in two stages and drain out about Rs22,000 crore of liquidity from the system

If RBI does not act now, it will have to resort to a larger dose of CRR and rate hikes later. The good news is that a hike in CRR at this point may not immediately push up the borrowing costs for firms and individual consumers as banks will continue to have appropriate liquidity.

Subbarao may refrain from raising interest rates even though many members of the technical advisory committee (TAC) on monetary policy at RBI, I am told, are rooting for an increase to rein in inflationary expectations.

To read more, please, visit Tamal Bandyopadhyay-livemint.com

The hollow men of monetary policy

Higher interest rates or CRR hikes not only curtail growth and employment, but also add to inflation by raising input costs. Policy pundits should know that, in fact, tight money is never a good idea

There is a cacophony of confused ideasand a deficit of genuine insight into how to fix India's runaway inflation. The mavens of the Reserve Bank of India or the Ministry of Finance, who sit in their air-conditioned offices poring over numerous numbers that pretend to tell India's economic story,should think twice — or more than that.

FALLING GROWTH

In their aggregation, these numbers mask the sheer complexity of the millions of micro-economies that make up India. Looking at these numbers and deciding that interest rates need to be raised (admittedly great for middle income savers) or that money supply has to be made tight, is simply the wrong way to go. Such an approach ignores the realities of Indian consumption and entrepreneurship.
To read more, please, visit Sumit K. Majumdar - The Hindu Business Line

Subscribe for Free!

Wednesday, October 28, 2009

Thanks to RBI! Property rates to go up!!
-How much?
Depends upon the liquidity and cash flow of the real estate developer

RBI's move may boost cost and reduce the demand:

The Reserve Bank of India’s move to ask lenders to set aside more funds to cover defaults on loans to property companies may boost costs at real estate developers and reduce demand for homes, company officials said.

The central bank yesterday ordered lenders to set aside an equal amount of their loans to cover for potential bad debts at property companies, an increase from 40 percent to help banks build a cushion against likely bad debts.

"Property developers may be forced to “pass on the prices to the end user," said DTZ’s Bhikshu. "This, combined with the sluggish sales of last few months, indicates that the sector’s recovery path could see some hurdles in near future." Read More

No asset bubble. It's turned around !

The Reserve Bank seeks to head off a real estate bubble, withdraws an earlier move to revive the sector..

According to Mumbai-based Housing Development and Infrastructure Ltd (HDIL), the third largest developer by market value, home prices may increase depending on the liquidity levels of companies.

“The new provisioning norm will make lending more expensive for developers, squeezing their profitability, and so those in need of cash flow may pass it on to buyers, leading to a rise in prices,” said Hari Pandey, vice-president, finance and investor relations, HDIL. Read More

Subscribe for Free!

Funds just got costlier for builders

Avoiding creation of another asset bubble:

The RBI’s credit policy announced on Tuesday appears intended to rein in an incipient bubble in the real estate sector. The provisioning requirement for loans to commercial real estate has been increased from 0.40% to 1%, implying costlier bank loans for the sector.

As most of the realty companies rely on bank funding, especially in times of financial crisis, this move could have an impact on the sector.

“As banks often keep a cushion for any regulatory changes in provisioning, this measure is more for bringing moderation in the realty sector. Since necessary reduction in prices has still not taken place and there is fair amount of money available for the sector, this step is to avoid creation of another asset bubble,” says M Narendra, executive director of Bank of India.

Too early:

Not unexpectedly, industry officials differ. According to Rajeev Talwar, executive director of DLF, “Stability in major parameters is a good sign, but increasing the risk weightage for commercial real estate is a negative signal, which is perhaps not required so early in the economic revival process.”
To read more, please, visit The Economic Times

Subscribe for Free!

Banks asked to make higher provisions on bad loans (to real estate!)

Indian banks could see their profitability being marginally impacted in the wake of the Reserve Bank of India directing them to set aside more funds as a cushion against losses on loans extended to builders and also to make more provisions on bad loans.

1% of a loan:

Banks will now have to set aside 1% of a loan given to commercial real estate as a provision, up from 0.4% now.

