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Banks may cut rates after FM’s push
Posted on Jun 22, 2015

Delhi/NCR

Banks are expected to reduce interest rates in the days ahead after Finance Minister Arun Jaitley prodded them to ease rates to ensure that there was a better transmission of RBI's rate cuts.

"The Union finance minister Arun Jaitley asked the chief executive officers (CEOs) of both the Public Sector Banks (PSBs) and private sector banks that why the banking system, in response to RBI's rate cut of 75 basis points since January 2015, effected a corresponding rate cut of only 25 basis points," a statement from the finance ministry said after Jaitley's meeting with bank chiefs.

CMDs of both state run and private banks said full transmission would not be viable till the time the cost of funds and deposits for the banks, as reflected in the re-pricing of their liability book at the new rate, comes down and liquidity level at the new lower cost, is tested. "However, all banks unanimously expressed that in a period of two to three months, greater transmission of lower rates could be seen," the finance ministry statement said.

The government and the central bank are keen to ensure that there is better transmission of the interest rate cuts to support growth. The finance ministry is keen to ensure that the growth engines roar again and rate cuts would help drive investment and consumption. RBI governor Raghuram Rajan had also expressed his disappointment with the slow pace of monetary transmission as banks have been slow to respond to RBI's rate cuts.

"Some part of it (rate cut) has been passed on to customers, while some banks have not passed on. I feel over the next few days ...some of the bankers felt that over the next few weeks, they would be in a position to work out greater cuts," Jaitley told reporters after the review meeting.

Jaitley also expressed his concern over the modest domestic credit growth of 7% over the previous year registered by state-run banks and took stock of the sectoral profile of the total domestic credit flow of Rs 49 lakh crore during 2014-15. The agricultural credit grew by 17.3% over the previous year, which came as a silver lining. The FM urged the bankers to achieve the target of 20% growth in educational loans.

Jaitley noted the robust credit growth of 16-18% in the housing sector, and advised the banks to achieve 30% growth in priority sector housing loans, which are required to provide a stimulus to overall growth.

The government also discussed the issue of growing non-performing assets with banks, which is a matter of concern. The increase in bad loans is due to some stalled infrastructure projects, slowdown in the global economy and continuing uncertainty in the global markets.

Jaitley said the RBI, government departments and the financial institutions should collectively examine solutions that work, to de-bottleneck critical projects of economic value. The FM suggested that the secretary, department of financial services (DFS) obtain a list of all major projects stalled purely due to financial reasons and attempt to sort out the sticky issues along with the concerned banks.

He also suggested that DFS and the RBI should interact to examine and sort out the regulatory issues in bad loans and the scope for their modification to ease the pressure on banks. Minister of state for finance Jayant Sinha said banks should sell off their non-core assets. Jaitley said he would like to sort out issues which relate to state governments and other ministries with regards to stalled projects.

Jaitley also shared his concern over the low participation of private banks in government promoted schemes, especially the three social security schemes where private bank participation is only 4 %.

Jaitley told banks that grievance redressal ought to be a serious pursuit and constructive effort should be made towards disposal of pending grievances within banks, without allowing them to escalate to higher government levels.


Prahladnagar: A commercial & residential hub
Posted on Jun 22, 2015
AhmedabadPrahladnagar, an excellently planned area comprising of a consolidated four town planning schemes, has developed quite well over the years. The area is known for extensive road network and well planned streets. The area also boasts of community facilities. The planned allotment of plots has helped in balancing of resources such as well man ...

Interest rates falling, should your refinance your home loan?
Posted on Jun 22, 2015
With banks reducing their base rates, home loan rates will start falling in the days ahead. While this is good news for new home loan customers, people who are already paying home loan EMIs at higher interest rates tend to feel the pinch. Banks and home loan financiers often chase such loan clients to get their loans refinanced in order to reduce a ...

Prestige launches premium high-rises in Hyderabad
Posted on Jun 22, 2015
The Prestige Group has recently announced its high-rise premium residential project, the Prestige Ivy League, a residential project near Kondpur in Hyderabad. The project would have 349 apartments across three towers, with a combination of two, three and four bedrooms.The 2 BHK units size would vary from 1,327-1,355 sqft, the 3 BHKs would be 1,738- ...

Mantri Developers Launches Pune Project 'Mantri Vantage' Through CommonFloor Retina
Posted on Jun 22, 2015
Bangalore, India, June 11, 2015 --(PR.com)-- CommonFloor.com, Indias leading online real estate platform has collaborated with Mantri Developers, one of the leading property developers in the country to launch their new property Mantri Vantage in Kharadi, Pune, through CommonFloor Retina. This recently-launched feature by CommonFloor will offer ‘r ...

Unitech to raise 200 cr for housing projects
Posted on Jun 22, 2015
Realty firm Unitech plans to raise about Rs200 crore from private equity players to part finance its ongoing housing projects as real estate market continues to remain sluggish.The company has no plans to launch new housing projects this year and would focus on delivery of existing projects.The company has been facing problems in one of its housing ...

Small housing finance companies yet to lower lending rates
Posted on Jun 12, 2015
KOLKATA: Although the Reserve Bank of India is pushing lenders to make loans cheaper, a huge number of home loan applicants, who borrowed money from smaller housing finance companies, are yet to get the benefit of softer monetary policy.Smaller lenders are holding on to their rates because they said their cost of borrowing has not dipped much in th ...

