The great Indian home loan puzzle6 min read . Updated: 23 Jan 2017, 06:38 PM IST
Competition is welcome and the drop in interest rates will help expanding the home loan market but there are a few key questions about whether lenders will be able to sustain it
In October 2003, Romesh Sobti, then executive vice-president of ABN Amro Bank (now he heads IndusInd Bank Ltd) took the Indian mortgage market by storm, announcing home loans at 6% in the first year and 6.5% in the second year—around 1.75 percentage points lower than the prevailing home loan rate, offered by larger banks and housing finance companies. A newspaper headline screamed, “ABN Amro hits a sixer".
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