RBI governor D Subbarao has categorized such loans as those given to builders for construction of commercial properties like offices, malls, entertainment zones and hotels.

Interest rates to go up:

OP Bhatt, chairman, State Bank of India, said the interest rate on such loans would go up marginally. Most banks are disbursing loans to builders at prime lending rate (PLR) or at a spread over the PLR.

Low exposure:

Chanda Kochhar, CEO of ICICI Bank, said: “There is no issue of asset bubble as such. The provisioning of loans extended to commercial real estate was high previously. Subsequently, the credit flow to this sector fell, which impacted its activity. Now that the activity has picked up in this sector, RBI has raised provisioning requirement back to the old levels. But banks’ exposure towards commercial real estate sector is low. NBFCs and mutual funds are more active in this space.”

The provisioning for such loans was reduced from 1% to 0.4% after the collapse of Lehman Brothers caused credit lines across banks (globally) to freeze.

Low property prices?:

RBI said the hike in provisioning for such loans was largely due to an increase in the flow of credit to this sector and the extent of restructuring of loans.“Excess of credit to a particular sector is a concern for RBI, and thus, provisioning has been raised.

This will reduce easy access to money (for builders). Hopefully, it should result in builders lowering the price of property, something most have refrained from doing so far,” pointed out M Narendra, executive director, Bank of India.

Provision Coverage Ratio on Bad Loans:

Also, RBI has asked banks to improve the provision coverage ratio (PCR) on bad loans to 70%.

All banks follow asset classification norms, which ranges from 10% for sub-standard to 100% on loss loan. PCR is the overall provision on bad loans.

Simply put, PCR is the amount that the banks expect to forego from a loan if they have to write off that loan account.

However, Mr Bhatt, after a meeting with the RBI, said that banks have requested the regulator to review the entire model of asset classification. He indicated to the media that RBI may give banks more than one year to adhere to the 70% norm.

Among banks, SBI’s PCR is 38% and ICICI Bank’s is 55% as of March 2009, while PNB’s PCR stood at 90%. In fact, early this year, RBI had written to SBI asking it to raise its PCR to the industry average of 52%. But a lower PCR does not mean that the bank has not made adequate provision.
The Economic Times

Subscribe for Free!

The days of easy money may fade

RBI's Exit:

Reserve Bank governor Duvvuri Subbarao on Tuesday ended the soft monetary policy aimed at easing credit crisis last year as he began the exit by withdrawing liquidity boosting measures, becoming the third central banker in the world to do so after Australia and Israel.

This makes increase in lending rates imminent next quarter if consumer and asset prices remain high. He left key policy rates unchanged.

Exit of an easy money policy:

The governor withdrew a special facility making available funds from banks to mutual funds and finance companies, made it more expensive to lend to commercial real estate, forced banks to invest more in government bonds and asked lenders to set more funds for bad loans. The special facility was introduced last year to boost liquidity for firms in the financial sector after the credit markets froze.

But the RBI surprised the market in its choice of instrument to announce the exit of an easy money policy. The statutory liquidity ratio (SLR), which prescribes the percentage of deposits that banks are required to invest in government debt, has been raised to 25% from 24%, which Mr Subbarao said was a reversal of an exceptional measure.

Last year, at the height of the global credit crisis, the central bank had lowered the SLR to ease credit flow to industry.

RBI: Alarmed and Reassured:

RBI has introduced curbs on securitising loans and has announced a stress test for all banks next year.

While the governor was alarmed with the secular rise in prices of all asset classes, real estate, equities, gold and commodities, resurgent foreign portfolio, or FII flows of $14 billion in the first seven months appears to have reassured him that recovery will not be hit.

Lending to real estate:

The fact that year-on-year bank lending to real estate has grown 43% as on end-August had already sparked speculation that the RBI may act on these loans. As Mr Subbarao said, although the amount of credit to real estate is not very high, it has been the fastest growing.

By choosing to increase the extent of standard provisions that banks need to make on real estate loans, the RBI has discouraged fresh loans, yet at the same time has ensured that the capital adequacy ratio is not hit because of existing loans.

