Tag: home loan rates

ICICI Bank’s special festive offers for NRIs

Mumbai, Oct. 22:

ICICI Bank, India’s largest private sector bank, is offering flat processing fees on home loan to its Non-Resident Indian (NRIs) customers for the festive season.

The bank will charge a processing fee of Rs 5,000 on home loans up to Rs 75 lakh and Rs 10,000 on home loans above Rs 75 lakh, this up to October 31, 2013.

On loans below Rs 10 lakh, ICICI bank will charge a processing fee of 0.5 per cent on the loan amount. The bank also has a referral arrangement with ICICI Home Finance Co Ltd which provides property search facility in India.

Further, the private lender has also partnered with Thyrocare Technologies to give discounts on health check-ups offering 77 medical tests worth Rs 5,000 for Rs 1,500 for its NRI customers and their family members, the bank said.

Moreover, the bank’s NRI customers will get preferential rates on foreign currency conversion and a ‘no minimum balance savings accounts’ to resident family members of NRI customers

Rajiv Sabharwal, Executive Director, ICICI Bank, said, “These offers have been designed based on customer insights derived from serving 1.5 million NRI customers across more than 150 countries and processing over 2 lakh NRI transactions monthly.”

Syndicate Bank cuts interest rate on vehicle, consumer durable loans

Bangalore, Oct 22:  Business Line
Syndicate Bank has slashed the interest rate on vehicle loans, consumer durable loans and light and heavy commercial vehicle loans.

To commemorate its Foundation Day, the bank is offering home loans at 10.25 per cent (base rate) for both the existing and new borrowers irrespective of the loan amount.

Interest rate on two-wheeler loans for home loan borrowers has been reduced from 12.25 per cent to 11.5 per cent (base rate + 1.25 per cent). For others, it is 12 per cent (base rate + 1.75 per cent).

Interest rate on four-wheeler loans for home loan borrowers has been brought down from 10.9 per cent to 10.4 per cent (base rate + 0.15 per cent). Other borrowers will be charged at 10.75 per cent (base rate + 0.50 per cent).

Interest rate on loans to consumer durables has been brought down from 15 per cent to 11.75 per cent (base rate + 1.5 per cent) for home loan borrowers. For others, it is 12.75 per cent (base rate + 2.50 per cent).

Interest rate on loans to light and heavy commercial vehicles has also been brought down from 12.75 per cent to 11.5 per cent.

RBI ups repo rate by 25 bps; markets in free fall

Mumbai, Sept 20:  The Hindu Business Line

In his first credit policy since taking over earlier this month, the RBI Governor, Raghuram Rajan, has hiked the key policy repo rate.

The RBI has increased the policy repo rate under the liquidity adjustment facility (LAF) by 25 basis points from 7.25 per cent to 7.5 per cent with immediate effect.

It has also reduced the marginal standing facility (MSF) rate by 75 basis points from 10.25 per cent to 9.5 per cent with immediate effect. MSF is the rate at which banks borrow from the central bank.

The RBI has reduced the minimum daily maintenance of the cash reserve ratio (CRR) from 99 per cent of the requirement to 95 per cent effective from the fortnight beginning September 21, 2013, while keeping the CRR unchanged at 4.0 per cent.

Consequently, the reverse repo rate under the LAF stands adjusted to 6.5 per cent and the Bank Rate stands reduced to 9.5 per cent with immediate effect. With these changes, the MSF rate and the Bank Rate are recalibrated to 200 basis points above the repo rate.

“The need to anchor inflation and inflation expectations has to be set against the fragile state of the industrial sector and urban demand. Keeping all this in view, bringing down inflation to more tolerable levels warrants raising the repo rate by 25 basis points immediately,” RBI Governor, Raghuram Rajan, said in the mid-quarter policy review statement.

Highlights of the monetary policy review

Stock markets reacted negatively to the policy announcement. The Bombay Stock Exchange’s sensitive index Sensex dropped nearly 500 points to a level of 20,155 points at 11.30 a.m, minutes after the announcement. Except software majors – TCS, Wipro, Infosys and pharma major Sun Pharma,which were flat, all other constituents of the index were in the red.

The rupee opened at 62.04, moved up slightly to 61.88 before reversing and trading at 62.38 to the dollar at 11.32 a.m.

Cautious unwinding of exceptional measures

Explaining the rationale for its moves, the RBI said in a statement that it had earlier taken a number of exceptional measures to tighten liquidity with a view to dampening volatility in the foreign exchange market. These had the impact of raising the effective policy rate to 10.25 per cent, and were intended to maintain tight liquidity conditions till there was improved prospects of stable funding took efect. With the improvement in the external environment, the RBI is now in a position to contemplate easing these measures, it said.

Inflation high

Conceding that “inflation is high and household financial savings is lower than desirable”, the RBI hopes that a better harvest and negative output gap will help offset the consequences of the currency depreciation and inflation.

Costlier food items sent wholesale price inflation to a six-month high of 6.1 per cent in August.

Growth trailing

Stating that economic growth has weakened with continuing sluggishness in industrial activity and services, the RBI said the pace of infrastructure project completion is subdued and the start of new projects remains muted.