Delhi, NCR likely to see fresh realty boom
Posted on Jun 11, 2015
Prices in the residential segment likely to correct by 15-20 per cent because of the land pooling policy Delhi and its adjoining areas are again becoming sought-after destinations for real estate developers, with such as Sobha Developers and Godrej Properties planning new projects. Tata Housing and Bharti Realty have also announced projects ne ...

Commune Properties to expand ‘branded affordable homes'
Posted on Jun 11, 2015
BengaluruCommune Properties India, a group company of Golden Gate Properties plans to expand its 'branded affordable homes' segment to seven other cities.The company which has built apartments in parts of Bengaluru, now wants to build in Chennai, Hyderabad, Coimbatore, Mangalore, Vijayawada, Mysore and Vizag by the end of 2016.Sheker Sundhara Raman ...

RBI cuts repo rate, home loan EMIs likely to fall
Posted on Jun 10, 2015
This is the third time in this year now that the Reserve Bank of India (RBI) governor Raghuram Rajan had announced a cut in a repo rate by 25 basis points to 7.25 per cent from 7.5 per cent. In his speech today, Rajan said, "Banks have started passing through some of the past rate cuts into their lending rates.” Will this help in boosting the senti ...

Property prices in Mumbai could rise 6% in 2015: JLL
Posted on Jun 10, 2015
NEW DELHI: Property prices in Mumbai are expected to see an appreciation of 6% in 2015, according to property advisory firm JLL India."Many home buyers as well as investors have been speculating about the movement of residential property prices in Mumbai. These fence-sitters are watching the market's movements keenly. Their guess is that prices cou ...

Keys Hotels launches second hotel in Kochi
Posted on Jun 10, 2015
MUMBAI: Mid-market hotel brand Keys Hotels & Resorts has announced the launch of its hotel in Kochi, its second property in Kerala and 16th hotel across India.Kochi is one of the top destinations for international and domestic tourists and a recent survey conducted by the Nielsen ranks it as the sixth best tourist destination in India.Hotel Keys Ko ...

PE investments in India grow by 15% in Q1 2015
Posted on Jun 10, 2015
Private equity investments in the country grew 15 per cent to total $2.8 billion across 130 deals in the first quarter of calendar year 2015.Compared with the same period in 2014 the value surged by 15 per cent despite a 10-per cent drop in volume (144 deals worth $2.42 billion).However, it is a 37-per cent drop in value when compared with the prev ...

Kolte-Patil’s Ivy Estate Phase II in east Pune
Posted on Jun 10, 2015
Kolte - Patil Developers, the Pune-based BSE-listed real estate firm, has launched a new residential project called Ivy Estate Phase II in Eastern Pune. Ivy Estate is one of the largest gated communities in Pune city, spread across 85 acre campus.Located in one of the fastest developing Wagholi area, Ivy Estate, is close to the Pune airport and eas ...

Home Loan EMIs Set to Fall as SBI Cuts Base Rate
Posted on Jun 09, 2015
Equated monthly installments on home and auto loans are likely to come down after State Bank of India announced a 15-basis point reduction in base rate on Tuesday. New rates would be effective June 8.After Tuesday's cut, SBI's base rate or the minimum lending rate will come down to 9.70 per cent. Lenders that compete directly with SBI, such as ICIC ...

Godrej Properties adds a new residential project in Bengaluru
Posted on Jun 09, 2015
The Mumbai based real estate developer enters into a joint venture partnership to develop a residential project in Bengaluru.Godrej Properties, the real estate development arm of the Godrej Group, has entered into a partnership to develop a residential project on the DoddaballapurYelahanka main road in North Bengaluru. The proposed project will off ...

Localities offering highest rental returns in Kolkata
Posted on Jun 09, 2015
Neeraj Bose, who is currently living in Rajarhat, wants to invest in a property in Kolkata with the sole aim of earning high rental returns. Bose is not alone. There are many investors who are keen to invest in the realty market of the city. However, the more or less stable real estate market has kept such investors from benefiting.Though capital g ...

Invest in Manikonda to earn good rental returns
Posted on Jun 09, 2015
If you are an investor looking forward to buy a property in Hyderabad to get monthly returns then Manikonda is the best area. The locality offered rental returns of 4.29 per cent, highest in the current quarter.Manikonda is a commercial and residential hub of Hyderabad, witnessing attention from real estate developers owing to the boom of IT and IT ...

Home & Soul Launches F Premiere
Posted on Jun 09, 2015
Home & Soul launched F Premiere, in association with Fashion TV,graceful anddistinguished residential apartments away from the hustle bustle of the city situated in Jaypee Sports Cityoverlooking the Formula 1 Track. These fashionable homes offer an international standard of living for the fast & fabulous which is the epitome of glamorous and luxuri ...

VBHC projects get CRISIL rating
Posted on Jun 09, 2015
VBHC Value Homes Pvt Ltd, the pioneer of affordable housing in India announced new project ratings that have been assigned to it by CRISIL, a global analytical real estate ratings company. Five projects from VBHC bagged among the top valued accreditation, each rated project garnering one of the highest ratings in the micro market of its operation.C ...




Recent Articles
Banks may cut rates after FM’s push
Prahladnagar: A commercial & residential hub
Interest rates falling, should your refinance your home loan?
Prestige launches premium high-rises in Hyderabad
Mantri Developers Launches Pune Project 'Mantri Vantage' Through CommonFloor Retina
Unitech to raise 200 cr for housing projects
Small housing finance companies yet to lower lending rates
Delhi, NCR likely to see fresh realty boom
Commune Properties to expand ‘branded affordable homes'
RBI cuts repo rate, home loan EMIs likely to fall

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