Saturday, July 30, 2011
Tuesday, July 5, 2011
Loan market hit but not out
Sunitha Natti - Express News Service - Last Updated : 03 Jul 2011 01:25:02 PM IST
On June 16, the Reserve Bank of India increased key rates for the tenth time in 16 months, and mortgaged India let out a collective curse. Bangalore-based software professional Mahesh Kumar, who had taken a housing loan of Rs 29 lakh at a floating interest of 9.25 per cent in May 2010, was one of those who cursed. He was slated to pay Rs 26,850 as EMI when he started; he’ll now be forking out Rs 31,900. With the cumulative increase of prime lending rates by 275 basis points since March 2010 (where 100 basis points equal 1 per cent), borrowers like Kumar are being forced to pay much more than anticipated while prospective buyers prepare to postpone their dreams.
Dena Bank ups lending rates by 25 bps to 15.25%
Published on Fri, Jul 01, 2011 at 20:31 | Source : PTI
Medium-sized state-run lender Dena Bank today became the second bank to raise its base rate by 25 basis points or 0.25 percentage points to 10.2%.
The bank has also upped its benchmark lending rate by a similar quantum to 15.25%, the lender said in a release here. The new rates will be effective tomorrow.
Since the Reserve Bank had raised its key policy rates 25 bps at its mid-quarter policy review on June 16--the tenth hike since March 2010 during which time it has upped the short-term lending and borrowing rates a by whopping 250 basis points to 7.5% and 6.5% respectively to batten down inflation--many banks have hinted at upping their base rates.
Yesterday the Bangalore-based state-run lender Canara Bank became the first lender to do so, when it raised its base rate and lending rates by 25 bps to 10.25% effective July 1 and the benchmark lending rate by a similar amount to 14.5%, attributing it to rise in the cost of funds.
NHB says oversupply condition in housing market, hints at price correction
Jul 01 2011 , New Delhi
National Housing Bank, a wholly-owned entity of Reserve Bank of India, in its report on the housing finance market in 2010 released on Friday, has said there is an oversupply condition in the residential property sector, and held out the possibility of a price correction if present trends continue.
The report “Trend and progress of housing in India” highlights important trends like growing competition in the primary housing finance market in terms of marketing and innovative products, and high food inflation which has led to low bank credit for most of 2010.
Launching the report, chairman and managing director of National Housing Bank, RV Verma, said, “The housing market is seeing an oversupply condition and if present trends continue, then a price correction is very near.”
Emphasising the need to improve accessibility and affordability of housing finance for the middle- and low-income groups, Verma said, “NHB is exploring the possibility of introducing a mortgage guarantee product in the country in collaboration with some international partners including IFC and ADB to improve accessibility and affordability of housing finance.”
The bank, which follows the July-June financial year, has fixed the refinancing disbursement target for 2011-12 at Rs 12,500 crore against Rs 11,723 crore last financial year.
“NHB’s disbursements in the last financial year reached an all-time high of Rs 11,723 crore against Rs 8,108 crore in 2009-10,” Verma said.
The report mentions that outstanding housing loans increased to Rs 1,53,188.73 crore at the end of March 2010 against Rs 1,26,823.50 crore in March 2009, a growth of 20.79 per cent year-on-year. Rural lending increased from 13.12 per cent in 2008-09 to 16.25 per cent in 2009-10.
Verma said the Central Registry of Securitisation Asset Reconstruction and Security Interest of India (Cersai), a government company under Section 25 of the Companies Act, 1956, has been incorporated for the purpose of operating and maintaining the central registry of loan disbursements under the provisions of the SARFAESI Act, 2002.
Explaining the initiative, Verma said, “The objective of setting up the central registry is to prevent frauds in loan cases involving multiple lending from different banks on the same immovable property. We have registered 166 leading institutions till now that provide data on loan disbursals.”
The registry became operational on March 31, 2011 and all transactions made on or after March 31 will have to be registered with Cersai.
NHB, which completed its accounting year on June 30, also released its RESIDEX index, which covers residential property prices in 15 cities. The index shows that majority of the cities have witnessed a price correction of 2-3 per cent.
Explaining the condition, Verma said, “The correction may be due to the interest rate hike and slackening demand or because prices have already peaked in some of the cities, which means they can either plateau or come down.'
National Housing Bank, a wholly-owned entity of Reserve Bank of India, in its report on the housing finance market in 2010 released on Friday, has said there is an oversupply condition in the residential property sector, and held out the possibility of a price correction if present trends continue.
The report “Trend and progress of housing in India” highlights important trends like growing competition in the primary housing finance market in terms of marketing and innovative products, and high food inflation which has led to low bank credit for most of 2010.
Launching the report, chairman and managing director of National Housing Bank, RV Verma, said, “The housing market is seeing an oversupply condition and if present trends continue, then a price correction is very near.”
Emphasising the need to improve accessibility and affordability of housing finance for the middle- and low-income groups, Verma said, “NHB is exploring the possibility of introducing a mortgage guarantee product in the country in collaboration with some international partners including IFC and ADB to improve accessibility and affordability of housing finance.”
The bank, which follows the July-June financial year, has fixed the refinancing disbursement target for 2011-12 at Rs 12,500 crore against Rs 11,723 crore last financial year.
“NHB’s disbursements in the last financial year reached an all-time high of Rs 11,723 crore against Rs 8,108 crore in 2009-10,” Verma said.
The report mentions that outstanding housing loans increased to Rs 1,53,188.73 crore at the end of March 2010 against Rs 1,26,823.50 crore in March 2009, a growth of 20.79 per cent year-on-year. Rural lending increased from 13.12 per cent in 2008-09 to 16.25 per cent in 2009-10.
Verma said the Central Registry of Securitisation Asset Reconstruction and Security Interest of India (Cersai), a government company under Section 25 of the Companies Act, 1956, has been incorporated for the purpose of operating and maintaining the central registry of loan disbursements under the provisions of the SARFAESI Act, 2002.
Explaining the initiative, Verma said, “The objective of setting up the central registry is to prevent frauds in loan cases involving multiple lending from different banks on the same immovable property. We have registered 166 leading institutions till now that provide data on loan disbursals.”
The registry became operational on March 31, 2011 and all transactions made on or after March 31 will have to be registered with Cersai.
NHB, which completed its accounting year on June 30, also released its RESIDEX index, which covers residential property prices in 15 cities. The index shows that majority of the cities have witnessed a price correction of 2-3 per cent.
Explaining the condition, Verma said, “The correction may be due to the interest rate hike and slackening demand or because prices have already peaked in some of the cities, which means they can either plateau or come down.'
Subscribe to:
Posts (Atom)