Managing the recovery:

The RBI has said that it expects activity in the service sector to grow with a lag and it also points out that inflation has returned to positive territory earlier than expected. The governor pointed out that the upside risks have already materialised. Attention has shifted from managing the crisis to managing the recovery.

To read more, please, visit The Economic Times

Interest rates set to rise, signals RBI

Subscribe for Free!

Interest rates set to rise, signals RBI

Interest rates are likely to start rising soon.....

Rising Inflation:

Interest rates are likely to start rising soon. This was clearly indicated by the second quarter review of the monetary policy, 2009-10, unveiled by RBI governor D Subbarao on Tuesday.

Releasing the review, the governor said that in the light of mounting inflationary pressure, which is projected to touch 6.5% by March 2010, the monetary policy's first priority would be to contain the inflationary expectation.

Repo, Reverse Repo Rate and Cash Reserve Ratio:

The RBI left all major policy rates like repo and reverse repo rates — the rates at which it lends to and accepts money from banks respectively — and cash reserve ratio (CRR) — the percentage of deposits banks are supposed to keep with the central bank — unchanged.

Easy Money :

But it took the first step towards rolling back its easy money policies, pursued for the past year to counter the economic slowdown. It terminated special liquidity facilities like credit refinance limits extended to banks against the loans given to exporters and mutual fund companies ahead of the original March 31, 2010 expiry date.

Statutory Liquidity Ratio;

The central bank also reversed its earlier decision to reduce the minimum required investment by banks in government securities from 25% to 24% of deposits. The statutory liquidity ratio is now once again 25%. As most banks have already invested more than 25% in government securities, this decision will not have an immediate impact on the availability of funds, but these measures clearly indicate the RBI's intent to discontinue the accommodative monetary policy.

Stimulus Packages:

Responding to the measures, finance minister Pranab Mukherjee said that the RBI's assessment, on the whole, is in conformity with the government's thinking on both fiscal policy and monetary policy. However, he said the government would continue with the stimulus packages till the economy is back on a firm recovery path.

Economic Growth :

Finance minister also disagreed with RBI's projection of 6% economic growth with an upward bias for 2009-10. He said he would prefer to go with the growth projection of 6.5% to 6.75% given by the prime minister's economic advisory council in its mid-year review.

Prime Lending Benchmark System:

Pranab Mukherjee further hoped that with the new prime lending benchmark system likely to be introduced soon, the lending rates would become more transparent and competitive. This would make the banks lend at lower rates with lesser margin over the cost of funds.

To read more, please, visit The Times of India

Subscribe for Free!

Tuesday, October 27, 2009

Interest rates unlikely to go up (immediately)

"Instead of focusing on policy rate change, take steps to arrest rising consumer prices"

RBI's policy rate change:

Industry and individual borrowers can rest assured that any tweak in the RBI's policy rate on Tuesday may not have immediate bearing on their pockets, economists and policymakers said.

Enough funds to lend:

"There is enough liquidity in the system while deposit rates in banks currently are quite high at 20% in comparison to the credit rate of 14%," said D H Pai Panandiker, head of think tank RPG Foundation. This alone will ensure surplus funds to lend and would also keep a check on the interest rates, he added.

Prime Minister's Office:

Sources in the finance ministry said the central bank was unlikely to make any changes in the current interest rate regime as the government had conveyed to RBI governor D Subbarao that it was not in favour of an exit policy on stimulus till global recovery was in sight.

To read more, please, visit The Times of India

Subscribe for Free!

Saturday, September 19, 2009

Builders must make a public disclosure of the land mortgaged to banks - RBI cracks whip

Builders should reveal land mortgaged to banks in advertisements, brochures and pamphlets of their housing projects

Developers generally mortgage their land to banks to get construction loans. Many consumers are not aware of this when they book flats in such projects.

If the builder defaults in repaying the loan to the bank after the flats are sold and building occupied, the bank could take over a portion of, say a garden plot, in the housing society. The society may also find it difficult to get the land conveyed in its name. However, the bank is not entitled to attach a flat already sold by the builder.
To read more, please, visit - RBI cracks whip on builders

Subscribe for Free!

