Good news for home-loan borrowers as country's largest banks have reduced their key lending rates by 0.15 per cent to 0.25 per cent, effective from April 10.
The Reserve Bank of India (RBI) on Tuesday asked the public and private banks of why they are not reducing interest rates on home loans and other utilities even when the apex bank has cut the repo rate by 50 basis points in this year alone.
In its bi-monthly monetary policy review on April 7, the Reserve Bank of India keeps key lending rates unchanged, while directing banks to pass on the benefits of the two previous cuts to customers.
RBI has announced cut in key lending rate by 25 basis points from 7.75 per cent to 7.5 per cent in March this year. This was the second rate cut, the first being in January. It was largely expected that with cumulative cut reached to 0.5 per cent in this year alone, it will enhance lending powers of the banks and significantly reduce monthly EMIs on home loans.
While presenting his policy statement for 2015-16, RBI governor Raghuram Rajan took the banks by storm and said, “I do not see an environment where credit growth is tepid. Banks are sitting on money, so to speak, and their marginal cost of funding has fallen. The notion that it hasn't fallen is nonsense.”
He further said that banks have to cut their base lending rates owing to competitive pressure and pass on the benefits of the two previous cuts to people at the earliest.
Within hours of the statement made by RBI governor, three of the country's largest banks have reduced their lending rates by 0.15 percent to 0.25 percent. While State Bank of India and HDFC Bank cut their benchmark base rate by 15 basis points to 9.85% from 10%, ICICI Bank reduced its base rate by 25 basis points to 9.75%.
The cut in interst rate by SBI and ICICI Bank will be effective from April 10, while that of HDFC Bank from April 13. The much-awaited rate cuts will bring lots of optimism back into the real estate sector and also provide a major relief to home-loan borrowers to pay less on their monthly EMIs.
Mr. Anil Mithas, Chairman & Managing Director at Unnati Fortune Group says, “The Indian real estate sector is witnessing winds of positive change with numerous developments in the past few months. Whether it's the current government's plan to build 100 smart cities in India or setting a target of providing affordable housing to all Indian citizen by 2022, the real estate sector is strengthening in the country. Now that the banks have reduced key interest rates by 15 to 25 basis points, there will be more people coming forward to invest in the real estate sector.”
The Reserve Bank of India (RBI) on Tuesday asked the public and private banks of why they are not reducing interest rates on home loans and other utilities even when the apex bank has cut the repo rate by 50 basis points in this year alone.
In its bi-monthly monetary policy review on April 7, the Reserve Bank of India keeps key lending rates unchanged, while directing banks to pass on the benefits of the two previous cuts to customers.
RBI has announced cut in key lending rate by 25 basis points from 7.75 per cent to 7.5 per cent in March this year. This was the second rate cut, the first being in January. It was largely expected that with cumulative cut reached to 0.5 per cent in this year alone, it will enhance lending powers of the banks and significantly reduce monthly EMIs on home loans.
While presenting his policy statement for 2015-16, RBI governor Raghuram Rajan took the banks by storm and said, “I do not see an environment where credit growth is tepid. Banks are sitting on money, so to speak, and their marginal cost of funding has fallen. The notion that it hasn't fallen is nonsense.”
He further said that banks have to cut their base lending rates owing to competitive pressure and pass on the benefits of the two previous cuts to people at the earliest.
Within hours of the statement made by RBI governor, three of the country's largest banks have reduced their lending rates by 0.15 percent to 0.25 percent. While State Bank of India and HDFC Bank cut their benchmark base rate by 15 basis points to 9.85% from 10%, ICICI Bank reduced its base rate by 25 basis points to 9.75%.
The cut in interst rate by SBI and ICICI Bank will be effective from April 10, while that of HDFC Bank from April 13. The much-awaited rate cuts will bring lots of optimism back into the real estate sector and also provide a major relief to home-loan borrowers to pay less on their monthly EMIs.
Mr. Anil Mithas, Chairman & Managing Director at Unnati Fortune Group says, “The Indian real estate sector is witnessing winds of positive change with numerous developments in the past few months. Whether it's the current government's plan to build 100 smart cities in India or setting a target of providing affordable housing to all Indian citizen by 2022, the real estate sector is strengthening in the country. Now that the banks have reduced key interest rates by 15 to 25 basis points, there will be more people coming forward to invest in the real estate sector.”