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Topic : What one should know about Home loans
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Created by : Leena Khade, Banc Assurance, Deutsche Bank  | 02 12 2010 07:11:36 +0000
Industry : BankingFunctional Area : India(Markets)
Activity:  572 views;  last activity : 07 06 2010 20:18:09 +0000

Banks which till now offered special invitational or we should say the teaser rates for new home loans which were less than those offered are set to be withdrawn, some say due to the hike in CRR which was made uptp 75 basis points, and some say there was lack of transparency in these home loans given out by banks was what RBI said. And this means a hike of up to 2% in interest rates offered by both private and public banks in the next one month.

The withdrawal of the offers, which typically cover the first couple of years of a loan, And it was only providing these teaser rates to new customer and not all, and this irked the RBI which said banks should not discriminate against older customers. Banks were giving home loans at 8% from what it was earlier like more than 11%. So what do you think people is RBI doing the right thing by asking to end special low home loan rates? Please do share your views on this.

 
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I think RBI is doing the right thing by asking banks to end low home loan rates, as it discriminated new customers from old loyal customers of the banks and it also made many switch to new banks to get the special home loan rates which were as low as 8% and the move which intended to get new customers and increase the banks business, would also have resulted in attrition rate of customers from one bank to another, and these low home loan rates was there only for 2 years only and not for the whole thing, And in a recent meeting of top bankers the apparent lack of transparency in the process made RBI to address banks to stop this low home loan rates.


By Leena Khade, Banc Assurance, Deutsche Bank  02 12 2010 07:11:36 +0000
 
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Earlier at least new customers were getting home loans at a much reduced rated and now because of RBI's decision there is no benefit to anyone, So, how this is a good decision I don't understand.


By Inani Sarkar, Sales/BD Manager, Aricent  02 13 2010 08:40:04 +0000
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I am agree with you. I also experienced same, while approaching for home loan. New customers always goes for lower initial interest rate without thinking for repercussion in future. Initially most of the banks are keeping very low intersest rate, but their rate climbs the height later on.


By Syed Fareh-uz Zaman, Causal Research Team Leader, Brooke-India  | 02 15 2010 09:26:11 +0000
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Such a recomendation is proposed by RBI, for loans above Rs 5 lakh and up to Rs 50 lakh, the interest rate has been fixed at 8 per cent during the first year and 8.5 per cent during second and third years.

 


By RAMANATHA PRABHU N, Chartered Accountant  | 02 13 2010 07:10:35 +0000
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When the slow down impacted even India, real-estate sector was badly suffering, RBI ( perhaps at the behest of Govt.), came out to rescue and asked Banks to (forcefully) lower their Home-loan rates to 8% for a limited period. Govt. agreed to compensate Banks' losses.

This was supposed to be lifted any time. If RBI thought it prudent to 'lift' this now, this may be a welcome measure. Most likely, recent CRR hike may be a reason. We may remind RBI that Banks are required to lend a hooping 41% to Priority Sector ( basically a loss-making proposition ) for the welfare of society. Why ask more ? One is reminded that other than Banks, no institution in India is required to look after the society at the cost of their P/L A/c. Question : why so ?


By ASOKE KUSARI, Domestic Private Banking-Executive/Manager, A large leading PSU Bank - India  | 02 12 2010 15:04:15 +0000
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RBI is doing right thing as these teaser rates in the name of innovation are like what life insurance companies have been doing by somehow luring customers for first 3years.

In the last week, I have met so many bankers along with my cousin in Pune to understand the housing loan, interest, etc and we have been shocked to learn, except HDFC, most of others have been simply luring us for a 35-40lakhs loan and at that time it self I was just wondering by looking at Bank of Rajasthan, PNB, SBH's luring(low) interest rates  in the first few years that why RBI should not caution bankers in this regard as annoyed customers may even default loans and it may become a mess like what we have been witnessing in credit card business and RBI's timely intervention emphasizes the popular saying "PREVENTION IS BETTER THAN CURE"

Some of the guys in financial services market have been acting smart and wild in the name of innovation.We as responsible and knowledgeable personnel in financial services field have to condemn bad apples and appreciate and support good apples


By N M K D SARMA AMBATIPUDI, GM-MARKET DEVELOPMENT, DURON ENERGY PRIVATE LIMITED  | 02 12 2010 14:36:00 +0000
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yes leena i agree with u always


By Neeraj Thakur, Networking engineer, NAHAR SPINNING MILLS LTD.  | 02 12 2010 08:37:01 +0000
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