Friday, September 18, 2009

Interest rates may go up by year-end

“RBI particularly has to guard against inflation”

The economy is showing the signs of recovery and interest rates are set to rise by the end of the current fiscal, said C Rangarajan, chairman of the Prime Minister’s Economic Advisory Council.

“The improvement in credit off-take will push up demand for credit, as the economy recovers. Interest rates may harden a little bit by end of the fiscal,” he said at a conference on global economic meltdown on Thursday. Read More

Economists see inflation hitting 7-8% by March 2010, prompting the Reserve Bank of India (RBI) to hike interest rates:

Consumer price index inflation has proved remarkably stubborn and there is a risk of further rises ahead. The RBI governor, Dr D Subbarao, has become more worried about inflation, raising the possibility that the cash reserve ratio of banks…will be hiked before the end of calendar 2009. Read More

Subscribe for Free!

Friday, March 6, 2009

ICICI Bank cuts interest rates only for new home loans

No interest rate cut for the existing customers!

New floating rate structure

1) Home loans less than Rs 20 lakhs:
New interest rate 9.75% as against 10% earlier

2) Between Rs 20-30 lakhs:
New rate 10% as against 10.5% earlier

3) Rs 30 lakhs and above:
11.5% as against 12% earlier.

To read about Canara Bank's offer, please, visit - The Economic Times

Saturday, January 3, 2009

Indian Real Estate Developers to meet the RBI Governor to demand more sops for the struggling real estate sector

Lower interest rates and restructured debt for the developers:

Representatives from the Confederation of Real Estate Developers Association of India (CREDAI) will be meeting the RBI Governor D Subbarao next week to demand more Government sops for the struggling real estate sector.

The developers are likely to push for lower interest rates and restructured debt for the developers.

Demands:

1) A restructuring of existing debt by way of Financial Institutions (FIs) granting a minimum moratorium period of 12 months

2) Reduced interest rates for home loan borrowers upto Rs 20 lakh should be increased to Rs 30 lakh for customers in metros only. (Pune is not a Metro!)

To read more, please, visit - indianexpress

Subscribe for free to receive hot Pune real estate news, views and reviews:

1) Ravi Karandeekar's Pune Real Estate Market News Blog

2) Ravi Karandeekar's Pune Real Estate Investment Blog

3) Ravi Karandeekar's Pune Real Estate Advertising and Marketing Blog

4) Ravi Karandeekar's Pune Real Estate Blog

5) Please, feel free to call me on my mobile +91 98600 44110! I enjoy talking, sharing my views and giving advice about buying property in Pune real estate market (so i do not charge anything for the first 8 minutes!)

6) Please, join me on Friendfeed, to share news articles, family photos, interesting links and videos and let us discover and discuss information!

Visit Ravi Karandeekar's Pune Real Estate Blog Group and join for free to receive updates of all blogs!

real estate Indian real estate Pune real estate Pune news Pune news Pune real estate news Pune real estate market Pune real estate market news blog Pune real estate blog Pune property blog Pune realty Pune real estate investment Pune real estate marketing upcoming and ongoing real estate projects in Pune current property rates in Pune latest real estate prices Ravi Karandeekar 91 98600 44110 Friendfeed Ravi Karandeekar\'s Pune Real Estate Blog Group Google Groups

Friday, January 2, 2009

RBI cuts key rates to stimulate economy

The Reserve Bank of India on Friday cut key policy rates. The repo and the reserve repo rate under the liquidity adjustment facility (LAF) has been cut by 100 basis points while cash reserve ratio (CRR) has been reduced by 50 bps.

Following this move, reverse repo stands at 4%, repo stands at 5.5% and CRR now stands at 5%. The cut in CRR will infuse Rs 20,000 crore in the system.

The market had widely expected RBI to cut the key lending rates. The cut in repo and reserve repo is with immediate effect while CRR cut will be effective from fortnight beginning January 17. Since August RBI cut CRR by 450 basis.

Repo rate is the rate at which banks borrow from RBI while the reverse repo is the rate which RBI gives banks for parking their surplus funds. These two rates are seen as the floor and the cap for daily call money movement.

The decisions would among other things infuse Rs 20,000 crore into the banking system.

