AHMEDABAD: The slowdown in real estate and overall economic slump has led to a record shortfall in demand for home loans last year. According to the latest report by state-level bankers' committee (SLBC), fresh loans worth Rs 1,375 crore have been granted to 18,510 beneficiaries during the third quarter September-December last year, a decrease of 55% from the same period in 2012.
According to experts, the fall in home loans this quarter is due to high interest rates offered by the banks. "The rate of interest is around 11% or more in most banks because the average base rate of the banks is between 10.5% and 11%. This has discouraged people from applying for loans," said Aspy Bharucha, a forex consultant.
The slump in demand for home loans is also significant as it came during the quarter which had festivals like Diwali and New Year. "There is no substantial rise in incomes of individuals compared to inflation. Renting is cheaper than buying homes at high interest rates," said Bharucha.
The report of the 140th meeting of SLBC revealed that year-on-year growth in outstanding housing finance is Rs 1,373 crore and the outstanding level stood at Rs. 23,051 crore in 3,51,340 accounts as of December 2013.
In disbursements of education loans, banks across the state recorded an increase of 60% in the last quarter of 2013 compared to same period in 2012. Against loans worth Rs 47.48 crore to 1,919 students in third quarter of 2012, the banks have disbursed education loans to 4619 students to the tune of Rs 118.08 crore during September- December 2013.
According to the report, for the first time ever, deposits in Gujarat banks crossed Rs 4 lakh crore, recording a growth of 16.86% during the third quarter over the same period in 2012. The deposits in the state were Rs 4,06,862 crore in quarter ending December 31 last year against Rs 3,48,156 crore in December 2012.
Gross NPAs across all banks in Gujarat is 4.26% as of December 2013 while the net NPAs stood at 3.22%.
Loans (Rs in crore)
Particulars Sept-Dec 2013 Sept-Dec 2012
Fresh loans disbursed Accounts Amount Accounts Amount
Home loans 18,510 1375.21 44,495 3013.46
Education loans 4,619 118.08 1,919 47.48
Minority communities 16,904 477.42 11,585 283.25
Women entrepreneurs 38,831 887.24 26,567 1255.57
NRI deposits increase by Rs 5,400 crore in third quarter
In spite of the weakening rupee, NRI deposits in Gujarat continued to grow in the third quarter. According to the latest data by state-level bankers' committee, NRI deposits in Gujarat increased by Rs 5,402 crore-to Rs 44,153 crore-forming 10.85% of total deposits as of December 31, 2013 against Rs 38,751 crore (9.86%) as of September 30, 2013. NRI deposits increased by Rs 7,123 crore during the quarter ending September 30, a period when the rupee saw the sharpest falls.
Experts believe attractive fixed deposit rates announced by the Reserve Bank of India for NRIs are a major reason for the record increase. "The interest rate offered in India is around 1.5 percent more than in US," said a city based forex consultant. In the first quarter of 2013, NRI deposits decreased by Rs 1,486 crore creating anxiety among investors and bankers alike.