In Thiruvananthapuram HDFC Bank launched ‘home loan solutions in 30 minutes at your doorstep’. The main aim behind the extensive campaign of this scheme is to maximizing customer convenience in the State by providing doorstep assistance on home loans.
According to sources of the bank a set up has been developed consisting of 12 offices and strong team of over 300 HDFC sales personnel, to cater the housing needs of the home-seekers spread over 300 locations in the State within the shortest possible time by connecting with them.
Monday, May 26, 2008
Wednesday, May 14, 2008
RBI policy brings relief for home loan borrowers
The Reserve Bank of India's in its credit policy has given no indications for a rate hike and home loan borrowers can thus expect the status quo to be maintained on the interest rate front. The apex bank in its annual statement on the monetary policy for 2008-09 has not made any key changes, including the bank rate unchanged at 6.0 per cent while the reverse repo and repo rate at 6.00 per cent and 7.75 per cent respectively.
However the central bank has, hiked Cash Reserve Ratio (CRR) affected by 25 basis point, whereby scheduled banks will now be required to maintain CRR of 8.25 per cent beginning May 24, 2008. This means a drain of Rs 9,000 crore from the banking system. The RBI policy has projected GDP growth for 2008-09 in the range of 8.0-8.5 per cent and endeavors to bring inflation to around 5.5 per cent in 2008-09 from the current level of 7 per cent.
Expressing his views on RBI credit policy RV Verma, Executive Director, National Housing Bank said it as a neutral and positive policy which recognizes the need for growth. He said the CRR hike will not have a direct impact on interest rates. He added that the RBI in its policy has recognized the importance of supply and any increase in interest rates will hurt supply and bring cost push inflation.
Here the cost push factor is major rather than demand pull this clearly shows that the policy is trying to certain that supply does not get restricted because of want of credit. Another important feature in the policy of the apex bank has increased the priority sector lending for home loans from Rs 20 lakh to Rs 30 lakh and the risk-weight reduced for home loans up to Rs 30 lakh. Thus in the both growth and inflations has been balanced while recognizing the role of supply management in determining growth.
On the other hand Canara Bank chairman MBN Rao said in the current scenario home loan rates are unlikely to increase and borrowers can look forward for finer pricing for loans up to Rs 30 lakh, with a condition, banks maintain the reduced risk-weight and lower requirements of capital adequacy for such loans. The move is being considered as good because it will encourage more loans in this segment which will specially help the middle class. Giving views on policy Canara Bank Chief Economist Manoranjan Sharma described policy as good and justifiably hawkish. He said main concern was to address inflationary tendencies. Credit growth has been at about 30 per cent in the last three years.
Commenting on the policy V K Khanna, MD PNB Housing Finance said it will be good for home loan borrowers, specially the middle class, which may be given favored treatment in case of loans up to Rs 30 lakh. There will be a moderate liquidity control through the CRR hike, which will not have much impact. "I don't personally see any increase in rates," he adds. The CRR hike will be counterbalanced by the reduced risk weights on loans below Rs 30 lakh, he says. According to Punjab National Bank GM Arun Kaul the policy does not indicate any change in interest rates. The RBI wants to maintain the money supply at 17%, as against the actual money supply at around 22%. The main aim is to continue growth momentum without doing any changes in interest rates.
It would be premature to say anything about interest rates on home loans. Banks will wait and watch and depending on the incremental cost of deposits and liquidity, decide on interest rates.
While real estate developers like Boman Irani, MD, Keystone Group, feel the RBI's CRR hike has sucked Rs 8000 crore from the market, which means the money market will be tight and the real estate sector will be impacted. Irani feels that it would be too early to say anything one has to wait and watch to see whether the banks will affect an increase in interest rates, which will mean more pressure on home loan borrowers. On the whole, experts believe, that RBI's Credit Policy has acknowledged the slow down in the housing sector and its impact on the economy as a whole. Therefore, the central bank has decided to support the sector.
However the central bank has, hiked Cash Reserve Ratio (CRR) affected by 25 basis point, whereby scheduled banks will now be required to maintain CRR of 8.25 per cent beginning May 24, 2008. This means a drain of Rs 9,000 crore from the banking system. The RBI policy has projected GDP growth for 2008-09 in the range of 8.0-8.5 per cent and endeavors to bring inflation to around 5.5 per cent in 2008-09 from the current level of 7 per cent.
Expressing his views on RBI credit policy RV Verma, Executive Director, National Housing Bank said it as a neutral and positive policy which recognizes the need for growth. He said the CRR hike will not have a direct impact on interest rates. He added that the RBI in its policy has recognized the importance of supply and any increase in interest rates will hurt supply and bring cost push inflation.
Here the cost push factor is major rather than demand pull this clearly shows that the policy is trying to certain that supply does not get restricted because of want of credit. Another important feature in the policy of the apex bank has increased the priority sector lending for home loans from Rs 20 lakh to Rs 30 lakh and the risk-weight reduced for home loans up to Rs 30 lakh. Thus in the both growth and inflations has been balanced while recognizing the role of supply management in determining growth.
On the other hand Canara Bank chairman MBN Rao said in the current scenario home loan rates are unlikely to increase and borrowers can look forward for finer pricing for loans up to Rs 30 lakh, with a condition, banks maintain the reduced risk-weight and lower requirements of capital adequacy for such loans. The move is being considered as good because it will encourage more loans in this segment which will specially help the middle class. Giving views on policy Canara Bank Chief Economist Manoranjan Sharma described policy as good and justifiably hawkish. He said main concern was to address inflationary tendencies. Credit growth has been at about 30 per cent in the last three years.
Commenting on the policy V K Khanna, MD PNB Housing Finance said it will be good for home loan borrowers, specially the middle class, which may be given favored treatment in case of loans up to Rs 30 lakh. There will be a moderate liquidity control through the CRR hike, which will not have much impact. "I don't personally see any increase in rates," he adds. The CRR hike will be counterbalanced by the reduced risk weights on loans below Rs 30 lakh, he says. According to Punjab National Bank GM Arun Kaul the policy does not indicate any change in interest rates. The RBI wants to maintain the money supply at 17%, as against the actual money supply at around 22%. The main aim is to continue growth momentum without doing any changes in interest rates.
It would be premature to say anything about interest rates on home loans. Banks will wait and watch and depending on the incremental cost of deposits and liquidity, decide on interest rates.
While real estate developers like Boman Irani, MD, Keystone Group, feel the RBI's CRR hike has sucked Rs 8000 crore from the market, which means the money market will be tight and the real estate sector will be impacted. Irani feels that it would be too early to say anything one has to wait and watch to see whether the banks will affect an increase in interest rates, which will mean more pressure on home loan borrowers. On the whole, experts believe, that RBI's Credit Policy has acknowledged the slow down in the housing sector and its impact on the economy as a whole. Therefore, the central bank has decided to support the sector.
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