Posts Tagged ‘Bankers’

Interest Rates War Heating Up,Home Loans Rates Down!

An interest rate war led to the dip in home loan rates

An interest rate war led to the dip in home loan rates

An interest rate war is brewing in the home loans this festive season.

Development Credit Bank (DCB) and GIC Housing offering home loans below the psychological 8%.


DCB, which recently entered the segment, is offering home loans at 7.95% for loans up to Rs 5 crore at fixed interest rate for the first year and floating rates from year two.

Affordable housing is the buzzword these days, but the market would get a further boost if attractive financing options are available.

Therefore, bankers have started coming up with the attractive options for their target segments.

Central Bank of India and PNB have waived processing fee and documentation charges on certain loans.


Bankers have basically started offering a psychological pricing to get more borrowers into their fold.

According to bank observers, borrowers have started preferring low interest bearing home loan accounts of nationalised banks over private banks.

However, private sector bankers maintain that borrowers should not fall flat over the sub 8% schemes and exercise caution before signing on the dotted line.

As well as borrowers also say that such switch over is not easy.

Half way through EMI repayments, it is getting quite impossible for borrowers to get their account Shifted.

Constraints like, paying a hefty penalty and transfer fees are proving to be deterrents for them.


Interest Rate War is really heating up coming Diwali. 🙂

Fiscal Deficit will not be in Double Digits: Montek Singh Ahluwalia

Fiscal Deficit will not be in Double Digits: Montek

Fiscal Deficit will not be in Double Digits: Montek

Seeking to mollify the fears of banks that high government borrowing would not allow interest rate to come down, the Planning Commission on Sunday said the fiscal deficit will be high but not in “double digits”.

“Bankers are always concerned about the size of the government’s borrowing. Because it is very very large, many of them think that the interest rate on government debt will rise and they would rather retain liquidity now in order to invest in high-yielding government bonds,” Planning Commission Deputy Chairman Montek Singh Ahluwalia said.

He, however, advised bankers to wait as nobody knows what the government borrowing would be till the Budget and added that “I feel it will be possible to accommodate a reasonable fiscal deficit.”

He stressed, “should not look for a return this year to the normal fiscal deficit, which used to be 3 per cent. It should be significantly higher.”

Fiscal deficit, which is roughly the difference between total expenditure and total receipts, is an indicator of government borrowing.

On account of various stimulus packages announced by the government to arrest the impact of the global financial meltdown on the country, the fiscal deficit during 2008-09 shot up to over 6 per cent of gross domestic product (GDP) as against the original estimate of 2.5 per cent.

He pointed out that all over the world countries are running high fiscal deficits.
Admitting that the monetary policy stance does have a bearing on interest rates, he said, “I am sure the Finance Ministry and the RBI are in close contact on this issue.”