Both reductions are effective immediately. The repo rate has been cut aggressively since mid-October last year as the central bank tried to minimise the knock-on effects of the global financial crisis.
The Economic Times

Equities to respond positively to fiscal and monetary measures

Indian equities on Monday are expected to positive cues from the combination of fiscal and monetary measures that are aimed at stemming a slowdown in the Indian economy.

Fund managers said while there are no major surprises in the fiscal stimulus package, the extent of measures used by the Reserve Bank of India to ease money supply in the banking system have been higher-than-expected.

Analysts said the CRR cut has come as a surprise, while the extent of repo rate cut has been has been higher than anticipated.

These measures are aimed at making loans cheaper and revive consumer borrowing in an economy that has been affected by a recession in major global economies.
The Economic Times

India Cuts Rates, Unveils Stimulus Package

Subscribe for free to receive hot Pune real estate news, views and reviews:

ICICI slashes home loan rate

The largest home loan lender ICICI Bank has given a New Year gift to its borrowers. The bank has cut its home loan rate by half a percentage points to 11% for loan up to Rs 20 lakh and to 12.50% for loan more than Rs 20 lakh.

Despite the cut in the rate, the home loan offered by the bank will be costlier than its rival HDFC Ltd and other public sector banks.

The bank on Wednesday has cut its floating reference rate by 50 basis points to 13.75% from 14.25%. The bank has also cut its deposits rates by up to 75 basis points. In August 2008, the bank had increased its home loan rates by one percentage point. This is the first time the bank has responded to the liquidity infusion by RBI in last three months.

Public sector banks like State Bank of India, Punjab National Bank, Union Bank of India and others have already cut their lending rates by up to 150 basis points since RBI infused liquidity in the financial system. The home loan rates offered by large government-owned banks like SBI, PNB, UBI and Bank of Baroda vary between 9.5% and 11%.

HDFC Ltd, the second largest player in home loan market, has also cut its rate by half a percentage point to 10.25% for loan up to Rs 20 lakh and 11.25% for loan more than Rs 20 lakh. In fact, HDFC Ltd had not increased its rates as sharply as ICICI Bank when RBI had tightened the liquidity in the system during initial months of 2008. That is why, HDFC's home loan product is cheaper than that of ICICI Bank.

The rate cut will benefit the existing customers too as it will be passed on to them also. It will reduce the EMI of a 20-year loan by Rs 35 per lakh to Rs 1,136. That means, on a Rs 50 lakh loan for 20 years, the EMI will come down by 3% or Rs 1,772 to Rs 56,807. But, if somebody wants to continue to pay the same EMI and reduce the tenure of the loan repayment, the fall in the interest rate by half a percentage points from 13% to 12.5% will lead to reduction in the period by 28 months.

But as the bank has kept its home loan rates higher than the other banks, clearly suggests that it would not like to be very aggressive in the home loan segment. Till early 2007, ICICI Bank used to offer home loan at one of the lowest rates. But, later on it changed its focus as the liquidity situation tightened in the money market.

The bank has also cut its prime lending rates the benchmark rates for the corporate loan by half a percentage points to 16.75%.
The Times of India

Subscribe for free to receive hot Pune real estate news, views and reviews:

Wednesday, December 31, 2008

Now is the right time to work on reducing interest rates - K V Kamath, ICICI Bank

Existing and new ICICI Bank customers to get their new year gift in the form of a cut in interest rates

Forecasting that inflation is inching towards zero, ICICI Bank Managing Director and CEO K V Kamath on Tuesday suggested to the Reserve Bank to further cut key policy rates by 100 basis points as part of a calibrated move to usher in a low interest rate regime.

"I think just now let us start by cutting them (repo and reverse repo rates) by 1 per cent or so, and see what happens," he told when asked for what his advise would be for RBI to reverse the economic slowdown.

Kamath, who is also the President of the Confederation of Indian Industry, said, "It would be in everybody's interest to work interest rates down. Inflation clearly talked of being near zero. I think it is the right time to work on this front (reducing interest rates) now.

ICICI home loan interest rates:

As for the ICICI Bank customers, Kamath promised, they would get their new year gift in the form of a cut in interest rates.

