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.

Accommodation Times - - Newslines -

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.

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