Home loan interest rates have come down to around 10.25 - 11% on amount up to Rs 30 lakh! Are you booking a 2 bhk compact flat at an affordable rate?

When i read the story "Construction poised to pick up: Demand for realty to get a boost again" written by Prabhakar Sinha in today's The Economic Times, i understood why Finance Minister P Chidambaram had whipped the public and private sector banks to reduce the home loan interest rates. F M knows well that you are tired of postponing booking a compact, luxurious, 2 bhk flat at an attractive rate.

F M knows that you want that car which comes as a free gift along with the flat. F M knows that Obama can change everything except outsourcing to India. F M loves you and he is doing his best to make you happy.

Real estate developers also love you. This time, builders have decided not to increase the property rates though there will be increase in demand. Builders are not only sacrificing their profits for you. They are sacrificing their future. Builders are going to use installments of your payment for construction, not for purchasing more land.

Most of the builders are thankful to you and your F M for giving them an opportunity to complete their dream projects. God bless you. God bless your housing finance company. God bless F M.

Related Stories:

1) Be ready to pay as much as 40% own contribution upfront if you are planning to buy a home on a bank loan

2) Diwali Offer: Buy 1 flat Get 1 free !

3) Is it the right time to invest in property?

4) Can our banks weather the financial crisis? - PSM Rao

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

The Reserve Bank of India (RBI) has kicked off an exercise to gauge the extent of bad loans of banks in the real estate segment

Impact of the subprime crisis in the US and Europe on Indian banks :

The latest exercise seems to be a follow-up on the meeting that RBI had with banks during the second week of September to discuss the impact of the subprime crisis in the US and Europe on Indian banks.

RBI officials wanted to assess whether Indian banks had any exposure to such loans while attempting to gauge the impact of the crisis on the broader Indian economy. In fact bankers have been told to keep central bank officials posted of any developments, including marker rumours.

Bad Home Loans :

RBI now wants to have a fix on the level of bad loans in the banking industry, especially relating to home loans and commercial property. It has commissioned a survey on bad loans in both residential mortgages and commercial real estate loans. The regulator has sought details on standard advances in the sector from banks for three fiscals — 2001-02, 2002-03 and 2003-04. RBI wrote to some banks on September 14, directing them to respond to queries by September 28, bankers said.

The impact of a higher interest rate :

Banks have been told to furnish details of bad loans generated during 2004-05, 2005-06 and 2006-07. RBI wants banks to submit details of all such loans at the end of March 31, 2005, 2006 and 2007. The impact of a higher interest rate on borrowers and consequent default gets reflected only with a bit of a lag. Bankers reckon that this could be the reason for the regulator calling for data of loans which had originated a few years ago.

Aggressive lending :

Commercial banks have, over the past four years, been lending aggressively to the real estate sector. In fact, for several banks lending to residential mortgages constitutes over 50% of their total retail exposure. Outstanding real estate loans for banks, according to RBI data, rose from Rs 13,546 crore in March 2005 to Rs 45,328 crore at the end of March 2007

During the last couple of years, RBI has clamped down excessive lending by banks to the real estate sector on fears of an asset price bubble.

Related Stories :

1. Role of the Reserve Bank of India(RBI) in the growth and slowdown of the Indian real estate market

2. "Sale of residential property dropped by over 70 percent in May-June 2007," the Associated Chambers of Commerce and Industry report

3. Rise and Fall of Subprime Lenders Began on Wall Street