×
Home Companies Industry Politics Money Opinion LoungeMultimedia Science Education Sports TechnologyConsumerSpecialsMint on Sunday
×

Home loan gloom

Home loan gloom
Comment E-mail Print Share
First Published: Wed, Feb 11 2009. 12 12 AM IST
Updated: Wed, Feb 11 2009. 12 12 AM IST
New Delhi: First it was the Reserve Bank of India and then the central government that asked banks to cut interest rates for home loans. Public Sector Banks have cut home loan rates by up to 300 basis points between October and December 2008. However, according the finance ministry data, the sector witnessed a credit growth of only 2.49% between 7 November 2008 and 16 January 2009.
Click here to watch video
More than a week after the country’s largest bank, State Bank of India , cut interest rates on housing loans, bankers are saying the move has failed to excite consumer demand. On January 31, the State Bank had locked interest rates at 8%, a day before acting finance minister Pranab Mukherjee asked public sector bank officials to cut rates. While other state-owned banks followed suit, they don’t think lower interest rates alone can help in reversing the sagging real estate market.
Experts say growth in housing finance has not trickled down to the lower income sections. National Housing Bank, the nodal agency for refinancing and regulator for refinancing housing loans, plans to join hands with NGOs to propagate housing loan schemes for the weaker sections. Analysts say only by constructing affordable housing will the housing market gather momentum.
Comment E-mail Print Share
First Published: Wed, Feb 11 2009. 12 12 AM IST