According to the National Housing Bank (NHB) interest rates on home loans are expected to slope down from January.
In an interview to the The Telegraph S. Sridhar, chairman and managing director of the NHB, told, “Interest rates are likely to come down from January and we expect the home loan rates to fall after that.”
He said after the Reserve Bank of India hiked the interest rates there has been spurt in home loan rates. “We expect home loans to stabilize to around 10 per cent in the near term.”
Sridhar informed that there has been increase in the disbursal of home loans and the rising interest rate had not affected it.
In the last fiscal year, there was a healthy growth of 20 per cent in home loans. Whereas disbursal of home loans by banks was about 14-15 per cent, loans from financial companies grew 24 per cent.
“This year, too, the trend appears to be similar, but it is too early to form a definitive view,” he said.
Sridhar said the bank has launched NHB Residex to keep check on residential property prices in Delhi, Calcutta, Mumbai, Bangalore and Bhopal.
He said 10 more cities will be added in the list in the next two months and over 60 cities will be covered over the next two years. The index would be revived every six months, to get a good idea of the property prices in the country and city-specific realty movement.
Recently NHB has picked up a 12.5 per cent stake in Mahindra Rural Housing Finance Ltd, a wholly owned subsidiary of Mahindra and Mahindra Financial Services Ltd, but the amount has not been disclosed, and will continue to focus on rural housing finance.
Sridhar informed bank will soon be launching fixed deposit products and the capital will be used to fund rural homes
“We are studying the market condition. We will launch fixed deposit products soon. Given our changed focus to facilitate rural housing and growing business in terms of loan refinancing and direct project financing, we have decided to mobilize public money through fixed deposits,” he said.
Monday, September 15, 2008
Thursday, September 11, 2008
Only few senior citizens applied for reverse mortgage scheme
This year banks have introduced reverse mortgage scheme for senior citizen to help them get loan against their houses so that they do not face any financial crush in their need of time.
As per the data available only 2,000 senior citizens across the country have taken loan against their houses under the reverse mortgage scheme. Amongst the 18 banks and two housing finance companies are offering the scheme, State Bank of India alone has given a majority of the 1,900 loans.
The National Housing Bank (NHB), which developed the scheme for the people aged above 55 years, think that the poor show is because of lack of awareness among senior citizens, whose number stands at 76 million as per the records of 2001 census data, and lack of enthusiasm on the part of the banks.
Therefore NHB has decided to sign agreements with NGOs and corporate foundations to bring the awareness about the unique mortgage program under which a senior couple can continue to live in the house while getting the market value of the house minus ten per cent. Following this NHB on Tuesday signed an agreement of cooperation with Anil Dhirubhai Ambani Group’s social outfit, Harmony, to work with the bank to make the program successful.
S Sridhar, chairman and managing director, NHB said, “The bank is also nudging insurance firms to start an insurance package for people who have outlived the 20-year coverage under the reverse mortgage scheme”.
“The scheme does not compel anyone to part with their house,” Sridhar adds. In case the senior couple decides to repay the loan amount then they will get the house back. Even heirs can do that. He said they can resell the property and profit later.
Once a couple go for this option, they can either take the entire money for their house in installments or will be eligible to get a lump sum up to a total of Rs 15 lakh. Sridhar said but, this can be given only on medical grounds. In the meantime, the couple will be able to continue to reside in the house.
He informed that the maximum installment can go up to Rs 50,000 a month and the valuation of the property will be done by the beneficiary himself.
Bankers, who were busy with queries from senior citizen at forums, said that if the property is in the name of the wife and she dies early, the husband can continue to live there till he dies.
He said that the eligibility for availing the scheme is 55 for women and 60 for men. State Bank of India General Manager Sharad Sharma says, “The depreciation in the value of the property is a risk against which the banks have no cover.”
As per the data available only 2,000 senior citizens across the country have taken loan against their houses under the reverse mortgage scheme. Amongst the 18 banks and two housing finance companies are offering the scheme, State Bank of India alone has given a majority of the 1,900 loans.
