Almost all the news paper published news that State Bank of India (SBI) might withdraw its special home loan schemes. Country’s largest lender SBI sources has clarified that it has no plans to revise its most popular home loan scheme under which it is charging 8 per cent interest for the first year.
The bank source has issued the clarification in view of reports published in various newspapers stating SBI might withdraw the scheme from November 7.
The bank added, “News reports have been appearing in various newspapers across the country indicating that SBI plans to withdraw its special home loan schemes carrying an interest rate of 8 per cent for the first year of the repayment period. SBI has no immediate plans to revise interest rates on home loans”.
Bank had launched the scheme in February after which other banks due to increasing pressure followed the suite. SBI is giving the same offer for auto loans too.
Earlier when SBI announced the scheme in February, the offer was valid till April-end; later on the scheme was extended till September. The bank has further extended the scheme but has not set any deadline for its closure.
Friday, November 6, 2009
Monday, October 26, 2009
Central Bank restructuring home finance arm before selling
Central Bank of India, Mumbai-based public sector lender is in the process of restructuring its home finance subsidiary, Centbank Home Finance, for this the bank has appointed Ernst and Young for advice on restructuring and valuation. The bank has an aim to raise the valuation of the mortgage company before selling it.
In this process bank will be buying the shares of other shareholders in the home finance arm. According to Central Bank executive bank has already started negotiating with other shareholders. The bank plans to sell home finance arm over the next two years.
In the home finance arm Central Bank is having a 59.5 per cent stake in the subsidiary while UTI and National Housing Bank have 16 per cent each. Hudco is holding the remaining 8.5 per cent stakes. Central Bank has nominated five directors on the board of Centbank Home Finance, while Hudco, NHB and UTI have nominated one director each.
At present the home loan company capital base amount to Rs 20 crore while the net worth is Rs 48 crore. During 2008-09, the mortgage company's net profit was Rs 3.18 crore. By the end of March its gross outstanding loans stood at Rs 257.88 crore.
In the current financial year, Centbank Home Finance has decided to disburse around Rs 150 crore, which will be twice the amount sanctioned last year. It will be also increasing the average loan amount to Rs 10-15 lakh from the present level of Rs 3 lakh.
Recently Central Bank gave a credit line of Rs 100 crore in order to increase the profitability of Centbank Home which would partly be used to repay the entire debt of NHB.
As a restructuring exercise the head office of Centbank Home office has been shifted to Mumbai from Bhopal.
Several public sector banks who has opened separate home loan arm have exited or are in the process of exiting the business to avoid duplication ad they are already offering home loans.
Earlier in May, Punjab National Bank had sold 26 per cent in its home loan arm, PNB Housing Finance, to Dawnay Day, with an option to sell another 25 per cent. IDBI Bank is also in the process of selling its home loan subsidiary.
In this process bank will be buying the shares of other shareholders in the home finance arm. According to Central Bank executive bank has already started negotiating with other shareholders. The bank plans to sell home finance arm over the next two years.
In the home finance arm Central Bank is having a 59.5 per cent stake in the subsidiary while UTI and National Housing Bank have 16 per cent each. Hudco is holding the remaining 8.5 per cent stakes. Central Bank has nominated five directors on the board of Centbank Home Finance, while Hudco, NHB and UTI have nominated one director each.
At present the home loan company capital base amount to Rs 20 crore while the net worth is Rs 48 crore. During 2008-09, the mortgage company's net profit was Rs 3.18 crore. By the end of March its gross outstanding loans stood at Rs 257.88 crore.
In the current financial year, Centbank Home Finance has decided to disburse around Rs 150 crore, which will be twice the amount sanctioned last year. It will be also increasing the average loan amount to Rs 10-15 lakh from the present level of Rs 3 lakh.
Recently Central Bank gave a credit line of Rs 100 crore in order to increase the profitability of Centbank Home which would partly be used to repay the entire debt of NHB.
As a restructuring exercise the head office of Centbank Home office has been shifted to Mumbai from Bhopal.
Several public sector banks who has opened separate home loan arm have exited or are in the process of exiting the business to avoid duplication ad they are already offering home loans.
Earlier in May, Punjab National Bank had sold 26 per cent in its home loan arm, PNB Housing Finance, to Dawnay Day, with an option to sell another 25 per cent. IDBI Bank is also in the process of selling its home loan subsidiary.