"We are looking at cutting interest rates very early in January for our housing and other loan customers," he said.

The extent of the rate cut is being calibrated and would be announced soon, he said when asked if the rate could be more than 100 basis points.

ICICI had earlier this month reduced home loan rates for new customers by up to 1.5 per centage point. There are indications that the fresh cut in interest rates would benefit both existing and new customers.
To read more, please, visit - Cut key rates by 100 bps; usher in low-interest regime: Kamath

Friday, December 19, 2008

Banks must reset the interest rates for past borrowers - Union Home Minister P Chidambaram (ex-finance minister)

Even floating rates must come down!

Relief for Old Home Loan Borrowers:

The Union Government on Thursday said that it would continue to push for cheaper home loans even for the existing borrowers. Speaking in the Lok Sabha Union Home Minister P Chidambaram, who earlier held the finance portfolio, said the government has asked banks to cut interest rates on home loans.

Chidambaram's statement assumes importance as public sector banks on Monday said interest rate for fresh home loans of up to Rs 5 lakh will not exceed 8.5 per cent, while the lending rate is a maximum of 9.25 per cent for new housing loans in the bracket of Rs 5 lakh and Rs 20 lakh.

However, the existing borrowers did not get such relief.

"We are talking to the bankers. As the PLR is refixed, they must lend even to the past borrowers and reset the loans rates for past borrowers also. As the PLR is brought down even floating rates must come down," he said in reply to a debate in on review of the economic situation in the country.

Chidambaram said housing is an important sector and a major driver of the economy.

"Steel, cement, bricks, pipes, wires, electrical equipment, construction, labour everything depends on housing," he added.
To read more, please, visit - Govt asks banks to cut home loan rates, again

Subscribe for free to receive hot Pune real estate news, views and reviews:

Thursday, December 18, 2008

National Building Organisation to launch housing index by March '09

The Reserve Bank of India (RBI) has asked a government agency that collects statistics on the country’s housing construction activities to launch a housing start-up index by March 2009, to help it assess the impact of fiscal and monetary stimulus offered to revive the sector.

The index, to be launched by the National Building Organisation (NBO) under the ministry of housing & urban poverty alleviation, will offer reliable data to RBI and other government agencies, facilitating speedy decision making.

As housing is a sector with high forward and backward linkages, the proposed index will be useful in assessing demand and supply situations in other sectors, such as cement and steel.

The data for the proposed index would be collected on the basis of building permits issued by local authorities.
To read more, please, visit - The Economic Times

Subscribe for free to receive hot Pune real estate news, views and reviews:

India, with its strong drivers of growth, may escape the worst consequences of the global financial crisis - RBI

Trend and Progress of Banking in India, 2007-08

(If you wonder "Why banks are not cutting interest rates for home loans above Rs. 20 lakhs?", you can find answers in this report. Banks are not interested in the "risky ventures". However, RBI says, you are free to play the risky game of investing at unreasonably priced real estate on your own!

At the same time, Banks do not want property rates to come down because it will create "asset and liability mismatch"!)

Once the global situation is stabilised, confidence is restored, India would return to its high growth trajectory - RBI

Prevent asset-liability mismatches:

At present, the challenge is to meet the credit demand without impacting credit quality. Banks have to monitor their credit portfolios closely and take corrective action to prevent asset-liability mismatches, keeping a look at business cycles and monetary policy measures, RBI said.

Macroeconomic developments:

Banks need to ensure that their business decisions are guided by the long-term perspective of macroeconomic developments and are not unduly influenced by the current stream of exceptional events.

Credit to productive sectors:

However, RBI also urged banks to ensure that flow of credit to productive sectors does not get affected. Though the initial impact of the crisis in India has been limited, some tremor has been felt through the credit, equity and the foreign exchange markets, the report pointed out.

Deposits - safe & protected:

It also said that Indian financial market is safe and Indian depositors enjoy a high degree of protection. About 93% of deposit accounts and 61% of total assessable deposits were fully protected at March-end 2008.

Vigilance:

The report said that the major problems which financial institutions have faced internationally are illiquid assets, capital shortages and collapse of counter-party trust. In India, however, the situation is different. The central bank has been vigilant about the lessons emerging from the crisis.