The National Housing Bank (NHB), which developed the scheme for the people aged above 55 years, think that the poor show is because of lack of awareness among senior citizens, whose number stands at 76 million as per the records of 2001 census data, and lack of enthusiasm on the part of the banks.
Therefore NHB has decided to sign agreements with NGOs and corporate foundations to bring the awareness about the unique mortgage program under which a senior couple can continue to live in the house while getting the market value of the house minus ten per cent. Following this NHB on Tuesday signed an agreement of cooperation with Anil Dhirubhai Ambani Group’s social outfit, Harmony, to work with the bank to make the program successful.
S Sridhar, chairman and managing director, NHB said, “The bank is also nudging insurance firms to start an insurance package for people who have outlived the 20-year coverage under the reverse mortgage scheme”.
“The scheme does not compel anyone to part with their house,” Sridhar adds. In case the senior couple decides to repay the loan amount then they will get the house back. Even heirs can do that. He said they can resell the property and profit later.
Once a couple go for this option, they can either take the entire money for their house in installments or will be eligible to get a lump sum up to a total of Rs 15 lakh. Sridhar said but, this can be given only on medical grounds. In the meantime, the couple will be able to continue to reside in the house.
He informed that the maximum installment can go up to Rs 50,000 a month and the valuation of the property will be done by the beneficiary himself.
Bankers, who were busy with queries from senior citizen at forums, said that if the property is in the name of the wife and she dies early, the husband can continue to live there till he dies.
He said that the eligibility for availing the scheme is 55 for women and 60 for men. State Bank of India General Manager Sharad Sharma says, “The depreciation in the value of the property is a risk against which the banks have no cover.”
Monday, September 8, 2008
IDBI to pay Rs 50,000 compensation for harassing a customer
IDBI has been directed by the District Consumer Disputes Redressal Forum to pay Rs 50,000 as compensation for harassing a customer. The petitioner had taken a home loan of Rs 13 lakh in 2004. The bank has been charged of raising the rate of interest illegally therefore has been directed to revamp the loan account and not change the rate of interest for the first three years as per the agreement. The forum has also asked the bank to pay Rs 5,500 as litigation costs.
The complainant, Pardeep Tayal, a resident of Sector 35, took a housing loan of Rs 13 lakh in 2004, which was to be paid back in 96 equated monthly installments (EMIs) of Rs 17,724.
Bank has mentioned in the letter delivered to him that the interest rate will be reviewed at the end of three years from the date of final disbursement. But, he was then sent three letters intimating that the rate of interest has been revised to 7.5 per cent, 8 per cent and 9.5 per cent, respectively.
Claiming the action of the bank in reviewing and enhancing the interest rate before the expiry of three years as unwarranted and amounting to deficiency in service, hence the complainant moved the forum.
The Bank, in its response, stated that the complainant had chosen for a floating rate of 7 per cent, which was subject to resetting of interest rate as per the home loan agreement.
The forum established that as per the agreement, there cannot be any change in interest rate in the first three years, which is to remain at 7 per cent. The forum held: “The bank cannot just issue a letter and change the terms of the agreement to the disadvantage of the complainant.”
The complainant, Pardeep Tayal, a resident of Sector 35, took a housing loan of Rs 13 lakh in 2004, which was to be paid back in 96 equated monthly installments (EMIs) of Rs 17,724.
Bank has mentioned in the letter delivered to him that the interest rate will be reviewed at the end of three years from the date of final disbursement. But, he was then sent three letters intimating that the rate of interest has been revised to 7.5 per cent, 8 per cent and 9.5 per cent, respectively.
Claiming the action of the bank in reviewing and enhancing the interest rate before the expiry of three years as unwarranted and amounting to deficiency in service, hence the complainant moved the forum.
The Bank, in its response, stated that the complainant had chosen for a floating rate of 7 per cent, which was subject to resetting of interest rate as per the home loan agreement.
The forum established that as per the agreement, there cannot be any change in interest rate in the first three years, which is to remain at 7 per cent. The forum held: “The bank cannot just issue a letter and change the terms of the agreement to the disadvantage of the complainant.”
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