Housing Financers positive about passing benefits of rate cut to home buyers
Mr Kapil Wadhawan, CMD, DHFL “The rate cut in first monetary policy for the current fiscal has started on a very positive note and sent a strong signal to see the system moving towards lower interest rate regime.
Reserve Bank of India (RBI) issued its first quarter monetary policy for the financial year 201617, with a positive start for current year, RBI Governor Raghuram Rajan announced the policy with a rate cut of 25 basis points from 6.75 per cent to 6.5 per cent.
The move will be positive for the real estate industry and home buyers, as home loans will get cheaper with banks passing the benefits to the home buyers. Recently, country’s largest bank State Bank of India, reduced its lending rates by 10 bps, under the Marginal Cost of Funds based lending Rate (MCLR) regime. The move will may bring further reduction in rates.
Experts say, the decision will create a positive impact on market sentiments and there are signs that lenders would pass on the lower rates to borrowers soon.
The housing financers have welcomed the move and have expressed their willingness to reduce the lending rates for home buyers.
Mr Kapil Wadhawan, CMD, DHFL “The rate cut in first monetary policy for the current fiscal has started on a very positive note and sent a strong signal to see the system moving towards lower interest rate regime. The monetary policy has addressed the liquidity constrains of banks by assuring a near neutral liquidity deficit through open market operations. In the back drop of Marginal Cost System introduced for banks recently, RBI has shown its keenness to reduce the time lag and allow interest rate gains. We in the Home loan industry will be proactive in passing on the benefit of lower cost to the end borrowers and look forward to a very robust growth in the demand from retail home loan borrower.”
Mr. Deepak Joshi, President and Chief Business Officer, Religare Housing Development Finance Corporation Ltd, “As expected it’s a welcome move of RBI by cutting repo rate by 25 bps. This coupled with Marginal Cost of funds based Lending Rate - (MCLR) on which SBI has already taken a lead, will further reduce the lending rates in the market and increase credit off take. Also EMIs on retail consumer loans will further soften which will increase demand for auto and home loans.” But till now, no housing finance company declared any rate cut. In the past, RBI had reduced the rates and had given opportunities to Housing Finance companies to reduce the rates but many banks have just reduced it for new customers. The rates are very important for new home loan seekers. The rates not coming down soon.