Thursday, August 13, 2009
Stimulus package offered to PSBs by govt. boosted housing loan demand
The benefits of government’s first initiative taken to boost the realty sector in the form of special home loan package are visible. As per the latest data released by RBI there has been a growth of 353% i.e. four times growth in housing loan distribution during three months ended May 2009 in comparison to the average 53% decline in the previous three quarters.
Bank of India executive director M Narendra said, “It was a right step to introduce the stimulus package. This helped to ease out the risk of interest rate volatility for at least the initial years”. He added unless there is growth in housing, real estate and construction sectors the core sectors like steel and cement can not grow.
In December 2008 the home loan rates were around 11% therefore to boost realty sector special housing loan scheme was announced. Under this the public sector banks were given a special incentive package to offer home loans at low interest rate.
Under the scheme housing loans of up to Rs 5 lakh offered at 8.5% interest rate and for Rs 5-20 lakh the banks charged 9.25% for the first five years. Although this scheme was up till June 30, 2009. The scheme received gentle response in the initial stage. Later on in the month of April and May the demand started picking up due to which there was a growth of Rs 3,138 crore in housing loans during three months ended May 22 as against to Rs 693 crore in first three months of the scheme.
For instance Bank of India residential mortgage year-on-year (YoY) basis increased to 31% at the end of June 2009, as compared to 15% growth at the end of March 2009. Other banks also witnessed the similar growth.
IC Shetty, divisional manager of Canara Bank stated, “The response to the scheme showed the impending demand in the sector. April May and June saw the maximum loan applications”. The measure taken by the government showed the positive response of boosting housing demand which helped the homebuyers who were unable to fulfill desire of owning a house due to skyrocketing prices.
The low interest rates scheme not only attracted aspirant home buyers but also helped the developers in generating revenues. During August’08-March’09, hardly any houses were being sold but by April the demand picked up so much that almost 3-4 flats were being sold every week.
Bank of India executive director M Narendra said, “It was a right step to introduce the stimulus package. This helped to ease out the risk of interest rate volatility for at least the initial years”. He added unless there is growth in housing, real estate and construction sectors the core sectors like steel and cement can not grow.
In December 2008 the home loan rates were around 11% therefore to boost realty sector special housing loan scheme was announced. Under this the public sector banks were given a special incentive package to offer home loans at low interest rate.
Under the scheme housing loans of up to Rs 5 lakh offered at 8.5% interest rate and for Rs 5-20 lakh the banks charged 9.25% for the first five years. Although this scheme was up till June 30, 2009. The scheme received gentle response in the initial stage. Later on in the month of April and May the demand started picking up due to which there was a growth of Rs 3,138 crore in housing loans during three months ended May 22 as against to Rs 693 crore in first three months of the scheme.
For instance Bank of India residential mortgage year-on-year (YoY) basis increased to 31% at the end of June 2009, as compared to 15% growth at the end of March 2009. Other banks also witnessed the similar growth.
IC Shetty, divisional manager of Canara Bank stated, “The response to the scheme showed the impending demand in the sector. April May and June saw the maximum loan applications”. The measure taken by the government showed the positive response of boosting housing demand which helped the homebuyers who were unable to fulfill desire of owning a house due to skyrocketing prices.
The low interest rates scheme not only attracted aspirant home buyers but also helped the developers in generating revenues. During August’08-March’09, hardly any houses were being sold but by April the demand picked up so much that almost 3-4 flats were being sold every week.
Thursday, August 6, 2009
Can Fin Homes Ltd reduced home loan rates for fresh loans
Canara Bank subsidiary Can Fin Homes Ltd (CFHL), has reduced the home loan rates for fresh individual housing loans. The new rates have come into effect from 1 August, 2009.
According to CFHL release the company, in the current financial year has reduced the rates of second time.
As per revised interest rates on fresh loans rate will be 8.7 per cent for loans up to Rs 20 lakh, 9.00 per cent for loans above Rs 20 lakh to Rs 30 lakh and 9.75 per cent for loans above Rs 30 lakh.
The rates have been reduced under variable interest rate scheme and will be applicable for all repayment periods
For the current fiscal the company has set a target of disbursing loan of Rs 550 crore as against Rs 300 crore as of March 2009 at the growth rate of 83 per cent, the release stated.
According to CFHL release the company, in the current financial year has reduced the rates of second time.
As per revised interest rates on fresh loans rate will be 8.7 per cent for loans up to Rs 20 lakh, 9.00 per cent for loans above Rs 20 lakh to Rs 30 lakh and 9.75 per cent for loans above Rs 30 lakh.
The rates have been reduced under variable interest rate scheme and will be applicable for all repayment periods
For the current fiscal the company has set a target of disbursing loan of Rs 550 crore as against Rs 300 crore as of March 2009 at the growth rate of 83 per cent, the release stated.
Friday, July 31, 2009
FM says: Interest subsidy on home loans to be offered through banks
The interest rate subsidy for mid-segment housing loan is basically for the customers belonging to lower middle to middle income groups. Finance minister Pranab Mukherjee informed that the interest subsidy will be passed to the customers through commercial banks and housing companies which are registered with the National Housing Bank.
He added to boost the housing sector tax holiday benefit will be provided to it on the profits earned from projects which were approved between April 1, 2007 and March 31, 2008, if these projects are completed on or before March 31, 2012.
He said, ‘‘I expect the developers to pass on the benefit of tax holiday to home buyers by appropriately reducing their prices. I am sure that both the expenditure and tax-foregone initiatives would provide relief to a large segment of prospective home owners and help revive the real estate sector’’.
On Monday while speaking on the finance bill Congress MP from Mumbai (North) Sanjay Nirupam pointed out that 42.4% of Maharashtra’s population is living in urban cities and in last few years there has been increase in the migration to cities. Moreover the home loan rates are increasing sharply therefore it would be right to provide relief to the borrowers. Also providing an interest subsidy and a targeted tax break can give some support to the stranded real estate sector.
However on its part government has asked the real estate developers to lower prices so that housing becomes more affordable for the aam aadmi.
The housing loan subsidy is attached with a slew of other concessions such as exempting road repairs and maintenance from the sphere of service tax on the other hand the sunset clause for tax holidays for industrial parks has been extended for two years up to March 2011 to increase growth in infrastructure. However the FM made it clear that the service tax on new services and any alteration in the existing services announced in the Budget 2009-2010 will come into effect from September 1, 2009.
Renu Sud Karnad, Joint MD, HDFC Ltd stated, “It’s a welcome step from the government. The decision is sure to improve loan eligibility and affordability of a large section of the Indian middle class. It will also lead to increased activity with regard to real estate in the affordable housing segment which in turn will create employment’’.
He added to boost the housing sector tax holiday benefit will be provided to it on the profits earned from projects which were approved between April 1, 2007 and March 31, 2008, if these projects are completed on or before March 31, 2012.
He said, ‘‘I expect the developers to pass on the benefit of tax holiday to home buyers by appropriately reducing their prices. I am sure that both the expenditure and tax-foregone initiatives would provide relief to a large segment of prospective home owners and help revive the real estate sector’’.
On Monday while speaking on the finance bill Congress MP from Mumbai (North) Sanjay Nirupam pointed out that 42.4% of Maharashtra’s population is living in urban cities and in last few years there has been increase in the migration to cities. Moreover the home loan rates are increasing sharply therefore it would be right to provide relief to the borrowers. Also providing an interest subsidy and a targeted tax break can give some support to the stranded real estate sector.
However on its part government has asked the real estate developers to lower prices so that housing becomes more affordable for the aam aadmi.
The housing loan subsidy is attached with a slew of other concessions such as exempting road repairs and maintenance from the sphere of service tax on the other hand the sunset clause for tax holidays for industrial parks has been extended for two years up to March 2011 to increase growth in infrastructure. However the FM made it clear that the service tax on new services and any alteration in the existing services announced in the Budget 2009-2010 will come into effect from September 1, 2009.
Renu Sud Karnad, Joint MD, HDFC Ltd stated, “It’s a welcome step from the government. The decision is sure to improve loan eligibility and affordability of a large section of the Indian middle class. It will also lead to increased activity with regard to real estate in the affordable housing segment which in turn will create employment’’.