“Consequently, growth is trailing below potential and the output gap is widening. Some pick-up is expected on account of the brightening prospects for agriculture due to kharif output and the upturn in exports,” it said.

Rajan said concerns on the current account deficit have been mitigated by steps taken by the government and the RBI.

Also, steps have been taken to improve the environment for external financing, turning the focus to internal determinants of the value of the rupee, primarily the fiscal deficit and domestic inflation, he said.

“Further actions need not be announced only on policy dates. However, any further change in the minimum daily maintenance of the CRR is not contemplated,” he added.

LIC Housing Finance raises interest rates on home loans by 35 basis points

3 Sep 2013, ET Bureau

MUMBAI: LIC Housing Finance has raised interest rates on home loans by 35 basis points but has spared its existing customers from a rate hike. The company has not hiked its prime lending rates – the rate which is linked to floating rate that is charged to customers- to protect the existing customers. It raised rates on two of its schemes – Bhagyalashmi Plus and Super Choice – and has also launched a new scheme wherein it would charge a fixed interest rate of 11.50% for 10 years.

Under ‘Bhagyalakshmi Plus’ scheme aimed at women borrowers, LIC Housing would charge 10.35% against 10% charged in the past.

If the first borrower is not a woman, the person can opt for ‘Super Choice’ scheme wherein LIC would charge 10.60% against 10.25% charged earlier. In both these schemes – Bhagyalakshmi Plus and Super Choice’ scheme – rates are fixed for first two years and floating rate thereafter.

“We do not have any plan to raise interest rates in immediate future because it will only add to the burden of our existing customers,” said V K Sharma, MD and CEO of LIC Housing speaking to ET. “But the current rates are not sustainable as it is hurting our margins.” He said that the move by LIC HF is also aimed take care of shareholders interest since raising rates for new customers would ensure healthy margins.

In the recent weeks, after Reserve Bank of India tightened the liquidity in the system, private banks and housing Finance companies like HDFC has raised interest rates on the home rates. For instance HDFC floating rate home loan is pegged at 10.40% for loans below Rs 30 lakhs and 10.65% for loans between Rs 30 to 75 lakhs.

At present, it charges 10.60% for loans above below Rs 75 lakhs and 11.10% for loans between Rs 75 lakhs and Rs 3 crore.

Meanwhile, the housing finance company is mainly owned by LIC, launched a ‘New Fixed 10’ scheme wherein the customer wherein interest rates would be fixed for ten years at 11.50%. Further, the customers would have an option to shift to the floating rate loan after five years.

However those wishing to take fixed rate loan for the entire tenure of the loan, the company charges 12.50% under the scheme ‘sure fixed scheme’.

Lending rates to remain high in near term: Bankers

24 Mar 2013, PTI.

Borrowers troubled by elevated interest rates will have to wait for a bit longer for relief as bankers have virtually ruled out any immediate cut in the lending rates, citing high cost of funds.

The stance comes even after the Reserve Bank delivered two successive rate cuts of a cumulative 0.50 per cent this year.

“The basic thing that is required – the cost of deposits – is still in the higher side,” Union Bank of India Chairman and Managing Director D Sarkar said, explaining his bank’s inability to cut rates now.

Pratip Choudhary, the chairman of SBI, also said it is impossible for his bank to cut rates in the near term.

Many state-run banks, which generally rely on the costly bulk deposits to shore up their deposit bases unlike their private sector counterpart, which mop up the low-cost savings and current account deposits, have been ratcheting up their term deposit rates for the past few months.

The poor deposit collection problems for the state-run banks were compounded with finance ministry’s directive last year asking them to bring down their bulk deposit ratio to 15 per cent of their total deposits by March 31.

In a move that some experts saw as a sign of a weakness in deposit mobilisation, SBI upped its deposit rate offering by 0.25 per cent last month.

Deposits have grown only about 13 per cent during the fiscal, while credit has grown much faster at close to 17 per cent. In the absence of sufficient deposits, the credit deposit ratios for the banks go up, according to the latest RBI data.

The interest rate scenario has been at an elevated level for over two years now, after the RBI went on a 13 consecutive rate hikes between March 2010 and October 2011 with a view to fight double-digit inflation.

Allahabad Bank lowers home loan rate by 5 bps to lure high-end customers

13 Mar 2013, ET Bureau.

KOLKATA: State-run Allahabad Bank has lowered interest rate by 5 basis points to 10.25% for housing loans above Rs 30 lakh to attract new customers before the end of this fiscal.

State Bank of India, India’s largest bank, offers home loans above Rs 30 lake at 10.10% rate, while ICICI Bank’s rate for this high-value bracket is 10.5-75% a year. Kolkata-based Uco Bank offers home loan at 10.2% a year.

A senior official in Allahabad Bank said the bank has good demand for loans above Rs 30 lakh of late, while borrowers planning to take a loan less than Rs 25 lakh are deferring their decision to get the benefit of tax breaks announced in the budget.

