Tag Archives: CRR

Residential Market Revives After RBI Rate Cut

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Real estate experts said that the residential market across India has revived after RBI cut its major rates. After the RBI rate cut; the home loans have become cheaper and this has improved the sentiments of home buyers.
Residential market started reviving after RBI cut rate.

Residential market started reviving after RBI cut rate.

RBI rate- cut have highly affected the sentiments of home buyers. With the RBI rate cut, the home loans have become cheaper. This has increased the housing demand that helped residential market to revive.

Praising the RBI rate cut, real estate developers and consultants have said that the act will improve the housing demand. As a result the residential market will see a growth. According to them, the rate cut will boost foreign investment as well.

Last week; in a much awaited decision enabling the subsidiary banks to offer loans at lower interest rates, RBI had cut short its key interest rates. The Central Bank lowered the repo rate by 0.25% and cash reserve ratio by 4%. Continue reading →

Home Loans’ Interest To Fall As RBI Cuts Rates Finally

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Finally, Reserve Bank of India (RBI) declared a cut in its main interest rate on Tuesday. As a result the banks will be pushed to provide home loans at lower interest rates.
Home loans will become cheaper

Home loans will become cheaper as RBI cuts rates.

Home buyers finally heard the much-awaited good news when the Reserve Bank of India cut its main interest rate (Repo Rate) and cash reserve ratio (CRR). As the central bank cut the rates the impact will be on the subsidiary banks. They will be able to provide home loans at lower interest rates.

Home loans will become cheaper. The banks will remain capable of providing easier EMI loans (Equated Monthly Installments) to the home buyers. D Subbarao, Honorable Governor of RBI, said that the act of  RBI will boost the investments. He added that the RBI rate – cut will keep inflation in a moderate level. Further, the rate cut will improve liquidity and credit flow. Continue reading →

Gudi Padwa and its Impact on Indian Realty Sector.

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Gudi Padwa, a festival which earmarks new beginnings and new hopes to everybody’s life. Hence many builders announce their new projects at this point of time taking into consideration the sentiments of the local market. The festival is widely celebrated in the state of Maharashtra. As for common people in India, a home is a priced possession and they do not sell and buy residential properties often. They wait for an auspicious date to such transactions.

Keeping this in mind, realtors at Pune has organized Sakal Pune Property Show named as Sakal Gudi Padwa Grihotsav 2012. Across the just concluded quarter, residential prices in the outskirts of Mumbai have seen a positive slide. With the Union Budget 2012 giving due consideration to the loans of affordable housing projects coupled with the positive feeling related to the festival, buyers and sellers expect to strike a great deal during this year’s Gudi Padwa.

The buyers mainly constitute the New Urban Family Sector. Moreover, during this festive season, realtors juxtapose the properties with attractive discounts and freebies. But with these factors only, nobody can lure customers today. They are more oriented towards the location of the property, the pricing and the quality of construction.

The recent years were not so good for real estate sector. The ever rising inflation rates and interest rates kept the buyers at the bay. But the recent decision of the RBI to cut CRR rates gives little bit of hope to the sector.

However real estate experts suggest that the sentiments related to a festival only cannot trigger the sector. But it is decisive in getting the real estate market on the right track after a gloom. Moreover, traditionally Gudi Padwa means birth of bhoomi and bhoomi is everybody’s shelter. We can hope and look forward for bright days for real estate sector ahead with this auspicious festival.

RBI Might Compel Banks to Increase Loan Rates

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April 15, 2010

The builders might now suffer with costlier scrounging since Reserve Bank of India (RBI) plans to ask banks to set apart more funds for loans to commercial realty projects. This in turn will force banks to aggrandize the interest rates on such loans.

According to senior bankers RBI can take either of the two options. First, increase normal provisioning or second, risk weight on bank loans to realty firms in the forthcoming policy on 20th of April. This will be intended at shielding banks’ contact with properties in the midst of mounting prices.

According to the Chairman and Managing Director of Indian Overseas Bank, SA Bhat, the outcome of RBI not raising the cash reserve ratio (CRR) and keep signaling rates like reverse-repo rate and repo rate untouched will be that the prudential norms will get tighten. “An increase in risk weight, especially on realty loans, is not ruled out”, he added.

As per the latest available figures, in November 2009, banks exposure to commercial realty was Rs. 88,581 crores.

The capital which is set apart to estimate capital sufficiency ratio is the risk weight which is now 9 percent for all banks. Less capital is to be kept for borrowers with increased credit rating. The risk weight is 20 percent for triple A clients, which indicates that a reserve of Rs. 1.80 of its own capital for every Rs. 100 loan is to be needed within banks for such borrowers.