Thursday, July 9, 2009
Bankers say: “extremely unfortunate if the developers were to increase the home prices at this juncture”
Slowly the real estate market is coming up as banks have reduced lending rates and especially in home loan segment most of the banks are offering 8% interest for the first year therefore some of the big developers have started increasing prices. But on Tuesday leading bankers have warned the real estate developers against raising residential prices as any such move at this point can bring halt in the recovery market.
Mr Deepak Parekh, Chairman, HDFC, stated, “Certain top-rung developers have already started increasing prices, especially in mid-income projects, following the recent pick up in sales. Besides, with liquidity no longer a constraint, certain developers are seeking once again to increase their margins”.He stated that just now the real estate market has begun correcting itself and it will be “extremely unfortunate if the developers were to increase the home prices at this juncture.”
While speaking at Habitat Business Forum event organized by FICCI, Mr Parekh, expressed his uncertainty on whether existing developers might stay committed to affordable housing segment.
Mr S. Sridhar, Chairman and Managing Director, Central Bank of India, expressed the similar views. He said that it will be “short-sighted” in case the players think of raising prices thinking that the demand is coming back into the market.
According to Mr Sridh, “It is difficult to generalize but as a whole there is some more scope for downward adjustment in prices, or in certain places it should plateau. That will stimulate the demand. If the real estate players revise the prices upwards, it will stall the recovery process”.
He pointed out however, the demand for housing loans has picked up among the banks.
Mr Deepak Parekh, Chairman, HDFC, stated, “Certain top-rung developers have already started increasing prices, especially in mid-income projects, following the recent pick up in sales. Besides, with liquidity no longer a constraint, certain developers are seeking once again to increase their margins”.He stated that just now the real estate market has begun correcting itself and it will be “extremely unfortunate if the developers were to increase the home prices at this juncture.”
While speaking at Habitat Business Forum event organized by FICCI, Mr Parekh, expressed his uncertainty on whether existing developers might stay committed to affordable housing segment.
Mr S. Sridhar, Chairman and Managing Director, Central Bank of India, expressed the similar views. He said that it will be “short-sighted” in case the players think of raising prices thinking that the demand is coming back into the market.
According to Mr Sridh, “It is difficult to generalize but as a whole there is some more scope for downward adjustment in prices, or in certain places it should plateau. That will stimulate the demand. If the real estate players revise the prices upwards, it will stall the recovery process”.
He pointed out however, the demand for housing loans has picked up among the banks.
Friday, July 3, 2009
LIC Housing Finance launched new scheme for new customers
People who are planning to take home loan there is good news LIC Housing Finance has reduced interest rates for new customer.
A new scheme has been launched by LIC housing finance a three-year 'Fix-o-Floaty' scheme, under which the customers will get flexibility as well as protection against the volatilities of interest rate movement.
A press release issued by LIC stated in this scheme, the borrowers will have to pay a fixed interest rate of 8.9 per cent for loans up to Rs 75 lakh and 9.5 per cent for loans above of Rs 75 lakh for a period of three-years.
The release added after that, a floating rate prevailing at the end of three-years will have to be paid. This scheme will be effective from today.
The release added any time during the three-year initial period, the customer can opt for shifting to the floating interest rate without paying any additional charges.
The home loan borrowers who opt for floating rates ab-initio, the special offer rates for new customers for loans up to Rs 75 lakh will be 8.50 per cent, instead of 8.75 per cent to 9.75 per cent. While for loans above Rs 75 lakh, the rates will be 9.50 per cent as against 10.25 per cent earlier.
A new scheme has been launched by LIC housing finance a three-year 'Fix-o-Floaty' scheme, under which the customers will get flexibility as well as protection against the volatilities of interest rate movement.
A press release issued by LIC stated in this scheme, the borrowers will have to pay a fixed interest rate of 8.9 per cent for loans up to Rs 75 lakh and 9.5 per cent for loans above of Rs 75 lakh for a period of three-years.
The release added after that, a floating rate prevailing at the end of three-years will have to be paid. This scheme will be effective from today.
The release added any time during the three-year initial period, the customer can opt for shifting to the floating interest rate without paying any additional charges.
The home loan borrowers who opt for floating rates ab-initio, the special offer rates for new customers for loans up to Rs 75 lakh will be 8.50 per cent, instead of 8.75 per cent to 9.75 per cent. While for loans above Rs 75 lakh, the rates will be 9.50 per cent as against 10.25 per cent earlier.
Subscribe to:
Posts (Atom)