RBI and Finance Minister mull cheaper home loans
Ascheme by the RBI and the government would allow consumers to access funds at lower rates to buy houses and boost the realty sectors
Sep 20, 2013
Source : The Times of India


DELHI: With little headroom to cut interest rates, the finance ministry and the RBI are considering a plan to give cheaper funds to banks to lend to the housing sectors as the festive season approaches. “The finance ministry is evaluating a scheme launched by the Bank of England wherein it provides funding to banks and building societies at lower rates,” a ministry official said.

Reserve Bank of India governor Raghuram Rajan, who will present his maiden policy on September 20, held discussions on 17th September with Prime Minister Manmohan Singh and finance minister P Chidambaram on the macro-economic situation.

“The RBI has constant consultations with the finance ministry. This meeting was part of that. We discussed the whole gamut of issues,” Rajan said after meeting Chidambaram.

The Bank of England launched the Funding for Lending Scheme in 2012, providing incentives for banks and building societies to boost their lending. Both the price and the quantity of funding provided are linked to their lending performance, according to the Bank of England website.

Ascheme by the RBI and the government would allow consumers to access funds at lower rates to buy houses and boost the realty sectors, which are bearing the brunt of slowing growth and demand compression. At its previous policy review in July, the RBI kept key interest rates unchanged on account of a weak rupee. The repo rate stands at 7.25%, the reverse repo rate at 6.25% and the cash reserve ratio (CRR) is at 4%.

This time, the RBI’s options may be limited by the high rate of inflation and a volatile rupee. Wholesale prices in August climbed 6.1%, the fastest pace in six months. The rupee, which depreciated to a record low of 68.85 against the dollar on August 28, has recovered some ground and closed on Tuesday at 63.37.

Industry has clamoured for a reduction, blaming the high interest rate regime for the slowdown. With the peak festival season around the corner, bankers are pressing for a cut in the CRR and policy rates to help boost demand for manufactured goods and revive sagging economic growth.

“We have recommended a cut in CRR, repo rate and asked the RBI not to restrict the MSF (marginal standing facility) to a particular number,” State Bank of India chairman Pratip Chaudhuri said on 17th September.

Latest Realty News

A square look at the revised Land Acquisition, Rehabilitation and Resettlement Bill
Sep 20, 2013
MUMBAI: The Land Acquisition Bill, which the new Bill now supersedes, is a century-old law with many archaic elements and loopholes. The new Land Acquisition Bill essentially champions the cause of the marginalised section and puts in place many safeguards and checks. The Parliament has now passed the new Bill with amendments such as exclusion of irrigation projects from the compulsory Social Impact Assessment study within a period of six months from the date of acquisition, and tweaks in Clause
Non-resident Gujaratis wary of investing in realty sector
Sep 20, 2013
AHMEDABAD: Contrary to the belief that the depreciating rupee will bring in investment from non-resident Indians (NRIs) into the real estate industry, Gujarat has seen up to 50% decline in investment by global Gujaratis this year from three years ago.
The property market is witnessing some structural changes with developers gradually coming out of th...
Sep 20, 2013
BANGALORE: Developers are now focusing more in their own regions and are selling their non-core businesses to improve their balance sheet. Further, interest in tier II city investment has also reduced as investors are unable to make the desired returns in their earlier portfolios.
Greater Noida authority launches industrial plots scheme
Sep 20, 2013
GREATER NOIDA: The Greater Noida Industrial Development Authority has launched a scheme offering industrial plots of sizes greater than 2,100 square metres.
Avenue Venture invests Rs 55 crore in Rohan Builders' housing project
Sep 20, 2013
DELHI: Private equity firm Avenue Venture Real Estate Fund has invested Rs 55 crore in a residential project developed by Rohan Builders in Bangalore, property consultant Jones Lang LaSalle India said.
Red Fort Capital invests Rs 365 cr in Lotus Greens Developers
Sep 20, 2013
DELHI:Real estate firm Lotus Greens Developers today said it has raised Rs 365 crore from private equity firm Red Fort Capital for the development of housing projects in the national capital region.
New industrial policy fixes time for setting up units
Sep 19, 2013
DELHI: The Noida Authority has decided to do away with a policy that provided industrial plot allottees extended periods for setting up functional units. This clause allowed allottees to pay insignificant amounts as penalties in lieu of delay in running units. The move is expected to put industrial development on the fast track.
Real estate inventories close to record high
Sep 19, 2013
DELHI: Inventories in the residential real estate market are close to an all-time high in all the major cities in India.
Home prices could drop
Sep 19, 2013
MUMBAI: Real estate developers are realising that they cannot hold on to inventory forever. Until now, they had shied away from lowering prices, but now, they will have to book sales to gain some liquidity.
How realtors lost the plot
Sep 19, 2013
MUMBAI: Their sales have slowed down and they have a mountain of debt to repay. And that is forcing real estate developers to sell non-core assets and look for other ways to raise money.

Latest Realty News Of State

Realty Talk's