The bank offers a 50% rebate in home loan processing fee. The government has proposed that a person taking first home loan up to Rs 25 lakh would get an additional Rs 1 lakh deduction of interest over and above the present deduction of Rs 1.5 lakh. To get the benefit, loan needs to be availed in 2013-14 and the value of the property has to be below Rs 40 lakh.

Home loans will grow 20% on rate cuts: National Housing Bank

24 Oct 2012, ET Bureau.

MUMBAI: Housing finance regulator National Housing Bank expects a growth of 20% in loans this fiscal, up from 17% in 2011-12, with lenders slashing rates and reducing other charges. Mortgage lending business has become competitive with state-run banks aggressively cutting rates and waiving processing fees, besides doing away with the pre-payment penalty, making it easier for borrowers to switch lenders.

“Some banks are very aggressive in terms of lowering of interest rates,” said NHB chairman and managing director RV Verma. “The lowering of base rates and abolition of some of the fees have made the whole environment competitive and, going forward, we do not rule out further price wars among the banks and HFCs (housing finance companies),” Verma said.

Banks have the benefit of lower cost of funds through strong deposit franchise, while HFCs are constrained by higher cost of funds as they borrow from banks and other sources. Verma, however, said the HFCs can succeed by offering personalised service.

“Despite the slowdown in other sectors of the economy, all geographical locations for that matter, the demand for housing loans has been good and sustained, and we are seeing growth of close to 20% this year for 2012-13 as compared with last year’s 17% between banks and HFCs,” he said. NHB plans to disburse close to Rs 17,000 crore as refinance support to banks and housing finance institutions in 2012-13 against Rs 14,400 crore in 2011-12.

Federal Bank offers home loans at base rate from October 3-18

3 Oct 2012, PTI.

 MUMBAI: Private sector lender Federal Bank today said home loans will be offered at its base rate, which is pegged at 10.45 percent, from October 3 to October 18 as part of the 67th anniversary of its founder’s day celebrations.

The Kochi-based bank will also offer discounts in some other segments during this period.

The bank, which has 1,010 branches spread across the country, had total business of Rs 86,693 crore by end of the last fiscal.

Banks to provide 1% interest sop for home loan upto Rs 15 lakh

18 Sep 2012, PTI.

MUMBAI: Reserve Bank today asked banks to provide one per cent interest subsidy to home loans of up to Rs 15 lakh as announced by the government.

The interest subvention scheme has been liberalised with effect from 2011-12 by extending it to housing loans up to Rs 15 lakh where the cost of the house does not exceed Rs 25 lakh, RBI said in a notification.

The scheme has since been extended by Government of India and will remain in force up to March 31, 2013, it said.

A Budgetary provision of Rs 400 crore has been made under the scheme for the year 2012-13 by Government of India, it said.

The Union Cabinet chaired by Prime Minister Manmohan Singh approved the scheme in July.

The limit of subsidy for an individual borrower would be Rs 14,912 for a loan of Rs 15 lakh, and Rs 9,925 for a loan of Rs 10 lakh. The extended scheme will benefit all housing loans availed in the current financial year.

The National Housing Bank is the sole nodal agency for implementation of the scheme for banks, Regional Rural Banks and housing finance companies.

Realty share in FDI slumps to 1.94% between April ’09- December ’11

22 May 2012, PTI.

MUMBAI: Owing to global financial crisis, the foreign direct investment (FDI) in the real estate sector between April 2009 and December 2011 (Q1 FY10 and Q3 FY12) declined by a drastic 92 per cent, a recent survey says.

According to a survey by consultancy firm Knight Frank, FDI in real estate declined by 92 per cent and its share in total FDI shrunk from 16.83 per cent to 1.94 per cent during this period.

“Since 2005, 21 realty companies have raised Rs 213.06 billion through initial public offer ( IPO) and follow on public offer ( FPO). Of which Rs 145.74 bn or 68 per cent was raised alone in 2007, post the opening up of FDI in real estate sector. This route of raising money witnessed a slump in the immediate next year due to global financial crisis of 2008,” the survey said.

The bursting of the US housing bubble, which peaked in 2007, caused the values of securities tied to the US real estate pricing to plummet, damaging financial institutions globally.

This had ripple effects on the Indian economy impacting the Indian real estate sector the most, it said.

The year 2008 had no new issues in the form of IPO/FPO while there was just one issue in 2009. In 2010, post the global crisis, the economy saw some support in terms of stronger UPA government at the centre which helped as many as five promoters to raise Rs 43.12 bn from the public through IPO/FPO route, it said.

However, 2011 witnessed a phenomenon of high property prices, high interest rate and low sales, the report said.

“Dismal corporate earnings growth coupled with a weak employment scenario impacted the realty industry. Funding avenues like IPOs, qualified institutional placement (QIP) and FDI, which were harnessed in the earlier years dried up,” it said.

As a leveraged balance sheet was strained amidst slowing sales, developers resorted to selling land, TDR and non-core assets and some even resorted to pledging promoter equity. Private equity (PE) and high net worth individuals (HNI) money also salvaged the position of the industry.

“Fate of fund flow through IPOs, QIP and PE is also similar. As a result, all hope is stemmed on revival in sales, which is imminent on either a robust economy or lower property price,” it said.

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