PUNE: Real estate developers in the city on Wednesday welcomed cut in lending rates by India's top three banks, including the country's largest lender State Bank of India (SBI).
Expecting more banks to follow suit, they said the otherwise stagnant sales in the sector will get much-needed boost with the recent turn of events. While SBI along with HDFC Bank brought down their lending rates by 15 basis points to 9.85%, ICICI bank reduced its base rate by 25 basis points to 9.75% on Tuesday.
The move follows a statement by Reserve Bank of India (RBI) governor Raghuram Rajan, who said the earlier rate cuts announced by the RBI have not been passed on to the customers. The RBI has cut the key interest rates twice since the beginning of this year.
Shrikant Paranjape, chairman, Paranjape Schemes Construction Limited, said the bankers' response to the RBI's observations about rate cuts not being passed on is an encouraging sign. "The industry expects similar rate cut by more banks which will help boost the sentiments and will create positive air within the sector."
Terming the rate cut 'too little, too late', Sachin Kulkarni, managing director, Vastushodh Projects, said more needs to be done to revive the 'bleeding' sector. "The RBI governor's reaction has finally paid off. However, the rates need to go down further, particularly after a disappointing Union and state budget," he said.
Vishal Gokhale, CMD, Gokhale Constructions, said the rates need to go down further in order to lift the buyer sentiments.
Aditya Javdekar, chief executive officer at Vilas Javdekar Developers, said: "The home finance institutions must work out innovative strategies to lower EMIs for homebuyers in 2015-16."