The crisis suggests that risk management and supervisory practices lagged behind financial innovations and emerging business models. The report notes that RBI has already put in place a system to mitigate liquidity risks at the very short-end, risks at the systemic level and at the institution level.

Risk management in Indian banking system:

Talking about the Indian banking system, the report said that risk management in India has been made more granular and prudential norms for off-balance sheet exposure of banks have been prescribed. In order to further strengthen capital requirements, the credit conversion factors, risk weights and provisioning requirements for specific off balance sheet items, including derivatives, have been reviewed.

Synthetic securitization:

In India, complex structured products, such as, synthetic securitization, have not been permitted so far. Introduction of such products, when found appropriate, would be guided by the risk management capabilities of the system. Exposures of banks to synthetic security derivatives are the main cause of the global financial crisis.
The Times of India

Thursday, September 5, 2013

Reserve Bank of India's (RBI's) Notification to All Scheduled Commercial Banks about 20:80 Schemes - a.k.a. - Advance Disbursement Facility (ADF) - No EMI (Pre-EMI) till Possession:

Collapsing Rupee, Collapsing Economy & RBI:

Builders & Politicians - Pimps of Global Financial Firms:

RBI's Notification:

Updates:

Related Stories:

Subscribe for Free!

Feel free to call me:

Tuesday, April 20, 2010

Real estate Developers do not foresee any increase in home loan rates:

Related Story:

Subscribe for Free!

Sunday, January 31, 2010

Subscribe for Free!

Monday, January 25, 2010

The hollow men of monetary policy

Subscribe for Free!

Wednesday, October 28, 2009

RBI's move may boost cost and reduce the demand:

No asset bubble. It's turned around !

Related Stories:

Subscribe for Free!

Avoiding creation of another asset bubble:

Too early:

Related Stories:

Subscribe for Free!

1% of a loan:

Interest rates to go up:

Low exposure:

Low property prices?:

Provision Coverage Ratio on Bad Loans:

Related Stories:

Subscribe for Free!

RBI's Exit:

Exit of an easy money policy:

RBI: Alarmed and Reassured:

Lending to real estate:

Managing the recovery:

Related Story:

Subscribe for Free!

Interest rates are likely to start rising soon.....

Rising Inflation:

Repo, Reverse Repo Rate and Cash Reserve Ratio:

Easy Money :

Statutory Liquidity Ratio;

Stimulus Packages:

Economic Growth :

Prime Lending Benchmark System:

Subscribe for Free!

Tuesday, October 27, 2009

RBI's policy rate change:

Enough funds to lend:

Prime Minister's Office:

Subscribe for Free!

Saturday, September 19, 2009

Builders should reveal land mortgaged to banks in advertisements, brochures and pamphlets of their housing projects

Subscribe for Free!

Friday, September 18, 2009

Subscribe for Free!

Friday, March 6, 2009

No interest rate cut for the existing customers!

New floating rate structure

Saturday, January 3, 2009

Lower interest rates and restructured debt for the developers:

Demands:

Related Stories:

Subscribe for free to receive hot Pune real estate news, views and reviews:

Friday, January 2, 2009

Equities to respond positively to fiscal and monetary measures

Related Story:

Subscribe for free to receive hot Pune real estate news, views and reviews:

The largest home loan lender ICICI Bank has given a New Year gift to its borrowers. The bank has cut its home loan rate by half a percentage points to 11% for loan up to Rs 20 lakh and to 12.50% for loan more than Rs 20 lakh.

Despite the cut in the rate, the home loan offered by the bank will be costlier than its rival HDFC Ltd and other public sector banks.

Subscribe for free to receive hot Pune real estate news, views and reviews:

Wednesday, December 31, 2008

Existing and new ICICI Bank customers to get their new year gift in the form of a cut in interest rates

Forecasting that inflation is inching towards zero, ICICI Bank Managing Director and CEO K V Kamath on Tuesday suggested to the Reserve Bank to further cut key policy rates by 100 basis points as part of a calibrated move to usher in a low interest rate regime.

ICICI home loan interest rates:

Related Stories: