Month: December 2013

Kotak Bank slashes home loan rates by 0.25%

Mumbai, Dec 24, PTI

Private sector lender Kotak Mahindra today followed State Bank of India and mortgage major HDFC by announcing a rate cut of up to 0.25 per cent on their housing loans for a limited period.

Accordingly, new home loans under Rs 75 lakh will be available at 10.25 per cent per annum, down from the earlier 10.50 per cent, while ones above Rs 75 lakh will cost 10.75 per cent as against the earlier 10.90 per cent.

The reduced interest rates will be applicable till January 31.

“The rate cut is driven largely by the scenario in the market place, a reduction in our cost of funds and our expectations from the future,” its executive vice president and head of retail assets, Sumit Bali, said announcing the rate cut.

The move follows similar ones announced by the country’s largest lender State Bank of India and mortgage major HDFC over the past week, ever since the RBI decided on a status quo in its mid quarter policy review.

When asked about the impact on margins as a result of this move, he said the rise in volumes will help the bank hold on to the current margins.

ICICI Bank cuts home loan rates

Hindustan Times, 23 Dec 2013.

India’s largest private sector lender, ICICI Bank, has cut its home loan rates for new customers by 15 basis points or 0.15 percentage points, as a part of a special scheme. It will be valid till January 31, 2014.

Under the scheme, the bank will offer home loans up to Rs. 75 lakh at an interest rate of 10.25%, while loans above Rs. 75 lakh will be charged 10.50%, the bank said in a statement on its website.

The move comes shortly after India’s largest lender, State Bank of India, and private sector lender Housing Development Finance Corp (HDFC) reduced their home loan rates a few days ago.

SBI is charging an interest rate of 10.15% for all home loans up to Rs. 75 lakh and 10.30% for loans above Rs. 75 lakh. It also announced a further 5 basis points or 0.5 percentage point discount for women borrowers. The bank was earlier charging an interest rate of 10.30% for loans up to Rs. 30 lakh and 10.50% for loans above Rs. 30 lakh.

HDFC also announced a “winter bonanza” scheme – providing home loans up to Rs. 75 lakh at 10.25%.

The rate cuts come after the RBI’s surprise decision last week to hold its key interest rates in its mid-quarter monetary policy review on December 18.

The repo rate, or the rate at which RBI lends to banks, was left unchanged at 7.75%, as RBI governor Raghuram Rajan indicated that his focus may shift to the slowing growth in the economy.

Rajan also indicated that  the bank would act again if food inflation does not translate into a significant reduction in headline inflation in the next round of data.

Banks look at women to check home loan NPA

Kumud Das, TNN, 21 Dec 2013

INDORE: Females have outnumbered their male counterparts, while approaching banks and financial institutions for seeking home loans. The simple reason being the large incentives banks are offering the females. Facing with problem of mounting NPAs (non-performing assets), bankers feel that disbursing loans to women are always safe.

In Indore alone, NPA in home loan was at 8-9% as on September 30, compared to the mark of 5-6% prevailing during the corresponding period last year.

While the country’s largest lender State Bank of India (SBI) has brought down its interest rate to 10.15%, the effective rates in case of women borrowers has been further brought down by the lender to 10.10%. In case of the mortgage lender, LIC Housing Finance, the rates for women borrowers are already lower by 0.50%, when compared to their male borrowers, at 10.25%.

LIC Housing Finance (LICHF), which was the first to lower its interest rate for its women borrowers two years ago in the name of Bhagyalakshmi scheme, has projected the target of crossing the mark of Rs 500 crore by the end of the fiscal. Senior manager, LICHF in Indore, Pradeep Chakrabarty, said, “We have already achieved the mark of Rs 325 crore and we expect to take it to Rs 500 crore by March next year as against the mark of Rs 405 crore which had been achieved by us during the last fiscal”.

Lead district manager of Indore, Satish Sant, said, “There are two direct advantages having women as borrowers. First, they rarely change their residential address and secondly, they make sure that EMI was being paid in time”.

Branch manager of recently opened all women, Bharatiya Mahila Bank in Indore, A K Dubey, said, “We are also looking for more and more women borrowers to come forward for home loans. “

Talking to TOI, chairperson of SBI, Arundhati Bhattacharya, said, “We want to encourage more women to become co-borrowers for home loan. Secondly, we want to help women entrepreneurs overcome the problem of collaeral”.

Regional manager of Bank of Baroda, R K Soni, said, “More than 50% of our home loan borrowers do have women as co-borrowers and our total outstanding to the sector as of now stands at Rs 400 crore”.

CMD of National Housing Bank, R V Verma, said, “We have recently launched a refinance scheme for banks/mortgage lenders for women borrowers in which we charge interest rate less by 0.5-0.75%. The idea is to see making homemakers as home owners too.”

State Bank of India may cut new home loan rates by 15-25 bps

19 Dec 2013, ET Bureau.

MUMBAI: State Bank of India has decided to lower home loan rates for new borrowers and offer a special discount to women, in moves prompted by the Reserve Bank of India keeping policy rates unchanged on Wednesday contrary to expectations that they would be increased.

The country’s largest bank has decided to lower rates by 15-25 basis points (bps) and raised the borrowing limit for loans at the lowest rate. One basis point is one-hundredth of a percentage point.  are expected to kick in shortly.

“The reduction in the risk weightage and poor demand for loans has been the key reason for SBI to reduce rates,” said a senior SBI official.

Move may Help Realty Sector

The move might lead to a revival of interest in the real estate sector, which has been hit by high prices amid a sluggish economy

SBI will charge 10.15% on loans up to Rs 75 lakh and 10.30% on loan amounts higher than that. Women borrowers will get a further 5 bps off. Earlier, the bank charged 10.30% for loans up to Rs 30 lakh and 10.50% for loans above that level.
The move to lower rates and offer discounts to women comes as Housing Development Finance Corporation(HDFC), the country’s biggest mortgage company, did the opposite about two weeks ago. It raised rates by 10 bps to 10.5% for loans up to Rs 30 lakh ..

“The aim is to attract customers and improve market share,” said an SBI official who did not want to be named. The decision to reduce rates had been taken at a meeting of the high-level asset liability committee, he said. SBI has a home loan book of Rs 1,30,034 crore that comprises 13.6% of the bank’s loan book.

The move to raise the borrowing limit at the minimum rate to Rs 75 lakh from Rs 30 lakh comes after RBI changed its policy on risk weightage.

In June, RBI reduced risk weightage to 50 bps for home loans up to Rs 75 lakh, and 75 bps for loans above 75 lakh. Earlier, risk weightage was in three slabs – 50 bps for loans up to Rs 30 lakh, 75 bps for loans up 75 lakh and 125 bps for loans above Rs 75 lakh

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